Perceived Environment-Economic Benefits and Factors Influencing the Adoption of Indonesian Sustainable Palm Oil Production System by Smallholder Farmers

Abstract

Palm oil industry plays a vital role in Indonesia economy. The palm oil industry can also support sustainable development since it is based on renewable natural resources. The contribution to sustainable development is hampered if oil palm production system, especially of smallholder farmers is not sustainable. Smallholder farmers consist of almost half of the total of oil palm plantations in Indonesia. The sustainability of oil palm farming of smallholder farmers may influence significantly to the overall sustainability. The adoption of Indonesia sustainable palm oil production system by smallholder farmers may improve the sustainability of oil palm farming. This study aimed to find out if perceived environment-economic benefit differed between conventional and sustainable oil palm farmers and to uncover factors affecting the adoption of Indonesia sustainable oil palm production system. The respondents were selected using a purposive sampling method, comprising of 313 conventional smallholder farmers and 167 smallholder farmers implementing Indonesian sustainable palm oil production system. A structured-questionnaire used to gather data. Descriptive statistics and logic regressions were utilized to analyse the data. The results show that the perceived environment and economic benefit is higher for farmers adopting sustainable palm oil production than conventional farmers. Several factors which were the age of farmer, formal and non-formal education, income, total land managed, the involvement of farmer in a cooperative, and environmental management did not motivate farmers to adopt Indonesian sustainable palm oil production system. While the experience of the farmers, family size, main job, involvement in farmer‘s association, doing good cultivation practice, and plantation management influenced the adoption of Indonesian sustainable palm oil production.

Palm oil’s contribution to the United Nations sustainable development goals: outcomes of a review of socio-economic aspects

“…It should, however, be taken into account that the minimum size of a monoculture plot should be 6 ha to guarantee productivity and meet family needs (Li 2018). Adiprasetyo et al (2019) showed that, in general, perceived economic and environmental benefits are greater for farmers who adopt sustainable palm oil production than for conventional farmers. Specifically, an analysis carried out in Kalimantan (Indonesia) shows that the application of RSPO certification does not bring about a reduction in poverty but could be related to a deceleration in the growth of poverty rates (Morgans et al 2018).…”

“…In order to limit these negative effects, it is important for all stakeholders involved in the production chain, together with politicians, investors and civil society, to agree on the need for responsible palm oil production that avoids the conversion of natural ecosystems, maximizes ecosystem services, respects Earth and, above all, guarantees the fair redistribution of socio-economic benefits (Persey et al 2011, Schrier-Uijl et al 2013, Elmhirst et al 2017a, Edwards 2018, Sitepu et al 2020. For example, according to a number of studies conducted in Indonesia, smallholders' implementation of a sustainable approach to oil palm cultivation through the adoption of standard certification schemes such as ISPO and RSPO leads not only to greater social benefits than conventional production, but also to better economic outcomes (Morgans et al 2018, Adiprasetyo et al 2019. It is important to point out that the criteria contained in sustainable production certification schemes do not only address compliance with employment and migration standards, but also refer to other services, such as training, housing, water supply, electricity, insurance (Dayang Norwana et al 2011) and other basic social services such as healthcare and education (Obidzinski et al 2012).…”

“…Santika et al (2019Santika et al ( , 2020 also demonstrate that the socio-economic impacts of oil palm expansion differ depending on the site-specific characteristics of the villages and, in particular, the basic socioeconomic conditions of the villages prior to oil palm expansion. According to some studies, the adoption of practices for the sustainable production of palm oil brings about greater economic, environmental and social benefits than conventional production, benefits that are perceived by the farmers themselves (Elmhirst et al 2017a, Adiprasetyo et al 2019). Another study (Yaap and Paoli 2014) that analyses four certification standards-RSPO, ISCC, ISPO and SAN-shows that all four contain rules and principles aimed at preventing any form of discrimination related to race, gender, social class, sexual orientation, disability or political affiliation.…”

Green consumer behaviour influences Indonesian palm oil sustainability

“…The use of these methods itself is a novelty. Many studies have used SEM in exploring smallholder behaviour (Adiprasetyo et al 2019), soil (Tao et al 2018, Winanto 2017, contribution to regional gross domestic product (Muda et al 2017), biodiversity (Giam et al 2015), performance (Lukman et al 2019, Winarsih et al 2021 and sustainable behaviour for land remediation (Hou et al 2014). However, there is a lack of studies that systematically build, model and test sets of variables that have the potential to affect sustainability and livelihoods.…”

“…The use of these methods itself is a novelty. Many studies have used SEM in exploring smallholder behaviour (Adiprasetyo et al . 2019), soil (Tao et al .…”