CONSIDER PALMOIL NOT JUST RICE FARMING

Pablito P. Pamplona, Ph.D.

I. FOOD CRISIS IS COMING!

Major events are leading to the storm predicted by the Food and Agriculture Organization (FAO) which threatens to push the future worldwide food situation to crisis level – national food shortages and at unprecedented high prices expected to be unaffordable to many rural and urban poors.  These events include climate change, shrinking farm holdings, increasing farm production cost, competing use of food products for biofuel, and decreasing interest in grain farming due to low profitability and income.

The response of the Philippine government through the Department of Agriculture to overcome the food crisis is to focus almost all of its agricultural production resources to rice and corn farming leaving a crunch (if any) to the production of other food crops like palmoil.  While rice is the staple food of the Filipino and therefore rice farming deserves priority, the production of palmoil in Mindanao and Southern Visayas deserves consideration by farmers and government as this will significantly contribute to a broader and comprehensive solution to the food crisis of the country.

II. PALMOIL IS MORE THAN JUST FOOD

Both rice and palmoil are important food commodities.  However, oil palm is more than just food.  It is a high value crop giving farmers much higher income than rice thus giving the farmers cash to buy rice, other food commodities and goods to make him and the people around him healthy and happy.  Palmoil is also a strategic energy commodity; in situation when petroleum oil is difficult to obtain in Arab countries or become expensive, palm oil can take the place of petroleum oil as biofuel to power vehicles and engines for industrial purposes.  Palmoil, use by Filipino as cooking oil and many more, offers many healthy attributes such as a high content of antioxidants and certain ingredients which assist in sustaining low cholesterol level in the blood for users.  This is the reason why in the USA soybean oil is blended with palmoil by food processors to overcome obesity, a serious health problem in that country.  The many good attributes of palmoil triggers its high demand for food in China, India, Pakistan and European countries.  A larger component of the palm oil requirement of the Philippines is being imported.

Focusing on rice farming only helps overcome the rice shortage of the country but not food crisis.  In fact, any rice farmer planting rice remains in the same economic situation as before after each rice harvest due mainly to price control on rice.  Many of the rural and urban poors cannot buy rice at a higher price attractive enough to motivate the rice farmers to plant his next crop of rice.  This makes the unilateral government support on rice to overcome food crisis unsustainable.

III. MULTI-BENEFITS OF OIL PALM FARMING

Planting palm oil on the other hand brings five national benefits, namely:  overcome the increasing food importation in the form of vegetable oil, increase the capacity of the rural folks to buy rice and other food commodities even at high price, provide farmers with higher income to overcome poverty, help mitigate climate change and increase the chance for a more peaceful Mindanao.  Let’s discuss in brief how these five benefits are achieved by oil palm farming.

First, the Philippines ballooning vegetable oil importation in the form of palmoil is now at 155,936 MT valued at US$ 150 million.  This is expected to increase to over 220,058 MT and valued at US$ 250 million in 2020 (Table 1).  This importation helps drain the country’s foreign reserve and provide benefits to the palm oil farmers of Indonesia, Thailand and Malaysia rather than the Filipino farmers.  A significant and reasonable government program to utilize wide idle and underutilized lands in Mindanao to oil palm production shall overcome this huge importation and to benefits the Filipino farmers.  To be self-sufficient in palmoil there is a need to plant an additional of 50,000 ha to the current planting of 43,000 ha up to the year 2016.  Further increase in the area planted to oil palm in Mindanao which is blessed with almost a million ha suitable for oil palm farming shall make the Philippines a net importer of palmoil in 2020.

Table 1.  Actual (2006-2009) and projected (2010-2020) importation of palm oil CPO and PKO of the Philippines.

YEAR VOLUME OF IMPORTATION (MT)* TOTAL
CPO PKO*
2006 118,291 8,106 126,397
2007 123,499 8,282 131,781
2008 129,155 8,463 137,618
2009 135,071 8,647 143,718
2010 141,257 8,836 150,093
2011 146,907 9,029 155,936
2012 152,783 9,226 162,009
2013 158,894 9,427 168,321
2014 165,250 9,633 174,883
2015 171,860 9,843 181,703
2016 178,734 10,058 188,792
2017 185,883 10,278 196,161
2018 193,318 10,502 203,820
2019 201,051 10,731 211,782
2020 209,093 10,965 220,058

*    Crude Palm Oil Estimated to grow on the average of 4% annually

**  Palm Kernel Oil Estimated to grow 2.18% annually

Note: Data from 2006 to 2008 are actual data from Garin, 2008, former Administrator PCA.  The Philippine Oil Palm Industry:  Data of 2009 to 2020 are projected based on historic annual importation.

