Malaysian Palm Oil Council: Proposed French Palm Oil Tax Discriminatory

Kuala Lumpur – The Malaysian Palm Oil Council (MPOC), today, condemns efforts by the governing party of France, the Socialists, to impose a discriminatory tax on palm oil produced in the developing world. A new report (The Economic Facts About Palm Oil Taxation in France) commissioned by MPOC finds no economic rationale for the new tax, and in fact, finds it to be disproportionate and discriminatory.

The French Parliament is currently debating a Biodiversity Bill. This week in the French National Assembly, Socialist MPs have proposed a new 90EUR per tonne tax on palm oil. This follows an attempt in January by the French Senate to place a 300EUR tax on palm oil.

MPOC wishes to state clearly that any additional tax on palm oil in France has no economic rationale. To those who may claim that a 90EUR tax is preferable to a 300EUR tax, the answer is clear: there is no basis for any tax increase and neither proposal should be supported by the French Government. The economic analysis clearly shows any additional tax on palm oil to be discriminatory and unjust.

The CEO of MPOC, Dr Yusof Basiron, issued the following statement:

 “The proposed tax is based on flimsy grounds that palm oil is under taxed in France. This is false.

“The Assemblée Nationale has also proposed a ‘differential’ tax which would discriminate between different palm oil producers based on unspecified, unworkable, and discriminatory views of sustainability. This action clearly undermines the national development goals of developing countries. The differential tax proposal is a clear violation of both WTO and EU rules.

“Malaysia is a good friend of France, and French Foreign Minister Jean-Marc Ayrault promised to the people of Malaysia that he would not tax palm oil. Mr Ayrault promised to the 300,000 small farmers in Malaysia that France would not harm them with a new tax. We expect this promise to be kept.

 “MPOC asks the French Government to reject these discriminatory and unjust tax proposals, which will harm jobs, poverty alleviation efforts and economic growth in both France and Malaysia.”

Professor Pierre Garello issued the following statement:

 “The economic analysis clearly shows that the premise for increasing taxes on palm oil is economically unsound. The claim that palm oil is ‘under-taxed’ in France is factually and materially wrong. Senators and MPs are using incorrect economic measurements to justify new taxes, which is misleading and makes for terrible laws.”

Facts on Taxation

The new economic analysis – conducted by Prof. Pierre Garello from Université Aix-Marseille – shows the following facts about palm oil taxation in France:

  1. Palm oil is currently already over-taxed in France, compared to other vegetable oils.
  2. The current tax levels for vegetable oils in France are –
    1. Olive oil: 4.9% tax
    2. Rapeseed oil: 11.69% tax
    3. Sunflower oil: 15.79% tax
    4. Palm oil: 21.67% tax
    5. Soybean oil: 23.64% tax
  3. The additional tax on palm oil would raise this tax discrimination to extraordinary levels. The levels proposed by the Senators are:
    1. Olive oil: 4.9% tax
    2. Rapeseed oil: 11.69% tax
    3. Sunflower oil: 15.79% tax
    4. Soybean oil: 23.64% tax
    5. Palm oil: 209.7% tax

The facts are clear. Claims from the Senators and MPs that palm oil is under-taxed are untrue. There is no economic justification for this proposed tax.

Key Facts About Malaysian Palm Oil

Malaysia is the second-largest producer of palm oil, and a major exporter. The Malaysian Palm Oil Council (MPOC) represents the interests of palm oil growers and small farmers, in Malaysia.

40% of all palm oil plantations in Malaysia are owned or farmed by small farmers, who have benefited from oil palm cultivation[1]. Palm oil has been a major factor in Malaysia reducing poverty from 50% in the 1960s, down to less than 5% today. The palm oil industry directly employs more than 570,000 people, with another 290,000 people employed downstream.

 Economic Impact of Palm Oil in France

 According to respected economic analysts Europe Economics, palm oil contributes substantially to the French economy. 4,600 jobs in France are dependent on palm oil imports; palm oil contributes 167m EUR in tax revenue to France; and over 323m EUR in French GDP is attributed to palm oil imports.

 Environment

The allegation that Malaysia is deforesting and destroying biodiversity is inaccurate. The Malaysian Government has committed to protecting at least 50% of land area as forest – a bold and far-sighted environmental commitment that no other country has matched, including France.

This commitment by Malaysia has been recognized by the United Nations[2], and the World Bank[3], among others. Malaysia is a recognized world-leader in forest protection.

Malaysia is committed to a balanced policy that allows for both land development for agriculture (including palm oil) and forest protection. Palm oil covers just 0.03% of the world’s agricultural land, and has the highest yield of any oilseed crop[4].

Health & Nutrition

Palm oil is a balanced oil, with 50% saturated and 50% unsaturated fatty acids. This balance provides excellent qualities for baking and food production. Palm oil is free of GMOs, and has also been used as a replacement for dangerous trans fats, in Europe[5].

Multiple researchers and experts in France and across Europe have confirmed that palm oil is safe. A study from the French Foundation for Food & Health[6], explained that palm oil is not hazardous, and the amounts consumed in Europe are perfectly normal.

Similarly, a study in 2014 from the Mario Negri Institute in Milan, authored by Drs Elena Fattore and Roberto Fanelli[7], confirmed this point. The study found no evidence that palm oil is harmful.

 

[1] CIRAD: http://www.cirad.fr/actualites/toutes-les-actualites/articles/2010/science/huile-de-palme-et-idees-recues

[2] United Nations Food & Agriculture Organisation (UN FAO): http://www.fao.org/forestry/fra/fra2010/en/

[3] World Bank: http://data.worldbank.org/indicator/AG.LND.FRST.K2

[4] CIRAD: http://www.cirad.fr/actualites/toutes-les-actualites/articles/2010/science/huile-de-palme-et-idees-recues

[5] Journal of American Clinical Nutrition: http://www.palmoilworld.org/PDFs/Nutrition/Palm-oil-and-health-McNamara.pdf

[6] Fonds Francais pour l’ Alimentation et la Santé: http://www.alimentation-sante.org/wp-content/uploads/2012/12/Etatdeslieux_HdP_1112.pdf

[7] Mario Negri Institute: http://www.ncbi.nlm.nih.gov/pubmed/23406428

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