13 Research on World Agricultural Economy | Volume 04 | Issue 02 | June 2023 Research on World Agricultural Economy https://journals.nasspublishing.com/index.php/rwae Copyright © 2023 by the author(s). Published by NanYang Academy of Sciences Pte. Ltd. This is an open access article under the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) License. (https://creativecommons.org/licenses/by-nc/4.0/). DOI: http://dx.doi.org/10.36956/rwae.v4i2.835 1. Introduction The global demand for biomass for food, energy, and chemical uses has led to a rapid expansion of oil palm tree (Elaeis guineensis Jacq.) plantations in Southeast Asia, Central Africa, Latin America and the Caribbean [1]. It was estimated that by 2050 the worldwide oil palm plantations are expected to increase from 14.6 million hectares in 2010 to 31.1 million hectares [2]. Moreover, oil palm cultivation has become a major source of income for many countries in the tropics and subtropics, contributing significantly to the provision of private and community Received: 4 April 2023; Received in revised form: 10 May 2023; Accepted: 15 May 2023; Published: 22 May 2023 Citation: Pulighe, G., 2023. Navigating the Path to Sustainable Oil Palm Cultivation: Addressing Nexus Challenges and Solutions. Research on World Agricultural Economy. 4(2), 835. http://dx.doi.org/10.36956/rwae.v4i2.835 *Corresponding Author: Giuseppe Pulighe, CREA, Research Centre for Agricultural Policies and Bioeconomy, Via Barberini 36, 00187 Rome, Italy; Email: giuseppe.pulighe@crea.gov.it SHORT COMMUNICATION Navigating the Path to Sustainable Oil Palm Cultivation: Addressing Nexus Challenges and Solutions Giuseppe Pulighe* CREA, Research Centre for Agricultural Policies and Bioeconomy, Via Barberini 36, 00187 Rome, Italy Abstract: Global palm oil demand for energy, food, and chemical uses has led to a rapid expansion of tree plantations in Southeast Asia, Central Africa, Latin America and the Caribbean. This oil tree is the world’s most productive, highly profitable and traded vegetable oil crop, and the demand is expected to increase further in the near future. Nevertheless, oil palm expansion involves risks and nexus challenges. This work supports the idea that disruptive farming intensification, instead of land expansion, could scale up productivity, reducing the anthropogenic pressure on tropical forests and biodiversity losses. Findings from recent studies suggest that there is considerable scope for further yield improvements per hectare of palm oil with sustainable agronomic practices and farming intensification. Smallholder producers, agribusiness investors, civil society actors, NGOs, governments, researchers, and industry should make coordinated efforts with regulatory and support schemes and landscape design to increase yield and productivity with sustainable management practices and to achieve zero deforestation by protecting ecosystems. Keywords: Land-use changes; Ecosystem services; Sustainable intensification; Deforestation; Tree plantations http://dx.doi.org/10.36956/rwae.v4i2.835 http://dx.doi.org/10.36956/rwae.v4i2.835 mailto:giuseppe.pulighe@crea.gov.it https://orcid.org/0000-0002-6470-0984 14 Research on World Agricultural Economy | Volume 04 | Issue 02 | June 2023 goods in rural villages [3]. The process of planting oil palm trees typically begins with the preparation of the land. This involves clearing the existing vegetation and trees, which often results in defor- estation and soil degradation. The land is then drained and plowed, and young oil palm seedlings are planted in rows. The seedlings are carefully tended to until they mature, which takes about three years. Once the oil palm trees mature, they start to produce fresh fruit bunches (FFBs) which are harvested and then transported to a mill where they are processed to extract the crude palm oil (Figure 1). Figure 1. Oil palm plantation in Negeri Sembilan, Malaysia. Source: Image courtesy of Nazarizal Mohammad. https://unsplash.com. Oil palm is the most productive (average oil yield 5.5 tonnes per hectare) [4], versatile, highly profitable and traded vegetable oil crop in the world [5], and demand is expected to grow further in the near future. Today, palm oil is used in an impressive number of packaged products (e.g. soap, cosmetics, detergents, chocolate, margarine, and cookies), cooking oil, as well as for biofuel [6]. Oil palm is not only a source of edible oil but also a source of bioenergy (Figure 2). In the last decade, driven by government support [7] tropical oils used as biodiesel-diesel blends were promot- ed as a renewable resource in many scenarios for achiev- ing climate change commitments. However, the rapid expansion of oil palm plantations has also led to environ- mental, social, and economic challenges. Global palm oil demand acts as a driver of land-use changes with associ- ated nexus challenges in the environmental, social and economic spheres, leading to concerns about deforesta- tion, soil degradation and losses of ecosystem services [8,9], and other telecoupled effects such as land-grabbing, food price volatility, income inequalities, and land conflicts associated with palm oil concessions, especially for in- dependent smallholder plots. In this perspective essay, we claim that achieving sustainable oil palm cultivation requires a collaborative effort that involves all stakehold- ers, including