SCMP: Improved Public Relations a Must in Malaysia's Defence of Palm Oil

Malaysia’s defence of palm oil against the EU continues, with the former’s more recent move being filing an official complaint with the World Trade Organisation (WTO) on grounds that the EU anti-palm oil campaign is in violation of WTO rules. SCMP, however, reports that experts believe Malaysia needs to improve its public relations in order to succeed in its complaint and its defence of palm oil in general. One of the interviewed experts is Segi Enam principal, Khor Yu Leng, who was quoted as below:

Khor Yu Leng, a political economist at Segi Enam Advisors, said the EU’s issues with the use of palm oil – including allegations of labour abuse within the industry, concerns over deforestation and other systemic risks – have threatened its future as a sustainable product.

“These issues need to be addressed with convincing evidence that this is of low incidence and there is an improvement plan,” she said.

“On the supply side, there has been a chronic shortage of labour in Malaysia over the years that has meant less than optimal operations and production,” she said, adding that the problems point to questions over “how the Malaysian authorities can address systemic labour market problems.”

“Flat denials from the authorities regarding deforestation or other oversights and no data transparency is a contrast to how commodity producers are nowadays aiming to charm their customers – the countries we export to,” she said.

“The other thing is to consider whether it serves palm oil‘s interest to be in the limelight too much. Being criticised on social media for poor human rights records is just not a good place to be,” she said, referring to the avalanche of bad publicity Malaysia received when the US slapped bans on the country’s top palm oil plantations.

Aquaculture: Common Questions

What do tilapia, shrimp and cockles have in common?

They are all key products of the aquaculture industry in Malaysia (FAO, 2020a). But what exactly is aquaculture? Aquaculture is farming, but with fish or other delectable aquatic organisms intended for human consumption. This practice has become increasingly common globally, and now makes up about 54% of the world’s fishery production (FAO, 2018). In Malaysia, aquaculture makes up a substantial 21% of our fishery production (DOSM, 2019). When it comes to aquaculture here, it is commonly split into two types; freshwater and brackishwater aquaculture. Freshwater aquaculture, as the name suggests, is the breeding and raising of aquatic animals such as tilapia, catfish and carp in freshwater lakes, ponds, rivers or even reservoirs for economic purposes (Li and Liu, 2019). Brackishwater aquaculture, on the other hand, is the dominant aquaculture in Malaysia, making up about 70% of our aquaculture production, where it is the breeding of mainly bivalve molluscs like cockles and clams in waters that have a salinity fluctuating between 0.5% to full strength salinity (FAO, 2020b). These conditions can be commonly found in estuaries, bays and lagoons.

Now that we have the introduction out of the way, lets address some common questions people might have when it comes to aquaculture.

Is wild caught fish really better than farmed fish?

This is a question that stems from what I have heard come up countless times in conversations about wild vs farmed fish among family and friends, as well as in studies (Verbeke et al., 2007). There is this assumption by the general public that wild fish seem to have the edge over farmed fish when it comes to quality. Well luckily for you, I'm here to do the research and answer this question once and for all.

The answer: There really isn’t much difference from a nutritional standpoint. In fact, farmed fish has the potential to be more beneficial than wild fish. Some studies have shown that because farmed fish can be controlled in terms of diet and water quality, this could result in fish with lower levels of potentially toxic heavy metals, compared to their wild counterparts (Cahu et al, 2004). While it is true that farmed fish in some cases can have higher fat content than wild fish, this can be easily tweaked through the composition of the fish feed used, as well as the size of the fish enclosures (Nettleton and Exler, 1992; Cahu et al, 2004). 

But what about the antibiotics?

Another common question involving farmed fish is the fear of antibiotics and other artificial substances that may be used on farmed fish affecting us human beings. 

The answer: Yes, this is a potential issue with some farmed fish. The issue stems from the risk of antibiotic resistance. For those who aren’t familiar with this term, antibiotic resistance is when bacteria start to develop resistances to the antibiotics used to destroy them. Antibiotics are commonly used in aquaculture to fight bacterial infections and keep the fish healthy. While fine to use moderately, antibiotics are sometimes overused by the farmers, which then leads to antibiotic resistance issues. Residues of the antibiotics tend to stay in the fish when overused, which is then passed on to us humans when we then eat the fish (Miranda et al., 2018). This could then result in bacteria in our body developing resistances to antibiotics. It is important to note however, that this is still a relatively new field of research. There are limited studies done on the long term effects of antibiotic residues, as well as just how impactful it is on human health (Chen et al., 2020). It can only get better over the next few decades, as it will take time for more scientific studies to be carried out to determine the right doses of antibiotics and alternative methods to combating bacterial infection in aquaculture (Chen et al., 2020).

Does aquaculture hurt the fish or have any negative effects regarding welfare?

