Sustainability Analysis of Monoculture to Polyculture Transitions: A Palm Oil Case Study

By:KatiePhillips

Director:Dr.SusanClark

SecondReader:Dr.MilanShrestha

ArizonaStateUniversitySchoolofSustainabilityBarrettHonorsCollege

Spring2016

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Abstract: The purpose of this research was to address the viability of a monoculture to polyculture agricultural land-cover transition within the context of the palm oil industry in Malaysia and Indonesia. A lifecycle assessment was used as a framework in the Cradle-to-Gate methodology used to understand sustainability hotspots, develop four future scenarios, and to measure three chosen indicators for metric changes. The four scenarios included a business-as-usual, perfect world, and two transition scenarios highlighting greenhouse gases, bio-control chemicals, fertilizer-use, and crop yield as indicators. In the four scenarios, a 1000 ha of plantation land with 140,000 palm oil trees created the backdrop for investigating nutrient cycling, cultivation methods, and the economic trade-offs of a transition. Primary literature was the main source of investigation and a wide-variety of current polyculture research helped create tangible data across the four scenarios. However, polyculture failed to address the socioeconomic barriers present in the governance, business-state, and regulations within this industry and region. An institutional analysis was conducted to investigate the political, financial, and regulatory barriers in this industry and recommend changes. It was concluded that while polyculture is an important form of environmental sustainability and can increase crop yield, the socioeconomic structure of the industry is the largest barrier to change and implement polyculture. In order for this social structure to change, it was recommended that the regulatory institutions, such as the Roundtable for Sustainable Palm Oil (RSPO), reframe their pressure points and instead focus on the interconnectedness of logging and palm oil companies with the regional governments.

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Table of Contents

Chapter1 :IntroductionandMethods………………………..…………………………………..4

Introduction…………………………………………………………………………………………………4

HypothesisandMethods…………....…………………………………………………………………5

Chapter2 :CurrentStateAnalysis……………………………………………………………...……8

BackgroundandCurrentState………………………………………………………………....……..8Indicators……………………………………………………………………………………………..…….....10CurrentStateDiagram………………………………………………………………………….…..….…11

LifecycleAnalysis………………………………………………………………………………..…..…..….12

Chapter3 :TheMonocultureandPolycultureTransition………………………….…....15

MonocultureandPolyculture………………………………………………………………..…….....15

FutureScenarios………………………………………………………………………………..……….....16

ScenarioComparison…………………………………………………………………………..…….…..19

Chapter4 :SocialandEconomicBarriers……………………………………………….……….22

InstitutionalAnalysis………………………………………………………………………...…………..22

Chapter5:Conclusion&Discussion………......…………………………………….…………….25

WorksCited………………………………………………………………………………………….…………27

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Chapter 1: Introduction and Methods Introduction:

In the summer of 2013, I traveled halfway across the world to volunteer at Wildlife 1 Sanctuary in Chiang Dao, Thailand. It was on this trip that I was first exposed to the challenge of sustainable agriculture related to problems of land use change and wildlife management. on a hike to collect field camera trap data, the team witnessed acres of rainforest being cut down and burned to make room for new agriculture schemes. Specifically, palm oil, an important commodity for Southeast Asia, is known for causing forest degradation and social land conflicts (Teoh, 2010). During my time in Southeast Asia, I personally worked with various species of primates displaced from intensive palm oil monoculture in the region. Many of these primates suffered from Post Traumatic Stress Disorder (PTSD), severe burns, or were disfigured as a result of farmers removing native vegetation and wildlife through violent slash-and-burn methods. Their injuries, both mental and physical, represented a much larger, sustainability issue: a disconnect between farmers, their crops, and the natural surrounding ecosystems. While this industry provides livelihoods for thousands of people, it has been hotly contested as a sustainability crisis for several decades (Wakker et al., 2004). My first-hand experience in Thailand inspired me to investigate the palm oil industry further, with the goal of identifying strategies to reduce negative impacts.

Up until the 1960’s, African Oil Palm (Elaeis guineensis) had remained a local commodity among smallholder farmers in Southeast Asia, Central and West Africa, and Latin America (Teoh, 2010). Today, palm oil accounts for 34.0% of global oil production and can be found in 50% of packaged food and health products at most supermarkets (Teoh, 2010). It is expected that palm oil will become the world’s most traded oil in the next twenty years (Wakker et. al, 2004) The palm oil agriculture industry in Southeast Asia has seen unprecedented expansion in the past four decades, accounting for 5 Mha of agricultural land expansion in Indonesia from 1975 – 2005 (Wicke et. al, 2011). During the 1990s, most of the land-use change in Southeast Asia was attributed to changing existing and new forest areas into permanent agricultural development (Lambin et. al, 2003). Through this expansion, palm oil has aided these developing regions to create global economies. For example, the 1997-1998 financial crisis in Malaysia was mitigated by increasing exports of cheap palm oil (Teoh, 2010).

Despite the economic gains, current practices within the palm oil industry are associated with environmental degradation, human rights violations, increased carbon emissions, and biodiversity loss. Indonesia has been cited among the top ten national emitters of carbon, where most of the carbon is sourced from deforestation and peatland drainage for agricultural uses including the production of palm oil (Carlson et. al, 2012). In addition, Southeast Asia experienced rapid tropical forest degradation and deforestation in the 1990s, from 2% to 5% of forests cleared annually, in order to establish more permanent agricultural schemes (Lambin et. al, 2003). In Riau, an Indonesian province, 85% of palm oil plantations planted between 1982 and 2007 are located on former natural forest land, indicating high amounts of deforestation, biodiversity loss, and higher carbon emissions. (Wicke et. al, 2011). Moreover, the displacement of native tribes, like the Iban of Malaysia, and the rabid acquisition of tribal land for palm oil joint-venture schemes are just a few of the social and economic issues related to the palm oil industry (Cramb et. al, 2011). This thesis seeks to investigate strategies for reducing these negative impacts and improve the overall sustainability of the palm oil industry.

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Research Question, Hypothesis, and Methods

The primary research question for this project is the following: “Is a polyculture transition a viable sustainable solution for current monoculture practices of the palm oil industry?” My hypothesis is that switching from monoculture farming practices to a polyculture growing method will improve the industry’s overall sustainability. To investigate this question, my research explores the environmental, social, and economic aspects of a transition from monoculture to polyculture methods in Malaysia using life cycle analysis, assessment of

alternative future scenarios, and an institutional analysis, as illustrated in Figure1.1. My hypothesis and the methods employed are discussed in detail below.

