The seemingly impossible task of decoupling deforestation from the palm oil industry could be achieved by raising the price of palm-based consumer goods by just 1.8 per cent, a new report from risk analysis firm Chain Reaction Research (CRR) suggests.

The additional revenue consumer goods firms make from the sale of products such as instant noodles, lipstick, ice cream and shampoo could go into helping growers implement zero-deforestation commitments with better monitoring and verification, and provide support for smallholder farmers to grow palm oil without encroaching on forests.

Some consumer good companies with higher profit margins, such as Procter & Gamble, could raise the price of products by 0.15 per cent to cut forest loss out of their palm oil value chain, while cooking oil brands with smaller margins would have to raise their prices by more, the study published on Tuesday finds.

Alternatively, the downstream consumer goods companies, could dip into the vast profits they generate from palm oil to tackle deforestation in grower countries such as Indonesia or Malaysia.

Aida Greenbury, senior sustainability advisor at the Indonesian Palm Oil Smallholder Union (SPKS), said that consumer goods firms have profited from palm oil at the expense of forest landscapes and local communities for generations, and the damage being done must be paid for.

She called on consumer goods firm to introduce better traceability systems to track the palm oil they use back to the smallfarmers who grow it, to incentivise sustainable production, and allocate at least 2 per cent of their profits to address their deforestation footprints, including forest conservation schemes that benefit smallholders and local communities.

Read the full article about small price increase in palm oil based products could save forests by Robin Hicks at Eco-Business.