National Export Strategy Oil Palm Export Strategy

2 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Source: © Craig Morey EXPORT PERFORMANCE Liberia maintains a very small share of the total world exports of palm oil. Nevertheless, it has seen important The demand for crude palm oil ( CPO ) is largely con- increases of exported growth in value between 2008 centrated in emerging markets ( for direct consumption and 2012 ( 90 % ). The top three markets for Liberia’s purposes ) and in more mature markets ( EU 27 ) for oleo- palm oil are Portugal, the United States of America and chemicals. For the Liberian oil palm sector as a whole, Cameroon, although exports are highly concentrated in large investors already have either internal installed ca- the Portuguese market ( 58.9 % ). pacity for refining or guaranteed markets. At the lower end of scale the sector is dominated by small- OPTIONS FOR FUTURE holders who feed into an ecosystem led by cross-border markets. The primary challenge for smallholders to enter DEVELOPMENT markets and /or expand existing market positions through In order to realize the export potential and increase the international, cross-border or concessionaire markets will export competitiveness of the Liberian oil palm sector, be understanding buyer preferences and setting up sys- the following vision has been adopted : tems for systematic compliance in the market. “ To establish the Liberian oil palm sector as a leading contributor to the national economic transformation ” agenda through exports development in an inclusive and sustainable manner. This vision will be realized by the following strategic and operational objectives, which are designed to compre- hensively address the overall weaknesses identified across the value chain. EXECUTIVE SUMMARY 3 Strategic objective Operational objective Boost productive capacity in the • Establish an integrated research programme. oil palm sector, particularly at • Augment the availability of quality skilled and semi-skilled labour, in close the smallholder level, in existing collaboration with industry. and high potential product • Improve business services and extension services support. extensions. • Improve data collection capabilities to allow better policymaking. • Increase substantially the level of organization in the sector, in a representative and geographically equitable manner. • Support cooperatives and Farmer Field Schools ( FFS ) to impart relevant training components to their oil palm constituents. • Drive improvements in quality management at both institutional and enterprise levels. Promote product and capacity • Improve packaging capability. diversification. • Provide support to promulgate use of mills. • Encourage product diversification. Improve the regulatory • Ensure requirements for the oil palm sector are met through the development and business environment. of the Liberia Agricultural Commodities Regulatory Authority ( LACRA ). • Develop the capacity of the Cooperative Development Agency ( CDA ) to provide effective service delivery to cooperatives and farmer-based organizations ( FBOs ). • Develop dedicated infrastructure connecting non-concessionaire areas with important processing and transportation hubs. • Improve access to credit for operators in the small / medium-sized base. Strengthen in-market support • Improve in-market support. and branding related to the • Promote certification of CPO sourced from Liberia. sector. Balance human development • Increase information related to environmental considerations and global best ( specifically youth and practices. gender ) and environmental • Provide incubation support to women and youth-owned transport businesses. considerations with economic • Support women operators involved in cross-border trade. growth. The envisioned future state of the sector has been devel- Existing trade relationships and bilateral geographical dis- oped using a combination of consultations, surveys and tances will form the major criteria determining the markets analyses. This future state consists of two components for Liberian oil palm in the short-to-medium term. Market ( both of which combine to form the future value chain ) : penetration in existing markets will be the main mode of market entry. It is also expected that in the short-term ƒƒ Structural changes to the value chain that result in ei- phase product diversification will be rather limited while ther strengthening of linkages or introduction of new capabilities undergo a gestation period. linkages ; and ƒƒ A market-related component involving identification Markets in the short-to-medium term will include Sahel of key markets in the short and medium-to-long terms countries, Economic Community of West African States for exporters. ( ECOWAS ) members, as well as the United States and European Union ( EU ) markets. Driven by factors such as geographical distances and established relationships, OPTIONS FOR FUTURE demand is expected to be high for Liberian palm oil in these markets, especially that of the Dura variety. The do- DEVELOPMENT : MARKETS mestic market will also be an important market in the short term, allowing opportunities for SMEs to build capabilities Palm oil continues to lead as the world’s preferred source through import substitution and then scaling operations to of fat, for both food and non-food uses. Demand has international target markets in the medium-to-long term. steadily risen and remains set to continue to rise on the back of demand from emerging markets, which make up The Strategy advocates that over the short term, small almost 50 % of total world demand. Coupled with matur- and medium-sized Liberian operators strengthen their ing demand in traditional markets and top suppliers re- supply consistency, production levels, and quality lev- sponding to certification requirements, the future of both els by forging new or reinforcing existing relationships conventional and certified oil palm products is robust. with concessionaires. Organized groups in the form of THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

4 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 cooperatives will play an especially important role in this. ƒƒ Mainstreaming of women and youth in value added As the build-up of capabilities in the small/ medium-sized activities in the sector ; and segment continues, they will gradually become better po- ƒƒ Movement towards Roundtable for Sustainable Palm sitioned to reach regional and international markets on Oil ( RSPO ) certification in the longer term. their own ( over the medium-to-long term ). This medium-to-long-term phase will be witness to grow- IMPLEMENTATION ing small / medium-sized operators gradually starting to export to target markets in parallel with existing conces- MANAGEMENT sionaire export activities. In addition to the markets iden- The broad range of activities, together with the complex tified in the short-to-medium term, target markets are nature of integrated intervention, requires careful imple- expected to be the United States, EU, India, and China. mentation that efficiently directs resources and monitors As discussed earlier, the products basket will diversify results at both the micro and macro levels. To this end, a based on increased capacity and diversification abilities Liberian Export Council ( LEC ) will be established in or- in the sector – products such as African black soap and der to facilitate the public-private partnership in elaborat- palm kernel oil. ing, coordinating and implementing the National Export Strategy ( NES ). In particular, LEC will be tasked with co- ordinating the implementation of activities in order to op- OPTIONS FOR FUTURE timize the allocation of both resources and efforts across the wide spectrum of stakeholders. Within this framework, DEVELOPMENT : STRUCTURAL implementation of the oil palm strategy will also fall within ADJUSTMENTS TO THE the purview of LEC. LIBERIAN OIL PALM VALUE Such efforts will involve directing donor and private and CHAIN public sector organizations towards the various NES pri- orities in order to avoid duplication and guarantee maxi- To drive improvements in the sector it will be important to mum impact. Responsibilities will also include monitoring leverage the different interventions already taking place the results of activities and outputs, while at the same and consolidate as many gains as possible from across time recommending policies that could serve to enhance policy, institutional, regional, scientific, livelihoods and realization of the strategic objectives. With a 360 degree conservation / adaptation perspectives to optimize the view of progress, the Council will be best placed to man- business environment within which the sector operates age funding and provide regular reports to donors and so as to optimize the commercial ( growth ) opportunities, stakeholders. Moreover, LEC will play a key role in recom- and consequently the development opportunities, offered mending revisions and updates to the strategy so that it by the sector. continues to evolve in alignment with the country’s evolv- ing needs. The projected structural changes are based on efficiency gains identified through the four gears analysis of the sec- In addition to LEC, a variety of stakeholders will be criti- tor’s performance, and through the identification of op- cal to the successful implementation of this strategy. portunities for improving the sector’s capacity to acquire, These include public sector actors such as the Ministry add, create, retain and distribute value. of Agriculture ( MoA ) ( including extension services ), NIC, the Cooperative Development Agency ( CDA ), MoCI and The structural adjustments will focus on : the Ministry of Foreign Affairs ( MoFA ), and also private sector / civil society organizations that have a successful ƒƒ Increased organization levels among producer groups; track record in the sector and are well positioned to assist. ƒƒ Improved technical and vocational education and train- ing ( TVET ) infrastructure relevant to the sector ; ƒƒ Development of a domestic inputs supply chain ; CONCLUSION ƒƒ Development of an efficient extension services network ; The palm oil export sector in general is in an early stage of ƒƒ Improved data collection and policy level decision- recovery (from pre-war levels) and growth and so it is vital making ability ; to make well-thought out decisions in terms of business ƒƒ Streamlined border and customs processes with those models, core propositions, positioning etc. This strategy of regional partners ; reflects that analytical rigor and builds towards exports ƒƒ Adoption of land management and general manage- competitiveness in the sector. ment best practices ; ƒƒ Improved research base aimed at sector needs ; INTRODUCTION TO THE GLOBAL OIL PALM SECTOR 5 INTRODUCTION TO THE GLOBAL OIL PALM SECTOR Palm oil is one of the oldest oils / fats used by humans, to both growth 5 and development 6 in them. The main rea- with the first evidence of palm oil use being from West sons include the steadily growing demand for palm oil Africa about 5,000 years ago.1 The tree is endemic to and other downstream products driven by low prices and West Africa and has been used in the region for several high productivity, and the inherent labour-intensiveness thousand years. of the sector. In more recent times, the tree was planted in South East Palm oil is also the world’s most produced and sold oil Asia – Malaysia in particular first – in the mid-nineteenth with roughly a 28 % market share in the global oils and century.2 The bulk of the development of the sector started fats market, followed by fat from animal and other sources midway through the twentieth century and has been dom- with approximately a 24 % share and soya oil with 22 % of inated by two countries – Malaysia and Indonesia. These the market.7 two countries are of particular significance because be- tween them they produce 87 % of total world production3 The industry is inherently labour-intensive, requiring a and account for 86% of total exports.4 Some of the biggest global average of five workers per hectare. The small- multinationals in the palm oil sector, like Sime Darby and holder sector is primarily responsible for most production Equatorial, also come from these two countries. – this is especially true for Malaysia and Indonesia, which are two of the world’s largest producers of CPO. The sector forms a very important part of the economies of these two countries and has been a major contributor Competing oil crops often require approximately one worker for every 200 hectares. In Malaysia, the palm oil sector employs 590,000 direct workers ( including many labourers imported from Indonesia ), and 35 % of production derives from smallholders.8 In Indonesia 3.7 1. Elaeis guineensis is well documented in archaeological contexts at million people are engaged in the palm oil industry and Bosumpra from 5210 ± 100 BP and at Kintampo and Obobogo from downstream industries, with 45 % of production from about 3700 BP onwards, and in non-archaeological contexts at Lake smallholders.9 Bosumptwi and the Niger delta. Shaw, Ian and Robert Jameson, eds ( 1999 ). The Dictionary of Archaeology, p.17. Blackwell Publishers. 2. 1848 in Bogor. 3. From roughly 38,000 ha under oil palm cultivation in the country 5. Palm oil production is economically vital for Malaysia and Indonesia in 1950, the total area covered in 2011 approximately 5 million and their rural communities. Oil palm represents 3.2 % of Malaysian ha. ( Malaysian Palm Oil Board ( 2011 ). Overview of the Malaysian gross domestic product and 6 % to 7 % of Indonesian gross domestic Oil Palm Industry 2011. Available from http : /  / econ.mpob.gov. product ( RSPO, 2011a ). my / economy / Overview %202011_update.pdf ). In neighbouring 6. Booming commodity prices in recent years have trickled down Indonesia too, the growth of the sector has been nothing short of through this labour-intensive system, helping to lift millions out of dramatic. Oil Palm today covers as much as 16.9 million hectares of poverty in Indonesia and Malaysia and contributing to a more than the total land area in the country ( World Bank / International Finance doubling of the Indonesian middle class in the decade leading up to Corporation ( 2011 ). The World Bank Group Framework and IFC

2009 ( Bellman, 2011 ). Strategy for Engagement in the Palm Oil Sector. ). 7. Oilworld Mielke 2011. 4. World Bank / International Finance Corporation ( 2011 ). The World Bank Group Framework and IFC Strategy for Engagement in the Palm 8. NEAC, 2009. Oil Sector. 9. RSPO, 2011a. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

6 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 There are other uses in animal feed manufacturing and as a primary feed stock for biodiesel production and refining. An important trend for palm oil is the increasing impor- tance of its industrial use vis-à-vis its human consumption use. In the ten year period from 2000-2001 to 2010-2011, industrial use rose from 15 % to 25 %.10 Figure 1 shows the wide and ubiquitous use of palm oil in some of the world’s best known consumer brands across a wide range of products. 10. Adapted with permission from : AOCS Lipid Library ( 2013 ). Oils and Fats in the Market Place : Commodity Oils and Fats : Palm Oil. Available from http : /  / lipidlibrary.aocs.org / market / palmoil.htm. Figure 1 : Leading brands / manufacturers of palm oil based consumer products ( ranked by sales volume high to low ) Brand Manufacturer Warburtons Warburtons Hovis Premier Foods Cadbury Dairy Milk Cadbury Kingsmill ABF Persil Unilever Flora Spreads Unilever Galaxy Mars Young’s Frozen Fish Young’s Kit Kat Nestle Mr Kipling Cakes Premier Foods Wrigley’s Extra Wrigley Birds Eye Poultry Birds Eye Maltesers Mars Mars Mars Kellogg’s Special K Kellogg’s Ginsters Ginsters McVitie’s Digestive United Biscuits Comfort Unilever Goodfella’s Pizza Northern Foods Source : UK–Liberia Investment Forum ( presentation by Michael Frayne, Executive Chairman, Equatorial Palm Oil Liberia ). CURRENT CONTEXT 7 CURRENT CONTEXT HISTORICAL PERSPECTIVE As the conflict was resolved, palm oil markets began to re- spond to demand in the formerly inaccessible urban cen- In the 1970s and 1980s, GoL made a strategic decision tres of Liberia. Some of this demand has been satisfied to establish oil palm as an alternate tree crop for export. by imports, while other consumers prefer to purchase raw Plantations were established in the northern, north-east- palm nuts for home processing and still others choose to ern and north-western parts of the country. The decision purchase a share of the production that originates from to locate farms predominantly along the northern ridge upcountry.13 were based on the fact that the bulk of agricultural ( espe- cially at the commercial level ) activity was concentrated ( as it indeed continues to be ) in the counties within that STRUCTURE AND region – namely Nimba, Bong, Lofa and to a lesser extent Grand Gedeh. These plantations consisted of the higher PRODUCTION TRENDS yielding Tenera variety and could produce both edible In Liberia the oil palm tree crop mainly grows in wild and industrial grades of CPO. groves, which supplied almost half of the 35,000 tons of palm oil produced in 2007.14 Cultivation is done on small The plantations were alternatively completely GoL owned, household farms and medium-to large-scale state-owned communally-owned ( GoL aided ) and managed by coop- plantations.15 The majority of production in the post-war eratives, or held under trusteeship by managing commu- years has been concentrated in the smallholder sector. nities. Given that these plantations were all planted 25-30 As per the National Renewable Energy Laboratory/United years ago, they are all past their peak productivity levels 11 States Agency for International Development ( USAID ) and have to a varying extent been reclaimed by surround- Biomass Study of 2009, MoA 2008 estimates show that ing jungle during the prolonged civil conflict. They are of the total of about 35,000 tons, a significant proportion currently in a state of near complete neglect and in many was produced by smallholders. instances ownership 12 has become tenuous. Existing players in the Liberian oil palm sector can be The civil war resulted in large-scale abandonment and divided into small players working with Dura / Tenera, in- destruction of plantations and processing facilities. There dividuals playing various intermediation roles / providing has been limited maintenance or replanting in the last 20 support services, and large concessionaires. The val- years and the trees are largely at the end of their produc- ue chain is dominated by large concessionaires. In the tive life. concessionaire economy the scale is 100 % industrial and every process is defined to the last detail, wheth- er in agronomy, logistics, production or sales. Of the 11. Oil palms may live up to 200 years, but their commercial value four large concessionaires in Liberia, Sime Derby and rapidly drops after about 30 years. FAO ( n.d. ). Small-scale Palm Oil Golden Veroleum are global leaders in the industry with Processing in Africa. FAO Agricultural Services Bulletin 148. Available annual revenues of hundreds of millions of dollars each from ftp : /  / ftp.fao.org / docrep / fao / 005 / y4355E / y4355E00.pdf. 12. As is the case in many African countries, Liberia allows the 13. Republic of Liberia, Ministry of Agriculture ( 2007 ). Comprehensive application of both civil and customary law, individual and communal Assessment of the Agriculture Sector in Liberia ( CAAS-Lib ), Volume 2.2 ownership. As a result ownership issues have become extremely – Sub-Sector Reports. contentious and resolution is slow. This is the case with plantations that were set up by GoL, but which management ceded to communities, 14. Milbrandt, A. ( 2009 ). Assessment of Biomass Resources in Liberia. in many instances several decades ago. Any re-development in and Colorado : National Renewable Energy Laboratory. Available from www. around these plantations will need to deal carefully with this issue of nrel.gov / docs / fy09osti / 44808.pdf. legal ownership. 15. Ibid. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

