Sustainability Criteria of Smallholders Oil Palm Farming in Indonesia: A Stakeholder View

Abstract:

INDONESIA HAS become a major supplier of palm oil in the world market which is reflected in the significant expansion in the country’s area planted to oil palm. This expansion has largely been at the expense of forest and peat lands mainly in Sumatra. In response to actual and potential environmental and social problems the Government of Indonesia (GoI) has been promoting the concept of sustainable oil palm production (ISPO). ISPO is a regulatory measure for oil palm growers in Indonesia.

In this paper, we analyze the views of different stakeholder along the oil palm value chain in the oil palm industry including those small holders in the province of Jambi, Sumatra. Our source of data is focus group discussions in three villages and a stakeholder survey that included large scale oil palm producers, government agencies, farmers association, researchers and NGOs. The objectives of the study are twofold: (1) to compare stakeholders views on the ISPO criteria and (2) to explore perceptions of oil palm farmers to implement ISPO criteria in the reality of small holder oil palm production.

In the analysis keywords from Focus Group Discussions were analyzed using qualitative methods and descriptive statistical are used to describe stakeholder views on ISPO criteria. Results show that while stakeholders tend to agree on the principles large differences exist in views regarding the practicality and economics of implementation of standards. Focus Group discussions revealed that ISPO criteria do not only have benefits but also have costs which in many cases are beyond household’s financial capacity. The policy recommendation emerging from these findings is that governments on the one hand should more strictly enforce standards and on the other hand should provide more effective guidance on contractual arrangements between small holders and oil palm companies.

Keywords: Sustainability criteria, smallholders oil palm, Indonesia.[]

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Ernah & Hermann Waibel, “Sustainability Criteria of Smallholders Oil Palm Farming in Indonesia: A Stakeholder View”, Paper presented at the International Conference, Konferensi Nasional XVII, and Kongres XVI Perhimpunan Ekonomi Pertanian Indonesia (PERHEPI), Bogor, August 28-29, 2014.