Oil palm cultivation, household welfare, and exposure to economic risk in the Indonesian small farm sector

Mehraban, Nadjia; Kubitza, Christoph; Alamsyah, Zulkifli; Qaim, Matin

doi:10.1111/1477-9552.12433

Cited by 26 publications

(11 citation statements)

References 30 publications

(49 reference statements)

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“…Previous study also discovered similar findings. (Mehraban et al, 2021) in their study yielded that palm oil business had improved the farmer's prosperity level and reduced the risk of financial issues among marginal farmer family in Indonesia. Another study also confirmed the advantageous effect of palm oil agricultural business among small farmers (Budiasa, 2002), and the income from the business had contributed to their prosperity (Firman et al, 2018).…”

Section: Factors Affecting the Farmer's Family Prosperity Levelmentioning

confidence: 99%

The Prosperity Level of Plasma Palm Oil Farmer’s Family in the State Border Area during the New Normal Era

Dahliani

Nurdialy²,

Relawati³

et al. 2022

SOCA

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This study aimed to investigate and analyze: the demographic characteristics, prosperity levels, and factors affecting the prosperity level among the plasma palm oil farmers during the new normal era. This study was conducted in a palm oil plantation area, Kembayan, Sanggau Regency, West Borneo from August to July 2020. Primary data were collected using a questionnaire that directly distributed to the partisipants. The level of prosperity was measured by the prosperous family indicators from the National Population Planning and Family Board and poverty line indicators from the National Statistical Institute. A descriptive quantitative, descriptive qualitative, and multinomial logit regression analysis applied to address the study’s objectives. Findings revealed that 51%, 23%, 17%, 8%, and 1% of the farmer’s family were classified into the prosperous family level III plus, prosperous family level III, prosperous family level II, prosperous family level I, and pre-prosperous family category, respectively. According to poverty line indicators, all farmer’s state of living were placed above the line of poverty. These findings signified that palm oil businesses in the state border area were providing sufficient amount of revenue for the farmers during the new normal era. The variabel of age, total plantation land area, and income were associated with the farmer’s family prosperity level.

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Section: Factors Affecting the Farmer's Family Prosperity Levelmentioning

confidence: 99%

The Prosperity Level of Plasma Palm Oil Farmer’s Family in the State Border Area during the New Normal Era

Dahliani

Nurdialy²,

Relawati³

et al. 2022

SOCA

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show abstract

“…Several studies have also indicated that engagement between plantation companies, cooperatives, and district authorities with rural communities plays a vital role in the significance of the welfare benefits from oil palm cultivation in rural communities (Rist et al, 2010;Persch-Orth and Mwangi, 2016;Baudoin et al, 2017;Morgans et al, 2018). Mehraban et al (2021) further argue that oil palm cultivation reduces household economic risk by reducing income variability in Indonesia. This risk-reducing effect of oil palm cultivation is evident despite fluctuating international palm oil prices.…”

Section: Oil Palm Provides Stable Income To Smallholder Farm Householdsmentioning

confidence: 99%

Oil palm boom: its socioeconomic use and abuse

Sibhatu

2023

Front. Sustain. Food Syst.

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Oil palm cultivation has experienced explosive expansion in recent decades. Although the oil palm boom has serious environmental and socioeconomic consequences, only environmental issues have garnered attention in public discussion and synthesis studies. In this study, we synthesize the literature on the socioeconomic impacts of oil palm expansion across various observation units and spatial and temporal scales, which is of significant relevance to policymakers, researchers, and the wider public. Our review demonstrates that oil palm expansion is a double-edged sword. On the one hand, it has significantly helped both producing and non-producing countries’ economies by facilitating the (re)export of crude palm oil and its byproducts and by creating employment opportunities. This has stimulated rural economies, led to rural poverty reduction, and improved food security and diets for rural households in producer countries. On the other hand, it has increased conflicts and tension between local communities and agro-industrial companies, worsened workers’ conditions, and widened domestic economic inequality between producing and non-producing areas within a given producer country. Monetary quantification of the costs of oil palm’s negative environmental and social impacts indicates that the loss of ecosystem services and social services far outweighs the benefits derived from the increased production of oil palm. The direct income benefits through harvest sales and employment are more evident in the Southeast Asia production frontier, where oil palm cultivation and marketing are relatively advanced and well-integrated into global value chains. The negative outcomes are observed in all oil palm production regions, with more negative effects on food security in the African production frontiers. We propose multiple actionable research and policy recommendations that may jointly lead to inclusive and sustainable socioeconomic (and environmental) outcomes in oil palm cultivation. The socioeconomic consequences of oil palm expansion at the global level, in the African and American production frontiers, and the role of gender in oil palm production systems remain understudied. Hence, studies should be conducted.

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“…In 2022, the harvested area is 12.5 million hectares and contributes to the world's total harvested area of 51.7% [3]. For Indonesia, oil palm is one of the economic pillars that makes a major contribution to foreign exchange earnings and job creation for the community [4,5] and reduces poverty among agricultural and non-agricultural households [6][7][8][9]. The Central Bureau of Statistics (BPS) noted that the export value of Indonesian palm oil in 2020 reached US $18,7 billion [10].…”

Section: Introductionmentioning

confidence: 99%

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

et al. 2023

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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.

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Oil palm cultivation, household welfare, and exposure to economic risk in the Indonesian small farm sector

Abstract: This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

Cited by 26 publications

References 30 publications

The Prosperity Level of Plasma Palm Oil Farmer’s Family in the State Border Area during the New Normal Era

The Prosperity Level of Plasma Palm Oil Farmer’s Family in the State Border Area during the New Normal Era

Oil palm boom: its socioeconomic use and abuse

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

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