The common agricultural practice of palm oil today is monoculture (Wicke et. al, 2011). Monoculture is the agricultural practice where one plant species is cultivated in the complete or near absence of all other plant species (Freedman, 2004). When stress and demand for a crop increases, it is clear that the cultivator would respond by intensifying crop production through monoculture, in order to reduce competition (Turner et. al, 1978). However, this practice yields greater vulnerability to epidemics and environmental changes with a larger magnitude of loss (Turner et. al, 1992). Pesticides were developed to combat these negative effects, but these pesticides created other health and environmental problems, such as eutrophication (Turner et. al, 1992). Frontier commodity economists claim that this one-crop system and the market-driven land acquisition methods of Southeast Asia are the most efficient process to ensure financial development of these farming regions (Laungaramsri, 2012). But, the myth of cheap, unlimited land has been shown to be risky investments for foreign agencies through constant amendments of land governance laws as well as create regional economic depressions through the dispossession of local communities (Laungaramsri, 2012). Frontier commodity and capitalism is a unpredictable process, as shown in both the palm oil and rubber industry throughout Southeast Asia, and often creates inefficiencies in both environmental degradation through negative

Economic:InstitionalAnalysis

Social:Institutional

Analysis

Figure 1.1: The Three Pillars of Sustainability and sub-sections of this research project.

Societal Growth

Sustainability

Environment:

Lifecycle Analysis

Future Scenario Indicators

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externalities, but also social and government deficiencies from an aggressive land acquisition program (Laungaramsri, 2012). Alternatively, polyculture, a method of cultivating mutually beneficial plants and biotic material together, provides a possible sustainability solution to mitigate the negative side-effects of monoculture while maintaining higher overall system productivity and efficiency long-term (Phorsi et. al, 2010). While this paper will not include a full economic analysis of a monoculture to polyculture transitions, some economic trade-offs will be included in the future scenario planning stage.

Other research in monoculture to polyculture transitions cites promising strategies, including mycorrhizal fungal polyculture, the use of mycorrhizal fungus during cultivation, as a way to increase plant nutrient uptake, water consumption, soil richness, and overall farm longevity in tropical plants such as bamboo, clover, coffee, and corn (Phorsi et. al, 2010). In this same study, palm oil was cited as another plant commodity that would benefit from this fungal polyculture process (Phorsi et. al, 2010). In addition, groundcover polyculture will be investigated as another source of agroecological change. Through a mix-use groundcover strategy, legumes and recycled palm oil green waste is hypothesized and referenced in many studies to provide more efficient nutrient cycling and uptake for palm oil and other tropical perennials, while also cycling important limiting nutrients like nitrogen and phosphorus back into the system (K. Haron, 2000). This research will explore these two polyculture solutions to improve the ecological integrity within the palm oil industry in Malaysia.

To investigate this hypothesis, my research will study the environmental, social, and economic challenges to current monoculture practices of the palm oil industry using a life-cycle perspective, as shown in Figure 1.2. This perspective will help identify stages where a polyculture transition would be most beneficial to the overall system. Lifecycle thinking and lifecycle assessments (LCA) emphasize the importance of addressing environmental impacts by first understanding the entire process of a product or service from raw material extraction (cradle) to waste disposal (grave) perspective (Azapagic, 2004).

Due to the diversity of palm oil uses and destinations, this research will follow a ‘Cradle-

to-Gate’ methodology, meaning that the lifecycle assessment will begin with land-conversion for palm oil plantations (cradle) and end with the milling process (gate) before the refined oil is bought, sold, and exported on an international market. The cradle to gate processes include: growth, harvesting, processing, transport, and retail.

Next, key environmental indicators were identified to quantitatively measure the severity of impacts of current and potential future practices within the palm oil industry including tons of bio-control chemicals, tons of fertilizer (represented by tons of nitrogen and phosphorus), Greenhouse Gas Emissions, and Crude Palm Oil (CPO) yield. The indicators are used to

Figure1.2:Theflowofatypicallifecycleassessmentmodel.Source:(Azapagic,2004)

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compare the impacts of monoculture practices to polyculture using existing literature. The future scenarios being presented in this investigation will primarily focus on ecological change and impact through a lifecycle analysis. The alternative scenarios are briefly described in the table below:

Current data and relevant polyculture research data was used to created the four scenarios from the following sources:

Greenhouse Gas Emissions Nutrient Cycling & Bio-Control Crop Yield

(Basiron, 2007), (Carlson et. al, 2012), (Gleissman, 1982), (Iverson et. al, 2014), (Jones et. al, 2005), (Luskin et. al, 2011), (Magarey, 1999), (Nair et. al, 2009), (Wicke, 2011), (Wilcove et. al, 2010)

(Bah et. al, 2014), (Basiron, 2007), (Comte et. al, 2013), (Carlson et. al, 2012), (Gleissman, 1982), (Govindarajulu et. al, 2005), (Gupta, 2012), (Haron et. al, 2000), (Iverson et. al, 2014), (Kiers et. al, 2011), (Luskin et. al, 2011), (Magarey, 1999), (Martinez et. al, 2013), (Phorsi et. al, 2010), (Pringle et. al, 2009), (Wicke, 2011), (Wilcove et. al, 2010)

(Bah et. al, 2014), (Basiron, 2007), (Comte et. al, 2013), (Carlson et. al, 2012), (Foley et. al, 2011), (Gleissman, 1982), (Haron et. al, 2000), (Iverson et. al, 2014), (Kiers et. al, 2011), (Luskin et. al, 2011), (Magarey, 1999), (Martinez et. al, 2013), (Phorsi et. al, 2010), (Pringle et. al, 2009), (Wicke, 2011), (Wilcove et. al, 2010)

The lifecycle of palm oil will be using the lifecycle assessment model as a starting point

when analyzing the system as a whole. However, due to the diversity of palm oil uses and destinations, this research has devised a different method of analysis. The scope of this lifecycle examination will follow a Cradle-to-Gate methodology, meaning that the lifecycle assessment will begin with land-conversion for palm oil plantations and end with the milling process before the refined oil is bought, sold, and exported on an international market. Finally, an institutional analysis will be used to understand the social and economic challenges of these systems required for enabling the changes within the larger context of the palm oil industry as well as understanding how those changes relate to global sustainability challenges. An institutional analysis and development framework (IAD) is a tool used by scientists and policy makers to map and identify key variable institutions in an arrangement that highlights relationships (Ostrom, 2011). By creating an IAD map of the palm oil industry, simplifying the multi-tier institutional current-state will help identify areas where socioeconomic challenges will persist (Ostrom, 2011).

