Oil Palm Expansion among Smallholder Farmers in Sumatra,Indonesia

Many tropical regions are experiencing a rapid growth of oil palm cultivation. In Indonesia, the world's leading palm oil producer, in addition to large companies, smallholder farmers are increasingly engaged in the oil palm sector. Smallholder oil palm cultivation may contribute to income gains and socio‐economic development. However, land‐use decisions by smallholders are not well understood. Without appropriate policies, negative social and environmental consequences can also occur. To improve the knowledge base, we use data about present and past land‐use decisions from a survey of farm households in Sumatra. Employing duration models, we analyse the determinants and dynamics of oil palm adoption among smallholders. We find that independently operating farmers are currently driving growth rates in the oil palm sector. Smallholder adoption decisions are mainly attributable to regional and village level factors. While the current adoption primarily occurs outside of contracts, previous contractual ties between companies and other farmers in the same village play an important role for individual decisions. Beyond initial adoption, we also analyse later expansion decisions. While expanding the oil palm area subsequent to initial adoption is common among all types of adopters, those without previous contracts are found to expand significantly faster. We conclude that the concessions the government has allocated to palm oil companies in the past have initiated oil palm adoption in the small farm sector, but that the ensuing land‐use dynamics are mostly beyond government control. Some wider implications are discussed.     

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.     

From Farm to Kitchen: How Gender Affects Production Diversity and the Dietary Intake of Farm Households in Ethiopia

Malnutrition in farm households remains a significant problem in many developing countries and is linked to a lack of diversity in diets. We explore how gender differences might affect household dietary diversity using the LSMS‐ISA Ethiopia panel dataset. Drawing on a farm household framework, nonlinear panel models are estimated allowing for unobserved heterogeneity and production endogeneity using a control function. We use decomposition techniques to identify the impact of different potential sources of gender difference in dietary diversity. Our results provide evidence of significant gender effects in production diversity and in dietary diversity using the food variety score (FVS). For other indicators of dietary diversity, the evidence of gender effects is weaker. The decomposition results suggest that, after controlling for differences in characteristics, female‐headed households are at a dietary diversity disadvantage. Gender differences in the relationship between production diversity, price and income and dietary diversity and the production diversity decisions appear to be the main drivers. The results also suggest that female preferences are more orientated towards ensuring greater dietary diversity in the household. Our evidence also suggests that a key driver of gender disadvantage in dietary diversity is related to whether food is sourced from the household’s own production or the market. This implies that part of the observed negative gender impact on dietary diversity may stem from differences in marketing and storage of own production through the year.     

Does mixed crop‐livestock farming lead to less diversified diets among smallholders? Evidence from Laos

Malnourishment continues to remain a challenge in developing countries. As the undernourished are largely smallholder farmers, it is widely assumed that farm diversification and mixed crop‐livestock agricultural systems can help alleviate this problem. However, empirical evidence in this context is limited. Hence, we use a two‐year panel's data from Laos to examine whether farm production diversity as well as a mixed crop‐livestock farming system improves household dietary diversity among smallholder farmer. The results from the fixed effects regression indicate that although farm production diversity does lead to a higher dietary diversity, the effect diminishes with continued farm diversification. The counterfactual analysis from the endogenous switching regression reveals that mixed crop‐livestock farming systems do not necessarily enhance dietary diversity. However, we further find that purchasing food from the markets plays an important role in enhancing the dietary diversity of rural smallholder farmers.     

Differential livelihood impacts of oil palm expansion in Indonesia

In this article, the impacts of oil palm adoption on livelihoods of smallholder farm households are analyzed. The study builds on survey data from Sumatra, Indonesia. Treatment‐effects and endogenous switching regression models suggest that smallholder households benefit from oil palm adoption on average. Part of the benefit stems from the fact that oil palm requires less labor than rubber, the main alternative crop. This allows oil palm adopters to allocate more labor to off‐farm activities and/or to expand their farmland. For households with a low land‐to‐labor ratio, rubber is typically a more lucrative crop than oil palm. Depending on various social and institutional factors, households’ access to land, labor, and capital varies, contributing to impact heterogeneity. Welfare gains associated with oil palm are more pronounced among households that have formal land titles and access to additional land to expand their farm size during the process of adoption.     