Secondly, oil palm farming is highly effective in mitigating climate change.  Oil palm trees are among the most, if not the most, efficient crops in capturing and utilizing high amount of sunlight and CO2 in the atmosphere.  This contrasts with coconut trees, considered as among the inefficient crops of the world, capturing low amount of sunlight and CO2 and yield only 20% of the oil yield of oil palm trees per unit area.  Oil palm plantation creates an environment almost similar to a virgin forest in terms of CO2 and sunlight utilization.   Contrary to many misinformation campaigns against palmoil production, processing the fresh fruit bunches to oil does not pollute the environment.  New technologies are in place in Indonesia, Malaysia and Thailand utilizing the by-products of oil processing like empty fruit bunches to generate high quality organic fertilizers, biogas and electricity.  This provides low-cost and renewable electric power to many rural areas in these countries.  The leaves, fronds and trunk of oil palm trees are projected to provide the third generation of renewable biofuel to counteract the high cost of petroleum oil from the Arab countries.  Due to the high yield of oil palm trees with many climate mitigating benefits, a famous Canadian Agricultural Scientist, Dr. T.H. Fairhurst considers oil palm as ”The greatest crop of Southeast Asia”.  Unfortunately our national leaders are not able to see the potential of palmoil farming similar to what is seen by political leaders of Malaysia, Indonesia and Thailand.

Third, palm oil farming provides the farmers with high income and increase capacity to buy rice and other food commodities, even if the rice farmers sell their product at a much higher price for a more profitable rice farming.  This is because a hectare of oil palm farming gives the farmer today a net income of from P182,000 to P325,500 (Table 2) annually, four to more times the income of a farmer engaged in rice farming.  Oil palm farming is a lot easier and five times more productive than coconut farming.  A farmer who plant oil palm trees in suitable area can expect high yield and income in just 28 months after planting and for over 35 years.  A palm oil farmer with two to three ha has the capacity to buy rice and other food commodities like vegetables, fruits, meat, milk, eggs, and others to make his family and farm workers healthy, happy and create a vibrant rural economy.

Table 2.  Income of palm oil farming in Mindanao at a current world price of US$ 1,200/ton of crude palm oil (CPO).

PRODUCTIVITY LEVEL*
HIGH MID LOW
Production of Fresh Fruit Bunch (t/ha/yr) 35 25 20
Price/on (P)* 10,000 10,000 10,000
Gross Income 350,000 250,000 200,000
Less Expenses 24,500 21,000 18,000
Net Income:
Yearly 325,500 229,000 182,000
Monthly 27,125 19,033 15,167

*    Represents the yield of oil palm starting at the 3rd year to over 35 years after planting in soils of high, medium, and low level of productivity.

Fourth and fifth, palm oil farming is effective in overcoming rural poverty and bringing peace to rural communities.  This is proven in rural Indonesia, Malaysia, and Thailand which now cultivate 7.5, 4.5 and 0.675 million ha of oil palm, respectively.  Thought massive planting of oil palm and rubber, both Indonesia and Thailand are moving ahead of the Philippines in meeting the United Nations Millennium Development Goal of overcoming poverty.  These countries have demonstrated that one way to overcome food crisis is to increase the capacity of the rural folks to buy rice and other food commodities is by engaging in the production of high income tree crops like oil palm and rubber.  Vietnam with its current aggressive program in expanding rubber, coffee, and oil palm farming is projected to overtake the Philippines the per capita income and in reducing poverty in two years.

IV. PROSPERITY AND PEACE IN SOUTHERN THAILAND THROUGH OIL PALM FARMING

On March 4 to 11, 2011, the author with some palm oil planters and researchers from the University of Southern Mindanao got a first hand information on how oil palm farming brings about rural wealth, prosperity and peace to the Southern provinces of Thailand – Krabi, Surathani and Songkla in Southern Thailand (Figs 1 to 3).  These provinces were once part of the Muslim secessionist movement due to poor rural economy.  That was the time when the Thai government was just promoting the cultivation of rice and corn for domestic sufficiency and export.