Scenario Description Current State The present monoculture state of Malaysian palm oil plantations. Polyculture The “best-case-scenario”, with a mixture of soil and groundcover

polyculture. Mixed Transition 1 A transition scenario, with only soil biota restoration and polyculture. Mixed Transition 2 Another transition scenario, with only groundcover diversity and

polyculture.

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Chapter 2: Current State Analysis Background and Current State In the last fifty years, palm oil has seen unprecedented expansion in Southeast Asia, and namely in the countries of Indonesia and Malaysia where this crop is the backbone of their economic security (Teoh, 2010). In Indonesia and Malaysia, almost 90% of the world’s palm oil supply is grown and exported (Hamilton-hart, 2014). Palm oil cultivation was originally comprised of smallholder farming schemes by local communities, and the first known commercial plantation system for palm oil in Malaysia began in 1917 at 1 in Kuala Selangor (Basiron, 2007). Historically, palm oil was only in high demand from European sailors for its versatility and uses from candle-making to food preservation (Basiron, 2007). It was not until the 1960s that the demand for palm oil began to accelerate world-wide in numbers not seen by any commodity crop since, as illustrated by Figure 2.1 (Teoh, 2010). Today, palm oil has become the world’s most-consumed vegetable oil and has the largest amount of cropland devoted to a perennial plant on earth (Luskin, 2011). Malaysia produces 13 million tons of crude palm oil per year and palm oil plantations cover 11% of its land area, and this new cash crop has far surpassed its predecessor: rubber (Yusoff, 2007). Since 1896, rubber had been one of the main exports for Malaysia and Indonesia, but has since been completely dominated by palm oil cultivation (Basiron, 2007).

Figure2.1:Comparisonofplantingareaofpalmoilandrubberfrom1960to2005.Source:(Basiron,2007)

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Palm oil today accounts for 34.0% of global oil production and can be found in 50% of packaged food and health products at most supermarkets (Teoh, 2010). The palm oil agriculture industry in Southeast Asia has seen immense expansion in the past four decades, accounting for 5 Mha of agricultural land expansion in Indonesia from 1975 – 2005 (Wicke, 2011). During the 1990s, most of the land-use change in Southeast Asia was attributed to changing existing and new forest areas into permanent agricultural development, as shown on the island of Borneo in Figure 2.2 (Lambin, 2003). Through this expansion, palm oil has aided these developing regions to create global economies. For example, the Federal Land Development Authority (FELDA) was established in 1956 in Malaysia with the mission to reduce rural poverty by resettling landless farmers onto agriculturally viable land (Basiron, 2007). Around 100,000 families who had been living below the poverty line were resettled over the next few decades onto FELDA land-holdings and given work, making FELDA today the largest, single plantation company with over 600,000 ha of palm oil and a yearly revenue of $2 billion USD (Basiron, 2007). In addition, the 1997-1998 financial crisis in Malaysia was mitigated by increasing exports of cheap palm oil by creating larger plantation schemes (Teoh, 2010). The abundance of labor, low production costs, and rising oil prices in the 1990s led many countries, such as India and China, to import even more palm oil as an option for an efficient biodiesel fuel (Basiron, 2007). This led to even more expansion and land acquisition, as well as the creation of the thousands of new jobs.

Despite the economic gains, current practices within the palm oil industry are associated with environmental degradation, human rights violations, increased carbon emissions, and biodiversity loss. Indonesia has been cited among the top ten national emitters of carbon, where most of the carbon is sourced from deforestation and peatland drainage for agricultural uses such as the production of palm oil (Carlson, 2012). In addition, Southeast Asia in the 1990’s experienced the highest amount of rapid tropical forest degradation and deforestation, from 2%

Figure2.2:DeforestationontheislandofBorneo,ownedjointlybyIndonesiaandMalaysia,from1950-2020.Source:(Ahlenius,2007)

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to 5% of forests cleared annually, in order to establish more permanent agricultural schemes (Lambin, 2003). During this time, 55% - 59% of agricultural land expansion in Malaysia and at least 56% in Indonesia occurred at the expense of primary forest (Koh et. al, 2008). In Riau, an Indonesian province, 85% of palm oil plantations planted between 1982 and 2007 are located on former natural forest land, indicating high amounts of deforestation, biodiversity loss, and higher carbon emissions (Wicke, 2011). Conversely, 11% of remaining tropical forests in the world exist in Southeast Asia, where they are most threatened (Koh et. al, 2008).

In addition, the displacement of native peoples, like the Iban of Malaysia, and the rabid acquisition of tribal land for palm oil joint-venture schemes enable an industry filled with social and economic injustices (Cramb, 2011). The Iban are a well known case-study of tribal land acquisition and migration. Originally, the Iban are from the Kapuas basin in what today is the southern, Indonesian portion of the island of Borneo, but in the late 19th Century began traveling towards the Sarawak basin on the Malaysian side of Borneo (Cramb, 2011). Over the nest 80 years, the Iban would be moved from the heart of the Sarawak basin and their cultural heritage, to small, isolated communities along the Tinjar River, and finally to dispersed and broken up land “lots” along the Tinjar roadside in the name of “national economic security” and palm oil ventures (Cramb, 2011). This story is not the only one of human displacement in Indonesia and Malaysia. In Malaysia in 1974, smallerholder farms owned by local communities like the Iban accounted for 37% of palm oil production, which peaked in 1986 at 52%, but this number has dramatically fallen since as government deals with big businesses overtook the market (Hamilton-hart, 2014). Now, in 2010, smallholder farms that continued to plant palm oil were as low as 13%, with many of the original holdings being absorbed by larger business and government land-acquisition policies (Hamilton-hart, 2014). The workforce required to work these now massive plantations are primarily immigrants from Bangladesh and Singapore, leaving many of the communities that once held this land unemployed and without opportunities (Hamilton-hart, 2014). The laws in place now in Indonesia and Malaysia are contradictory and do not acknowledge the rights of the indigenous people while also promoting huge land-acquisition schemes by corporations both domestic and foreign (Colchester, 2006). There is also a severe absence of laws that recognize and legitimize collective land actions that are customary practice among many these indigenous communities, which creates the opportunity for loopholes and discrete business deals to obtain community owned farmlands (Colchester, 2006). Indicators in the Current State

