Oil Palm (Elaeis guineensis)Cultivation and Food Security in the Tropical World

Abstract

The paper examined the nexus between oil palm cultivation in the tropics and food security. It was established that food security is real in oil palm producing nations of the tropical world and has grave consequences on people and the economies. Some of the identified drivers of food insecurity include oil palm production policies that do not support food production, problem of economies of scale among smallholder farmers, increased land use pressure from expanding industrial and urban areas as well as poor food distribution system, among others. From theoretical perspective, some authors expressed a direct relationship between palm oil production and food insecurity. However, a number of empirical studies from different regions of the tropics indicated that palm oil production promote food security. In addressing how oil palm cultivation mitigates or promote food insecurity, we looked at palm oil and the pillars of food security – food availability, access, stability and utilization. For this to be achieved there must be changes to the use of palm oil through private regulatory regimes like the Roundtable on Sustainable Palm Oil (RSPO), acquisition of only reserve agricultural land or unused land instead of grabbing land already in use by local communities, and ensuring food crop integration into plantations. Thus, policy makers willing to maintain the tropical rain forest, expand cultivation of oil palm must consider the drivers of food insecurity and how expansion of oil palm cultivation, especially under smallholdings, promotes or negatively affects food security in the tropical region.

1. Introduction

Palm oil, derived from Elaeis guineensis, is the world’s most traded vegetable oil and 90% of it is used for food consumption while industrial consumption such as cosmetic production or fuel and diesel covers the remaining 10% [1]. Recent years have witnessed a massive expansion of oil palm monocultures in the tropics of Asia, Africa and South America, mainly to the detriment of rainforests, agroforests (timber and jungle rubber), and traditional arable crops [2, 3]. Tens of millions of farm households in the tropical areas continue to adopt the crop to enhance their livelihood [4]. This increasing adoption by smallholder farmers is carried out despite the crop’s requirement of an expensive initial investment, managerial skills, and a switch to more capital-intensive farming practices [5]. The cultivated area of oil palm cultivation has increased greatly exceeding over 16 million hectares in 2017, with the yearly palm oil production increasing from one million tonnes in 1970 to 63 million tonnes by 2016 [6]. This was possibly because the crop is cheap to produce; it is more efficient as less land, fewer pesticides, and less fertilizers are used. For societies, especially in the tropics, having food security as their top priority, palm oil production could be one of the best approaches towards alleviating food insecurity.

The expansion in the production of palm oil has created concerns about the effect of such an activity on local food security and rural livelihoods. It has also produced diverse effects on the growers and the environment. Though some studies suggest that farm households’ adoption of the crop contributes to alleviate poverty and improve households’ income and living standards [5, 7, 8, 9, 10], others have seen the activity as either promoting food security or aggravating the problem of food insecurity in some localities. For instance, [11, 12] have seen oil palm cultivation as an opportunity for fighting against rural poverty and food insecurity in several Southeast Asian countries, including in Indonesia and Malaysia.

However, [13] opined that the impact of oil palm expansion on food security is uncertain. This is possibly because, it is not always clear as to what extent, and under which prevailing circumstances, the production of the crop improves or compromises rural livelihoods and household food security [6, 14]. Some researchers [15] have argued that expansion of oil palm cultivation affects available land for food crop production and as a result food insecurity might be promoted. Others [16] have reasoned that waged employment in industrial crop plantations or smallholder oil palm cultivation can generate employment and income opportunities in rural areas of tropical region. Households can invest the obtained income to purchase food or improve farm productivity thereby increasing the yield of crops.

Available literature indicates that existing studies focused on the impact of oil palm expansion on some environmental and socio-economic issues rather than on food security; only few capture the interaction between oil palm cultivation and household food security. It is important to explore this area in order to understand the nature of the relationships between oil palm expansion in the tropics and household food security from a theoretical perspective and based on some empirical evidences. This paper, therefore, addresses the nexus between oil palm cultivation in the tropics and food security, and proffer solution on how land-use for oil palm can best be carried out to promote food security rather than food insecurity. It also aims to discuss identified several mechanisms through which oil palm production as an industrial crop interacts with the different pillars of food security – food availability, access, stability and utilization.

