Authorities should reconsider ban on oil palm to address economic crisis | Sunday Observer

Authorities should reconsider ban on oil palm to address economic crisis

25 September, 2022

The oil palm tree has originated in the tropics of African countries. This native land is characterised by the same weather we experience in the wet zone of the country, i.e. annual mean rainfall of around 3,000 mm, mean temperature of about 280 C and five-six hours of daily sunshine. When the palm is grown under such climatic conditions the environment is benefitted by the removal of greenhouse gases, conserving soil and soil moisture and also by contributing to the natural water cycle. Hence, when the crop is domesticated and grown under conditions in which it was found naturally, the use of sound agronomic practices cannot harm our environment.

Introduction of oil palm to Sri Lanka

The palm oil tree had been introduced to Sri Lanka over 100 years ago, initially as an ornamental plant. However, subsequently in 1968 Gerry Wales introduced this palm to Nakiyadeniya Estate in Galle as a commercial plantation crop. Today, almost the entire estate is planted with this crop. Though the crop had been in existence for nearly half a century in Nakiyadeniya, Galle no scientifically validated adverse environmental impact have so far been reported.

Efficient crop

While it is fairly common knowledge that palm oil is a vital, highly in-demand commodity in international markets, the efficiency of this crop tends to be less well understood. Particularly when juxtaposed with other popular vegetable oils, this picture comes into sharper focus.

Apart from being used as a cooking oil, oil palm is used across a plethora of industries and in products such as creams used for skin care, shampoos and soaps, detergents, margarine, confectionery including biscuits and chocolates, bakery products, milk powder and drinks such as cola, thus making palm oil an important ingredient. With the increasing world population, the demand for these products are also increasing therefore the world demand for palm oil is on an increasing trend.

Economic case

Sri Lanka’s annual edible oil requirement stands at 264,000 metric tons (MT). Conversely, the country produces only 40,000 MT of coconut oil and 25,000 MT of palm oil, leaving a deficit of 199,000 MT in the island’s edible oil requirement. Notably, this data actually excludes all other vegetable and plant based oils, meaning that the country’s actual total need is even higher.

While these dynamics present notable challenges to the Sri Lankan economy, particularly in terms of the depletion of foreign exchange, they also speak to vast untapped potential for import substitution and export development. Sri Lanka spent Rs. 24 billion during 2018 to import palm oil.

Hence from purely a demand perspective, we can clearly see that there exists a clear, strong, pressing demand for oil palm, locally and internationally. Similarly, the supply-side economics of oil palm are equally persuasive.

With this background, the Government took a decision in 2014 to plant 20,000 hectares of land with the oil palm crop to achieve self-sufficiency in their vegetable oil requirement and thereby curtailing the drain of valuable foreign exchange earnings from the country. However, this decision has now been changed and there is a complete ban on oil palm cultivation, in fact the decision is to remove the cultivated extents on a phased out basis by 10% per year.

Environmental impact - dispelling myths

The health of the plantation economy is intrinsically and irrevocably linked to the health of the plantation environment. When dealing with the reality of the plantation sector, we must first understand that the financial viability of investments into the estates hinges on the ability of such investments to generate returns sufficient for them to be sustainable.

If we continue to confine ourselves solely to crops which have low margins, then investments will eventually begin to decline. No new investments mean no employment, and an inability to implement agricultural best practices. Therefore, in a very real sense, low profitability can lead to environmental threats over time.

Crop diversification is also a widely accepted strategy for sustaining financial viability in plantations as it protects investors from unhealthy price fluctuations of plantation produce. Considering the climate change effects that the “wet zone will have more rainfall and the dry zones are going to be drier” it is best that the Rubber plantations move away from the wet zone to new areas to achieve the true potential of the plant.

Sri Lankan RPCs are bound to strictly adhere to rigidly enforced legal prohibitions on the clearing of existing natural forests. In that regard, all Sri Lankan RPCs are only able to plant oil palm on existing plantation land.

To date, RPCs have only replaced unproductive rubber and tea in low lying regions of the country with oil palm, all of which is situated in Sri Lanka’s wet zone. With such diversifications RPCs need to endeavor to maintain production levels of both tea and rubber crops by enhancing land productivity of the remaining younger cultivations for which there is ample room.

With regards to water uptake, it is certainly true that each oil palm plant consumes more water. A typical mature oil palm plant needs 249 litres of water per plant, where coconut needs 130 litres and rubber consumes 63 liters. However, the requirement per plant must also be balanced against the fact that oil palm needs a significantly smaller number of plants per hectare than coconut, rubber or tea.

To get a true picture of the consumption of water resources, we must therefore analyse these crops in terms of daily water requirement per hectare. Coconut needs 20,800 litres per hectare per day while rubber requires 31,500 liters and oil palm, slightly more with 34,860 litres per hectare per day.

When speaking of the environmental services performed by oil palm, it is, therefore, important to note that with regards to the fixing of atmospheric carbon-dioxide (CO₂), oil palm has a far greater capacity for absorbing carbon-dioxide from the air. As with the increased water consumption, there is an underlying cause for this, and that is the accelerated and higher productivity of an oil palm plant.

Despite the fact that oil palm too is evidently having some environmental benefits; no due attention has so far been paid. For an example, the net carbon dioxide fixation of an oil palm plantation (64.5 t CO 2 /ha/yr.) is higher than that of a natural rainforest (42.4 t CO 2 /ha/yr.).

The photosynthetic efficiency of a rainforest is 1.73% which is as high as 3.18% in an oil palm plantation. Therefore, taking all these into account, more sound and practical decisions need to be made rather than taking cheap popular decisions. If the country is in a position to halt imports of palm oil and ensure the production of vegetable oil adequately to meet the local demand at a reasonable cost while protecting the environment, restriction of oil palm cultivation is somewhat justified. Otherwise, any decision taken for the sake of protecting the environment would only enrich the hands of food importers and will lead the country to a deeper abyss in terms of economic sustainability.

- The writer is the President of the Alumni Association of the National Institute of Plantations Management.