The Green Development Oil Newsletter – Issue 21 July 2012

Government funded anti-growth NGOs fail at Rio

Attempts by anti-growth environmental NGOs to stifle agricultural and economic development in developing nations have failed to materialise at the Rio+20 Summit.  However their efforts will continue as ‘aid’ from governments in developed nations is focused on NGO causes.

The Rio+20 Summit delivered a welcome outcome for developing nations seeking to grow their economies and reduce poverty through the agriculture sector.  The agreement reached by the Parties to the Conference rejected the notion of a ‘green economy’ and instead embraced a free and open trading regime and the sustainable conversion of forest land for agriculture.

This outcome was a major setback for environmental NGOs and developed nations including the European Union, which had been seeking to constrain agricultural production in developing nations by demanding that all tradeable goods meet WWF environmental standards.

James Roberts, research fellow at the Heritage Foundation’s Centre for International Trade and Economics, stated in a recent opinion piece ‘the utilisation of these standards will raise consumer costs and hurt small famers throughout the world who need unencumbered access to markets.  In fact, denying small producers access to world markets would well lead to more environmental damage and increased poverty than would leaving them alone’.

Despite the setback to WWF, there is little doubt that their efforts to control the supply chains of certain commodities (including palm oil) through certification will continue with the assistance of aid payments from foreign governments.

According to a recent report by Italian think-tank Libertiamo, entitled Taxpayer Funding, NGO Collusion and Manufactured Crises, the European Commission has provided nearly 5 million euro to WWF since 2005.  Part of this funding has gone to ‘misinformation activities’ against palm oil and other commodities pushing for stronger environmental regulations in developing nations.  The report argues that these activities completely ignore the reality of existing environmental regulations.

Similarly, the Institute of Public Affairs in Australia has pointed out in a recent paper that the Australian taxpayer contributes $110 million each year to NGOs including groups such as the WWF and the Australian Conservation Foundation to ‘engage in political activity’.

A new study by the UK-based Taxpayers’ Alliance, reported in the Daily Telegraph, has also argued that government funding for environmental lobby groups means that ‘[t]axpayers pay twice: once for the grants, then again with the higher prices that result when environmentalist groups successfully campaign for new regulations’.

Environmental NGOs such as WWF and supporters of the ‘green economy’, including the European Union will continue to push policies which are harmful to economic growth and poverty alleviation in developing nations.  It is now time for the governments funding these activities to take responsibility for the damage being done with taxpayer funds.


French Government aid supports palm oil – despite French retailers’ misinformation

The Government of Ghana has announced the establishment of 3000 hectares of oil palm plantations with the support of French development agency, Agence Francaise de Developpement (AFD).  The French Government agency’s financial support comes in spite of the misinformed anti-palm oil campaign by French retailers such as Carrefour and Supermarche U.

Mr Kwesi Ahwoi, Ghanan Minister for Food and Agriculture, announced that the government had agreed with AFD to finance two new out-grower oil palm schemes in Western Ghana.  The two schemes are expected to assist 750 farmers to establish oil palm plantations.

The Minister also stated that the Ghana Government would release an Oil Palm Development Master Plan this month which would see the development of a new 10,000 hectares nucleus plantation and a 40,000 hectare out-grower scheme in the next 15 years.

The Minister highlighted the vast potential for oil palm plantations in Ghana noting that only 2 per cent of land currently designated for agriculture is currently being used.

French aid agency, AFD, will finance the two new schemes that are due to begin in August.

Despite the French Government’s recognition of the benefits of palm oil to smallholders and developing economies, French retailers including Carrefour, Casino, Lesieur, Systeme U, and Jacquet, continue to boycott palm oil on health grounds. However, the health benefits of palm oil are well known and acclaimed internationally; for instance international research has shown that palm oil is not only free of trans-fats, but also a rich source of Vitamins A and tocotrienols – a form of Vitamin E that has shown to be effective at killing cancer cells. And a recent study indicates that palm oil is just as healthy as olive oil, which is widely recognized for its health benefits.

This latest support shown by the French Government for oil palm plantations makes it clear that attempts by some French producers and retailers to replace palm oil from their supply chain with other oils are aimed at protecting uncompetitive European produce, rather than altruistic concern for nutritional health. Unfortunately these efforts come at the expense of the livelihoods of small farmers in developing nations.