2. Global food security challenges

The Food and Agricultural Organization (FAO) projected that the agri-food sector would need to generate 50 percent more food by 2050 in order to meet the demand requirements, thereby making food security to be a global serious threat to millions of households in developing countries [17]. In the FAO’s 2019 Summit on Food Security and Nutrition in the world, several levels of food insecurity were identified: moderate food insecurity and severe food insecurity. Moderate food insecurity occurs when people face uncertainties about their ability to obtain food and thereby forced to reduce, at times during the year, the quantity and/or quality of food they consume due to lack of money or other resources. Severe food insecurity, on the other hand, affects a community or a nation when people have likely run out of food, experienced hunger and, at the most extreme, gone for days without eating, putting their health and wellbeing at serious risk.

Despite significant progress in recent decades by most countries in the oil palm producing countries of the tropics, hunger and nutritional deficiencies still constitute serious challenges in farm households. Indonesia, the leading oil palm growing country in the world, which was once self-sufficient in rice and sugar failed to keep up with demand in the face of rising population and there are doubts about the future stability in the country’s food system. This could be linked to the farm decisions of most oil palm farmers. Plantation farmers, for example, hardly cultivate food crops for their own consumption [5, 18]. Most plantation farmers heavily depend on agricultural cash income to purchase adequately diverse foods from such imperfect markets [18, 19], which consequently makes them vulnerable to substantial income and price shocks. Moreover, cultivating perennial and non-food commercial crops—that do not directly add to household dietary diversity through own consumption, are claimed to compete for resources (e.g., land) with other food crops that in turn negatively affects food availability and increase food prices [20]. This has significant implications in terms of food and nutrition security. According to the 2015 Global Hunger Index (GHI), Indonesia reduced its GHI score by about 25% and the rate was found to be higher in other oil palm growing nations like Thailand and Vietnam [21]. As a result, many of the nations have to resort to reliance on foreign imports to meet demand for key food products to ensure some level of food security. Concerning nutritional deficiencies, about 40% of the Indonesian population is affected by under-nutrition and micronutrient malnutrition, and majority of the affected group are farm households [22, 23]. It is not unlikely that similar situations may be prevalent in other oil palm growing regions of the tropical world.

For instance, [12] observed that the Jambi Province on the island of Sumatra, like other rural areas in South East Asia, has high levels of underweight and stunted children, poor household dietary diversity and pervasive micronutrient deficiency. The diets of farm households in the tropics in general are highly vulnerable to food prices and income shocks, most times due to global drop in prices of oil palm and rubber [24].

Food insecurity has grave consequences on people and the economy. Food insecurity could lead to stunting in children which is a significant health challenge. Between 2005 and 2015, the rate of stunting in children under the age of five in Indonesia increased from 28.6% to 36.4% According to the World Bank, children that experience stunting in their early development are less likely to graduate high school and are expected to earn ten percent less during their lifetime than their food secure peers.

In the Buvuma area of Uganda in East Africa food insecurity has been reported to be high. Poverty in the area made some farmers to sell their land cheaply to large oil palm companies. When they spent the money, several residents resorted to stealing food [25].

3. Drivers of food insecurity in the oil palm producing tropical land

The farming of oil palm, which is not a food crop, contributes to food insecurity. Piesse [21] opined that oil palm production does not further food security and makes importation of food more likely. The researcher also opined that the competition for land from industry and housing has pushed many farmers out of the market thereby further reducing the ability of palm oil producing nations like Indonesia to produce their own food.

Most food-crop farmers are smallholders and face problems of economies of scale. This has made it difficult to increase food production to meet self-sufficiency targets. Other factors that affect hunger and malnutrition include economic slowdowns and downturns, world price fluctuations for countries dependent on production of primary commodities and the ability to trade in free and open markets which leads to unemployment affects income and ultimately access to food. This is mainly affecting countries dependent on primary commodity exports, in South America, Asia and some countries in Africa.

Promoting policies of oil palm nucleus estates that is not balanced with sustained programmes that gradually increase agricultural food productivity and distribution, have the potential to reduce food security. The experience of Indonesia is a case in point. Though the country has the potential to produce enough food to feed its population, but it is prevented from doing so due to some policy issues. Large tracts of its agricultural land have been developed for oil palm plantations, which, while commercially successful, do nothing to bolster food security.

