Oil palm contribution to sdgs achievement: A case study in main oil palm producing provinces in Indonesia

Abstract

The development of oil palm plantations and their production is not only expected to generate foreign exchange for the country, but it is also expected to have a positive impact on the social and economic development of the community, which must be in line with the sustainable development goals (SDGs). The development of oil palm plantations that involves the people through the Nucleus Estate and Smallholder (NES or PIR) Scheme with its various variations has several weaknesses that are detrimental to farmers, causing various conflicts and weaken farmers’ bargaining position, unclear determination of plantation development costs and unclear criteria in determining the quality and price of fresh fruit bunches (FFB) produced by farmers. This study aims to study whether oil palm development is able to improve socio-economic conditions of the people in Indonesia, mainly in main oil palm producing provinces in accordance with the SDGs targets, including no poverty (Goal-1), reduced inequality (Goal-10), and good health and wellbeing (Goal-3). The research was carried out on a national level, especially in oil palm producing provinces in Indonesia. The data used are time series data for the period of 1990 to 2020. The analysis model used is a regression model where oil palm area as an independent variable and the SDGs indicators as dependent variables. The results showed that oil palm development could significantly reduce the number of poor people in both rural and urban areas, had not been able to reduce income inequality even in 4 provinces significantly increased income inequality, and had no effect on improving people’s health and wellbeing based on the human development index.

Assessment of the efficiency of palm plantations using a stochastic frontier approach

“…For this reason, the government needs to provide assistance to farmers, more intensive education to introduce better and more profitable cultivation technology for farmers, subsidize fertilisers, guarantee the availability of fertiliser at the level and increase farmers' access to factories (industry). According to Alamsyah et al (2021), the determining factor for farmers' income is the price of fresh fruit bunches, because there is a large difference between prices at the farmer level and factory prices, which results in a farmer share of only 76.1-81.5 %. Table 7 shows that there is a gap in the actual production inputs used by farmers with the optimal production inputs or production inputs that farmers should use.…”