Campaign against oil palm estate wrong: Ugandan journalist

Ugandan journalist Andrew Mwenda voiced support for palm oil’s capacity to reduce poverty and boost the country’s advances in commercial agriculture after visiting a BIDCO plantation in Kalangala.  Mr Mwenda was previously responsible for coordinating campaigns against the establishment of oil palm plantations in Uganda, but now believes that these campaigns often stem from a ‘fear of change’.

Mr Mwenda has admitted that he was one of the first people to take a stance against the BIDCO project.  Mwenda stated that: ‘Using Daily Monitor (where I was Political Editor) and KFM (where I hosted a daily radio talk-show), I mobilised various people to try block the deal. The contract between Uganda government and BIDCO stipulated that government would buy land for BIDCO to plant oil palm.’  ‘I made a mistake in the tax computation and felt that this was a bad deal. Today, especially after visiting the BIDCO factory in Jinja in 2010 and now after visiting Kalangala and talking to key people in the business, I admit I was wrong and mistaken.’

The Kalangala Oil Palm Development Project, established with the assistance of BIDCO, has been widely recognised as a transformational project for region since planting began in 2005. The project has provided smallholders with the means to buy their own land and establish plantations from which to make an income. It also claims to be managed in a way that considers the rights of traditional land owners and squatters; compliance with high environmental standards; and has provided a dramatic boost to the region’s tourism industry.

Mr Mwenda found that the BIDCO plantations have about 6200 hectares of land under its nucleus farm and about 3,000 hectares of out-grower plantations. Those farmers earn USG350 million per month selling their palm oil fruit to BIDCO.

He also found that a farmer can earn up to USG100 million in a year from a 10 hectare plot – approximately equivalent to $US35,000 per year.  It was also found that if Uganda was to become palm oil independent – that is, was capable of growing enough oil to meet their own domestic demand – the benefit for the Ugandan economy would be huge.

Oil self-sufficiency for Uganda would result in the direct employment of 12,000 people, and indirect employment of 60,000. Uganda would save US$300 million on importing vegetable oil, while the taxes paid by palm oil companies would increase from UGS74 million to UGS900 million.

More particularly, Mr Mwenda wholly endorses the move from subsistence agriculture to commercial farming and states that the key to a successful, growing agriculture industry is securing an investor, such as BIDCO, early in the project.   He also stated that most opposition to new oil palm plantations stemmed from a fear of change, rather than well informed decision-making.

Mr Mwenda’s opinions, presumably informed by exposure to the very real benefits from palm oil , are in direct contrast with environmental and social NGOs which consistently claim that commercial agriculture is not beneficial for small farmers because the profits are taken by large companies.  The experience of BIDCO and Uganda shows that oil palm plantations are commonly run in a way where profits are shared between the company and the community for the benefit of all.


Smallholders central to food security: IFAD

President of the International Fund for Agricultural Development, Kanayo Nwanze, has strongly promoted the role of the smallholder for poverty alleviation and the environment.  This endorsement is in stark contrast with the position of environmental NGOs who portray highly successful smallholder crops such as oil palm as environmentally devastating.

Nwanze argues in an article in The Guardian that smallholders are not only the most economically and environmentally efficient famers – but they are vital for maintaining global food security.

The article notes that the benefit of smallholder farming has only recently begun to be recognised as being environmentally sustainable.  Previously, smallholder farming was portrayed as highly damaging due to associated farming techniques, such as  slash and burn crop production.

Contrary to this widely held NGO position, Olivier De Schutter, the UN’s special rapporteur on the right to food also argues that smallholder famer groups must be helped to cooperate and share resources in order to keep their costs down.

However the 500 million smallholders across the world provide up to 80% of food in developing countries.  It is also one of the measures proven most effective for reducing poverty rates.  For this reason, poverty alleviation and food security were the headline issues at the recent Rio+20 Summit.

Across Malaysia and Indonesia, smallholders account for approximately 40 per cent of palm oil production.  The Malaysian Government has successfully promoted smallholder growth and formed the large cooperative FELDA across the nation.  It has also been widely recognised by world-class standards organisations, the International Organization for Standardization (ISO) that certification standards should not be applied to smallholders or small businesses on the grounds that it is too expensive and onerous.