Starting 15 years ago the government massively promoted the planting of oil palm and rubber trees in tandem with rice farming in Southern Thailand which had similar agricultural resources of Mindanao.  This totally changes the socio-economic situation in the countryside.  Now a farmer with three to five ha of palm oil owns a good house loaded with appliances, capable of buying a brand new pick up of either Toyota, DMax, Navarra, etc. for use by his family and to haul his palm fruit bunches weekly to the palm oil processing/milling plant where palmoil is extracted (Fig 4).  Upon delivery, a farmer is paid with cash more than enough to buy rice and other nutritious food items and household commodities.  This created a vibrant rural economy in Southern Thailand.  During the day farmers and laborers are busy attending to the farms planting oil palm in any vacant space including his backyard as quality hybrid seedlings are made readily available from the government oil palm planting program.  Limited agricultural lands remain idle to these days in these three provinces.   Late afternoon and at night time the rural market places are well-lighted, full of rural folks, eating, singing, discussing farming innovations and buying households and other goods (Fig 5).  Such is an evidence of how palmoil farming side by side with rubber farming brought rural wealth and prosperity to these southern provinces at years back was less developed than Mindanao.  Rebellion in these provinces is a thing of the past.  Variety of food is in abundance in household and eatery places where several times in the past there were food riots not because of lack of food but for lack of money to buy food.

V. STRATEGIES USED IN EXPANDING OIL PALM FARMING IN SOUTHERN THAILAND

Thailand started oil palm farming in the Southern provinces in 1968, six years later than the first commercial planting of palm oil in Basilan, Sultan Kudarat and Agusan in Mindanao in 1962.  For lack of government support palmoil farming in Mindanao remain stagnant; that in Southern Thailand expanded over the years.  Government support in Thailand is credited for the rapid expansion of this crop to now at almost 700,000 ha.  More than 60% of the plantings in Thailand were done just in the last ten years.  From a traditional palmoil importer since 2006 Thailand became a net exporter of palmoil; now it exports palmoil worth almost US$ 500 million annually and expected to export more than US$ 1 billion worth of palmoil by the year 2016.  Among the strategies used by the government of Thailand to promote the expansion of oil palm farming in Southern Thailand are as follows:

  1. Created a parallel program in the promotion of the cultivation of rice and corn for the cultivation of oil palm farming in Southern Province where oil palm is highly suitable.
  2. Encouraged private investments in oil palm farming particularly in the areas of putting up plantations and milling plants to showcase technologies to Thai farmers largely smallholders.
  3. Made readily available to small landholders planting materials on plant-now-pay-later program.  This made possible for farmers even with a land property of less than 1/2 ha to plant oil palm, thus bringing almost all suitable vacant lands including those in the backyard to palmoil production.  Today, there are more than 200,000 smallholders engaged in oil palm farming in Southern Thailand.
  4. Provided the oil palm smallholders with effective training and innovation programs which include sustainable farming and best farming practices for high yield and income.
  5. Starting 12 years ago the Thai Government put up two national research centers for oil palm, one in the province of Surathani and another in Krabi.  Due to the strategic importance of palmoil as food, the Thai government was assisted upon request by the Food and Agricultural Organization (FAO) for the development of these research centers.  These centers have now developed seven outstanding oil palm hybrids, made available planting materials to smallholders and extensively introduced innovative practices for high yield.
  6. Developed the rural infrastructures particularly farm-to-market roads which enable farmers to deliver their oil palm ripe fruit bunches to the milling plants within 24 hours of harvest for quality palmoil.
  7. Provided a strong regional and provincial economic and agricultural development autonomy to the South with equitable funding support.  This enables the provincial governments to implement meaningful and aggressive program in the planting of oil palm and rubber trees.  One should take note that Indonesia cited regional agricultural development autonomy as responsible for the massive planting of rubber and oil palm trees to overcome poverty.