The food distribution network is one of the largest barriers to food security and increased consumption of domestically produced food. Increased land use pressure from expanding industrial and urban areas makes it difficult to find new agricultural land that is close to transport infrastructure. This is found to be partly responsible for Indonesia’s poor domestic food production capacity. As the world’s largest archipelagic state, Indonesia faces unique challenges that complicate its food distribution system. Transporting food throughout its 6,000 or so inhabited islands is a particularly difficult undertaking that the government has long grappled with.

Demographic transition also poses a potential problem for food supply, especially in Indonesia. Piesse [21] noted that the Indonesian middle class is currently the fourth largest in the world, after the US, India and China. By 2030, about 20 million households are likely to belong to the middle class. As the middle class grows to occupy a larger portion of the population, a shift in food preferences is likely to follow. Middle class consumers are more likely to purchase higher-cost food products, such as meat, dairy and processed foods, which Indonesia will struggle to supply through domestic production alone. Indonesia will continue to rely on foreign imports to meet domestic demand in key food products such as rice and beef. This is likely going to be the situation in other oil palm producing countries in South East Asia, Sub-Saharan Africa and in South America.

Low commodity prices are also likely to drive food insecurity. A consistent slide in the price of commodities over time may lead to depreciation and devaluation of currencies resulting in domestic price increases, including food prices. This then affects the ability of households to buy food as the cost of food relative to their incomes increases.

4. Nexus between oil palm and food security: theoretical perspectives and empirical evidences

Some researchers have expressed a direct relationship between palm oil production and food insecurity. For instance, [26], argues that palm oil production creates food insecurity in a direct way for local communities, especially rural and indigenous communities whenever government allocates to private plantation firms the land on which such communities depend on for their food and livelihood. Kimbowa [25] reported that Buvuma – Oil Palm Uganda Limited-BOPUL, a subsidiary of Oil Palm Uganda Limited and Bidco Uganda Limited in Kalangala arranged to acquire from the local communities 6, 500 hectares of land for oil palm cultivation while the out-growers of the companies will use 3, 500 hectares and this affected food production. Since their compensation in 2012, most of the residents have failed to secure alternative land for settlement and food production. In Nigeria, the Friends of the Earth also claimed that the allocation of agricultural land by the Cross River State Government to Wilmar International for the development of oil palm nucleus estates robbed the local communities of their land for arable crop production thereby promoting food insecurity in the affected communities.

Many plantation farmers are known to heavily depend on agricultural cash income to purchase adequately diverse foods [18, 19], thereby making them vulnerable to substantial income and price shocks. Furthermore, focusing on perennial and non-food commercial crops like oil palm that do not directly add to household dietary diversity through own consumption, is likely to encourage competition for land with other food crops which could negatively affect food availability and food prices [20].

A link between oil palm cultivation and food security has been established through some empirical studies. Using panel farm household data from Jambi province on the island of Sumatra, Indonesia, [24] examined the effects of oil palm adoption on dietary diversity, quantities of fruits and vegetables consumed calories, and food expenditure. Endogenous switching regression was applied to control for selection bias and to obtain counterfactual outcomes. Panel logit regression was also used to estimate the impact of oil palm adoption on dichotomous variables of household’s diets, indicating whether or not the diet met the minimum adequacy level of fruits and vegetables consumed as well as intake of calorie, iron, zinc, vitamin A, and the average of the three micronutrients. Regardless of the diet indicator, oil palm adoption was found to have statistically significant and positive effects, indicating that oil palm cultivation leads to higher food and micronutrient adequacy in general. On an average, the adoption of oil palm increases the probability of consuming fruits and vegetables by 33.6%, calorie adequacy by 38.6%, iron adequacy by 36.4%, zinc adequacy by 54.9%, vitamin A adequacy by 33.1%, and average adequacy of the three micronutrients by 35%. Together, with the results from the endogenous switching regression, it was deduced that oil palm adoption improves the diets of farm households in the tropics, whether they belong to the migrants or the local communities. Hence, the nutritional impact might justify why farm households in the tropical region are rapidly expanding oil palm cultivation. Moreover, several socioeconomic, farm, and demographic factors impact oil palm adoption and, at the same time, shape the diversity and adequacy of diets in those households. The study therefore supports the idea that adopting a perennial and non-food commercial crop like oil palm does not worsen dietary quality and diversity in farm household. Rather land-use change through oil palm adoption significantly improves the diets of farm households in the tropics.

