YCLOAK

When palm oil farmer Isnin Kasno eventually retires, his three children will turn their backs on the family’s small plantation in Malaysia’s southern state of Johor.

Like many aging oil palm growers in Southeast Asia, the 58-year-old struggles to make ends meet from his 2 hectares (5 acres), and his adult children have little appetite for the physically demanding work and dwindling financial rewards.

“It makes me very sad,” said Kasno, who planted his land in 1983 after working in Singapore’s construction industry. “Soon, when I no longer have the energy to help with the harvesting, my only option will be to lease my farm.”

There are more than 2 million smallholders tending 5.6 million hectares of land in Malaysia and Indonesia – the two countries that dominate the world’s supply of the vegetable oil used widely in food, household products and biodiesel.

This army of farmers produces about 40 percent of palm oil from those two countries.

Over the last decade, growing pressure from green groups and consumers has pushed big companies that produce, trade or buy palm oil to tackle labor abuses on plantations and commit to ending deforestation that is contributing to climate change.

But smallholders like Kasno have been left behind, say industry officials.

Only 78,000 smallholders are certified by the Roundtable on Sustainable Palm Oil (RSPO), a body of consumer organizations, environmental groups and plantation firms that aims to make the industry greener and more ethical.

Some 35 years ago, Kasno and three workers spent 12 months clearing a plot of lush forest land near the city of Johor Bahru using chainsaws and burning.

The farmer planted oil palm on the carbon-rich peatland and then registered the land in his name for a nominal fee.

Kasno, who also does a part-time job to support his family, pays two Indonesians a monthly wage of 150 ringgit ($39) each to help harvest his plantation.

The father of three has heard of, but knows little about RSPO certification, a sustainability scheme that promotes best practice and is backed by major European buyers of palm oil.

The challenge for international companies now – faced with a scarcity of land to expand and the need to secure future supplies – is to work with small growers like Kasno, even though many farmers find it hard to follow sustainability rules.

“False Dream”

Smallholders across the region often live in poverty and have only a basic education level, industry officials said.

Averaging from 2 to 7 hectares of land each, they struggle to make large profits because they do not use the latest farming methods, cannot buy the best fertilizers and pesticides cheaply, and their yields are usually lower than the industry average.

Unlike major palm growers, independent farmers also face logistical problems getting their fresh palm fruit to mills for processing, and are inefficient because they cannot afford modern farming equipment.

During low output months when seasonal monsoon rains are at their heaviest, their income can plummet, forcing them to cut down on labor costs or spending on fertilizers. This harms harvests and quality further.

Fluctuating global palm prices also hurt farmers – many of whom cannot access credit or insurance that would help them when extreme weather damages their crops.

Growing oil palm promised big profits 25 years ago but has turned out to be a “false dream” for many smallholders, said Marianne Martinet of The Forest Trust, a non-profit that works with large plantations, consumers and smallholders.

“The common challenge now is low productivity and yields … also the financial ability to manage a business,” she added.

Smallholders outside Johor Bahru said they need lower or subsidized fertilizer prices, training in the best farming practices, more help to increase yields and financial support from governments – especially when palm oil prices drop.

The children of smallholders in Malaysia, who complain about a lack of entertainment and the difficulty of finding a partner in rural areas, often seek better-paid work in urban areas.

Halting that trend is crucial, farmers and dealers said.

“The priorities of smallholders, in most cases, (are) to put food on the table,” said Carl Bek-Nielsen, chief executive director of United Plantations, which has palm plantations in Malaysia and Indonesia.

“More resources need to be channeled to help smallholders, simply because they make up such a huge part of the (palm) cake. It’s a huge, huge task, but you have to start somewhere.”

Certification

Established back in 2004, the RSPO’s focus has been mostly on making large and medium-sized palm oil companies more sustainable, trying to achieve the maximum with limited funds.

