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Oil Palm Boom and Land-Use Dynamics in Indonesia: The Role of Policies and Socioeconomic Factors

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  • Gatto, Marcel
  • Wollni, Meike
  • Qaim, Matin

Abstract

We investigate land-use dynamics in Jambi, Sumatra, one of the hotspots of Indonesia' recent oil palm boom. Data from a structured village survey are used to analyze the role of socioeconomic and policy factors. Oil palm is partly grown on large plantations, but smallholders are also involved significantly. We find that, in spite of significant oil palm expansion, rubber remains the dominant crop. Most of the oil palm growth takes place on previous fallow and rubber land. Oil palm has not been a major driver of deforestation. Much of the forest in Jambi was cleared more than 20 years ago, and rubber was an established cash crop long before the oil palm boom started. However, oil palm growth occurs in locations with ongoing logging activities, so indirect effects on deforestation are likely. The government's transmigration program of the 1980s and 1990s was instrumental for the start and spread of oil palm in Jambi. Some autochthonous villages have adopted oil palm, but adoption started later compared to migrants from Java, and it happens at a slower pace. While the transmigration program benefited many of the participating families, it has contributed to the risk of unequal socioeconomic developments in Jambi.

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  • Gatto, Marcel & Wollni, Meike & Qaim, Matin, 2014. "Oil Palm Boom and Land-Use Dynamics in Indonesia: The Role of Policies and Socioeconomic Factors," EFForTS Discussion Paper Series 6, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    • Handle: RePEc:zbw:crc990:6
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    References listed on IDEAS

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    1. Larson, Donald F., 1996. "Indonesia's palm oil subsector," Policy Research Working Paper Series 1654, The World Bank.
    2. Hauser-Schäublin, Brigitta & Steinebach, Stefanie, 2014. "Harapan: A "No Man's Land" Turned into a Contested Agro-Industrial Zone," EFForTS Discussion Paper Series 4, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    3. David E. Sahn & David Stifel, 2003. "Exploring Alternative Measures of Welfare in the Absence of Expenditure Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(4), pages 463-489, December.
    4. Wheeler, David & Hammer, Dan & Kraft, Robin & Dasgupta, Susmita & Blankespoor, Brian, 2013. "Economic dynamics and forest clearing: A spatial econometric analysis for Indonesia," Ecological Economics, Elsevier, vol. 85(C), pages 85-96.
    5. Mertens, Benoit & Sunderlin, William D. & Ndoye, Ousseynou & Lambin, Eric F., 2000. "Impact of Macroeconomic Change on Deforestation in South Cameroon: Integration of Household Survey and Remotely-Sensed Data," World Development, Elsevier, vol. 28(6), pages 983-999, June.
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    Cited by:

    1. 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.
    2. 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.
    3. Gatto, Marcel & Wollni, Meike & Rosyani, Ir. & Qaim, Matin, 2015. "Oil Palm Boom, Contract Farming, and Village Development: Evidence from Indonesia," EFForTS Discussion Paper Series 10, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    4. Krishna, Vijesh V. & Pascual, Unai & Qaim, Matin, 2014. "Do emerging land markets promote forestland appropriation? Evidence from Indonesia," EFForTS Discussion Paper Series 7, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    5. Kauškale Linda & Geipele Ineta, 2015. "Land Use Analysis in Latvia in The Context of Sustainable Development," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 3(1), pages 14-25, December.
    6. 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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    Keywords

    oil palm; land-use change; deforestation; socioeconomic factors; Indonesia; government policy;
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