Intruiging Intricacies Of The Palm Oil Industry In Malaysia

Intruiging Intricacies Of The Palm Oil Industry In Malaysia

Never knew palm oil sector could be so complicated.

Our upcoming Malaysia Young Leaders Programme 2018 will be focused on issues of deforestation and sustainable land use through good agricultural practices in the palm oil industry. As this is the first programme in palm oil for GIFT as a whole (we are running our 60th Leaders Programme in India as I write this post), the GIFT ASEAN team needs to crack our heads on what would the potential output look like. This is definitely a tough one.

Those who are familiar with the industry would know that there are around 650,000 independent smallholder farmers in Malaysia and about 2million in Indonesia which commensurates with the ranking as the second and largest producer for palm oil in the global markets. In Malaysia, there are about 2million livelihoods affected by the whole supply chain and that figure, is no joke.

If you dive deeper into those figures, we’d find that there three categories of producers, they are the medium and small sized independent small holders, organised small holders (the like of FELDA, FELCRA, FGV etc) and the big players. Within this enclave of medium and small-sized farmers there, the challenges are wide and varies from state-to-state which makes it even harder to mobilise the group for economies of scale, certification, efficiency and increase in productivity.

Given the current heat in the industry on issues of certification, deforestation, wildlife protection, potential European ban etc, it will be interesting to watch how we (government and big players) are responding and moving the producers (towards a sustainable path).

Some of the questions that I have for the industry, given our palm oil sector is just a-little-over-100-years old, why haven’t we seen much technological advancement or innovation from harvesting to the way the upstream supply chain works.

Further into research, I picked up that agencies under MPIC (Ministry of Plantation Industries and Commodities) with different objectives/KPIs such as MPOA, MPOB, MPOC, MPOCC, FELDA, FELCRA and the list goes on seems to be engaged only within the scope of their purpose. Thus, a call for a tri-sectoral collaboration is imperative where government, private and civil society sector can pull their weight through coming up with innovative, practical and implementable solutions that would be beneficial not only to those at the bottom of the supply chain but the environment and wildlife (which is why we are in this rut in the first place).

So what’s cool about GIFT’s work?

Our Malaysian Young Leaders Programme is an annual programme for leadership learning and development with a different project focus at each programme. Part of the MYLP methodology is having a tri-sectoral cohort that exposes the participants to a real Malaysian challenge and for them to come up with an innovative solution which would culminate into a public forum at the end of the two-week programme.

In summary, what would an innovative business model or white paper recommendation look like? I look forward to the breakthrough moments by the Malaysian top young leaders of tomorrow and I’d like to invite you to join the discussion of the recommendations coming up on 27th of April 2018.

Details will follow once we have confirmed the venue. See you there lah.

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By 2050, we’ll have:
– 9.5B+ people
– .2B+ pets
– 20B+ livestock animals
– 100B+ farmed fish
– If they’re all going to eat, we’ll need to make some changes.
We are facing a daunting challenge – in the near future, our food system will not be able to support our growing population.
At the same time, the growing demand for protein is taking a huge toll on the planet.
Livestock rearing: Leader in green house gas emissions
Overfishing: Fisheries collapsing
​Soy ,Corn, Oil Palm: Clearcutting rainforests
An excerpt from the New Straits Times 15.11.2017
“It was reported that the EU Parliament had adopted a resolution in April that only environmentally sustainable palm oil could be imported into the EU after 2020. It also called for a single certified sustainable palm oil scheme for Europe-bound palm oil exports to make sure that the oil was produced using environmentally sustainable methods and prevented deforestation.”
How would this impact our palm oil growth/exports especially smallholder farmers in Malaysia (600k smallholders) and Indonesia (17.5million smallholders)? 
Interested to know more, join the leadership learning and development programme looking into real-time solutions. Click on the link below:
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