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Governing the sustainable palm oil value chain: roles of public and private actors in Thailand

  • Nupueng, Somjai
Publication Date
Jan 01, 2022
Wageningen University and Researchcenter Publications
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This thesis addresses the critical issue of implementing a global private governance regime promoting sustainability in global commodities, such as RSPO-certification in palm oil, in a country with its specific local context.The central research question of this thesis is “how can more sustainable palm oil in Thailand be created involving the whole supply chain.” The following four research questions have guided the study; (1) What are the factors influencing the adoption of sustainable oil palm practices certified through Thai-GAP and RSPO by smallholders in Thailand?; (2) Does RSPO certification change governance arrangements and power relationships within the Thai palm oil value chain?; (3) What policy arrangement can effectively balance the use of palm oil in Thailand for the production of biodiesel, palm cooking oil, and other usages, and strengthen sustainability by reducing greenhouse gas (GHG) emissions?; and (4) What interests exist among Thai consumers for sustainable palm oil and what arrangements would enable them to express their sustainability concerns for palm cooking oil?The study found that both local (Thai-GAP) and global (RSPO) voluntary certification schemes were adopted by Thai smallholders. The main factors contributing to the adoption of the Thai-GAP certification were the image of the scheme, concerns about the quality of their land, concerns about the water quality, and the trust farmers have in the scheme. In the case of RSPO-certification these factors were being a member of a farmers group and being the target of the scheme in combination with the trust farmers have in the scheme. There are four important characteristics of the certified and the non-certified palm oil value chains in Thailand. First, introducing RSPO-certification in the Thai sustainable palm oil value chain was mainly done by NGOs and private millers without much support from government agencies. Second, the RSPO-certified palm oil value chain is governed by a global sustainability standard, including principles and conditions for certification established by private actors, with some special features for smallholders to allow them to increase their productivity and improve the quality of their yield. Third, the RSPO-certified value chain is shorter and less complex than the non-certified palm oil value chain, while at the same time, products from the certified value chain can access the global market more easily and receive a premium price. Fourth, there are many barriers for smallholders in Thailand to enter the RSPO-certified palm oil value chain because the scheme requirements may be unsuitable for smallholders. Finally, it was also observed that because the palm oil market in Thailand is mainly oriented towards the domestic market rather than towards the global market, there is reduced motivation among private and government actors to promote certification against a global standard. In addition, the research showed that the ambitions in the Thai government’s biodiesel master plan do not comply with the feedstock expected to be available in the future. This is because the feedstock available in the future is not sufficient for the formulated ambitious goal. Therefore, effective biodiesel policy requires the setting of a clear and realistic target and careful balancing of the economic, social, and environmental interests. To achieve this, all involved private and public actors should actively collaborate. And in the end of domestic supply chain, Thai consumers have a limited understanding of sustainable palm oil. Most of them are more concerned with the economic aspects of palm cooking oil. The reflections on applying global sustainability standards for certifying smallholders producing commodities such as sustainable palm oil in developing countries.  First, developing countries have low adoption rates of sustainable agricultural practices as exemplified in a sustainable certification scheme or good agricultural practices. Second, the central role of private actors in governing certified value chains strengthens the already dominant role of private actors in global value chains. Third, a policy implementation perspective was chosen to assess the role of public, economic, and societal actors. Fourth, this thesis applied a social practice perspective on the engagement of consumers in promoting the sustainability of oil palm-based cooking oil in the context of the global south. 

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