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Farmer heterogeneity and differential livelihood impacts of oil palm expansion among smallholders in Sumatra, Indonesia

Author

Listed:
  • Krishna, Vijesh V.
  • Euler, Michael
  • Siregar, Hermanto
  • Fathoni, Zakky
  • Qaim, Matin

Abstract

The study examines the heterogeneous livelihood impacts of oil palm expansion among smallholder farmers in Jambi Province, Sumatra. Per-capita annual consumption expenditure (PACE) is chosen as a quantitative measure of livelihood status of farm-households. Its determinants are estimated using standard treatment-effect and endogenous switching regression models. After controlling for self-selection bias, adopters of oil palm are found increasing their PACE significantly in comparison to the counterfactual. On the other hand, most of the non-adopters are better-off without oil palm, presenting a strong case of comparative advantage. Differential consumption impacts of observed variables are evident across adoption and non-adoption regimes. In general, farm-households with higher opportunity cost of family labour benefit disproportionately more with oil palm adoption.

Suggested Citation

  • Krishna, Vijesh V. & Euler, Michael & Siregar, Hermanto & Fathoni, Zakky & Qaim, Matin, 2015. "Farmer heterogeneity and differential livelihood impacts of oil palm expansion among smallholders in Sumatra, Indonesia," EFForTS Discussion Paper Series 13, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    • Handle: RePEc:zbw:crc990:13
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    References listed on IDEAS

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    Cited by:

    1. Kibrom T. Sibhatu & Matin Qaim, 2018. "Farm production diversity and dietary quality: linkages and measurement issues," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(1), pages 47-59, February.
    2. Dislich, Claudia & Hettig, Elisabeth & Heinonen, Johannes & Lay, Jann & Meyer, Katrin M. & Tarigan, Suria & Wiegand, Kerstin, 2015. "Towards an integrated ecological-economic land-use change model," EFForTS Discussion Paper Series 17, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    3. 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.

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    More about this item

    Keywords

    adoption; agricultural development; endogenous switching; impact; Indonesia; farmer welfare;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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