By Datuk Dr Ahmad Ibrahim
Farmers perform an important economic function for the nation. They produce the food we need.
A good example is our staple food, rice. They also produce strategic raw materials for downstream manufacturers further adding value.
In Malaysia, these include crops like palm oil and natural rubber. Farmers do not always enjoy the full value of the downstream business.
This explains why farmers, especially smallholders, struggle to stay profitable, especially during times of low commodity prices.
Many are still mired in poverty. The circular economy can be the game changer. There are many ways farmers can benefit. They can optimize resource use including water and fertiliser, reduce waste, thereby enhancing sustainability.
More important, they can gain economically. In the case of the oil palm, farmers can earn more if values are created from the non-oil component such as the EFBs (empty fruit bunch).
The EFBs have been the subject of much discourse on how best to add value. Disposing them poses a major environmental concern. A growing burden for the country’s overused landfills. And there are economic and logistical issues to consider when harnessing them for profit.
The government has long registered the interest to create value from the EFBs. It was clearly mentioned in the 12th Malaysia Plan. The government has twice launched support policies to incentivise value creation.
First it was the National Biomass Strategy during the PEMANDU days. And recently, the National Biomass Action Plan (NBAM), was launched with much fanfare and promise. Progress has been lethargic.
The collection centre idea has been suggested under NBAM. But palm oil mills in the country have hesitated to embrace the strategy. Many are known to extract some remnant oil in the EFBs.
There is demand for such low grade oil from companies making sustainable aviation fuel (SAF). There is concern that some might incorporate such high FFA (free fatty acid) oil in the good CPO (crude palm oil). The quality of CPO may be compromised.
But the bigger concern is that the income from the sale of such low grade oil does not trickle down to the farmers. Also the fibres left behind are not economically feasible for conversion into products such as energy and other added value products.
There is no economy of scale. There are those who have been calling for change to embrace the circular economy model. Farmers can then enjoy a piece of the added value.
There are other benefits for the farmers.
One is nutrient cycling. Organic farm wastes such as manure, crop residues can be composted and returned to the soil as fertilizers, reducing reliance on synthetic chemical manure which is not welcome.
Wastewater from farming operations can be treated and reused for irrigation.
Using residues or byproducts such as food waste to create bio-based fertilizers enhances soil health while reducing dependency on chemicals. Diversified farming practices aligned with circular economy (CE) principles promote natural soil fertility.
Farmers can also process waste into products like biogas, animal feed, or biochar, creating additional revenue streams.
Certain crop residues such as rice or sugarcane waste can be used for producing bioplastics. But the economic viability of such ventures depends on the economy of scale. Farmers on their own are not in a position to participate in such ventures.
Relying on locally-sourced and renewable inputs reduces the vulnerability to global supply chain disruptions. The circular systems also encourage crop diversity, which improves resilience to pests, diseases, and climate change.
But the economic and environmental benefits are the big motivator in a circular economy.
Reusing materials and reducing waste cuts operational costs including fertilizers and feed. Circular practices like regenerative farming can qualify for carbon credits or sustainability incentives.
Farmers can collaborate with industries, such as supplying crop residues for energy or bioproducts manufacturing. Circular initiatives create new opportunities for farmers to engage with local stakeholders in sustainability projects.
Malaysia must take concrete steps to seriously embrace the circular economy. Plantation groups such as FELDA should reassess their business model to migrate to a more resource efficient circular economy. The returns to the settlers can be lucrative.
At the same time, issues concerning sustainability can be effectively addressed. Only a top down push can make this change to the circular model happen. – BACALAHMALAYSIA.MY
- The writer is a professor at Tan Sri Omar Centre for STI Policy, IISDS, UCSI University and Associate Fellow, UAC, University Malaya
