CIRAD says imposing higher taxes on palm oil was 'wrong action to take'

(foresthints.news) -The debate over the use of palm oil products in developed countries shows no sign of letting up, as such products continue to be linked with deforestation and a consequent loss of biodiversity.

Misgivings about palm oil production gave rise to a recent proposal in the French parliament for an additional tax to be imposed on palm oil importation as a way of preserving forests, preventing deforestation and protecting biodiversity. The propopsed levy on palm oil used in foods was eventually approved by Frances National Assembly on Friday (Mar 18), albeit with a number of concessions. The compromise tax hike might be seen as the result of opposition in some quarters to any increase.

For example, CIRAD, the French agricultural research and international cooperation organization working for the sustainable development of tropical and Mediterranean regions, including Indonesia, has expressed its opposition to the proposal, as had producers in Indonesia and Malaysia.

The President Director General of CIRAD, Michel Eddi, views the imposition of an additional tax on palm oil imports as a misguided policy which is likely to have inverse consequences to those intended.

Scientific evidence derived from long-standing partners in Indonesia shows that if the goal is to avoid deforestation and protect biodiversity, then imposing higher taxes on palm oil is the wrong action to take. Indeed, this policy will have the inverse effect, Eddi told foresthints.news when interviewed after the opening of the ICOPE event in Nusa Dua, Bali on Wednesday (Mar 16).

Eddi went on to explain that putting a high tax on palm oil would discourage investment from palm oil producers in sustainable palm oil production, for example through certification and other approaches. As such, forests and biodiversity will end up suffering instead of being protected.

The right position would be for the French government and parliament to support the approach of producers and governments of southern hemisphere countries in their current trajectory of providing certification - RSPO and a national certification - just as Indonesia is doing now, he argued.

Eddi added that CIRAD was not alone in its agreement with the Indonesian governments current approach to assisting and supporting sustainable palm oil production.

Our argument in support of the incentive policy of certifying sustainable palm oil is in fact shared by many people, he said.

The President Director General insisted that there should be no extra tax at all on certified sustainable palm oil, as this would serve as an incentive for using the approach of certifying sustainable palm oil.

Eddi concluded the interview with foresthints.news, which took place two days before the vote, by saying that he would be trying to convince the French parliament of CIRAD's views on the matter.

It would seem that the parliament was at least partially sympathetic to CIRADs concerns, and those of top producers. The tax increase will ultimately amount to an extra 90 euros per ton of palm oil, far lower than the additional 300 euros initially proposed.

Furthermore, this additional tax will be introduced gradually to lessen the blow on producers, reaching an extra 90 euros only in 2020. Also, perhaps most significantly, any palm oil produced in a sustainable way will be exempt from the tax.

The softer tax has won the backing of the French government which has hailed it as an important move in the fight against deforestation. It now awaits approval from the Upper House.

While the watered down version of the proposal may satisfy CIRADs appeal for no extra tax to be imposed on sustainable palm oil, it has not placated palm oil producers in Indonesia and Malaysia who have vowed to continue lobbying against such new taxes in an effort to maintain the competitive advantage of their product.