There is a future for palm oil in the dairy supply chain…

Date: 04.04.2024Source: Volac / Wilmar (photo Dr Richard Kirkland)

If not palm, then what? Understanding the complex story of sustainable palm and the vital role it plays in supporting global conservation efforts, local economies and the dairy supply chain.

According to Catherine Barton, Policy Lead on Deforestation-Free Commodities and Regenerative Agriculture for Chester Zoo, from ice cream to livestock feed rations, palm oil is a common ingredient found throughout all stages of the dairy supply chain and is valued for its unique melting point, mixability and low odour. It has become one of the top global edible oils by consumption since the palm oil boom of the early 1990s.

Said Ms Barton: “Palm is incredibly versatile and allows for manufacturing methods, product properties and extended shelf life that otherwise would not be possible if replaced with a different ingredient.” 

Added Dr Richard Kirkland, Global Technical Manager and nutritionist, Volac Wilmar Feed Ingredients (VWFI): “Palm-based fat supplements help to optimise rumen conditions for improved digestion and utilisation of the entire ration. They also boost milk production outputs, allowing farmers to improve feed efficiency of their herds. While energy supply can be increased with non-rumen-protected vegetable oils or cereals, these ingredients can be incredibly disruptive to rumen function with consequences to animal health and productivity.”

Continued Ms Barton: “When looking at what makes one commodity more sustainable than another, it must be both economically and environmentally feasible. When grown sustainably, palm checks those boxes. From an environmental point of view, we need less land to produce the greater volumes of oil that are required for global consumption. The high yield also hits business targets for increased efficiency.”

Since the early 2000s, huge strides have been made through collaborative efforts by palm industry stakeholders and NGOs to implement stricter production policies and to invest in palm production efficiencies to reset the industry with improved environmental and human rights practices, says Ms Barton.

Chester Zoo is one of several independent organizations collaborating on on-the-ground conservation efforts in Indonesia and Malaysia to safeguard wildlife populations and prevent deforestation while working with local communities to create sustainable palm production systems and improve working conditions.

Said Ms Barton: “Growing sustainable palm requires taking an entire ecosystem approach, and the only way to achieve this is by working at a community level to drive cohesive practices.” 

Alongside this work, many major palm industry suppliers have implemented their own sustainability programmes and policies. These include Wilmar International, the world’s largest palm oil trader, with the implementation of its No Deforestation, No Peat, No Exploitation (NDPE) policy in 2013. Following an update in 2019, Wilmar’s NDPE policy is the staunchest of any commercial company in the world, says Gersen Sumardi, sustainability manager for Wilmar Europe. This includes the immediate suspension of any supplier involved in verified cases of deforestation, and a ‘suspend first’ approach.

“Along with operating its own plantations, more than 90% of Wilmar’s total supply comes from third-party suppliers, which consist of around 900 palm oil mills. To ensure NDPE compliance is being met, a multi-pronged approach is taken to identify any risks before working with a supplier and to continue monitoring them,” explains Mr Sumardi.

This starts with Wilmar proactively monitoring grower practices through satellite surveillance systems, which notify the company of any alerts related to deforestation. To identify and assess any environmental and social risks, the company requires extensive reporting from suppliers. To allow for any on-the-ground reporting of malpractice, the company has also created a public and transparent grievance mechanism.

Since its ‘suspend first’ approach implementation in 2019, 12 supplier groups have been suspended due to deforestation. To re-enter Wilmar’s supply chain, Wilmar requires suppliers to meet certain criteria which include getting practices up to NDPE standards and rectifying any damage caused by malpractice.

As the commercial leader for both production volume and NDPE policy, Wilmar’s strict policies have set the commercial standard for the majority of the supply chain, adding incentive to growers to implement best practices.

Continued Sumardi: “This limits market opportunities for any offenders who refuse to implement best practices. Wilmar’s reputation in the industry for NDPE requirements is highly respected, with the suspension in relationship with any supplier hurting their reputation throughout the supply chain.”

Looking ahead to the future of sustainable food production, Ms Barton says so-called ‘no-palm’  policies are not the answer. Instead, sustainable palm production needs to remain part of the food chain, with significant environmental and economic consequences if it does not.

“Growth in the palm industry to where it is now has already been established – trying to shut it down is only going to cause larger issues,” said Barton.

From an economic standpoint, palm is the backbone of local economies within Indonesia and Malaysia where 85% of the world’s palm is grown. In Indonesia alone, the palm industry employs 4.5 million people, she says.

Concludes Barton: “Going palm-free isn’t going to save wildlife or stop deforestation – it will only shift the problem elsewhere. Markets will open up to buyers who don’t have sustainability or human rights standards, or plantations will shift to a different commodity crop that doesn’t have any regulations. The global edible oil demand would also need to be met by crops that take up significantly more land and natural resources than palm, creating other environmental issues. The palm oil industry has had so much pressure over the years that it has been in the best interests of commercial stakeholders to adhere to sustainability standards and work with third-party organisations to improve and certify best practices. As a result, palm has the best criteria for any sustainable commodity available. There is a lot of good work being done in the industry to ensure high standards are maintained into the future.”  For more visit volac.com

David Cox / IDM

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