Where are the animal rights activists at? This is also a pretty common question when it comes to aquaculture, where people question whether the welfare of the fish is taken care of.

The answer: It would probably be no surprise to you that aquaculture does have negative effects on fish welfare, given that they are commonly reared in enclosures that are smaller than the size of an ocean or river. Generally, issues such as the handling and manipulation of fish, malformation and inducing reproduction all commonly affect aquaculture fish (Saraiva et al., 2019). However, most studies on fish welfare are usually limited to several popular aquaculture species, and a lot more research needs to be done in order to better understand both the physiological and behavioural measures we have to account for to maintain good fish welfare in the farms (Ashley, 2007).

Why support aquaculture?

So you’re telling me that I should buy farmed fish and support aquaculture even when you have just pointed out some of its issues?

Well, like any food source, there will always be pros and cons. I could also write an article on how wild caught fish could potentially be just as harmful, if not more harmful to our health (maybe I will). Arguably, the welfare of wild fish isn’t doing so well either, with severe overfishing plaguing the high seas. The reasons why aquaculture has been painted in this slightly negative light mainly stem from media portrayal, as well as a lack of knowledge among the public on aquaculture (Froehlich et al., 2017). Furthermore, a relatively new technique of procuring fish, when compared to the practice of catching wild fish for thousands of years is bound to have some initial wrinkles that need to be ironed out. Only through continuing to support the transition to more aquaculture based fish production can we move forwards. 

Let’s not forget the main reason aquaculture is being pushed in the first place. Overfishing has left global wild fish stocks dangerously low, and we need alternative food supplies. This is not an environmentalist push to protect wild fish stocks for the sake of preserving nature. The world population is growing every day. With about three billion people in communities around the world reliant on seafood as the main source of food, dwindling fish stocks are a pressing food security issue (WWF, 2020). Aquaculture is looking to be the perfect solution to the problem, we just need to refine it.

Aquaculture production has surpassed wild catch since 2012, with an average person now consuming almost double the amount of seafood compared to the past 50 years (Ritchie, 2019).

I hope this article has given you some insight into the aquaculture scene, and gotten you hooked! Stay tuned for the next article on the environmental impacts of aquaculture, and how they compare to the impacts of conventional fishing.

By Robin GOON, Segi Enam intern, 10 Dec 2020 | LinkedIn

Edited by Nadirah SHARIF

Prepare for Trouble, Make it Double: Anger in Malaysia after Double Standards by Government

In the past two weeks, Malaysians have taken to the social media to vent their frustrations over the handling of the surge of COVID-19. Prime Minister Muhyiddin Yassin who had built his legitimacy on his swift tackling of the COVID-19 earlier this year saw his popular streak came to a grinding halt. Public sentiment turned against him in what they perceived as double-standard when his cabinet members were not subjected to quarantine upon returning from campaigning from Sabah.

Khor Reports’ PolTracker team took this opportunity to analyse how selected hashtags are trending on Twitter. Head over here to read our results of this analysis.

SCMP: The Wrangling in Raub Struck a Stark Contrast to the Thai Durian Export Juggernaut

A legal battle is underway between Raub durian farmers and a state-backed conglomerate. The dispute involved allegations that the farmers were encroaching and converting state government land into illegal durian plantations, as well as accusations that the Royal Pahang Durian Resources (RPDR) was exploiting the small-scale farmers by demanding unreasonable yield targets in a deal to legalise them.

The conundrum now involves an enquiry by the Malaysian Anti-Corruption Commission (MACC), who are questioning the farmers over the aforementioned land encroachment.

A recent SCMP article by Tashny Sukumaran covered the story in more detail, in which our principal Khor Yu Leng was quoted.

The wrangling in Raub struck a stark contrast to the Thai durian export juggernaut, said economist Khor Yu Leng, noting that Thailand had recorded almost US$1 billion in sales to China from March to June.

“Trade is just getting its footing and it would be unwise for people to try and muscle in,” she said.

While Malaysia has pinned great hopes on its new channel of frozen durian exports, the word from some eyeing volume to China is for volume to be flattish against 2019. Last year, China approved Malaysian imports, although this appeared to be delayed; durian insiders said there were some wrangling on the Malaysia-side over who would be allowed to export under the then-Pakatan Harapan administration.

This came as surprise as Malaysia is coming up from almost zero-base; tackling the China market seemed to offer enough room for all enterprising exporters. More recently, wrangles have appeared in the Raub area, which also supplies the famed Musang king (mao shan wang/MSW) durian. The previously described legal saga has unlicensed farmers fearing lopsided terms with a joint venture durian concessionaire-cum-marketing wannabe. In the meantime, the Thai durian export juggernaut has powered ahead with almost USD1 billion in sales to China in March-June, a record sales volume with unit prices doubling in the last two years.