8 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 year and worldwide share of markets, including strong small and intercropped plantations. Medium-to-large- presence in the biggest markets such as India and China scale plantations are more likely to adopt higher yielding and more mature speciality markets such as Organisation plant varieties and agronomic techniques ( including fer- for Economic Co-operation and Development ( OECD ) tilizers, pesticides and other technologies ). These grow- countries. ers often depend on nurseries for access to high quality seedlings. Small-scale oil palm farming is typically undertaken with minimal adoption of modern agronomic techniques, thus Oil palm cultivation activity is primarily focused on the leading to much lower yields and efficiency. These small- northern and north-western parts of the country, as indi- scale farmers often harvest from wild forests or oversee cated in Figure 2 below. Figure 2 : Oil palm producing regions by scale of production 2009 Foya Voinjama Lofa Concessions 2011 Gbarpolu Grand Cape Kpatawee Sanniquelli Mount Bopolu Gbarnga Wangeko Tubmanburg Bong Robersport Bomi Fendell Gol Platations Margibi Nimba from 70s & 80s Mount Coffee Kakata Montserrado Bensonville Zich Town Grand Bassa Monrovia Zwedru UBINCO Dubwe Grand Gedeh Buchanan River Cess Cestos City Butaw Planted Area River Gee Sinoe (hectares) Fish Town Above 5,000 Greenville 2,500 -5,000 Grand Kru Maryland 1,000 - 2,500 Bardayville Decoris 500 - 1,000 0 20 40 80 120 Harper Bellow 500 Kilometers Source : Milbrandt, A. ( 2009 ). Assessment of Biomass Resources in Liberia. Colorado : National Renewable Energy Laboratory. Available from www.nrel.gov / docs / fy09osti / 44808.pdf. Highlights added by NES. LIBERIAN PALM OIL VARIETIES TYPES Two quite different oils are produced from the oil palm butter substitute, kernel oil is used predominantly in the fruit – CPO from the mesocarp ( the fleshy part of the fruit ) oleochemical industry for making soap, detergent, toilet- and crude palm kernel oil (CPKO) from the seed or kernel. ries and cosmetics. The main oil extracted in Liberia is While palm oil is primarily used in food products (account- CPO, although there are a small minority of households ing for more than 75 % of global production ) as cooking which also extract CPKO for subsistence purposes. oil, shortening, margarine, milk fat replacer and cocoa CURRENT CONTEXT 9 VARIETIES DURA fitri agung Dura and Pisifera are the two native varieties of palm that have grown in Liberia at least for the past several hun- dred years. The Dura variety grows in wild groves in the forest and in village gardens. The Dura palm tends to be Source: in clusters and result from natural seed dispersal. Dura is the main variety found in this form and has traditionally been one of the primary ingredients in most West African recipes.16 Dura is almost always handpicked by men and Tenera CPO has been industrial, such as soap manufac- then converted to CPO, or ‘red oil’ as it is widely known turing, rather than direct consumption.19 because of the characteristic deep red colour that that marks the oil. This variety was aggressively promoted by various in- tergovernmental organizations in many parts of Africa in The fruit grows in bunches and in this form is referred to as the 1970s and 1980s, although it is relatively less popular Fresh Fruit Bunches ( FFB ). The FFBs are brought down, with domestic consumers because of its unfamiliar taste, boiled, washed, mashed and mechanically filtered, and high( er ) fat content and its appearance at ambient tem- the oil is finally manually skimmed. This process is fraught perature – it does not retain its viscosity and red colour. with inefficiencies and dangers of spoilage and adul- teration. Various reports from the Food and Agriculture Medium-sized plantations planted by GoL in the 1970s Organization of the United Nations ( FAO ) and MoA sug- and 1980s are exclusively Tenera. These plantations are gest that wastage is extremely high, amounting to 50 % mostly past their productive best or are close. These plan- during harvest and a further 35 % during production. This tations have also been planted along the northern and completely manual system also results in a short shelf life north-eastern ridge of the country, whereas the new con- and the quick build-up of free fatty acids. cessions, which are several hundred times bigger, have all been located in the coastal belt – which in agronomic Anecdotal evidence and first-hand accounts from small- terms is better suited for oil palm. scale exporters suggest that Liberian red oil is particularly preferred by Liberians in the diaspora as well by other West African diasporas, especially in the United States. SOCIOECONOMIC This appears to be true even in domestic and region- al markets. The presence of a certain amount of acid is CONSIDERATIONS preferred and users like the ‘bite’17 that the acid brings As per MoA / Liberia Institute of Statistics and Geo- to the oil. Red oil is also widely used for its digestive, Information Services ( LISGIS ) statistics for 2010-2011, laxative and other medicinal properties ; even for external oil palm production accounts for over 10 % of total em- application. ployment in Liberia’s agriculture sector. It is a widely con- sumed product in the West Africa region and therefore one of the most actively traded commodities in the re- TENERA gional trade network. Oil palm is the biggest source of dietary fat in Liberia and indeed over most of West Africa. Tenera is the leading oil palm hybrid between the two naturally occurring varieties, namely Dura and Pisifera.18 There are 29,080 households involved in production in While the oil yielding capacity of Tenera is significant- the sector, of which 23,860 households ( 82 % ) are male- ly higher than either Dura or Pisifera, the primary use of headed and the remaining 5,220 households ( 18 % ) are female-headed. The highest number of households in- 16. FAO ( n.d. ). Small-scale Palm Oil Processing in Africa. volved are in Nimba, Lofa, and Bong Counties, with male- FAO Agricultural Services Bulletin 148. Available from : headed households numbering 7,740, 3,380 and 2,430 ftp : /  / ftp.fao.org / docrep / fao / 005 / y4355E / y4355E00.pdf. respectively and female-headed households numbering 17. Ibid. 1,080, 1,060 and 890 respectively.20 18. Breeding work, particularly crosses between Dura and a shell-less variety ( Pisifera ), have led to the development of a hybrid with a much thicker mesocarp and a thinner shell, termed Tenera. All breeding and planting programmes now use this latter type, the fruits of which have 19. The Tenera nut is small and is easily shelled to release the palm a much higher content of palm oil than the native Dura. FAO ( n.d. ). kernel. The Tenera palm kernel is smaller than the Dura kernel, Small-scale Palm Oil Processing in Africa. FAO Agricultural Services although the Tenera bunch is much larger than Dura. In all, the Tenera Bulletin 148. Available from : is a much better variety for industrial and economic purposes. ftp : /  / ftp.fao.org / docrep / fao / 005 / y4355E / y4355E00.pdf. 20. MoA / LISGIS Statistics 2010-2011. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

10 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Table 1 : Oil palm households in Liberia 2010-2011 Both sexes Male-headed Hh Female-headed Hh Percent Country Number % Agric Hh Number % Total Number % Total Male Female Liberia 29,080 10.2 23,860 100 5,220 100 82 18 Grand Bassa 1,590 8.7 1,060 4.4 530 10.2 66.7 33.3 Margibi 2,000 13 1,330 5.6 670 12.8 66.7 33.3 Bong 3,320 8.5 2,430 10.2 890 17 73.3 23.7 Lofa 4,440 12.1 3,380 14.2 1,060 20.3 76.2 23.8 Grand Kru 730 7 610 2.6 120 2.3 83.2 16.8 Rivercess 800 10.6 670 2.8 130 2.5 83.3 16.7 Bomi 840 8 720 3 120 2.3 85.7 14.3 River Gee 500 6 440 1.8 60 1.1 87.5 12.5 Nimba 8,820 14.3 7,740 32.4 1,080 20.7 87.7 12.3 Grand Gedeh 230 2.2 230 1 30 0.6 88.8 11.2 Maryland 450 4.5 400 1.7 50 1 89.4 10.6 Montserrado 2,120 9.3 1,910 8 210 4 90 10 Grand Capemount 1,600 16.7 1,550 6.5 50 1 96.7 3.3 Source : MoA / LISGIS Statistics 2010–2011. Table 2 : Cash crop household survey statistics Description Both sexes Percent Male Female Agricultural households Number Percent Male Female Rubber producing households 48 290 17.3 41 800 7 490 84.8 15.2 Oil palm producing households 29 080 10.2 23 860 5 220 82 18 Cocoa producing households 35 960 12.6 29 050 6 910 80.8 119.2 Coffee producing households 24 240 8.5 19 250 4 990 79.4 20.6 Sugarcane producing households 31 400 11 25 480 5 920 81.1 18.9 Source : MoA / LISGIS Statistics 2010-2011 : Cash Crop Household Survey. As indicated in Table 2 above, oil palm is among the most spread income over the year in order to keep oil palm important cash crops in the country. households from facing uncertain consumption patterns, which in turn affect savings, investment and eventually Employment in the sector is sporadic at best, with high growth. Inefficiencies in the supply chain have kept oil seasonality and with the rainy season being the longest palm families from achieving the revenue potential of the continuous lean period. Any sector development invest- existing capacity. ments must keep the above facts in mind so as to better CURRENT CONTEXT 11 ENVIRONMENTAL more consensus that food security for the poorest popu- lations ( approximately 925 million that are acutely food AND FOOD SECURITY insecure ) 21 is a higher priority than energy security for the CONCERNS LINKED WITH significantly more affluent ( approximately a billion people who consume around 80 % of the world’s energy ).22 PALM OIL TRADE In terms of overall productivity and yield per land area, The oil palm sector has faced significant criticism in recent oil palm is relatively more productive than peers. A closer years for detrimental production practices which include look ( as illustrated in Figure 3 ) reveals that, compared to clearing large swathes of land (frequently encroaching on other sources of edible oils / fats, oil palm is significantly allocation for other sectors that have a bearing on food more efficient in terms of sustainable land use23 and over- security ) for cultivation of oil palm for industrial usage / ex- all productivity per ha per year. port. For instance, the palm oil sub-sector in Indonesia was the subject of widespread protests and collective However, the debate on environmental and food security action by consumer groups, conservation groups, non- concerns is not centred around relative productivity, but governmental organizations and importing governments rather around the unsustainable manner in which land is due to the large-scale replacement of High Conservation allocated at the expense of other crops ( especially those Value ( HCV ) forest. affecting food security ), and also the economic vs. food security trade-offs that are involved in focusing on devel- Several issues over the last two decades have altered oping palm oil for industrial purposes / export. It is there- public perception of the commodity, particularly in OECD fore important to find a balance between harvesting the countries, and have resulted in some loss of market share economic potential of the crop and ensuring that environ- to other oils in these markets as well as loss of reputa- mental and food security needs do not suffer. tion which affects the users ( industrial buyers such as Unilever ) of palm oil and its derivatives and, in turn, the 21. WFP ( 2013 ). Hunger. Available from http : /  / www.wfp.org / hunger. primary producers further upstream. WFP estimates that the food crisis of 2007-2009 pushed an additional 44 million people worldwide into poverty – with evidence that the use of food commodities for bio fuel production was one major reason The main criticism in terms of oil palm’s low sustainabil- for the sharp spike in food prices. ity was the spike in its use as a feed stock for biodiesel 22. The one billion who constitute the populations of the OECD, the production, which totalled about 9 % of total palm oil use Middle East, non-OECD Europe and the rich in other parts of the world in 2009 / 10. While in itself not a large number, the criti- – including in China and India. International Energy Agency ( 2011 ). Key World Energy Statistics 2011. Available from http : /  / www.iea. cism of palm oil use was part of a larger overall global org / statistics / . debate on the relative merits of using food sources ( in the 23. Globally at 8.5 million ha, oil palm has the lowest land use form of bio fuels ) for fossil fuel replacement. There is now compared with over 58 million ha of land used for soya beans. Malaysian Palm Oil Board. Figure 3 : Oil palm productivity tonnes/ha/year 200 Soybean 0.36 182 180 160

140 Input Energy Sunflower 0.46

120 Output Energy 100 Rape 0.6 80 70 60 50 40 19 20 23 Oil Palm 3.66 20 0 0 1 2 3 4 Oil Palm Soybean Rapeseed Source : RSPO ( 2007 ). Fact Sheet : About Palm Oil. Available from http : /  / www.rspo.org / files / pdf / Factsheet-RSPO-AboutPalmOil.pdf. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

12 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Source: onVillage Initiative INVESTMENTS IN THE LIBERIAN OIL PALM SECTOR The oil palm sector in Liberia has received the highest Between these four concessions an approximate 81,000 committed amount of foreign direct investment in the direct jobs 25 are expected to be created and many thou- post-war years, totalling over US $ 6 billion from just the sands more are likely to be created indirectly.26 The invest- four biggest players – Sime Derby ( US $ 3.1 billion un- ments are almost entirely export focused and are clearly til 2025 ), Golden Veroleum ( US $ 2 billion until 2017 ), indicative of the importance of the sector to the future of Equatorial Palm Oil ( US $ 800 million until 2017 ) and export, and indeed the country itself. 27 SIFCA – Maryland Oil Palm Plantations ( US $ 20 million until 2015 ). The main investment in palm oil production is from an Indonesian company called Golden Veroleum. This com- pany is owned by the United States based Verdant Fund LP, whose sole investor is a Singaporean palm oil giant com- 25. Liberia National Investment Commission ( n.d. ). Concessions in pany called Golden Agri-Resources.24 Liberia. Available from www.nic.gov.lr / ?environment / concessions.html. 26. Republic of Liberia, Ministry of Planning and Economic Affairs ( 2011 ). Socioeconomic Achievements of the Government of Liberia 24. Richard Valdmanis ( 2013 ). Largest Liberian palm oil project 2006–2011. is failing locals : study. Reuters, 22 March. Available from : www. 27. Liberia’s gross domestic product for 2010 was approximately reuters.com / article / 2013 / 03 / 22 / us-editor-liberia-veroleum-palmoil- US $ 1 billion as per Ministry of Planning and Economic Affairs idUSBRE92L0Y520130322. statistics. CURRENT SECTOR OPERATIONS 13 CURRENT SECTOR OPERATIONS INPUTS Effective management of intensive oil palm production re- Concessionaires have tested business and production quires a wide variety of inputs including land, seedlings, models and depth in terms of financial, human and intel- labour, fuel, research and development, farm equipment, lectual property resources. These companies also have fertilizer, and pesticides. The local supply chain of input very sophisticated risk assessment and management suppliers is virtually non-existent in the oil palm sector (as processes, which is why these companies have commit- is the case for other agricultural sectors ). ted bigger and bigger investments since they began their relationships with Liberia, while other types of investors Most input supplies are imported through input importers have difficulty in putting money on the ground. These operating from within the country. The import communi- larger private players potentially form a market in them- ty is small and almost wholly foreign-owned ( Lebanese, selves as far as the smallholder economy is concerned. Chinese, Ghanaian or Indian ). So far the smallholder sec- tor has not been a commercially viable market for input Small-scale oil palm farming is typically undertaken with importers since the demand is far too sporadic to consti- minimal adoption of modern agronomic techniques, thus tute a steady and profitable market. Input importers will leading to much lower yields and efficiency. These small- influence the cost base of the sector to the extent that they scale farmers often harvest from wild forests or oversee change their outlook, either due to better engagement by small and intercropped plantations. Medium-to-large-scale GoL and the larger stakeholder community in the sector, plantations are more likely to adopt higher yielding plant or due to better organization and predictability of demand varieties and agronomic techniques (including fertilizers, from smallholders. pesticides and other technologies). These growers often depend on nurseries for access to high quality seedlings. PRODUCTION Many production methods are highly dependent on man- ual labour, with harvesting typically conducted by hand Oil palm trees begin producing approximately three years using a chisel, machete or sickle. Pest management in- after planting and can remain productive for roughly 30 puts are also critical to prevent damage by rodents, bee- years. In terms of climate, the crop requires consistent tles, weevils and other pests. Herbicides may also be rainfall and high heat units throughout the year in order required to prevent diseases such as stem rot, ganoder- to attain optimal yields. The crop should also be planted ma, etc. Fertilizer inputs including ammonium sulphate in deep, rich soils. Production techniques and activities and potassium chloride are also common to replace nutri- vary significantly depending on the scale of the plantation. ents lost from harvesting in intensive plantations. In terms of downstream processing, palm oil refiners require a As discussed earlier, existing players in the Liberian number of specialized inputs, particularly equipment such oil palm sector can be divided into small players work- as digesters, mechanical presses, storage tanks, trans- ing with Dura / Tenera, individuals playing various inter- portation equipment, etc. as well as other fundamental mediation roles / providing support services, and large inputs such as chemical solvents, fuel, water and labour. concessionaires. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

