Tuesday, July 19, 2011


Palm oil, the mainstay in the economic strength of countries like Malaysia and Indonesia is about to get a body blow in Australia and New Zealand because of grossly discriminatory labeling regulation being proposed by these countries. It is beyond one's perception as to how a civilized country can harm the economic interests of a fellow country by restrictive trade practices not based on scientific facts. The only crime of Palm oil is that it is being produced in a more efficient manner and costs less in the global market compared to other competing oils like Soybean oil or Canola. The zealots of environmental salvation has zeroed in on Palm oil as they are of the view that large tracts of forests are denuded to establish giant Palm plantations in countries in the forefront of Palm oil production. How ever these protectionists are ignoring the fact that Palm oil trees, planted in denuded forests, also provide similar benefits of a green cover and a carbon sink! If such narrow considerations creep into sustainability assessment, practically no food crop can stand strict scrutiny and no one seems to have thought about the implications of such a policy world wide?

Almost immediately after the bill passed the Senate, international governments and food industry representatives criticised it, saying it was illegal and discriminatory. Dompok stated that the bill did not take into account that the palm oil sector has contributed substantially towards addressing rural poverty and generating employment in the agricultural sector.The Malaysian palm oil lobby had opposed the bill, with the Malaysian Palm Oil Council putting their case before a Senate committee public hearing in April. Y.B. Tan Sri Bernard Dompok, Malaysia's minister of plantation industries and commodities, said that labelling palm oil purely from the perspective of sustainable production was discriminatory. He also stated that in comparison, competing vegetable oils were not required to be labelled, which makes the bill discriminatory of only one type of oil.

Why is that some countries in the West try to put road blocks in the economic development of "not so well to do" countries in such a blatant way? Probably ugly protectionism may have some thing to do with such reprehensible policies under which domestic industry is "cocooned" to ward of any adverse influence through imports of low cost foods and ingredients from developing countries. The only way to counter such a strategy will be to declare many foods made in the developed countries unacceptable unless they modify their label declaration to suit the needs of the developing countries. If the world gets into such a "tit for tat" treatment mode, what will be the future of WTO which is supposed to remove all barriers for free and fair trade among the nations in a true spirit of a "global village" with no boundary restrictions? Nothing but utter chaos!


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