‘Costly and time-consuming’: Malaysian palm oil boss hits out at EU’s Farm-to-Fork Strategy – exclusive interview

By Pearly Neo

- Last updated on GMT

The European Union’s (EU) new Farm-to-Fork (F2F) Strategy could have massive cost implications for palm oil exports and major export countries such as Malaysia. ©Getty Images
The European Union’s (EU) new Farm-to-Fork (F2F) Strategy could have massive cost implications for palm oil exports and major export countries such as Malaysia. ©Getty Images

Related tags Palm oil Malaysia Eu

The European Union’s (EU) new Farm-to-Fork (F2F) Strategy may have been coined in the name of sustainability for its local food chain, but if implemented could have massive cost implications for palm oil exports and major export countries such as Malaysia.

This is according to Malaysian Palm Oil Council (MPOC) CEO Datuk Dr Kalyana Sundram, who emphasized that globalization had made it mostly impossible to keep the impacts of such a strategy contained to Europe.

“To be fair to the EU, the F2F strategy was developed as an internal framework to embitter the entire food chain from farm to consumer covering elements from health, nutrition, sustainability, labelling and so on – and to be honest, we would not be complaining at all if the effects were just so,”​ Datuk Sundram told FoodNavigator-Asia​.

“The issue here is that we are sure that this is not going to be just applicable to produce that is generated in the EU, but all produce entering the EU would be subject to this too as these have become part of the EU food chain given how highly globalised the world has become.”

The F2F strategy combines both regulatory and non-regulatory initiatives, many of which would start at the EU’s borders.

Dr Sundram cited margarine as an example of a food product in EU containing both local and imported ingredients as part of its formulation (i.e. palm oil from Malaysia and rapeseed oil from local sources), where both components would have to be subject to the F2F rules.

“What is most worrying is that in this strategy, nothing has been made clear if existing sustainable palm oil certification standards such as those by the Roundtable on Sustainable Palm Oil (RSPO) or our local Malaysian Sustainable Palm Oil (MSPO) certification will be accepted by the system,”​ said Datuk Sundram.

“If these are accepted, then great, it is doable. What I suspect though is that they will end up saying there are flaws and inadequacies and want to set up their own certification system – this is something the EU has tried many times to approach from other angles and not managed to implement.

“If it comes to that, it is not that Malaysia cannot match the goals or standards laid out, our palm oil can do this – but it will be a very costly and time-consuming process to certify and implement, and very challenging to achieve.”

The F2F strategy has put 2024 as the ‘deadline’ by which it aims to work out a final overall plan, and has also put 2021 as its target timeframe to implement many initiatives – a situation which is greatly disadvantageous to producers overseas.

“If you look at the strategy carefully, you can see there is really a lot of pressure being placed on all producers exporting palm oil or other commodities to the EU,”​ said Datuk Sundram.

“[The short timeframe] and costs involved means that most poorer palm-oil producing nations would not be able to foot the additional cost elements, [and risk] losing the EU market.

“If EU brand owners were willing to pay the extra costs for these, then the requirements can definitely be met, but if they’re imposing these requirements but not paying and falling back on producers to pay, this is a major challenge. Many producers are smallholder farmers, how can they be expected to foot this.”

Global control?

Datuk Sundram also expressed scepticism over the European Commission’s (EC) targeted range of oversight for agricultural products entering the EU, given that the F2F strategy could potentially have extremely far-ranging impacts.

“As a producer country, I am definitely concerned over how much control and legislative oversight the EC is looking to have over agricultural producers that export to the EU, [as] we are also legislated by local legislations,”​ he said.

“The F2F strategy is really giving the EU the opportunity to revisit and enforce their own requirements, sustainability or otherwise, on all imports – not just palm oil, but all commodities.

“How much control can they actually put and impose on foreign producers? Do they want to be the ‘global police’ per se for agricultural standards in other countries too? Subscribing to the F2F concept would need all these questions answered.”

At present, MPOC is still ‘reactive’ as it is awaiting public comment from expert working groups in the EU before speaking with the EC to highlight its concerns.

“We are pre-empting this as it is definitely a serious future concern for producers if implemented, almost like a food version of the Renewable Energy Directive (RED II, focused on sustainability for biofuels and often criticised as singling palm oil out as a target) – we really can see the overarching impacts of one strategy into another [for palm oil], which is concerning,”​ said Datuk Sundram.

More on the F2F strategy

The F2F strategy is part of the European Green Deal initiative, the EU’s plan to ‘make Europe the first climate-neutral continent by 2050’​.

According to the EC’s formal report, the F2F strategy aims to ‘reduce the environmental and climate footprint’​ of the EU food system, strengthen its resilience, ensure food security in the face of climate change and biodiversity loss and ‘lead a global transition towards competitive sustainability’​.

It does focus on internal EU matters e.g. rewarding farming practices that remove CO2​ from the atmosphere, the reduction of overall use of chemical pesticides by 50% and fertiliser use by 20% by 2030, reducing of GHG emissions, and so on, but MPOC fears that goals will be set without consultations with all the stakeholders that will be affected.

“The EU has not as yet engaged in any bilateral negotiations with other countries when setting these goals – we are also governed by local laws, so a lot of legislation and negotiations need to be made to reach any consensus,”​ said Datuk Sundram.

“All these measures need to be taken forward in line with the EU’s better regulation principles, including consultations, evaluations and impact assessments, where stakeholders can provide input and exercise influence.”

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