An interview with authors of the “The Tropical Oil Crop Revolution” predicts the future of soy and palm oil booms by examining the past and present.

Used in everything from food to fuel, soybean and palm oil have seen production rates skyrocket in the past 20 years. Controversy surrounds the planting of oil crops – cultivated primarily in Southeast Asia and South America – as they are often grown on deforested lands and rely on large farmers and agribusiness rather than smallholders. “The Tropical Oil Crop Revolution: Food, Feed, Fuel, and Forests,” a new book co-authored by Stanford University researchers, examines the economic, social and environmental impacts of the oil crop revolution, and explores how to develop a more sustainable future.

Derek Byerlee, visiting fellow at Stanford’s Center on Food Security and the Environment (FSE), FSE Fellow Walter P. Falcon, and FSE Director Rosamond L. Naylor recently discussed some of their book’s key ideas.

Q: What are the key similarities and differences between the rise of oil crops and the 1965-85 green revolution?

A: From 1990 to 2010, world production of soybean grew by 220 percent and production of palm oil by 300 percent. Like the green revolution for cereal crops, this recent revolution involves two crops – oil palm and soybeans – that dramatically expanded shares in their respective crop subsector – oil crops.

The oil crop revolution differs from its predecessor, the green revolution of rice and wheat, in its mode of expansion. The green revolution embraced tens of millions of producers across many countries, especially where irrigation was available. The oil crop revolution was highly concentrated in a few countries and almost entirely in rainfed areas. Unlike the green revolution, which was spurred on by rapid yield gains, the force behind the oil crop revolution was expansion of crop area. 

Q: What are some ways to improve oil palm sustainability?

A: A lot of faith has been put on certification and private standards and commitments. However, without effective land and forest governance, it will be very difficult for the private sector to operate. The state at both national and local levels will need greatly improved and more transparent systems starting from land and forest tenure laws, information systems, civil service capacity and judicial and redress systems. 

Q: How will the future of oil crops differ from the past?

A: By 2050, we predict demand for oil crops to drop by as much as two-thirds. Demand for biofuel feedstocks cannot maintain the rapid pace of the past decade. Vegetable oils used for food will also grow more slowly. In Asia, population growth will slow and the effects of rising incomes will diminish as consumers in middle-income countries reach high levels of vegetable oil consumption.

The biggest wild card in terms of supply is land availability. Africa has the most land available, however access to clear property rights are often difficult due to “customary rights” to the land. Soybean, a new crop in much of Africa, will increase along with oil palm. We believe the area covered by oil crops does not have to expand greatly; rather, intensification of existing crop land and a modest expansion in area can meet demand. Steady progress is possible through genetic gains in yield. Sufficient degraded land is available for area expansion, provided land governance and incentive systems are developed to steer the expansion onto degraded lands.

Q: How has development of the biodiesel industry affected tropical vegetable oils in the past 25 years, and how will it shape the sector going forward?

A: Before the turn of the 21^st century, few analysts predicted that biodiesel would play a major role in boosting global vegetable oil demand and prices. As it turns out, the expansion of biodiesel markets has been responsible for roughly half of the increase in vegetable oil consumption since 2013. Global biodiesel production more than doubled between 2007 and 2013. By some estimates, it could grow another 50 percent by 2025.

National energy policies continue to play a dominant role in the profitability of the biodiesel industry. The growing response of biofuel policies to low agricultural commodity prices is an important factor that is bound to keep biodiesel in the transportation fuel mix. This is true at least in countries that have strong interests oil crops, such as Indonesia, Malaysia, and Colombia in the case of oil palm, and the U.S., Brazil, and Argentina in the case of soybeans. Without policies mandating the use of biodiesel in fuel mixes, or incentivizing its use, the industry might fade away.

Q: What do you believe is the biggest takeaway from your research?

A: We are cautiously optimistic that the future expansion of the oil crop sector can be managed more sustainably. The predicted slowing of demand and land requirements will reduce pressure on native ecosystems. Several signs point to convergence among global consumers, private business, civil society, and local governments in finding ways to minimize the trade-offs between economic benefits and social and environmental costs.

Derek Byerlee, is an Adjunct Professor in the Global Human Development Program at Georgetown University and Editor-in-Chief of the Global Food Security journal. Walter P. Falcon is the Farnsworth Professor of International Agricultural Policy (Emeritus) at Stanford, senior fellow with the Freeman Spogli Institute for International Studies and the Stanford Woods Institute for the Environment. Rosamond L. Naylor is the William Wrigley Professor in Earth Science and Professor of Economics (by courtesy) and Gloria and Richard Kushel Director, at the Center on Food Security and the Environment Stanford.

Joann de Zegher is one of nine selected as a SAWIT Challenge Finalist. She will be pitching her sustainable palm oil solution in Jakarta, Indonesia November 17-18, 2016.

FSE is excited to announce that graduate student, Joann de Zegher, is one of the nine innovators chosen in the SAWIT Challenge to pitch her solution to help independent smallholder farmers produce palm oil sustainably. She will present her idea to international businesses, government, and NGO leaders in Jakarta, Indonesia November 17-18, 2016.

The nine finalists submitted their ideas to solve the biggest challenges facing independent smallholder palm oil farmers in Indonesia: financing, farming inputs and best practices, mapping and land tenureship, market information, as well as product traceability and transparency. The innovations are designed to make sustainable, more profitable palm oil production.

