As of 2015, Thailand ranked third in world’s palm oil output, responsible for 3% of production worldwide, behind Indonesia and Malaysia whose combined output accounts for more than 85% of the world’s production. Oil palm and palm oil industry plays significant role in Thai economy for consumption and as biodiesel for domestic use and as export, while also creates jobs and income for all involved. In 2015, 4.7 million rais of land was dedicated to grow oil palms all around the country. There were over 200,000 farmers/operators, 90% of whom were small farmers each of whom owns an average of 20-30 rais.
However, despite about 50 years of industry development, many issues are still predominant. These issues include headwaters, water processing, downstream markets as well as governmental policies. Small-scale farmers often face such major problems as 1) unpredictability and decline of pricing 2) low production per rai (average of 2.6 tons in 2015) 3) higher cost, for example. These problems must be overcome in order to ensure long-term sustainability by way of securing the economic stability and farmers’ finance.
Picture 2 Samples of tire labeling: (a) EU; (b) USA; (c) Japan
One of the more successful attempts to solve aforementioned issues is “Sustainable Palm oil Production for Bio-Energy in Thailand” project implemented by German International Cooperation (GIZ) in cooperation with Office of Agricultural Economics (OAE). The objective is to provide necessary support structures to promote sustainable palm oil production in Thailand. For over 2 years, the program has enlisted 500 farmers, 4 private crushing mills, 1 cooperative from Krabi, Surat Thani, Traad, and Sra Kaew.
The project provides training to farmers to increase yield per rai, improves quality of products, and guides farmers’ practices in accordance with Roundtable on Sustainable Palm Oil (RSPO). The project has developed several RSPO-based palm oil production manuals related to fertilizer application, farm management, farm diary, Occupational Health and Safety (OHS), Internal Control System (ICS), RSPO guide for small-scale farmers, integrated pest management, agronomic advice including soil/water/resource conservation, and conservation of high-value resource, for example.
The project specifically addresses smallholder farmers and encourages partnerships with the participating crushing mills through shareholding practice and setting agreeable premium price for quality products. The project also provides mentorship for farmers who receive advice and support fundamental farming practices. The project has provided continuous documentation of participating farmers and database management.
The evident of success achieved by the project is listed below:
Picture 1 sample of training materials
Picture 2 sample record of farm management
Picture 3 proper leafing arrangement
In conclusion, shareholding model in an industry like this stimulates sustainable development of palm oil production. Therefore, responsible governmental units such as Department of Academic Affairs and Department of Agricultural Extension should replicate this project’s model and lessons in other areas to improve a complete structure of palm oil while also promote sustainability in other agricultural products.