The Congo Basin is rich in biodiversity and stores an estimated 25%-30% of the worlds tropical forest carbon stocks. As agricultural land becomes increasingly scarce in Southeast Asia, and regulatory pressures continue to intensify, the Congo Basin could become the next frontier for oil palm expansion. Most of the roughly 280 million hectares (Mha) of additional land suitable for oil palm in the Congo Basin are found in the Democratic Republic of Congo (60%), Cameroon (11%) and the Republic of Congo (10%).
Many heavily forested countries in the Congo Basin are setting national targets to increase production to meet national and regional demands. Land area allocated to oil palm increased by 40% in the Congo Basin and five additional top-producing countries in Africa between 1990 and 2017. Without intervention, future production increases in the region will likely come from expansion rather than intensification due to low crop and processing yields, possibly at the expense of forest.
Sustainability strategies initiated by companies and aimed at certifying palm oil mills are unlikely to be effective at curbing deforestation in the Congo Basin. Smallholder farmers are an engine of growth in the regions palm oil sector, and recent evidence suggests they are actively clearing forest to expand. Because of the proliferation of non-industrial processing facilities (artisanal mills), a substantial fraction of the palm oil produced by smallholders never passes through a company's jurisdiction. Smallholders are also disadvantaged by power imbalances and limited access to technical and financial resources. Including smallholders in sustainability strategies offers opportunities to achieve multisectoral goals.
Recommendations to improve the sustainability of the palm oil sector in the Congo Basin include (1) improving access to finance for smallholders and non-industrial mill managers; (2) implementing policies to safeguard natural resources and facilitate access to appropriate market opportunities that offer incentives to prevent future deforestation; (3) intensifying production by replanting aging plantations, rehabilitating abandoned plantations with disease-resistant and high-yielding varieties, and increasing fertilization, without further expansion into high conservation value or high carbon stock forest areas; and (4) improving processing capacity and extraction rates by upgrading mill technologies. Sustainable palm oil development in the Congo Basin will require careful consideration of the governance, institutional, environmental and socioeconomic factors that underpin the complex regional supply chains.
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Center for International Forestry Research Center for International Forestry Research
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)
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)
Among other potential solutions, Naylor and her coauthors suggest Indonesia’s Village Law of 2014, which devolves authority over economic development to the local level, be re-drafted to enforce existing environmental laws explicitly. Widespread use of external facilitators could help local leaders design sustainable development strategies and allocate village funds more efficiently, according to the research. Also, economic incentives for sustainable development, such as an India program in which residents are paid to leave forests standing, could make a significant impact.
There is reason for hope in recent moves by Indonesia’s government, including support for initiatives that involve large oil palm companies working with smallholders to reduce fires and increase productivity; and the mapping of a national fire prevention plan that relies on financial incentives.
“In all of these efforts, smallholder producers operating within a decentralized form of governance provide both the greatest challenges and the largest opportunities for enhancing rural development while minimizing environmental degradation,” the researchers write.
Coauthors of “Decentralization and the environment: Assessing smallholder oil palm development in Indonesia” include Matthew Higgins, a research assistant at Stanford’s Center on Food Security and the Environment; Ryan Edwards of Dartmouth College, and Walter Falcon, the Helen C. Farnsworth Professor of International Agricultural Policy, Emeritus, at Stanford.
Coauthors of “Oil palm expansion at the expense of forests in Southwest Cameroon associated with proliferation of informal mills” include Raymond Nkongho, a former fellow at Stanford’s Center for Food Security and the Environment; and Eric Lambin, the George and Setsuko Ishiyama Provostial Professor in the School of Earth, Energy & Environmental Sciences and a senior fellow at the Stanford Woods Institute for the Environment.
Oil palm expansion resulted in 2 million hectares (Mha) of forest loss globally in 2000–2010. Despite accounting for 24% (4.5 Mha) of the world’s total oil palm cultivated area, expansion dynamics in sub-Saharan Africa have been overlooked. We show that in Southwest Cameroon, a top producing region of Africa, 67% of oil palm expansion from 2000–2015 occurred at the expense of forest. Contrary to the publicized narrative of industrial-scale expansion, most oil palm expansion and associated deforestation is occurring outside large agro-industrial concessions. Expansion and deforestation carried out by non-industrial producers is occurring near low-efficiency informal mills, unconstrained by the location of high-efficiency company-owned mills. These results highlight the key role of a booming informal economic sector in driving rapid land use change. High per capita consumption and rising palm oil demands in sub-Saharan Africa spotlight the need to consider informal economies when identifying regionally relevant sustainability pathways.