There are three indicators that will be investigated for change in each transition method to assess the sustainability of a monoculture to polyculture transition: greenhouse gas emissions, eutrophication from bio-control, and total crude palm oil (CPO) yield. These indicators are compared on a 1000 ha palm oil plantation with 140,000 palm trees spaced in a 9m x 9m setting. These indicators were chosen as transition indicators in the palm oil industry based on evidence presented in environmental and ecological surveys of Southeast Asia that supports their connection to the palm oil industry or agriculture in general. For example, Indonesia, a world leader in palm oil agriculture, has been cited among the top ten national emitters of carbon, where most of the carbon is sourced from deforestation and peatland drainage for agricultural uses such as the production of palm oil (Carlson, 2012). In addition, Southeast Asia in the 1990’s experienced the highest amount of rapid tropical forest degradation and deforestation, from 2% to 5% of forests cleared annually, in order to establish more permanent agricultural schemes

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(Lambin, 2010). In Riau, an Indonesian province, 85% of palm oil plantations planted between 1982 and 2007 are located on former natural forest land, indicating high amounts of deforestation, biodiversity loss, and higher carbon emissions (Wicke, 2011). The current state of these indicators creates an image of the environmental degradation facing the region of Southeast Asia due to palm oil agriculture, and a positive change in these metrics would suggest that a polyculture transition could lessen this environmental impact.

Indicator Measurement Unit Chemicals from Bio-Control and Fertilizer Tons of N, P2O5, or herbicides/pesticides Greenhouse Gases Tons of SO, NOx, or CO2 Crop Yield Tons of Crude Palm Oil (CPO)

Current State Diagram

In order to compare a change in metrics from a monoculture to polyculture transition, future scenarios were developed based on peer-reviewed research about current palm oil practices and polyculture research and application. Future scenario planning investigates three main lines of inquiry in order to predict the outcome of complex systems: “What may happen? What is most likely to happen? What would we prefer to happen?” (Duinker, 2007). In most sustainability research, these three question are centered around the environmental, social, and economic outcomes of complex systems (Swart, 2004). In this research, the future scenarios will follow a quantitative approach, which will extrapolate system outcomes based on current trends and phenomena that are likely to persist (Duinker, 2007). There were four scenarios developed: a business-as-usual monoculture plantation, best case scenario pure polyculture plantation, a mixed

Figure2.3:Thecurrentstatemodelofthepalmoilcultivationsystembasedoncurrentdatatrendsandvalues.

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system with polyculture groundcover, and another mixed system with a polyculture soil biota. All values are on an annual rate of inputs and outputs per a plantation of this size in Malaysia.

In this first scenario, the current state remains unchanged throughout plantations in Malaysia. This life-cycle begins with the deforestation of primary forest, releasing 2,000,000 tons of CO2 into the atmosphere before the plantation is even constructed (Yusoff, 2007). Once the clearing of land and terracing stages are complete, the plantation enters into its normal cycle for the next 25-30 years until the soil is infertile and new forest must be cleared to support global oil demand (Yusoff, 2007). During this time, due to a naturally highly acidic and fairly sterile soil, the young palm plants in the nursery only have a 55% survivability rate which decreases overall CPO yield (Phosri, 2010). Following the transition of young palms to the main plantation cultivation areas, large amounts of N, P, and herbicides/pesticides are required to keep yield steady and pests under-control (Teoh, 2000). Only 10%-20% of N and P is absorbed by this system, due to palm plants having cylindrical root systems with a minimal amount of root hairs (K. Haron, 2000, Phosri, 2010). Finally, greenhouse gases such as CO2, NOx, and SO are released into the atmosphere from the daily usage of mechanical equipment and vehicles (Teoh, 2000). Current Lifecycle of Palm Oil Industry

As mentioned previously, lifecycle analysis and assessment can help provide the framework within which environmental impact and human contribution to systems can be evaluated (Azapagic, 2004). While this research is using the LCA as a framework to present the Cradle-to-Gate analysis, there are many examples of LCA applied to palm oil in previous research. In work conducted by the Malaysian Palm Oil Board, the LCA presented investigates a small portion of the Cradle-to-Grave cycle and bounds the system around nursery transplantation and palm oil seed germination, in order to investigate emissions of energy and water in comparison to the high inputs of the system (Cossio, 2012). With the use of a LCA Framework, it was determined that fossil fuel use and emissions were the main contributor to environmental damage (Cossio, 2012). Another paper investigated the milling and production lifecycle of palm oil in order to understand the energy, water, and waste involved in the milling step (Stichnothe, 2011). Again, an LCA Framework helped determine that heavy metal waste and emissions from milling factories posed the greatest environmental threat in this system (Stichnothe, 2011). While there is plenty of research on production and energy use at various stages of this production cycle, there is very little research investigating land use change and land use cycling in the palm oil industry, and that is the space within which this research project will operate. Figure 2.4 is a simplified look at the lifecycle of palm oil as grown in Indonesia and Malaysia. This process begins with the land preparation and conversion to a palm oil plantation

Clear-cuttingforests&oldplantation

sites

Terraccingcleared land

&Fertilization

Planting Nurserytransplanting

PlantationHarvest

MillingProduction

Figure2.4:Cradle-to-GatelifecycleassessmentofpalmoilinIndonesiaandMalaysia.