Agricultural production and children's diets: evidence from rural Ethiopia

We study the relationship between pre‐school children's food consumption and household agricultural production. Using a large household survey from rural Ethiopia, we find that increasing household production diversity leads to considerable improvements in children's dietary diversity. However, we also document how this nonseparability of consumption and production does not hold for households that have access to food markets. These findings imply that nutrition‐sensitive agricultural interventions that push for market integration are likely to be more effective in reducing under‐nutrition than those promoting production diversity.     

Unpacking Indonesia’s independent oil palm smallholders: An actor-disaggregated approach to identifying environmental and social performance challenges

Processes of globalization have generated new opportunities for smallholders to participate in profitable global agro-commodity markets. This participation however is increasingly being shaped by differentiated capabilities to comply with emerging public and private quality and safety standards. The dynamics within Indonesia’s oil palm sector illustrate well the types of competitive challenges smallholders face in their integration into global agro-commodity chains. Because of public concern over the poor social and environmental performance of the sector, many governments, companies and consumers are attempting to clean up the value chain through self-regulatory commitments, certification and public regulation. As a result, many of Indonesia’s oil palm smallholders face compliance barriers due to informality and poor production practices, and threaten to become alienated from formal markets, which could in turn lead to a bifurcation of the oil palm sector. Recognizing that many oil palm smallholders lack compliance capacity, myriad public and private actors have begun designing initiatives to address compliance barriers and enhance smallholder competitiveness. However, failure to properly account for the heterogeneity of the smallholder oil palm sector will undermine the effectiveness and scalability of such initiatives. By developing a typology of independent smallholder oil palm farmers in Rokan Hulu district, Riau province, this article reveals the wide diversity of actors that compose Indonesia’s smallholder oil palm economy, the types of compliance barriers they face and the sustainable development challenges they pose. In doing so, this article illustrates how global agro-commodity chains can drive agrarian differentiation and offer new insights into the complex dynamics of agricultural frontier expansion.     

Gender,control, and crop choice in northern Mozambique

Women play an important role in the agricultural production process in developing countries, yet their role in making decisions about what to grow and implications for household welfare remains poorly understood. In this article, I study women's empowerment in northern Mozambique as it relates to agriculture, considering in particular the factors associated with women managing the plots that they nominally control. Women control about 30% of the plots in the data, but only manage about 70% of those plots. Using a unique panel data set, I find that women are more likely to manage plots when households have had historic access to off‐farm labor, typically completed by men. When women manage plots, they tend to grow crops with less complicated production techniques and are less likely to grow the main area cash crop. However, conditional on historic access to off‐farm labor their farm incomes are the same as among men.     

Food versus fuel: examining tradeoffs in the allocation of biomass energy sources to domestic and productive uses in Ethiopia

Rural households in Ethiopia have limited options to meet their domestic energy needs because they lack access to modern fuels and technologies. Domestic use of certain fuel sources, such as cow dung, can hinder agricultural outcomes and productivity. This article explores the tradeoffs between domestic and productive uses of biomass energy sources in the Nile Basin of Ethiopia using a nonseparable farm household model where labor allocation to energy collection and farming are analyzed simultaneously. We estimate a system of five structural equations using three‐stage least squares and find that the use of dung as a domestic fuel source has negative implications for the value of harvested crops, while use of on‐farm fuelwood is associated with increased value of agricultural output. On‐farm production of fuelwood appears to increase the value of crop output and provide labor savings, by making fuelwood collection more convenient for households. Policy interventions to support the expansion of agroforestry and increase access to new energy‐efficient technologies are needed to ensure that agricultural productivity can be both increased and sustained.     

Forest or oil palm plantation? Interpretation of local responses to the oil palm promises in Kalimantan,Indonesia

Global land use/land cover change is dominated by the expansion of cash crops plantations, replacing natural ecosystems including forests. International trade is an important factor in this process. Increasing demand on certain crops has triggered plantation expansion and deforestation, and influence local land use in other countries (land teleconnections). Oil palm expansion is one of the most prominent examples of land teleconnections. In Indonesia, oil palm plantations area increased from 1.1 million ha in 1990 to 11.2 million ha in 2015. According to the Indonesian Law on Plantation, the indigenous people's decisions play important roles in land use decisions. This paper investigates what were the factors (drivers) determining the individual-level responses to the oil palm promises in West Kalimantan. These questions are not only important for the future of Kalimantan’s rainforest but will also enrich deforestation and conservation-development discourses. We selected 49 respondents for interviews and focus groups such that people who opposed and people who supported the conversion were both well represented. Much attention was paid to arrive at a balanced set of operational variables, such as the economic resilience, agency and embeddedness of actors and the degree to which actors had appreciated and believed the oil palm promise. Data were analyzed through the QCA method. The outcomes show a perfect association of appreciation of the oil palm promises, belief in them and the decision to support the oil palm. This was not strongly associated with low economic resilience however; economically less resilient respondents could reject the oil palm conversion, while economically resilient respondents could support it. In other words, the data do not point to a poverty/deforestation nexus. Rather, the data suggest the existence of an ‘embeddedness / rejection nexus’; people that were well-connected to community, traditions and nature held long-term motivations and rejected the oil palm promise, and vice versa. More attention to this phenomenon will help bridge conservation-development objectives in Kalimantan.     

