Widespread cultivation of oil palm trees has been both an economic boon and an environmental disaster for tropical developing-world countries. New research points to a more sustainable path forward through engagement with small-scale producers.

Nearly ubiquitous in products ranging from cookies to cosmetics, palm oil represents a bedeviling double-edged sword. Widespread cultivation of oil palm trees has been both an economic boon and an environmental disaster for tropical developing-world countries, contributing to large-scale habitat loss, among other impacts. New Stanford-led research points the way to a middle ground of sustainable development through engagement with an often overlooked segment of the supply chain (read related overview and research brief).

"The oil palm sector is working to achieve zero-deforestation supply chains in response to consumer-driven and regulatory pressures, but they won’t be successful until we find effective ways to include small-scale producers in sustainability strategies,” said Elsa Ordway, lead author of a Jan. 10 Nature Communications paper that examines the role of proliferating informal oil palm mills in African deforestation. Ordway, a postdoctoral fellow at The Harvard University Center for the Environment, did the research while a graduate student in Stanford’s School of Earth, Energy & Environmental Sciences.

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An oil palm plantation in Cameroon (Image credit: Elsa Ordway)

Using remote sensing tools, Ordway and her colleagues mapped deforestation due to oil palm expansion in Southwest Cameroon, a top producing region in Africa’s third largest palm oil producing country (read about related Stanford research). Contrary to a widely publicized narrative of deforestation driven by industrial-scale expansion, the researchers found most oil palm expansion and associated deforestation occurred outside large, company-owned concessions, and that expansion and forest clearing by small-scale, non-industrial producers was more likely near low-yielding informal mills, scattered throughout the region. This is strong evidence that oil palm production gains in Cameroon are coming from extensification instead of intensification.

Possible solutions for reversing the extensification trend include improving crop and processing yields by using more high-yielding seed types, replanting old plantations, and upgrading and mechanizing milling technologies, among other approaches. To prevent intensification efforts from inciting further deforestation, they will need to be accompanied by complementary natural resource policies that include sustainability incentives for smallholders.

In Indonesia, where a large percentage of the world’s oil palm-related forest clearing has occurred, a similar focus on independent, smallholder producers could yield major benefits for both poverty alleviation and environmental conservation, according to a Jan. 4 Ambio study led by Rosamond Naylor, the William Wrigley Professor in the School of Earth, Energy & Environmental Sciences and a senior fellow at the Stanford Woods Institute for the Environment and the Freeman Spogli Institute for International Studies(Naylor coauthored the Cameroon study led by Ordway).

Using field surveys and government data, Naylor and her colleagues analyzed the role of small producers in economic development and environmental damage through land clearing. Their research focused on how changes in legal instruments and government policies during the past two decades, including the abandonment of revenue-sharing agreements between district and central governments and conflicting land title authority among local, regional and central authorities, have fueled rapid oil palm growth and forest clearing in Indonesia.

They found that Indonesia’s shift toward decentralized governance since the end of the Suharto dictatorship in 1998 has simultaneously encouraged economic development through the expansion of smallholder oil palm producers (by far the fastest growing subsector of the industry since decentralization began), reduced rural poverty, and driven ecologically destructive practices such as oil palm encroachment into more than 80 percent of the country’s Tesso Nilo National Park.

A worker in East Kalimantan, Indonesia, loads palm fruit for transport to a factory that will process it into palm oil (Image credit: Joann de Zegher)

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.

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.

Hunger touches the lives of people throughout the world, from the affluent Bay Area to the most impoverished regions of rural Africa. Food security – the availability of plentiful, nutritious, and affordable food – is a pressing issue for rich and poor countries alike as the world population moves toward 9 billion by mid-century.

In her new book The Evolving Sphere of Food Security (Oxford University Press, August), Professor Rosamond Naylor takes a holistic approach to the question of how to feed the world. Naylor, a professor of environmental earth system science and director of the Center on Food Security and the Environment (FSE), convened 18 colleagues from across Stanford’s diverse disciplines to shed light on the interdependent issues that affect global food security.

Throughout its 14 chapters, and a foreword by former United Nations Secretary-General Kofi Annan, the book takes up two important questions: How does the challenge of achieving food security change as countries develop economically? And how do food and agriculture policies in one country affect nutrition, food access, natural resources and national security in other countries?

Collaboration across disciplines

Naylor, who edited the volume and co-authored several chapters, explained that The Evolving Sphere of Food Security is the first book of its kind to engage faculty and scholars from across Stanford’s campus on issues of global hunger.

