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DR. SYLVESTER K. DERY
CSIR –OIL PALM RESEARCH INSTITUTE,
GHANA
e-mail: sylvesterdery@yahoo.com
Presentation at the: SOUTH AT THE STEERING WHEEL WORKSHOP.
STOCKHOLM ENVIRONMENT INSTITUTE (SEI)
May 2012
6/4/2012presentation by: Dr. S. K. Dery 1
 Among oil bearing plants, the oil palm Eleis
guineensis has the highest oil yield per hectare.
 According to Global Petroleum Club/Biofuel
International (2007); it yields 5,000 kg/oil/ha. or 5,950
ltr/oil/ha.
 Palm oil therefore, should play an important role in
Biofuel feedstocks.
 It is the only crop that has two destinct oils
- Palm oil
- Palm kernel oil
6/4/2012presentation by: Dr. S. K. Dery 2
 The oil palm takes 3 years to start fruiting, and has an
economic life span of 25 years.
 There is a 5 years lead time before significant volumes
of fruits are harvested, and 11 years to cash break even.
 Several factors need to be considered when discussing
sustainable investment in oil palm.
 Price volatility of the palm oil markets further
complicates economic forecasting.
6/4/2012presentation by: Dr. S. K. Dery 3
 (suitable, unencumbered, relatively cheap, easy process
of acquisition).
 two issues immediately come to mind.
- Land acquisition issues
- Land suitability issues
6/4/2012presentation by: Dr. S. K. Dery 4
 This to my mind is the most frustrating issue.
 It is misleading to generalize land acquisition in Africa.
 Different countries have different laws/ regulation.
 In Ghana; Government does not own land.
- Stool Lands:
i. The allodial title is vested in the stool (Chief), but
occupants of the land (subjects) have rights.
Therefore: Family land, Private land etc.
6/4/2012presentation by: Dr. S. K. Dery 5
- Government Land:
 This is land acquired by gov’t for a specific purpose,
normally through an Executive Instrument, and
payment of compensation.
 Very difficult to get 10,000ha of unencumbered land
without negotiating with different owners.
 Because of this problem investors go into outgrower
schemes.
6/4/2012presentation by: Dr. S. K. Dery 6
- Nucleus Estate:- plantation owned and managed by a
milling company
- Smallholder: - a grower allocated land owned by the
milling company.
- Outgrower:- a grower on land not owned by milling
company; but milling company supplies inputs and
extension services on credit. Grower is contracted to supply
FFB to the mill.
- Independent smallholder:- a grower who produces FFB
from his own land; does not have a contract with anybody
and sell his fruits to whoever he sees fit.
6/4/2012presentation by: Dr. S. K. Dery 7
 Not all land in the tropical forest is suitable for oil palm
cultivation.
- Rainfall/Climate: 1,800mm or more but with
sunshine.
- Soil:
i. Fertility/acidity
ii. Gradient
iii. Drainage
- Chemical contamination. (Palm oil is edible)
i. From mining operations
ii. From oil spillage
6/4/2012presentation by: Dr. S. K. Dery 8
 Because of the long term nature of oil palm investment
(50 years plus). Regulations/laws are required to ensure
i. Protection of the investor
ii. Protection of the landowner
Dissatisfaction by any of these stakeholders means
trouble unsustainable investment.
6/4/2012presentation by: Dr. S. K. Dery 9
 Oil palm is indegenous to Africa. It has socio cultural
uses in local cuisine and traditions.
i. How to encourage smallholders to maintain the
palms for 25 years, rather than fell for palm wine.
(15yrs + palm tree sells for GH¢10.00 = US$ 6-7).
ii. Not to divert FFB to artisanal mills etc.
iii. How do you attract large scale investors to facilitate
transfer of capital, technology, skills and
management.
6/4/2012presentation by: Dr. S. K. Dery 10
 The tendency of smallholders to revert to their age old
ways is high.
6/4/2012presentation by: Dr. S. K. Dery 11
 Provision of basic infrastructure which cannot be left to the
investor.
e.g. Roads:
- A 60tph mill, will take about 1,000mt FFB a day (24hr).
- Ave. truck load = 8mt = 125 truck loads a day.
This does not include transport of fertilizers, evacuation of
CPO, staff, fuel, spares, EFB (30% of FFB weight), palm
kernels.
Poor roads, results in increased cost.
6/4/2012presentation by: Dr. S. K. Dery 12
 Power supply:- (medium size mills). Large mills are
self sufficient.
 Water:- Mills use a lot of water
Before large scale investors can go in, funding is required.
 Infrastructural Development needs to preceed the
creation of plantations and mills.
Collaboration between Ministries is required to get this
done.
6/4/2012presentation by: Dr. S. K. Dery 13
 A large Estate requires about 200 skilled and
permanents staff, and up to 2,000 seasonal workers.
 Also competitive skills in Research & Development.
 Agronomy of production (developed and maintained).
6/4/2012presentation by: Dr. S. K. Dery 14
6. Sustainable Oil Palm Industry requires clear Rules and
Regulations on Environmental Protection
RSPO?
