Experts Renew Call to Reverse Oil Palm Cultivation Ban

Oil palm cultivation in Sri Lanka is a much-debated topic. Although the hype created around the introduction of oil palm to Sri Lanka was immense, as the plantations began to be established, many issues in the areas of health, land preservation and water retention began to surface which forced the Government to revisit its decision to commence oil palm cultivation in Sri Lanka. Accordingly, a special expert committee was appointed to probe the allegations levelled at oil palm cultivation and following the committee report, oil palm cultivation was banned in the country.

While some saw the landmark decision as a victory, many who were involved and invested in the industry saw it as an abrupt and unfair decision, especially considering how the committee report has recommended many other viable and win-win solutions. Discontinuing new plantations, expansions and re-plantations as well as banning the importation of viable oil palm seeds were only two recommendations among many others but much to the dismay of the investors, the Government’s decision to ban oil palm cultivation was only based on the two above-mentioned recommendations.

In review of the oil palm cultivation in Sri Lanka; the benefits of it, the possible concerns regarding the cultivation and the possibility of re-commencing oil palm cultivation in Sri Lanka materialised recently as a workshop to unveil strategies for a sustainable oil palm industry in Sri Lanka. Titled, ‘Sustainable Horizons,’ the workshop was organised by the Sri Lanka Association for the Advancement of Science (SLAAS) and the National Science Foundation (NSF) under the patronage of the Asia Palm Oil Alliance (APOA) and Solidaridad Asia. The workshop was coordinated by the Nucleus Foundation and was held on 28 November at BMICH with the participation of industry professionals, the scientific community, Government institutions, smallholder farmers, university lecturers, students, various interested parties and the media.   

History of oil palm in Sri Lanka 

Originating in the West African countries, the crop and the industry of oil palm were brought to other parts of the world by European merchants. During the industrial revolution, palm oil was widely used and was a highly sought-after commodity due to its lubricant properties. By 1870, oil palm became a primary export product of West African countries such as Nigeria. 

The increase in demand led to product development and hence, in the 1870s, the crop was introduced to Asian countries such as Indonesia and Malaysia, mainly by colonial rulers. While oil palm cultivation gained traction in the East Asian countries, Sri Lanka was happy to let tea and rubber plantations take over and saw the introduction of oil palm happening much later. The crop commenced its plantation process in Sri Lanka in 1968 with the first oil palm estate being established at Nakiyadeniya. However, the production of coconut oil is deep-rooted in Sri Lanka and as a part of our culture, the conversion from coconut oil to palm oil was not as swift as the industry would have hoped for.

In 2009 a Cabinet decision was taken to grant tax concessions to import oil palm seeds and to expand oil palm cultivation up to 25,000 hectares laying the Government policy on oil palm cultivation, which was a momentous policy decision taken in favour of developing oil palm cultivation in Sri Lanka. Further, the Government mandated that the Coconut Research Institute (CRI) should be involved in the research and development phase. Coming to the year 2016, the Government, after reviewing the available research data on oil palm cultivation, decided to expand the oil palm cultivation in Sri Lanka to 20,000 hectares (2.5 per cent of the extent of plantation crops) while the Ministry of Plantations and CRI developed policies for the importation of seeds and land selection. With these positive policy decisions taking effect, the cultivated extent of oil palm was extended to 12,000 hectares, mainly in the Western and Central provinces in 2019. 

However, the journey of oil palm in Sri Lanka wasn’t as smooth as the investors hoped it would be. Various issues began to surface as the oil palm cultivation took off which attracted the attention of environmentalists and the public. As the pressure from the groups and the society began to intensify, the Ministry of Plantations in 2018 requested the Central Environment Authority (CEA) to find a solution.

To answer the public outcry, CEA appointed an expert committee to look into the matter and prepare a comprehensive report. The report was made public and a decision to ban oil palm cultivation in Sri Lanka was implemented immediately in 2019. Although banning was one of many recommendations mentioned in the report, the Government was happy to go with only that decision and up until now, no other recommendation in the report has been entertained or considered, Further, in 2021, the Government reiterated its stance on oil palm ban by banning palm oil imports. 