VI. A POSSIBLE MODEL FOR CREATING A PROGRESSIVE RURAL MINDANAO

It is hoped that our farmers, LGU officials and national leaders, consider the agricultural development breakthroughs in Southern Thailand and Indonesia as possible model for the agricultural development of Mindanao to bring economic prosperity to this impoverish island with rich agricultural resources.  Political and agricultural leaders of Mindanao should demand not only political but also meaningful agricultural development autonomy with equitable funding allocation.  Such is needed considering that the priority to develop Mindanao into a dynamic progressive rural economy through massive plantings of oil palm and rubber tree is far from the priority of the national government.  Mindanao can best help solve the country’s food crisis and rural poverty by aggressively pursuing oil palm and rubber tree farming side by side with other high value crops like fruits and vegetables.  Apparently this is not in the priority of the agricultural programs of the national leaders.  Many national leaders are imposing programs which maybe one of national interest are not in the best interest of the rural communities of Mindanao to overcome poverty and in bringing peace and prosperity.  Example is in making Mindanao a major rice granary of the country ignoring the clamor to aggressively implement the expansion of palmoil and rubber farming.  The country can be better off when high value tree crop farming is being aggressively pursued side by side with rice farming in Mindanao.

About the Author

A retired Professor of the University of Southern Mindanao, he received many national honors and awards while in the government service.  Among these are the National Outstanding Agricultural Scientist Award in Malaca?an Palace in 1998.  He is a senior author of six books on fruit production and is actively writing books on palmoil and rubber farming.  Currently, he co-manages a family farm of 40-ha of rice, coconut, fruits, rubber and oil palm trees.  He traveled extensively and regularly to Thailand, Malaysia, and Indonesia to document innovative practices in rubber and palm oil production.  He can be contacted through his email address pabpamplona@yahoo.com and CP # +639189081227.

Fig. 1. A group of Filipinos who studied the production, processing and socio-economic impact of oil palm farming in Southern Thailand on March4 to 11, 2011.  At the near background are six month old oil palm hybrid seedlings for distribution to small landholders.  At the further background is an oil palm farm demo on high productivity for a net income of from P182,000 to over P325,500/ha per year using best management practices.

Those in the picture from L to R are Mr. Jerry John Taray, a businessman, palm oil farmer and Regent of USM at Kabacan, Cotabato; Mr. Sarut Cholathan, a Thai plantation manager who served as the tour guide and host;  Ms. Marisa E. Garcia, a palmoil researcher of USM; Dr. Pablito P. Pamplona; Dr. Adeflor G. Garcia, a palmoil researcher and Dean of the USM College of Agriculture; Dr. Emelita D. Pamplona, a socio-economic researcher and Engr. Vernoulli Belgira, a manager of a palmoil milling plant in Tacurong, Sultan Kudarat.

Fig. 2. Dr. Pamplona with a Thai friend, Saokee, in a newly planted palm oil hybrid in Krabi, Thailand intercropped with pineapple for high farm income within two years while waiting for the palm trees to become productive.  In just 28 months after field planting these oil palm trees are to produce ripe fruit bunches (inset picture) at the rate of 20 to 35 tons/ha per year, 25% of which are quality vegetable oil, five times the vegetable oil produced by coconut trees on the same area.  The oil palm trees remain productive for over 35 years.

Fig 3. Mr. Cholathan explains to the Filipino study tour participants the best management practices in the culture, harvesting and milling of oil palm for high yield of quality vegetable oil.  Compared to other vegetable oil crops, like soybean, rapeseed, coconut and peanut, palmoil have high contents of antioxidants and ingredients which help sustain low cholesterol level of human blood reducing the occurrence of heart attack.

Fig 4. Pickup vehicles loaded with palmoil fruit bunches as those found above is a common sight in the four to six lanes of highways in Southern Thailand.  Small landholders with less than two ha of oil palm trees use the pickups to deliver their harvests to the milling plants.  Those with bigger farms use the forward or 10-wheeler cargo trucks.  Upon delivery, the farmers are paid with cash more than enough for his need of rice and other food commodities to keep his family and farm workers healthy and happy.

Fig 5. Eating variety of nutritious food after a hard day work is among the favorite pastimes of Thai oil palm farmers, at times with friends, as shown above.  Thailand has demonstrated that to solve the food crisis, it is not just enough to promote rice production but equip the rural folks with the capacity to buy rice and other food commodities by engaging in the production of high value tree crops like fruits, oil palm and rubber trees.

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