But in 2012, it certified a first batch of smallholders, and three years later, set up a working group to look at how best to help them. In July last year, a roadmap was completed to open up the RSPO to more small growers, aimed at improving their livelihoods, sustainability and yields.

Eventually, with more funding and training, the goal is to make it easier for smallholders to get RSPO certification and access international markets. RSPO-certified palm oil is preferred by many European buyers, and is sold at a premium.

The RSPO launched a two-year pilot project late last year, partly funded by UN Environment, which will train smallholders in Sabah, Malaysia and Central Kalimantan in Indonesia.

“This is not only about economics but access to education, better healthcare,” said Julia Majail, RSPO associate director.

The RSPO project is similar to schemes backed by big palm buyers like Nestle, Unilever and Procter & Gamble (P&G), which partner with sustainability advisors like The Forest Trust, Wild Asia and Proforest.

Such schemes train pockets of smallholders to adopt modern farming techniques and ensure workplace safety, as well as to avoid planting on peatland or burning during land clearance.

Smoke from slash-and-burn agriculture is blamed for the polluting haze that brings health risks across Southeast Asia most years.

Besides helping farmers achieve RSPO certification, the hope is that other smallholders will notice the gains made by participating growers, and change their methods too.

“If we want to drive more production with the same land – improve productivity (and) minimize deforestation – the way to go about it is to work with the smallholders,” said Girish Deshpande, a global business planner at P&G.

Career Choice

But some say achieving RSPO certification is too costly and complicated for most smallholders, citing the remoteness of plantations, the number of middlemen in the supply chain and the scale of monitoring required.

“I’m now beginning to question whether certification is the route for smallholders,” said Simon Lord, chief sustainability officer at Sime Darby Plantation and former chair of the RSPO smallholders’ working group. “It’s just sheer logistics. The number of audit hours to do that just blows it out of the water, in terms of expense.”

Lord, who has more than 30 years of industry experience, said smallholders should form collectives, while government-run schemes offer them an easier “entry level” into sustainability.

The RSPO is reviewing how to simplify its certification process and standards for smallholders, said Majail, a process likely to be finalized by November.

Back in rural Johor, Malaysian navy veteran Farid Harith, 48, spotted a trend of smallholders leaving their land back in 2004, and now manages 70 plantations for owners who have moved to the cities or are too elderly to manage their crops.

“A lot of young people go to study at university and then pursue corporate careers,” said Harith, who employs some 17 Indonesian workers to help him. “It is a great loss, because I see the opportunities there are to make money in the palm plantations,” he added. “We need to change the mindset.”

($1 = 3.8620 ringgit)
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Tiger Woods is back in Green Jacket contention and from country club bars to boardrooms, the former world No. 1 is once again the tide lifting all boats in the golfing world.

Golf television ratings are trending upward, so are equipment and ball sales while Masters tickets and even tips are experiencing a “Tiger Bump” as a rejuvenated Woods returns to the U.S. Masters for the first time in three years.

Much of the buzz being generated around golf’s first major is emanating from a 42-year-old golfer who is closer to qualifying for the Seniors Tour (open to players 50 and over) than his last victory at Augusta in 2005.

But nothing gets the sporting public revved up more than a compelling comeback story and Woods is writing one for the ages.

“This is a little bit like a Lazarus resurrection here with respect to where he was,” Steve Mona, World Golf Foundation CEO, told Reuters. “Only last September he was talking about whether he would be able to come back at all. Now that he is the favorite at the Masters, it is just astonishing. He is certainly in form. I don’t think anyone would be terribly surprised if he were in the hunt.”

The greatest player of his generation, Woods dominated golf like few athletes in any sport ever have.

A prodigious talent who first appeared on television swinging a golf club at two years old, Woods grew into a champion by winning 14 majors in swashbuckling style. He became a crossover celebrity and very wealthy with career earnings totaling $1.7 billion, according to a 2017 report by Forbes.

Having climbed to such great heights, Woods’ fall from grace that started in 2009 has been all the more shocking.

