IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v120y2019icp105-117.html
   My bibliography  Save this article

Does oil palm agriculture help alleviate poverty? A multidimensional counterfactual assessment of oil palm development in Indonesia

Author

Listed:
  • Santika, Truly
  • Wilson, Kerrie A.
  • Budiharta, Sugeng
  • Law, Elizabeth A.
  • Poh, Tun Min
  • Ancrenaz, Marc
  • Struebig, Matthew J.
  • Meijaard, Erik

Abstract

Palm oil producing countries regularly promote the positive impact of oil palm agriculture on poverty alleviation, despite limited evidence about the contribution of this crop on village well-being. Past evaluations that quantify the social impact of oil palm are dominated by localized studies, which complicate the detection of generalizable findings. Moreover, only a few of these evaluations are based on rigorous case-control studies, which limits the robustness of the conclusions. Here we examined the association between the development of oil palm plantations and change in objective or material well-being between 2000 and 2014 across villages in Kalimantan, Indonesian Borneo. We applied a matching method to evaluate the impacts of oil palm plantations across different aspects of well-being, accounting for varying time delays in the accrual and realization of benefits after plantation development. Our study reveals that the social impacts of oil-palm plantations are not uniformly positive, nor negative, and have varied systematically with biophysical locations and baseline socioeconomic conditions of nearby communities prior to oil palm development. Plantations developed in villages with low to moderate forest cover, in which the majority of communities already relied on market-oriented livelihoods, were associated with improved socioeconomic well-being compared to villages without oil palm development. However, we found the opposite for plantations developed in remote villages with higher forest cover, in which the majority of communities previously relied on subsistence-based livelihoods. Overall, oil palm growing villages were more associated with reduced rate of improvement of social and environmental well-being compared to villages without oil palm development, regardless of location and baseline community livelihoods. Our findings highlight an urgent need for careful evaluation and planning in the development of oil palm agriculture in remote forested areas. For oil palm regions that have been developed, our study shows that unsustainable livelihoods, increased socioeconomic disparity, and environmental issues remain major challenges.

