seminar 13 mar 2013 - session 4 - oilpalm indonesia-cameroon-colombia_ by plevang and lfeintrenie
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The development of oil palm cultivation followed very different paths across continents. Originating from Central Africa where palm oil was first collected from the wild in the forest, oil palm has since become a typical agro-industrial crop especially in South-East Asia and Latin America. More recently smallholders have increased their share in the production, while with some differences. Nowadays the problem that the oil palm sector faces is no longer related to either choose agro-industries or smallholders, but to find the best way to associate agro-industries and smallholders in mutually beneficial schemes. Examples from Indonesia, Cameroon and Colombia show the limits and opportunities of such associations.TRANSCRIPT
Oil palm agro-industries and smallholders across continents:
examples from Indonesia, Cameroon and Colombia
Patrice Levang (IRD/CIFOR)
Laurène Feintrenie (CIRAD)
Outline
1. Palm oil sectors in: Indonesia, Colombia & Cameroon
2. Lessons learnt from oil palm development in Indonesia
3. Lessons learnt from oil palm development in Cameroon
4. Opportunities for future development in Colombia
1 2,001 4,001 6,001 8,001
10,001 12,001 14,001 16,001 18,001 20,001 22,001 24,001
Pal
m o
il p
rod
uct
ion
(1
00
0 t
)
Palm oil production in 2011
0 200 400 600 800
1,000 1,200 1,400 1,600
http://www.indexmundi.com . Source: United States Department of Agriculture
Palm oil global market
0
100
200
300
400
500
600
700
800
900
Pal
m o
il (1
00
0 t
/yea
r)
Colombia palm oil production
Production CPO
Imports CPO
Exports CPO
Production KPO
Imports KPO
Exports KPO
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
Pal
m o
il (1
00
0 t
/yea
r)
Indonesia palm oil production
Production CPO
Imports CPO
Exports CPO
Production KPO
Imports KPO
Exports KPO
0
20
40
60
80
100
120
140
160
180
200
Pal
m o
il (1
00
0 t
/yea
r)
Cameroon palm oil production
Production CPO
Imports CPO
Exports CPO
Production KPO
Imports KPO
Exports KPO
Source: United States Department of Agriculture; http://www.indexmundi.com
Indonesia
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000 1
96
7
19
71
19
75
19
79
19
83
19
87
19
91
19
95
19
99
20
03
20
07
Har
vest
ed
are
a (h
a)
Oil palm harvested area
PBS private
PBN government
Smallholders
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
100%
19
67
19
71
19
75
19
79
19
83
19
87
19
91
19
95
19
99
20
03
20
07
Share of the oil palm harvested area
PBS private
PBN government
Smallholders
http://ditjenbun.deptan.go.id , consulted on 04/04/2012
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
1999 2010
Oil
pal
m p
lan
tati
on
s (h
a)
> 200 ha
alliances
0-200 ha
Based on data from SISPA, 2011.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1999 2010
Share of oil palm planted area depending on the size of the
plantation
> 200 ha
alliances
0-200 ha
Colombia
Emmanuel Ngom, Communication at the South-South exchange ‘Sharing what works in sustainable and equitable oil palm development’, held by CIFOR in Bogor, 21-27 Sept 2011.
> 100ha
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Har
vest
ed
are
a (h
a)
Agroindustrial estates
Small and Medium holders
Share of oil palm growers in Cameroon
Cameroon
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100% Agroindustrial estates
Small and Medium holders
Plan
1. Palm oil sectors in: Indonesia, Colombia & Cameroon
2. Lessons learnt from oil palm development in Indonesia
3. Lessons learnt from oil palm development in Cameroon
4. Opportunities for future development in Colombia
Economic results of 2 ha of oil palm under plasma scheme
Kuamang Kuning area (Bungo, Jambi)
0
1 000
2 000
3 000
4 000
5 000
6 000
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Eco
no
mic
resu
lts (
€/y
ear)
Gross
added
value
Net
Income
Debt
Nucleus Estates and Smallholders (NES):
• 7 ha of land against 2 ha of oil palm, technical advice, land title and credit
• The credit covers planting costs, production costs and infrastructures
• A cooperative manages the smallholdings
Feintrenie L, Chong WK, Levang P. 2010. Why do farmers prefer oil palm? Lessons learnt from Bungo district, Indonesia. Small-Scale Forestry, 9 (3): 379-396.
Planting in 1998
In 2006,
reimbursement
completed
Comparison of land uses profitability For min, max and average prices (2008-2009)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Return to land (€/ha)
0
5
10
15
20
25
30
35
40
45
50
Return to labor (€/manday)
Feintrenie L., Schwarze S. and Levang P. 2010. Are local people conservationists? Analysis of transition dynamics from agroforests to monoculture plantations in Indonesia. Ecology & Society, 15 (4): 37. [online] URL: http://www.ecologyandsociety.org/vol15/iss4/art37/
Plan
1. Palm oil sectors in: Indonesia, Colombia & Cameroon
2. Lessons learnt from oil palm development in Indonesia
3. Lessons learnt from oil palm development in Cameroon
4. Opportunities for future development in Colombia
Location of oil palm
production area
(based on Bakoumé and Abdullah, 2005)
Cameroon
5
1
3
4
2
French group
Bolloré 3.5 t/ha
CPO
Public companies
2 t/ha CPO
Based on Emmanuel Ngom. 2011. -700
-600
-500
-400
-300
-200
-100
0
100
200
300
400
500
600
700
Co
sts
and
inco
me
s (€
/ye
ar)
Years after planting
FFB and red oil production by smallholders
Costs of FFB production
Income FFB
Income red oil
Indonesia: 800 to 2 900 €/yr
Small scale mills: Artisanal red palm oil: African food, soap, fuel.
