Taking the Malaysian Palm Oil Model Global

The Malaysian model for growing palm oil is going global. There has been prominent news coverage of large-scale investments by Malaysian palm oil companies such as Sime Darby in African countries such as Liberia, Sierra Leone and the Democratic Republic of Congo. Sime Darby, for example, secured a 220,000 ha lease in Liberia in 2009  which was its first major palm oil investment in Africa. Other companies such as Singapore’s Wilmar have followed Sime Darby’s lead with similarly large investments.

This is not oil palm’s first run in Africa.  Palm oil is native to West Africa. The company of William Lever predecessor to Unilever was the first to cultivate and harvest oil palm plantations in Africa in the early 20th century. Unilever’s efforts in Africa had the backing of the Belgian Congo; the considerations of modern forest investment for example human rights, sustainability and labour standards were not on the radar.

Nor was the Malaysian model for palm oil. One of the keys to the success of Malaysian and Southeast Asian palm oil has been the significant interest of small farmers. Between 30 and 40 per cent of palm fruit in the region is grown and harvested by small farmers and families operating on 2 hectares or less. Central to this is the establishment of and investment in medium and large-scale processing facilities, so that small farmers have access to both local and international markets.

Currently in Africa small farmers produce 90 per cent of output according to some estimates but this supplies only local markets. Taking the Malaysian model into Africa will give local communities access to international markets. It will also provide opportunities for knowledge-sharing between larger operations and small farmers.

Despite this, Western campaigners such as Greenpeace have already attacked Malaysian investments in Africa. But African communities are welcoming this investment, as illustrated by the highly positive response at the Clinton Global Initiatives event in New York City featuring a woman small farmer in Liberia who has prospered through palm oil cultivation.  The positive experience of Malaysian companies in post-colonial Southeast Asia in understanding local communities has provided an economic and social benchmark. The rest of the world  particularly the West should take notice.

Written by The Oil Palm