BFM: 'Sawit Anugerah Tuhan': Do Palm Oil Campaigns Work

Last week, BFM invited our principal, Khor Yu Leng, to give her opinions on palm oil campaigns and their effectiveness in increasing demand for the ever-popular vegetable oil. Click on the following link to listen to the podcast: 'Sawit Anugerah Tuhan': Do Palm Oil Campaigns Work?

Campaigns with an underlying message of reform seem to have better traction, i.e. engagement factor is higher, compared to those without, which tend to be more emotive but less clear on what it represents.

The government has unveiled the new "Sawit Anugerah Tuhan" campaign to replace “Love My Palm Oil”. But are these campaigns actually effective in promoting demand for the oil? We speak to Independent Political Economist, Khor Yu Leng for her thoughts.

Produced by: Kelvin Yee

Presented by: Kelvin Yee, Hezril Asyraaf

Thanks to a listener (a palm oil industry executive) who wrote in with his feedback: “Liked your comments, always well articulated, interesting that "sustainable palm oil" enjoys higher engagement rates than "love my palm oil" campaign. My teenage kids wouldn’t buy into the love message. They are too aware of human impact on the planet. Sustainable palm oil is the better message. I agree with you on the (importance of the) promise or the journey.”

I Believe I Can Fly: AirAsia Mulls Flying Durians in Farm-to-Table Food Line-Up

An interesting bit of news amid the coronavirus outbreak: AirAsia Group Bhd is considering flying durians into East Malaysia and Singapore as part of its plan to send fresh produce directly from farms to restaurants. Outfarm, the budget airline’s agriculture e-commerce arm, has been preparing its trucks and planes to transport food in the next three to four months, an operation which the company claims could reduce procurement costs by as much as 25%. According to Lalitah Sivanaser, the Chief Executive Officer of Outfarm:

“It’s the durian season now and we’re working very hard to get them on board… The Singaporeans, the Thais, as well Indonesians have reached out for durian exports using our platform.”

This talk of durians brings us back to our previous piece on the durian economy. In it, we discussed durians in China, as well as provided consolidated data on fruit farms and key indicators across Malaysia. Check it out here: Durians for China: A Preliminary View and Dashboard.

IVPA: Is COVID a Bull or a Bear for Veg Oils?

On 29th May 2020, Segi Enam Advisors attended a global webinar organised by the Indian Vegetable Producers’ Association. The webinar sought to address the effects of the Covid-19 pandemic on the supply chain of vegetable oils around the world, as well as other relevant trade and policy issues.

There were several interesting takeaways from the session:

1. In India, the demand for palm oil from the hotel, restaurant, and catering industry (HoReCa) has collapsed due to the lock-down. The pandemic has also called India’s food security into question, with suggestions for the government to enact policies to ensure smooth movement of the vegetable oil supply chain, particularly with regard to interstate logistics.

2. Total Indonesian and Malaysian palm oil exports to China and India has fallen sharply in the first quarter of 2020, although it was pointed out that sales to China are known to have recovered by April 2020. Globally, while the output of vegetable oils was not as badly affected as initially expected, demand has dipped much more significantly due to the lock-downs enforced across the globe.

3. In Argentina, there are transportation problems within the agriculture industry. The main cause is the low water levels of the Parana River, which transports approximately 96% of agriculture products, a situation further aggravated by Covid-19 (although it should be noted that these logistical issues preceded the outbreak). Experts project an improvement by Aug-Sep 2020.

4. The bilateral agreement signed by China and the US is now uncertain, especially in light of the coronavirus outbreak and recent developments in Hong Kong. It was also suggested that globalisation will not roll back but will have fewer Chinese characteristics, as supply chains are restructured and governments consider protectionist measures.

Click here to watch the video recording of the webinar.

Consequences of Oil Palm Expansions - read of an academic article

A recent study on the environment, economic, and social consequences of oil palm plantations has been published in May 2020 by Matin Qaim et al. The article is useful—it collates research findings from other studies and paints a good overview of the issues with regards to oil palm expansions.

Some of the more interesting points in the article are as follows:

1. Total deforestation attributed to oil palm expansions across the world varies between countries. During the last 40 years, oil palm accounts for 47% of total deforestation in Malaysia and 16% in Indonesia. In Nigeria between 2005 and 2015, only 3% of total deforestation was due to oil palm expansion. Globally, approximately half of existing oil palm areas have contributed toward forest loss.

2. Oil palm plantations have strong adverse effects on local and regional air and water quality, especially if the land was establish using fire (and exacerbated by weather events such as the El Niño). Oil palm plantations have also been found to emit volatile organic compounds, promoting the production of haze and aerosol, as well as lowering regional water quality via the excess use of fertilisers.

