walk the talk for sustainability
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Cover Story
The best planned sustainable
practices would be no more than
wishful thinking if these cannot be
translated into good agriculture practices.
Having spearheaded extensive research and
development in oil palm cultivation,
Malaysia has long advocated sustainable
farming practices. In this, it has struck a
balance between commercial and economic
needs and preservation of the environment.
GLOBAL OILS & FATS BUSINESS MAGAZINE VOL.3 ISSUE 2, 20066
Malaysia has long turnedconcept into action forsustainable production of palm oil
Bako National Park, SarawakPhoto: MT C
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the global vegetable oils as well as
accounts for 29% of export trade in oilsand fats. This is carried out on 1.84% (4
million ha) of the total area (216 million
ha) under global oilseeds cultivation.
Oil palm has been demonstrated to be the
most efficient and biologically superior
oilbearing crop in terms of land util isation
efficiency and productivity. Average oil
yields are 3.66 tonnes/ha/year, while thatof other oilseed crops pale in comparison
(soybean, 0.36 tonnes/ha/year; rapeseed,
0.60 tonnes/ha/year; sunflower seed 0.46
tonnes/ha/year).
Only 9.2 million ha of agricultural land
need be devoted to oil palm to produce
31.8% of the global fats and oils output.
For a similar output, soybean cultivation
requires 92.54 million ha.
Thus, if the target is to feed the growing
world population and better utilise
available land for cultivation, it makes
good sense to look at palm oil as a
sustainable commodity. In addition,
research strategies have focused on
improving yields, projecting an output of
up to 6 tonnes/ha/year within the nextdecade.
Scientific evidence
The acreage under Malaysian oil palm has
released approximately 85 million tonnes
of oxygen through photosynthesis and
related activities. In contrast, the entire
agriculture land of 17 million hectares in
the UK has generated only 43.5 million
tonnes of oxygen or half that of Malaysian oil palm cultivation.
Carbon dioxide levels are already at their
upper limits of acceptability in the
Western Hemisphere due to the use of
more fossil fuel and the lack of adequate
green cover. Oil palms carbon dioxide
absorption/sequestering power amounts
to 117 tonnes versus 60 tonnes for theUKs entire range of agricultural crops.
It should therefore come as no surprise
that the oil palm is unsurpassed in its
ability to generate oxygen and effectively
absorb carbon dioxide for the benefit of
the world population.
The Carbon Cycle
The carbon cycle illustrates
how plants and animals of
the rainforest rely on each
other for survival. Fast
growing young trees
convert carbon dioxide to
organic matter via
photosynthesis. In turn,
carbon dioxide is released
by living organisms into the
atmosphere through
respiration.
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SustainableOil Palm
Development
Economic productivity
In 2004, the UK received Euro 4.06
billion for subsidies to support its
agriculture sector, which earned Euro
24.72 billion per year. This produced an
earning of Euro 1,448/ha, of which Euro
238 was the subsidy component, leavingnet revenue of Euro 1,210/ha per year. In
the same year, the Malaysian palm oil
industry earned Euro 6.53 billion per year
or Euro 1,687/ha of revenue yearly, which
exceeded the UK agricultural unit
earnings.
If purchasing power parity is applied to
revenue, the Malaysian palm oil industry
is far superior to that of UK agriculture in
terms of the sustainability indicators.
Without the subsidy, EU agriculture
would be totally unsustainable. The
subsidy contributes to environmental
damage due to the over-use of fertilisers
and pesticides, and the inexorable
destruction and removal of forests.
Compared to the major annual oilseed
crops planted in the US and the EU, each
hectare of oil palm produces 10 times
more oil with fewer resulting emissions
and pollutants. Combining such natural
efficiency and a productive lifespan of 25-
30 years ensures a sustainable and steady
supply of an essential food commodity
that feeds millions.
The sustainability of the Malaysian palm
oil industry is therefore obvious, and it
can be safely claimed that cultivation is
comparatively superior to any large scale
agriculture in the tropics or the temperate
countries in terms of sustainability
parameters. The plantation industry is
professionally managed, with manycompanies being listed on the Malaysian
stock market, and practising
corresponding requirements of corporate
governance and corporate responsibility.
Demonstrated commitment
While it cannot be emphasised enough
that Malaysian palm oil is produced using
sustainable practices, the industry is open
to collaboration to enhance its high
GLOBAL OILS & FATS BUSINESS MAGAZINE VOL.3 ISSUE 2, 200610
Cover Story
For any development to be sustainable, it should be:
economically viable
socially acceptable
environmentally compatible
technologically appropriate
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standards. To underscore its seriousness,
Malaysia has launched a Palm Oil Wildlife
Conservation Fund with an anticipated outlay
of RM20 mill ion. This will fund ideas andproposals to enhance biodiversity linked to palm
oil production worldwide.
NGOs, meanwhile, are calling for plantations to
join the Roundtable on Sustainable Palm Oil
(RSPO), which has yet to establish official
certification procedures. Malaysian palm oil
should mostly qualify within currently
acceptable parameters of sustainability.
Any call for the boycott of unsustainable palm
oil would be premature and difficult to
implement in the absence of certification. After
all, there are no sustainable oilseed products
from the EU, raising the question as to why
these are not being boycotted.
The RSPO is a novel idea, supported by the
Malaysian palm oil industry, but its
implementation should be further researched
for consensus between the participating
suppliers and buyers.
Indeed, the challenge is now for other oilseed
and food crop producers to take up the concept
of a Sustainability Roundtable. It will be
interesting to see if they can achieve sustainable
standards of production already achieved in
Malaysia.
Dr Yusof Basiron
CEO, MPOC
This is a revised version of a paper presented at the M POC symposium.
Photo: MTC 11GLOBAL OILS & FATS BUSINESS MAGAZINE VOL 3 ISSUE 2 2006
A river flowing through thedense forest of Taman Negara,Malaysias oldest and mostfamous national park