An abrupt ban

The common consensus of the plantation sector invested in oil palm cultivation and the scientific community keen on the introduction of the new agricultural crop is that the ban was a rushed decision which isn’t the most suitable one for the issue. Elaborating further, the Director (Agriculture) of Lalan Rubbers (Pvt.) Ltd. Emeritus Professor Asoka Nugawela shed light on other recommendations of the expert committee report:

Planting already imported seeds should be only allowed in areas identified via a Strategic Environmental Assessment (SEA).

A district-level monitoring committee should assess the already established plantations. 

Cultivation in fragile and environmentally unsuitable areas should be rehabilitated. 

Precautionary measures should be adopted to stop the invasiveness of the crop. 

An Environmental Management Plan (EMP) should be prepared and implemented by the plantation companies.

Reasons and effects 

As the ban came into effect, more than Rs 500 million worth of plants raised after obtaining all relevant Government approvals became worthless overnight, leaving plantations to suffer huge losses. In place of oil palm, other crops such as rubber and cinnamon were entertained but the industry experts are adamant that the return on investment would be considerably less than oil palm. 

In terms of reasons for the abrupt ban, the Government presented plenty. The belief that oil palm is a threat to other crops, the relatively high water consumption by the oil palm tree, the relatively high soil erosion observed in oil palm cultivations, the potential of oil palm to become an invasive and a threat to other naturals, the high fertiliser demand, oil palm tree and its parts not having much commercial value, not being as eco-friendly as rubber and above all the possible long-term health complications the palm oil consumption is said to have are all strong reasons behind the permanent ban of oil palm cultivation in the country.

However, the experts and the scientific community point out that the situation is not as grim as many paint it to be, mainly because Sri Lanka lacks proper scientific evidence and research to support or disprove these claims. Moreover, the industry professionals who were present at the workshop pointed out that the majority of taken-for-granted issues related to oil palm cultivation such as soil erosion, compaction of soil and water retention issues, are all a result of poor management which can be ameliorated via proper, scientific management practices. 

Examples from neighbours 

In justifying the decision to ban oil palm cultivation, it was claimed that even Malaysia is moving away from the oil palm industry which causes a myriad of issues including biodiversity loss, soil degradation and deforestation. The latter, however, doesn’t apply to the Sri Lankan context since the proposed implementation means of oil palm cultivation leaves no room for deforestation. Oil palm cultivation was only encouraged in old rubber plantations where fourth or fifth-generation trees are now producing less desirable outcomes. No actual forest is cleared to make way for oil palm in Sri Lanka. 

In terms of Malaysia moving away from oil palm cultivation, the claim holds little water as the industry is a thriving and expanding one in Malaysia; a fact which was confirmed by the High Commissioner of Malaysia Badli Hisham Adam.  

Our land, our decision

Speaking of Malaysia’s experience related to the oil palm industry and its contribution to improving smallholder businesses and the country’s economy, Adam said the Global West shouldn’t interfere with the way the East conducts business since the East is completely capable of taking eco-conscious decisions that are beneficial to both communities and the environment. “The environmental concerns related to oil palm have been a global talking point. Malaysia is dedicated to addressing these issues head-on, striking a balance between economic development and environmental preservation. Other countries, especially the West, have already destroyed their own forests.

Now, they are dictating environmental laws and parameters. How come the West can dictate whatever it is we can or cannot do with our land? This is our land. At the same time, we also understand how to preserve and sustain our environment which we share with other creatures. For us, forest is very important but at the same time, we must utilise our land to make profits so that we can move forward. Our land is one of the best ways we can make economic use of it. That’s why we have innovation and technology in the cultivation,” Adam said. 

