Quantifying and understanding land cover changes by large and small oil palm expansion regimes in the Peruvian Amazon

With rapid increases in global food demand and production, oil palm expansion constitutes a major emerging challenge for forest conservation in Amazonia and other tropical forest regions. This threat is evident in the Peruvian Amazon, where local and national incentives for oil palm cultivation along with growing large-scale investments translate into accelerated oil palm expansion. Environmental sustainability of oil palm cultivation in the Peruvian Amazon is contingent on policy incentives for expansion onto already-cleared lands instead of biodiverse, high carbon primary rainforests. Previous research indicates that while industrial plantations use less land area than local smallholders, companies have a higher tendency to expand into primary rainforests. However, the motivations behind these differing expansion scenarios remain unclear. In this study we combine data from optical and radar satellite sensors with training information, field discussions, and review of public documents to examine the policy incentives and spatial patterns associated with oil palm expansion by smallholders and industries in one of Peru’s most rapidly changing Amazonian landscapes: the Ucayali region of the city of Pucallpa. Based on our satellite-based land cover change analysis, we found that between 2010 and 2016, smallholders utilized 21,070 ha more land area for oil palm than industries but industrial expansion occurred predominantly in old growth forests (70%) in contrast to degraded lands for smallholders (56%). Our analysis of national policies related to oil palm expansion reveal policy loopholes associated with Peru’s “best land use” classification system that allow for standing forests to undergo large-scale agricultural development with little government oversight. We conclude that both sectors will need careful, real-time monitoring and government engagement to reduce old-growth forest loss and develop successful strategies for mitigating future environmental impacts of oil palm expansion.     

Preventing wildlife crime with a focus on orangutans: Applying social influence techniques to public education efforts

Orangutans are projected to become critically endangered or extinct this century if humans continue to destroy their habitat. Threats include legal and illegal clearcutting of rain forests to establish palm oil plantations, climate change, and transnational organized crime. This study examines how self-benefit and other benefit appeals, knowledge of threats, concern about habitat loss, and liking orangutans are associated with (a) intent to protect habitat due to licit threats and crimes against wildlife, and (b) seeking information to save habitat. Upon entry to a zoo, 251 (118 men, 128 women, and 5 unknown) persons viewed posters highlighting the benefits of habitat conservation to self or others and completed a survey. Concern, threat knowledge, liking, and self-benefit and other benefit appeals accounted for 28% of the variance associated with intent to take action to protect the habitat. Integrating social influence principles into zoo displays and addressing barriers that prevent conservation behavior are discussed. The ideas in this paper are relevant to many primates and endangered species.     

Extreme risk spillovers between crude palm oil prices and exchange rates

This study is the first attempt to examine the extreme risk spillovers between Malaysian crude palm oil (CPO) and foreign exchange currencies of the three largest CPO importers: India, the European Union and China throughout the global financial crisis. Using daily data of three currencies, CPO spot and futures from 2000 to 2018, our results show: First, before the crisis, the unexpected change in foreign exchange rates is the primary driver of risk spillover to the CPO market. Second, during the crisis, the extreme movement of CPO spot returns is dominant in the Malaysian exchange rates relative to the euro. Third, after the crisis, the spillover flows from the CPO market to the foreign exchange market. Overall, our findings show the importance of CPO pricing dynamics in mitigating foreign exchange risk over the crisis period. This paper contributes to the extant literature by recognizing the effect of risk spillover on the targeted foreign exchange rate for portfolio allocation.     

Discouraging Rainforest Transformation: An Ex-ante Policy Impact Analysis

Despite extensive efforts made by national and international certification agencies, Indonesian smallholder farmers’ participation in palm oil certification schemes adoption remains low. A fundamental obstacle is the smallholder practice of rainforest transformation into oil palm plantation which is forbidden by the agencies. In this context, we investigate three policies that could lead to a reduction in rainforest deforestation by smallholders: price premium on certified palm oil; the provision of environmental information; contributor recognition. In order to evaluate the influence of the policies ex-ante, we conduct a social dilemma experiment involving rubber and oil palm smallholders in Jambi Province, Sumatra, Indonesia. The findings indicate that the price premium and provision of context-specific environmental information could reduce rainforest transformation. However, a statistically significant effect of contributor recognition was not found.     

Governing the Palm-Oil Sector through Finance: The Changing Roles of the Indonesian State

By analysing the different roles of the Indonesian state in arranging finance schemes for palm-oil development since 1945, this article aims to answer two questions: What are these roles? And to what extent have they prioritised or balanced economic growth, social equity, and environmental protection? We conclude that the state has never been absent from the palm-oil industry but has had different and changing financing roles that are historically contingent and shaped by the evolving economic and political landscape. Furthermore, these roles reflect Indonesia’s priorities of achieving economic growth through palm-oil development, furthering social equity, and, recently, promoting environmental sustainability.     

