In Indonesia, oil palm plantations have long affected income levels positively. Furthermore, Indonesia has developed oil palm smallholdings in 1980 to improve rural incomes. The success of this program has attracted other farmers and migrants to further developed oil palm plantations. Those who collaborated with companies were known as scheme smallholdings, while the others are known as independent smallholdings. In general, the lack of professional assistance has caused independent smallholdings to perform lower than the scheme ones. In addition, on average, the migrants also performed better as they were familiar with the collective actions of group activity management. Using as many as 210 and 219 scheme and independent smallholders from the Provinces of North Sumatra, South Sumatra, Jambi and Riau, such assumption were tested using the ANOVA compare means test of the four groups, namely schemed local and migrant, and independent local and migrant. Comparisons between the smallholders’ incomes and the Regional Minimum Wages of each province were analysed. The results showed that oil palm plantations have significantly improved the smallholders’ incomes in all provinces, although the impacts were observed to be higher for the scheme-migrant smallholders, not only concerning income, but also for productivity and selling price. However, this was likely due to the difference between scheme and independent rather than locals and migrants. This was partly explained due to the collective actions of all migrant-schemed smallholders in both the input purchases and the output sales and around 50% of the local-schemed, while almost all independents did it individually.
The Efforts to empower the economy of villagers have been pursued through a government-run program through Law No. 6 of 2014 on villages that optimize the implementation of village government. This study aims to analyze strategies and models of village community empowerment based on Village Fund Allocation (ADD). Whether through the ADD strategy can lead to the empowerment of villagers and reduce the impact of poverty on the economic welfare of the community. The method used is descriptive quantitative with a sample of seven villages in Kuala sub district of Nagan Raya district. The primary data source was obtained by going directly to the research object, while the secondary source was obtained from the Central Statistical Agency (BPS), the District Government Empowerment Agency (BPM), and the sub district, by accessing documents from the official website. Then analysis of poverty effect used panel data analysis with Random Effect Model.
This study aims to analyze the impact of the economic crisis on Indonesia’s palm oil exports. The relationship between factors in palm oil trade was analyzed using the simultaneous equation system model and estimated using the Two-Stage Least Square (2SLS) method. This research uses time-series data (years 2000 - 2018). The results showed that Indonesia’s economic growth contracted up to 5.32% leading to an economic recession due to the Covid-19 pandemic and the United States-China trade war which caused Indonesia’s palm oil exports to decline significantly. However, the increase in domestic palm oil consumption is thought to be due to lower palm oil prices and the implementation of domestic industrial policies. In this condition, the depreciation of the rupiah (11%) and the reduction in import tariffs for palm oil from trading partner countries are predicted to be able to improve the performance of Indonesia’s palm oil exports, but still low in net compared to conditions of average economic growth. This proves that the reduction in export tariffs (Indonesia) and import tariffs (trading partners) during the depreciation of the Rupiah due to contraction in economic growth can improve the performance of Indonesia’s palm oil exports.
Smallholders are a group of oil palm growers in Indonesia, having a share of more than 40% of the Indonesian oil palm plantation area. There are a number of weaknesses that limit their inclusivity in the industry, posing a risk to their sustainability. This study analyses this hypothesis through 3 different types of smallholders representing the highest to the lowest level of inclusivity, namely ex-plasma partner, independent partner, and independent non-partner. Data were collected from 217 smallholders, 8 village collectors, 4 RAM and 2 mills from the province of Riau, Jambi and South Sumatra. Higher selling prices, lower profit margins, and more efficient marketing channel are used to indicate business sustainability. Shepherd, Acharya and Aggarwal, and Composite Index agree that higher selling prices and lower profit margins improve the marketing channel efficiencies, while the Marketing Efficiency Index and Soekartawi marketing efficiency values agree that lower cost of production will do so. The results show that on average, plasma/ex-plasma smallholders present the highest selling price, lowest total profit margin, and high production costs. This is caused by fertilizer usage that follows the recommended amount, improving productivity. Therefore, it can be concluded that inclusivity could improve the sustainability of smallholder marketing channels.
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