Annie Chiang<br />Ms. Clover<br />TSEA: Period 1<br />26 May 2010<br />Palm Oil Plantations in Indonesia: Economically Uns...
TSEA Research Paper
TSEA Research Paper
TSEA Research Paper
TSEA Research Paper
TSEA Research Paper
TSEA Research Paper
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TSEA Research Paper


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A final research paper I did on the Palm Oil Plantations in Indonesia for my social studies class, TSEA.

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TSEA Research Paper

  1. 1. Annie Chiang<br />Ms. Clover<br />TSEA: Period 1<br />26 May 2010<br />Palm Oil Plantations in Indonesia: Economically Unsustainable and Destructive<br />“Every morning, the cage doors swing open and 34 orangutan orphans climb into the outstretched arms of their human mothers. It’s a primate day care, a scene that seems choreographed for the Animal Planet channel. But this spectacle of one hominid helping another is more than entertainment. It is a genuine reflection of environmental collapse. <br />These rust-red fluff balls were born in the wild, in the steamy, lime-green rain forest of tropical Indonesia. Today this jungle is being leveled and its great apes captured, killed and orphaned to grow palm oil, a plantation crop refined into biofuel for environmentally conscious consumers in Europe and the United States.” (Knudson)<br />Indonesia is one of the largest producers of palm oil plantations in Southeast Asia. Palm oil has been in greater demand recently with more foreign companies hoping to utilize palm oil to produce biodiesel, a more environmentally friendly product. Although it has provided income for many families in Indonesia, it has also created many environmental issues such as deforestation. The government has worked to some extent in trying to boost the economy and eliminate poverty. Palm Oil plantations should not be increased in Indonesia because of the global environmental issues, the non-sustainable economic growth, and local environmental issues that might incite.<br />Although palm oil plantations may bring money into Indonesia to support families, the global environmental issues must also be considered. According to Greenpeace, a non-governmental environmental organization aiming to protect the earth, the cause of carbon dioxide being released into the air is by the forests that are burned down and the peat wetlands that are drained for palm oil plantations (“Palm Oil”). For example, every year, 1.8 billion tonnes of carbon dioxide are released by the destruction of Indonesia’s peat wetlands (“Palm Oil”). The damage caused by burning down trees to make way for palm oil plantations also contributes to global warming as more carbon dioxide is released into our atmosphere. Globally, 1.3 billion tonnes of carbon dioxide were emitted from drained peat wetlands in 2008, compared with 1.06 billion tonnes in 1990 (Ingham). The amount of carbon dioxide has increased drastically over the years and will only continue to grow if palm oil plantations rise. In addition, emissions related to forest destruction accounts for 80% of the 2.3 million tonnes of carbon dioxide released into the air (Rivet). As palm oil plantations require land where forests are currently standing, more trees are cut down causing deforestation, which in turn emits carbon dioxide into the atmosphere, thus Palm Oil plantations should not be increased in Indonesia. <br />The Indonesian government claims that increasing palm oil plantations will boost Indonesia’s economy. It has the potential to grow into the largest biofuel producer because of the vast amount of space available and cheap labor (“Bright Future”). Also, there is an increasing demand for palm oil in western countries to encourage environmentally friendly use of biodiesel (Saroso). This gives Indonesia the opportunity to expand their production to fulfill the desires of export companies. Another source of economic growth are the roads, schools, and health clinics which are established from the profit made from palm oil plantations of a small company, Lyman Agro (Law). This palm oil producing company has utilized the profit by developing infrastructure, in hopes of economic growth.<br />While it is true that Palm Oil plantations in Indonesia promote economic growth, the level of sustainable growth lacks stability. Indonesia relies on their palm oil exports as a source of income for millions of families, but how consistent can these exports be? There must be sufficient demand for Biodiesel in order for Palm Oil plantation companies to increase their manufacture and profit (“Bright Future”). Even though there may be an increased demand for Biodiesel, it has to continue at a stable rate so that the growth is sustainable. Furthermore, environmentalists accuse companies of contributing to deforestation and committing other unethical environmental actions, thus causing many foreign companies to stop buying palm oil from those Indonesian producers (“Nestle Drops”). For example, SMART, a leading Indonesian palm-based company was dropped by the Anglo-Dutch giant Unilever after the company was accused of causing deforestation (Rivet). Because of the damage palm oil plantations impose on the environment, many companies that utilize palm oil, decide not to risk their corporate image over the small amount of profit gained from these resources. Thus, this becomes a problem for Indonesia’s economy with unsteady exports relative to the amount of land damaged. Many indigenous people of Indonesia have agreed to plant palm oil if each person is paid 70 million rupiah and land, but this only benefits these people in the short-term because they are only paid once and once all the forests are cut down, they will not be able to make more profit(Rivet). Giant companies are also stashing up large amounts of fertilizers that farmers have shortage of, causing prices of the farmers’ crops to soar up in less than two months (Saroso). This problem causes an unbalance in the economy because more people cannot afford to buy these crops. As rainforests are being cut down, there are fewer resources and possibly cause prices to rise up, therefore leaving more people in poverty in hunger (Girling). Not only will increasing palm oil plantations put more people in poverty, it will push foreign companies to discontinue business with Palm Oil Companies.