An exploratory study was also carried out by [6] to assess the food security outcomes of smallholder-based oil palm and rubber production at the household level in the forest region of Guinea using six standardized metrics of food security. The selected metrics covered different aspects of food security related to diet diversity, perceptions of hunger and coping behaviors in the face of food scarcity. Households involved in industrial crop production were compared with households that only grow food crops under subsistence conditions, using statistical tools like Propensity Score Matching (PSM) and Endogenous Treatment Effect Regression (ETER). The results obtained are mixed. Both oil palm and rubber have significantly lower levels of diet diversity (Food Consumption Score, FCS) than subsistence farmers. However, industrial crop smallholders have lower levels of perception of hunger compared to subsistence farmers, with oil palm farmers having significantly better values than other groups. Both the PSM and ETER analyses suggest that involvement in industrial crop production decreases food security in terms of diet diversity, but when it comes to perception of hunger, the involvement of oil palm production improves food security. The results of the ETER regarding involvement in oil palm production and coping strategy index were statistically significant and therefore suggest that involvement in industrial crop production improves coping strategy index thereby enhancing food security. Overall, results show that oil palm and rubber smallholders perform better than subsistence farmers on metrics that capture perceptions of hunger and coping behaviors. However, involvement in oil palm and rubber production reduces the levels of food security metrics that use shorter time scales and measure food diversity. This implies that involvement in industrial crop production does not enhance consistently food security across all metrics. This could be explained to arise from the strong sense of security that steady and higher income provides across time (food stability), that outweighs the shortcomings on diet diversity (food utilization).

Furthermore, [27] established a causal relationship between oil palm cultivation and farmers’ household food security. Their study applied OLS and quantile regression models to household data in Indonesia to find the socio-economic factors that influence farmers’ food expenditure and calorie intake, and to estimate the effect of oil palm expansion on food security across quantiles. The study indicated a statistically significant influence of the income from oil palm expansion on calorie intake. The study further showed that expansions of oil palm cultivated area, resulting in more crop income, could lead farmers to consume more nutritious food, but the food share in the household budget decreases, which is consistent with Engel’s law. This is in consonant with the work of [5] who found that expansion of oil palm plantation by smallholder farmers positively affected nutritious food intake, particularly at the mid to upper tail of the expenditure distribution, implying that households in such categories spend their income to not only satisfy their basic calorie needs, but also consider the nutrient intake quantities in their daily diets.

5. Mechanism through which oil palm cultivation mitigates or promotes food insecurity

In addressing how oil palm mitigates or promotes food insecurity, we want to look at palm oil and the pillars of food security: availability, access, utilization and stability. There is the availability of palm oil in the tropical world – through production, distribution, and exchange. The crop is efficiently produced in comparison with other vegetable oil. Less land and other resources are required per hectare to produce palm oil and associated by-products. There is an efficient distribution system of the product through storage, processing, transport, packaging and marketing in most oil palm producing countries which eliminates waste in the value chain. This tends to make palm oil available in the countries that consume the product. A system of exchange or cash economy exists to acquire oil palm products in all seasons, thereby promoting food security. However, climate change affects the crop productivity and thus its products availability [28].

Oil palm products are accessible. They are affordable and preferable to individuals and households because of the nutrients in them. Palm oil, for instance, contains beta carotene, a precursor of vitamin A and also contains equal proportion of saturated and unsaturated fatty acids [29]. Oil palm products are sold in units that almost every household can access. Since the crop has been found to lift many of its growers out of poverty [30, 31], the revenue obtained from the sale of oil palm products can be used to access other food items not produced in the environment. Based on the crop income per hectare of average oil palm smallholder farmer estimated to be $2,200 per annum in Nigeria [31] and $1,400 per annum in Indonesia [13], most families in oil palm producing communities are likely have enough financial resources to purchase food at prevailing prices or have sufficient land and other resources to grow their own food.

Oil palm farmers enjoy both direct access to food and financial resources. Many of them, especially those who integrate food crops into their farms, produce food using human and material resources available to them while some others purchase food produced elsewhere, with financial resources obtained from oil palm farming. However, access to food must be available in socially acceptable ways, without, for example, resorting to emergency food supplies, scavenging, stealing or other forms of coping strategies as experienced in the Kalangala region of Uganda where large oil palm companies stripped the locals of their agricultural land and were left without land to farm, though compensated. The amount paid could not keep them for long.