14 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 A non-existent extension system, the lack of any agro- DISTRIBUTION nomic research in the sector, the absence of a domestic inputs market and the near absence of any kind of agro- In terms of the informal cross-border trade ( ICBT ) sub- specific loan products are all serious challenges at this value chain, the red oil (transformed from FFBs) is packed stage of the value chain. into plastic (jerry) cans and transported by travelling inter- mediaries/‘market women’ in shared transport to regional (in-country hubs) and then later to counterpart traders from PROCESSING markets such as Sierra Leone, Guinea or Côte d’Ivoire. Palm fruit is typically processed in order to extract two dif- Related to the concessionaires’ sub-value chain, palm ferent types of oils : palm oil, which is extracted from the oil and palm kernel oil ( following processing ) can be fruit’s pulp ; and palm kernel oil, which is extracted from shipped to a domestic fractioning facility for further re- the fruit’s large inner seed. Palm oil and palm kernel oil finement or to wholesaler markets. Existing relationships are extracted using different methods. Currently, the bulk with wholesalers in Guinea and Sierra Leone enable ac- of processing activity in Liberia revolves around palm oil cess to large-scale purchasers. Liberian exporters also extraction, while palm kernel oil production is very limited. leverage networks in Monrovia in order to reach retail dis- tributors in international markets. Ultimately both palm oil Processing can take place using basic traditional tech- and palm kernel oil can be used in many food or non-food niques or more sophisticated methods and technologies. applications ( ranging from frying oil to processed foods, Following harvesting, the palm fruit is immediately trans- cosmetics, biofuels, etc. ). A growing movement towards ferred to the processing facility where it undergoes thresh- sustainable palm oil (e.g. RSPO) provides important value ing to remove individual fruit from bunches. Afterwards added opportunities for the sector but will also require the fruit undergoes sterilization in order to prevent enzy- strong coordination along the supply chain in order to matic degradation and prepare the pulp for digestion. The ensure adherence to strict standards. digestion process releases oil from the pulp in preparation for extraction using mechanical presses or leaching sys- tems. Finally, the oil is clarified ( filtering debris and sepa- MARKETS rating palm kernels ), dried, and packaged for shipment or storage. It is important to note that many ( but not all ) The smallholder value chain currently supplies to local waste by-products resulting from the palm oil and palm markets and ‘market women’ in ICBT or in semi-organized kernel oil extraction process have residual value, particu- export-to-niche diaspora markets. Market women some- larly as animal feed. times supply red oil to markets in Monrovia for local con- sumption and to small-scale exporters who then export The activity of bridging the farm to the first level market the oil to diasporas ( Liberian and other West African dias- gets compressed into one link by a conglomerate of in- poras ) in the United States, the Caribbean or the United termediary networks which are almost wholly dominated Kingdom of Great Britain and Northern Ireland. These by women, more specifically encapsulated by the popu- overseas connections tend to be made via family or oth- lar Liberian nomenclature of ‘market women’. The term is er secondary networks where both parties can establish used variously to describe the first level buyer at the farm trust based on tribal, clan or community affinities. gate level ; the secondary level aggregator who can pro- vide basic warehousing / post-production handling ser- In the case of the cross-border consumer, Liberian red oil vices including packaging ; the cross-border trader on clearly has a competitive advantage for reasons of physi- the Liberian side who acts as the intermediary who is cal and culinary proximity ( Guinea, Sierra Leone ) and at- responsible for making the border crossing ; and finally tributes ( superior taste ) in other neighbouring markets. In the cross-border contact on the other side of the border, the medium and long terms there is no reason why there who might set up her own stall at a local market on the could not be a shift in preferences based on other attributes other side of the border, travel into a third country herself, such as longer shelf life, better packaging/branding or the or sell to another intermediary. like in favour of CPO from other countries such as Sierra Leone or Côte d’Ivoire as this market grows and matures. Figure 4 : Current value chain of the Liberian oil palm sector Inputs Production Transformation and Processing Distribution Exports Markets Nursery Mechanized Household buyer Labour Foreign owned large Management, Harvesting, and B2B buyer TNC -end (conventional): scale concessions planting, stoking product: processed Supermarkets/ EU 27 maintenance Oil Clasification Dying/ Concessionaire insourced Inhouse refering/ foods, cosmetics, plastics Other retailer export-int transfer princing Sterilization Fult digestion PRIMARILY SOURCED Pulp Pressing Fuel fractioning facility Bunch Treshing FROM CONCESSIONAIRES Household buyer Packaging (conventional): Small/medium-sized US Mech mills holdings Manual TENERA tree stocks from Harvesting, the 70s/80s (farms with Basic maintenance Liberian Cross-border transfer to drying International Buyer Industriel Food Grade trader Distributers/retailers/ End consumers: Heavy machinery declining yields, Wjollesaller in Nrekere Manual rock lined pit yard Liberia exporter mechanical mills) Via. Ganta (Guinea)/Foya Guekedou Macenta caterers/boutiques Guinea, Mali / Senegal Teneva CPO Drying/ (Sierra Leone) Bunch reception Labour extraction and separation Packaging Fuel IMPORTED Naturally occuringg Just-in-time Diaspora importer harvesting wild Freedom Mill Mechanical Liberian exporter, red light Distributor Retailer DURA variety (secondary Bunch Bollin/Cooking Sterilization/Digestion Fertilizers markets, Monrovia forest) grove hand picking Food grade DURA CPO - Speciality/ethnic retailers/ End consumers (West Africa) Pulp pressing/Oil restaurants/caterers Supplier for traditional CPO production extraction skimmed & packaged International Component of Value Chain Primary Supporting Services Training centers Research and Development Re-packaging NGO services Distributionn services Post harvest facilities Maintenance and parts Export finance Marketing services Market and policy Analisis Market, demand on price Market intelligence Sector association Warehousing facilities Business service providers Packaging Re-packaging information services Meteorological services Pest and disease control Quality control and certification Local customs Inspection services Inspection services Maintenance and parts Harvesting information Research and development Investement Promotion Foreign customs Marketing services Diaposal services Transportation services Extension services support Access to finance - input/trade Source: Stakeholder consultations and desk research. CURRENT SECTOR OPERATIONS 15 Source: onVillage Initiative GLOBAL MARKETS–A SNAPSHOT 17 GLOBAL MARKETS–A SNAPSHOT GLOBAL TRENDS to be 55.4 million tons in 2013/2014. The forecasts of glob- al consumption are balanced by expected lower levels in The production of palm oil has grown exponentially over the EU and Indonesia, but expected increased consump- the last 50 years. Palm oil production has remarkably in- tion in other countries (mainly the Russian Federation).30 creased from 1.5 million tons in 1961 to over 48 million tons in 2011 28 and approximately 55 million tons in 2013. Prices of palm oil have always been characterized by high However, a deceleration is expected for global output in volatility, influenced by supply and demand changes, 2013/2014. Forecasts indicate a growth rate of global out- price of competing vegetable oils, weather ( e.g. El Niño ) put of only 3.5 %, the lowest since late 1990s. 29 This is and import policies of importing countries, among other partly explained by the slowdown of the growth in mature factors.31 After reaching a peak in 2008 of approximately palm oil areas caused by the replacement of older trees. US $ 1,200 per ton, CIF NW Europe, prices dropped in line with the prices of other commodities during the finan- The impressive growth trend of production has been driv- cial crisis to below US $ 600 per ton in the second half of en in the last years primarily by Asia, i.e. Malaysia and 2008. Palm oil prices have been recovering since then, Indonesia. However, until 1970 palm oil was mainly pro- although the forecasts for 2014 indicate a drop to below duced in Africa, which steadily decreased its share of world US $ 800 per ton. Meanwhile, stocks are estimated to be production from 76% in 1961, to 55% in the 1970s, to below around 11 million tons at the end of season 2012 / 2013, 20% in the 1980s, to only 5% between 2008 and 2011. On and are expected to increase to approximately 14 million the other hand, global consumption of palm oil is expected tons in 2014 / 2015.32 28. UNCTAD ( 2013 ). Palm oil, with all of its comparative advantages, is the queen of oils. Available from : 30. Ibid. www.unctad.info / en / Infocomm / Agricultural_Products / Palme / Market / . 31. Oriental Pacific Futures ( n.d. ). 5 Factors That Affect Crude Palm Oil 29. Economist Intelligence Unit ( 2013 ) World Commodity Forecasts ( CPO ) Prices. Available from : www.opf.com.my / blog / 5-factors-that- Food Feedstuffs and Beverages – Main Report December 1st, 2013. affect-crude-palm-oil-cpo-prices / . Available from http : /  / viewswire.eiu.com / index.asp?layout=VWArticle 32. Economist Intelligence Unit (2013). http:/  /www.eiu.com/industry/ VW3andarticle_id=221268406. commodities / article / 1971326581 / palm-oil / 2013-12-11 Figure 5 : Palm oil stocks and prices, 2005–2015 Palm oil: stocks and prices Closing stocks (m tonnes); left scale Prices cif NW Europe (US$/tonne); right scale 16,000 1,600 14,000 1,400 12,000 1,200 10,000 1,000 8,000 800 6,000 600 4,000 400 2,000 200 0 0 2005 06 07 08 09 10 11 12 13 14 15 Source : Oil World ; Economic Intelligence Unit THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

18 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Table 3 : Major importers of palm oil Trade indicators Importers Value imported Annual growth in value Annual growth in value Share in world in 2012 ( US $ 2008–2012 ( % ) 2011–2012 ( % ) imports ( % ) thousands ) World 40 708 369 13 1 100

1 India 7 896 374 35 17 19.4

2 China 6 502 236 9 -2 16

3 Netherlands 2 749 623 11 50 6.8

4 Pakistan 2 131 602 12 -9 5.2

5 Malaysia 1 704 963 35 -12 4.2

6 Germany 1 328 139 6 -2 3.3

7 United States 1 097 029 7 -14 2.7

8 Italy 1 079 825 13 7 2.7

9 Bangladesh 950 076 12 -10 2.3

10 Singapore 877 026 35 15 2.2 Source : ITC Trade Map. Figure 6 : Imports of palm oil by region ( 2012 )33 Europe Africa 23,32% 8,76% Oceania 0,40% North America 2,93% LAC 3,41% Asia 61,18% Source : ITC Trade Map 33. North America excluding Mexico. GLOBAL MARKETS–A SNAPSHOT 19 MAJOR IMPORTERS high food price inflation and a weak rupee. The estimat- ed consumption is 8.6 million tons for 2013 / 2014 and 9.1 Palm oil and its derivatives are mainly used for human million tons for 2014 / 2015.36 On the other hand, China consumption, e.g. vegetable fat, ice cream, margarine. is expected to continue its consumption growth, mainly Generally, the other main uses for palm oil have been in driven by population and economic growth and increased the oleochemical industry, e.g. soaps, detergents, but it consumption of instant noodles, a product that uses palm is being increasingly demanded for the biofuel industry, oil in its composition.37 e.g. biodiesel and an alternative to mineral oils for use in power stations.34 The EU market for palm oil presents slow growth ex- pectations as the result of its increasing use in the en- Palm oil is known to be the most traded oil in the world. ergy sector, primarily by Netherlands, Italy and Spain. Nearly 90 % of total palm oil production is traded.35 The Nonetheless, palm oil is facing competition from other world market for palm oil stood at over US $ 40 million in types of oil in the food sector, which has lowered expec- 2012. This value represents an annual growth rate of 13 % tations for its consumption in the EU market.38 of imports between 2008 and 2012, but only 1 % growth of imports between 2011 and 2012. The main importer of palm oil is India with a 19.4 % of share of world imports, MAJOR EXPORTERS followed closely by China with 16 %. The main exporting region of palm oil is Asia, since The regional distribution of palm oil in terms of consump- the two major exporters of palm oil are Indonesia and tion is primarily concentrated in Asia ( 61 % ), followed by Malaysia, which combined represent 86 % of the share in Europe ( 23 % ) and Africa ( 8 % ). world exports. An important remark is that Malaysia pre- sented a considerable drop ( 12 % ) in its annual growth India has slowed down its imports of palm oil as a result rate in value between 2011 and 2012. Liberia is the 57th of expectations of increased local oilseed production, main exporter of palm oil. Its annual growth rate in value was 24 % between 2011 and 2012. 34. UNCTAD ( 2013 ). Palm oil, with all of its comparative advantages, is the queen of oils. Available from : www.unctad.info / en / Infocomm / Agricultural_Products / Palme / Market / . R.E.A. Holdings ( 2013 ). Markets-Oils and Fats : Uses of Palm Oil. Available from : www.rea.co.uk / rea / en / markets / oilsandfats / palmoilproduction. 36. Economist Intelligence Unit ( 2013 ). http : /  / www.eiu.com / industry / commodities / article / 1971326581 / palm-oil / 2013-12-11 35. UNCTAD ( 2013 ). Palm oil, with all of its comparative advantages, is the queen of oils. Available from : www.unctad.info / en / Infocomm / 37. Ibid. Agricultural_Products / Palme / Market / . 38. Ibid. Table 4 : Major exporters of palm oil Trade indicators Exporters Value exported Annual growth in Annual growth in Share in world in 2012 ( US $ value 2008–2012 value 2011–2012 exports ( % ) thousands ) ( %) ( %) World 38 180 115 11 -5 100

1 Indonesia 17 602 168 13 2 46.1

2 Malaysia 15 439 766 11 -12 40.4

3 Netherlands 1 510 386 2 -13 4

4 Papua New Guinea 506 652 -19 1.3

5 Thailand 306 231 13 -23 0.8

6 Ecuador 300 915 18 0 0.8

7 Germany 297 173 10 -2 0.8

8 Honduras 290 041 10 78 0.8

9 Guatemala 252 439 18 17 0.7

10 Costa Rica 196 286 18 -3 0.5 … 57 Liberia 2 042 90 24 0 Source : ITC Trade Map. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

20 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Table 5 : Liberia’s export performance Trade indicators Importers Exported value Share in Exported Exported growth Exported growth

2012 ( US $ Liberia’s quantity 2012 in value 2008-2012 in value 2011-2012 thousands ) exports ( % ) ( % p.a. ) ( % p.a. ) Total 2 042 100 2 123 90 24

