Farmers feel the pressure as Ecuador’s palm oil sector grows

Jorge Jurado has been farming oil palm on Ecuador’s coast for almost 20 years, and has seen the industry go through many changes. But over the last few years, he and hundreds of other small-scale farmers have been hit by two major plagues: abnormally low market prices for palm oil over the past five years, and a deadly disease that has killed thousands of hectares of oil palm crops in the country.

“Those who carry all the weight is the farmer,” said Jurado, who in addition to farming oil palm also works another a full-time job in a neighboring city as an English tutor in order to provide for his family.

Palm oil is one of the most common vegetable oils in the world, found in everything from cosmetics, certain fabrics, and almost 50 percent of everything in your local grocery store. Ecuador is the second-largest producer of palm oil in Latin America (only behind Colombia), and sixth largest in the world – although its output doesn’t reach anywhere near that of top producers Indonesia and Malaysia, which together produce around 85 percent of the world’s palm oil supply.

Oil palm is an important part of Ecuador’s agricultural economy, particularly in the La Concordia portion of the province of Santo Domingo de Los Tsáchilas, where Jurado lives. The region has long been known as the heart of Ecuador’s palm industry, since it was here that the first seeds were planted over 60 years ago.

Today in La Concordia, for miles around in all directions, all you can see are oil palm trees. Recently, external factors have made it hard for small farmers in the region to make a living, but it continues to be an important hub for Ecuadorean palm oil production, and much of the local economy is involved either directly or indirectly in the industry.

The heart of Ecuador’s palm oil industry

Although palm oil production contributes a relatively small portion to Ecuador’s overall GDP, it is an important part of the country’s agricultural sector. In 2013, palm oil represented some 15 percent of the country’s agricultural GDP, and generated more than 165,000 jobs in both the agriculture and industry sectors that same year, according to research cited by labor advocacy organization Verite.

The swath of land from the city of Santo Domingo to La Concordia up to Quininde was always one of the most productive oil palm production regions of Ecuador. The areas comprising La Concordia, Santo Domingo, Puerto Quito and Quininde comprise 46 percent of all oil palm cropland in the country – a combined 118,562 hectares out of a total 257,120 hectares, according to the last major census released in March 2018. The census indicates there has been a significant reduction in oil palm cropland in La Concordia and Santo Domingo compared to the previous census published in 2005. However, it continues to be a central hub for the industry.

One reason behind this development can be explained by the region’s climate, which is highly suitable for oil palms trees, with stable temperatures between 25-28 degrees Celsius, regular rainfall and abundant sunlight, But government policies in place since the 1950s that have promoted colonization of the region has also played a major role. This includes the Pilot Plan for the Colonization of Santo Domingo adopted in 1958, which offered credit and low-interest loans for land in wild, primary forest areas, with the specific goal of expanding Ecuador’s agricultural sector. Some 109 plots were sold when this plan was introduced, most destined for small-scale cultivation.

Small farmers continue to be numerous in the region today, as 40 percent (101,589 hectares total) of all land cultivated with oil palm in Ecuador consists of small properties 50 hectares in size or less. This represents some 89 percent of all farmers in the country, according to the 2017 census.

The colonial policies put in place in the 1950s didn’t simply promote agricultural development, they also required that colonizers chop down 60 percent of the forest on their properties in order to receive land titles. By 1970, the area had been transformed from primary rainforest with ecosystems similar to the Amazon, to pastureland and plantations.

“Back in those days, there was no concept of ‘conservation’,” said Jason Crespo, a local agricultural engineer, who currently lives on the only tract of primary forest still left in La Concordia – a 250-hectare nature reserve known as La Perla Protective Forest.

Crespo’s grandparents moved to the region in 1947 from the United States, when La Concordia was still “100 percent forest,” he told Mongabay. He said they were seemingly the only ones who cut down only the required 60 percent of forest on their property, while everyone else cleared their entire plots. Crespo is now among the third generation fighting to conserve La Perla and its wildlife from agricultural encroachment.

Oil palm, or “African palm” as it was known at the time, wasn’t introduced into the region until 1953, when seeds were brought over from Honduras. Two brothers from the U.S., Roscoe and Leal Scott, were the first to plant the seeds, and to this day are revered by locals for introducing the industry. But oil palm didn’t really take off until 1967, when the government started to focus its agricultural policies on developing the sector. Farmers were offered low-interest loans with a 10- to 12-year payback period, which they could begin repaying after the first five years. This was ideal for oil palm, since the trees don’t produce their first fruit harvest until three or four years after being planted.

Oil palm cultivation expanded rapidly in the area in the 1960s and 1970s. Today, roughly 70 percent of the economic activity in the region of La Concordia is related to this specific crop, according to Cesar Loaiza Granda, Executive Director of the Foundation for the Promotion of Export of Palm Oil and its Derivatives of National Origin (FEDAPAL). This includes farmers, truck drivers, equipment vendors, manufacturers, and people employed at oil processing plants, among others.

Because plantations were largely established on land that had already been degraded for agriculture during the 1950s, oil palm in La Concordia hasn’t had the environmental impacts for which it has been criticized in other parts of the tropical world. The crop is also more productive than many other vegetable oils, and often requires less pesticide and fertilizer than other regional crops like cacao, bananas and pineapples.

