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Palmed Off: Incentive Problems with Joint-Venture Schemes for Oil Palm Development on Customary Land

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  • Cramb, R.A.

Abstract

The oil palm boom has prompted governments and plantation companies to find ways to incorporate customary landholders in large-scale plantation developments. This paper examines the joint-venture model that has been widely promoted in Sarawak, Malaysia. Principal–agent theory is used to analyze the structural relations between the actors in joint-venture projects—the landholders, the government agency that acts as their trustee, and the private investor. The analysis shows that unequal access to information and influence has compromised the stated objectives of the joint-venture schemes, leaving customary landholders vulnerable to significant exploitation and losses. Thus there has been a systematic failure to achieve the anticipated developmental outcomes.

Suggested Citation

  • Cramb, R.A., 2013. "Palmed Off: Incentive Problems with Joint-Venture Schemes for Oil Palm Development on Customary Land," World Development, Elsevier, vol. 43(C), pages 84-99.
    • Handle: RePEc:eee:wdevel:v:43:y:2013:i:c:p:84-99
    DOI: 10.1016/j.worlddev.2012.10.015
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    Cited by:

    1. Apriani, Ernawati & Kim, Yeon-Su & Fisher, Larry A. & Baral, Himlal, 2020. "Non-state certification of smallholders for sustainable palm oil in Sumatra, Indonesia," Land Use Policy, Elsevier, vol. 99(C).
    2. Chamberlain, Wytske & Anseeuw, Ward, 2019. "Inclusive businesses in agriculture: Defining the concept and its complex and evolving partnership structures in the field," Land Use Policy, Elsevier, vol. 83(C), pages 308-322.
    3. Schwarze, Stefan & Euler, Michael & Gatto, Marcel & Hein, J. & Hettig, Elisabeth & Holtkamp, Anna Mareike & Izhar, Lutfi & Kunz, Y. & Lay, J. & Merten, J. & Moser, S. & Mußhoff, O. & Otten, Fenna & Qa, 2015. "Rubber vs. oil palm: an analysis of factors influencing smallholders' crop choice in Jambi, Indonesia," EFForTS Discussion Paper Series 11, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    4. Wilman, Elizabeth A., 2019. "Market Redirection Leakage in the Palm Oil Market," Ecological Economics, Elsevier, vol. 159(C), pages 226-234.
    5. Pye, Oliver, 2019. "Commodifying sustainability: Development, nature and politics in the palm oil industry," World Development, Elsevier, vol. 121(C), pages 218-228.
    6. Euler, Michael & Hoffmann, Munir P. & Fathoni, Zakky & Schwarze, Stefan, 2016. "Exploring yield gaps in smallholder oil palm production systems in eastern Sumatra, Indonesia," Agricultural Systems, Elsevier, vol. 146(C), pages 111-119.
    7. Jelsma, Idsert & Woittiez, Lotte S. & Ollivier, Jean & Dharmawan, Arya Hadi, 2019. "Do wealthy farmers implement better agricultural practices? An assessment of implementation of Good Agricultural Practices among different types of independent oil palm smallholders in Riau, Indonesia," Agricultural Systems, Elsevier, vol. 170(C), pages 63-76.
    8. Christoph Oberlack & Markus Giger & Ward Anseeuw & Camilla Adelle & Magalie Bourblanc & Perrine Burnod & Sandra Eckert & Wegayehu Fitawek & Eve Fouilleux & Sheryl Hendriks & Boniface Kiteme & Livhuwan, 2021. "Why do large-scale agricultural investments induce different socio-economic, food security, and environmental impacts? Evidence from Kenya, Madagascar, and Mozambique," Post-Print hal-03419337, HAL.
    9. Edi Purwanto & Hery Santoso & Idsert Jelsma & Atiek Widayati & Hunggul Y. S. H. Nugroho & Meine van Noordwijk, 2020. "Agroforestry as Policy Option for Forest-Zone Oil Palm Production in Indonesia," Land, MDPI, vol. 9(12), pages 1-34, December.

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