1 Portugal 1 202 58.9 1 237

2 United States 459 22.5 553 20 87

3 Cameroon 280 13.7 233

4 France 53 2.6 38 8

5 Sweden 36 1.8 32 60 350

6 Australia 12 0.6 30 33 Source : ITC Trade Map. Indonesia is expected to expand its mature palm oil area markets in Nimba county. Liberia serves both as a in spite of the forest moratorium ( 2011-2013 ), recently ex- substantial supplier and important conduit, especially tended to 2015. According to the Economic Intelligence for supplies ( though much smaller ) from Sierra Leone. Unit, output growth in Indonesia was expected to slow ƒƒ Between 2012 and 2013 the price per gallon of palm oil in 2013 / 14 as a result of tree stress following the recent presented significant increases ( indicated in Figure 7 ) strong yield increases. A higher output is expected in that can be partially explained by the reasons stated 2014 / 2015, since oil palm trees require three years to below : reach maturity stage.39 –– ICBT. This has an impact on palm oil price increases; –– High transport costs. Transport costs also influ- On the other hand, Malaysia is expected to decelerate its ence the increase of prices ; output as a result of limits to mature areas being added. –– High potential. Although Liberia’s exports are main- Moreover, there are concerns among Malaysian export- ly dominated by rubber, there is high potential and ers related to the removal of the Generalized System of expectations of the growth of a big palm oil industry, Preferences. This would take place at the end of 2013. If representing an important source of employment this is the case, it is expected that there will be a shift to- generation. wards Indonesian imports.40 ƒƒ Liberian exports of palm oil are marked by low surviv- ability rates, as indicated by Figure 8. The probability of export relationships lasting after the first year is ap- EXPORT PERFORMANCE proximately 35 %. The probability further falls by about 20 % in both the second and third years, and to about Liberia maintains a very small share of the total world 10 % by the beginning of the fourth year. exports of palm oil. Nevertheless, it has been presenting ƒƒ There is a large unmet domestic demand for palm oil in important increases of exported growth in value between Liberia, and indeed throughout the broader ECOWAS 2008 and 2012 ( 90 % ). The top three markets for Liberia’s region. In 2012, nearly US $ 30 million of palm oil ( and palm oil are Portugal, the United States and Cameroon ; its fractions ) was imported, primarily from Indonesia although the country’s exports are highly concentrated in ( which constituted the bulk of these imports ) and the Portuguese market ( 58.9 % ). Malaysia. The trade balance, heavily skewed towards imports, is indicated in Figure 9. Imports are growing at a much MAIN TRENDS IN LIBERIAN higher rate than exports. The deficit constitutes an im- portant opportunity for Liberian SMEs in the form of PALM OIL EXPORTS imports substitution in the short term, which would al- ƒƒ There is clear evidence that ICBT is currently the most low them to build supply consistency /quality levels un- important market for the Liberian smallholder ( Dura ) til they are capable of developing sustainable export value chain. Red oil also goes out of Liberia via Foya relationships. into Sierra Leone and into Côte d’Ivoire out of border 39. Ibid. 40. Ibid. GLOBAL MARKETS–A SNAPSHOT 21 Figure 7 : Price per gallon of palm oil in Liberian dollars by market ( September 2012–September 2013 ) Figure 3: Price of 1 gallon of palm oil in Liberian Dollars (September 2012-September 2013) Sep - 12 Sep - 13 650 550 450 350 250 150 50 ide an ya ga bo ht ea wn rg a ru rs an Fo rn ee Lig lep To bu nj am ed at e uc h Gb a Pl ed c an oi Zw B R Sa T oe bm V -W Tu Bo Source : WFP ( 2013 ) 41 Figure 8 : Survivability of export relationships in the Liberian palm oil sector Export Relationships - Priority Sector Palm oil Survival Rate 2002-12 1 8 Probability of Survival 6 4 2 0 0 5 10 Year Source : ITC calculations based on COMTRADE SITC Revision 3 data. 41. WFP ( 2013 ) Liberia Market Price Monitor, Volume 29, Issue September 2013. Available from http : /  / reliefweb.int / sites / reliefweb.int / files / resources / Liberia %20Market %20Price %20Monitor %20No. %2039.pdf. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

22 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Source: onVillage Initiative Figure 9 : Trade balance in the Liberian palm oil sector Exports & Imports Exports Palm oil priority sector Imports LBR Trade Balance 0 US Dollars, Millions -10 -20 -30 01 02 03 04 05 06 07 08 09 10 11 12 20 20 20 20 20 20 20 20 20 20 20 20 Source : ITC calculations based on COMTRADE SITC Revision 3 data. COMPETITION IN TARGET occurs within the market share of Indonesia’s exports of MARKETS palm oil. For Indonesia, India represents 27.5 % and China represents 14.8 % of the total Indonesian palm oil exports Malaysia’s greatest importer of palm oil is China, followed to the world. Both Malaysia and Indonesia primarily ex- by India. They represent 17.4 % and 15.3 % of Malaysian port palm oil as ‘palm oil and its fractions refined but not palm oil exports to the world. Meanwhile, the opposite chemically modified’. COMPETITIVENESS CONSTRAINTS 23 COMPETITIVENESS CONSTRAINTS The four gears framework presented below determines Border-In Issues Border Issues the major constraints – within the country as well as out- side – to export development and ways to overcome them. Capacity Cost of ƒƒ Supply-side issues affect production capacity and Development Doing Business include challenges in areas such as availability of d ls an kil hip appropriate skills and competencies ; diversification g s rs ini neu Di Ca ve pa re rm ctu efo Fa Trad lop re rs ci tru R cil e capacity; technology and low-value addition in the sec- ve rep ifi ty es r y ita ca ra ato tio De Ent tio n Inf egul n d tor’s products. This group of issues is also referred to an R as the border-in gear. Poverty Alleviation Market Access ƒƒ The quality of the business environment includes and Gender Issues and Policy Reform issues that influence transaction costs, such as reg- n me n ulatory environment; export procedures and documen- lop eve ion E Su nvir s o Cli taina nme mo tio Tra d l D rat ro ing Se e Su ma bi nta l P nd tation ; infrastructure bottlenecks; certification costs; na eg gio Int te lity l Ch an na ra tio d B r vi pp ce or t s R e and an d ge Na an Internet access and cost of export credit insurance. t These constraints are grouped together and classified as the border gear. Development Issues Border-Out Issues ƒƒ Market entry issues include questions of competitive- ness that are essentially external to the country ( but Addressing these above categories would exhaustively re- may also be manifested internally ), such as market solve most major competitiveness bottlenecks. However, access; market development; market diversification for an export strategy to be sustainable, it out to make the and export promotion. These are referred to as the greatest socioeconomic impact. Issues that have a pro- border-out gear. found impact on people’s lives need to be addressed in the NES design initiative. ƒƒ Social and economic concerns include poverty reduc- tion, gender equity, youth development, environmental sustainability and regional integration. These develop- mental concerns form the development gear. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

24 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Box 1 : The border-in gear ( supply-side issues ) ƒƒ Severe human capital challenges in the sector. ƒƒ Proper land usage needs to be ensured. ƒƒ Inefficient processing practices lead to a high rate of spoilage and adulteration. ƒƒ Entrepreneurship activity in the sector needs to be boosted. ƒƒ Lack of capacity diversification makes Liberian exports of palm oil vulnerable to global price fluctuations. ƒƒ Fragmented and inaccessible production sites affect productivity. Severe human capital challenges in the sector ƒƒ Welders ƒƒ Plumbers Overall, the oil palm sector, and indeed the whole country, ƒƒ Marketing professionals have significant human capital challenges. The long civil ƒƒ Packaging specialists. conflict and the forced recruitment of children and young people into active combat meant that a whole generation of Liberians missed primary schooling and / or the possi- Proper land usage needs to be ensured bility to get vocational, professional or technical training of any sort. The TVET apparatus is critically fragmented and In agronomic terms, the preferred conditions for growing suffers from a serious lack of infrastructure, funding, fac- oil palm in Liberia are along the coast, where the major- ulty and support staff, updated course content and so on. ity of the naturally occurring oil palm exists and where all the new mega concessions are located. However, for The conflict also resulted in widespread migration and various reasons mentioned earlier, several of these GoL- brain drain, including in the oil palm sector. Liberia is still owned plantations are situated in areas that are more one of the top 10 countries in the world in terms of emigra- suited for crops such as cocoa, coffee or rubber. This is tion of individuals with tertiary university education at over another consideration that GoL will need to keep in mind 45 % of total graduates and post-graduates. while making any decisions on redevelopment of these properties. The human capital challenge cuts across the public, pri- vate and not for profit sectors. While the civil service has This is especially true for the Tenera variety which was benefitted from programmes such as the United Nations’ promoted and planted at a high rate in the 1970s. The Transfer of Knowledge Through Expatriate Nationals, stock is now largely in disrepair and fast reaching the end there are substantial shortages even here to be able to of its productive life. As a result, careful thought must be provide the minimum level of institutional support to pro- given to whether these old Tenera plantations should be ductive sectors. The oil palm sector, as others do, faces a replanted at all or be selectively phased out into other severe challenge in terms of institutional support. Oil palm more suitable uses – e.g. community-based agro-forestry. being one of the fastest growing sectors in the country, the shortage is anywhere between 30,000 – 40,000 workers Dura production is either from palms growing in the wild ( till 2030 ) with all kinds of skills including : or from private gardens and smallholder farms. There is very little management or maintenance of tree stock, or ƒƒ Fertilizer scientists planning in terms of sustainable yields. ƒƒ Irrigation engineers ƒƒ Farmers / cultivators Inefficient processing practices lead to a high ƒƒ Seed scientists ƒƒ Agro-economists rate of spoilage and adulteration ƒƒ Agronomists ƒƒ Machinists As discussed earlier, the process involved in processing ƒƒ Factory workers the Dura variety is characterized by inefficiencies. The ƒƒ Refrigeration and preservation specialists FFBs are brought down, boiled, washed, mashed, me- ƒƒ Mechanical engineers chanically filtered and the oil is finally manually skimmed. ƒƒ Chemical engineers This process is fraught with inefficiencies and dangers of ƒƒ Civil engineers spoilage and adulteration. Various reports from FAO and ƒƒ Landscape architects MoA suggest that wastage is extremely high, amount- ƒƒ Electricians ing to 50 % during harvest and a further 35 % during COMPETITIVENESS CONSTRAINTS 25 production. This completely manual system also results This 100 % focus on CPO makes the sector vulnerable to in a short shelf life as well as the quick build-up of free world commodity price cycles. Diversification is therefore fatty acids. an imperative. Dura production and processing processes are the ex- Fragmented and inaccessible production sites act same process that have existed since the early days of palm oil production in Liberia. Of the less than 50 % of affect productivity Dura production that gets harvested, only 35 % gets con- verted to CPO, primarily as a result of wastage and inef- Producer level limitations such as the sheer remoteness, ficiencies in the processes employed. inaccessibility, and small unit-size of most landholdings constrain possibilities to increase productivity and invest- ment in the oil palm sector, as in all other agricultural sec- Entrepreneurship activity in the sector needs tors in Liberia. to be boosted Access to finance is challenging A culture of entrepreneurship in general has effectively been undermined by decades of forced inaction, not from for smallholder farmers the point of view of the smallholder producer/SME export- er but more from the point of view of the institutional lend- The existing network of commercial banks is limited to the er / regulator / support institution. The urban middle class Monrovia region, which leaves out smallholders in the rest that runs the establishment is mostly unfamiliar with or of the country. Banks are also unwilling to accept land in unresponsive to activity in the smallholder space. Liberian rural areas as collateral due to liability issues in case there entrepreneurship is alive and well, albeit constricted to the is a need for foreclosure of defaulting accounts. Even in SME space. This is the entrepreneurship that the oil palm Monrovia, access is also restricted for smaller players who sector should harness to catalyse rapid change. are often unable to meet minimum collateral requirements or demonstrate creditworthiness. Commercial banks are also hesitant to issue loans spanning 10-15 years, which Lack of capacity diversification makes Liberian is the typical amount requested by agricultural operators. exports of palm oil vulnerable to global price fluctuations Depending on the type of lender approached, the costs of borrowing vary. Microfinance institutions, which are ac- Almost 50 % of the country’s palm oil exports in the last tive in rural areas, are able to lend at lower standardized few years have consisted of red oil ( CPO from Dura ). The rates, while other private party lenders can be exploita- other 50 % is also CPO, though industrial grade. Given tive, providing loans at exorbitant rates. Most farmers rely the perishability of FFB, CPO is the absolute first level on ad hoc financial mechanisms provided by marketing value addition that can take place in palm oil production. agents ( merchants ). Box 2 : The border gear ( business environment issues ) ƒƒ Access to finance is challenging for smallholder farmers. ƒƒ The country’s institutional structure is weak. ƒƒ An efficient business services network is needed. ƒƒ There is a need to spur infrastructure improvements, especially in the transportation sector. ƒƒ Lack of statistical information in the sector prevents effective decision-making. ƒƒ Infrastructure in border areas needs to be improved. ƒƒ Improvements are needed to align MoCI processes to Automated System for Customs Data ( ASYCUDA ) systems. ƒƒ LACRA’s capacity to cater to the oil palm sector must be increased. ƒƒ Short-and medium-term costs – including opportunity costs – involved in developing certification capabilities in the sector must be considered. ƒƒ The out-grower model needs to be reviewed for inefficiencies. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

26 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Access to credit is not just a supply-side issue. Enterprises Business support in terms of mill manufacture, mainte- seeking credit in the oil palm sector are unable to demon- nance, extension provision, inputs provision, credit ser- strate adequate levels of creditworthiness due to reasons vices intermediation, logistics and transport, cross-border both within and outside their control. Small-scale export- forwarding, packaging services provision and so on will ers are unable to secure firm orders from clients that they need to be strengthened. can present to banks. Additionally, the historic distrust of the banking system has prevented the majority of rural There is a need to spur infrastructure improve- Liberians from opening a bank account, which further prevents lending officers from gauging the risk levels as- ments, especially in the transportation sector sociated with loan applications. Liberia has some of the highest transport costs in the world. For example, it costs more to transport a container The country’s institutional structure is weak from Monrovia to Greenville – a 150 km ride – than it does to transport the same container from East Asia.42 While There is overall overlap in the different categories of insti- this is an issue of infrastructural development, it is also an tutions in the country, whether institutions that provide pol- issue of modernization of fleets and of investment. icy, trade or business support, or civil society players who play an important role in sector development, or other Lack of statistical information in the sector agencies. The current debilitation of the institutional struc- ture is in part a result of the systematic destruction caused prevents effective decision-making by the many years of violent civil conflict and in part the legacy of the political economy of pre-war years when There is a comprehensive lack of information in the sec- Liberian society was largely still based on entitlements. tor related to existing tree stock and its current status in terms of estimated years of productive age left etc. This The scope and quality of the extension services’ service information is required to conduct effective future plan- delivery is poor. The ‘thinness’ in the support environ- ning for the sector, including decisions on replanting etc. ment is not just in terms of the number of such services A proper survey of the Dura / Tenera tree stock ; a Global that are available but also the level of service that they Positioning System ( GPS ) mapping of the location of the offer when they do exist. There is a near complete lack groves, their density and their proximity to primary for- of extension support at the producer level. The concept est areas / sacred lands ; and a productivity analysis of of Farmer Field Schools, an approach that centres cur- the existing tree stock will help plan harvest in a manner riculum design and learning in the field, has been shown that mitigates the current ad hoc harvest procedure that to be effective in the cocoa sector in Liberia. Large-scale results in a nearly 50 % wastage already at harvest stage. replication across sectors will take concerted coordinated A detailed GPS survey is also imperative to make any action by the international community and, more impor- large-scale changes or investments. tantly, by local government. Infrastructure in border areas needs An efficient business services network is needed to be improved In the absence of a functional business support services Given that CPO trade volumes are as much as 90,000 li- network even in the capital region, the oil palm sector tres per week out of Ganta alone and destined for nearby needs active everyday support to function in a market- markets such as Nzérékóre and farther markets such as driven and professional manner, to allocate resources Dakar, infrastructural improvements along selected hubs strategically, and upgrade production and processing will result in closer economic ties in the subregion. techniques and use better practices and technologies. This function is being / was performed by various civil so- Improvements are needed to align MoCI ciety alliances (such as Winrock International), institutions ( such as the International Institute for Tropical Agriculture processes to ASYCUDA systems ( IITA ) ), or by programmes such the USAID-sponsored Freedom Mill Project. The creation of a functional busi- There is a clear opportunity to streamline customs and ness support sector will require some time – possibly be- other border processes by aligning all line ministry pro- tween 5 and 10 years. This, however, is a process that cesses with ASYCUDA World and by aligning systems must be managed so as to incentivize the formation of across the Mano River Union subregion, for instance an ecosystem that can service the particular needs of the ( countries that also happen to be part of the ASYCUDA Liberian economy in practical and result-oriented ways. network ). This would immediately simplify procedures 42. Key informant – General Manager, Golden Veroleum Liberia Inc. COMPETITIVENESS CONSTRAINTS 27 and reduce opportunity for human error and illegal ac- tivity based on opaque systems – the way they are now. Box 3 : The border-out gear LACRA’s capacity to cater to the oil palm sector ( market entry issues ) must be increased ƒƒ Inadequate utilization of the high market access While MoA and MoCI have overall responsibility to set available to the sector. policy direction in agriculture and trade at the highest ƒƒ Lack of access to trade information in the sector. level, LACRA has been handed the responsibility, via Presidential Decree, of being both policymaker at an op- erational level and fulfilling discretionary services as a tier 2 trade support institution. LACRA needs substantial Box 4 : The development gear assistance, both technical and financial, to fulfil this brief. Especially with oil palm, given the complexity of the sec- ( development issues ) tor – straddling ultra-modern plantations and forest based red oil production, and the pace and scale of change – ƒƒ Women actors need to be supported across the LACRA will need to ramp up its ability to monitor, regulate ICBT value chain. and support the sector dramatically. ƒƒ Lax environmental waste management regulations are leading to detrimental effects on the environment. Short-and medium-term costs – including opportunity costs – involved in developing certification capabilities in the sector must be considered There is a strong business case for pursuing certifica- Inadequate utilization of the high market tion in the oil palm sector that ensures that environmental access available to the sector considerations are integrated in the production process. Liberian enterprises in the sector have been unable to However, this involves significant resources that must be capitalize on the high level of market access available to invested. This is not an easy decision at the policy level them. There is significant opportunity to enter these mar- given that resources are stretched thin. kets, provided that the sector is able to build up levels of supply consistency, quality and value added products. While the demand for CPO for both industrial and direct consumption uses is robust, the demand for certified CPO Lack of access to trade information in the sector is growing at a slower pace. However, this may be bal- anced through increased exports to countries such as Switzerland that are currently closed off to small/medium- Along with the logistical and financial challenges that sized operators due to non-certified status. Trade-offs in prevent potential exports from expanding their scope to terms of revenue cuts in favour of sustainability and long- international markets, operators lack reliable and timely term growth in specific volume and niche markets must trade information. The comprehensive lack of trade in- be examined in significant detail. formation within the palm oil exporting base is primarily driven by the prominence of the concessionaire model. Concessionaires have well-established export relation- The out-grower model needs to be reviewed ships and access to updated trade information. Since for inefficiencies concessionaires are the main customer base for local producers, the need for updated trade information has The out-grower support scheme is fraught with longer- largely been reduced. However, as capabilities across the term issues such as unclear land titles and the complete value chain improve, access to efficient and timely trade lack of an extension system. This results in most commu- information will be an important requirement. nity members preferring employment rather than risking entrepreneurship. There is a crucial need to review this model and identify opportunities for improvements. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