Professor Rosamond Naylor

“This book grew out of a recognition by Stanford scholars that food security is tied to security of many other kinds,” said Naylor, who is also William Wrigley Senior Fellow at the Freeman Spogli Institute for International Studies and the Stanford Woods Institute for the Environment. “Food security has clear connections with energy, water, health, the environment and national security, and you can’t tackle just one of those pieces.”

Stanford has a long history of fostering cross-disciplinary work on global issues. It is in this spirit that the idea for the book was born, Naylor said. The book weaves together the expertise of authors from the fields of medicine, political science, engineering, law, economics and climate science.

“Stanford was the ideal place for this project. A book like this exemplifies how collaborative, interdisciplinary research can be greater than the sum of its parts,” Naylor said. “We have painted a much more inclusive picture of food security than if we had approached these questions from only one discipline.”

Rooted in field research

Another unique feature of the book is that each author’s insights are shaped by years of hands-on research and policymaking experience around the world.

Several authors, for example, have been instrumental in shaping U.S. and global food policy for decades. Walter Falcon, professor emeritus of economics and the deputy director of FSE, traces his career as an agricultural economics advisor to the Indonesian government, where he witnessed the country’s dramatic improvements in combating hunger and poverty since the 1960s.

Political science professor Stephen Stedman recounts his experience as a security policy advisor to the United Nations during the 2000s. Recognizing that food insecurity can exacerbate civil conflict, weaken governments and threaten international stability, Stedman worked to integrate food security into traditional security agendas.

Other authors have spent many years working in East Asia, Africa, South America, the Middle East and Europe. As a whole, said Naylor, the team has conducted well over a hundred years’ worth of field research all over the world.

Challenges evolve as countries develop

A recurring theme throughout the book – also reflected in its title – is the evolving nature of the food security challenges countries face as they move through stages of economic growth. At low levels of development, countries struggle to meet people’s basic needs. For example, Naylor’s chapter on health, co-authored with Eran Bendavid (medicine), Jenna Davis and Amy Pickering (civil and environmental engineering), describes a recent study showing that poor nutrition and rampant disease in rural Kenya is closely tied to contaminated, untreated drinking water. Addressing these essential health and sanitation issues is a key first step toward food security for the poorest countries.

As nations rise above the bottom rungs of development, they encounter new challenges. Scott Rozelle, director of the Rural Education Action Program, warns that middle income countries like China now face a “second food security crisis” of widespread micronutrient deficiency. Recent rapid economic and agricultural advancements have largely solved the problem of supplying sufficient calories. But this progress masks what Rozelle describes as “hidden hunger,” or a lack of vitamins and minerals that impedes kids’ school performance and could slow China’s long-term growth. Even in rich countries like the U.S., said Naylor, malnutrition can be a drag on educational and economic performance.

Developed countries face other unique tradeoffs in the use of resources for food production. In his chapter on water institutions, Buzz Thompson, professor of law and co-director of the Woods Institute, explains that conflicts over water increase between smallholder and industrial users as countries develop. Eric Lambin, professor of environmental earth system science, and Ximena Rueda, research associate in earth sciences, offer the paradox that as countries grow wealthier, changing patterns of agricultural land use may actually worsen food security by fueling the spread of obesity and diabetes.

At its core, said Naylor, The Evolving Sphere of Food Security is about more than economic and policy trends. “The book puts a human face to food security, because hunger is an intensely human experience,” she said. “This book tells an integrated story about people’s lives, and how they are shaped by resource use and the policy process around global food security.”

President Obama and Mitt Romney meet for their third debate to discuss foreign policy on Monday, when moderator Bob Schieffer is sure to ask them about last month's terrorist attack in Libya and the nuclear capabilities of Iran.

In anticipation of the final match between the presidential candidates, researchers from five centers at Stanford’s Freeman Spogli Institute for International Studies ask the additional questions they want answered and explain what voters should keep in mind.

What can we learn from the Arab Spring about how to balance our values and our interests when people in authoritarian regimes rise up to demand freedom?  

What to listen for: First, the candidates should address whether they believe the U.S. has a moral obligation to support other peoples’ aspirations for freedom and democracy. Second, they need to say how we should respond when longtime allies like Egypt’s Hosni Mubarak confront movements for democratic change.

And that leads to more specific questions pertaining to Arab states that the candidates need to answer: What price have we paid in terms of our moral standing in the region by tacitly accepting the savage repression by the monarchy in Bahrain of that country's movement for democracy and human rights?  How much would they risk in terms of our strategic relationship with Bahrain and Saudi Arabia by denouncing and seeking to restrain this repression? What human rights and humanitarian obligations do we have in the Syrian crisis?  And do we have a national interest in taking more concrete steps to assist the Syrian resistance?  On the other hand, how can we assist the resistance in a way that does not empower Islamist extremists or draw us into another regional war?  

