Palm oil is still an underdeveloped industry
In the Philippines, groups like the Philippine Palm oil Development Council, Inc are lobbying with the government to improve the palm oil industry in the country, saying that it is being “neglected.”
In a paper prepared for the 7th Philippine Palm Oil Congress 2011 last August 25-26, 2011, the PPDCI said the continued government failure to support the palm oil industry in expanding to at least 144,000 hectares by the year 2017 would mean that by 2022 the country will be forced to import 576,596 metric tons of palm oil valued at $ 634.26 million or P27.26 billion.
“It shall also forfeit in favor of the Malaysians (through imports) the opportunity of giving high farm income to 60,000 would-be oil palm farmers and direct employment of 288,000 rural workers (sic),” the group said.
The PPDCI is insisting that even if the Philippines’ palm industry is very underdeveloped compared to the coconut industry, there is a great potential in it as the local demand for palm oil is steadily increasing at 2.18 percent per year.
“Palm oil can replace part of the coconut oil consumption to allow more exports of the more expensive coconut oil.
Nevertheless, the Philippines is now starting to expand and develop its palm oil industry, preparing to be one of the major exporters from the East ASEAN Growth Area (BIMP-EAGA),” it said.
The BIMP-EAG a subregional economic cooperation initiative in Southeast Asia by the governments of Brunei Darussalam, Indonesia, Malaysia and the Philippines which are all members of the Association of Southeast Asian Nations (ASEAN).
Private-sector groups like the PPDCI and government agencies like the Philippine Coconut Authority and the Philippine Council for Agriculture, Forestry and Natural Resources Research and Development have issued reports that there is a need to expand the country’s palm oil industry and “to meet local demand for export, promote access to capital; promote joint ventures with foreign investors; and gain access to markets.”
In the meantime, reports have it that the Land Bank of the Philippines now has a financing package for palm oil. The loan ceiling is about P 144,000 (US$3,349) covering the development costs for the first three years and for working capital for the fourth year. The loan ceiling is for cooperatives and small and medium enterprises, and loan terms is 10 years.Even small landowners are being encouraged to use their lands for cash crops such as oil palm.
Fight against land conversion for biofuels
For the most part, there have not been many protests against palm oil companies in the Philippines, but farmers organizations and human rights groups continue to campaign against the landgrabbing of various corporations that have jumped on the biofuel production bandwagon. Groups like Peoples’ Coalition for Food Sovereignty, the Asian Peasant Coalition (APC), Kilusang Magbubukid ng Pilipinas, and Danggayan Dagiti Mannalon ti continue to fight against massive land grabbing and conversion of agricultural lands into biofuel plantations.
During the Macapagal-Arroyo administration, the Philippine Agribusiness Development Corporation Center (PADCC) was able to earmark six million hectares of supposedly “idle” lands for the production of sugarcane, coconut, cassava, jathropa, oil palm and other high-value export crops.
Groups like the KMP said the country is now facing a situation wherein a significant percentage of agricultural lands are in the hands of foreign investors and their local business partners engaging in biofuel products. As the months pass, the proportion of produce retained for domestic consumption is being tragically reduced.
The claim of the KMP is bolstered because of government policies supporting land use conversion for biofuels.
In 2008, Joint Administrative Order (JAO) No. 2008-1, Series of 2008 was issued. These were the the Guidelines Governing the Biofuel Feedstocks Production and Biofuels and Biofuel Blends Production, Distribution and Sale , and it was enacted by the Departments of Energy, Agrarian Reform (DAR), Agriculture, Environment and Natural Resources, Finance, Labour and Employment, Science and Technology, Trade and Industry, Transportation and Communication, the National Commission on Indigenous Peoples, the Philippine Coconut Authority, the Sugar Regulatory Administration and the National Biofuels Board.
The Center for Agrarian Reform Empowerment and Transformation, Inc. pointed out that the order not only expanded the scope of coverage of lands that may be converted, it also exempts from DA certification landowners whose “effective area is twenty five (25) hectares or less.”
” This means that all landowners with 25 hectares or less can arbitrarily and unilaterally decide to convert his landholding to a biofuel production site. The DAR estimates that 1.3 million hectares of land are undistributed. If these hectares of lands are made up of landholdings bigger than the retention limit of five hectares but less than 25 hectares, then they may immediately be converted into biofuel sites, no questions asked and no certification process required,” it said.
The joint order made no mention of the farmers and tenants who cultivate the land, and by extension, it gave no assurance that the tenure security of the farmers is protected should there be an agri-business arrangement between the landowner and a foreign corporation. In the meantime, seeing how the government continues to take a position of apathy towards demands of farmers for genuine agrarian reform and actual land distribution, the human rights, economic welfare and the very future of millions of farmers and the country’s food security is all the more threatened.
(1) According to business profile posted on the net from the Securities and Exchange Commission (SEC Form 17-A (2008) A. Brown Company, Inc.(registered as BRN in the SEC, but its acronym in business report profiles in ABCI) is a producf of a merger between three companies that focused on chemicals and real estate development.
In June 1993, the SEC approved the plan of merger between Brown Chemical Corporation, Brown Chemical Sales Corporation and Epic Holdings, with Epic Holdings as the surviving entity.The resulting company was renamed to its current corporate name, and ABCI serves as the holding company of the Brown Group of Companies.
Its primary focus are the real estate projects located in Cagayan de Oro City, Cainta, Rizal and Valencia City, Bukidnon. According to business reports, ABCI through its subsidiaries, has begun ventures into oil palm nursery and seedlings distribution, palm oil milling, operation of apartelles and real estate brokerage.