The Tangled Web of Palm Oil Production - We've Been Here Before

Unless you're a real health and fitness devotee, you've probably never thought about palm oil. I never had, until I heard a recent radio program discussing its role in the migration of Central Americans to the U.S. Seems the struggle between small farmers and large palm oil production companies was resulting in land that had been farmed traditionally on "communal" lands to be taken over for organized high-production management.

The same thing is being experienced by farmers in Indonesia and Malaysia. Here is a well-done documentary that is well worth the time, if you're interested in the impact of renewable energy policy on the world in general.

I made note of these comments in the video...

"Since the EU decided to save the climate by imposing biofuel quotas, member states are committed to adding at least 5% vegetable oil to fuels...The quota is expected to rise to 10%."

"Since Europe introduced its biofuel policy, the land used for palm oil monoculture has quadrupled."

"The Indonesian government subsidizes every liter of biofuel...and there are plans to keep raising the amount of palm oil added to biofuel to 30%."

The focus of the video is explained in the introduction provided on its YouTube site...

"Palm oil has become one of the world's most ubiquitous resources - it's in our food, fuel, and cosmetics to name but a few. Yet the palm oil industry is responsible for committing environmental destruction on a massive scale in the tropical paradises of Indonesia, at the expense of local populations and wildlife. Can the developed world shake its addiction to palm oil?"

After watching the video, however, I don't see the problem as the world's "addiction to palm oil." Seems to me the problem is a lot more complicated.

Palm oil has the same problem that wood has. It's a great natural resource,  and can be used in almost infinite different ways that are beneficial to man. And, like wood, there are efficient ways to produce it, which tend to be profitable, and inefficient ways to produce it, which are usually not. The video clearly highlights the difference, and the impact on those trying to produce it inefficiently, usually small local farmers.

The issue at the foundation of all natural resources is the control of the land from which it is produced. When the resource is found on public lands, the controlling agency determines what, when, and under what conditions the resource can be produced, and public policy is the primary driver of the harvest. When the resource is found on private lands, the landowner has that control, and the market for the product is the key driver of what gets harvested.

However, in many countries of the world, there is a hazy type of ownership that is neither truly public or private. Much of this could be classified as "communal" ownership...that is, a community, or group of people occupying the land, have historical priority of the use of the land, and they consider that as good as ownership. And it usually is, until the value of the land or its products becomes greater than what the communal owners are able to produce. We've seen that story unfold here in America as the natives were relieved of their rights to "their" land through public policy that allowed others to obtain legal ownership of the same. And of course, the result is violence as the communal owners see their land rights stripped away in one agreement and encounter after another. We see that playing out once again in this video, in minutes 11:15 to about 13:00.

It is a sad story, one that is hard to watch, or even to read about. But it happens in all places where land rights are not firmly held by either government or private hands. The right of private property is one of the cornerstones of American culture, and one of the reasons we've led the world in developing the utilization of natural resources, regardless of whether for food, fiber, or energy.

So the issue of palm oil production, and the unexpected issues that go along with it, are either the result of short-sighted public policy, or the workings of the market, depending on one's point of view and corner of the world. There seems to be no argument that the forced production of biofuels via government climate change policies have accelerated the confrontations we see in the video, and the acceleration of Central American refugees to the United States. And lest we forget, they are policies that are taking a natural product from its highest use in food and personal products, into a false-market, subsidized lower use for biofuel...a product that is scientifically inferior to just about any other type of propulsion our engineers can develop.

The last words of the video are "unless the demand is curbed." Interesting. Now our policy makers are being tasked to curb the demand they helped drive to unsustainable levels.

Seems like we've seen this play before.

Go wood, go palm oil, go corn, go sugar and canola. Just don't force us to drive around on it. We've got better things to do with it.

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