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field, which can be on native forests or re-clearing old plantation sites. The process of preparing land to be converted requires intense mechanical removal of any and all vegetation and controlled burns (Luskin, 2011). In this land conversion process, intense damage is done to the native ecosystem through deforestation and is a major concern for most environmental studies of palm oil. For example, in Malaysia between 1990-2005, 1,040,000 ha of forest were converted to palm oil which accounted for 94% of the nation’s total deforestation (Wilcove, 2010). The life of a palm oil plantations is only 20-30 years of continual harvest and management due to the soil-intense monoculture practices, with the first fruit only appearing after 3-5 years, because of this land with native forests are in constant demand for clearing to make room for palm oil (Luskin, 2011). The next step of this lifecycle is terracing, which mostly takes place at the end of the step one. Terrace farming is a technique used to create “steps” on uneven terrain in order to create a uniform flat areas for agriculture. However, this technique destroys top soil biota and causes the soil to lose many key nutrients for agriculture, such as nitrogen and phosphorus, which are already scarce in the acidic, Southeast Asian soils (Allen, 1992, Luskin, 2011). While terracing can help with long-term land and water management, the initial change of land cover through mechanical deforestation and clear-cutting creates a rapid soil micro-climate change which disrupts the native soil biota (Luskin, 2011). Due to this sterilization of the soil, plantation owners are forced to invest heavily in pesticide, herbicides, and fertilizer, as palm oil is highly susceptible to insect herbivores and requires high nutrient soil (Martinez, 2013). This step of the lifecycle is completed immediately after land-clearing in preperation for step three. In step three, palm oil seedlings are planted in the nurseries of the plantations where they will mature and then be moved. Seeds are prepared in a different production facility to prepare them for planting. Fresh fruit bunches (FFB) from a previous harvest are kept stored in polyethylene bags after being removed from the mesocarp and kept at humidity level of 18%-19% for 14-30 days before transportation for planting (Cossio, 2012). Throughout the plantation, in both the nurseries and other sections, palm oil seeds or seedlings are planted in even, identical 9m by 9m spacing to maximize yield and decrease inter-plant competition (Luskin, 2011). Step four, Nursery Transplanting, takes place after the plant has matured and before the first fruit (Luskin, 2011). The young trees are placed in the same 9m by 9m configuration on the larger plantation sites, where they will continue to produce fruit for the next 20-30 years until they are cut down and burned (Basiron, 2007). Many plantations use old palm leaves to create groundcover and promote a healthy microclimate and hinder pest activties, but often even more herbicide and pesticide is necessary for maximized yield (Martinez, 2013). These seedlings will take 3-5 years to produce the first fruits, and then will only have another 20-30 years of productivity (Luskin, 2011). The last two steps, Plantation Harvest and Milling Production, are almost one in the same. After the FFB are harvest from the plantation, some are set aside for seed prep and the rest are transported to mills and processing plants near the harvest site (Yusoff, 2007). Here, the FFBs are separated by into different categories based on final destination, such as biofuel or vegetable oil (Yusoff, 2007). After this step, palm oil is dispersed to a wide range of production facilities and buyers depending on its intended purspose, making this step the “gate” in the Cradle-to-Gate metholodgy of this research. Based on the lifecycle analysis of the palm oil industry, there are two main hotspots of environmental impact and where small change would make the biggest impact. First, the continual terracing and cutting of the landscape creates a huge disturbance regime from which

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the natural soil biota cannot recover. High amounts of fertilizer, pesticides, and herbicides are then introduced into the system and must remain in high quantities in order for the plantation to be successful. If the cultivation methods of this step were to transform into a state where soil biota is preserved and maintained through each growing season, it would have cascading positive effects in the entire Cradle-to-Gate lifecycle. If natural soil conditions are cared for, longevity of plantations would dramatically increase, which would address the first step, another hotspot for environmental degradation. Constant need for land with viable soil and environments is the main driver for deforestation and land-grabs in Southeast Asia, and this socioeconomic driver could be addressed by cultivation methods addressed in step two. If the plantations were sustained through polyculture over the long-term, new deforestation could be prevented and the ecologically rich region of Southeast Asia could be protected and keep providing important ecosystem services.

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Chapter 3: The Monoculture to Polyculture Transition Monoculture and Polyculture Monoculture is the agricultural practice where one plant species is cultivated in the complete or near absence of all other plant species (Freedman, 2004). When stress and demand for a crop increases, it is clear that the cultivator would respond by intensifying crop production through monoculture (Turner,1978). An older practice, this agricultural method is used to reduce competition between the desired crops and any other plant species, and thusly create more yield (Freedman, 2004). The practice of monoculture became popular during the global Green Revolution, with an exponentially growing population demanding more food and other plant resources driving farmers to abandon multiple-crop agriculture methods in the interest of large, global agriculture business schemes (Freedman, 2004). The Green Revolution promoted large-scale agriculture of single-crop yields, which benefitted communities and countries around the world with a means to food, money, and global power (Iverson, 2014).

However, this practice yields greater vulnerability to epidemics and environmental fluctuations with a larger magnitude of loss in long-term agriculture schemes (Turner, 1992). The trade-off for large-scale, single crop agriculture was a decline in ecosystem services such as soil formation, nutrient cycling, water supply, climate regulation, pollination, and biological control of pests (Iverson, 2014). For example, it was shown that monoculture practices in sugar cane, apples, and a variety of other species led to poor root health or rot, harmful soil micro-organisms, and overall reduced productivity of the system (Magarey, 1999). Soon, to avoid the epidemics and reduce the magnitude of loss, pesticides were developed and introduced as a cheap and easy method to increase system productivity, but these pesticides created other health and environmental problems, such as eutrophication and high exposure to dangerous chemicals (Turner, 1992). Pesticides used in Southeast Asia today, many of which still contain known harmful chemicals such as DDT, are used to control insect pest populations from destroying vulnerable one-crop plantations (Gupta, 2012). In places like Indonesia, little regulation is in place to monitor pesticide use in palm oil and rubber plantations, exposing thousands of people to pesticide mixtures that can cause neuro-toxicity, lung cancer, blindness, Non-Hodgkins Lymphoma, and death (Gupta, 2012). In addition to threatening human health, this high demand of pesticide use to protect these vulnerable plantations creates runoff into sensitive and highly diverse aquatic ecosystems, making conservation of the forest ecosystem more challenging (Gupta, 2012). The livelihood security of the region depends on palm oil, however, monoculture practices lead to system vulnerability, infertile soil composition, less productivity, and exposure to life-threatening pesticide mixtures. Alternatively, polyculture, a method of cultivating mutually beneficial plants and biotic material together, is a possible method for mitigating the negative side-effects of monoculture as well as offering many other benefits (Phosri, 2010). The ideology behind polyculture comes from not viewing agriculture as only a means for provisioning food and human benefit, but as an agroecosystem that can provide ecosystem services as well as food and human benefit (Iverson, 2014). Communities in the tropics, including Southeast Asia, have throughout their cultural history used polyculture as a means take limited resources and maximize profit while minimizing risk-taking (Gleissman, 1982). Some benefits of this historical system include weed suppression, reduction of insect and pest populations, water conservation, sustainable soil composition, erosion control, and maintaining an overall high system productivity (Gleissman, 1982).