Given these endorsements by the special rapporteur and IFAD of oil palm as a crop that not only benefits economic growth and the environment, but also contributes to food security, it is difficult to see how environmental NGOs and bodies such as the World Bank continue to maintain their anti-palm oil stance and impose certification and co-ops on smallholders throughout the world; nor how environmental NGOs are allowed to continue their campaign for imposing certification of smallholders under the Roundtable on Sustainable Palm Oil.


Greenpeace pretends to change tack on palm oil

Greenpeace has launched a new campaign promoting ‘local solutions’ to environmental management to demonstrate empathy for smallholders.  But the organisation’s underlying policy of zero conversion of forest land for agriculture and mandatory certification will harm local communities in developing nations.

Greenpeace is well-known for its anti-palm oil stance, including its campaigns against sustainably certified palm oil.  For many years, Greenpeace has campaigned against any company using palm oil in its products.

In the face of constant criticism that its policy harms small holders, Greenpeace has launched a campaign which claims to ‘recognise’ the economic benefit of palm oil to local communities.

The new campaign, called ‘Good Oil’, promotes the use of an ‘independent small-holder improved management schemes’ as the way to achieve economic growth and environmental sustainability.

Whenever Greenpeace champions sustainability systems for small farmers and local people, it invariably champions sustainability systems which are commercially unviable and reduce income such as onerous certification schemes or cooperatives.  This scheme is no exception.

Nevertheless, the shift in Greenpeace’s rhetoric is noticeable. Until recently, Greenpeace denounced Indonesian palm oil as unsustainable, steadfastly refusing to recognise either the economic benefit or the fact that palm oil is a highly environmentally-advantageous product.

Greenpeace’s latest campaign appears to aim at shifting Greenpeace’s image away from the militant anti-palm oil campaigns it has run in the past.  A closer look at the substance of their latest campaign, however, tells us that Greenpeace still refuses to recognise the economic benefit of palm oil, as both a smallholder and commercial crop, and will continue to undermine the industry and its future. In fact, this latest campaign appears to be a cynical attempt to undermine small farmer cultivation of palm oil by advancing the unprecedented notion that small farmers should be required to pay for NGO approved certification schemes.


WWF dysfunctional on food security

Recent commentary by WWF representative to the Roundtable on Sustainable Palm Oil ignores the reality that additional land is needed to expand agricultural production to meet global food security needs in coming years.  Instead, WWF propose the impracticality that demand can be met by ‘increasing productivity’ on existing plantation land.

In his comments, the WWF representative, Mr. Harrison, admits that WWF forecast demand for palm oil will double to 100 million tonnes by 2050.  He also recognized that palm oil was a high yield crop with significant potential to meet future demand for food.

However Mr. Harrison failed to make the connection between increased food supply and increasing land for agriculture.  The International Food Policy Research Institute has previously recognized that the primary cause of expansion of oil palm plantations is demand for food in developing countries – not biofuels as WWF has consistently claimed.  The obvious corollary is that if the expansion of oil palm plantations is halted, food supply will be constrained.

WWF has constructed an artificial case by claiming there is a shortage of forest land needed to ensure biodiversity.  More forest has already been set aside by countries in the tropical zone than is deemed necessary to protect biodiversity by international authorities. In 2010, parties to the Nagoya Biodiversity Summit agreed that 17 per cent of forest land must be conserved to protect biodiversity.  WWF simply pulls numbers out of the air to justify its position that all conversion of forest land to other uses must cease.  WWF’s figures on emissions from deforestation have now been directly contradicted by US-based consultants Winrock International which found that emissions from land conversion, are at best 10 percent, and between two and seven per cent of global emissions once carbon sequestration was included, compared with WWF’s claim of 20 per cent.   Incredibly, western donors are increasingly supporting the WWF position.

WWF has outlined a global strategy to control and restrict international trade of  food . In the case of palm oil, this strategy is to be achieved by manipulating how and where oil plantations and crops are grown through WWF led certification schemes and lobbying – placing WWF’s ambition to control markets ahead of the global need to expand production.  Its own strategy is an anti-food security policy.  Global food supply must be responsive to need and demand, not WWF’s ambitions.

The debate over food security is vital to the future of those living in poverty across the world.  This was recognized at the Rio+20 Conference where the ambition of WWF and Western environmental officials to subordinate economic growth to the environment through the green economy was taken off the table.

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