A tawdry divorce, a DUI and years and years of injuries, surgeries and failed treatments sent sponsors scurrying.

The back that had caused Woods so much pain was getting no better and the golfer who had held the No. 1 world ranking for a collective 683 weeks slumped out of the top 1,000.

Even the ever-positive Woods suddenly seemed resigned to a dour fate.

Yet after undergoing spinal fusion surgery last April, the dark clouds hanging over Woods slowly began to lift.

Shaking off years of competitive rust, Woods returned with an encouraging tie for ninth at the Hero World Challenge, followed by a tie for 23rd at the Farmers Insurance Open and a missed cut at the Genesis Open.

Highest ratings

Then suddenly Woods grabbed the spotlight as only he can, announcing his return to form with three impressive results — 12th at the Honda Classic, a tie for second at the Valspar Championship and a tie for fifth at the Arnold Palmer Invitational.

Woods’ back now appears to be strong enough to carry the hopes of an entire industry that is experiencing a “Tiger Bump.”

With Woods back in contention, NBC/Golf Channel said the final rounds of both the Arnold Palmer and Valspar championships registered the highest ratings for a PGA Tour telecast, outside of the majors, since the 2015 Wyndham Championship.

The golf industry has also seen a spike. Bridgestone said that when Woods (who uses its ball) has been in the field in 2018, the average basket value with Bridgestone products increased by over 120 percent compared with the same period in 2017.

“His endorsement [that we make the best ball] is more valuable than all of the science and data that we throw out to the consumers,” Angel Ilgan, President & CEO of Bridgestone, told Reuters. “It is just ridiculous that we can show them hundreds and thousands of testings with robots and projectile guns that we’re the best ball, the most accurate ball. And the consumer doesn’t believe us until Tiger says, ‘Yeah that’s true.’

“During Tiger’s absence the entire industry, the PGA Tour, we were all kind of looking who is the next player,” he continued. “Then when Tiger came back, the entire industry is jumping on the Tiger bandwagon.”

Far-reaching effects

The trickle-down economics of Woods’ comeback are far-reaching.

During the final round of the Valspar, a bartender at a golf club raved on social media that tips were up 300 percent with Woods in contention.

“I was slammed packed with people watching Tiger play, it was insane,” said Alcaonline in a post on Reddit picked up by several news outlets. “I know it seems minimal but the economic trickle down effect this has when it comes to the golf world is hard to explain. I made at least 3X the amount of money I usually make on Sundays just because Tiger was in contention.”

With Woods at the start of a comeback but on the downslope of a turbulent but spectacular career, it is uncertain how long this Tiger bubble will last.

But with Woods’ stock soaring, everyone is buying in and Mona believes that it could be a good long-term investment.

“That [bartender] obviously takes it down to the grass-roots level and it is felt on many different levels and the most obvious ones are from TV ratings standpoint,” he said. “It’s astronomical how much they have increased and there is one common denominator and that is Tiger in contention.

“You look at attendance at those events and it is much the same story. What Tiger does is he increases interest in the game … they get interested and think maybe this is a game for me,” he added.
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U.S. factory activity slowed in March amid shortages of skilled workers and rising capacity constraints, but growth in the manufacturing sector remains underpinned by strong domestic and global economies.

The Institute for Supply Management (ISM) survey published Monday also showed a surge in the cost of raw materials and worries among manufacturers about the impact of steel and aluminum import tariffs imposed by President Donald Trump last month to shield domestic industries from what he has described as unfair competition from other countries.

“Demand remains robust, but the nation’s employment resources and supply chains are still struggling to keep up,” said Timothy Fiore, chair of ISM’s manufacturing business survey committee.

The ISM said its index of national factory activity slipped to a reading of 59.3 last month from 60.8 in February. A reading above 50 in the ISM index indicates growth in manufacturing, which accounts for about 12 percent of the U.S. economy.

