The Oil Palm

Campaigners jeopardise investment in African development

Malaysian investment in African palm oil has been widely welcomed by African governments who regulate and enforce national environmental standards; and the rural communities that embrace development opportunities associated with local palm oil industries. But despite the clear benefits from this investment for sustainably reducing poverty, NGOs have mounted aggressive campaigns to cease this development and mire communities throughout Africa in poverty.

NGOs such as WWF, Greenpeace and the Rainforest Foundation have attacked Malaysian investment to Africa, claiming that development from this investment is causing adverse environmental and economic impacts. These allegations – are simply part of an underlying campaign against industrial agriculture that is denying developing world communities the means to rise out of poverty and millions of people throughout the world food they need to survive.

Palm oil production is widely regarded as one of the best opportunities for African small farmers to produce and trade value-added agricultural goods – witness Malaysia’s robust poverty alleviation thanks to responsible and sustainable growth of the palm oil industry. Malaysian partnerships between smallholders and private sector operators lead the world in palm oil production, and are recognised as an effective tool for poverty alleviation. Likewise, Malaysian smallholder cooperatives such as FELDA have been recognised by the World Bank for their potential to alleviate poverty andcreate economic opportunities for rural populations.

Malaysia’s investment in African growers and local palm oil projects promote the development of national agricultural sectors and is one of the best ways for developing economies of scale necessary to achieve food security. Agriculture investment – such as investment in oil palm projects – stimulates agricultural growth, increases food supplies, and most importantly generates jobs and income for those most vulnerable to food prices increases.

Infrastructure development and partnerships between estates and smallholder also open up new economic opportunities for rural communities. Those communities gain access to needed education and medical infrastructure, as well as public roads by which locals can access new markets to trade their goods and services.

This model has proved to be a success in Malaysia whereby over 40 per cent of palm oil is produced by smallholders, and important organizations like FELDA have been instrumental in alleiating poverty and increasing the living standards for Malaysians.

More investment from the foreign private sector, not less, is required. African governments have welcomed overseas investment recognizing its potential to assist small farmers through improved yields and vital access to market. According to the FAO, agricultural investment in low-income countries comes mostly from private domestic investors, the majority of whom are farmers. But with population growth on the increase and breadbaskets like Malaysia running out of land for agriculture due to aggressive conservation commitments, greater foreign investment will be required in under-developed regions such as Africa.

International development institutions such as the FAO and the World Bank recognise that investing in agriculture is one of the most effective strategies for reducing poverty and hunger and promoting sustainability. Environmental activists are jeopardising this investment by irresponsibly trying to cut off Western markets from these small farmers – whether in Malaysia or Africa. In many developing countries, investors already face investment challenges and risk. Halting industrial agricultural in Africa may suit Western campaign groups, but does little to address food insecurity and poverty throughout the continent.