28 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Source: © Lian Pin Koh Women actors need to be supported across Lax environmental waste management the ICBT value chain regulations are leading to detrimental effects on the environment CPO is a major ICBT commodity that connects actors across at least three countries : Liberia, Sierra Leone and There is currently no requirement under Liberian law spe- Guinea. Women overwhelmingly dominate ICBT at the cifically mandating recycling of agricultural production operational level. Their needs are of two kinds : a ) issues waste. As a result, large-scale open waste disposal is that all SMEs in Liberia face of the many operational inef- common, including in the oil palm sector. ficiencies that have been detailed before and b ) issues that they face especially as women, whether they are re- lated to harassment by respective government agencies on both sides of borders, issues related to personal secu- rity, or issues of gender-based violence. Women also face challenges in dividing time between competing priorities in family care and duties outside the home. WHERE WE WANT TO GO 29 WHERE WE WANT TO GO The following vision has been developed towards the goal of increasing the export competitiveness in the Liberian oil palm sector : “ To establish the Liberian palm oil sector as a leading contributor to the national economic ” transformation agenda through exports development in an inclusive and sustainable manner. The vision statement for the sector was developed as a MARKET AND STRATEGIC OPTIONS result of in-depth consultations with a wide range of stake- holders representing GoL, the concessionaire economy, As indicated in the introduction, the envisioned future the smallholder economy, input importers and manufac- state of the sector has been developed using a combi- turers, and providers of logistics and other critical support nation of consultations, surveys and analyses. This future services. This vision reflects the comprehensive scope of state consists of two components : the strategy and its strategic intent to transform the sector such that it will be an engine of inclusive growth, a vehi- ƒƒ Structural changes to the value chain that result in ei- cle for greater regional integration, and a promoter of the ther strengthening of linkages or introduction of new Made in Liberia brand in markets. structural linkages ; and ƒƒ A market-related component involving identification The scope for improvements in the oil palm sector is im- of key markets in the short and medium-to-long terms mense and extends along the value chain. In some cases for exporters. it involves strengthening existing linkages, while in other areas structural modifications to the sector are required. Market identification was based on a combination of trade Both these types of improvements must lead to mar- analysis conducted by ITC for identifying potential target ket penetration ( increasing exports in existing markets ), markets and consultations with sector enterprises. Both product development ( increasing exports of new prod- short-term and medium-to-long-term target market op- ucts in existing markets ), market development ( increas- tions are assessed. The projected structural changes to ing exports of existing products in new markets ), and the sector are based on efficiency gains identified through full diversification ( increasing exports of new products in the four gears analysis of the sector’s performance and new markets ). through the identification of opportunities for improving the sector’s capacity to acquire, add, create, retain and This envisaged future state of the oil palm sector is dis- distribute value. cussed in greater detail below. Figure 10 indicates the proposed future value chain for the sector. 30 Figure 10 : Future value chain 15 6 8

2 Inputs Production Transformation and Processing Distribution Exports Markets Nursery Household buyer Foreign owned large Management, Mechanized B2B buyer TNC -end (conventional): Labour planting, Harvesting, and product: processed scale concessions EU 27 stoking Oil Clasification Dying/ Concessionaire insourced foods, cosmetics, plastics Supermarkets/ maintenance Inhouse refering/ PRIMARILY SOURCED Other retailer export-int transfer princing FROM CONCESSIONAIRES Sterilization fractioning facility Fult digestion Pulp Pressing Bunch Treshing Fuel Household buyer Packaging (conventional): US Small/medium-sized 9 Mech mills holdings Manual Basic TENERA tree stocks from Harvesting, maintenance Liberian Cross-border the 70s/80s (farms with transfer to drying THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY Manual rock lined pit Industriel Food Grade yard trader Wjollesaller in Nrekere International Buyer Distributers/retailers/ End consumers: declining yields, Heavy machinery Via. Ganta (Guinea)/Foya Guekedou Macenta Liberia exporter caterers/boutiques Guinea, Mali / Senegal mechanical mills) Teneva CPO Drying/ (Sierra Leone) Bunch reception extraction and separation Labour Packaging End consumers Fuel Speciality/ethnic retailers/ Just-in-time (West Africa) Naturally occuringg restaurants/caterers IMPORTED DURA variety (secondary harvesting wild Freedom Mill Mechanical forest) grove hand picking Liberian exporter, Bunch Bollin/Cooking Sterilization/Digestion Fertilizers Food grade DURA CPO - Diaspora importer red light Pulp pressing/Oil markets, Monrovia Distributor Retailer Distributers/retailers/ End consumers caterers/boutiques Sahel countries Supplier for traditional CPO extraction skimmed & packaged Distributers/retailers/ End consumers production caterers/boutiques ECOWAS countries Smallholder sourced Product diversification - PALM KERNAL OIL, REFINED OIL, SOAP MANUFACTURING products to wholesale End consumers in US/EU27 Primary Supporting Services distributers CPO to wholesalers/ End consumers/industry

1 Training centers distributers/direct to

7 Research and Development Re-packaging in India industry OIL PALM SECTOR EXPORT STRATEGY 2014-2018 CPO to wholesalers/ End consumers/industry NGO services Distributionn services Post harvest facilities Maintenance and parts Export finance Marketing services distributers/direct to in China industry International Component of Value Chain Market, demand on price Market intelligence Sector association Warehousing facilities Business service providers Packaging information services

5 Market and policy Analisis Meteorological services Pest and disease control Quality control and certification Inspection services Local customs Re-packaging Maintenance and parts Harvesting information Research and development Investement Promotion Foreign customs Inspection services 13 Transportation services Marketing services Diaposal services 3 Extension services support 14 Access to finance - input/trade Source: Sector consultations. WHERE WE WANT TO GO 31 STRUCTURAL CHANGES Given the extremely low base from which the country is starting, this can mean importing everything from labour TO THE VALUE CHAIN to inputs to support services in logistics, finance, testing, 1. Improved human capital in the sector compliance certification and others. While these imports in principle do amount to value leakage, as in value that The sector will have important human capital needs in could potentially have been generated through activity the near future. Industry requirements amount to between performed in Liberia by Liberians and Liberian firms, it 50,000 and 60,000 workers (skilled and semi-skilled) until would appear that import substitution could be the long- 2030; jobs that are well paid, sustainable in the long term, term solution to this overall problem. Therefore, the strate- and will add significantly to the country’s stock of produc- gy will propose steps to develop an efficient inputs supply tive knowledge and contribute substantially to effectively chain that will reduce the dependency on imported inputs creating a small but significant percentage of the Liberian and bring down operational costs. middle class. The following human capital areas have been identified by the National Capacity Development 3. Development of an efficient extension Strategy : services network ƒƒ Fertilizer scientists ƒƒ Irrigation engineers Given the weak status of the extension services network ƒƒ Farmers / cultivators ( both public and private ) across the agriculture sector ƒƒ Seed scientists in general, efforts will focus on building the capacity of ƒƒ Agro-economists the MoA extension services division through a compre- ƒƒ Agronomists hensive gap assessment and consequent interventions ƒƒ Machinists aimed at strengthening the services. Efforts will also focus ƒƒ Factory workers on developing a private sector extension services subsec- ƒƒ Refrigeration and preservation specialists tor through targeted incubation and mentoring support to ƒƒ Mechanical engineers identified service providers. ƒƒ Chemical engineers ƒƒ Civil engineers 4. Improved data collection and policy level ƒƒ Landscape architects ƒƒ Electricians decision-making ability ƒƒ Welders ƒƒ Plumbers As discussed in the four gears section, lack of reliable ƒƒ Marketing professionals and timely information affects the ability of policymakers ƒƒ Packaging specialists. to make effective decisions. To offset these gaps a com- munity-based data collection system will be established The strategy will focus on enabling improvements on both to maintain access to relevant and up-to-date statistical the institutional side ( TVET infrastructure ) and the enter- information related to the sector. Collected information prise side. These will include setting up vocational training will range from Dura vs. Tenera stock levels to location, facilities and designing training programmes that reflect productivity levels etc. Innovative crowdsourcing mecha- closely the needs of industry. Ideally these programmes nisms will be used on a sustainable basis to maintain a should be designed together with industry and be de- feedback loop. livered along with on the ground training components conducted in partnership with industry. The same would 5. Streamlining and aligning border apply to certificate and more advanced tertiary education programmes that would aim to train Liberians for more and customs processes specialized technical, managerial and administrative roles in the oil palm sector. Ministry ( MoCI ) processes will be aligned with ASYCUDA World and with systems across the Mano River Union subregion : for instance, countries that also happen to be 2. Development of a domestic inputs part of the ASYCUDA network. This will significantly as- supply chain sist in streamlining operations and improving efficiency and transparency. As in any other post-conflict economy, Liberia faces the challenge of kick-starting economic activity without the This intervention will specifically focus on setting up of requisite density in support services. The only way to keep the first integrated transaction processing and decision the transformation process from derailing, therefore, is to support trade facilitation system, effectively bringing to- import those elements that do not exist within the country gether MoCI, MoA and the Ministry of Finance including in the short term. Liberia Customs), ASYCUDA (United Nations Conference THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

32 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 on Trade and Development ( UNCTAD ) and relevant au- resistance to diseases and productivity levels will be thorities in the neighbouring countries. Guinea, for in- undertaken. stance, being an ASYCUDA country, is a good example of a cross-border trade partner with whom trade facilita- 8. Mainstreaming youth in productive activities tion harmonization can be achieved relatively simply. in the value chain This use of information technology to streamline border procedures will help the make the system more transpar- There is substantial opportunity for young individuals ent and less prone to malpractice – thus decreasing the to get involved, especially in mechanical production, in transaction costs associated with the current non-trans- the mill production business, and in provision of support parent system, which is characterized by delays due to services such as transport and logistics, handling and manual processing, duplication of requirements on both processing. sides of the border, and a series of unofficial fees by vari- ous departments including the police, customs and other 9. Increased support to ‘market women’ and actors, both state and non-state. This will in particular help women, who form the bulk of the ICBT community and other female actors across the value chain who are particularly prone to harassment and are there- fore forced to incur extra transaction costs by hiring male It has been variously documented how Liberia’s ‘mar- proxies whose only role is to clear border procedures. ket women’, together with its mostly female agricultural work force – or the smallholder sector – kept the country fed and functioning through the war years.43 Their role 6. Improved land management and, in general, in the sector’s development cannot be underestimated. adoption of other best practices such as The strategy will support this key ‘influencer’ through the Good Management Practices ( GMP ) establishment of support / grievance mechanisms at key and Good Agricultural Practices ( GAP ) hubs to address issues that they face in their daily op- erations within the ICBT sub-value chain. Incubation and Since it is clear that significant portions of future demand business support will also be provided. for CPO will overwhelmingly be in favour of certified vari- eties, there is a clear opportunity to advocate and adopt 10. Improved quality management GAP, sustainable land management and other sustaina- bility-related practices so that the practices themselves infrastructure and the outcomes they will result in become the source of lasting competitive advantage for the sector. To improve quality compliance levels at the enterprise level, training / coaching programmes, primarily aimed at As an example, some simple alterations in the traditional the cooperative level, will be launched. A best practice oil extraction method ( for Dura ) will result in the produc- manual in different local languages will be developed. tion of better quality red oil/CPO. These would include us- At the institutional level, the capabilities of the National ing steel drums / vats in place of the corrugated ( tin / zinc ) Standards Laboratory ( NSL ) will be enhanced and di- metal barrels that are currently used for boiling and stor- rected towards the needs of the oil palm sector. Among age, and using metal tubs for squashing boiled fruit. the proposed recommendations is the international ac- These would directly result in the reduction of waste dur- creditation of NSL. Networks of labs outside Monrovia will ing and after production. be expanded in key oil palm hubs. 7. Establishment of an integrated research 11. Movement towards certification programme in the sector Palm oil production practices have been severely criti- An improved research base in the sector will result from cized in developed countries because several of the main strengthened relationships with research institutions in producers have in the past engaged in unsustainable other palm oil supplying countries such as Malaysia and practices such as clearing HCV forest area to plant oil Indonesia as well as regional neighbours such as Ghana palms. The negative perception drove retailers in some and Côte d’Ivoire. markets to disguise palm oil content in processed foods A decision will be taken to either extend the Central Agriculture Research Institute ( CARI ) mandate to in- 43. Liberia’s population grew right through the war years, aided in clude/strengthen a focus on oil palm, or establish a sepa- part by a high fertility rate but also because of the informal economy – and crucially its cross-border component that helped families rate oil palm research institute in the country. Accordingly, that chose / were forced to stay in the country or sought refuge in specific research programmes aimed at improving both neighboring countries to survive. WHERE WE WANT TO GO 33 as ‘vegetable oil’. The criticism has led to the adoption 13. Improved transportation and logistics ( to a large degree ) of best practices and very strict en- infrastructure forcement of conservation laws, especially in Malaysia and Indonesia. The development of RSPO has been a Infrastructure, including development of roads and feeder significant step in the transformation of the oil palm sector. networks, will be improved across the value chain. This is a high priority given that linkages in non-concessionaire Many of the largest industrial buyers such as Unilever areas and important processing and transportation hubs have made public commitments to transition many of are quite weak. Smallholder logistics / distribution hubs their palm oil based brands to using certified palm oil. will be established in key areas identified through initial The RSPO certification process itself, now the industry feasibility studies. standard, ensures that oil palm production is sustainable as per internationally accepted standards for emissions, 14. Improved access to finance use of peat lands, replacement of secondary and HCV forest areas, and the use of chemical fertilizers. As part of the overall access to finance strategy, the The oil palm sector in Liberia has a unique opportunity to credit finance challenges of the oil palm sector will be choose a trajectory at this early stage of redevelopment addressed. and create a sector that is from its very inception sustain- able and perhaps even entirely RSPO compliant. This 15. Improved in-market support and branding achieves several objectives at once. On the development side, this will ensure sustainable use of Liberia’s natural initiatives resources. On the competitiveness side, this will make Liberia prepared to serve a higher premium market that Exporters in the small / medium-sized holder sectors will represents the future of the sector the world over. It also be provided with enhanced in-market support and trade differentiates Liberian palm oil in a market where there is information. A solid feedback loop will be developed in increasing clutter, especially with the growing production collaboration with Liberian consulates and trade repre- levels in other West African growers. sentations overseas to feed information on consumer preferences, market trends, import / export requirements Initial steps towards the sector becoming RSPO certifica- etc. to operators in the sector. tion compliant will involve the establishment of a traceabil- ity mechanism in the sector and ensuring that monitoring The strategy also plans for a ‘sourced sustainably in and enforcement mechanisms accompany this mecha- Liberia’ stamp, around which a strong brand can be built nism. As a fundamental step for driving certification in the and turned into a powerful symbol of the values defin- sector, an RSPO secretariat with the capacity for compli- ing post-conflict reconstruction and economic/socioeco- ance assessment – closely connected to the NSL and nomic growth. mandated with making RSPO certification the industry standard in the medium-to-long term – will be set up. 16. Product and capacity diversification 12. Institutional improvements, specifically The oil palm sector has high product diversification op- to LACRA and CDA portunities as indicated through the following excerpt from a USAID technical report : Institutional capacities of key institutions in the sector such as LACRA and CDA will be studied and enhanced Oil palm grows throughout Liberia but is particular- through recommendations. LACRA is expected to take ly abundant in the coastal areas. It can yield cooking on an important policy and regulatory role when the tran- oil, animal food, and raw material for the manufacture sition from its current incarnation as the Liberia Produce of cosmetics, detergents, and pharmaceuticals. Palm Marketing Corporation (LPMC) takes place. In this regard, oil can be used to produce biodiesel or used direct- significant efforts would be required to develop the capac- ly to run low-rpm diesel generators. In addition, the ity and capabilities to satisfy its mandate requirements for palm residues can be a feedstock for heat and power the oil palm sector. generation.44 CDA’s capacities will also need to be enhanced along hu- man capital, financial and technical dimensions so that it can help support existing, and foster new, cooperatives in the sector. 44. Milbrandt, A. ( 2009 ). Assessment of Biomass Resources in Liberia. Colorado : National Renewable Energy Laboratory. Available from : www.nrel.gov / docs / fy09osti / 44808.pdf. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