governments, producers, retailers, and consumers. We argue that the adoption of sustainable and smart cultivation practices is essential to ensure that palm oil production supports economic development and pov- erty reduction in tropical regions, while minimizing the negative impacts on the environment and society. In sum- mary, the path to sustainable oil palm cultivation involves balancing the economic benefits with environmental and social considerations. Figure 2. Palm oil value chain. Source: This cover has been designed using resources from https://Freepik.com. 2. Nexus Challenges Addressing the challenges facing the palm oil industry requires a comprehensive approach that considers eco- nomic, social, and environmental issues. Several studies have identified many future challenges, including emerg- ing threats from GHG emissions and climate change, land degradation, and pests and diseases [10]. Nevertheless, previous studies have suffered from siloed approaches in addressing the range of challenges associated with oil palm cultivation. In this study, the authors attempt to solve nexus domains that coexist within the oil palm value 15 Research on World Agricultural Economy | Volume 04 | Issue 02 | June 2023 chain, highlighting the multifaceted challenges and pos- sible solutions. One of the main nexus challenges is deforestation. Large-scale oil palm cultivation has been a leading cause of deforestation in many tropical regions. This has re- sulted in the loss of valuable carbon sinks and biodiversity hotspots, leading to climate change and ecosystem de- struction. Overall, tropical oil trees expansion has impli- cations in the well-known trilemma [11] posed to scientists, international organizations, economists and governmental institutions for balancing the domain of biofuel produc- tion, food security and environmental implications. For instance, land use changes and landscape fragmentation affected high-biodiversity wilderness areas, as recently suggested by de Almeida et al. [12] in a long-term trajectory of oil palm expansion in the eastern Brazilian Amazon. In the same vein, Rulli et al. [13] argue that bioenergy and food industry demands have driven forest losses, forest fragmentation and freshwater pollution in different areas across Indonesia. However, the GHG emissions following land use/cover changes have been questioned by researchers in many cross-sectional studies, suggesting substantial challenges and trade offs concerning the accounting of greenhouse fluxes [14,15]. Bioenergy production is another intercon- nected challenge associated with oil palm cultivation. As 46% of total palm oil imported by the European Union was used as biofuels, in 2018 the EU Parliament provi- sionally agreed to phase out the use of palm oil for trans- port fuel to reduce the risk of direct and indirect land-use changes [16]. Nevertheless, avoiding palm by switching to alternative replacement oils is not the solution in the short term because other cultivated crops (e.g. jatropha, jojoba, soybean, rapeseed) are less productive and will require ad- ditional land resources [17]. A recent assessment found that land-intensive bioenergy will play a significant role in the energy mix in the coming decades during the energy tran- sition towards net-zero emissions targets [18]. Future bio- fuel targets and mandates will require a further land area with substantial land-use changes and probably may lead to multiple interdependencies. In this sense, completely banning exports of bioenergy may not be the best solution for the planet. Social impacts are also a major concern associated with oil palm cultivation. Strictly linked with the oil palm expansion are land grabbing, displacement of indigenous communities, poor working conditions for plantation workers, and human rights abuses. Agribusiness multina- tional corporations and big companies may drive continu- ous expansion impacting the rural villages, populations and territories [19], putting at risk freshwater availability, food sovereignty and drinkable water for livestock. Moreover, recent studies suggest a clear link between deforestation and outbreaks of vector-borne and zoonotic diseases [20,21]. New plantations take up large tracts of land, exacerbating interdependent connections on land, water, food and human rights. 3. Solutions toward Sustainability To address these challenges and controversies, a new paradigm for modernizing oil palm cultivation and the value chain is necessary. First, a viable solution is to sup- port sustainable intensification with disruptive technolo- gies, i.e., agriculture 4.0 (agriculture revolution which uses digital technologies) [22] and precision agriculture, scaling-up productivity reducing pressure on tropical de- forestation and biodiversity losses. In this sense, findings from recent field-scale studies and reviews suggest that there is considerable scope for further yield improvements with improved high-yielding varieties (i.e. breeding, genetic improvement) and inte- grated farming systems for optimal inputs management of nutrients, irrigation, pests and diseases. For example, scientists are developing oil palm varieties that are more resistant to drought and heat, which will become increas- ingly important as the climate changes [4,23]. Although technology transformation and industry 4.0 are relatively new concepts in the palm industry [24], the application of