Suggested Citation

  • Santika, Truly & Wilson, Kerrie A. & Budiharta, Sugeng & Law, Elizabeth A. & Poh, Tun Min & Ancrenaz, Marc & Struebig, Matthew J. & Meijaard, Erik, 2019. "Does oil palm agriculture help alleviate poverty? A multidimensional counterfactual assessment of oil palm development in Indonesia," World Development, Elsevier, vol. 120(C), pages 105-117.
    • Handle: RePEc:eee:wdevel:v:120:y:2019:i:c:p:105-117
    DOI: 10.1016/j.worlddev.2019.04.012
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X1930097X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2019.04.012?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zoomers, Annelies & van Noorloos, Femke & Otsuki, Kei & Steel, Griet & van Westen, Guus, 2017. "The Rush for Land in an Urbanizing World: From Land Grabbing Toward Developing Safe, Resilient, and Sustainable Cities and Landscapes," World Development, Elsevier, vol. 92(C), pages 242-252.
    2. Krystof Obidzinski & Ahmad Dermawan & Adi Hadianto, 2014. "Oil palm plantation investments in Indonesia’s forest frontiers: limited economic multipliers and uncertain benefits for local communities," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 16(6), pages 1177-1196, December.
    3. Costanza, Robert & Fisher, Brendan & Ali, Saleem & Beer, Caroline & Bond, Lynne & Boumans, Roelof & Danigelis, Nicholas L. & Dickinson, Jennifer & Elliott, Carolyn & Farley, Joshua & Gayer, Diane Elli, 2007. "Quality of life: An approach integrating opportunities, human needs, and subjective well-being," Ecological Economics, Elsevier, vol. 61(2-3), pages 267-276, March.
    4. Euler, Michael & Krishna, Vijesh & Schwarze, Stefan & Siregar, Hermanto & Qaim, Matin, 2017. "Oil Palm Adoption, Household Welfare, and Nutrition Among Smallholder Farmers in Indonesia," World Development, Elsevier, vol. 93(C), pages 219-235.
    5. Kimberly M. Carlson & Lisa M. Curran & Gregory P. Asner & Alice McDonald Pittman & Simon N. Trigg & J. Marion Adeney, 2013. "Carbon emissions from forest conversion by Kalimantan oil palm plantations," Nature Climate Change, Nature, vol. 3(3), pages 283-287, March.
    6. Michael Euler & Stefan Schwarze & Hermanto Siregar & Matin Qaim, 2016. "Oil Palm Expansion among Smallholder Farmers in Sumatra, Indonesia," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 658-676, September.
    7. Klasen, Stephan & Meyer, Katrin M. & Dislich, Claudia & Euler, Michael & Faust, Heiko & Gatto, Marcel & Hettig, Elisabeth & Melati, Dian N. & Jaya, I. Nengah Surati & Otten, Fenna & Pérez-Cruzado, Cés, 2016. "Economic and ecological trade-offs of agricultural specialization at different spatial scales," Ecological Economics, Elsevier, vol. 122(C), pages 111-120.
    8. Phalan, Ben, 2009. "The social and environmental impacts of biofuels in Asia: An overview," Applied Energy, Elsevier, vol. 86(Supplemen), pages 21-29, November.
    9. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
    10. Rosenbaum, Paul R., 2005. "Heterogeneity and Causality: Unit Heterogeneity and Design Sensitivity in Observational Studies," The American Statistician, American Statistical Association, vol. 59, pages 147-152, May.
    11. McCarthy, John F. & Gillespie, Piers & Zen, Zahari, 2012. "Swimming Upstream: Local Indonesian Production Networks in “Globalized” Palm Oil Production," World Development, Elsevier, vol. 40(3), pages 555-569.
    12. Budiharta, Sugeng & Meijaard, Erik & Wells, Jessie A. & Abram, Nicola K. & Wilson, Kerrie A., 2016. "Enhancing feasibility: Incorporating a socio-ecological systems framework into restoration planning," Environmental Science & Policy, Elsevier, vol. 64(C), pages 83-92.
    13. Gatto, Marcel & Wollni, Meike & Asnawi, Rosyani & Qaim, Matin, 2017. "Oil Palm Boom, Contract Farming, and Rural Economic Development: Village-Level Evidence from Indonesia," World Development, Elsevier, vol. 95(C), pages 127-140.
    14. Vijesh Krishna & Michael Euler & Hermanto Siregar & Matin Qaim, 2017. "Differential livelihood impacts of oil palm expansion in Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 48(5), pages 639-653, September.
    15. Belcher, Brian & Achdiawan, Ramadhani & Dewi, Sonya, 2015. "Forest-Based Livelihoods Strategies Conditioned by Market Remoteness and Forest Proximity in Jharkhand, India," World Development, Elsevier, vol. 66(C), pages 269-279.
    16. Jelsma, Idsert & Schoneveld, G.C. & Zoomers, Annelies & van Westen, A.C.M., 2017. "Unpacking Indonesia’s independent oil palm smallholders: An actor-disaggregated approach to identifying environmental and social performance challenges," Land Use Policy, Elsevier, vol. 69(C), pages 281-297.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Santika, Truly & Wilson, Kerrie A. & Meijaard, Erik & Budiharta, Sugeng & Law, Elizabeth E. & Sabri, Meindra & Struebig, Matthew & Ancrenaz, Marc & Poh, Tun-Min, 2019. "Changing landscapes, livelihoods and village welfare in the context of oil palm development," Land Use Policy, Elsevier, vol. 87(C).
