Agriculture and Environment: Palm Oil

Better Management Practices: Planting on Degraded Lands

Oil palm plantations can be established on former pastures or degraded agricultural lands.

Whether it makes sense to do so depends on how the cost of rehabilitating these areas compares to the cost of establishing plantations in natural forests.

In many places the sale of timber and pulpwood subsidises the expense of clearing forested areas for plantation establishment.

Makes economic sense
However, payments for environmental services might tilt the balance in favour of rehabilitating degraded lands instead. For example, rehabilitation of degraded lands may offer significant carbon sequestration potential.

Reducing global carbon emissions
Oil palm plantations are reported to sequester as much as 15 metric tons of carbon per hectare per year. If such plantations can be established without destroying forest or releasing carbon already in the soil, then 15 metric tons of carbon per hectare per year is a significant contribution toward reducing global emissions.

Countries with carbon-reduction commitments under the Kyoto Protocol, for example, or companies that have made voluntary commitments to reduce or offset their greenhouse gas emissions, have shown interest in "buying" the ecosystem service of carbon sequestration.

At current global prices of U.S. $4-$6 per metric ton of carbon, this could result in a $60-$90 per-hectare income stream for farmers. However, much more research is required to insure that the carbon would remain sequestered when the plantations are replanted (World Rainforest Movement 2001).

Ways of generating more income
In Malaysia there are attempts to integrate other crops (such as food crops, cocoa trees, or coconut palms) with plantations of oil palm as well as livestock such as cattle, deer, sheep and buffalo. These practices should be evaluated as possible ways to diversify producer income while reducing environmental impacts. For example, the manure from livestock is an excellent source of nitrogen, which could be used to reduce the amount of purchased nitrogen fertiliser.