<br />Supporters of Palm Oil plantations state that increasing production will eliminate poverty in Indonesia. According to a report, palm oil plantations will pull people out of poverty and provide jobs for people (Saroso, Uebelherr). With an increased demand for palm oil, it creates more jobs for poorer people like farmers, desperate to be able to better themselves and take care of their family. According to John McCarthy, an economist and expert on the Indonesian palm oil industry, more than half of the people cultivating palm oil are ordinary people (Law). Another statistic has claimed that 40% of palm oil plantations come from small producers who cultivate 10 to 20 hectares of land to support their family and allow them to be able to send their children to universities (Rivet). This demonstrates the potential Indonesia has at reducing poverty and at prospering by supplying those without jobs.<br />Even though increasing palm oil plantations eliminates poverty in Indonesia, the country’s local environmental issues impose a bigger problem. Deforestation is high which may be due to the forest conversion occurring throughout Indonesia (Simamora, Saroso). A source of these environmental problems could be from the large companies that log illegally, which increases deforestation and forest conversion (Simamora). Moreover, there is more carbon dioxide released into the air by deforestation than is being saved by the reduction of fossil fuels (Girling). If the government does not enforce stricter laws on illegal logging, more forests will be reduced in Indonesia, leaving very little for animal species to survive on. An increase in palm oil plantations will increase the extinction of endangered animals like the Sumatran Tigers (Uebelherr). According to a study, only one in six forest species can survive on the plantations and this significantly reduces animal species and diversity (Siddle). Environmentalists believe that the extinction rate of these endangered animals destroys the cycle of life. Furthermore, palm oil plantations are more beneficial for big companies and the community is too weak to retaliate against these companies, thus causing the unequal distribution of wealth between large firms and locals (Rivet). The government is replacing food crops with palm oil plantations, which cause small scale farmers to be pushed off their land (Girling). This problem between dislocated farmers and large companies creates great conflict and poses a possible threat of increasing the gap between the rich and poor.<br />There are more disadvantages to increasing palm oil plantations in Indonesia, so the government should not consider the possibility of expanding production. The environmental issues associated with palm oil plantations will pose greater problems than benefits in the long term, since environmental damage only appears after a long period of time, while the economic gain lasts for a short amount of time. The distribution of profit made from palm oil plantations is not equal between large companies and ordinary farmers. To prevent the environment from dying out, palm oil plantations should be decreased or utilize on already abandoned land. The establishment of the REDD organization, or Reducing Emissions from Deforestation and Forest Degradation, where wealthy countries pay developing countries for every hectare of trees that were not cut down, will slowly pay back the amount of damage caused to both Indonesia and the world (Gelling).<br />Works Cited<br />"Bright future for biodiesel in Indonesia." Jakarta Post, The (Indonesia) 8 Feb. <br />2010. Record Number: FJKP76761880. NewsBank. Web. 5 May. 2010. <br />Gelling, Peter. "Forest Loss in Sumatra Becomes a Global Issue." New York Times, The <br />(NY) 6 Dec. 2007, Late Edition - Final, Foreign Desk: 14. Record Number: 2007-12-06-232734. NewsBank. Web. 12 May. 2010. <br />Girling, Richard. "Biofuels: Fields of Dreams" Times Online News and Views <br />from The Times and Sunday Times. 9 Mar. 2008. Web. 13 May 2010. <>.<br />Ingham, Richard. "SE Asia peatland loss helps drive warming, scientists warn." Agence <br />France-Presse 4 Nov. 2009. Record Number: 115911-TX-NZR51. NewsBank. Web. 11 May. 2010.<br />Knudson, Tom. "Dark Side of a Hot Biofuel." Rainforest Portal. N.p., 29 Jan. 2008. Web. <br />13 May 2010. <>.<br />Law, Bill. "Can Palm Oil Help Indonesia's Poor?" BBC NEWS. 1 Mar. <br />2010. Web. 09 May 2010. <>.<br />"Nestle Drops Indonesian Palm Oil Supplier." The Jakarta Post. 18 Mar. 2010. <br />Web. 11 May 2010. <>.<br />“Palm Oil Warning for Indonesia." BBC NEWS News Front Page. 8 Nov. <br />2007. Web. 11 May 2010. <>.<br />Rivet, Jerome. (AFP) – Mar. "AFP: Palm Oil: Environmental Curse or a <br />Blessing?"Google. 1 Mar. 2010. Web. 09 May 2010. <>. <br />Saroso , Oyos. " Subsidized fertilizers hoarded by big oil palm plantation firm." Jakarta <br />Post, The (Indonesia) 20 Mar. 2010. Record Number: FJKP77654299. NewsBank. Web. 12 May. 2010.<br />Siddle, Julian. "Palm Oil's Carbon Benefit Queried." BBC NEWS. Web. <br />06 May 2010. <>.<br />Simamora, Adianto P. "Forestry corruption spirals since '05." Jakarta Post, The <br />(Indonesia) 29 Apr. 2010. Record Number: FJKP78497035. NewsBank. Web. 3 May. 2010.<br />Uebelherr, Jan. "Palm oil production hurts orangutans, helps humans: Plantations <br />destroy apes' habitat, but product is used by consumers and boosts economies." Milwaukee Journal Sentinel, The (WI) 06 July 2008: Newspaper Source. EBSCO. Web. 9 May 2010.<br />