The impact of palm oil


Expert opinion

The issues involved in oil palm cultivation and local economies

Different cultivation systems exist for palm oil, from huge plantations covering thousands of hectares to small growers. As sustainable palm oil sees increasingly widespread use, the objective of the French Alliance for Sustainable Palm Oil is to promote the development and economic stability of small producers.

An issue affecting millions of people

Because oil palm cultivation is not mechanised to the level of fruit picking, this type of farming serves as a direct or indirect livelihood for millions of people in countries where the oil-palm industry is centred: 590,000 people in Malaysia, three to seven million people in Indonesia.

A regular, stable revenue source

For small farmers, the income increase generated when moving from traditional cultures into the oil palm industry is spectacular. In Sumatra, Indonesia, for example, the average annual income per hectare over a plantation’s full cycle amounts to € 2,100 for the oil palm, ten times more than for a rice paddy (€200 per hectare). A man thus earns €36 a day working with oil palms and only €1.70 a day for irrigated rice.

The emergence of a rural middle class

Oil palm cultivation, being a very important source of income, has made it possible for local populations to escape poverty in the space of a generation, giving them access to modern infrastructure: roads, healthcare networks, schools, hospitals. Moreover, the percentage of small independent growers in the production mix is very high and steadily increasing: 40% in Malaysia and Indonesia, for example, almost 80% in Thailand. We better understand how this crop has led to the emergence a rural middle class wherever it is present, a class that itself is gradually transforming the economy of the countries concerned.population_DSC0129_HD

Sustainable palm oil: what does it change?

Oil palm cultivation is a source of jobs and sustainable income. But some rural communities have yet to benefit from the dynamic development it generates due to a lack of respect for workers’ rights and proper benefit sharing.

This is why the criteria adopted by the Alliance include social, economic and cultural objectives. They impose minimum compliance with legal working conditions and support for development of local populations.

Local development

The Alliance supports the redistribution of wealth to local communities, as well as programmes managed by member companies to meet the needs of local peoples. This means that sustainable palm oil protects producers and allows for fair trade between producers, refiners and manufacturers. It also helps to develop infrastructure around the plantations, including roads and schools.

The rights of local communities

Respecting the rights of local communities is one of the Alliance’s priorities. Here again, it honours the standards set forth by the RSPO to recognise the customary rights of populations on their lands. Several types of areas are therefore not only recognised for their high environmental value, but for their social, cultural and economic value, too. This entails preserving spaces used for traditions (cemeteries, sacred spaces, etc.) or those essential to the livelihoods of populations (food crops, etc.).

Sanctions to develop jurisprudence

Failure to respect RSPO criteria may result in certification suspension or revocation. RSPO also provides for mediation services that can lead to compensation for damages suffered by local populations. For example, the pictures showing the seizure of their land made it possible for the Suku Anak Dalam group 113 of Pinang Tinggi, in the Indonesian province of Jambi, to obtain compensation from the company cultivating a palm grove on a sacred area: the palms planted around the ancestral graves were cut down.