34 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Value addition to an existing product can occur in three fundamental ways : 1. By promoting a particular attribute of the product – e.g., by targeting consumers for whom the character- istic red colour and typical taste of the Dura red oil is a source of enhanced utility as compared to other attrib- utes of the product or attributes of other substitutes.45 2. By changing the perceived attributes of the product. This would constitute, for instance, getting Liberian red oil certified by RSPO and additionally as a sustainable non-timber forest product to serve the specialty foods market in the OECD, primarily. This would not change the product itself, but would change the specific fea- tures of the product that are promoted to respond to an existing and substantial opportunity. Source: onVillage Initiative 3. By changing the physical composition / properties of the product – e.g., by removing the red colour of Currently all the kernel from the fresh fruit used to pro- Liberian red oil and by controlling the free fatty acid duce the 45,000 tons of palm oil annually is almost com- levels or by transforming the product into the next logi- pletely discarded.46 Using the lower industry ratio of 1 :3 cal variant – e.g., processing CPO into refined palm ( based on Tenera, of palm kernel oil to palm oil ) rather oil. This would in effect alter the entire outlook of the than a higher ratio – given that half of Liberia’s palm oil sector, since the biggest markets for the two are quite comes from the Dura variety, which has a bigger kernel different and consequently also the particular ac- than the Tenera – the amount of palm kernel oil that Liberia cess conditions, critical success factors and buyer could be producing, assuming the same level of efficiency preferences. as palm oil ( 15 % ), would amount to significant levels of CPKO. This is boosted by the fact that new palm kernel While the first alternative above could potentially result in processing technologies are being produced by local the consolidation of a relatively inelastic market i.e., the Liberian manufacturers which can further help develop West African diaspora, the larger longer-term growth op- the transformation capacities of processors. portunity would be to enter the higher premium special- ity oils market via primary distribution channels and with Refined oil mainstream business to consumer buyers / retailers. Given the scale of Liberia’s oil palm sector, which by 2030 will cover approximately 10 % of total land area ( 600,000– The following products have been identified as having 700,000 ha) and produce approximately three million tons high potential for enabling product / capacity diversi- of CPO annually ( by conservative estimates ), oil refining fication in the sector (based on alternative 3 above): will be a natural next step for the industry. While it is un- clear whether the concessionaire economy would con- sider this a viable next step, it is in the country’s interest Palm kernel oil to encourage and incentivize investment in refining and other fractioning technologies to create a value chain that The oil palm fruit and the kernel produce two different reaches substantially downstream. oils, palm oil and palm kernel oil respectively. Palm ker- nel oil is different both in its chemical composition and Soap manufacturing in its uses from palm oil. While palm oil is predominantly used for direct consumption, palm kernel oil is preferred The NES consultations have revealed that Liberia’s first for industrial uses such as in manufacture of plastics etc. patent could be a locally developed formula for man- ufacture of soap from a local variety of palm. There is significant potential to develop an exports-based soap manufacturing value chain. While further examination will 45. For the domestic ( West African ) consumer of crude palm oil, be required to evaluate whether this claim amounts to a flavour is the primary quality factor. This is boosted by the fermentation that takes place within the fruit when bunches are allowed to rest for patentable piece of intellectual property, this does pre- three or more days after harvesting. Thus sterilization immediately after sent an important opportunity for product diversification. harvesting is not a crucial consideration. Herbs and spices for flavour are introduced during the oil-drying phase of operations to mask off- flavours. FAO ( n.d. ). Small-scale Palm Oil Processing in Africa, p.26. 46. Anecdotal evidence suggests that some kernel oil might be being FAO Agricultural Services Bulletin 148. Available from ftp : /  / ftp.fao. produced at household level in some parts of the country for external org / docrep / fao / 005 / y4355E / y4355E00.pdf. cosmetic uses. NES consultations 2012. WHERE WE WANT TO GO 35 Box 5 : SHOPS Program The USAID sponsored Smallholder Oil Palm Support (SHOPS) Program has been involved with the Liberian Oil Palm sector since April 2011. Winrock international has been leading the im- plementation of this program that is expected to last until April 2014. The program is designed around four components which aim to increase farmer’s capacity to meet market demand : 1. Increased production ; 2. Improved processing ; 3. Effective marketing ; and, 4. Enabling environment and support functions. Under the four main components, the SHOPS Program is : ƒƒ Developing commercial linkages to highly productive hybrid oil palm seeds through 2 local pre-germinated seed importers ; ƒƒ Training nursery operators to produce and commercialize improved hybrid seedlings ; ƒƒ Training manufacturers and vendors to produce and sell improved processing technologies; including the Freedom Mill 2, motorized Freedom Mill and palm kernel cracker, separator and expeller, using locally available materials ; ƒƒ Linking financial services to the agricultural sector through support to supply and demand side capacity ; ƒƒ Strengthening women’s entry into the value chain by developing credit, encouraging entry into processing and developing production models suitable for rural women. Progress to Date: ƒƒ 23 Active nurseries producing a total of over 46,000 oil palm seedlings ƒƒ 179 Processing units sold ƒƒ 101 Loan recipients approved for over $80,000 USD in loans ƒƒ 168 Enterprise generating profits ƒƒ 5,257 Participants generating increased income ƒƒ $354,513 USD of private sector investment generated ƒƒ $4,508,947 USD of income generated Source : SHOPS program factsheet. MARKET IDENTIFICATION SHORT TERM ( 0-5 YEARS ) The following analysis is divided into two broad phases : In the short-term phase there will be significantly less one related to the immediate, short-term perspective and potential for small / medium-sized operators to strike out the other related to the medium-to-long-term outlook, by on their own and succeed in international markets given which time it is expected that a significant portion of the the significantly low base of activity. Market penetration NES and the oil palm sector plans of action will have been through existing concessionaire activity will remain the implemented. This phased approach is aimed at staging main mode of export operations in the short term, which interventions in alignment with the evolving capacities of is defined as up to five years. In this regard, the strategy the sector’s trade support institutions and sector enter- for the short-term phase will be consolidating rather than prises as the NES implementation moves forward. visionary in nature. Note : The products / markets listed under the short- The strategy advocates that over the short term, small/me- term section will also hold export potential in the medi- dium-sized Liberian operators strengthen their supply um-to-long term, unless specifically mentioned. consistency, production levels and quality levels by forg- ing new or reinforcing existing relationships with conces- sionaires. Organized groups in the form of cooperatives will play an especially important role in this regard. As the THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

36 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 build-up of capabilities in the small / medium-sized seg- ment continues, they will gradually become better posi- tioned to reach regional and international markets on their own ( over the medium-to-long term ). As discussed above, existing trade relationships and bi- lateral geographical distances will form the major criteria determining the markets for Liberian oil palm in the short- to-medium term. Market penetration in existing markets will be the main mode of market entry. It is also expected that in the short-term phase product diversification will be rath- er limited while capabilities undergo a gestation period. Target market Product Domestic market / import • Dura substitution Neighbouring / regional • Red oil Source: onVillage Initiative markets ( Côte d’Ivoire, Guinea ) Sahel markets • Red oil presence of the Liberian diaspora in the country and be- • Tenera cause oil palm is not endemic to Mali. ECOWAS • Red oil The Tenera variety could be exported to Sahel coun- United States • Palm oil tries for cooking and industrial uses through established EU • Dura for cosmetics wholesalers in particular markets. In order to develop industry in Italy this potential, it will be important to coordinate with trade promotion organizations, as well as other relevant pub- lic / private sector bodies in the markets, to establish re- Target markets for Liberian palm oil in the short-to-medi- lationships and agree on quality, quantity and price um term will include the following : requirements. DOMESTIC MARKET ECOWAS The domestic market depends heavily on imports for There is an unmet demand for palm oil in the ECOWAS managing local demand. In the short term, this could be a region, which is estimated at 360,000 tons annually. Oil critical opportunity to build up capabilities through import palm is the preferred source of dietary fat all over the sub- substitution, and then scale up operations to international region. This is a market that is attractive for the Liberian target markets in the short-to-medium term. oil palm sector ( the Dura value chain ) for two reasons : ƒƒ The ECOWAS region is a net importer of the commod- NEIGHBOURING / REGIONAL MARKETS ity, in spite of it having grown and consumed oil palm IN WEST AFRICA ( CÔTE D’IVOIRE, SIERRA for over two millennia. LEONE, GUINEA ) ƒƒ The West African consumer uses CPO in many forms : as a cooking medium, as butter for direct consump- ICBT is used prolifically for exporting Liberian palm oil to tion and for external application. Also, the West African regional and bordering markets such as Côte d’Ivoire, preference is for higher free fatty acid ( FFA ) content, Sierra Leone and Guinea. There is evidence that up to unlike for conventional CPO markets, where FFA con- 90,000 litres of locally produced CPO (red oil) is exported tent needs to be within very strict permissible limits. out of Ganta market into Guinea. This particular preference, and the fact that all Liberian red oil is essentially a secondary forest product, actu- ally gives it a competitive edge in the regional market SAHEL MARKETS place. This is a strength that not many other agricultural products from Liberia can claim to have. This is there- The red oil exported from the border routes is consumed fore a significant opportunity for the Dura value chain in Guinea but also in markets as far away as in Senegal to optimize and maximize in terms of market share and and Mali. The demand in Mali is driven by the large value share. WHERE WE WANT TO GO 37 Nigeria is a major importer that offers potential for Liberia. EU Although it is the world’s fifth CPO producer, its refinement capacity is still very limited. It imported $577 million worth The EU 27 countries represent the third largest market for of refined palm oil in 2011. Nigerians also seem to appre- palm oil in the world. Consumption growth has been low ciate the distinct taste of Liberian palm oil. Tariff issues and stable : 1.1 % for the last 10 years. Liberia is already should be seen under the ECOWAS framework, which exporting some of its palm oil to the Netherlands. facilitates trade within West Africa. The EU imposes an import tariff duty of 3.8 % on red palm Better production values, use of modern implements, me- oil intended for direct human consumption. Nonetheless, chanical processing, sanitary and phytosanitary com- under Council Regulation ( EC ) No 732 / 2008, it ex- pliance and export quality packaging will help optimize empts certain developing countries, including Liberia, these substantial market opportunities. from paying this tax.47 In this regard it offers significant opportunities. UNITED STATES The Italian market also offers potential for the Dura va- riety, driven by high demand for the oil as an ingredient The United States is currently the biggest market for in cosmetics and soap production. Wholesale distribu- Liberian palm oil exports. This is evidently based on tors would be an important mode of market entry for the the preference of the West African diaspora for red oil Italian market. from West Africa, especially from Liberia. The demand is primarily driven by the high presence of diaspora in the United States. In this market segment, wholesale dis- 47. European Union ( 2008 ). Council Regulation ( EC ) No 732 / 2008. Official Journal of the European Union, 6 August. Available from: tributors and specialized retailers ( stocking African food http : /  / eur-lex.europa.eu / LexUriServ / LexUriServ.do?uri=OJ :L :2008 :211 : goods ) will be the main mode of market entry. 1 :1 :en :PDF. Box 6 : Requirements for exporting to the EU The following are specific requirements that exporters of crude oil for human consumption should comply with when exporting to the European Union ( HS 15111090 ) :* ƒƒ Control of contaminants in foodstuffs ; ƒƒ Health control of feeding stuffs of non-animal origin ; ƒƒ Health control of foodstuffs of non-animal origin ; ƒƒ Labelling for foodstuffs ; ƒƒ Marketing requirements for dangerous chemicals, pesticides and biocides (only required when intended to be used in plant protection products and / or biocides ) ; ƒƒ Voluntary – products from organic production. For exporters packaging their products for direct sale to consumers, it should be noted that from 13 December 2014 EU Regulation 1169 / 2011 will come into effect. The new law com- bines two Directives into one legislation : ƒƒ 2000 / 13 / EC – labelling, presentation and advertising of foodstuffs ; ƒƒ 90 / 496 / EEC – nutrition labelling for foodstuffs. * European Commission (2013). Export Helpdesk: Requirements: Liberia / Netherlands. Available from: http://exporthelp.europa.eu/thdapp/taxes/MSServlet?action=outputandprodLine=80andsimDate=20120601andlanguageId= enandmode=specificRequirementsandstatus=nullandtaricCode=15111090andpartnerId=LRandreporterId=NLandnomenCmd=View. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