“If you’re destined to have the area for some kind of agriculture activity, actually palm is not as bad as many others … given that there isn’t any more forest you are taking down to plant more palm, at least in this area,” Crespo said.

A monocrop economy

While oil palm has played a big role in La Concordia’s economy, it has also turned that economy into one reliant on monocrop agriculture. Small farmers in the region say this has left their crops – and their livelihoods – more vulnerable to disease and shifting prices.

Jurado moved to La Concordia in 2000 to take over his family’s 25-hectare farm. He said that for years he saw high returns – an average of $180 to $220 per metric ton of fruit – and was able to live comfortably and even hire farmhands. These high prices were attractive to many farmers in the region, convincing them to switch their operations to oil palm cultivation.

But in 2012 the price of palm oil began to fall and by 2015 farmers report getting only around $80-90 per ton of fruit. They say this drop has left many of them in debt and unable to pay back their startup loans. The market didn’t begin to stabilize again until recently, reaching $130 per ton in the last months of 2017 – but for many it was too late.

“I put myself in this business in 2000 when it was going well, but now with these palms I can’t get out,” Jurado said. Oil palm trees are cultivated on a 30-year cycle, at which point they get too tall to harvest. Jurado said he has at least 12 years left on his crop cycle.

Farmers have also been affected by a deadly, fast-spreading plague caused by a fungus-like organism called Phytophthora palmivora. Known as “PC,” short for “Pudrición del Cogollo,” the Spanish term for bud rot, the disease was first encountered in Colombia where it killed thousands of hectares of oil palm trees before spreading south to Ecuador’s northern province of Esmeraldas.

But PC has also recently been found in La Concordia, according to Angela Alvarez, a specialist in oil palm with the Ministry of Agriculture and Cattle Raising, leaving many worried about Ecuador’s palm oil industry and the people who depend on it for their livelihoods.

So far there is no known cure for PC, except to destroy entire crops – and farmers’ 30-year investments. Producers say this loss is devastating since the average price of re-planting is between $4,000 and $5,000 per hectare for a crop that takes three or four years to produce its first harvest.

This has turned into a “real social issue,” according to Alvarez, who said many farmers have asked the government to forgive the debt or to implement price protections. But since Ecuador exports over 62 percent of its palm oil – mainly to neighboring Colombia and Venezuela – price protection mechanisms for farmers aren’t viable options, Alvarez said.

To try to offset the disease, many farmers have turned to planting hybrids that have shown limited resistance to PC. But this has turned out to be more labor intensive, as these trees require manual pollination since they produce fewer male flowers and little to no pollen and are thus more expensive to grow. It’s also riskier for farmers since if the pollination is done poorly it could lead to very minimal production. The fruit from these hybrid trees also produce less oil than conventional oil palm.

But Loiza has hope for these hybrids, saying he expects them to continue to develop and eventually become the standard of oil palm in Ecuador. He said there is little cause for concern for the future if farmers also learn to be more productive.

Restoration unlikely

La Concordia developed as an agricultural center and the livelihoods of many in the region depend on it staying that way. But scientists and conservationists debate whether using already degraded land for oil palm is actually the best choice for the environment, or whether it’s preventing the area from being reforested.

Studies have shown that once-forested areas that have been degraded due to agricultural activity can be restored to its natural state, and researchers at the World Wildlife Fund (WWF) in Ecuador say it’s not too late for La Concordia.

“Despite the long period of occupation of these areas, the act of reforestation and restoration of the landscape is possible, yes,” Jorge Rivas, National Coordinator of the Forest and freshwater program WWF-Ecuador, told Mongabay via email. Rivas added that the longer the land is worked, the longer and more costly the restoration process would be.

A 2015 study published in the journal Perspectives in Plant Ecology, Evolution and Systematics found that reforestation is an important tool for mitigating climate change and reducing biodiversity loss. But some researchers say that since oil palms are trees, they also contribute to carbon sequestration in the atmosphere, making the industry much less harmful than other types of agriculture. Another study conducted in Indonesia and released earlier this year found that oil palm is capable of absorbing 161 tons of carbon dioxide per hectare, making it more ecologically friendly than cattle ranching or most alternative crops.

However, this number doesn’t compare to the carbon capturing potential of natural forests. Research indicates tropical rainforest, which would be naturally found in the La Concordia region, can store up to 250 tons of carbon per hectare.

But while reforestation in La Concordia may be possible, critics say there’s no accounting for the thousands of agricultural jobs that would be lost, or pushed into primary forest areas, if that were done. And as palm oil is already considered a product with “high growth potential” and an important export for Ecuador’s economy, according to the national statistics institute INEC, its production is unlikely to stop. Because of this, many forest conservationists are instead focusing their efforts on preventing agricultural frontiers from pushing further into the Chocó and Ecuadorian Amazon in the hopes of saving rainforests there from the same fate that has befallen La Concordia.

 

Banner image: Land recently cleared for an oil palm plantation in Esmeraldas, Ecuador. Photo by Jonatan Rosas

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