The survey’s prices index jumped to its highest level since April 2011. There were price increases across 17 of 18 industry sectors last month. While a measure of new orders dropped, a gauge of backlog orders rose to levels last seen in May 2004.

The survey’s customers’ inventories index was at its lowest level since July 2011. A measure of factory employment dropped last month and the ISM said there were indications that labor and skill shortages were affecting production.

Seventeen industries including fabricated metal products, computer and electronic products, machinery, and chemical products reported growth last month. Apparel, leather and allied products was the only industry reporting a decrease.

Eyes on tariffs

Machinery manufacturers said the tariffs on steel and aluminum imports were “causing panic buying, driving the near-term prices higher and leading to inventory shortages for non-contract customers.”

Manufacturers of miscellaneous products reported that “new tariffs are causing concern across the supply chain. Full impact will take a few weeks to reveal itself.” Primary metal producers reported “significant price increases in the steel commodity” as a result of the tariffs.

Trump slapped 25 percent tariffs on steel imports and 10 percent for aluminum in early March. Fiore said 42 percent of survey comments in March were related to prices and tariffs.

U.S. financial markets were little moved by the data, with investors worrying about a global trade war after China increased tariffs by up to 25 percent on 128 American products in response to the duties on aluminum and steel imports.

Stocks on Wall Street were trading sharply lower and the dollar fell against a basket of currencies. U.S. government bond prices rose, with the yield on the benchmark 10-year Treasury note falling to a near two-month low.

Still, the outlook for manufacturing remains upbeat amid dollar weakness, which is boosting the competitiveness of American-made goods on the international market.

“The near-term prospects for the manufacturing sector and the broader economy still appear brighter than they have been at any point over the past five years,” said Michael Pearce, an economist at Capital Economics in New York.

Construction spending

A separate report from the Commerce Department on Monday showed construction spending edged up 0.1 percent in February after being unchanged in January. February’s marginal increase in construction spending supports economists’ expectations for a slowdown in economic growth in the first quarter.

Gross domestic product growth estimates for the January-March quarter are mostly below a 2 percent annualized rate. The economy grew at a 2.9 percent pace in the fourth quarter.

Construction spending in February was held back by a 2.1 percent drop in outlays on public construction projects, which almost reversed January’s 2.3 percent rise.

Spending on federal government construction projects plunged 11.9 percent, the biggest decline since October 2004, after surging 13.4 percent in January.

State and local government construction outlays fell 1.0 percent after rising 1.3 percent in January. The drop in public construction spending dwarfed a 0.7 percent rise in investment in private construction projects.

“We expect only limited gains in public construction spending this year, based on the budget constraints at the state and local level,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York.
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U.S. stocks plunged again Monday after President Donald Trump unleashed a new verbal attack on giant online retailer Amazon and China fired its shot at U.S. imports in a developing trade war.

The Dow Jones Industrial Average lost 589 points by the close, shedding 1.9 percent. The Standard & Poor’s 500 dropped 2.3 percent while the NASDAQ fell nearly three percent at the end of trading.

Trump has strongly criticized Amazon three times in the last few days. Amazion founder Jeff Bezos also owns The Washington Post, whose revelatory stories on Trump and his administration frequently draw the president’s ire.

The U.S. leader says Amazon’s large-scale operations are detrimental to the business success of small retailers that cannot compete with its high-volume sales. Trump has also complained that the fees Amazon pays to the U.S. Postal Service to deliver merchandise the retailer sells are too low, costing the quasi-governmental agency hundreds of millions of dollars in annual revenue, although the Postal Service says its contract with Amazon is profitable.

“Only fools, or worse, are saying that our money losing Post Office makes money with Amazon,” Trump said in his latest broadside against Amazon. “THEY LOSE A FORTUNE, and this will be changed. Also, our fully tax paying retailers are closing stores all over the country…not a level playing field!” 

