Palm oil: environmental curse or a blessing?

It is blamed for everything from deforestation to threatening the extinction of the orangutan, but palm oil is a vital source of income for many developing countries, the crop's producers say.

In Indonesia, the world's largest palm oil producer, where the plant provides work for three million people, the government is keen to promote the benefits of the crop.

Gatot Irianto, research director at Indonesia's Ministry of Agriculture, pleaded with producers, scientists and NGOs meeting on the holiday island of Bali last week to reconsider the plant's reputation.

"Stop demonising palm oil," he urged. Irianto says palm oil should be considered a "gift from nature" that provides a significant economic boon for the country, where it is "helping to eradicate poverty".

But in many parts of the Western world, and in Europe in particular, palm oil is a byword for ecological disaster; a crop that requires the slashing and burning of vast areas of forest and is a major contributor to global warming.

Nazir Foead, head of WWF Indonesia, said the crop's reputation is deserved because of the way the industry has behaved in recent years.

He says millions of hectares (acres) of tropical rainforest have been razed in Indonesia and neighbouring Malaysia to make way for the palm plantations that make up 80 percent of the world's total.

"But things are changing," he accepts. "Some players have understood that their activity could be linked to deforestation."

Financial pressure has forced at least one big producer to review its business practices after a key partner walked away.

Smart, a leading Indonesian palm-based company, involved in marketing and exporting products such as cooking oil, was dropped by Anglo-Dutch giant Unilever after a Greenpeace report accused it of tropical deforestation.

Daud Dharsono, the company's president, disputes the accuracy of the Greenpeace report, but said the firm had since reaffirmed its commitment to sustainable production to limit the environmental impact of its plantations.

"There will be no conversion on land with high carbon stock as well as land with high biodiversity value, no development on peat soil and primary forests."

For its part, Greenpeace said it was pleased with the commitments, but was now waiting to see action on the ground.

The pressure also comes from big European retailers like Marks and Spencer, which recently launched an anti-palm oil campaign, saying it would use alternatives such as rapeseed oil wherever possible.

The retailer is one of the 400 members of the Roundtable on Sustainable Palm Oil, formed in 2004 to promote sustainable palm oil production.

One of the group's founders, WWF, says dedicated plantations have so far produced over 1.4 million tonnes of certified sustainable palm oil.

Most experts agree that demand for palm products such as cooking oil, margarine, soaps, cosmetics and resins, will continue to increase and better management is the only way to reduce its environmental impact.

"Rapid growth in global demand, notably from China and India, is likely to drive land use change. We cannot change that," said Moray McLeish of the World Resources Institute.

"The solution is an increased utilisation of degraded land," which usually results from deforestation or overgrazing, he said.

Jean-Charles Jacquemard, an engineer at CIRAD, the French Centre for Agricultural Research said palm oil was too profitable for producers in Asia and Africa to abandon, regardless of pressure from the West.

"It is a plant which has many benefits for them. It produces a large amount of oil per hectare, three to six times more than rapeseed or sunflower," he said.

"Its cultivation uses relatively little fertilizer - around eight kilogrammes (18 pounds) per tree per year."

In Indonesia, 40 percent of production comes from small producers who, by farming between 10 and 20 hectares, "are able to live decently and send their children to university", he said.