Currently about half the people in the world rely on palm oil as part of their diets and it is the dominant oil used in food in Africa and Asia. As the global population grows, palm oil’s role in meeting global food demand will increase.
Oil palm plantations provide jobs and drive national economic development. The industry is an important source of employment in Indonesia and Malaysia. It also contributes to the development of remote areas via provision of infrastructure including roads, hospitals and schools.
However, the way plantations are currently established and managed is damaging to the environment. The expansion of oil palm plantations into natural areas is responsible for greenhouse gas emissions from deforestation and peat drainage, and contributes to regional smoke haze and water pollution. Further expansion of the area occupied by oil palms would most likely occur in Africa and South America, where potential plantation sites are particularly rich in biodiversity.
The oil palm industry also often has negative impacts on local communities. Some communities suffer economically from oil palm development because their loss of access to forests is not sufficiently compensated by economic gains from oil palm cultivation. Human-wildlife conflict often increases with the displacement of species such as orangutans and tigers when forests are cleared for oil palm, resulting in human and animal casualties. Because of high labour requirements, palm oil expansion can also lead to labour shortages for local food production, and labour in-migration from lower income countries or regions.