Look for how the candidates will wrestle with difficult trade-offs, and whether either will rise above the partisan debate to recognize the enduring bipartisan commitment in the Congress to supporting democratic development abroad.  And watch for some sign of where they stand on the spectrum between “idealism” and “realism” in American foreign policy.  Will they see that pressing Arab states to move in the direction of democracy, and supporting other efforts around the world to build and sustain democracy, is positioning the United States on “the right side of history”?

~Larry Diamond, director of the Center on Democracy, Development, and the Rule of Law

What do you consider to be the greatest threats our country faces, and how would you address them in an environment of profound partisan divisions and tightly constrained budgets? 

What to listen for: History teaches that some of the most effective presidential administrations understand America's external challenges but also recognize the interdependence between America's place in the world and its domestic situation.

Accordingly, Americans should expect their president to be deeply knowledgeable about the United States and its larger global context, but also possessed of the vision and determination to build the country's domestic strength.

The president should understand the threats posed by nuclear proliferation and terrorist organizations. The president should be ready to lead in managing the complex risks Americans face from potential pandemics, global warming, possible cyber attacks on a vulnerable infrastructure, and failing states.

Just as important, the president needs to be capable of leading an often-polarized legislative process and effectively addressing fiscal challenges such as the looming sequestration of budgets for the Department of Defense and other key agencies. The president needs to recognize that America's place in the world is at risk when the vast bulk of middle class students are performing at levels comparable to students in Estonia, Latvia and Bulgaria, and needs to be capable of engaging American citizens fully in addressing these shared domestic and international challenges.

~Mariano-Florentino Cuéllar, co-director of the Center for International Security and Cooperation

Should our government help American farmers cope with climate impacts on food production, and should this assistance be extended to other countries – particularly poor countries – whose food production is also threatened by climate variability and climate change?

What to listen for: Most representatives in Congress would like to eliminate government handouts, and many would also like to turn away from any discussion of climate change. Yet this year, U.S. taxpayers are set to pay up to $20 billion to farmers for crop insurance after extreme drought and heat conditions damaged yields in the Midwest.

With the 2012 farm bill stalled in Congress, the candidates need to be clear about whether they support government subsidized crop insurance for American farmers. They should also articulate their views on climate threats to food production in the U.S. and abroad.

Without a substantial crop insurance program, American farmers will face serious risks of income losses and loan defaults. And without foreign assistance for climate adaptation, the number of people going hungry could well exceed 15 percent of the world's population. 

~Rosamond L. Naylor, director of the Center on Food Security and the Environment

What is your vision for the United States’ future relationship with Europe? 

What to listen for: Between the end of World War II and the end of the Cold War, it was the United States and Europe that ensured world peace. But in recent years, it seems that “Europe” and “European” have become pejoratives in American political discourse. There’s been an uneasiness over whether we’re still friends and whether we still need each other. But of course we do.

Europe and the European Union share with the United States of America the most fundamental values, such as individual freedom, freedom of speech, freedom to live and work where you choose. There’s a shared respect of basic human rights. There are big differences with the Chinese, and big differences with the Russians. When you look around, it’s really the U.S. and Europe together with robust democracies such as Canada and Australia that have the strongest sense of shared values.

So the candidates should talk about what they would do as president to make sure those values are preserved and protected and how they would make the cooperation between the U.S. and Europe more effective and substantive as the world is confronting so many challenges like international terrorism, cyber security threats, human rights abuses, underdevelopment and bad governance.

~Amir Eshel, director of The Europe Center

Historical and territorial issues are bedeviling relations in East Asia, particularly among Japan, China, South Korea, and Southeast Asian countries. What should the United States do to try to reduce tensions and resolve these issues?

What to listen for: Far from easing as time passes, unresolved historical, territorial, and maritime issues in East Asia have worsened over the past few years. There have been naval clashes, major demonstrations, assaults on individuals, economic boycotts, and harsh diplomatic exchanges. If the present trend continues, military clashes – possibly involving American allies – are possible.

All of the issues are rooted in history. Many stem from Imperial Japan’s aggression a century ago, and some derive from China’s more assertive behavior toward its neighbors as it continues its dramatic economic and military growth. But almost all of problems are related in some way or another to decisions that the United States took—or did not take—in its leadership of the postwar settlement with Japan.

The United States’ response to the worsening situation so far has been to declare a strategic “rebalancing” toward East Asia, aimed largely at maintaining its military presence in the region during a time of increasing fiscal constraint at home. Meanwhile, the historic roots of the controversies go unaddressed.

