Palm Oil Industry Potential Weapon to Combat Poverty

Ivan Cairo, De Ware Tijd (Suriname)

CANCÚN – The palm oil sector could be a potential source of help to combat poverty in Surinam and bring development to neglected regions, such as the interior. The sector is known to have high productivity, furnishes those involved direct revenue, and is less damaging to the environment than other agrarian or industrial activities. That’s what Alan Oxley, chair of the development organization World Growth, says in an exclusive interview with De Ware Tijd. This nongovernmental organization is the world’s greatest advocate for the palm oil sector in developing countries and is also trying to persuade environmental organizations in particular here in Cancún to give up their resistance against this industry.

Oxley says that he is unaware of the situation in Surinam, but in his view the reintroduction of the palm oil industry and the manner in which this sector will be organized are political choices that the government has to make. The situation differs from country to country, but a fair land policy forms the basis of the advantages that the population can enjoy.

Alan Oxley, chair of the organization World Growth and former chair of the GATT, the predecessor to the World Trade Organization (WTO).

The question is, he says, to what extent people in the interior are interested in getting involved in commercial activities in the palm oil sector. It is up to the government to investigate that.

“You can choose for setting up an industry with enormous oil palm plantations, but you can also choose for a model whereby small farmers cultivate oil palms on their own cultivated area and deliver their harvests to the factories,” says the World Growth executive.

He mentions Malaysia as an example. There the government gave the local population titles to the land at one point so that they had collateral and could obtain loans from the bank to begin to expand their production activities. In Indonesia the large enterprises began to develop the land, after which it was transferred to small farmers. In Malaysia and Indonesia, 40% of the oil palm areas under cultivation are in the hands of small-scale farmers, says Oxley.

The greatest advantage of palm oil is the “enormously high productivity.” Oil palm yields much more per acre than crops such as soy and rapeseed. “It also yields much more than durable timber cutting. An important aspect of oil palm is that it generates tangible benefits for small-scale producers.” It also provides an enormous number of jobs. The most important way to lift people out of poverty, says Oxley, is to allow them to acquire ownership. That’s why ownership of the land is enormously important for access to capital in the agrarian sector. New plantings already begin to render harvests within four or five years. And plantings have a life of over 25 years. A replanting can occur on the same cultivated area after 25 years.

Oxley further argues that governments must determine ahead of time with absolute precision how large the area for oil palm cultivation will be.  The rest of the forest must then be protected. Besides, just letting the forest be, as advocated by environmental organizations, is not conservation, says Oxley. On the contrary, adequate stewardship of the forest is better conservation than leaving the forest be and not doing anything with it. He argues that most countries where oil palm is introduced have declared 40% of their forests protected territory. Surinam, more than 90% of which is covered by tropical forest, could easily exploit 30% to 40% of its forest territory commercially, in his view.

The reintroduction of the palm oil industry in Surinam by Chinese Zhong Heng Tai has encountered opposition from, among others, the A-Combination and a large portion of the population of the Marowijne region where plantations were to be established once again. The fear is that the Chinese enterprise has its eyes on the lumber in the Patamacca region and is not so concerned about developing the palm sector. There is also a fear that this will create few jobs for the local population because the Chinese company may also bring its own workers to Surinam.

The Bouterse/Ameerali cabinet has not yet expressed whether it will or will not accept the Zhon Heng Tai project from China.