Oil palm a lucrative crop for Indonesia, Malaysia

Walter Sim Straits Times 26 Jun 13;

PALM oil is the liquid gold of South-east Asia, accounting for billions of dollars in the economies of Malaysia and Indonesia - as well as the livelihoods of millions of people there.

The two countries together account for some 85per cent of global production, and this contributed about $42.3billion to their economies last year, going by the average price of US$750 (S$960) a tonne. This was estimated by Dr Dodo Thampapillai, an economist at the Lee Kuan Yew School of Public Policy.

Some 4.5 million people in the two nations earn a living from the crop, said World Wide Fund for Nature Singapore (WWF).

The labels of many products show how ubiquitous palm oil is - it can be found in everything from ice-cream and chocolate to soap and shampoo.

"It is almost impossible to avoid palm oil," said Ms Khor Yu Leng, a visiting research fellow at the Institute of Southeast Asian Studies who specialises in agribusiness research. "It is everywhere."

Palm oil has come under scrutiny after an Indonesian Forestry Ministry official accused Malaysian and Singapore palm oil companies there of being responsible for the fires in Sumatra.

But substituting it with another oil crop may not be a solution.

Compared to other vegetable oil crops such as sunflower, soyabean and rapeseed, palm oil requires less than half the land to produce the same amount of oil, say experts.

This means production costs and the eventual price will be lower than alternatives, Ms Khor noted. Palm oil also has health benefits, as it does not need to be chemically processed and has no transfat, she said.

Substituting palm oil with other oils may thus create "similar,

if not even larger, environmental and social problems", WWF said.

"The issue here is not around the usage of palm oil, but around the way it is produced today," it stressed.

Unsustainable production could involve the indiscriminate clearing of rainforests, said Dr Thampapillai.

Ms Khor said sustainable practices should be encouraged, although they carry a "slight premium" as they need to comply with global protocols. The WWF said this premium could be as little as 1 per cent.

Forests and oil palm plantations with less-usable crop may be cleared using heavy machinery such as bulldozers. But errant companies and farmers tend to use the slash-and-burn method, which some believe improves soil fertility.

This involves chopping down trees, piling up dead wood and leaves, and razing the heap.

When this is done on highly flammable peat land, the fires can spread great distances underground and make fires difficult to extinguish, said the Roundtable on Sustainable Palm Oil, a non-profit body promoting sustainable oil palm farming.

The WWF said: "To find a long-term solution, a multi-stakeholder method must be employed, beyond governmental rule and regulation."

Haze: 40 times cheaper to burn than use machines, says expert
Rashvinjeet S. Bedi The Star 26 Jun 13;

PETALING JAYA: The slash and burn method of land clearing is 40 times cheaper than using machines, thus making it difficult for Indonesia to stop open burning.

“The underlying factor is cost,” said Dr Helena Varkkey of the Department of International and Strategic Studies, Universiti Malaya.

Dr Varkkey, whose expertise is in environmental politics, said that based on research done by others, the cost per hectare in using the slash and burn method is approximately USD5 per hectare.

Using machines would cost about USD200.

She pointed out that small-scale farmers were not the primary source of fires and the culprits were the 60% to 80% of commercial plantations.

“The problem is that most commercial plantations also prefer to use fire, for similar cost-related reasons.

"These companies are able to avert the risk of being caught and punished for open burning,” said Dr Varkkey who was written papers on the haze and oil palm.

She explained that the companies would hire subcontractors to clear land and if they were caught for burning, they claimed to have instructed the subcontractors not to use the slash and burn way.

These companies, she added, often cultivate healthy relationships with local and central government officials.

Another situation that led to the fires causing transboundary haze that has affected Malaysia and Singapore in recent days is the increasing use of peat soil to grow oil palm trees.

Dr Varkkey said there are regulations that forbid the use of peat land for commercial purposes

“When drained for use, peat dries quickly and becomes highly flammable.

"Even if these companies do not deliberately burn for land clearing, drained peat is highly susceptible to accidental fires.

"These companies are already placing their concessions at risk of fires by opening up these areas,” she said.

She added that while pulp and paper or rubber plantations owners also used fire to clear land, the effects were not as severe as the burning of peat soil.

“When peat burns, it releases carbon-rich, sooty smoke that result in very bad haze, and the fires are very hard to put out.

"Fires on other types of land do not produce such choking smoke, and are usually easier to put out,” she said.

Dumai is epicentre of haze
The Star 26 Jun 13;

Dirty skies: The landscape covered in thick layers of smoke, showing the dirty air, poor visibility and almost non-existent sun. Dirty skies: The landscape covered in thick layers of smoke, showing the dirty air, poor visibility and almost non-existent sun.

DUMAI: Sitting at a stall by a centre coordinating efforts by a special unit to fight peat fire, one of my newly-made friends asked if Malaysia could send help to put an end to the smog from peat fires.

“We have minimal equipment, only a water pump and hose to put out the smoke,” said the man named Nafi.

“Hopefully, Malaysia could send an aircraft to help us,” he added.

Cameraman Lim Cheng Kiat and I were to cover the haze in Pekanbaru, the capital of Riau, a province in Indonesia on the island of Sumatra. Dumai wasn’t in our plan.

But we decided to come here anyway as the people in Pekanbaru told us that Dumai was “the epicentre of the haze”.

Leaving our hotel in Pekanbaru at about 7am on Monday, it took us about six hours to arrive in Dumai using the Jalan Lintas Timur.

The 250km journey passed through Kandis, Bengkalis, Duri, Simpang Bangko, Bukit Timah, Minas, Ujung Tanjung and Rokan Hilir before reaching Dumai.

The haze was bad as we were leaving Pekanbaru, unlike a day before when the air quality had improved.

Our supir (driver) Tarmi said the skies looked dirty, the air smelled bad and “the sun look sick”, referring to the ochre-coloured sun.

There were signs along the route, reminding motorists it was accident-prone. There had already been several road casualties in the area.

Along the way, we saw evidences of the slash-and-burn methods used by the traditional farmers.

We made a detour at Jalan Bukit Timah, Mandau, after seeing smoke billowing from a distance.

Entering the jalan kampung (village tracks), we saw dark smog coming from the pineapple farms and other plantations belonging to villagers. Much of the undergrowth was being burned and turned to ashes.

We stopped by the roadside. Tarmi and I entered the plantation area and I lost my balance while stepping on the dried tree trunks.

My legs sank into the peat soil which was up to almost knee high and my RM125 sandals got caught in it.

We stopped at the special unit post to clean up and to chit-chat with the staff there. They were on their lunch break at a nearby stall.

Unit commander Ustil said the peat soil fire started in Simpang Bako a month ago, adding that it was not due to slash-and-burn but more so by the on-going dry season.

He said that 1,000ha of pineapple farms and thousands of hectares of estates had been razed, causing huge loses to smallholders.

Others who joined us at the stall – Dodi, Putra and Coki – wanted to know how bad the haze was in Malaysia and were surprised when told that schools were forced to close.

Nafi joked: “Ya Pak, Indonesia expor asap dengan TKI ke Malaysia, Malaysia pula expor narkoba sama teroris ke Indonesia.”

(Indonesia exports smoke and manpower to Malaysia, Malaysia in turn exports drugs and terrorists to Indonesia.)