Oil palm plantations in Thailand have been increasing at an average of 9% from 2001 to 2010. The fastest growing sector among vegetable oils, palm oil is in high demand in Asia where it is widely used in the food processing, cosmetics and pharmaceutical industry – but most of all, as a bio-fuel. In Thailand, more than 120,000 farmers are involved in oil palm cultivation, mostly on small to medium sized farms. Small farmers owning less than 50 hectares manage approximately 70% of the 580,275 hectares planted with oil palm and account for a similar percentage of oil production.
A result of skyrocketing land prices, ceilings on land allocation, and the redistribution of both private and public land between 1975-2003 (3.7 m ha of public land was distributed to 1.5 million beneficiaries who received either freehold titles of user rights under the law), this small holder pattern has had a positive impact on several fronts. Indeed, a recent study Oil Palm Expansion in South East Asia: trends and implications for local communities and indigenous peoples, edited by Marcus Colchester and Sophie Chao, credits the small holder pattern with avoiding the serious social and environmental fallouts of large scale conversion of forestland in countries like Malaysia and Indonesia.
The study also commends the Thai industry for recycling waste efficiently through biogas and for reducing green house gas emissions from processing plants. As of 2008, 21 projects were registered with the Green House Gas Management Organization in Thailand and are also eligible to register for funds under the Clean Development Mechanism.
On the minus side, yield per hectare from small holder farms is lower than from large commercial plantations. “To ensure the sustainable livelihoods of smallholder farmers from oil palm growing and at the same time reduce the pressure to expand oil palm plantations, the low efficiency of the Thai palm oil sector needs to be addressed,” says the report. Another challenge is the difficulty in getting sustainability certification for small farmers under the Round Table on Sustainable Oil (RSPO) which has limited experience and resources in setting up networks with small farmers -who also cannot shoulder the costs of management, compliance and verification processes required for certification.