While the dispute between the European Union (EU) and the major economies of Southeast Asia over palm oil is smoldering, India now wants to make massive progress in the cultivation of oil palms.

The cabinet of Prime Minister Narendra Modi has released around 110 billion rupees (1.3 billion euros) in order to have huge plantations built on the remote Andaman and Nicobar Islands in the Indian Ocean.

Christoph Hein

Business correspondent for South Asia / Pacific based in Singapore.

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Overall, the cultivation area is expected to almost triple to around one million hectares - roughly four times the area of ​​Luxembourg. In India, anger is rising over the threat of monocultures. In Southeast Asia they lead to massive logging and burning of tropical rainforests and peat bogs.

The Indian government plans to triple palm oil production to as much as 3 million tons by 2029.

This is intended to relieve the burden on imports.

Palm oil is not only used as fuel, it is used in thousands of products, from chocolate to soap to pizza.

A German consumer consumes around 1.5 kilograms of palm oil on average each year.

India imports nearly 15 million tons of edible oil annually for around $ 10 billion, of which palm oil imports make up the majority.

The Indian Ministry of Finance has just lowered the import duty on raw palm oil by 5 percent.

Promote cultivation in the poorer northeast

The archipelagos that New Delhi is considering for cultivation are located in the east of the Indian Ocean, much closer to Thailand than to the Indian mainland.

The archipelago has a total of 572 islands, 38 of which are uninhabited.

New Delhi also wants to promote cultivation in the poorer, agricultural north-east of the subcontinent.

The main supplier countries are the two largest growing countries in the world, Indonesia and Malaysia.

The EU is at odds with both of them.

Since 2017, Indonesia has also been fighting before the World Trade Organization (WTO) against a European import ban on palm oil, which is processed into biofuel.

With around 15 percent of the industry's exports, the EU is Indonesia's second largest customer after India.

With around 40 million tons annually, a good half of the world's palm oil production comes from Indonesia.

Together with its neighboring country Malaysia, it accounts for 87 percent of global production.

Number three is Thailand.

The issue is also explosive for Southeast Asia because the EU has been preparing a free trade agreement with the region for a long time.

Asian ministers, however, threatened to boycott the purchase of Airbus aircraft or automobiles from European manufacturers.

The free trade negotiations that have been stalling for years are also to be resumed with India.

There, however, no export of the oil is planned.

Environmentalists are mobilizing against the plan

The high level of funding from the Indian government attacks Indonesia and Malaysia. "It will stimulate investment, create employment, reduce dependency on imports and increase the incomes of our farmers," said Agriculture Minister Narendra Singh Tomar. India is the largest importer of edible oil in the world. Around two thirds of the consumption of the almost 1.4 billion people is covered by imports. Last fiscal year (March 31), the subcontinent imported palm oil worth around $ 5.8 billion. The plan to expand the acreage thanks to taxpayer subsidies is not new. Already in 2011 and 2014 there were programs to expand the area under cultivation.

Environmentalists in India are mobilizing against the plan because they fear monocultures similar to those that are destroying large parts of Southeast Asia. Among other things, they are betting that the Supreme Court must confirm the cabinet decision. In 2002 he banned all plantations with "unnatural plants" on the islands with their fragile ecosystems. Environmentalists fear that the monocultures also destroyed natural rainforest in India, but also the land that small farmers plowed according to the traditional model of the jhum.

The age-old system of slash and burn is also used for this; but then, depending on the season and year, up to 30 different plants are grown on small areas in a rhythm. The agronomist R. Shankar Raman of the Nature Conservation Foundation explained that this use of slash and burn is different from the logging and burning of the jungle that the palm oil companies use for their monocultures: “In the northeast, as in other tropical regions, grow thanks to bamboo and other trees are followed by secondary forests on cultivated areas relatively quickly and densely. Of course, they are not as diverse as an undisturbed forest. But in any case, they are far better than oil palm plantations, which are a permanent form of deforestation. "

The adaptation extends to the ownership structure: while the jhum cultivation areas belong to villages, the plantations are in the hands of companies - women, for example, lose their role as co-owners. However, other scientists recommend converting areas for sunflowers or rapeseed into palm oil plantations, as these are more productive.