Vegetable oil shortage looms in 4 years

Manila, Philippines – During the launching of the Food Staple Sufficiency Program (FSSP) at the World Trade Center in Pasay City last July 5, President Aquino took pride in the accomplishments of his administration towards national rice self-sufficiency.

He cited facts and figures indicating the country’s rice shortage of 1.3 million metric tons (MT) in 2010 when he assumed the presidency. This figure went down to 850,000 MT in 2011 and this year 2012 the government may need to import only 500,000 MT to overcome the shortage.

The President expressed confidence that by next year 2013, the country would become self-sufficient in rice and that in the remaining years of his term, the country may be exporting rice.

Unfortunately, an inconvenient truth is emerging, indicating that the President’s term is characterized by its failure to stop the ballooning vegetable oil shortage.

During the first two years of his term, the Philippines’ importation of vegetable oil in the form of palm oil significantly increased. This is expected to increase further at a higher volume toward the end of his term.

Data provided by the Malaysian Palm Oil Council (MPOC) indicates that in 2009 or a year prior to the President’s term, the Philippines imported from Malaysia only 119,255 MT of palm oil. This increased to 204,731 MT in 2010 or during the first year of the President. Last year or 2011, during his second year in office, importation increased to 543,000 MT valued at P28.03 billion (Fig. 1, Table 1).

This makes the Philippines the third biggest importer of the Malaysian palm oil among the 18 countries in the Pacific Region after China and Japan. This importation is projected by MPOC to grow at a minimum rate of 11 percent a year for the next 10 years. This is translated to an importation volume of 597,000, 657,000, 723,000, 795,000, 875,000, and 962,000 MT in the years 2012, 2013, 2014, 2015, 2016 and 2017, respectively.

This means that the Philippines will be importing over P45 billion worth of palm oil annually.

Will the President’s legacy be national rice sufficiency but a dismal failure in vegetable oil sufficiency and in providing food security for the country? This is expected to happen considering the unwillingness of some DA officials to listen to the clamor of the Mindanaoans to meaningfully and substantially support the expansion of the palm oil industry.

The purpose is to overcome these huge vegetable oil shortage, and to benefit the poor farmers of Mindanao rather than the rich Malaysian farmers who are already earning high income by producing and exporting palm oil to the Philippines.

Berck and Bigman (1993)* defined food security as “the availability of enough food at all times. . . across income groups and across members of individual households”. Food security therefore does not mean rice alone, but also includes fruits, vegetables, meat, eggs, and vegetable oils.

Fig. 2. Comparative price of the coconut and palm oil in the world market (MPOC, 2012). The World Health Organization (WHO) recommends that 30 percent of the energy (calorie) of an individual should be obtained from oil and fats. This works out to a per capita consumption of about 25/kg of oil and fats/year. The Philippines average per capita consumption of oil and fats is only 9.5 kg per person/year less than one-half of the WHO recommendation.

Fig. 3. Coconut oil production and palm oil import of the Philippines for the last six years (MPOC, 2012). That’s why the country should produce more palm oil to increase the per capita consumption of vegetable oil and provide adequate energy and nutrition to the Filipinos. The volume needed by the country cannot be substituted by coconut oil as this is more expensive due to its high demand in the oleochemical industries worldwide. As a result in recent years, the price of coconut oil in the world market is higher than the price of palm oil, giving coco farmers and traders more income through exports rather than selling the same at a lower price in the domestic market as vegetable oil similar to palm oil (Fig 2). Besides, the production of coconut oil in the country remains almost static since 2005 (Fig. 3). Many fastfoods, food processors and vegetable oil outlets in the country have recently shifted from other vegetable oils – coco, soybean, cañola, etc. to palm oil as it is the cheapest and in many ways more nutritious, healthful and convenient to use than other vegetable oils.

The situation is not yet hopeless for the President to prevent a big black-eye at the end of his term – the huge vegetable oil shortage. He has practically little time left to reverse the situation and therefore he has to act fast.

It should start with the changing of the mind-set of some DA officials who are anti-oil palm farming (OPF). They put the OPF expansion in the Philippines now at 60,000 hectares to almost a standstill. Apparently, they were convinced by the distorted information of NGOs who are well-funded by the “Western conspirators” to “preach” and magnified the negative aspects of OPF. For example these NGOs pointed out that the palm oil processing by-products are polluting the environment in Indonesia and Malaysia when in fact these by-products are now almost fully converted to organic fertilizers and biogas giving cheap source of organic fertilizers and electricity in Thailand, Indonesia and Malaysia. In fact the main purpose of these “Western conspirators” is to spread erroneous information to prevent further the growth of the production of cheap, highly healthful and nutritious palm oil so they could maintain a good portion of the global oil markets for soybean, sunflower and canola oils and at a higher price which many Filipinos cannot afford.

The Philippine Palmoil Development Council, Inc. (PPDCI) suggests that P-Noy organizes an interagency task-force headed by the DA and participated by DAR, DENR, DOST, LGU, DILG, DTI, PPDCI, the banking sectors, etc. to prepare a palm oil development road map and promote the massive planting of oil palm to reach 300,000 hectares during the remaining four years of his term.

There are over one million has. of vacant grass and brushlands in southern Philippines, Mindanao in particular, suitable for OPF. If these areas are put to OPF, the Philippines will become a major palm oil exporting country just like Thailand, Malaysia and Indonesia.

The people of Mindanao have restlessly waited for the opportunity of a government-supported lead program similar to what is done in rice, corn, coconut, etc. to promote the massive planting of oil palm. In doing so the benefits of the high domestic demand and high income in OPF goes to the poor farmers empowered by the government to plant palm oil in Mindanao rather than the already rich Malaysian oil palm farmers whose produce is exported to the Philippines. After all Mindanao has better areas for OPF production compared to most areas in Malaysia.

One should realize that OPF is a high income enterprise – giving a farmer with a hectare of land a yearly net income of from P70,000 to P120,000/year. That is why oil palm is known as “Asian miracle palm tree” as it brings the amazing “second green revolution” after the miracle rice of IRRI, creating an unprecedented high farm income in many countries notably Malaysia, Indonesia and Thailand.

Expansion of OPF to 300,000 hectares to overcome the vegetable oil shortage would provide high income to 150,000 small landholders and employment opportunities to 75,000 farm workers. Such expansion in the vast grass and brushlands of Mindanao is in line with EO 26 – the National Greening Program advocated by the President which would make the country participate actively in the global effort to mitigate climate change and bring peace and prosperity to the countryside similar to the transformation that OPF has done to the poor communities of Malaysia, Indonesia and Southern Thailand.

The President could make OPF a major component or the centerpiece of his national greening program. When this is done then one of the greatest legacies he would provide the people of Mindanao is the strong foundation of a progressive and vibrant agricultural economy under the auspices of sustainable production, climate change mitigation and anchored in OPF. –(The Philippine Star)