22/02/2013 (PR Newswire) - WWF has initiated a campaign attacking palm oil imports from South-East Asia into India, claiming that palm oil is a key driver of deforestation, and Indian imports of the commodity are driving biodiversity loss and greenhouse gas emissions through peat burning. The claims are either gross exaggerations or false. Meanwhile the foreword of the report was written by a businessman with commercial interests in domestic palm oil production, suggesting protectionist intentions.

India is the world's largest importer of palm oil, and represents a huge market for both importers and domestic vegetable oil producers. According to the report, India's palm oil imports have doubled in the last few years, with the majority supplied by imports from Indonesia and Malaysia. Efforts to restrict imports would limit economic opportunities in South East Asian producer countries, and ultimately raise levels of rural poverty in producer countries.

India is also a large market for the RSPO, the WWF established and endorsed palm oil certification body. RSPO has struggled to gain a foothold in the Indian market, where there is little consumer demand for eco-labels. Darrel Webber, contributor to the report and Secretary General of the RSPO, indicated that advocacy efforts in India are one of the organisations “strategic pillars”.

The WWF report claims that increased procurement of RSPO certified palm oil will reduce the environmental impact of commodity production in South East Asia. The contention is contemptible. The WWF attack insinuates that Asian palm oil imports are somehow ‘unclean', and suggests such imports are unsustainable. These claims cannot be substantiated.

Over a quarter of India's palm oil imports come from Malaysia. Malaysian palm oil industry is well regulated and is responsible for little forest lost. Deforestation rates in Malaysia are low, even compared to some fully industrialised countries. Over 60% of Malaysia is still forested, while much of the industry expansion that has occurred over the last two decades has been confined to already degraded lands, or lands converted from other commodity crops. The country has strict biodiversity and conservation regulations; while land clearing is well regulated in part since Malaysia enacted a ‘zero burn' policy over 10 years ago.

The WWF report includes a foreword by Jamshyd Godrej, Chairman and Managing Director of Godrej & Boyce Manufacturing Company Limited. This holding company includes diversified interests, including agribusiness Godrej Agrovet – a significant domestic palm oil grower and producer. Godrej is also President Emeritus of WWF India.

According to its website, Godrej Agrovet is the largest palm oil producer in India with over 44900 hectares of smallholder cultivation and potential cultivation area of over 200,000 hectares. The company claims to be “positioned to significantly reduce India's crippling dependence on imported edible oil.”

The company clearly has an aggressive strategy to compete with overseas imports, raising the possibility that Godrej's cooperation with WWF to campaign against palm oil imports is de facto protectionism. Only 10 per cent of palm oil produced globally is certified under the RSPO system. If India only permitted imports of RSPO certified palm oil, the cost of palm oil in India would rise. The approach is likely to be supported by protectionist interests within the Indian agricultural sector.

Limiting South East Asian imports might aid WWF and Godrej and Joyce, but not the Indian people or the Indian Government. A senior Indian official told palm oil producers recently that India needed cheap palm oil, not certified palm oil.

Palm oil production in India should be supported. The industry has contributed significantly to economic development and poverty alleviation in South East Asia and Africa. With investment and expertise, palm oil may also be an important tool for poverty alleviation in India as well. However efforts to decrease the competitive advantage of competing imports - through coordinated campaigning by business interests, WWF and RSPO - will not strengthen the India industry in the long term.

SOURCE : World Growth