The Oil Palm The Oil Palm

The Facts About ‘Forest Risk Commodities’

 ‘Forest Risk Commodities’ (FRC), a key concept in the COWI Report, is poorly defined and is based on work previously undertaken by the Global Canopy Project. This concept has a history of use among advocacy groups opposed to Palm Oil.

The European Commission is currently attempting to construct a set of policies that will determine how the EU deals with its impact on global deforestation.

At the heart of the Commission strategy is a new report assembled by COWI, which attempts to weigh up the pros and cons of different policies.

Some of the work that has led up to the COWI report has been sound, particularly on the contribution of different commodities to deforestation.

However, there is one concept at the heart of the entire exercise that requires a critique: forest risk commodities (FRCs).

The idea of ‘Forest Risk Commodities’ was first defined in 2013 as part of work undertaken by the Global Canopy Programme (GCP).

It is defined as: “globally traded goods and raw materials that originate from tropical forest ecosystems, either directly from within forest areas, or from areas previously under forest cover, whose extraction or production contributes significantly to global tropical deforestation and degradation.”

The GCP is an NGO that undertakes work on deforestation in tropical countries. It is for the most part funded by aid agencies such as the U.K.’s Department for International Development (DFID).

Consider this: A concept on deforestation, developed by an organisation funded with European aid money, is now being used to lobby the various layers of the European Union on how to shape policy on deforestation.

When the idea of FRCs was developed, it concentrated solely on four commodities: palm oil, soybean, beef and timber. But there are a series of problems with the concept.

First, the commodities themselves do not actually cause the deforestation. For example, in Asia and Africa, the major driver of deforestation is local and subsistence agriculture. In these cases, the commodities are less relevant than the fact there is a local and/or subsistence population that is attempting simply to survive. The choice of commodity or cash crop in these cases – whether it is cocoa, coffee, palm oil or rubber – makes no difference. These populations would be clearing land in order to make a living.

Second, whether a commodity is a ‘deforestation risk’ has less to do with the commodity, and more to do with the way the land use and forest use is regulated and governed in a particular territory. Beef, for example, is considered a ‘forest risk commodity’ because of the correlation between forest clearance and cattle grazing in Brazil. However, no-one considers beef from the U.S., Australia or Western Europe to be a ‘forest risk commodity’. Similarly, soybean has come under fire because of deforestation in South America, but there is very little issue with soybeans from, say, Spain or Canada.

Third, the concept of ‘forest risk commodities’ when it was developed in 2013 made a series of assumptions about the commodities associated with deforestation that have simply not held up now that better data is available. Pigs and poultry, for example, are a greater contributor to deforestation than palm oil. Maize is also a bigger contributor. Yet these are never considered to be ‘forest risk commodities’. They clearly represent a risk to forests – and a greater risk than palm oil – but are not part of the broader calculation.

Fourth, and this is related to the previous two points, is that the idea of FRCs completely sidelines the fact that deforestation is the result of a complex series of variables that are often dependent on local context.  For example, Western Europe and the United States lost some 2 million ha of forest annually between 1850 and 1920 as it gave way to cropland. In these cases, poverty, demographics, technology, agricultural expansion, and land policies all contributed in some way to this forest loss. In both the U.S. and Western Europe, increased urbanization, higher living standards and better environmental management all contributed to the eventual slowing of forest loss.

That exact same pattern of decreased levels of forest loss as incomes rise has been seen over the past two decades in Malaysia, as living standards have risen and forest area has increased.

The idea of a ‘Forest Risk Commodity’ lays the blame for deforestation on a simple set of objects, driven by the misguided belief that halting the production of these commodities will magically solve this problem.

The reality is very different, and far more complex. Too often – as in the COWI report – well-paid analysts follow the ‘simpler’ explanation, even when it is inaccurate. As a result, policymakers are pressured to act on Palm Oil, even though the evidence does not support such action. For example, it is this type of faulty thinking that suggested paying impoverished local communities subsidies to leave forests standing was a simple way to end deforestation.

Our next blogs on the COWI report will examine an even thornier issue – the global debate around trade restrictions for commodities, and why Palm Oil is too often in the spotlight.