Thursday, July 29, 2010

How big is the palm oil problem in Indonesia?

One of the letters I received about my recent palm oil piece questioned whether palm oil was a really a significant component of deforestation in Indonesia.

In researching this piece, one of the pieces of Overmatter I did not use was an unpublished report by McKinsey (which was leaked to me by a source) that is pretty clear about what is known about the state of Indonesian forests. A large number of its contributors are the Indonesian forestry ministry.

The report states that deforestation of Indonesian forests peaked in the late 20th century at a rate of 1.9 million ha per year, and decreased to the current rate of 1.1 million ha between 2000 and 2005

However, it goes on to say that an increasing demand for pulpwood, palm oil, food crops will drive around 21-28 million ha of land conversions till 2030 along with mining and infrastructure. Further, that government plans for increasing pulp and palm oil production will require 11-15 million ha of currently forest covered areas to be converted.

Finally it says that deforestation and degradation is taking place across all regions and in all types of Indonesian forests--including protection and conservation forests.

We already know that between 1967 and 2000 the area under cultivation in Indonesia expanded from less than 2,000 square kilometres (770 square miles) to more than 30,000 square kilometres.

What we cannot say from these figures is exactly how bad the problem is right now. As recently as 2007 UNEP said deforestation in Indonesia for palm oil and illegal logging was so rapid that most of the country’s forest might be destroyed by 2022.

In considering how bad the problem might be, these factoids are useful:

1. each hectare of land can produce an average yield 4-5 tonnes of crude oil

2. the current average price of crude palm oil per tonne is about 800-900 US dollars. This is down from a peak two years ago of 2,000 dollars a tonne. (Oil World, and figure quoted by us)

3. although palm oil can be planted on degraded land, the conversion of forested land allows palm oil producers to use the sale of timber to fund plantations, providing up front capital prior to the first crop.

Given all these facts and figures, trying to argue that such a valuable crop is not a significant contributor to deforestation in a very poor forested country seems a tough call to me. One might as well nail $50 bills to tree trunks and expect them to stay there.

The one thing that our piece did not have the scope for was to ask that given that palm oil is such a significant contributor to economic growth in poor countries like Indonesia how does one get improvements in living conditions without causing environmental devastation? Its not easy to answer, but the fact that the government has announced a moratorium on deforestation thanks to a huge dob of cash from the Norwegian government suggests that minds are at least focusing on the problem.

7 comments:

  1. I was talking to my brother who lives in Indonesia about deforestation. He spoke of being amazed to see the regrowth of trees in deforested areas that he'd revisited years before.

    Discussions about deforestation are always framed in terms that imply that once forest is gone, it doesn't come back.

    Should they be?

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  2. This is a really interesting question Bishop. Conservationists tend to value "primary" forest, which has been untouched for centuries or more as it contains a particular type of fauna and flora. Although forested areas to recover quite rapidly in Indonesia after they have been cut (not true everywhere, and assuming that the land has not been drained), you get a different type of fauna and flora replacing it. Now given enough time, say a few hundred years, natural succession would mean that these cut areas would become much more like uncut areas. The problem is with so much forest being cut, some of the animals and plants (particularly the big animals) cannot survive because their habitat was the first type of forest, not the second. Habitat destruction is the main thing threatening species destruction.

    So when conservationists get upset about forest loss, they are generally focused on primary tropical rainforest and areas of high conservation value. You will find that once a forest has been cut, and it regrows, they tend to be less worried about it being cut again and used for agriculture.

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  3. Anonymous4:47 pm

    Good post and this fill someone in on helped me alot in my college assignement. Say thank you you as your information.

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  4. There's an interesting parallel in Britain, where the cycles of regular cutting of forest lead to biodiversity (see Oliver Rackham's books - highly recommended - where he rails against people failing to chop down their coppices frequently enough for certain specialised flora to flourish).

    In some ways therefore, what you say in your last comment makes sense. If you chop down part of a forest you get different species in the cut part than you had before - your forest is more biodiverse in other words. Now obviously, this can go too far, but it isn't a bad thing per se.

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  5. Anonymous9:05 pm

    Sustainable forestry is one thing... clear cutting for palm plantations is quite another.

    When small patches of forest are cut, all the bugs, birds, small and large animals have somewhere else to go for awhile. The surrounding plants and trees will seed the hole left in the forest and life will eventually continue.

    When vast tracks forests are cleared, there is nowhere for the flora and fauna to go. They are usually burned up in the clearing process. The remaining land is then planted with ONE species: Palm Oil trees. This is not diverse or natural. When animals like orangutans come back to the land and discover the fruit trees they grew up with are gone, they turn to the only available food source, palm fruit. But the farmers take offense to this invasion of "their" land and shoot the apes as if they were common thieves.

    This is one impact of deforestation. There are many more. I, for one, value and appreciate wild, untamed forests and lands. A forest without top predators, amazing insects and diverse wildflowers and trees is, in my opinion, just another botanical garden.

    - Amanda K. ~ Hawaii

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  6. It is not a fair statement if you just write down about what happen to flora and fauna without first come and see for yourself how the government of Indonesia and malaysia, the world top palm oil producers manage their plantations. They have all the laws and regulations that comply with RSPO. besides, for malaysia the revenue from tourism industry is higher than of oil palm. All the forest, biodiversity, flora and fauna are the valuable assets these two countries treasure most.

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  7. Anonymous7:02 pm

    Good point, though sometimes it's hard to arrive to definite conclusions

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