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However, with palm oil expansion accelerating with interest in national and regional economic security, highly integrated logging and palm oil schemes have forced these traditional practices to disappear along with their socioecological benefits (Colchester, 2006).

Research in comparing monoculture and polyculture systems has shown promising benefits in using this transition strategy. For example, research conducted by the University of Michigan showed 40% increase in bio-control and 31% increase in yield when transitioning from a monoculture system to a polyculture system (Iverson, 2014). While this research did not specifically investigate palm oil, it showed promising evidence at the success that a polyculture transition strategy could bring to this system. The ecosystem service benefits, higher system productivity, and yield security of polyculture systems illustrates a viable sustainability alternative to current monoculture practices in the palm oil sector.

While in theory, polyculture is clearly the more sustainable alternative, there many limitations in making this transition a reality. First, as discussed in the study by the University of Michigan, crop value and intra-crop compatibility can slightly alter the success of a polyculture scheme (Iverson, 2014). If intra-crop compatibility, the ability for two organisms to have a mutually beneficial symbiosis within the same system, is outweighed by intra-crop competition, the rivalry between two organisms within the same system, then the value of the crops grown does not necessarily show an increase. Second, farmer preference plays an important role in polyculture agriculture. In the context of Southeast Asia, large, multi-faceted, government-run palm oil companies want to invest in intensifying their one-crop agriculture, and may not wish to put money towards a polyculture scheme for the sake of sustainability and longevity of their systems. Finally, cost of the polyculture venture overall can completely dismantle the benefits of any polyculture system. If the price of the additive crop increases overall production cost, then the benefits no longer outweigh the costs. Future Scenarios

Figure3.1:Polyculturesystemmapoverayearofpalmproductionidentifyingkeyindicators.

17

In this first future scenario, polyculture is quickly implemented by using a combination of soil and groundcover diversity; this includes low-growing legume plants, native weeds, arbuscular mycorrhizal fungus, and high amounts of nitrogen cycling bacteria. This type of polyculture would be expected to greatly extend the life of each plantation by re-introducing naturally occurring polyculture systems back into the soil and groundcover, which would eliminate the need to deforest primary forest for new plantations and reducing emissions by 2,000,000 tons of CO2 per 1000 ha from the very beginning (Haron, 2000). The high diversity in groundcover would be expected to greatly increase N and P absorption and cycling within the system, increasing palm N and P uptake 37%-44%, which leads to a total absorption of 80% of present N and P (Haron, 2000). This type of nitrogen fixing groundcover has also been shown to increase water potential and retention during dry seasons, as tested by other polyculture, agroforestry studies (Marschner, 2002). In addition, loss of water-soluble nutrients during the dry season was reduced by 80% in polyculture, agroforestry test sites, indicating more bio-available nutrients in a polyculture setting (Marschner, 2002). AMF symbiosis would aid the young palm plants with nutrient uptake by increasing root hair surface area, which would increase nursery survivability to 80%-100% (Phosri, 2010). This drastic increase in survivability would create an annual savings of $634,836,100 (Phosri, 2010). Another benefit of high diversity in the soil biota would be a 31% increase in yield which would bring more economic gain, as well as a 40% increase in bio-control to reduce the need for herbicides/pesticides by a small margin (Iverson, 2014). Finally, the presence of high amounts of nitrogen cycling bacteria would make NOx emissions negligible, but the total system reduction in CO2 and SO from agroforestry and groundcover carbon sequestration would not make a sizeable impact (Nair, 2009). Overall, this system would be the best case scenario for palm oil plantation production, but may not be possible for several decades due to social norms, initial economic costs, and willingness for change. This creates a need to create transition-focused, mixed scenarios from monoculture to polyculture.

Figure3.2:Mixedsystemmap1overayearofpalmproductionidentifyingkey

indicatorsandfocusingsoilbiotarestoration.

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The first mixed system focuses on restoring the soil biota by using AMF fungus and nitrogen fixing bacteria. A restored soil biota would decrease NOx emissions, increase yield, and eliminate the need for more deforestation, as mentioned previously. However, a restored soil biota would not address the need for high amounts of P, N, and herbicides/pesticides and would not address the high amounts of eutrophication as well as the social health concerns and lack of chemical regulation.

Conversely, in the second mixed system focused on a high diversity of groundcover plants, would significantly reduce the eutrophication effect from N and P leeching while also reducing the initial need for herbicides/pesticides because of increased natural bio-control. However, greenhouse gas emissions would hardly be mitigated and yield would remain low due to low survivability of palm nurseries. In addition, because the soil would remain acidic and nutrient poor, more forest would need to be cleared to meet demands for palm oil as a global commodity. By combining these two mixed scenarios in the polyculture system, the best outcome is achieved.

Figure3.3:Mixedsystemmap2overayearofpalmproductionidentifyingkeyindicatorsandfocusingonhighdiversityofthegroundcovervegetation.

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Scenario Comparison

When examining just the outputs of bio-control chemicals, such as pesticides or fertilizer, the levels of eutrophication and damage to the aquatic systems of Malaysia can be analyzed based on each scenario. The monoculture scenario showed the highest amounts of eutrophication predominately from the high amounts of nitrogen in fertilizers. The second highest contributor to eutrophication would be the first mixed scenario with high soil biota diversity. Finally, both polyculture and the second mixed scenario had similar levels of eutrophication due to the presence of high groundcover diversity in both scenarios.

36.841

9.211

27.631

9.211

6.2704

0.729

4.703

0.7290.391 0.235 0.235 0.2350

5

10

15

20

25

30

35

40

Monoculture Polyculture Mixed1(soil) Mixed2(groundcover)

TonsofB

io-con

trolch

emicals

Bio-Control&FertilizerOutputsComparison

Nitrogen Phosporhus HerbicidesandPesticides

20

Across all scenarios, polyculture and the first mixed scenario had the biggest reduction in greenhouse gas emissions. Whereas the monoculture scenario and second mixed scenario had little to no reduction in greenhouse gases. This is primarily from the need to deforest land area in order to replace the infertile soil from old plantations. This comparison shows that any reduction in deforestation would result in a significant overall reduction of greenhouse gases.

