Will palm oil profits
push Thai fruit and coffee off the field?
By Jon Fernquest |
Last Friday the Bangkok Post ran a feature article on the threat that the sudden expansion of palm oil cultivation poses to other crops in Thailand such as coffee and tropical fruits like rambutan.
Thai tropical fruits have just recently gained access to the US market. Read a recent Bangkok Post article on new Thai fruit exports to the US.
(Photo on right of a Thai government official carrying palm oil fruit, a new valuable commodity)
Here is the article in full:
Palm-oil frenzy raises concern
Rapid expansion of plantations in the South could pose a threat to other crops, say officials
WALAILAK KEERATIPIPATPONG and ASAWIN PHAKAWAN (Friday March 07, 2008)The new king of fruits? An official carries a bunch of oil-palm fruit at a recent presentation held by the Bank for Agriculture and Agricultural Co-operatives and the Energy Ministry to outline support for palm-tree growers to expand their plantations.
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The increasing use of biodiesel has driven demand for alternative-energy crops to unprecedented levels and given rise to new concerns over their impacts on other key crops and the environment. A recent field survey of the Office of Agricultural Economics (OAE) in the South, where oil-palm trees prevail, found more growers gradually replace other low-income crops such as rambutan, coffee and even rice with higher-value plants like palm and rubber.
"They grow palm trees on vacant space everywhere: in coffee fields, on hills, and even in rice plantations," said Viroj Meemak, a senior official of the OAE, Zone 8, which looks after the seven upper-south provinces of Chumphon, Krabi, Surat Thani, Ranong, Nakhon Si Thammarat, Phangnga and Phuket.
"Some planters said they would fell coffee trees in the next two or three years when the palm trees that they inserted alongside them are ready for harvest," he said.
Having witnessed the astronomical rises of energy crop prices and mindful of the state's policy to promote the use of alternative fuels, villagers are quick to jump on the bandwagon.
The government plans to turn some rubber plantations, rice farms, and new areas in Krabi, Chumphon and Surat Thani into oil-palm plantations, with an ultimate goal of adding another four million rai by the end of 2012, from 2.9 million rai currently.
Although the prices of coffee and rice remain stable, their upward potential is nothing compared to that of valuable palm nuts, whose prices have more than doubled to 5.60 baht per kilogramme this week from an average of 2.40 bath two years ago.
Oil prices and strong market demand also pushed rubber prices early this year to about 76-77 baht a kg for raw rubber sheets, up 22% from the same period a year earlier.
Worried about the possibility of a dwindling food supply, Mr Viroj once asked the farmers if they had any concern that they might not be able to produce enough rice for their own consumption one day.
"The answer was a resounding no, " he recalled. "They said they could buy rice from other regions now that they have made hefty incomes from palm trees."
Surasak Suwanavongse, chief of the agricultural office in Phattalung, the so-called "rice bowl" of the South, has also observed a critical decline of rice fields over the past decade.
"Ten years ago, the province has about 570,000 rai of rice fields but today the acreage has fallen below 400,000 rai, with the balance turned into palm fields," he said.
Cultural changes and better profits have lured away farmers to other occupations and Mr Surasak said it was only a matter time before the province saw a shortfall of rice. In Songkhla, there are also attempts to convert two million rai of rice fields near the Songkhla Lake into palm-tree plantations.
Unlike rubber, palm and coffee, rice is not among the staple crops of the 14 southern provinces. The region produces less than 5% of the country's total paddy output.
Apart from the attractive prices, the farmers see palm oil and rubber as more cost-effective due to their longer harvesting lives of up to 20 years for oil-palm trees and 30 years for rubber trees.
The Zone 8 Office has estimated that palm production in the region would increase by about 10% this year, and the output of rubber would rise by 7-8% from 2007 crop year thanks to continued high prices.
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Nukul Chaiyos, another OAE official, said consumers might have to pay more for fruit from the South, notably rambutan, especially from popular destinations like Surat Thani and Chumphon due to limited output.
Since growers receive unsteady incomes from rambutan over the past years - their prices dropped to less than one baht a kilogramme in one season - they do not hesitate to switch to other crops, Mr Nukul reasoned.
Coconut and mangosteen, the other key tropical fruit, are also affected by the crop-switching trend.
"Even in Koh Samui, owners of horticultural land said they would grow rubber and palm trees instead," Mr Viroj said, referring to land on the other side of the world famous island. "We're a bit worried that there will be problems if palm trees are planted in inappropriate places such as on hill slopes, as they need a lot of water.
(Source: Bangkok Post, business section, page B4, WALAILAK KEERATIPIPATPONG and ASAWIN PHAKAWAN, temp-link)
Vocabulary:
palm oil - edible vegetable oil obtained from the fruit of the oil palm tree (See Wikipedia)
plantations - very large farms growing crops like sugar, coffee, rubber, or palm oil
X poses a threat to Y - X is a threat to Y, X might harm or damage Y in the future
oil-palm fruit, palm oil fruit - the fruit of the oil palm from which palm oil is extracted
Bank for Agriculture and Agricultural Co-operatives (BAAC) - the main government bank involved in loaning to farmers
biodiesel - biofuel substitute for diesel commonly used in commercial vehicles, the most common biofuel in Europe and also experiencing phenomenal growth recently in the US (See Wikipedia on biodiesel and articles on biodiesel)
X has driven demand for Y - factor X has caused demand for Y to increase
alternative-energy crops, biofuels - fuel from biological materials (biomass) such as sugar cane or corn that helps reduce climate change and reduces dependence on oil (See Wikipedia on biofuels and energy crops)
unprecedented levels - high levels for the first time
X has given rise to new concerns over Z - when X happened, people remembered and worried that something dangerous Z might happen (for example, calls for another "drug war" gave rise to concerns that thousands would die without a trial again)
prevail - is most common
vacant space - empty space (an area with nothing inside of it)
astronomical rises - rising to a very high level (like "sky high")
mindful of Y - thinking of Y when you do something (for example, mindful of the neighbors he turned his music down at night)
jump on the bandwagon - follow a trend or fad, start doing what everyone else is doing
do X with an ultimate goal of Y - do X to achieve goal Y in the future
upward potential - the possibility of increasing in the future
palm nuts - the fruit of the oil palm from which palm oil is extracted
dwindling food supply - decreasing food supply (See glossary)
resounding - loud and clear
a resounding no - saying no very loudly and clearly, so that everyone can hear and understand
hefty - very big and large
made hefty incomes - very large incomes
lured away from X - something attractive made you leave X and go there
a shortfall of Y - less Y than planned or expected
paddy - rice
more cost-effective - costs less
do not hesitate to - do immediately, right now, don't wait
inappropriate places - not places where you should do something (for example, the sidewalk is an innappropriate place to drive a motorcycle)
