Palm oil production in Malaysia
Palm oil production is vital for the economy of Malaysia, which is the world's second- largest producer of the commodity after Indonesia. The Malaysian Palm Oil Board (MPOB) is a government agency responsible for the promotion and development of the palm oil sector in the country. The country's palm oil industry produces about 90 million tones of lignocellulosic biomass, including empty fruit bunches, oil palm trunks, and oil palm fronds, as well as palm oil mill effluent (POME). In 2010, in response to concerns about social and environmental impact of palm oil, the Malaysian Government pledged to limit palm oil plantation expansion by retaining at least half of the nation's land as forest cover.
Palm oil trees were introduced to British Malaya by the British government in early 1870s as ornament plants. The first commercial palm oil cultivation was done in Selangor in 1917. In the early 1960s, palm oil cultivation increased significantly under the government diversification program to reduce Malaysia's dependency on rubber and tin.
As of December 2012, palm oil plantation accounted for a total land use of 51,000 km2 in Malaysia. It makes up 77% of agricultural land or about 15% of total land area in Malaysia.
In 2012, the Malaysian palm oil industry employed an estimated 491,000 workers.
Malaysia's Sime Darby is the largest listed palm oil company globally, based on plantation area and fresh fruit bunch production. The company was created through a Malaysian government initiated merger in December 2006. The world's second-largest oil palm plantation company, Felda Global Ventures Holdings (FGV), is also based in Malaysia. Felda Global Ventures Holdings is the world's third largest palm oil company by planted acreage, controlling over 850,000 ha of land in the country, including approximately 500,000 ha that it leases and manages for smallholders.
In the 1960s, research and development (R&D) in oil palm breeding began to expand after Malaysia's Department of Agriculture established an exchange program with West African economies and four private plantations formed the Oil Palm Genetics Laboratory. The Malaysian government also established Kolej Serdang, which became the Universiti Putra Malaysia (UPM) in the 1970s to train agricultural and agroindustrial engineers and agribusiness graduates to conduct research in the field.
In 1979, with support from the Malaysian Agricultural Research and Development Institute (MARDI) and UPM, the government set up the Palm Oil Research Institute of Malaysia (PORIM), a public-and-private-coordinated institution, meaning PORIM was run by representatives from government and industry B.C. Sekhar was appointed founder and chairman and Yusof Basiron served as Director-General.
PORIM was merged with the Palm Oil Licensing and Registration Authority (PORLA) to form the Malaysian Palm Oil Board in 2000. MPOB scientists work in oil palm tree breeding, palm oil nutrition and potential oleochemical uses.
The Malaysian government established the National Biofuel Policy in 2006, which led to the implementation of the B5 mandate in some regions of the country. The B5 mandate requires that all diesel sold in these regions of Malaysia contain 5% palm oil biodiesel. This mandate is expected to be expanded nationwide in 2014, with plans to increase the minimum palm oil biodiesel content to 10%. The biodiesel sector in Malaysia has struggled to become profitable, due in part to the high cost of crude palm oil, which led to a dip in biodiesel production in the late 2000s. In 2012, there were 20 biodiesel plants in Malaysia, of which 2 were operational by early 2013. According to an advisor to the Roundtable on Sustainable Palm Oil, biodiesel production in Malaysia is expected to double in 2013.
According to the United States Department of Labor Bureau of International Labor Affairs' List of Goods Produced by Child Labor or Forced Labor, Malaysia's palm oil industry includes both child labour and forced labour practices.
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