Extraction rate: Around 15% (Tenera fruits)
Nucleus Estate & Smallholders scheme: Why does it work in Indonesia and not in Cameroon?
1968 : SOCAPALM : development company : 4 mills, 5 industrial plantations 1978 : FONADER : development bank : credit to develop smallholdings
– FONADER, provided a plantation credit to smallholders through SOCAPALM, CDC et PAMOL Ltd
– SOCAPALM, CDC & PAMOL ruled the smallholdings development project providing technical advice, inputs and planting material
– Smallholders had to sell all their production to SOCAPALM, and pay back the credit (interest rate of 9%)
– Planted area: around 70% of estates industrial plantation, 30% of contracted-smallholdings for out-growers
• Reasons of failure of the NES scheme: – No dependence of Cameroonian smallholders vis-à-vis companies (small scale mills and other
agro-industrial mills around looking for FFB supply)
– No reimbursement of the credits (bankruptcy of FONADER)
– Lack of trust in FONADER (high interest rate, long term credit, no transparency for credit reimbursement,…)
Enterprise Company
group Homeland
Concession asked (ha)
Year Region Investment promissed
source
Sithe Global Sustainable
Oils Company (SG SOC)
Herakles Farms
USA 100 000
(73 000 secured)
2009 South-West 350
Millions US$
Hoyle and Levang, 2012 http://e360.yale.edu/ http://af.reuters.com/
Goodhope Asia Holdings
GMG Singapore 50 000 2011 Ocean
division, South
200 Millions
US$
Hoyle and Levang, 2012 http://www.journalducameroun.com
Biopalm Energy
Siva
Indian owned,
Indonesian registered
200 000 (50 000
secured)
2011 Ocean
division
1800 Millions
US$
Hoyle and Levang, 2012 http://www.journalducameroun.com
Sime Darby
Malaysia 600 000 2011
Centre, South,
Littoral, South-West
Hoyle and Levang, 2012
PalmCo 100 000 2012 Nkam and
Littoral Hoyle and Levang, 2012
Smart Holdings
25 000 2012
Hoyle and Levang, 2012
> 1Mha
Deforestation
Land grabbing
High social costs
250 000 ha Indonesia, 300 000 ha Malaysia
140 000 ha Indonesia-Malaysia
Cameroon oil palm development : What future?
Plan
1. Palm oil sectors in: Indonesia, Colombia & Cameroon
2. Lessons learnt from oil palm development in Indonesia
3. Lessons learnt from oil palm development in Cameroon
4. Opportunities for future development in Colombia
Oil Palm Agro-industry in Colombia 2010
Zona Norte 114.986 has
Zona Central 112.986 has
Zona Oriental 158.404 has
Zona Occidental 15.636 has
Source: SISPA, July 2011
Oil palm has been planted in Colombia for over 50 years
Growth of the Planted Area 1961-2010 (Thousands of Ha)
Source: SISPA, July 2011
0
50
100
150
200
250
300
350
400
19
61
19
64
19
67
19
70
19
73
19
76
19
79
19
82
19
85
19
88
19
91
19
94
19
97
20
00
20
03
20
06
20
09
Mile
s d
e h
ect
áre
as
In production Under development
17
Productive Strategic Alliances
Oil palm is an inclusive business in Colombia:
• Strategic Alliances are a partnership between entrepreneurs (as operator), with smallholders associated farmers and facilitators •1 in 4 hectares planted with oil palm over the last decade involve production alliances
• 109 alliances established as of 2008 • 5,391 smallholders
18
Opportunities for Colombia Smallholdings are representing now 19% of total planted area in Colombia and
they are to stay a major actors of oil palm development:
• Alliance scheme of development allowed the recent development of smallholdings and now smallholders are about 5400 in Colombia.
=> Good experience from Indonesia and bad from Cameroon about plantation credit can be valorised in order to maintain the opportunity of credit for new smallholders.
• Colombia is one of the pioneers for implanting oil palm plantations on planted pasture and grassland
=> no deforestation, Carbon storage, but research is needed to get information about indirect changes of land uses.
=> ecological intensification should be a good way of research to improve the soil fertility in such situations. Exchange and partnership with other experiences on degraded land will be interesting.
(Source : Pacheco 2012 : Soybean and oil palm expansion in South America)
Conclusion: Lessons learnt, risks and opportunities
• 3 options for FFB production:
– Large-scale plantations
– Out-growers contracts
– Smallholders’ independent plantations
• Sustainable oil palm development requires:
– Compliance to RSPO certification, Free, prior and informed consent
– Transparency on any negotiation of concession, and on management of credits
– Invest in increasing FFB productivity of smallholdings
– Favor FFB production by smallholders and CPO/KPO extraction by industries
– AI : skills, productivity, capacity of investment