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The palm oil sector in Indonesia has seen the adoption of zero deforestation commitments by the larger companies in the form of various pledges around No Deforestation, No Peat, and No Exploitation (NDPE). At the same time, at the national and sub-nationa
This research critically examines implementation gaps and externality problems associated with the recent proliferation of zero deforestation commitments (ZDC) by large commodity producers. By developing and employing a hierarchical framework, we evaluate
The oil palm industry has transformed rural livelihoods and landscapes across wide swathes of Indonesia and Malaysia, generating wealth along with economic, social, and environmental controversy. Who benefits and who loses from oil palm development? Can oil palm development provide a basis for inclusive and sustainable rural development? Based on detailed studies of specific communities and plantations and an analysis of the regional political economy of oil palm, this book unpicks the dominant policy narratives, business strategies, models of land acquisition, and labour-processes. It presents the oil palm industry in Malaysia and Indonesia as a complex system in which land, labour and capital are closely interconnected. Understanding this complex is a prerequisite to developing better strategies to harness the oil palm boom for a more equitable and sustainable pattern of rural development.
There is abundant literature focusing on the palm oil sector, which has grown into a vigorous sector with production originating mainly from Malaysia and Indonesia, and on increased palm oil consumption in many countries around the globe, particularly European Union states, China and India. This sector expansion has become quite controversial, because while it has negative social and environmental impacts, it also leads to positive benefits in generating fiscal earnings for producing countries and regular income streams for a large number of large- and small-scale growers involved in palm oil production. This document reviews how the social, ecological, and environmental dynamics and associated implications of the global palm oil sector have grown in complexity over time, and examines the policy and institutional factors affecting the sector's development at the global and national levels. This work examines the geographies of production, consumption and trade of palm oil and its derivatives, and describes the structure of the global palm oil value chain, with special emphasis on Malaysia and Indonesia. In addition, this work reviews the main socioenvironmental impacts and trade-offs associated with the palm oil sector's expansion, with a primary focus on Indonesia. The main interest is on the social impacts this has on local populations, smallholders and workers, as well as the environmental impacts on deforestation and their associated effects on carbon emissions and biodiversity loss. Finally, the growing complexity of the global oil palm value chain has also driven diverse types of developments in the complex oil palm policy regime governing the sector's expansion. This work assesses the main features of this emerging policy regime involving public and private actors, with emphasis on Indonesia. There are multiple efforts supporting the transition to a more sustainable palm oil production; yet the lack of a coordinated public policy, effective incentives and consistent enforcement is clear and obvious. The emergence of numerous privately driven initiatives with greater involvement of civil society organizations brings new opportunities for enhancing the sector's governance; yet the uptake of voluntary standards remains slow, and any push for the adoption of more stringent standards may only widen the gap between large corporations and medium- and smallscale growers. Greater harmonization between voluntary and mandatory standards, as well as among private initiatives is required. Commitments to deforestation-free supply chains have the potential to reduce undesired environmental impacts from oil palm expansion, and while this risks excluding smallholders from the supply chains, such commitments may function to leverage the upgrading of smallholder production systems. Their success, however, will require greater public and private sector collaboration.
Oil palm plantations and smallholdings are expanding massively in Indonesia. Proponents highlight the potential for job creation and poverty alleviation, but scholars are more cautious, noting that social impacts of oil palm are not well understood. This report draws upon primary research in West Kalimantan to explore the gendered dynamics of oil palm among smallholders and plantation workers. It concludes that the social and economic benefits of oil palm are real, but restricted to particular social groups. Among smallholders in the research area, couples who were able to sustain diverse farming systems and add oil palm to their repertoire benefited more than transmigrants, who had to survive on limited incomes from a 2-ha plot.
The rapid development of oil palm cultivation feeds many social issues such as biodiversity, deforestation, food habits or ethical investments. How can this palm be viewed as a ‘miracle plant’ by both the agro-food industry in the North and farmers in the tropical zone, but a serious ecological threat by non-governmental organizations (NGOs) campaigning for the environment or rights of local indigenous peoples? In the present book the authors – a biologist and an agricultural economist- describe a global and complex tropical sector, for which the interests of the many different stakeholders are often antagonistic. Oil palm has become emblematic of recent changes in North-South relationship in agricultural development. Indeed, palm oil is produced and consumed in the South; its trade is driven by emerging countries, although the major part of its transformations is made in the North that still hosts the largest multinational agro industries. It is also in the North that the sector is challenged on ethical and environmental issues. Public controversy over palm oil is often opinionated and it is fed by definitive and sometimes exaggerated statements. Researchers are conveying a more nuanced speech, which is supported by scientific data and a shared field experience. Their work helps in building a more balanced view, moving attention to the South, the region of exclusive production and major consumption of palm oil.
In search of sustainable and inclusive palm oil production builds on the old debate regarding the role of smallholder farmers in society and links it to the integration of smallholders into modern global value chains. Since the peak in global agro-commodity prices in 2007/08, interest in agriculture has increased again among policymakers and in the private sector. Modern global value chains provide opportunities for smallholder farmers but also increasingly dictate conditions in terms of production practices, and thereby determine conditions for inclusion. The Indonesian oil palm sector provides an interesting case regarding smallholder inclusion in modern global value chains and the role they play in sustainable agro-commodity production. Palm oil production in Indonesia has thrived due to insertion in global value chains, experienced massive smallholder engagement, faces considerable sustainability challenges and illustrates the impacts sustainability initiatives can have on smallholders. It thus provides a promising case to further explore the nexus of sustainable and inclusive development, smallholder agriculture and policy. The primary aim of this book is to advance the understanding of how the oil palm sector can be made more sustainable and inclusive. It does so by exploring independent and organized oil palm smallholders in Sumatra, explaining their emergence and performance, and discussing strategies to improve their performance. Whereas the smallholder oil palm sector clearly has its unique characteristics, this book unpicks some stereotypical views on smallholders and highlights the dynamics impacting farmers’ organizations over time, and thereby contributes to debates on the future of farming.
The book provides a broad synthesis of the major supply and demand drivers of the dramatic expansion of oil crops in the tropics; its economic, social, and environmental impacts; and the future outlook to 2050. It is a comprehensive review of the oil crop sector with a major focus on oil palm and soybeans, the two most dynamic crops in world agriculture in recent decades.
Evolving international sustainability norms demand greater environmental and social responsibility from business across global commodity chains – from countries of origin to countries of consumption. Conventional commandand-control regulation has had limited success in addressing negative environmental and social impacts. As a result, advocacy groups and NGOs have championed a diversity of market-based and multi-stakeholder governance approaches aimed at shifting the private sector towards delivering more sustainable business models. Multiple non-state, market-driven social and environmental standards have emerged for palm oil. Through interviews with growers and key stakeholders in the Indonesian palm oil industry this occasional paper explores the motivations driving the uptake of sustainability standards, as well as the factors supporting and preventing implementation of sustainability standards, and asks, what model of “sustainable” oil palm agriculture is ultimately being built?