disruptive innovations can effectively improve the sus- tainability of the value chain. Under a high-yield growth scenario of doubling global average palm oil yields up to 9 metric tons per hectare [2], future expansion of oil palm plantations can be counterbalanced, and the harvested area will slow at 2010 levels assuming no change in global de- mand. Regarding the issues on biodiversity and ecosystems, new agroforestry systems planting buffer zones of native vegetation around oil palm plantations and integrating trees with crops can create more diverse and resilient landscapes. For example, shade-tolerant crops like cof- fee, cocoa, and black pepper can be grown beneath oil palm trees, which provide habitat for wildlife and helps to reduce the impact of monoculture cropping. This could di- versify and stabilize the price and supply of the food bas- ket and income of smallholders, reinforcing the resilience and livelihoods of local communities. 4. Conclusions and Future Perspectives To develop appropriate and sustainable oil palm cul- tivation practices, nexus challenges and viable solutions in the production pathway need to be better understood. 16 Research on World Agricultural Economy | Volume 04 | Issue 02 | June 2023 As stated above, the palm oil processing industry, large agricultural companies, researchers, governments, and small-scale producers should raise their ambition toward technology innovations and new processing technologies to modernize their practices of production and to reduce competition and conflicts among different land uses. If growth in palm oil demand continues to rise in the next years, a key priority for policymakers should there- fore be to plan for effective supply-chain interventions. Important vehicles for nexus solutions include regulatory support and economic support schemes [25]. Regulatory support instruments can include company pledges, codes of conduct, sector-wide sanctions [26] and rigorous ac- counting rules protecting tropical and subtropical rainfor- ests and biodiversity-rich ecosystems against unnecessary and detrimental land conversions. In this sense, commit- ments such as “No Deforestation, No Peat, No Exploita- tion (NDPE)” can help raise awareness and prevent new damage [6]. Companies that adopt NDPE policies commit to sourcing palm oil from suppliers who do not engage in deforestation, conversion of peatlands, or exploitation of workers. Economic support instruments include realistic measures to regulate production and implementing policy instruments such as mandatory quotas, tax incentives or credits, capital subsidies, grants and rebates, and voluntary market initiatives. Furthermore, sustainability indicators such as those established by the Roundtable on Sustainable Palm Oil principles and criteria (see The RSPO, 2020) [27], and certified international standards checked against per- formance measures (e.g. practical to implement, sensitive, measurable and traceable) can further increase sector sus- tainability, encouraging companies to adopt sustainable practices and provide assurance to consumers that palm oil is produced sustainably. In conclusion, the path to sustainable oil palm cultiva- tion involves a comprehensive approach that balances economic, social, and environmental considerations. Ad- dressing the challenges requires the cooperation of gov- ernments, industry, and civil society. Adopting sustainable practices can benefit not only the environment and local communities but also the long-term profitability and repu- tation of the palm oil industry. 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Available from: www.rspo.org/ https://www.europarl.europa.eu/news/en/press-room/20180614IPR05810/energy-new-target-of-32-from-renewables-by-2030-agreed-by-meps-and-ministers#:~:text=Parliament%20and%20Council%20provisionally%20agreed,upwards%20revision%20clause%20by%202023 https://www.europarl.europa.eu/news/en/press-room/20180614IPR05810/energy-new-target-of-32-from-renewables-by-2030-agreed-by-meps-and-ministers#:~:text=Parliament%20and%20Council%20provisionally%20agreed,upwards%20revision%20clause%20by%202023 https://www.europarl.europa.eu/news/en/press-room/20180614IPR05810/energy-new-target-of-32-from-renewables-by-2030-agreed-by-meps-and-ministers#:~:text=Parliament%20and%20Council%20provisionally%20agreed,upwards%20revision%20clause%20by%202023 https://www.europarl.europa.eu/news/en/press-room/20180614IPR05810/energy-new-target-of-32-from-renewables-by-2030-agreed-by-meps-and-ministers#:~:text=Parliament%20and%20Council%20provisionally%20agreed,upwards%20revision%20clause%20by%202023 https://www.europarl.europa.eu/news/en/press-room/20180614IPR05810/energy-new-target-of-32-from-renewables-by-2030-agreed-by-meps-and-ministers#:~:text=Parliament%20and%20Council%20provisionally%20agreed,upwards%20revision%20clause%20by%202023 https://www.europarl.europa.eu/news/en/press-room/20180614IPR05810/energy-new-target-of-32-from-renewables-by-2030-agreed-by-meps-and-ministers#:~:text=Parliament%20and%20Council%20provisionally%20agreed,upwards%20revision%20clause%20by%202023 https://www.wrm.org.uy/bulletin-articles/oil-palm-plantations-and-water-grabbing-ivory-coast-and-gabon https://www.wrm.org.uy/bulletin-articles/oil-palm-plantations-and-water-grabbing-ivory-coast-and-gabon https://www.wrm.org.uy/bulletin-articles/oil-palm-plantations-and-water-grabbing-ivory-coast-and-gabon