Palm oil and palm-derived products are everywhere. Why? Because it’s the world’s least expensive vegetable oil. In addition to that, it is incredibly versatile in its applications. However, the reach of palm oil extends far beyond products and uses, which have consequences for the humans and lands that produce this oil. This is why sustainable production is capable of transforming industries and lives all over the globe.
In its most apparent application, palm oil and its derivatives are found in food. Around 50% of products in supermarkets contain these ingredients. The most common food uses are cooking and frying oil, shortenings, margarine, and as a fat for sweets and desserts.
Palm-derived products also appear in processed foods like salad dressings, chocolate, ice cream, and packaged bread, making it a nearly unavoidable staple in kitchens all over the world.
The use of palm oil in food products accounts for about 70% of palm oil consumption, which translates to more than 40 million tonnes annually. It’s used so much that it is estimated that about half of the world’s population (3 billion people) consumes the oil on a regular basis.
Personal care products including cosmetics account for about a quarter of all palm oil use. Cosmetics and beauty products are multi-billion dollar industries, churning out products ranging from shampoo and laundry deteregents, to shaving cream and fragrances.
Palm-derived products are even used in lipstick because it remains solid at high temperatures and offers the balm a more appealing taste. Its derivatives are present in soap and shampoo because they help to remove dirt and oil.
Palm oil is not only found in the numerous food items we consume to fuel our bodies, but it can also be used as alternative fuel option when heating homes, generating electricity, and as a biodiesel for fuelling automobiles.
In terms of worldwide consumption, energy applications currently account for only 5% of palm oil use. But this volume may increase as the world seeks alternatives to fossil fuels and the biodiesel market grows.
Increasing smallholder participation
Palm oil production and trade is dominated by large enterprises, yet a substantial portion of worldwide production (40%) is carried out by small farmers. As large companies are increasingly moving towards sustainability certification to meet consumer demand, smallholders run the risk of being excluded from the certification process.
Smallholders often suffer from lower yields due to a lack of knowledge on good farming practices and this translates to lower incomes. In addition, it can be difficult for small scale producer to meet the certification requirements.
The growing demand for certification from consumers for sustainably produced palm oil places smallholders in a tough position. If they want to continue selling their product, then they will have to become certified. Additionally, most smallholders are unaware of sustainability initiatives, which when combined with low incomes, limited access to financial resources and inputs, low bargaining power and market access means smallholder famers will remain in a marginalised position.
Even when smallholders can fund certification efforts that would provide them with more sustainable incomes through greater market access, they often lack the necessary technical support and inputs to comply with the standards. This is unfortunate because palm oil presents a great opportunity for income and economic development. It can produce more oil using less land than any other oil crop.
Reducing environmental damage
Palm oil is the world’s most used and fastest growing vegetable oil, but unfortunately the crop’s high growth rate also means that unsustainable environmental practices can occur while establishing new plantations and farms.
In order to meet rising demand, large corporate plantations rely on land conversion. This means that valuable forests are cut down and the underlying growth, like peat and timber, are burned to create clearings for plantations. This endangers the ecosystems local inhabitants rely on for their livelihoods. Deforestation and subsequent biodiversity loss means that animals lose their natural habitats and may become endangered.
Large plantations can also pollute the surrounding ecosystems with run-off, sending the chemicals used in the cultivation process streaming into lakes and rivers. In Honduras, plantation pollution poses a major threat to the coral reefs in the Caribbean. The drive for profits has endangered the ecosystems upon which these profits are made.
But it doesn’t have to be this way. If palm oil production was sustainably organised where the same amount of land produced more palm oil, it would have less of an impact on forests, coral reefs, lakes, rivers, and people.
In Colombia, palm oil producers and industry leaders have committed to eliminating deforestation from their palm oil supply chains. Colombia is the first country to present a national agreement on deforestation. In West Kalimantan Indonesia, 1,885 farmers were trained in good agricultural practices and 1,891 farmers were trained in financial literacy. In the village of Sepulut, a total of 14,16 hectares of communal forest was mapped and a regent decree was secured to ensure the forest’s protection.
Smallholders’ investment in implementing best management practices in Ghana led to more than tripling of yields, proving that with the right investment West Africa could become self-sufficient in palm oil production. In Asia, national and regional sustainability initiatives for large producing and consuming countries gained momentum in China, India and Malaysia. In Central America, national palm oil sectors are starting to take significant steps towards RSPO certification.