Palm oil and associated products are safe for human and livestock consumption, thereby promoting food utilization as a pillar of food security. With the Roundtable on Sustainable Palm Oil (RSPO), emphasizing certification of oil palm fields and operations, palm oil is safe for ingestion and the nutrients therein are enough to meet the physiological requirements of each individual consumer. The Malaysian Oil Palm Council is doing a lot of sensitization about nutrition and palm oil preparation which can affect oil palm products’ utilization and improve on food security.

Palm oil supply and prices can be considered to be relatively stable thereby making it possible to obtain the product supply over time. However, some forms of transitory palm oil food insecurity has existed in the past, thus making the products unavailable during certain periods of time. This has been due to drought resulting in crop failure and decreased food availability. There have also been cases of instability in markets resulting in food-price hikes causing transitory food insecurity. In virtually all oil palm producing nations, there are seasonal palm oil food insecurity resulting from the regular pattern of growing seasons of the crop. In Nigeria, for instance, the production level decreases during the rainy season which reduces the supply of the product to the market, thereby causing price rise. This limits the ability of some poor households to access the product or reduce the quantity bought.

6. How to govern palm oil production to militate against food insecurity

There must be changes to the use of palm oil if the direct and indirect food security contributions of the crop are to be maintained. One of such measures is through private regulatory regimes such as voluntary certification as practised under the Roundtable on Sustainable Soy. So, palm oil sustainability should be effectively promoted in order that plantation areas can be certified by the Roundtable on Sustainable Palm Oil (RSPO) established since 2014 under the Swiss Civil Code. Oil palm producing nations should adopt the food security criteria developed by ZEF in 2015. It is expected to be integrated in sustainability standards for different crops. This is likely to ensure that human rights to food at local level is not violated and the nations buying palm oil are complying with good purchasing practices required by international bodies like UN, OECD and EU.

In order to further reduce the direct consequences of large oil palm plantations on food and livelihood security of rural and indigenous communities, the government of oil palm producing areas regions should allow only acquisition of reserve agricultural land or unused land instead of “grabbing lands” that are already in use by local communities. This is because acquiring forested land or forest dwellings or lands that are lived on and farmed by local communities for generations is likely to cause conflict and deprive the local people from using the area for arable crop production most beneficial to their livelihood.

Another way to promote food security while encouraging oil palm cultivation is through food crop integration into plantations [32]. With crop integration as practised in Malaysia, Nigeria and other oil palm growing nations, food availability is promoted. Crops integrated include – pineapple, groundnut, banana, soya bean, sugar cane, sorghum, sweet corn, sweet potato, green pea, etc. In some cases livestock are reared and made to graze under the palms as being practised by Siat in their plantations in Nigeria, Ghana, and Gabon. In Eastern part of Nigeria, the farmers carry out spacing of their oil palm trees, large enough to prevent the tress from forming canopy, to promote arable farming in the midst of the palms. In this way, the smallholder farmers have adequate supply of vegetable oil and food crops like cassava, yam, vegetables, sweet corn and cocoyam planted in between the oil palms. Thus, food security is promoted.

7. Conclusion

The paper examined the nexus between oil palm cultivation in the tropics and food security. It was established that food security is real in oil palm producing nations of the tropical world and has grave consequences on people and the economies. Some of the identified drivers of food insecurity include oil palm production policies that do not support food production, problem of economies of scale among smallholder farmers, increased land use pressure from expanding industrial and urban areas as well as poor food distribution system, among others. From theoretical perspective, some authors expressed a direct relationship between palm oil production and food insecurity. However, a number of empirical studies from different regions of the tropics indicated that palm oil production promote food security. In addressing how oil palm cultivation mitigates or promote food insecurity, we looked at palm oil and the pillars of food security – food availability, access, stability and utilization. For this to be achieved there must be changes to the use of palm oil through private regulatory regimes like the Roundtable on Sustainable Palm Oil (RSPO), acquisition of only reserve agricultural land or unused land instead of grabbing land already in use by local communities, and ensuring food crop integration into plantations. Thus, policy makers willing to maintain the tropical rain forest, expand cultivation of oil palm must consider the drivers of food insecurity and how expansion of oil palm cultivation, especially under smallholdings, promotes or negatively affects food security in the tropical region.