Elaborating further, Adam said it is unclear as to from where the negativity stems since Malaysia is balancing out the eco-conservation and oil palm cultivation perfectly, while empowering smallholder cultivators. Despite being one of the largest oil palm producers in the world, Adam said, Malaysia is still a ‘green’ country with over 60 per cent of its land area covered in greenery. Even among the oil palm cultivations, the diversity of flora and fauna is much significant and with the crop diversification, the cultivators have managed to not only maintain high levels of biodiversity in Malaysian oil palm estates but also earn some extra cash by selling secondary crops associated with oil palm cultivations such as durian and rambutan.   

Significant economic gains 

Oil palm is an industry that is on an ever-expanding growth route. From toothpaste, shampoo, detergents, cosmetics, edible fats, bakery items and cheese to coffee creamers, the paper industry, household cooking, ice cream, vitamins and even biodiesel production the use of oil palm-related products is vastly diverse, making it an industry with a guaranteed potential to produce high economic gains.

Speaking of the economic gains Indonesia has so far experienced thanks to the oil palm industry, Ambassador of the Republic of Indonesia to Sri Lanka Dewi Gustina Tobing said, “The palm oil industry continues to contribute to the Gross Domestic Product (GDP) and the percentage increases yearly. The input-output data shows that the output value of Indonesia’s oil palm plantation grew relatively quickly from USD 322.5 million in 2000 to USD 23.7 billion in 2021. Also, the oil and fat industry saw an increase in output from USD 3 billion to USD 48.5 billion. In fact, the regional economy grows quickly today as palm oil production increases. A study conducted in 2022 revealed that economic growth of oil palm centred areas is faster and much considerable than of the non-centre counterparts.”

“The economic impact of oil palm is quite astonishing, it employs more than half a million and significantly contributes to the country’s GDP. The industry has been a game-changer, especially in rural areas, transforming the communities into prosperous areas. Oil palm has brought schools, infrastructure development, hospitals and roads into rural areas, enhancing living standards. We want to share knowledge and experience with Sri Lanka mainly because the oil palm industry is profitable. We want to share our knowledge and to see our neighbours also profit and prosper. Here in Sri Lanka, the Government gives out cash allowances to the needy; but how many times the Government can afford to do it?” questioned Adam.

According to him, empowering the rural communities economically by introducing a plantation economy such as oil palm is the most ideal solution to sustainably eradicate poverty. 

Attesting to this, Tobing said the main reason why Indonesia is the biggest oil palm producer in the world is the diversification of the industry and the involvement of smallholders. In the 1980s when the oil palm industry was in its infancy in Indonesia, the State dominated the oil palm cultivation but by 2021, the industry had been diversified among private and smallholder cultivators. Today, around 40 per cent of Indonesia’s oil palm industry is run by smallholders. 

An opportunity we must reconsider 

Sri Lanka presently imports around 180,000 – 200,000 metric tons of vegetable oil annually; which means a considerable amount of foreign exchange is spent on the oil imports. This need could effectively be met with only 50,000 hectares of oil palm cultivation, which is much more efficient considering the amount of additional coconut cultivation needed to produce the annual oil imports within Sri Lanka – 271,000 hectares. Oil palm records a high yield per hectare, three or four times more than it is of coconut. As oil palm has the potential to produce Rs 720,000 per hectare per year, (coconut; Rs 315,000, rubber; Rs 90,000 and tea; Rs 600,000) it is logical and economic if we are to invest in oil palm.

At a time when Sri Lanka is recovering from a crippling economic crisis and the Government is on the constant lookout for revenue-generating ventures, the oil palm industry positions itself as a strong contender but it requires the lifting of the ban.

Considering how neighbouring countries have managed to continue oil palm cultivation and keep the ecological balance intact, it is argued that the issues related to the oil palm industry which led to its eventual ban, are much related to the shortcomings of management rather than the crop itself. The experts urge the Government to reconsider its decision to ban oil palm and lead the way to many data-driven policy decisions as opposed to unscientific and biased decision-making.

By Sanuj Hathurusinghe