After three years of co-investment with farmers, Solidaridad’s SWAPP palm oil programme has reported a tripling of smallholder yields in Ghana. In China, the sustainable palm oil working group was launched to stimulate sustainable sourcing in one of the world’s biggest markets.
Solidaridad launched the Asian Sustainable Palm Oil (ASPO), a multi-stakeholder platform to support and promote sustainable palm oil production and consumption in the main Asian markets of India, China and Indonesia.
Sustainable West African Palm oil Programme (SWAPP) launched with the help of a 12 million EUR grant from the Dutch Embassy in Ghana. Solidaridad and RSPO supported the scaling up of sustainable palm oil production in Colombia and Honduras in collaboration with 13 local plantation companies, industry associations and leading processors of palm oil.
Solaridad developed its first palm oil supply chain programmes, linking major brands and companies, such as Johnson & Johnson and CONO, with palm-oil smallholders working on RSPO compliance.
Thanks to a 30 million EUR grant from the Dutch government, Solidaridad launched its cross-commodity Farmer Support Programme together with five different roundtables, including the RSPO, which will support 400,000 smallholders by the end of 2015.
The Dutch Task Force for Sustainable Palm Oil set a target of using only RSPO certified palm oil in Dutch food, cosmetics, and animal feed industries by 2015.
Solidaridad began its Palm Oil Producer Support Initiative (POPSI) to stimulate better management practices among small palm oil farmers and assist them with RSPO certification.
The first palm oil plantation was RSPO certified
Roundtable on Sustainable Palm Oil was (RSPO) founded.
Farmers & Millers
We seek to unite growing demand for palm oil with a sustainable supply base by working with farmers on innovative approaches to sustainability.
With the farmers we work with in Latin America, Asia, and Africa, we help provide training on good agricultural practices in order to increase farmers’ yields and reduce the funds spent on fertilisers and chemicals.
Since financial management is often a problem for farmers, we partnered with the second largest credit union in Indonesia to train its smallholder members in financial literacy and agricultural best practices. This approach helps smallholders improve incomes and reduce the environmental impact of their farming.
Bringing smallholders the knowledge they need to grow sustainable palm oil is indispensable to our educational approach. In Iambi, Indonesia, for example, we support a local NGO that assists independent farmers in sustainable palm oil production. Famers here are not only instructed in good agricultural practices, but in how to collaborate with civil society and government towards RSPO compliance.
"Through the training, I now know about the management standards for palm oil plantations especially in relation to crop maintenance and fertiliser application and I can reduce fertiliser costs. Now, I am saving more money from my plantation!"
Silvanus Seyron Palm Oil Smallholder World Education Australia Farmer Field School
Working with palm oil traders, corporations, and retailers is critical in fostering sustainability within the palm oil industry because they can set the tone for practices throughout the supply chain. Companies are key to ensuring sustainability in the palm oil supply chain since they are in an excellent position to foster changes in the sector. This is why we work directly with companies, assisting them in sustainable sourcing and project investment.
RSPO certification is a useful tool for bringing about more sustainable production practices, and we use it as a starting point for continued commitment to sustainability. We unite groups of producers to commit to sustainability goals for the benefits of their business and the communities that are in any way affected by their businesses.
In Honduras, Solidaridad supports a group of eight cooperative and corporate palm oil producers called PASH, which account for 80% of palm oil production in Honduras and has also committed to RSPO certification. This industry-wide cooperation platform is critical for ensuring that sustainable palm oil stays relevant at the country level and that local companies invest in the places where they operate.
In Asia we run several projects with partners like Cargill, Nestle, Asian Agri, and Keresa. In West Africa, we have begun the Sustainable West Africa Palm oil Programme (SWAPP), which supports sustainability through creating networks for information exchange, best management practices, providing access to finance, RSPO certification, and looking after environmental and social practices.
This is the type of change we support: Cooperation between palm oil supply chain members, governments, civil society organizations in combination with certification is on its way to changing sustainability.
"RSPO has really brought our social performance to a higher level. Implementing RSPO inspired us to go out and talk to surrounding communities. We see this gives a very good result: Our relations improve a lot! Implementing ISO 9000 and 14000 gave us a lot of improvements, but only when implementing RSPO we created better relations with the local communities."
Ms. Suyapa Sustainability Honduras Agrotor, Honduras
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