Oil palm production expanded 1.2 million hectares in sub-Saharan Africa since 1990, with expansion accelerating in several heavily forested countries since 2000. Despite a narrative of expansion driven by multinational corporations, we provide evidence of a dynamic non-industrial oil palm production sector linked to a burgeoning informal milling enterprise. Surveys were conducted with oil palm farmers in Cameroon (n = 546), the third largest palm oil producer on the continent with the greatest amount of deforestation due to recent expansion, to determine who is expanding into forest. Seventy-three percent of survey respondents reported clearing forest, the magnitude of which was explained by differences in milling strategies and supply chain integration. Large-scale, non-industrial producers played a disproportionate role in deforestation, many of which were engaged in informal supply chains through the use of non-industrial mills. Farms associated with more clearing tended to use high-yielding seedlings. Even the highest yielding farms, however, averaged only 7.7 tons fresh fruit bunches (FFBs) ha−1 yr−1, well below the potential 20 tons FFBs ha−1 yr−1 yield for Cameroon. We also found a strong relationship between deforestation and land claims. Most farms claimed ownership of their land, although only 5% had official land titles. Conservation challenges in the region arise from land tenure laws that incentivize forest clearing. This study sheds light on the role of informal supply chains in deforestation and highlights the need for strict implementation and enforcement of land use zoning policies.
Intercropping oil palm during its immature stage with food crops is usually blamed for its negative impact on the growth and future yields of palms. Agro-industries unanimously condemn such practice. For smallholders on the contrary, intercropping presents numerous advantages as it not only covers the weeding cost but also provides food and revenue while waiting for the palms to come into production. While such trade-off may be of little interest to an agro-industry, it appears as determining for many smallholders. The study was carried out in seven communities in the Bamuso Sub-division of the SouthWest Region of Cameroon and seeks to understand how smallholder oil palm farmers (small, medium and large scale) use the intercropping technique during the early stages of oil palm development as a means to improve on their livelihood. Results indicated that, a mean annual wage of 705,000 FCFA (1075) was obtained per hectare per household for smallholders practicing intercropping. In addition to income gained, intercropping significantly reduced the cost of weeding. The study therefore, suggests the need for pre-emptive measuressuch as food crop choice, planting density amongst othersto be taken into consideration when intercropping annual food crops with oil palm so as not to jeopardize the yield of oil palm at production stage. The finding is of significance for sustainable agriculture in that intercropping encourages poverty reduction for marginalized people especially women with no access to land, maximises land use by farmers, food security in households, stability in yield and profit in smallholders oil palm plantations.
The present study was carried out in four of the seven oil palm production basins generated during the Fonader-sponsored smallholder development scheme in the late Seventies and Eighties. The four basins include: Eseka, Dibombari, Muyuka, and Lobe. The objective of our study was to understand why oil palm smallholders prefer to mill their fresh fruit bunches (FFB) despite the low extraction rates of the artisanal mills and the remarkable presence of industrial mills where they could sell bunches. Our study included the submission of 200 semi-structured questionnaires to different categories of palm oil processors from 131 artisanal mills. Categories included both millers (mill owners and mill managers) and users (smallholders and intermediaries). Our results showed that the processing of FFB in artisanal mills was able to generate a better income to all categories of processors especially during the low production season. Smallholders in Dibombari and Muyuka were found to get the highest additional profit reaching 65.2 and 74%, respectively at low season, when compared to income generated by the selling of FFB at 48,000 FCFA and 50,000 FCFA /ton to Socapalm and CDC mills, respectively. The artisanal milling activity also provided temporary employment opportunities to young men, with an impact on juvenile delinquency and rural exodus. The present study also revealed that the cost of FFB processing the extraction rates of the mills and the demand for red palm oil were amongst the factors which greatly affected the decision making of oil palm processors.
Palm oil has become one of the world’s fastest growing and most valuable agricultural commodities. This rapid expansion has come at a large environmental cost, in the form of tropical deforestation, biodiversity loss and rising greenhouse gas emissions. Large multinational companies dominate the sector, but smallholder farmers still account for around 40 percent of global production and contribute significantly to environmental damages. As multinationals increasingly adopt "zero net deforestation" strategies and move away from tropical forest burning, can they pull smallholders along with them? Join the principal researchers as they discuss progress in their efforts to achieve a balance between environmental objectives and poverty alleviation through public and private sector interventions in Indonesia and West Africa.
This project, led by a multidisciplinary team of researchers, aims to drive operational innovation in the palm oil sector and promote an integrated development-environment policy agenda. The researchers will discuss preliminary results from their first round of field visits and data collection, along with the impact this research will have on broader scholarship.
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roz@stanford.edu
Senior Fellow, Stanford Woods Institute and Freeman Spogli Institute for International Studies
William Wrigley Professor of Earth System Science
Senior Fellow and Founding Director, Center on Food Security and the Environment
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Rosamond Naylor is the William Wrigley Professor in Earth System Science, a Senior Fellow at Stanford Woods Institute and the Freeman Spogli Institute for International Studies, the founding Director at the Center on Food Security and the Environment, and Professor of Economics (by courtesy) at Stanford University. She received her B.A. in Economics and Environmental Studies from the University of Colorado, her M.Sc. in Economics from the London School of Economics, and her Ph.D. in applied economics from Stanford University. Her research focuses on policies and practices to improve global food security and protect the environment on land and at sea. She works with her students in many locations around the world. She has been involved in many field-level research projects around the world and has published widely on issues related to intensive crop production, aquaculture and livestock systems, biofuels, climate change, food price volatility, and food policy analysis. In addition to her many peer-reviewed papers, Naylor has published two books on her work: The Evolving Sphere of Food Security (Naylor, ed., 2014), and The Tropical Oil Crops Revolution: Food, Farmers, Fuels, and Forests (Byerlee, Falcon, and Naylor, 2017).
