Exploring land use changes and the role of palm oil production in Indonesia and Malaysia

Abstract

This study compiles and analyses national-level data on land use change (LUC) and its causes in Indonesia and Malaysia over the past 30 years. The study also explores the role that palm oil has played in past LUC and that projected growth in palm oil production may play in LUC until 2020 and suggests strategies to minimize negative effects. Data collection for the study revealed that the quality and quantity of data on LUC on a national scale over time are low. Despite these uncertainties, the overview of past LUC indicates that large changes in land use have occurred in Indonesia and Malaysia. In Indonesia, LUC can primarily be characterized by forest cover loss on 40 million ha (Mha) of land, a 30% reduction in forest land. Deforestation in Malaysia has been smaller in both absolute and relative terms, with a forest cover loss of nearly 5 Mha (20% reduction in forest land). Other large changes in Malaysia occurred in permanent cropland (excluding oil palm), which has decreased rapidly since the early 1990s, and in land under oil palm cultivation, which experienced a sharp increase. Projections of additional land demand for palm oil production in 2020 range from 1 to 28 Mha in Indonesia. The demand can be met to a large extent by degraded land if no further deforestation is assumed. In Malaysia, expansion projections range from 0.06 to 5 Mha, but only the lowest projection of oil palm expansion is feasible when only degraded land may be used. The role of palm oil production in future LUC depends on the size of the projected expansion as well as agricultural management factors such as implementation of best management practices, earlier replanting with higher yielding plants, and establishment of new plantations on degraded land. The current use of degraded land needs to be investigated in order to reduce possible indirect LUC, land tenure conflicts, or other social impacts. In addition to minimizing direct and indirect LUC by the palm oil sector, measures that reduce deforestation triggered by other causes must also be implemented. A key element for doing so is better planning and governance of land use, which entails more appropriate demarcation of forest land and protection of land that still has forest cover, improved monitoring of land use, and more research to uncover the complexities and dynamics of the causes and drivers of LUC.

Introduction

The current debate about the (un-)sustainability of palm oil production in Southeast Asia has largely been spurred by land use change (LUC) that occurs by converting natural rainforest, peat swamp forest, cropland, or other land types to oil palm plantations. This LUC, in turn, has further environmental and social implications such as the loss of biodiversity, emission of greenhouse gasses (GHG) from carbon stock changes in biomass and soil, (peatland) forest fires and related respiratory diseases, and land tenure and human rights conflicts (Wakker, 2004, Colchester et al., 2006, Gibbs et al., 2008, Koh and Wilcove, 2008, Wicke et al., 2008).

The large increase of palm oil production over the past 30 years explains in part why LUC has become a concern for the sustainability of palm oil production. The global land area of mature oil palm increased from 3.5 Mha in 1975 to 13.1 Mha in 2005. Most of this increase is found in Malaysia (increasing from 0.4 to 3.6 Mha) and in Indonesia (increasing from 0.1 to 3.9 Mha) (FAOSTAT, 2008a). Including the area of immature oil palm (0.4 Mha in Malaysia (MPOB, 2008) and 1.6 Mha in Indonesia (IPOC, 2005) in 2005), a total land expansion for palm oil production of nearly 9 Mha took place in Malaysia and Indonesia between 1975 and 2005.

Case studies on a local and sometimes regional scale present detailed information on the link between oil palm expansion and LUC. For the Malaysian state of Selangor, for example, it was found that oil palm expansion was the major contributor to peatland forest fragmentation between 1966 and 1995 (Abdullah and Nakagoshi, 2007). In the state of Sabah, Malaysia, the major cause of forest disturbances shifted from logging to palm oil production (McMorrow and Talip, 2001). For the Indonesian province Riau it was determined that large scale oil palm plantations were responsible for 29% and smallholder palm oil producers for an additional 7% of the total forest cover loss between 1982 and 2007 (Uryu et al., 2008). This translates into 85% of all oil palm plantations in the province being created on former natural forest land (Uryu et al., 2008).

While detailed information regarding LUC as a result of palm oil production growth is available for specific locations and for some provinces, such information is sparse on a national scale. In Malaysia, expansion of palm oil production is said to have occurred primarily on logged-over forest and on former rubber and coconut plantations (Ming and Chandramohan, 2002, Abdullah and Nakagoshi, 2007), while in Indonesia natural rainforest and peatland have often been converted for palm oil production (FWI/GFW, 2002). A recent estimate by Koh and Wilcove (2008) indicates that of all oil palm expansion between 1990 and 2005 in both countries, at least 50% has come at the expense of natural rainforest. However, Koh and Wilcove do not account for other causes that triggered deforestation before oil palm plantations were established. Only a better understanding of the complexity and the dynamics of causes of forest cover loss in the past can help to prevent undesired LUC in the future.

Increasing world demand for palm oil from the food, oleochemical and energy industries combined with high prices, up to 780 $ t⁻¹ crude palm oil in 2007 (MPOB, 2008), has resulted in large profits from the production of palm oil and thus an incentive for producers to expand their operations. Rising palm oil production in the future is likely to cause even more LUC and its related environmental and social impacts. In terms of the sustainability, using palm oil for energy is also discussed in combination with the GHG emissions that it causes when converting natural rainforest or peatland forest into plantations. While the GHG emissions from converting various land types to palm oil production have already been determined (Gibbs et al., 2008, Wicke et al., 2008), little is known about the extent to which different land types were converted to palm oil production on a national scale. The main objectives of this study are thus to (1) compile national-level data on land use over the past 30 years in Indonesia and Malaysia, (2) explore the causes of changes in land use, specifically the role that palm oil production has played, (3) investigate the extent to which future growth in palm oil production may affect LUC in both countries and (4) suggest strategies for avoiding or minimizing negative effects.

The remainder of the study is organized as follows: ‘Data and methods’ describe the methods applied for determining past LUC and its causes, explains how projections of future palm oil production growth and its land requirements were developed, and presents the input data. The section ‘Results’ presents an overview of past LUC in Indonesia and Malaysia, its direct causes and underlying drivers, and scenarios of possible future LUC induced by a growth in palm oil production. In the ‘Discussion’ the uncertainties of the underlying data and the assumptions that were made are discussed. Also strategies for reducing the impacts of future increases in palm oil production are described. The ‘Conclusions’ present the study's final conclusions.