EU palm oil ban bitter for SE Asian farmers

25 Sep 2018 2103 | Business & Trade Fairs

INDONESIAN palm oil farmer Kawal Surbakti says his livelihood is under attack, but the threat is not from insects or hungry orangutans eating his prized crop.

Half a world away, the European Parliament is moving to ban the use of palm oil in biofuels, while British grocer Iceland has announced it will stop using the commodity over concerns that it causes widespread environmental destruction.

Losing the key European market worries small farmers like Surbakti and millions of others in Indonesia and neighbouring Malaysia – the world’s top two producers – as prices drop for an oil found in everything from biscuits and sweets to cosmetics and vehicle gas tanks.

“I’ve suffered serious losses,” the 64-year-old Surbakti said from his two-hectare (five acre) farm on Indonesia’s Sumatra island.

“Before, I could save up a little money but now I can’t even do that.”

Across the Malacca Strait in Malaysia, grower Mohamad Isa Mansor issued a dire prediction as he plucked reddish-orange fruits from his trees.

“If the EU succeeds in the ban, I’m dead,” he said at his small plantation in the coastal town of Ijok.

“Without this crop we will be living in poverty. It is the source of income for thousands of people (here),” he added.

‘Victims of big corporations’

Europe is one of the world’s biggest palm oil consumers, along with India and China.

About half of the palm oil used last year in Europe was for biofuels that ended up in gas tanks, according to environmentalists.

Indonesia and Malaysia have threatened retaliatory sanctions on European products over the proposed palm oil ban, which calls for a complete phase-out from biofuels by 2030. The legislation is awaiting a final vote and member-state approval.

As the diplomatic row smoulders, Indonesian grower Selamet Ketaren says he and other small farmers – the backbone of the industry – are pawns at the mercy of land-clearing multinational firms that buy their crops.

“Smallholder farmers like us are just victims of the big corporations,” said Ketaren, who has been growing palm oil since the mid-eighties.