Thank you
6/4/2012presentation by: Dr. S. K. Dery 15

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Sustainable investment for biofuel feedstocks: Oil palm

  • 1. DR. SYLVESTER K. DERY CSIR –OIL PALM RESEARCH INSTITUTE, GHANA e-mail: sylvesterdery@yahoo.com Presentation at the: SOUTH AT THE STEERING WHEEL WORKSHOP. STOCKHOLM ENVIRONMENT INSTITUTE (SEI) May 2012 6/4/2012presentation by: Dr. S. K. Dery 1
  • 2.  Among oil bearing plants, the oil palm Eleis guineensis has the highest oil yield per hectare.  According to Global Petroleum Club/Biofuel International (2007); it yields 5,000 kg/oil/ha. or 5,950 ltr/oil/ha.  Palm oil therefore, should play an important role in Biofuel feedstocks.  It is the only crop that has two destinct oils - Palm oil - Palm kernel oil 6/4/2012presentation by: Dr. S. K. Dery 2
  • 3.  The oil palm takes 3 years to start fruiting, and has an economic life span of 25 years.  There is a 5 years lead time before significant volumes of fruits are harvested, and 11 years to cash break even.  Several factors need to be considered when discussing sustainable investment in oil palm.  Price volatility of the palm oil markets further complicates economic forecasting. 6/4/2012presentation by: Dr. S. K. Dery 3
  • 4.  (suitable, unencumbered, relatively cheap, easy process of acquisition).  two issues immediately come to mind. - Land acquisition issues - Land suitability issues 6/4/2012presentation by: Dr. S. K. Dery 4
  • 5.  This to my mind is the most frustrating issue.  It is misleading to generalize land acquisition in Africa.  Different countries have different laws/ regulation.  In Ghana; Government does not own land. - Stool Lands: i. The allodial title is vested in the stool (Chief), but occupants of the land (subjects) have rights. Therefore: Family land, Private land etc. 6/4/2012presentation by: Dr. S. K. Dery 5
  • 6. - Government Land:  This is land acquired by gov’t for a specific purpose, normally through an Executive Instrument, and payment of compensation.  Very difficult to get 10,000ha of unencumbered land without negotiating with different owners.  Because of this problem investors go into outgrower schemes. 6/4/2012presentation by: Dr. S. K. Dery 6
  • 7. - Nucleus Estate:- plantation owned and managed by a milling company - Smallholder: - a grower allocated land owned by the milling company. - Outgrower:- a grower on land not owned by milling company; but milling company supplies inputs and extension services on credit. Grower is contracted to supply FFB to the mill. - Independent smallholder:- a grower who produces FFB from his own land; does not have a contract with anybody and sell his fruits to whoever he sees fit. 6/4/2012presentation by: Dr. S. K. Dery 7
  • 8.  Not all land in the tropical forest is suitable for oil palm cultivation. - Rainfall/Climate: 1,800mm or more but with sunshine. - Soil: i. Fertility/acidity ii. Gradient iii. Drainage - Chemical contamination. (Palm oil is edible) i. From mining operations ii. From oil spillage 6/4/2012presentation by: Dr. S. K. Dery 8
  • 9.  Because of the long term nature of oil palm investment (50 years plus). Regulations/laws are required to ensure i. Protection of the investor ii. Protection of the landowner Dissatisfaction by any of these stakeholders means trouble unsustainable investment. 6/4/2012presentation by: Dr. S. K. Dery 9
  • 10.  Oil palm is indegenous to Africa. It has socio cultural uses in local cuisine and traditions. i. How to encourage smallholders to maintain the palms for 25 years, rather than fell for palm wine. (15yrs + palm tree sells for GH¢10.00 = US$ 6-7). ii. Not to divert FFB to artisanal mills etc. iii. How do you attract large scale investors to facilitate transfer of capital, technology, skills and management. 6/4/2012presentation by: Dr. S. K. Dery 10
  • 11.  The tendency of smallholders to revert to their age old ways is high. 6/4/2012presentation by: Dr. S. K. Dery 11
  • 12.  Provision of basic infrastructure which cannot be left to the investor. e.g. Roads: - A 60tph mill, will take about 1,000mt FFB a day (24hr). - Ave. truck load = 8mt = 125 truck loads a day. This does not include transport of fertilizers, evacuation of CPO, staff, fuel, spares, EFB (30% of FFB weight), palm kernels. Poor roads, results in increased cost. 6/4/2012presentation by: Dr. S. K. Dery 12
  • 13.  Power supply:- (medium size mills). Large mills are self sufficient.  Water:- Mills use a lot of water Before large scale investors can go in, funding is required.  Infrastructural Development needs to preceed the creation of plantations and mills. Collaboration between Ministries is required to get this done. 6/4/2012presentation by: Dr. S. K. Dery 13
  • 14.  A large Estate requires about 200 skilled and permanents staff, and up to 2,000 seasonal workers.  Also competitive skills in Research & Development.  Agronomy of production (developed and maintained). 6/4/2012presentation by: Dr. S. K. Dery 14
  • 15. 6. Sustainable Oil Palm Industry requires clear Rules and Regulations on Environmental Protection RSPO? Thank you 6/4/2012presentation by: Dr. S. K. Dery 15