Politics and palm oil: A potent mixture at the polls

The proposed ban on palm oil has become a pivotal issue ahead of the May 9 polls. (Reuters pic)

KUALA LUMPUR: Palm oil has unexpectedly become an issue in the coming general election, as Felda settlers are a crucial vote bank for the ruling Barisan Nasional (BN).

The European Parliament has voted to ban the use of palm oil in all European biofuels by 2020, citing deforestation as a main factor.

If approved by the European Commission, the decision will seriously impact hundreds of thousands of smallholders. This is why, on Jan 16, Felda settlers and smallholders protested the European Parliament’s decision.

Writing in East Asia Forum, Khor Yu Leng, an independent political economist, said the EU energy demand for palm oil from Malaysia and Indonesia was worth about US$1.5 billion (RM5.9 billion) per year.

“Malaysia’s market share is 30% and a notional loss would total about US$256 for each of Malaysia’s 650,000 smallholders. Under current income estimates, this would represent 5% of a Felda settler’s annual income from oil palm.”

This is also why BN has included the fight against the EU move as a major component of election speeches in Felda settlements and rural areas.

Khor noted that in the last general election in 2013, Felda areas voted 60-90% in favour of candidates from Umno, the backbone of BN.

With Prime Minister Najib Razak being hamstrung by scandals such as those involving 1MDB and Felda Global Ventures Holdings Berhad, she said BN had to pay extra attention to this issue to keep the rural vote.

Khor said opposition politicians had estimated a decline in support for BN of between 5% and 15% among rural Malays, especially outside Felda settlements, in recent years.

“While it is no surprise given its popularity woes that Umno–BN is becoming more vocal about protecting domestic palm oil interests, the Najib administration’s efforts to deal with the EU palm oil issue are questionable.

“Opposition politician Rais Hussin noted that ‘talk of a European Parliament ban had been obvious at least since 2012’ and criticised the government’s ‘sheer neglect’ of the farmers’ plight.”

However, Khor said, the average planter and smallholder was not too concerned about these issues and that this should help BN.

“These conditions indicate that any shifts in the EU’s palm oil policy should not affect the Najib administration’s political prospects. Political analysts agree that ‘fortress Felda’ should hold for the upcoming general election,” she added.

A report in The Guardian agreed that, with the general election slated for May 9, the proposed palm oil ban had become a pivotal issue.

Felda farmers, it noted, were a key support base for BN and Najib had made defending palm oil one of the talking points of his campaign.

According to The Guardian report, Felda settlers and smallholders account for 40% of Malaysia’s palm oil output, and none of them engage in land-grabbing, slash and burn or deforestation practices as claimed by proponents of the ban on palm oil in biofuels.

However, the report added that there was evidence to show that these were practised by big corporations in Malaysia and Indonesia.

The report went on to quote smallholders and Felda settlers on why they were against the ban and how they had slogged on their farms.

It quoted Aliasak Ambia, the president of the National Association of Smallholders Malaysia as saying: “Palm oil has allowed the rural poor in Malaysia to develop our own land, lift ourselves and our families out of poverty, and take control of our own economic destiny.”

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