Calculating the Cost of Palm Oil: A Commodity Chain Approach

• In Event: 1248 - The Curse of Resources: Commodifying Development, Developing Commodities

Abstract

Palm oil is now a major component of the global food system. The largest producer state is Indonesia, where palm oil is major economic sector. Palm oil is also a source of environmental degradation and labor problems. A large body of policy-oriented studies highlights governance to mitigate these problems. However, this approach ignores the importance of social class within the hierarchical structures of the global economy. I ask whether palm oil can deliver on its developmental promises for a peripheral state like Indonesia. I use a commodity chain approach to adjudicate between the possibility of development within the present world-system and the “developmentalist illusion” explored in other contexts. To do this, I employ data collected from Indonesia’s 2013 agrarian census, Pye et al.’s (2016) investigations into palm oil wages, and corporate reports. I find that palm oil can contribute to some household improvements in income, but the oppressive nature of the labor regime, its reliance on a flexible workforce, and its environmental repercussions make serious improvements in the lives of rural Indonesians an unlikely possibility. This study shows the relevance of social class and commodity production to answer questions about sustainability in an era of environmental degradation and the continued need for “development” among the world’s rural poor, countering the NGO narratives of “good governance” as the major requirement for countering labor and environmental issues.

Author

• John Kenyon McCollum, Minot State University