The SAWIT Challenge is run by Smallholders Advancing with Technology and Innovation (SAWIT), a partnership between the Oil Palm Smallholders Union, and the Indonesia Business Council for Sustainable Development, with support from the U.S. Agency for International Development.

De Zegher’s solution offers a substantial price incentive to smallholder farmers who comply with buyer sustainability policies, but only passes on a very small portion of the cost to buyers. The innovation leverages the simple fact that small farmers and large buyers have substantially different cash flow needs. It also helps to shorten and strengthen the palm supply chain from smallholder farmers to mill.

FSE director Roz Naylor will give the opening plenary lecture at the 2nd International Conference on Global Food Security on October 12, 2015 at Cornell University. Naylor is William Wrigley Professor in Earth System Science, and senior fellow at the Stanford Woods Institute for the Environment and the Freeman Spogli Institute for International Studies at Stanford. 

In addition to Naylor's lecture on "Food security in a commodity-driven world," several FSE researchers will give talks and poster sessions during the five-day conference, including professors Marshall Burke and Eric Lambin, visiting scholar Jennifer Burney, postdoctoral scholar Meha Jain, and doctoral candidate Elsa Ordway.

In a new study in the journal BioScience, a team of researchers including Stanford professor Roz Naylor links marijuana cultivation to widespread environmental damage in California and calls for greater regulation of the crop’s impact on natural ecosystems.

Recent debates about marijuana legalization have focused on the potential social, health and economic impacts, with little attention paid to environmental issues. The new study, spearheaded by the California chapter of The Nature Conservancy, brings environmental concerns to the forefront of the policy discussion. Between 60 and 70 percent of the marijuana consumed in the United States comes from California.
 

Water and wildlife

Marijuana plants require nearly twice as much water as do grapes or tomatoes, and the last five years have brought a 50 to 100 percent increase in the amount of northern California watershed lands used for marijuana production – figures that are causing growing concern among conservationists in the midst of a severe statewide drought.

The majority of California agriculture is subject to heavy water use regulations. Farmers of most irrigated crops help their plants through the dry summer months by filling water tanks in the winter, when streams and springs are full.

By contrast, many marijuana growers draw surface water during the plant’s summer growing season, when drought conditions are worst.

“Taking water directly from rivers and streams in the summer not only reduces the water available for agriculture but also threatens wildlife species, especially birds and fish, that depend on these wetland ecosystems for survival,” said Naylor.

Illegal marijuana plantations in California are associated with a wide range of other environmental impacts, including pollution, poaching, and pesticides that poison wildlife. Even legal outdoor cultivation can cause deforestation and soil erosion.
 

Policy options

The research team identified several opportunities to reduce the environmental impacts of marijuana cultivation in California. For example, states can:

• Offer incentives for growers to protect natural resources
• Enforce new or existing environmental laws,
• Use sales tax revenues to fund restoration projects
• Implement certification or labeling programs to encourage consumers to buy sustainably grown products.

“Regardless of the legal status of marijuana, the way we are currently managing its impacts on water and wildlife in California just doesn’t work,” said Naylor. “Bringing these impacts into future policy discussions about marijuana is critical for protecting California’s environmental resources given the high value and demand for the crop.”

Naylor is William Wrigley Professor of Earth Science at Stanford, director of the Center on Food Security and the Environment, and a senior fellow at the Stanford Woods Institute for the Environment and the Freeman Spogli Institute for International Studies. She serves as a trustee of The Nature Conservancy California Chapter.

Media Contact

Laura Seaman, Communications Manager, Center on Food Security and the Environment: lseaman@stanford.edu 
Lisa Park, Media Relations, The Nature Conservancy: lpark@tnc.org.

A research team led by FSE director Rosamond Naylor has won a $400,000 multi-year grant to study how to create sustainable palm oil supply chains that promote economic growth and environmental sustainability in Indonesia and West Africa. 

Palm oil has become one of the world’s fastest growing and most valuable agricultural commodities. Global production of palm oil doubled in both volume and area each decade between 1970 and 2010, and is expected to double again by 2025. The windfall profits from this rapid expansion have come at a cost of tropical deforestation, biodiversity loss and rising greenhouse gas emissions, and in many cases the economic benefits have bypassed local smallholder farmers. 

Naylor and her team of Stanford faculty, scholars and students will undertake the three-year project with funding from the Stanford Global Development and Poverty Initiative (GDP), launched in Spring 2014. GDP aims to transform Stanford’s capacity to speak to the challenges of poverty and development. This year, GDP awarded more than $2 million to 13 faculty research teams from across the university. 

The new project marks the first venture that connects Stanford’s expertise in sustainability with the Graduate School of Business’ experience in value chain innovations. The team will conduct an evaluation of value chain opportunities for sustainable palm oil production, build corporate partnerships to improve smallholder incomes, and engage in policy advising. 

GDP is a joint initiative of the Stanford Institute for Innovation in Developing Economies (SEED) and the Freeman Spogli Institute for International Studies (FSI). SEED is housed within the Stanford Graduate School of Business. 

Rosamond Naylor is William Wrigley Professor of Earth System Science and Senior Fellow at the Stanford Woods Institute for the Environment and at FSI.

FSE director Roz Naylor has been selected to deliver the 6th annual Ned Ames Honorary Lecture at the Cary Institute of Ecosystem Studies in Millbrook, NY on Friday, April 24. Her lecture on "Feeding the World in the 21st Century," is free and open to the public, and a video recording of the event will be available on the Cary Institute's website shortly after the talk.