Since Trump started verbally attacking Amazon, the company has lost more than $37 billion in market value.

China’s announcement that it is increasing duties on 128 categories of U.S. imports worth $3 billion in annual trade also worried investors. They fear Beijing’s response to the Trump tariffs on $50 billion worth of Chinese imports could spark an all-out trade war between the world’s two biggest economies.

Atsi Sheth, an analyst for Moody’s Investors Service, said, “The importance of tariff announcements by both the U.S. and China lies in what they may portend for overall bilateral trade and investment relations between the two countries.”

Late Monday, White House deputy press secretary Lindsay Walters issued a statement saying, in part, that China needs to stop “its unfair trading practices which are harming U.S. national security and distorting global markets.”
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The Trump administration on Monday rejected an Obama-era plan to make automobiles more fuel efficient, opening up a long process to weaken current standards and putting California and the federal government on a collision course over vehicle emissions.

Scott Pruitt, administrator of the Environmental Protection Agency, said in a statement that the standards on model year 2022 to 2025 vehicles were not appropriate and should be revised.

The Obama administration set the average fleet-wide fuel efficiency standards “too high” and “made assumptions about the standards that didn’t comport with reality,” Pruitt said. He did not offer specifics on revising them.

The standards called for roughly doubling by 2025 the average fuel efficiency of new vehicles sold in the United States to about 50 miles (80 km) per gallon. Proponents said they could help spur innovation in clean technologies.

California has long been allowed by an EPA waiver to impose stricter standards than Washington does on vehicle emissions of some pollutants. And 12 other states, including New York, Pennsylvania and Massachusetts, follow California’s lead on cleaner cars.

That has set up a battle on vehicle efficiency between California, the most populous U.S. state and a massive car market, and the administration of President Donald Trump.

Pruitt is a big proponent of states’ rights to regulate themselves, but opposes California’s push for greener cars.

California’s waiver to impose its own efficiency standards is being re-examined, the EPA said.

It is in “America’s best interest to have a national standard,” Pruitt said in the release.

California Governor Jerry Brown blasted the EPA’s action.

“This cynical and meretricious abuse of power will poison our air and jeopardize the health of all Americans,” Brown said.

Mary Nichols, the head of the California Air Resources Board, said her state “will vigorously defend the existing clean vehicle standards.”

Patchwork of Rules

Auto industry executives have not publicly sought specific reductions in the requirements negotiated with the Obama administration in 2011 as part of a bailout deal. But they have urged Pruitt and Trump to revise the Obama standards so it becomes easier and less costly to meet complex targets, which vary depending on the size of vehicles and whether they are classified as cars or trucks.

Automakers also want to avoid a patchwork of rules that would add costs to engine manufacturing.

“The best way to achieve our collective goals is under a single national program that provides an aggressive but achievable pathway, a variety of compliance tools, and factors in the role of customers,” said John Bozzella, president and chief executive officer of the Association of Global Automakers.

Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, said Pruitt made the right decision and that the administration was working on a way to both increase fuel economy and “keep new vehicles affordable to more Americans.”

Changes to the standards could affect car manufacturers, including Ford, General Motors and Tesla.

Auto suppliers were cautiously optimistic about the creation of a national fuel efficiency plan. Steve Handschuh, head of the Motor and Equipment Manufacturers Association, said while his group supports adjustments and flexibilities “we do not support significant changes to the standards.”

Environmentalists decried Pruitt’s decision, saying stricter standards would slash emissions of the greenhouse gas carbon dioxide. Proponents of the corporate average fuel economy standards, or CAFE, say they have led to big gains in auto technology and that relaxing them could eventually hurt sales of U.S. cars in European and Asian countries that are moving toward mandates for electric cars.

It would “take America backward by jeopardizing successful safeguards that are working to clean our air, save drivers money at the pump, and drive technological innovation that creates jobs,” said Luke Tonachel, a clean vehicles advocate at the Natural Resources Defense Council.
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