Green Trade War on Palm Oil – How EU’s palm oil ban is devastating livelihoods of farmers in the Global South

The EU’s palm oil ban unintentionally sparked a green trade war against the world’s palm oil producers, reviving memories of colonialism, argues Muhammed Magassy.
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By Muhammed Magassy

Muhammed Magassy is a member of the CSPO Advisory Board, of the National Assembly of Gambia and of the Parliament for Economic Community of West African States (ECOWAS)

12 May 2021

The European Union occasionally implements policies that produce unintended, even harmful effects on historically marginalised populations. In January 2018, for example, the European Parliament - citing environmental concerns - banned palm oil for biofuels. The European Commission approved this, ignoring the devastating impact the ban would have on millions of smallholder farmers.

It should come as no surprise that major palm oil producers like Malaysia and Indonesia labelled this decision ‘crop apartheid’: it reanimated the exploitative, colonial origins of the industry.

“COVID-19 has further increased economic insecurity in developing countries, leading many to conclude that the EU is dictating the rules of global trade without taking into account the world’s poorest”

In order to optimise the efforts to combat climate change, such massive discrepancies in how the EU and palm oil producers view the biofuel ban must be resolved. While smallholder farmers are responsible for significant percentages of palm oil production, they are overwhelmingly not responsible for catastrophic deforestation. Nevertheless, the marked decline in demand provoked by the pandemic, followed by the EU biofuel ban, presents these farmers with a survival crisis, made all the more severe considering the significance of palm oil.

In Malaysia, conscientious oversight of the industry - including the equitable distribution of viable plots for smallholders -  has powered that country’s development and altered the fortunes of millions. Malaysia has complemented such prudent policies with a commitment to the Malaysian Sustainable Palm Oil (MSPO) scheme, which has realised the widespread adoption of sustainable standards across that country.

In light of Malaysia’s progress, it is easier to understand why it reacted strongly to the EU’s biofuel ban, describing it as ‘crop apartheid’ and ‘green colonialism’. Despite undeniably positive intentions, the European Union’s decision to apply sanctions to palm oil will cause immense hardship to huge numbers of economically precarious people of colour and threatens to drive them back into poverty. Simultaneously, the ban effects a subtle protectionism, exempting European oil seed products such as rapeseed and sunflower, which require more land, water, and fertiliser than palm oil, from any kind of economic penalty.

Unfortunately, palm oil is not the only example of EU environmentalism - no matter how well intended - that has sparked feelings of resentment in the Global South. We in Africa know this too well; the EU’s Common Agricultural Policy (CAP) provides domestic farmers €42 billion in annual subsidies, strengthening their ability to export at artificially low prices to the developing world.

This gives European producers an unfair advantage in markets such as Africa, bankrupting local farmers as a result. COVID-19 has further increased economic insecurity in developing countries, leading many to conclude that the EU is dictating the rules of global trade without taking into account the world’s poorest. As a result, farmers in the Global South are prioritising survival over sustainability - but not by choice.

Rather than penalising the Global South for the demands of Western consumers, the EU should work towards a level playing field. This would mean the EU working with the Global South, rewarding real momentum towards full sustainability, such as the MSPO scheme, and also pursuing mutually supportive forms of production, cultivation, and consumption.

The Global South is, after all, no less invested in saving the world than Europe. As a global environmental leader, the EU has the opportunity to show that its policies are not motivated by protectionism or bias, but by genuine environmental concerns.

Done correctly, international trade can contribute to curbing global deforestation. However, there cannot be such exchanges if one party dictates to another. Otherwise, the EU will place on the Global South a burden it simply cannot shoulder. 


This article was published as part of the Sustainability First supplement by the Center for Sustainable Palm Oil Studies (CSPO). The full supplement is available on: https://www.theparliamentmagazine.eu/magazine/issues/sustainability-first-supplement

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Agriculture & Food
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