She is a Fellow of the Ecological Society of America, a Pew Marine Fellow, a Leopold Leadership Fellow, a Fellow of the Beijer Institute for Ecological Economics, a member of Sigma Xi, and the co-Chair of the Blue Food Assessment. Naylor serves as the President of the Board of Directors for Aspen Global Change Institute, is a member of the Scientific Advisory Committee for Oceana and is a member of the Forest Advisory Panel for Cargill. At Stanford, Naylor teaches courses on the World Food Economy, Human-Environment Interactions, and Food and Security.
Helen Farnsworth Professor of International Agricultural Policy, Economics (Emeritus)
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Walter Falcon was former deputy director of the Center on Food Security and the Environment, former director of the Freeman Spogli Institute for International Studies, and Farnsworth professor of International Agricultural Policy and Economics at Stanford University (Emeritus). He died on August 2, 2023. Read his obituary here.
In 1972, Falcon moved from Harvard University to Stanford University's Food Research Institute where he served as professor of economics and director until 1991. From 1991-1998, he directed the Freeman Spogli Institute for International Studies, and from 1998-2007 he co-directed the Center for Environmental Science and Policy. He also served as senior associate dean for the social sciences, a member of the academic senate, and twice a member of the University's Advisory Board.
Falcon consulted with numerous international organizations, and had been a trustee of Winrock International and chairman of the board of the International Rice Research Institute (IRRI) and the International Center for Wheat and Maize Improvement (CIMMYT). Falcon became a Fellow of the American Association for the Advancement of Science in 1991. Falcon was cited as the outstanding 1958 graduate of Iowa State University in 1989 and in 1992 he was awarded the prestigious Bintang Jasa Utama medal of merit by the government of Indonesia for twenty-five years of assistance with that country's development effort. His recent co-authored papers have analyzed the effects of El Nino on Asian agriculture; Mexican agricultural policy; food price volatility; and biofuels.
Falcon received a BS in Agricultural Economics at Iowa State University in 1958, an MA in Economics at Harvard University in 1960, and a PhD in Economics from Harvard University in 1962.
This project focuses on private and public sector strategies for promoting sustainable palm oil, with sustainability defined by environmental, social, and economic objectives. The main goals are:
The present article explores the origin and changes in partnership agreements established between agro-industries and oil palm smallholders in Cameroon. The different forms of partnership which have existed over the years in the oil palm sector until now are assessed, notably the FONADER-sponsored smallholder scheme (1978 to 1991) and more recently the Afriland First Bank sponsored project of Socapalm Eseka (2007/2008 to present). Special attention is given to the factors and conditions that have influenced the outcomes of these partnerships, specifically the failure of the FONADER-sponsored smallholder scheme. The authors conclude that with the current absence of steady support from the government to oil palm smallholders, especially after the implementation of the structural adjustment plans, private partnership schemes between agro-industries and oil palm smallholders could be highly profitable for both stakeholders. Such partnerships can foster social cohesion and limit further encroachment of agro-industries into the primary forest, provided such partnership agreements are carefully planned and adequately implemented.
The present study is an evaluation of the current strengths and weaknesses of the oil palm smallholder sector in Cameroon, or more precisely of the non-industrial sector, as some holdings owned by elites can reach hundreds of hectares. A randomized sample of oil palm producers was chosen after categorization into elites, migrants, natives and company workers (past and present) in four palm oil production basins in the Southern part of the country. 176 semi-structured questionnaires were administered. The production basins included: Eseka, Dibombari, Muyuka, and Lobe. Results from the study revealed that elites owned larger average areas (41.3 ha) than the other categories of oil palm producers. All categories recorded low average plantation yields, ranging from 7 to 8.4 t FFB/ha/year (with minimum yields of 3 t FFB/ha). Though the elites showed better bargaining power and higher income, all categories of producers faced similar problems such as the high cost of inputs with no governmental subsidies, the difficulty in accessing loans with low interest rates and the use of rudimentary working tools. Despite such weaknesses, the sector also demonstrates some strengths such as the ability to impose little threat to the primary forest when compared to agro-industrial plantations, the availability of a domestic and sub-regional market for red palm oil, the availability of artisanal mills with low extraction rates although able to generate more income for the producers. There is a need for governmental policies that will strengthen partnership between small and medium oil palm producers and agroindustries as it was the case during the Fonader period, in order to converge with the poverty reduction strategy initiated by the government of Cameroon.