38 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 Source: jbdodane MEDIUM-TO-LONG TERM ( 5+YEARS ) UNITED STATES AND EU In the longer term it is expected that the evolving capaci- ties of Liberian exporters – across multiple dimensions As a product diversification channel, African black soap including quality management, supply capacities, prod- derived from Liberian palm oil could have important po- uct diversification, time to market efficiency, and market- tential. High quality and packaging will be important pre- ing / branding, in conjunction with the improving business requisites, as well as the development of supply / volume environment and export value chain improvements af- consistency in the sector. Market penetration would pri- fected by the NES and sector plan of action implementa- marily occur through sales to large-scale wholesalers for tions – will allow exporters to target other markets in the onward distribution. There is a market for this product medium-to-long term which seem hard to penetrate now. across the EU and United States, driven by the diaspora This phase will be witness to growing small/medium-sized and other market segments. The United States is also operators gradually starting to export to target markets a major market for certified / traceable palm oil. There is in parallel with existing concessionaire export activities. significant opportunity in this niche space for Liberian red oil. Product diversification will be an important requirement during this phase, given that there is an urgent need to develop value added products that will bring in great- INDIA AND CHINA er revenue. However, an important consideration in this stage is the need to be especially careful in balancing These are the two biggest markets for refined palm oil. food security needs vs. exporting opportunities. As the Demand for palm oil in both these countries is growing capacity of exporters grows and export relationships are to the tune of 16.6 % and 12.8 % annually, respectively. strengthened there is a real possibility that production However, a prerequisite for developing strong export rela- for domestic consumption may be reduced in favour of tionships to these markets will entail Liberia’s World Trade exports, affecting food security needs in the process. In Organization ( WTO ) accession. Liberia cannot currently this regard, this strategy advocates caution and policy export competitively to either of these markets due to stiff measures to ensure that food security and exports com- import tariffs in both markets. petitiveness go hand in hand. Finalizing Liberia’s WTO accession will have an imme- Target market Product diate positive effect on the oil palm sector, especially in being able to supply some of the world’s biggest and fast- Further market penetration / product diversification est growing markets. The current tariffs could be lowered in markets covered through the short-term phase considerably when Liberia joins WTO. The difference for United States • African black soap Liberia between being part of WTO and not being part • Certified palm oil of it is 32.5 % in the case of India ( this is the result of the tariff India applies to CPO from non-WTO countries, i.e. EU • African black soap 40%, minus 7.5% which is the tariff that it imposes to CPO • Certified palm oil coming from Liberia’s WTO neighbours Côte d’Ivoire and India • CPO Burkina Faso ) and 51 % in the case of China ( this is the result of the tariff China applies to CPO from non-WTO China • CPO countries, i.e. 60 %, minus 9 %, which is the tariff that it im- poses to CPO coming from most WTO countries ). WHERE WE WANT TO GO 39 Box 7 : Market access for Liberian oil palm products As indicated in figure below, Liberia has duty-free access to most markets in the world. Figure 11 : Tariffs faced by Liberian CPO in the world Greenland Level of Protection Norway Russian Federation 0-5% Canada 6-10% 11-15% 16-20% 21-30% Ukraine Kazakhstan Mongolia 31-40% United States of America Italy 41-50% Turkey >50% China Iraq Trade (value 2006 Algeria Egypt in US$ thousand) Mexico India 18 -18 Mali Niger Sudan Peru Brazil Australia Chile Source : ITC Market Access Map, 2012. Market Access as initially planned. As of the time of drafting the NES, the EPA has not been finalized. A negotiation round at World technical and Senior Official level took place in April The weighted average rest of the world tariff imposed 2012 to proceed in drafting the text of the agreement. on Liberia’s exports is a low 0.3 %, indicating favour- This was followed by another meeting in June where able access conditions relative to the averages of 3.5% negotiators concentrated on issues related to market and 3.9 % for sub-Saharan Africa and least developed access.49 country comparators, respectively. The country’s ag- Although the EPA has not been finalized yet, Liberia’s ricultural exports have easier access to international exports remain eligible for duty-free access to the markets with a tariff of 0.04 % compared with the tariff EU under the Everything But Arms initiative for least of 0.3 % on its non-agricultural exports.48 developed countries. As a Generalized System of Preferences beneficiary with a number of industrialized ECOWAS countries, Liberia’s exports enter the United States du- As a member of ECOWAS, Liberia has generally com- ty-free under the Africa Growth and Opportunity Act.50 mitted to adopting its Common External Tariff and to In spite of the relatively favourable access conditions a phased reduction and gradual elimination of tariffs Liberia’s exports have been generally affected by se- and nontariff barriers on products of community origin. vere supply-side constraints that keep it from effec- Liberia currently has tariffs ranging from 0 % to 25 %, tively surpassing the non-tariff measures ( NTMs ) that but with the adoption of the Common External Tariff, characterize international trade. the maximum tariff will be reduced to 20 %. Source : World Bank ( 2010 ). World Trade Indicators EU/USA 2009 / 10 : Liberia Trade Brief. Washington, DC : World Bank. Negotiations to replace the expired trade preferences Available from http : /  / info.worldbank.org / etools / wti / docs / L of the Cotonou Agreement and complete a regional iberia_brief.pdf. Economic Partnership Agreement (EPA) between West Africa and the EU did not conclude by the end of 2007, 49. European Commission (2013). Overview of Economic Partnership Agreement Negotiations. Available from http://trade. 48. World Bank (2010). World Trade Indicators 2009/10: Liberia ec.europa.eu/doclib/docs/2009/september/tradoc_144912.pdf. Trade Brief. Washington, DC: World Bank. Available from http://info. 50. World Bank (2009). Liberia Trade Brief. Available from http://info. worldbank.org/etools/wti/docs/Liberia_brief.pdf. worldbank.org/etools/wti/ docs/wti2008/brief108.pdf. Source: onVillage Initiative HOW TO GET THERE 41 HOW TO GET THERE STRATEGIC OBJECTIVES Five strategic objectives are considered necessary for realization of the sector vision. Accompanying each of the strategic objectives are operational objectives that will support the realization of the strategic objectives and the overall vision. Strategic objective Operational objective Boost productive capacity in • Establish an integrated research programme in the sector. the oil palm sector, particularly • Augment the availability of quality skilled and semi-skilled labour, in close at smallholder level, in existing collaboration with industry. and high potential product • Improve business services and extension services support to the sector. extensions. • Improve data collection capabilities in the sector to allow better policymaking. • Increase substantially the level of organization in the sector, in a representative and geographically equitable manner. • Support cooperatives and FFS to impart relevant training components to their oil palm constituents. • Drive improvements in quality management at both institutional and enterprise levels. Promote product and capacity • Improve packaging capability in the sector. diversification in the sector. • Provide support to promulgate use of mills. • Encourage product diversification. Improve the regulatory and • Ensure requirements for the oil palm sector are met through the development of business environment in the LACRA. sector. • Develop the capacity of CDA to provide effective service delivery to cooperatives and FBOs. • Develop dedicated infrastructure connecting non-concessionaire areas with important processing and transportation hubs. • Improve access to credit for operators in the small / medium-sized base. Strengthen in-market support • Improve in-market support for the sector. and branding related to the • Promote certification of CPO sourced from Liberia. sector. Balance human development • Increase information related to environmental considerations and global best ( specifically youth and practices. gender ) and environmental • Provide incubation support to female- and youth-owned transport businesses. considerations with economic • Support women operators involved in cross-border trade. growth. THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY

