Ivory Coast: the oil palm sector, a summary of sustainable development issues
In Europe, debates on environmental preservation often result in strong criticism of palm oil, seen, among other things, as the main driver of deforestation in tropical areas: to the point that the label "palm oil free" has become a sign of trust for consumers, even a "civic gesture" when making a purchase. At the level of public authorities, particularly in France, the stated desire to combat imported deforestation is particularly targeting palm oil exports.
But these criticisms apply to Southeast Asian countries, which actually export large quantities of this product to Europe, nearly two-thirds of which is used for energy purposes.[1]They do not coincide with the African reality. South of the Sahara, a dozen countries produce 4.% of the world's palm oil (compared to 84.% for Indonesia and Malaysia), mainly to meet their own food needs. The disappearance of forests is also a major problem there, but it should not be understood from the perspective of imported deforestation. Another analysis is necessary, which we develop in a note recently published by the FARM Foundation[2].
The case of Ivory Coast, the second largest African palm oil producer after Nigeria, is particularly illuminating.
The Ivorian palm sector is crucial to the country's economy, particularly its rural areas. A few figures illustrate its importance: its value chain provides a living, directly and indirectly, for some two million people. This includes the 41,000 village planters who farm two-thirds of the 250,000 hectares planted with palm trees, complementing agro-industrial plantations. There are also the thousands of people employed in the dozens of cooperatives and processing plants that produce approximately 500,000 tons of crude oil each year, nearly half of which is exported to countries in the sub-region. This is without forgetting the other workers working in industries and services located upstream and downstream of production, whether in transport, trade, or other professions. The sector also has a major social impact at the territorial level, because certain agro-industrial companies finance basic services for planters and their families, such as schools or health centers, thus compensating for the shortcomings of the State.
The Ivorian palm sector is well structured, thanks to a state-recognized interprofessional organization that brings together the majority of stakeholders, from village planters to primary and secondary processing industries. It should be noted in passing that such an institutional arrangement is rare in West Africa, especially for a product that is a staple food for households and is almost never exported outside the sub-region. The interprofessional organization is responsible for the operational management of the sector, including the monthly setting of prices for bunches and palm oil, supplemented—again, this is worth noting—by a price smoothing mechanism between producers and processors, activated in the event of a crisis. Within the framework defined by the interprofessional organization, it is the sector's stakeholders who finance the essential elements of its operation and development, from the development of tracks to the implementation of an environmental certification process, focused on combating deforestation.
Despite numerous commitments, deforestation continues in Côte d'Ivoire, where the issue has become politically sensitive. Since 1986, in fact, more than half of the country's forest cover has disappeared. The expansion of oil palm areas is partly responsible for this, far behind, admittedly, cocoa or rubber, which are intended for export. It is primarily village planters, each cultivating a few hectares, who are behind this dynamic, which both professionals and the government have been fighting against for several years.
For the oil palm industry, the challenge for the coming decades comes down to the following equation: produce more to meet rapidly rising demand.[3], both in Ivory Coast and in neighboring countries, without increasing deforestation – or even contributing to reforestation – while remaining competitive compared to oils imported from Asia.
The first thing that follows is the need to massively increase the yields of small producers, which remain three to five times lower than those of agro-industrialists. The increase in demand represents a tremendous opportunity for these players, provided they have access to the best plant material and fertilizers, master the technical itineraries, and are aware of and trained in forest preservation.
More broadly, the issue is the sector's ability to collectively address all the challenges it faces. This requires increased mobilization of all stakeholders, within an interprofessional framework that is sufficiently unifying to curb informal dynamics. A significant portion of the harvest of schemes is in fact sold outside of formal channels and thus escapes the taxes and levies necessary for the sector to operate, which leads to distortions of competition and exacerbates difficulties in times of crisis. Better compliance with common rules and the duties that this implies, particularly in terms of financing and competitive fairness, constitutes the first challenge that the sector must address, with, of course, the support of the public authorities, who ultimately guarantee the application of interprofessional disciplines.
Improving coordination between stakeholders also requires closer contractualization between producers and processors, to reduce the burden of informality and improve value sharing for the benefit of village planters. But contractualization can only truly succeed if complete traceability of palm bunches is first established, making it possible to identify the origin of deliveries. The industry is committed to this goal: it has launched a geolocation of plots, which will make environmental certification in accordance with international standards possible in the medium term. For several years, the interprofessional organization has been leading the industry towards the adoption of RSPO standards.[4] and their effective implementation, which requires major efforts to adapt these standards both to the African context and to the Ivorian reality.
Cooperatives, undermined by the emergence of intermediaries who capture a growing share of production, could find new legitimacy in the application of environmental standards to small producers, a source of added value. But the challenge is more global: it is that of a structural transformation of the sector, with a view to a profound improvement in its economic, social, and environmental sustainability. This transformation requires time as well as resources that unfortunately remain beyond the reach of the interprofessional organization. This last objective: scaling up the transformation initiated by the stakeholders, requires strong support from the Ivorian government and international donors.
We must therefore not get the wrong idea about the debate: the issue surrounding African palm oil is not that of Asian oils exported to Europe. It is that of the ability of Africans to ensure their food security and create jobs, while respecting the rainforest, which is so essential for protecting biodiversity and limiting climate change. Supporting this sector towards greater sustainability, in the broadest sense of the term, also means contributing to preserving these global public goods.
[1] In 2018, 53 billion tonnes of EU palm oil imports were used to produce biodiesel; 12 billion tonnes were used to generate electricity and heat. Source: Oilworld.
[2] “The oil palm sector in Côte d’Ivoire, a summary of the challenges of sustainable development”, FARM, Note 13, February 2020, https://fondation-farm.org/la-filiere-palmier-a-huile-en-cote-divoire-un-condense-des-enjeux-du-developpement-durable/
[3] Sub-Saharan Africa currently imports around 60 billion pounds of its palm oil, mainly from Southeast Asia. We project that consumption could double by 2030, driven by population growth and rising per capita oil consumption, driven by rising incomes.
[4] Roundtable on Sustainable Palm Oil, Roundtable on Sustainable Palm Oil.
