Ivory Coast hopes to squeeze the profits from palm oil

BBC | 9 September 2013
Desire-Jacques Porquet says it takes five years for a tree to bear fruit (Photo: BBC)

Ivory Coast hopes to squeeze the profits from palm oil

The palm oil industry originated in West Africa but is now dominated by massive plantations in South-East Asia. The BBC's Tamasin Ford reports that Ivory Coast, and other African countries, are trying to take the lucrative business back home to tap into its profits.

An hour's drive to the west of Abidjan, Ivory Coast's skyscraper-filled commercial capital, palm trees dominate the landscape; thousands upon thousands of them in neat orderly rows.

People have renamed the long, sweeping highway "Plantation Road". Most of the land belongs to PALMCI, a subsidiary of SIFCA Group, an Ivorian company involved in palm oil, sugar and rubber production across West Africa.

But, as in Nigeria and Ghana, it is the smallholders in Ivory Coast, like Desire-Jacques Porquet, who produce most of the country's palm oil.

"Palm oil is important because it supports two million people [in Ivory Coast]," Mr Porquet says as he turns off the smooth, tarred highway and drives deep into the bush along a winding, dusty track.

The nuts, clustered together under the big green fronds of the palm trees, produce the world's most consumed cooking oil”

"Farmers, producers, workers… and they use the fruit for food," he adds.

Mr Porquet owns 200 hectares of land; 100 for rubber trees, 50 for palm oil and the remaining 50 he leaves as natural forest.

The young farmer inherited the land from his father, who was inspired to start farming by Felix Houphouet-Boigny, Ivory Coast's first president.

In the 1960s and 1970s, Mr Houphouet-Boigny encouraged Ivorians to turn to the land, creating laws to make it easy to cut down the forests.

Agriculture became the driving force behind the country's economic boom but it also depleted the rainforest; less than 4% of virgin forest remains in Ivory Coast.

Crushing one of the nuts between his fingers until they become stained with the crude orange oil, Mr Porquet says with a smile: "This is the money."

'African resource'

In fact, palm oil is a multi-billion dollar industry. The nuts, clustered together under the big green fronds of the palm trees, produce the world's most consumed cooking oil. Almost every major food manufacturer uses it in their products.

It is cheap. Unlike most other oils, the palm fruit produces mostly oil so there is little waste.

And it is versatile; it is used in soaps, detergents and, increasingly, in biofuels.

Palm trees are also prized for the wine they produce, which used in traditional ceremonies across West Africa.

But demand for the lucrative oil across the world is increasing and land in the main exporting countries of Malaysia and Indonesia is quickly running out.

So companies are now looking to the hot, humid countries along the Equator in West Africa where, in fact, palm oil comes from.

"It's normal for African people to plant because that's the resource we have," says Mr Porquet as he points to the crop of new young trees on his plantation.

He will have to wait another five years before they start bearing any fruit but each tree has a life expectancy of around 25 years.

"In the European Union and America you sell cars, you sell manufactured products. In Africa we have oil palm, we have rubber, we have sugar and we have diamonds. That's what we sell," he says.

Ivory Coast, home to Africa's largest oil palm refinery, is planning to double production by 2020.

Keeping forests

SIFCA Group, which owns the refinery, is spending more than $400 million (£256m) in the next five years on plantations and factories in Ghana, Liberia and Nigeria - currently the continent's biggest exporter.

Over the last few years Malaysia's Sime Darby and Singapore's Golden Agri-Resources Ltd, the two leading palm oil producers in the world, have scooped up more than 500,000 hectares of land in neighbouring Liberia.

Across West and Central Africa, hundreds of thousands of hectares have been identified for other expansions.

All eyes are on Africa, the new frontier for palm oil. But this expansion has not arrived without problems.

In June, Abidjan held Africa's first palm oil congress; its main objective being to change the image of palm oil.

It is synonymous with words like deforestation, "land grabbing" and the thick smog that spread across parts of South-East Asia in June.

Mr Porquet, however, insists they do things differently here.

"In Africa we keep the forests - not in Malaysia or Indonesia," he says.

That is certainly true of Mr Porquet's plantation, but that's not the case everywhere.

For example in Liberia, where plantations are more than a hundred times the size of this one, companies have been accused of not keeping any free land.

It has meant there is little space for villagers to farm and grow crops for themselves, raising the issue of food security.

Mr Porquet says he has built a special village in the centre of his plantation for his 80-strong workforce.

They each get paid $2 a day, pretty standard in Ivory Coast for this kind of work but still barely enough to feed, clothe and send their children to school.

"The biggest problem of oil palm is the price," Mr Porquet says defensively, insisting he cannot afford to pay the workers more.

Mr Porquet wants African governments to provide subsidies for palm oil.

This, he says, would mean they could start paying workers more, as well as helping them compete with the Malaysian and Indonesian giants who rule the industry.

At the moment the price is set in South-East Asia but the hope is that will change once production is increased across Africa.

"For me, that's important," he says. "We need a local market so we can fix the price in Africa."
Original source: BBC

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