Agriculture and Environment: Palm Oil

Better Management Practices: Conversion to Smaller Mills

It is now possible to purchase smaller mills that have sufficient capacity to process palm oil from production areas of 400 to 1,000 hectares.

These mills can process the production from several small farms, instead of the huge plantations required to supply the older, larger mills.

Converting to smaller mills would minimise widespread deforestation and the conversion of natural habitat to monoculture.

As a consequence, such processing plants could help to promote more diversity and polyculture production with a region of oil palm production. This is not currently the norm, however.

Buyers could target their purchases from smaller mills as a form of corporate social responsibility. However, given the large quantities of bulk transport it would be hard to segregate the product.

The question is whether smaller mills could compete with larger ones if small farmers were owners or equity holders of such mills.

It is possible that international donors could help set up such mills as part of poverty reduction programs.