3. Oil palm plantations have contributed significantly to rural economic development, generating income for farmers, labourers, and those involved in the oil palm supply chains. Generally, farm households across the world do economically better compared to farmers not involved in the cultivation of oil palm. Likewise, rural non-farm households also benefit, mainly in the form of additional employment opportunities due to the labour intensive nature of the industry.

4. There are legitimate concerns regarding unequal distribution of the economic benefits mentioned in the previous point, i.e. some farm households may have better access to capital and hence are able to adopt oil palm much easier than others. Social and human rights issues, including forced and child labour, are also a source of great concern.

5. The article highlights the difficulties faced in the oil palm discourse—it acknowledges that while banning the use of oil palm may help solve the environmental issues the crop brings in the short run, doing so now will result in a large economic loss, which in turn may lead to even larger environmental problems, since farmers will simply replace oil palm with another vegetable oil with higher land requirements per unit of output.

Coronavirus Impact on Food and Markets via Migrant Workers?

New developments amid Malaysia’s Covid-19 recovery phase: several markets in Kuala Lumpur and Selangor areas—namely the Selayang Wholesale Market, the Taman Megah wet market, the PJ Old Town wet market, and the Raja Bot market—have recently been temporarily closed down following reports of coronavirus infections. Interestingly, 10 foreign workers told to self-quarantine on 25 March after being found to have attended the Seri Petaling Mosque tabligh event were employed at the Selayang Wholesale Market. There are also rumours of uncertainties with regard to the testing results and SOPs for operating food markets.

The domino effect of market closures seems to have parallels with the meat packing plants in the US, where employees often work in close quarters under difficult environments; the infection rate around the plants were found to be 75% higher than that of other US counties. In an official statement dated 23 Apr 2020, the United Food and Commercial Workers (UFWC) International Union disclosed that 13 processing plants have closed in the past two months, impacting over 24,500 workers (one-third of the US meatpacking industry are immigrants) and resulting in a 10% and 25% reduction in beef and pork slaughter capacity. USDA data reflects this reduced capacity, showing a decline of 27% and 20% in beef and pork processing respectively compared to this time in 2019. Various problems abound for the industry, including farmers considering euthanizing their animals to avoid overcrowding.

Migrant worker populations may be a common theme here. In 2018, Khor Reports has previously analysed Malaysia’s structural reliance on foreign labour based on 2016 data, which showed that Sabah’s share of foreign labour was the highest in the country at about 37%, followed by Selangor at 11%. An update on the most recent data will be conducted in due course.

Returning to the Covid-19 situation, in the case of the Malaysian capital’s wholesale market, approximately 16,000 Pusat Bandar Utara residents have been placed under a two-week Enhanced Movement Control Order (EMCO) from 20 April, with around 90% of residents comprising foreigners. That being said, the Malaysian Health Director General reiterated that screening for foreign workers will be done on a targeted approach on high risk groups, and that screening for all six million workers is not possible.

Source: https://twitter.com/MelGohCNA/status/1254700504539488256

Interestingly, this latest statement on the number of foreign workers affirms our previous estimate of six million workers in 2018, which was derived from official and industry comments as seen in our report preview below.

A preview of our 2018 analysis report. Note our estimate of six million foreign workers, both documented and undocumented, in Malaysia at the bottom right.

The news has given rise to alarming hostility on social media against the Rohingya community—there were even online petitions urging the government to deport Rohingyas from Malaysia, with one purportedly garnering 200,000 signatures and was later removed after being reported as hate speech. The PN leadership has yet to address and reflect on their current policy regarding Myanmar refugees and the de facto open migrant policy.

While the virus problem has brought down air pollution (and may even be one of the drivers behind lower meat consumption), experts have warned that it could be only temporary, especially if no concerted efforts follow after the outbreak dies down. But the issue it has wrought for poor migrant communities may be longer lasting; integration and social cohesion have been identified to be potential issues in future thanks to the growing discrimination and scapegoat attempts—aggravated by misinformation and fake news—against these communities.

The Busiest Land Crossing in Southeast Asia: Part #2 - Adjustments & Rethinking for Daily Commuters

Continuing from our first post on the closing of the Johor-Singapore crossing, drastic adjustments and rethinking for Malaysian commuting daily to the Singapore for work. As swathes of people flock the causeway into the city-state, Singapore authorities and employers scramble to facilitate temporary accommodation. Many workers who successfully crossed the border had to sleep rough at train stations (see picture). Those left behind were later allowed to resume work in Singapore.

Accordingly, Singaporean online public interest in matters related the Johor-Singapore crossing lockdown spiked around the time when the Movement Control Order was announced (17 Mar 2020) and enforced (18 Mar 2020) (see graph and map).

On our previous post about the Johor-Singapore crossing see Part #1.