The United States should no longer assume that the regional tensions will ease by themselves and rely on its military presence to manage the situation. It should conduct a major policy review, aimed at using its influence creatively and to the maximum to resolve the historical issues that threaten peace in the present day.

~David Straub, associate director of the Korea Studies Program at the Walter H. Shorentein Asia-Pacific Research Center

Compiled by Adam Gorlick.

Indonesia’s rainforests are among the world’s most extensive and biologically diverse environments. They are also among the most threatened. An increasing population and growing economy have led to rapid development. Logging, mining, colonization, and subsistence activities have all contributed to deforestation.

But the recent and booming expansion of palm oil plantations could cause the most harm to the rainforests, and is generating considerable concern and debate among industry leaders, environmental campaigners and scholars.

Joanne Gaskell in Sumatra, Indonesia.

Joanne Gaskell has dedicated her graduate studies to better understanding the tradeoffs and demand side of this dilemma. The doctoral candidate and researcher for the Center on Food Security and the Environment recently defended her thesis before an audience of advisers, friends, and fellow students from Stanford’s Emmett Interdisciplinary Program in Environment and Resources (E-IPER).

“You need to understand the economics and politics of palm oil demand if you want to understand the regional dynamics of oil production and associated environmental impacts,” Gaskell said. “From a conservation perspective, this is as important as understanding supply since demand patterns affect the incentives facing producers.”

In the past 25 years, palm oil has become the world’s leading source of vegetable oil. Indonesia is currently the world’s top palm oil producer. Since the 1980s total land area planted to palm oil has increased by over 2,100 percent growing to 4.6 million hectares – the equivalent of six Yosemite National Parks. Plantation growth has predominately occurred on deforested native rainforest with major implications for global carbon emissions and biodiversity.

And Gaskell projects the demand for palm oil for food will double by 2035, requiring more than 8 million new hectares for production. Plantation expansion has already begun in Kalimantan and Papua, and Indonesian companies are now looking beyond Indonesia for new investment opportunities. Just as palm oil production spread from Malaysia to Indonesia to escape rising land and labor costs, palm oil production is now spreading to parts of Africa, where the crop is native, and Latin America.

Demand for palm oil is quickly rising in Asian markets – notably India and China – where it is used for cooking and industrial processes. Indonesia has the highest level of per capita palm oil consumption, resulting not just from population and income growth, but also from government policies that promoted the use of palm oil instead of coconut cooking oil.

“Taste preferences and investment more than international prices have driven palm oil demand in Indonesia,” Gaskell said.

Biodiesel production and speculation have also contributed to the rapid expansion of palm oil plantations, but to a lesser extent. Gaskell said the success of palm-based biodiesel hinges on remaining cheaper than petroleum diesel and whether governments subsidize the industry, as the United States has done with corn and soybean farmers.

Interest in palm oil as a cleaner burning fuel is already waning in Europe and the United States. The short-term carbon costs of deforesting and preparing land, fertilizing and managing the crops, then processing and transporting them outweigh the benefits. This is particularly true when palm oil plantations are grown on peat soils that release potent methane gas when drained for growing palm oil.

Palm oil seedlings ready for planting. Photo credit: Wakx/flikr

Growing plantations on ‘degraded land’, land that had been previously converted for other purposes, such as logging, is a much more favorable option over forest expansion. In theory, there is an abundance of degraded areas that can be profitably converted into palm oil plantations. But there are hurdles: The areas are not necessarily contiguous, making it difficult to organize a plantation, and ownership rights in these areas are often contested.

Palm oil’s considerable productivity and profitability offers wealth and development where help is most needed. Half of Indonesia’s population lives on less than $2 a day. But along with the negative ecological impacts, palm oil production increases competition for land and could exacerbate inequalities between the rich and the poor.

Gaskell believes sustainable expansion strategies are possible, and says smaller mills and different processing technologies are needed so production is affordable in scaled-down, more distributed systems.

Palm oil plantation in Cigudeg, Indonesia. Photo credit:  Achmad Rabin Taim/flickr

Her work is feeding an international conversation about palm oil production. The Roundtable on Sustainable Palm Oil (RSPO), an international organization of producers, distributors, conservationists and other stakeholders, has promoted better ways of managing palm oil production and encouraging transparency and dialogue among corporate players, governments, and NGOs.

“We need to protect the most ecologically valuable landscapes from agricultural production and we need to make sure that, in areas where palm oil agriculture occurs, there are ecological management strategies in place such as riparian buffers, wildlife corridors, and treatment systems for mill effluent,” she said. “From a food security perspective, small palm oil producers, who might be giving up rice production or the production of other food staples, need strategies to minimize the economic risk associated with fluctuating global palm oil prices.”