    2. Ruml, Anette & Chrisendo, Daniel & Iddrisu, Abdul Malik & Karakara, Alhassan A. & Nuryartono, Nunung & Osabuohien, Evans & Lay, Jann, 2022. "Smallholders in agro-industrial production: Lessons for rural development from a comparative analysis of Ghana’s and Indonesia’s oil palm sectors," Land Use Policy, Elsevier, vol. 119(C).
    3. Daniel Chrisendo & Hermanto Siregar & Matin Qaim, 2021. "Oil palm and structural transformation of agriculture in Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 52(5), pages 849-862, September.
    4. Chrisendo, Daniel & Krishna, Vijesh V. & Siregar, Hermanto & Qaim, Matin, 2020. "Land-use change, nutrition, and gender roles in Indonesian farm households," Forest Policy and Economics, Elsevier, vol. 118(C).
    5. Bou Dib, Jonida & Alamsyah, Zulkifli & Qaim, Matin, 2018. "Land-use change and income inequality in rural Indonesia," Forest Policy and Economics, Elsevier, vol. 94(C), pages 55-66.
    6. Krishna, Vijesh V. & Kubitza, Christoph, 2021. "Impact of oil palm expansion on the provision of private and community goods in rural Indonesia," Ecological Economics, Elsevier, vol. 179(C).
    7. Ruml, Anette & Chrisendo, Daniel & Osabuohien, Evans & Karakara, Alhassan & Iddrisu, Abdul Malik & Lay, Jann, 2021. "Smallholders in Agro-Industrial Production: Lessons from Rural Development at New Frontiers from a Comparative Analysis of Ghana’s and Indonesia’s Oil Palm Sectors," 2021 Conference, August 17-31, 2021, Virtual 315162, International Association of Agricultural Economists.
    8. Ogahara, Zoë & Jespersen, Kristjan & Theilade, Ida & Nielsen, Martin Reinhard, 2022. "Review of smallholder palm oil sustainability reveals limited positive impacts and identifies key implementation and knowledge gaps," Land Use Policy, Elsevier, vol. 120(C).
    9. Nadjia Mehraban & Christoph Kubitza & Zulkifli Alamsyah & Matin Qaim, 2021. "Oil palm cultivation, household welfare, and exposure to economic risk in the Indonesian small farm sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 901-915, September.
    10. Kubitza, Christoph & Gehrke, Esther, 2018. "Why does a labor-saving technology decrease fertility rates? Evidence from the oil palm boom in Indonesia," EFForTS Discussion Paper Series 22, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    11. Salecker, Jan & Dislich, Claudia & Wiegand, Kerstin & Meyer, Katrin M. & Pe'er, Guy, 2019. "EFForTS-LGraf: A landscape generator for creating smallholder-driven land-use mosaics," EFForTS Discussion Paper Series 29, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    12. Sibhatu, Kibrom T. & Steinhübel, Linda & Siregar, Hermanto & Qaim, Matin & Wollni, Meike, 2021. "Spatial Heterogeneity of Oil Palm Production in Indonesia: Implications for Intervention Strategies," 2021 Conference, August 17-31, 2021, Virtual 315222, International Association of Agricultural Economists.
    13. Bou Dib, Jonida & Krishna, Vijesh V. & Alamsyah, Zulkifli & Qaim, Matin, 2018. "Land-use change and livelihoods of non-farm households: The role of income from employment in oil palm and rubber in rural Indonesia," Land Use Policy, Elsevier, vol. 76(C), pages 828-838.
    14. Krishna, Vijesh V. & Kubitza, Christoph & Pascual, Unai & Qaim, Matin, 2017. "Land markets, Property rights, and Deforestation: Insights from Indonesia," World Development, Elsevier, vol. 99(C), pages 335-349.
    15. Kubitza, Christoph & Dib, Jonida Bou & Kopp, Thomas & Krishna, Vijesh V. & Nuryartono, Nunung & Qaim, Matin & Romero, Miriam & Klasen, Stephan, 2019. "Labor savings in agriculture and inequality at different spatial scales: The expansion of oil palm in Indonesia," EFForTS Discussion Paper Series 26, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    16. Kubitza, Christoph & Vijesh, Krishna V. & Klasen, Stephan & Kopp, Thomas & Nuryartono, Nunung & Qaim, Matin, 2021. "Labor Displacement in Agriculture: The Case of Oil Palm in Indonesia," 2021 Conference, August 17-31, 2021, Virtual 314982, International Association of Agricultural Economists.
    17. Romero, Miriam & Wollni, Meike & Rudolf, Katrin & Asnawi, Rosyani & Irawan, Bambang, 2019. "Promoting biodiversity enrichment in smallholder oil palm monocultures – Experimental evidence from Indonesia," World Development, Elsevier, vol. 124(C), pages 1-1.
    18. Sibhatu, Kibrom T. & Steinhübel, Linda & Siregar, Hermanto & Qaim, Matin & Wollni, Meike, 2022. "Spatial heterogeneity in smallholder oil palm production," Forest Policy and Economics, Elsevier, vol. 139(C).
    19. Dalheimer, Bernhard & Parikoglou, Iordanis & Brambach, Fabian & Yanita, Mirawati & Kreft, Holger & Brümmer, Bernhard, 2024. "On the palm oil-biodiversity trade-off: Environmental performance of smallholder producers," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    20. Mikkel Kruuse & Kasper Reming Tangbæk & Kristjan Jespersen & Caleb Gallemore, 2019. "Navigating Input and Output Legitimacy in Multi-Stakeholder Initiatives: Institutional Stewards at Work," Sustainability, MDPI, vol. 11(23), pages 1-27, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:120:y:2019:i:c:p:105-117. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.