Palm oil: Smallholder expansion into peatlands on the rise

A new study overturns assumptions that the palm oil industry is solely to blame for deforestation and peatland conversion in Indonesia.

The popular narrative about palm oil in Borneo is a David-and-Goliath story.

Deforestation and peatland conversion is largely driven by big business growing oil palm in industrial plantations and exporting to overseas markets, the story goes—while smallholders generally convert tiny patches of existing cropland and produce comparatively few negative environmental impacts.

Media articles and activist campaigns reinforce these messages—and at the same time, oil palm research disproportionately focuses on industrial plantations, says CIFOR Senior Scientist George Schoneveld.

In the last couple of years, Schoneveld says, the big companies have been under increasing pressure from financiers, certification bodies, and their customers to clean up their supply chains—while oil palm smallholders go largely unmonitored.

They’re also the fastest-growing producer group in Indonesia: the total area cultivated with oil palm by smallholders is expected to grow from approximately 40 per cent of the total national acreage in 2016 to over 60 per cent by 2030.

So Schoneveld and colleagues from the Center for International Forestry Research (CIFOR) devised a way to find out who these smallholders were, and how they were impacting the environment—and the results upended a number of popular assumptions.

Usually you’d come to a farm and you wouldn’t find anybody. So you’d have to grab people from the neighbourhood and say, who does this belong to?

George Schoneveld, senior scientist, CIFOR

Part of the reason it’s difficult to study smallholder oil palm is because there’s no official government record of which land they own—so Schoneveld’s team had to create their own maps. They used Google Earth and another high-resolution satellite service, SPOT, to scour images of Kalimantan for the tell-tale signs of palm trees.

Then they used field validation to check their results and gather more details. Random spatial sampling gave them a series of GPS coordinates for 947 oil palm plots in West and Central Kalimantan—roughly 10 per cent of the smallholder plots they identified. Then some of the team hopped on motorbikes and rode out into the countryside.

“Usually you’d come to a farm and you wouldn’t find anybody. So you’d have to grab people from the neighbourhood and say, who does this belong to?” Schoneveld says. “Then you’d have to find the owner somewhere in a village, or for the bigger farms with absentee owners, sometimes you’d have to travel 100 kilometres to interview them.” This was time consuming, as you’d imagine—the resulting paper was three years in the making. 

What they found

When they crunched the data, Schoneveld’s team found that the kinds of land converted to oil palm changed over time.  The study covered plantations established between  2002 and 2016, and over those years, the researchers found an increase in the conversion of peat soils .

Their projections point to peat conversion rates rising for the foreseeable future, with the majority of smallholder oil palm expansion happening on peat soils by 2030.“The agricultural land that people are prepared to convert to palm oil has already been converted—and a lot of the existing farmland is becoming exhausted, so farmers are venturing further away and going into more marginal areas,” Schoneveld says.

A common perception in Indonesia is that migrants from other islands are responsible for the worst environmental effects of palm oil. But the study revealed that migrant farmers were in fact least likely to convert forests and peatlands—while indigenous farmers were most likely to convert these ecologically sensitive landscapes.

Another finding points to the prevalence of comparatively inexperienced farmers cultivating oil palm on peat soils, says Schoneveld. Many of these plots were owned by civil servants, he says.“People who are not really farmers are recognising that hey, oil palm can be quite profitable—they tend to have a more entrepreneurial perspective, and are thinking, where can we get land cheaply?” That cheap land tends to be forested or have peat soils.

What’s at stake?

It’s hard to say which is the worse environmental outcome.

Borneo’s towering rainforest hosts some of the richest biodiversity in the world, but peat forests have the biggest impact on climate change. Peat soils store huge amounts of carbon, and the drainage that occurs when they’re deforested releases that carbon into the atmosphere. “From the perspective of greenhouse gas emissions this type of conversion is especially disastrous,” Schoneveld says.

Converted peatlands are also prone to fire, and the risks are amplified by social dynamics the researchers identified.“You have inexperienced farmers converting peat, and peat is one of the most complex soils to farm responsibly and effectively. Our results showed that about a third of the farmers on peat soils have experienced fire problems, which is largely the result of mismanagement.”

In the former peat forest plots, many of the farmers were also not compliant with ISPO—a certification regime designed to improve sustainability practices.“So you have incompliant people adopting poor practices and then experiencing fire hazards. Partly you can attribute that to cultivating peat in general, which is just more difficult, but the role of inexperience also plays its part.”

What would help

Indonesia’s national government is very committed to tackling the problem of forest fires, Schoneveld says—but that commitment is yet to trickle down to the district level, which is where decisions about land use and enforcement are made.

“If district governments invest in mapping out their peatlands properly, in providing technical support to those inexperienced farmers to manage the peat soils better, conduct better land use planning, and perhaps restrict those sorts of farmers from going onto difficult peat land in the future—that would go a long way towards curbing this expansion and its impact.”

To make this happen, though, districts will probably need external support, Schoneveld says.“In a lot of these places, local government capacity is very low, and Indonesia’s decentralisation means they are also not sufficiently incentivised to follow national policies. And if you have so much money going around in oil palm, that can both enrich the district and benefit individuals also investing in oil palm, you have a recipe for inaction.“

The fact that so many local elites are going into palm oil in these marginal areas means that some people in district government may have a vested interest in not doing anything about it—because they are also benefitting.”Ultimately though, better planning will help both smallholders and the environment, Schoneveld says.

Under ISPO, oil palm farmers will increasingly be required to demonstrate that their land has been legally obtained, and is designated for palm oil.“If they can’t demonstrate that, those farmers may lose access to markets—and therefore rely on localised, highly unsustainable supply chains which could lead to low prices and exploitative behaviour.”

This story was published with permission from CIFOR Forests News.

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