2,000,031.35

31.34 31.34

2,000,031.35

0.489 0 0 0.4890.196 0.196 0.196 0.1960.00

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

Monoculture Polyculture Mixed1(soil) Mixed2(groundcover)

TonsofG

HGEmissions

GreenhouseGasesEmissionsComparison

CO2 NOx SO

21

Finally, across all four scenarios, polyculture and mixed scenario one had the highest output in yield. This is due to the restoration of the soil to its natural state, whereas mixed scenario two and the monoculture systems had the damaged, nutrient poor soil from deforestation and terracing. In order to increase yield and nursery survivability, the soil biota must be preserved to some degree to aid the young plants in establishing stronger root systems.

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

Monoculture Polyculture Mixed1(soil) Mixed2(groundcover)

TonsofC

rude

PalmOil

CrudePalmOilYieldComparison

22

Chapter 4: Social and Economic Barriers Institutional Analysis While the future scenarios of the previous section capture and mitigate environmental damage in the palm oil industry, the different strategies for addressing such environmental phenomenon fail to address the social impact of this industry. The rapid expansion of government owned logging and palm oil schemes has created a social atmosphere that is completely controlled by government officials (Hamilton-hart, 2014). In the previous chapter, polyculture was used as a method to address the environmental degradation caused by this industry. However, it failed to address any of the social injustices explained in Chapter 2, which is one part of the three pillar definition of sustainability. It is then crucial to create an institutional analysis of the industry to better understand how it operates and therefore how to create meaningful change.

This particular institutional analysis will be examining the state of Sarawak, Malaysia because of the amount of information available. However, the processes are widely similar throughout Malaysia and Indonesia. Within governance in Malaysia and Indonesia, the government is divided into National Agencies and State Agencies, where the state-level is headed by a State Chief Minister (Milieudefensie, 2008). Starting in 1968, the British Commonwealth Corporation created one of the first join-venture schemes in Malaysia with the

Figure4.1:Institutionalanalysisofthepalmoilindustry. The three main arenas of stakeholders are illustrated with blue for governance, green for business, and orange for regulatory institutions. The arrows also correspond with the same colors, blue for political, green for financial, and orange for regulatory agencies.

23

Sarawak state agencies and named it Sarawak Oil Palm (Hamilton-hart, 2014). As time progressed, more of these land-owning, join ventures between the Malaysian states and private business began to form: Sarawak Land Development Board in 1971, Sarawak Land Consolidation and Rehabilitation Authority in 1976, and the Land Custody and Development Authority in 1980 (Milieudefensie, 2008). By the 1990s, Sarawak had become the base of most of Malaysia’s palm oil schemes (Hamilton-hart, 2014). These Sarawak-based government agencies created the NCR-JV, which allowed government institutions to develop on land owned by indigenous peoples based on a customary title (Hamilton-hart, 2014). These agencies brought in private companies to develop, and acted as the trustee for the community while leasing out 5000-hectare blocks of indigenous lands on 60 year leases to the private companies (Hamilton-hart, 2014). Eventually, the Federal Land Development Agency would own twice the acreage of palm oil plantations than the largest private sector palm oil company, Sime Darby (Anuar, 2012). In 2012, the Federal Land Development Agency, with all of its palm oil land-holdings, also became a privatized corporation under the name Felda Global Ventures and still held much of its political power (Hamilton-hart, 2014).

Through all of this rapid development and land division, the State Chief Ministers, who are at the top of these state agencies, own 474,000 hectares of palm oil land, which is more than twice the land-holdings of purely privatized palm oil plantations (Milieudefensie, 2008). In addition, the State Chief Ministers of Malaysia, and especially Sarawak, have had long-standing political and financial relationships with international and domestic logging companies (Hamilton-hart, 2014). In the 2011 Sarawak Report, it was shown that the support of State Chief Ministers and success of land acquisition in Sarawak, Malaysia created longer and more powerful political terms for the State Chief Ministers (Hamilton-hart, 2014). Even today, the official statement of the governments of Malaysia and Indonesia at all levels is to promote the palm oil industry as business-as-usual (Hamilton-hart, 2014). Under this business-as-usual scenario, the State Chief Ministers and other public officials gain huge monetary and political advantages due their tight ties to both palm oil and logging companies, and any move towards changing the system is blocked at this level because of the unequal distribution of power.

The private palm oil sector is heavily supported and immersed in the politics of Malaysia and Indonesia. In order for the three palm oil giants, Sime Darby, Kuala Lumpur Kepong, and United Plantations, to be successful, they must have strong political connections and frequently help fund State Chief Ministers (Hamilton-hart, 2014). Their largest consumers are India and China, which account for 14% and 13% of world palm oil consumption respectively (Forest Risk Commodities: Palm Oil, 2016). Connected to these private corporations running palm oil plantations are the farmers and migrant workers. This connection is usually composed of indigenous communities from surrounding farmlands and islands, often lured there with the promise of housing, food, clothing, and living wages (Cramb, 2011). While the private palm oil industry has provided job security for some communities, case studies in the Riau province has shown labor disputes and unsatisfactory working conditions (Sinaga, 2013). Employment offered to those in need of income is not fixed or permanent, and wages often are far below the minimum required for basic necessities such as food, water, and clothing (Sinaga, 2013). On plantations, wages are determined by a target amount of FFB harvested, and anything below receives no wages while everything above receives a premi, or wage bonus (Sinaga, 2013). In order to receive as many premi as possible, workers often bring in unpaid assistants, such as their children or spouses, for high harvest seasons (Sinaga, 2013). In a more historical sense and discussed earlier in this paper, indigenous communities have often been moved from reservation

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to reservation for the better part of the last eighty years of development, such as the Iban of Malaysia (Cramb, 2011). All of this shows a lack of recognition of indigenous communities and their land, health, and labor rights.

