The Government is preparing to lift the ban imposed on palm oil in 2021 by former President Gotabaya Rajapaksa, The Sunday Morning reliably learns.
It is learnt that an expert committee appointed by President Ranil Wickremesinghe has given the green light to proceed with the lifting of the ban. The decision has been made considering the economic benefits of palm oil exports, it is further learnt.
In April 2021, President Rajapaksa instructed a complete ban on the importation of palm oil and the cultivation of oil palm. Furthermore, companies and entities engaged in such cultivation were directed to remove them in a phased out manner, with 10% uprooted at a time. They were mandated to replace the removed plantations with the cultivation of rubber or environmentally-friendly crops each year, with the goal of liberating Sri Lanka from oil palm plantation and palm oil consumption.
The palm oil industry in Sri Lanka was initially established as part of an import substitution policy aimed at reducing palm oil imports and stimulating economic growth. However, the 2021 ban on oil palm cultivation was primarily motivated by apprehensions about its long-term environmental impact, including soil erosion, drying of springs, and adverse effects on biodiversity and community life.
This ban generated diverse opinions and ignited debates. Some argued that it could have adverse effects on the economy since palm oil played a crucial role in meeting Sri Lanka’s edible oil requirements. The ban was likely to increase dependence on imports, potentially affecting the country’s trade balance and food security. Additionally, concerns were raised among the Regional Plantation Companies (RPCs) that had already invested in oil palm cultivation and processing.
The only country to ban palm oil
Speaking to The Sunday Morning, Palm Oil Industry Association (POIA) President Dr. Rohan Fernando said that Sri Lanka was the only country to ban palm oil, and that this fact itself suggested that there was something wrong in that decision.
“We have communicated with the President and the current Plantation Industries Minister, urging them to reconsider and remove the ban imposed by the former President, similar to the ban on chemical fertiliser. We remain optimistic that the President will lift the ban. In fact, we had a recent meeting with the President and his officials, during which he assured us that they were actively working towards lifting the ban,” he said.
Dr. Fernando noted that the President was aware of the significance of the palm oil industry, and that cultivating more palm oil in the country for export could contribute significantly to the economy. Increased palm oil production and exports have the potential to generate substantial export income.
In comparison, neighbouring India has undertaken a substantial effort by initially planning to plant one million hectares, then increasing it to two million, and currently targeting three million. This is aimed at ensuring ample palm oil supply for the domestic market and reducing the need for imports, as per Prime Minister Narendra Modi’s strategic plan.
Dr. Fernando highlighted that in 2014, during Mahinda Rajapaksa’s presidency, then Plantation Industries Minister Mahinda Samarasinghe, along with the Cabinet, had made a decision to plant up to 20,000 hectares of oil palm. However, the current oil palm cultivation stands at 11,000 hectares, raising questions about the continuity of policies between administrations.
He elaborated on recent developments, stating that President Wickremesinghe had appointed an expert committee, with indications from their report being positive, hinting at a potential imminent lift of the ban. “The decision to lift the ban is anticipated to be in the best interest of the country,” he said.
Addressing environmental concerns, Dr. Fernando debunked claims that palm oil cultivation contributed to drought and negatively affected the water table in the south. He argued that such assertions were baseless, pointing out that palm oil had been part of Sri Lanka’s plantations for over 60 years, specifically in Udugama.
“Contrary to environmentalists’ contentions, the rainfall in the south has been at its highest in the last decade,” Dr. Fernando said, dismissing any adverse impact of oil palm cultivation in the region.
Small- and medium-scale planters
Meanwhile, Small- and Medium-Scale Planters’ Association President Nimal Wijesinghe highlighted that these growers incurred a monthly income loss of around Rs. 75,000 due to the 2021 ban.
He pointed out: “We have 10-15 growers within the association at present, and an additional 3,000 members are eager to start oil palm cultivation given the challenging circumstances arising from rubber failures and the high costs associated with tea production.”
Wijesinghe noted that many planters willing to engage in oil palm cultivation were presently involved in tea or rubber cultivation.
“In the beginning, we were reluctant to opt for oil palm as we also thought it would affect the groundwater as alleged. However, most of our planters who lived near large-scale oil palm plantations verified that there was no difference in the well water in the area despite having oil palm cultivations,” he stressed, adding: “This is the reason why we insist that the Government reconsider the ban imposed on palm oil.”
Opposition from environmentalists
Nevertheless, environmentalists are vehemently opposed to the promotion of oil palm cultivations.
Speaking to The Sunday Morning, Centre for Environmental Justice (CEJ) Executive Director Hemantha Withanage pointed out that oil palm was mostly cultivated in lands that were previously used for rubber plantations.
“Even though both are commercial crops, rubber benefits the environment, especially by absorbing greenhouse gas emissions. However, oil palm has a negative impact on the environment. This is our concern,” he emphasised.
Withanage also noted that there have been no in-house research efforts within the country regarding the environmental impact, but that regional statistics supported the assertion that oil palm had detrimental effects on the environment.
“The issue is that in Sri Lanka, there is no proper agricultural vision. Everything happens haphazardly; a decision taken by one minister is abandoned by another. As a result, the country’s agricultural sector faces significant issues,” he stressed.
Global oil palm context
Derived from the oil palm tree, which is native to West Africa and thrives in tropical climates with abundant water, palm oil serves various purposes. Three-quarters of the total palm oil production is utilised for food applications, including cooking oil and processed oils and fats. Additionally, it finds use in cosmetics, cleaning products, and biofuel.
As per statistics, from 1980 to 2014, global palm oil production witnessed a remarkable surge, increasing by a factor of 15, from 4.5 million tonnes to 70 million tonnes. This growth was fuelled by the high yield and relatively low production costs associated with palm oil.
Presently, industrial-scale oil palm plantations cover an extensive area of 18.7 million hectares worldwide, as of October 2017, with smallholder oil palm plantations also holding a significant share. Projections indicate that palm oil demand is set to grow at a rate of 1.7% per year until 2050.
Indonesia and Malaysia dominate the global palm oil supply, contributing to 85% of the market, followed by Thailand, Colombia, and Nigeria. The majority of palm oil produced in these nations is exported to the EU, China, India, the US, Japan, and Pakistan.
As stated by International Union for Conservation of Nature (IUCN), the oil palm expansion is a major driver of deforestation and degradation of natural habitats in parts of tropical Asia and Central and South America, behind cattle ranching and local and subsistence agriculture. On the island of Borneo, at least 50% of all deforestation between 2005 and 2015 was related to oil palm development.
It is further stated that the tropical areas suitable for oil palm plantations are particularly rich in biodiversity. Oil palm development, therefore, has significant negative impacts on global biodiversity, as it often replaces tropical forests and other species-rich habitats.
Globally palm oil production is affecting at least 193 threatened species, according to the IUCN Red List of Threatened Species. It has been estimated that oil palm expansion could affect 54% of all threatened mammals and 64% of all threatened birds globally. It also reduces the diversity and abundance of most native species. For example, it has played a major role in the decline in species such as orangutans and tigers.
Some 10,000 of the estimated 75,000-100,000 critically endangered Bornean orangutans are currently found in areas allocated to oil palm. Every year around 750 to 1,250 of the species are killed during human-orangutan conflicts, which are often linked to expanding agriculture. A small number of species can benefit from the presence of oil palm plantations, including species of wild pig, rodents, and some snakes, as stated by IUCN.
When contacted by The Sunday Morning, a senior State official close to the subject, who wished to remain anonymous, confirmed that the Government was preparing to lift the ban on palm oil cultivation.
The official highlighted that the President had referred to it in his Budget speech as well.