42 OIL PALM SECTOR EXPORT STRATEGY 2014-2018 IMPORTANCE OF COORDI- recommending policies that could serve to enhance re- alization of the strategic objectives. With a 360-degree NATED IMPLEMENTATION view of progress, the Council will be best placed to man- The broad range of activities, together with the complex age funding and provide regular reports to donors and nature of integrated intervention, requires careful imple- stakeholders. Moreover, LEC will play a key role in recom- mentation that efficiently directs resources and monitors mending revisions and updates to the strategy so that it results at both the micro and macro levels. To this end, a continues to evolve in alignment with the country’s evolv- Liberian Export Council ( LEC ) will be established in order ing needs. to facilitate the public-private partnership in elaborating, coordinating, and implementing the NES. In particular, LEC will be tasked with coordinating the implementation IMPLEMENTATION of activities in order to optimize the allocation of both re- sources and efforts across the wide spectrum of stake- PARTNERS – LEADING AND holders. Within this framework, implementation of the oil SUPPORTING INSTITUTIONS palm strategy also falls within the purview of LEC. In addition to LEC, a variety of stakeholders will be critical Such efforts will involve directing donor, private, and pub- to the successful implementation of this strategy. These lic sector organizations towards the various NES priorities include public sector actors such as MoA, MoCI, LACRA, in order to avoid duplication and guarantee maximum MoFA and also private sector / civil society organizations impact. Responsibilities will also include monitoring the that have a history of providing assistance to the sector results of activities and outputs, while at the same time and are well positioned to assist. CONCLUSION The strategic Plan of Action below details the various ac- tivities that will be conducted to achieve the above goals, corresponding to the strategic objectives laid out earlier ; the time priority of each activity, whether short, medium or long ; the measures that will be used to verify their suc- cessful completion; specific targets commensurate to the vision ; the institution / stakeholder who will lead the effort on each activity ; the stakeholder( s ) who will support this effort ; and eventually what resources will be required to generate the intended result from each activity. The palm oil export sector in general is in an early stage of recovery ( from pre-war levels ) and growth and so it is critical to make well-thought out decisions in terms of business models, core propositions, positioning etc. This strategy reflects that analytical rigor and builds towards export competitiveness in the sector. Source: jbdodane THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY SECTOR STRATEGIC PLAN OF ACTION LIBERIA 44 Strategic objective 1 : Boost productive capacity in the oil palm sector, particularly at smallholder level, in existing and high potential product extensions. Operational Activities Priority Entry point of Primary Target measures Leading Supporting implementing Estimated objectives 1=low intervention beneficiaries implementing partners costs 2=med S – short term partners ( high, 3=high M – medium term medium, L – long term low ) 1.1 Establish 1.1.1 Establish formal relationships with oil palm research facilities and 3 M Entire value »» Modes / scope of CARI / Ministry of Education ( MoE ), M an integrated institutions in Malaysia / Indonesia / Ghana / Côte d’Ivoire, among other chain collaboration identified Universities MoA,MoFA, MoCI, IITA, NIC research relevant regional and international institutions. by end-2014 engaged in programme. »» Memoranda of agriculture Understanding signed with identified research institutes by end-2015 1.1.2 Design specific curriculum for oil palm research in conjunction 2 M Entire value Curriculum development MoE, CARI, MoA, MoCI M with identified universities specializing in oil palm related education and chain initiated by early 2015 MoA THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY research. 1.1.3 Conduct a feasibility study to explore either : 2 S Entire value Study conducted by end- MoA, MoE CARI, MoCI, universities M »» Extending CARI’s mandate to include research specific to the oil palm chain 2014 sector ; or »» Setting up a specific oil palm based research institute in the country. 1.1.4 Establish a specific research programme to : 2 S Entire value Research programme to be MoA, RSPO CARI, MoCI, universities M Improve the disease resistance of the Dura oil palm variety ; chain completed by mid-2015 Improve productivity levels. 1.2 Augment the 1.2.1 Assess and strengthen formal arrangements with concessionaires 3 S Liberian Arrangements identified CARI, MoE MoA, MoCI, RSPO M availability of for knowledge sharing and for sponsorship of promising Liberian graduates / post- and formalized on a rolling quality skilled graduates to acquire Masters and PhD degrees from premier institutions graduate basis OIL PALM SECTOR EXPORT STRATEGY 2014-2018 and semi- specializing in oil palm research. students skilled labour Existing programmes ( such as current association of concessionaires seeking to for the oil palm with Bong County Community College ) could be supplemented with specialize in the sector, in close additional support to students for further research in international sector collaboration institutions / field areas. with industry. 1.2.2 Develop specialization in Liberian universities / training institutions 3 S Entire value Courses developed with MoE University of Liberia ( + M related to Oil Palm through development of educational programmes chain support from benchmarked other universities ), partner ( Masters and post-graduate certificate levels ) to suit industry institutions institutions in benchmarked requirements for direct employment, in cooperation with various actors countries ( Malaysia / that have or could have linkages with the sector. Indonesia ) and industry. 1.3 Improve 1.3.1 Develop a best practice compendium from comparable situations 3 S Extension Incubation services MoE / MoA CARI, universities, M business for developing a business model focused on incubating private sector- service launched as a pilot project civil society and pilot services and led extension support especially geared for agribusinesses : providers by mid-2015 communities / cooperatives extension »» Based on the business case, develop a comprehensive financing ( private sector services vehicle for investment in and incubation of private sector extension based ) support. support service providers specifically for the oil palm sector and for specific markets ( domestic and ICBT, concessionaire, international ) and for agronomic regions. Strategic objective 1 : Boost productive capacity in the oil palm sector, particularly at smallholder level, in existing and high potential product extensions. Operational Activities Priority Entry point of Primary Target measures Leading Supporting implementing Estimated objectives 1=low intervention beneficiaries implementing partners costs 2=med S – short term partners ( high, 3=high M – medium term medium, L – long term low ) 1.3 Improve 1.3.2 Establish an oil palm trade / business services support programme 3 M Entire value »» Support programmes MoA / MoCI Liberia Business registry, M business so as to : chain launched by end-2014 MoCI, NIC, financial services and »» Compile an oil palm trade / business services providers directory ; »» Local procurement up institutions, LCC extension »» Establish an oil palm trade / business services providers association ; 20 % bi-annually services »» Work with oil palm concessionaires to develop a list of services that »» Three train-the-trainer support. can / will be procured from Liberian suppliers on a priority basis ; sessions per year »» Formulate local procurement contracts with high potential local ( minimum 50 % women suppliers ; trainers ) »» Train business service providers to create business plans based on revenue forecasts and signed contracts so as to be able to borrow against receivables and booked orders. 1.3.3 Undertake a comprehensive gap assessment of the extension 3 S MoA extension »» Gap assessment MoA CARI, IITA L services division in MoA in the technical, financial and human capital services completed by mid-2014 dimensions. Based on the identified gaps, develop a strategic roadmap »» Strategic roadmap / action for the development of these services. plan for extension services developed by end-2014 1.3.4 Conduct a gap analysis of the extension services required in major 3 S Entire value Needs assessment MoA CARI, IITA M Oil Palm producing counties, on topics such as the number of extension chain completed by end-2014 officers required and the type of services needed in the division. 1.3.5 In order to offset the significant shortage of extension service 3 S MoA extension »» Initial batch of 50 to 100 MoA CARI, MoCI, universities M officers ( in the short term ), launch a recruitment campaign to hire and services extension officers trained impart training ( through fast-track courses ) to extension service officers and deployed by end- on key aspects of GAP, GMP and other best practices related to the oil 2014 palm value chain. »» Targets to be revised in early 2015 1.3.6 Establish and strengthen linkages between extension services and 2 M CARI, MoA Quarterly meetings starting MoA, CARI L national research institutions such as CARI by regularizing knowledge extension early 2014 sharing sessions and establishing a two way feedback loop between services identified needs in the field and research updates. 1.4 Improve data 1.4.1 Establish a community-based data collection system on numbers 2 S Entire value Pilot system implemented MoA, MoCI LISGIS, UNICEF innovations M collection of trees, productive stage of tree stock, annual FFB production, harvest chain by early 2016 unit, EPA, FAO capabilities to and CPO produced, powered by mobile phone based supply chain allow better management systems. policymaking. 1.4.2 Conduct a study to comprehensively assess and map the state of 3 S Entire value Study conducted by mid- MoA, LISGIS MoCI, land commission, LME M oil palm stock in the country so as to enable policymakers and technical chain 2015 advisors to make effective strategic decisions : »» Dura vs. Tenera stock, including assessment of acreage and analysis of current productivity levels ; »» GPS based mapping of the location of groves, their density and their proximity to primary forest areas / sacred lands ; »» Assessment of future planting needs of the sector. SECTOR STRATEGIC PLAN OF ACTION 45 46 Strategic objective 1 : Boost productive capacity in the oil palm sector, particularly at smallholder level, in existing and high potential product extensions. Operational Activities Priority Entry point of Primary Target measures Leading Supporting implementing Estimated objectives 1=low intervention beneficiaries implementing partners costs 2=med S – short term partners ( high, 3=high M – medium term medium, L – long term low ) 1.4 Improve data 1.4.3 Speed up efforts to align border, customs, and ministry processes 3 S Entire value Rolling basis MoF MoCI M collection with ASYCUDA based systems used by regional markets in order to chain capabilities to streamline operations and improve efficiency and transparency. allow better policymaking. 1.5 Increase 1.5.1 3 M Cooperatives Co-op density to reach CDA, LPMC MoA, MoCI M substantially »» Establish new, or reinvigorate as relevant, cooperatives / associations and other FBOs 1 per 1,000 grower the level of ( as appropriate ) in the major smallholder concentration areas, linked households by 2017 organization in to the proposed processing / warehousing hubs already described. ( 70 %–80 % of all female- THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY the sector, in a »» Facilitate the formation of representative core management teams. headed households by representative »» Develop an overall portfolio of services to be delivered, especially same date ) and focusing on pre- and post-harvest product handling, preservation geographically techniques etc. equitable »» Train core management teams on operations management. manner. »» Design multiyear corporate strategies aligned to the overall sector strategy. »» Facilitate agreement upon and systematization of collective governance mechanisms to manage resources, especially leased / communally- owned. 1.6 Support 1.6.1 Develop and launch a train-the-trainers programme for focal points 3 S Cooperatives »» Train-the-trainers CDA, LPMC MoA extension services L cooperatives at selected cooperatives in the main palm oil producing counties. Main and other FBOs programme developed and FFS to thrust of the trainings will be on production ( GAP ) and post-harvest and launched in mid- OIL PALM SECTOR EXPORT STRATEGY 2014-2018 impart relevant ( GAP and GMP ) techniques. In addition to the trainings, case studies and 2014 training guidebooks will be also developed and disseminated. »» Recommend 8–12 week components to Capacities of cooperatives will be built focusing on the following programme sessions their oil palm components ( through training programmes ) : with batches of 20–30 constituents. »» Kernel handling / drying and storing techniques ; trainers »» Conservation, as well as hygienic handling methods during the harvest and post-harvest seasons ; »» Trainings related to GMP ( strategic goal setting and general operational management, financial management, record keeping and good labour practices ) ; »» Training producers on sustainable land use principles / techniques and incorporate curriculum within FFS interventions across the board. 1.7 Drive 1.7.1 Benchmark and document the country’s first market-driven quality 2 S Producers and Benchmark report created MoCI, MoA, LPMC / LACRA, universities L improvements manual for the sector in relevant local languages. processors and market-specific sector NSL ( Cuttington University ), MoE in quality quality manuals prepared management at both 1.7.2 Identify high potential candidates within cooperatives and 2 M Cooperatives 100 trainers trained by CDA, LPMC MoA, MoCI, LISGIS M institutional other FBOs who can be trained as trainers in issues related to quality and other FBOs end-2014 and enterprise management : levels. »» Develop curriculum related to quality management and conduct a series of Training of Trainers workshops to certify trainers. Strategic objective 1 : Boost productive capacity in the oil palm sector, particularly at smallholder level, in existing and high potential product extensions. Operational Activities Priority Entry point of Primary Target measures Leading Supporting implementing Estimated objectives 1=low intervention beneficiaries implementing partners costs 2=med S – short term partners ( high, 3=high M – medium term medium, L – long term low ) 1.7 Drive 1.7.3 Create adjunct training and resource centres at 2 M Processors Training and resource CDA MoA, MoCI H improvements processing hubs fully equipped to act as training cum data centres created on a rolling in quality collection / collation / dissemination cum quality testing / report basis management creation / certification facilities. at both institutional and enterprise levels. 1.4 Improve data 1.7.4 Conduct a needs assessment of the NSL and quality infrastructure 3 M Entire value Needs assessment NSL, MoA MoCI, ACE, SGS / BIVAC H collection requirements in key oil palm hubs. Specifically, the focus will be on : chain completed and capabilities to Expanding / setting up a network of testing laboratories in important hubs ; recommendations allow better »» Expanding the capacities of NSL in terms of financial / human submitted by mid-2015 policymaking. capital / technical requirements ; »» International accreditation for NSL to that it can certify oil palm products with international recognition ; »» Contracting quality service providers such as SGS / BIVAC to service the sector needs in the interim period as the quality management infrastructure improves. SECTOR STRATEGIC PLAN OF ACTION 47 48 Strategic objective 2 : Promote product and capacity diversification. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med S – short term partners partners ( high, 3=high M – medium term medium, L – long term low ) 2.1 Improve 2.1.1 Establish a smallholder oil palm packaging and promotion programme 2 M Entire value chain Programme set up by MoA MoCI M packaging that will link with existing packaging programmes and develop packaging early-2015 capability. capacity in the sector. Programme to focus on CPO using enhanced standardized packaging. Main aspects include : »» Packaging based infrastructure requirements ; »» Technology transfer and investment requirements ; »» Human capital requirements related to the packaging sector. 2.2 Provide support 2.2.1 Launch an incubation programme to spur mill production businesses : 2 S Processors Incubation programme MoA, MoCI, Winrock M to promulgate use »» Leverage / support existing ongoing initiatives such as the USAID / Winrock set up by mid-2015 International THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY of mills. Smallholder Oil Palm Support programme ; Smallholder Oil »» Identify potential light manufacturing facilities with existing capability Palm Support to manufacture Freedom Mills and other processing / transformation programme equipment ; »» Support identified facilitates through a structured support programme. 2.2.2 Establish kernel oil production pilots with private investors in 2 S Producers and Pilots launched on a NIC, CDA MoA, MoCI M collaboration with producer groups. Pilots will involve : processors rolling basis »» Technology transfer initiatives ; »» Development of pilot processing units in collaboration with cooperatives and relevant FBOs ; »» Development of an export based supply chain. 2.2.3 Launch a training campaign for users of the Freedom Mill, aimed at 2 S Existing operators of Expansion project MoA, Winrock Cooperatives, M OIL PALM SECTOR EXPORT STRATEGY 2014-2018 training existing operators on diversifying to the Dura variety ( in addition to Freedom Mills launched starting mid- International / CDA the current utilization of the Tenera variety ). 2014 USAID 2.3 Encourage 2.3.1 Launch an initiative aimed at identifying and integrating palm kernel 2 M Processors Technology transfer MoA, CDA MoCI, NIC M product processing technologies in the sector through technology transfer initiatives initiatives launched by diversification. and in collaboration with select cooperatives and private sector players. end-2014 2.3.2 Develop a pilot project to manufacture products from palm oil and test 2 S Entire value chain Pilot facility operational MoA, CDA MoCI, NIC M in a selected market : by mid-2015 »» Products to be tested include soap, refined oil, palm kernel oil ; »» Identify and solicit support from regional / international partners to set up a pilot facility ; »» With CDA’s assistance, identify cooperatives to be involved in the project ; »» Develop a market entry plan for an identified target market and establish an initial contractual pipeline on a test basis ; »» Based on the success of the pilot, scale up options to be considered, including a broader project for setting up supply chains for each product type. Strategic objective 3 : Improve the regulatory and business environment. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med S – short term partners partners ( high, 3=high M – medium term medium, L – long term low ) 3.1 Ensure 3.1.1 Support the ongoing initiative for restructuring of LPMC to LACRA ( possibly through 3 Immediate LPMC / LACRA LPMC to LACRA MoA, LPMC MoCI, Oil Palm M requirements consulting services support to LPMC and the MoA ) : restructuring begins Association for the oil palm »» Rationalizing mandates and internal organizational structure, based on the new role, to in early 2014 and is of Liberia, sector are met include oil palm ; completed by mid- other relevant through the »» Establishing guidelines on various aspects including standards for exporting oil palm, 2015 ministries development of pricing in line with international trends, licencing of agents / exporters and other aspects ; LACRA. »» Establish a monitoring and enforcement section within LACRA when it is established ; »» Formulate, together with industrial buyers and smallholder representatives, an integrated operational response to the institutional support requirements of the sector ; »» Reinforce enforcement and monitoring capacities of LACRA through recruitment and training of monitoring and enforcement staff. 3.2 Develop 3.2.1 Strengthen ( or re-establish, if defunct ) the oil palm cooperatives support unit at 3 S CDA / LPMC Needs assessment CDA, LACRA MoA, MoCI M the capacity of CDA : study completed and CDA to provide »» Identify human capital / technical / financial requirements in CDA related to service recommendations effective service delivery to the oil palm sector ; released by end-2014 delivery to »» Develop and implement a multiyear support programme to CDA related to the Service delivery cooperatives recommendations identified above ; programme set up by and FBOs. »» Develop a service delivery programme customized to the needs of individual or groups mid-2015 of co-ops. 3.3 Develop 3.3.1 Develop public–private partnership investment promotion plans for anchor 3 M Entire value Anchor investment NIC, MoCI, MoA LACRA H dedicated infrastructural additions in palm oil-specific port facilities, feeder roads, weighbridges chain plans finalized by infrastructure and CPO tank farms in non-concessionaire areas, benchmarked against similar clusters in mid-2015 and ready connecting other parts of the world : to proceed to project non- »» Specific focus on establishing smallholder logistics / distribution hubs at key market financing concessionaire centres like Ganta and the Red Light Market and Freeport to serve landlocked countries areas with in the region, domestic and international markets respectively ; important »» Based on select investment promotion plans, proceed to project financing and processing and development. transportation hubs. 3.3.2 Undertake construction projects in key oil palm hubs, especially focused on 3 Entire value Rolling basis MoA MoCI H improving infrastructure along border hubs such as Ganta. chain 3.3.4 Support greater formalization of the ICBT trade occurring to subregional markets 3 S Cross-border Facilities operational MoA MoCI, Farmers M such as Côte d’Ivoire and Sierra Leone markets through the establishment of pilot facilities traders by end-2015 Unions in Palm Oil producing counties such as Foya and Nimba : Network »» Develop mechanisms for addressing queries and grievances ; »» Establish packaging and other support functions in a pilot facility that can be used by traders at low rates. 3.4 Improve 3.4.1 Create an oil palm SME growth fund that will have : 2 M Entire value Lending to cover 30 % Central Bank MoA, MoCI M access to »» A lend against harvest facility ; chain of all households by of Liberia, credit for »» A lend against orders booked / supply agreements facility ; 2017 commercial operators in the »» A lend on pooled credit basis facility to farmer groups to access productive assets banks small / medium- including land leasing ; sized base. »» A lend to intermediaries facility on the basis of previous business performance. SECTOR STRATEGIC PLAN OF ACTION 3.4.2 Develop, in collaboration with banks and cooperatives, a regular mentoring 2 S Credit seekers Mentoring CDA / commercial MoA, MoCI, L programme involving loan officers providing training to members on documentation and in the value programme to be banks, MFIs CBL best practices involved in seeking loans. chain launched by end- 2014 49 50 Strategic objective 4 : Strengthen in-market support and branding related to the sector. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med S – short term partners partners ( high, 3=high M – medium term medium, L – long term low ) 4.1 Improve in- 4.1.1 Set up a comprehensive in-market support programme for the sector at 2 S Exporters In-market support NIC, MoFA MoA, MoCI L market support. Liberian overseas missions in the United States, Europe, Asia and Africa : programmes setup by Liberia Better »» Conduct a needs assessment exercise with selected missions ; end-2015 in key selected Business Forum »» Design and roll out an Oil Palm specific immersion programme for identified locations ( LBBF ), LCC staff at the missions ; »» Rejuvenate system of agriculture attaches and economic affairs counsellors at Liberian missions overseas ; »» Make available investor and consumer information resources at the trade promotion mission in Philadelphia and other trade representations globally ; »» Develop an operational market-specific annual plan for each trade THE REPUBLIC OF LIBERIA NATIONAL EXPORT STRATEGY representation to provide in-market support to Liberian exporters and to interested buyers and investors in target markets. 4.1.2 In collaboration with cooperatives, enhance market linkages by : 2 S Cooperatives as Campaign launched by CDA / MoCI Cooperatives, M Launching a branding / advertising campaign in select target markets ; and exporters end-2014 LCC, MoCI, MoFA Organizing business delegations to target markets / Liberia to facilitate transactions. 4.1.3 Organize and facilitate meetings between business delegations of Liberian 2 S Producers, Business networking MoA / MoFA MoFA, MoCI, Oil M Oil Palm operators / cooperatives and other representatives to select market Exporters events organized in Palm Association locations : Monrovia ( for external of Liberia, major »» Trade promotion organizations delegations ) and in target cooperatives such »» Direct buyers / wholesalers / distributors. markets on a rolling basis as Panfamcos OIL PALM SECTOR EXPORT STRATEGY 2014-2018 starting mid-2014 Select markets will include : »» Regional markets including Sahel countries, bordering markets and ECOWAS member countries ; »» EU, North America, India and Malaysia. 4.1.4 Leverage the existing trade and investment office in Philadelphia to 3 S Current / aspiring First round of business to MoFA, MoA, MoCI, LBBF M host international business to business meetings with international clients to exporters business meetings hosted trade and encourage potential international business. by investment office by investment end-2015. office in Philadelphia 4.1.5 Develop a feedback mechanism for continuously monitoring demand and 3 M Current / aspiring »» Feedback mechanism in MoFA, MoA MoCI M preferences in target markets through Liberian foreign service officers trained exporters place by mid-2015 to follow demand patterns in target markets and feed the information back to »» Specific training relevant MoA and MoCI contacts. components integrated in foreign service officers’ training curricula 4.1.6 Organize a business development event for a delegation of buyers from 2 M Current / aspiring Pilot event held in end- MoCI, MoA, LBBF M key target markets to interface and meet palm oil exporters from the smallholder exporters 2014 MoFA sector in Liberia, deal-making being the key aim of the event. Strategic objective 4 : Strengthen in-market support and branding related to the sector. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med S – short term partners partners ( high, 3=high M – medium term medium, L – long term low ) 4.1 Improve in- 4.1.7 Develop a comprehensive information dissemination campaign aimed at 3 M Current / aspiring Campaign active by MoA, MoFA MoCI M market support. regularly updating potential and current exporters on the following information : exporters early-2015 »» Market-specific consumer trends ; »» In-country marketing opportunities such as trade fairs, exhibitions etc. ; »» Import / export requirements at customs / port authority etc. 4.2 Promote 4.2.1 Launch an initiative for RSPO compliance in the sector : 3 L Entire value chain Programme rolled out by MoA, RSPO LBBF, MoCI, NSL H certification of »» Conduct a preliminary study to develop a long-term sustainability plan for the end-2016 CPO sourced from sector ; Liberia. »» Conclude agreement on traceability criteria and monitoring / enforcement / reporting mechanisms ; »» Commission certification bodies to engage with companies in the sector seeking to gain RSPO compliance. 4.2.2 Establish a ‘sourced in Liberia’ traceability programme for CPO being 3 L Entire value chain Programme rolled out by MoCI MoA,LBBF, MoCI, M exported from Liberia : end-2016 NSL »» Conclude agreement on conditions of use of the ‘Sourced responsibly in Liberia’ label and launch initiative. Strategic objective 5 : Balance human development ( specifically youth and gender ) and environmental considerations with economic growth. Operational Activities Priority Entry point of Primary Target measures Leading Supporting Estimated objectives 1=low intervention beneficiaries implementing implementing costs 2=med S – short term partners partners ( high, 3=high M – medium term medium, L – long term low ) 5.1 Increase 5.1.1 Strengthen civil society networks active in the sector : 2 S Entire value chain »» First oil palm report released MoA CDA, MoCI, M information related »» Establish a Liberian civil society alliance ( connected to other West in 2015 MoL, MoGD, to environmental Africa / worldwide networks ) for equity and opportunity in oil palm ; »» Oil palm ‘growth and equity’ CSO Council considerations »» Develop and publish annual oil palm sector reports that will open dialogue set up via and global best investigate issues of social / environmental and economic equity and multimedia programming practices. opportunity for smallholders in the sector ; including radio, text, town hall »» Disseminate information on global best practices in fair labour and meetings, Susu clubs etc. sustainability via radio and public service text messages. 5.2 Provide 5.2.1 Incubate female-owned and youth-owned logistics / transport 2 S Women / youth Ministry of CDA, MoCI M incubation businesses that provide crucial feeder networks connecting the most operators in the Gender and support to female- geographically remote farms to the nearest nodes : sector Development, and youth- »» Develop an incubation programme for women-owned enterprises MoA owned transport providing support services in the sector ; businesses. »» Identify promising candidate enterprises and launch a pilot. 5.3 Support women 5.3.1 Develop a specific competencies development programme for 2 M Women traders Pilot initiative for first batch of MoCI, Ministry MoA, MoE L operators involved women involved in cross-border trade, focusing on : trainees launched by end-2014 of Gender and in cross-border »» Raising awareness of their rights and recourse mechanisms in case Development SECTOR STRATEGIC PLAN OF ACTION trade. of grievances ; »» Negotiating fair prices ; »» Improved sorting and grading practices. 51 Source: onVillage Initiative BIBLIOGRAPHY 53 BIBLIOGRAPHY AOCS Lipid Library ( 2013 ). 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1211 Geneva 10, Switzerland Telephone: +41-22 730 0111 Fax: +41-22 733 4439 E-mail: itcreg@intracen.org Internet: www.intracen.org