Finally, regulatory institutions and NGOs have had a role in the developing palm oil industry, but have not had an effect in addressing the tight relationships between government officials and private business. The majority of regulatory institutions addressing the negative externalities of the palm oil industry have been private institutions with usually one focus issue in mind (Hamilton-hart, 2014). However, the private NGOs have set a precedence of credibility by seeking out their own information rather than relying on the often false reporting released by the government (Hamilton-hart, 2014). NGOs such as Sawit Watch, Forest People’s Program, and Friends of the Earth have laid important groundwork in conducting extensive field work on the violations of land rights and human rights, deforestation emissions, and peatland destruction which have been used extensively by NGOs since (Milieudefensie, 2008). The strategy employed by most of the NGOs has been to exert pressure on the private sector of palm oil in order to develop government standards, which has created small change.

The RSPO, the Roundtable for Sustainable Palm Oil, tried to change the status quo by involving all stakeholders together in order to create standards fitting for all (Hamilton-hart, 2014). In the majority of literature that has investigated the policies surrounding land-acquisition, palm oil plantations, and the rights of both plantation owners and workers has shown a distinct imbalance of power in favor of large plantations owned by big business and supported by government agencies (Hamilton-hart, 2014). The Roundtable for Sustainable Palm Oil (RSPO) was conceived as a initiative of major palm oil companies and conservation groups striving to address the environmental and social issues prevalent in their industries (Colchester, 2006). However, many of the board members were primarily seeking resolutions in the interest of their industries and the representation of indigenous communities and their rights were absent, including during the meetings in which the criteria involving local peoples’ rights were drafted (Colchester, 2006). The RSPO suffers from a common problem in market-driven, voluntary certification schemes of governance; first, the presence of electoral or representative governance is absent due to the voluntary and appointment system which creates an imbalance of governance power, and secondly, the wide variety of stakeholders at different levels of involvement dilutes the possible scope of work rarely beyond the need for consumer confidence and commercial viability (Marin-Burgos, 2014). Smallholder farming schemes, many of which exist within indigenous communities, lack the time, skills, and funding to create the documents needed to join the RSPO or apply for the certification (Colchester, 2006). Due to the structure of the RSPO, smallholder interests and local communities are lost among the large and wealthier voices within the government, NGO’s, and industry giants.

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Chapter 5: Conclusion and Discussion The conducted literature review investigated the feasibility of transitioning from a monoculture system to a polyculture system and the environmental impacts of such a transition. Palm oil was used as a case study application to investigate this type of change due to the intense monoculture system in place. In the previous chapter, it is made clear that not only would a transition to polyculture be environmentally beneficial, but it has the possibility to reduce production costs and increase yield. However, the likelihood of such a transition would be slim in the face of overwhelming social corruption and economic injustices. Industries such as palm oil rarely only have an environmental impact, but also can create large social systems based on exploitation. Sustainability is the study of the environmental, social, and economic pillars within larger systems. Only creating a polyculture transition strategy for palm oil cannot be considered a sustainable “solution” because it has little to no impact on the social structures already in place. It’s evident from the institutional analysis that deeply intertwined financial and political power run the palm oil industry and exclude or enslave those that live outside that realm of power. While NGOs play their part in spreading awareness and pushing for change, many of them also participate in these enabling institutions, such as the RSPO. In addition, there is a distinct lack of reliable information on the under-table economic and political dealings within all levels of this system. The information presented in the institutional analysis comes from many incomplete sources as a simplified patchwork of the whole system, whereas the actual complexity and local stakeholders remain mostly unknown. However, there is evidence through application of using an IAD to help manage common-pool resources from three databases of managerial evidence from Ostrom’s research. Beginning in the 1970s and continuing throughout the 1990s, Ostrom’s IAD was tested in three major common-pool resource scenarios: fisheries, irrigation systems, and forest use (Polski, 1999). Through the empirical testing and case-study review of these three scenarios, Ostrom and Polski were able to compile three databases of assumptions and political organization in order to create a strong, self-governance system of common-pool resources by the people who use them (Polski, 1999). Using these strategies and frameworks and applying them to palm oil, and specifically forest land area, a system of bottom-up management could create a system that keeps CPO yield high as well as sustainability of forest land health. But, the current system has a small probability of making the transition presented in this paper even with such management, and there are certain conditions that would need to be met first in order to begin pushing for this change. First, the international regulatory institutions, especially the RSPO, need to shift their focus and rearrange their formats. Instead of targeting large, international palm oil corporations and consumers, there needs to be an arrangement of international pressure on the national governments of Indonesia and Malaysia in order change the system. By applying international political pressure on Indonesia and Malaysia, there could be a cascading effect where the State Chief Ministers, logging companies, and palm oil joint ventures would no longer be intertwined and returning huge amounts of political and economic powers back to the state governments. The RSPO itself would have to start by moving from a voluntary based certification scheme and instead create a supplier certification with the help and guidance of indigenous peoples and argoecology science, rather than the economic sway of large corporations. This way, the corporations will not be paying to make easy, “greenwashed” guidelines, but be made to follow real sustainable guidelines in order to receive their

26

certification. These new guidelines for certified sustainable palm oil would include similar practices introduced in this paper. Second, under new guidelines and certifications put in place by a large regulatory institution, a polyculture transition could become more normalized and incorporated in large-scale palm oil schemes. Upfront, there might be an initial high cost for investing in different equipment, materials, and labor, but in the long-term, the palm oil plantations would experience reduced costs and increased yields if they employ the transition outlined in this paper. Environmental degradation would be quickly addressed with new, stronger guidelines from a regulatory agency, but social change would happen more slowly. The long-term political and economic power held by State Chief Ministers and state governments would be hard to combat, and could potentially completely prevent a polyculture transition in the palm oil industry. This problem can be found in similar agriculture commodity industries, such as soy and coffee, as well as in the larger sustainability challenges in the world today. Researching and addressing environmental change is simple and clear; high amounts of human exploitation and “mastery” of the environment has led to detrimental effects on the natural ecosystems and their services. This is addressed by reframing our view of the environment and shifting from mastering the natural systems to working with their inherent benefits, such as polyculture. The natural systems, even if severely damaged, will eventually reestablish their cycles and flows through their strong evolutionary resiliency. However, the environmental systems are rarely separated from human social and economic systems. Just as in the palm oil system, long-held political and economic power based on human and environmental exploitation can completely block any change in the environment. In addition, even if protection of the environment is achieved in these systems, the people negatively affected by such systems are often forgotten within a larger environmental objective. It is crucial as sustainability scientists to not forget the voices of indigenous peoples whose lands, rights, and cultural heritage are equally important to preserve and protect as well as the planet we share.

27

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