Exploring under-utilised low carbon land resources from multiple perspectives: Case studies on regencies in Kalimantan

Mobilising under-utilised low carbon (ULC) land resources for future agricultural production can help reducing pressure on high carbon stock land from agricultural expansion, particularly for deforestation hotspots like Kalimantan. However, the potential of ULC land is not yet well understood, especially at regency level which is the key authority for land-use planning in Indonesia. Therefore, this study explored ULC land resources for all regencies in Kalimantan. By analysing information from six monitoring domains, a range of indicators were derived to provide insights into the physical area of ULC land from various perspectives. It was found that these indicators show largely different values at regency level. For example, regency Pulang Pisau has a substantial area of ‘temporarily unused agricultural land’ but a very limited area of ‘low carbon land’ – this implies that not all ‘temporarily unused agricultural land’ is ready for future exploitation when assessing from different aspects. As a result of such diverging indicators, using a single indicator to quantify available ULC land resources is risky as it can either be an over- or under-estimation. Thus, ULC land resources were further explored in the present paper by taking four regencies as case studies and comparing all the indicators, supported with relevant literature and evidence collected from narrative interviews. This information was used to estimate ULC land area by possible land-use strategies. For example, Gunung Mas was found to have a large area of low carbon land which is not occupied and might be suitable for oil palm deployment. However, the major limitation is that physical estimates cannot provide a complete picture of ‘real’ land availability without considering a broader range of socio-economic factors (e.g. labour availability). Therefore, physical land area indicators from different domains must be combined with other qualitative and quantitative information especially the socio-economic factors underlying land under-utilisation to obtain better estimates.     

Effects of Export Duty Structure on the Performance of the Malaysian Palm Oil Industry

This study examines the impact of the abatement of the export duty on the Malaysian palm oil industry performance. The simulation results show that the impact of reductions in the export duty rates and the impact of increases in the threshold prices on the Malaysian palm oil industry have the same impact but with different magnitudes. Even the simulated results indicate that the policy of further reductions in the Malaysian export duty will promote its positive effects on the local palm oil industry; however, the impact is shown to not be significant. The further reduction of the export tax is very constrained and believed to no longer be the most effective policy in enhancing the competitiveness of local palm oil industry in the future. Hence, policymakers have to be aware of the possibility that the reduction of the export tax may no longer be an effective sustainable approach in facilitating the development of Malaysian palm oil industry.     

Context matters: Oil palm production and women's dietary diversity in the tropical forest of Cameroon

Oil palm is one of the most rapidly expanding food and cash crops in many tropical regions with significant environmental implications, but also economic gains. Previous analyses have established that this expansion is associated with changing gender roles and time allocation for women. Time allocation is an important determinant of maternal and child nutrition as well as well-being. We use a rich farm household survey from a native oil palm production hotspot, Cameroon, to examine the associations between oil palm production and women's dietary diversity. Using different estimation and identification strategies with some sensitivity checks, we show that oil palm is associated with lower dietary diversity for women, measured as the minimum dietary diversity for women and the minimum adequacy diversity diet. We explore heterogeneity in the various food groups consumed by women and show that oil palm production is associated with lower consumption of mainly pulses, fruits and vegetables. These findings contrast with the literature that has established some positive dietary diversity implications of oil palm expansion in Southeast Asia. We carefully discuss these findings and argue that context matters and may explain these differences. Particularly, we show that oil palm production is negatively associated with farm production diversity in Cameroon. Notwithstanding, we also confirm previous findings that highlight that oil palm production is associated with higher income. These insights add to the debate on the implications of oil palm expansion in tropical environments. Moreover, they can guide policy in designing more tailored interventions that address nutrition issues and improve rural development.     

Forestry,Forest Fires,and Climate Change in Indonesia

In recent months, strong global growth, rebounding commodity prices, and relatively accommodative financial conditions have benefited the Indonesian economy. The first quarter of 2017 in Indonesia saw resilient GDP growth, moderate inflation, stable exchange rates, an increase in the growth of non-oil exports, and an investment upgrade from ratings agency Standard & Poor's. Investment growth, however, did not pick up enough to drive overall growth to a higher rate. The poor quality of banking-sector assets and the gaps in tax revenue—despite the fulfilment of the government's tax-amnesty program—are two of the most immediate economic concerns. President Joko Widodo (Jokowi), who is well into the second half of his term, is under pressure to deliver on his development platform, which includes making progress in sustainable development and climate change mitigation. The effective management of forests is key to this platform. There has been longstanding tension over Indonesia's forests between the protection of environmental values, including carbon storage, and the production of valuable commodities, including timber, palm oil, and pulpwood, which generate revenue and employment. We survey recent developments in four storylines related to forestry and climate change: first, Indonesia's commitment to reducing emissions to 29%–41% below projected business-as-usual levels by 2030, as well as the international climate agreements and finance that can help achieve this commitment; second, land-use rights and regulations, including a moratorium on clearing, draining, or setting fires on peatland; third, measures to prevent catastrophic forest fires like those during the 2015 El Niño, including the establishment of the Peatland Restoration Agency; and, fourth, the actions of non-state actors, especially large agribusinesses, in managing forests and peatland. We conclude by discussing differences in the approaches of Jokowi's administration and those of former president Susilo Bambang Yudhoyono's administration and by questioning whether Indonesia's budgeted resources, actions, and results to date are commensurate with its climate commitments.     

Analysis of Indonesia's Market Position in Palm Oil Market in China and India

The objective of the study is to analyze the competition between palm oil with its substitute and between Indonesia's and Malaysia's palm oil in China and India. An import demand equation using Almost Ideal Demand System (AIDS) is constructed. The result indicates that Indonesia's palm oil is more elastic in China and India. Moreover, in China, Indonesia's and Malaysia's palm oil complement each other.