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Limits to Agribusiness-led Development: A Structural Analysis of the Malaysian Palm Oil Industry 15abuse25. Transnational political contradiction between Malaysian agribusinesses andlocal people in In....

Limits to Agribusiness-led Development: A Structural Analysis of the Malaysian Palm Oil Industry 15abuse25. Transnational political contradiction between Malaysian agribusinesses andlocal people in Indonesia as well as national contradiction reaches an intolerable levelfor everyone concerned with palm oil commodity chains.Conclusion: Beyond Agribusiness-led DevelopmentAs we have seen, Malaysian export-oriented palm oil development has had positiveimpacts on Malaysia’s economic growth called NACs. In particular, agribusiness corporationshave played an important role in this remarkable development. As production hasexpanded, many agribusinesses have tried to apply the following strategies; 1) verticalintegration of commodity chains from agriculture to value-added downstream sectors; 2)transnationalization of operations in search of developing plantations or market access.Only a few top plantation-based agribusinesses which secure raw procurement havecompetitive advantage to use these strategies.But, contrary to agribusiness growth, upstream plantation expansion has caused contradictionand limitation from the viewpoint of local people and communities. On the onehand, there is large-scale deforestation and related land disputes between agribusiness/government and local communities due to land appropriation and destruction for thesake of plantation expansion. On the other hand, there are impacts of agribusiness onsmallholders and plantation workers such as instability of economic life and alienationof self-determination. Besides this, as agribusinesses have been transnationalized interms of imported foreign labor and plantation development overseas such as Indonesia,the contradiction of agribusiness-led development has also become transnationalizedand, as a result, leads to international criticisms.Finally, we will show some new trends which will influence on future palm oildevelopment. First, Malaysian national biofuel policy was set up in 2006, and therewas a biodiesel boom, centering on plant registration and construction. This resulted insoaring palm oil prices and a slowdown in the realization of plant operation. On the otherhand, some agribusinesses are seeking overseas farmland in food importing countriesto expand oil palm plantations for biodiesel, and so-called “Land Grabbing” raisesadditional concerns about threatening local livelihood and food security26. It is necessaryto watch the biodiesel trend which has lead to new global demand and accompanyingoverexploitation of plantation development27.Second, after the criticism against environmental destruction and political conflicts, anew framework to control overexploitation was set up called Roundtable on SustainablePalm Oil (RSPO). RSPO was established in order to encourage participation from entire