Exploring land use changes and the role of palm oil production in Indonesia and Malaysia

This study compiles and analyses national-level data on land use change (LUC) and its causes in Indonesia and Malaysia over the past 30 years. The study also explores the role that palm oil has played in past LUC and that projected growth in palm oil production may play in LUC until 2020 and suggests strategies to minimize negative effects. Data collection for the study revealed that the quality and quantity of data on LUC on a national scale over time are low. Despite these uncertainties, the overview of past LUC indicates that large changes in land use have occurred in Indonesia and Malaysia. In Indonesia, LUC can primarily be characterized by forest cover loss on 40 million ha (Mha) of land, a 30% reduction in forest land. Deforestation in Malaysia has been smaller in both absolute and relative terms, with a forest cover loss of nearly 5 Mha (20% reduction in forest land). Other large changes in Malaysia occurred in permanent cropland (excluding oil palm), which has decreased rapidly since the early 1990s, and in land under oil palm cultivation, which experienced a sharp increase. Projections of additional land demand for palm oil production in 2020 range from 1 to 28 Mha in Indonesia. The demand can be met to a large extent by degraded land if no further deforestation is assumed. In Malaysia, expansion projections range from 0.06 to 5 Mha, but only the lowest projection of oil palm expansion is feasible when only degraded land may be used. The role of palm oil production in future LUC depends on the size of the projected expansion as well as agricultural management factors such as implementation of best management practices, earlier replanting with higher yielding plants, and establishment of new plantations on degraded land. The current use of degraded land needs to be investigated in order to reduce possible indirect LUC, land tenure conflicts, or other social impacts. In addition to minimizing direct and indirect LUC by the palm oil sector, measures that reduce deforestation triggered by other causes must also be implemented. A key element for doing so is better planning and governance of land use, which entails more appropriate demarcation of forest land and protection of land that still has forest cover, improved monitoring of land use, and more research to uncover the complexities and dynamics of the causes and drivers of LUC.     

Contract farming,contract design and smallholder livelihoods*

Contract farming has gained in importance in many developing countries. Previous studies analysed effects of contracts on smallholder farmers’ welfare, yet mostly without considering that different types of contractual relationships exist. Here, we examine associations between contract farming and farm household income in the oil palm sector of Ghana, explicitly differentiating between two types of contracts, namely simple marketing contracts and more comprehensive resource-providing contracts. Moreover, we look at different income sources to better understand how both contracts are linked to farmers’ livelihood strategies. We use cross-sectional survey data and regression models. Issues of endogeneity are addressed through measuring farmers' willingness-to-participate in contracts and using this indicator as an additional covariate. Farmers with both types of contracts have significantly higher household incomes than farmers without a contract, yet with notable differences in terms of the income sources. Farmers with a marketing contract allocate more household labour to off-farm activities and thus have higher off-farm income. In contrast, farmers with a resource-providing contract have larger oil palm plantations and thus higher farm incomes. The findings suggest that the two contract types are associated with different livelihood strategies and that disaggregated analysis of different income sources is important to better understand possible underlying mechanisms.     

Matching food security and malnutrition indicators: evidence from Southeast Asia

This article aims to understand the relation between household food security and individual undernutrition. The multitude of indicators available raises the question which aspects of food security are captured by the respective indicator. In our analysis, we first assess the relation between the dimensions of food security and households’ socioeconomic characteristics. Second, we examine whether household indicators detect undernutrition in children. Finally, we investigate the role of individual‐specific characteristics for child undernutrition. The analysis is based on a novel data set of 1,200 rural households from Cambodia and Lao PDR, which combines household‐ and individual‐level data. We capture household food security by three indicators including a dietary diversity score, a consumption behavior measure, and an experiential measure. Individual nutrition status is measured via anthropometric indicators. Our results show that different household‐level indicators capture fundamentally different aspects of food security. Moreover, household food security fails to explain stunting for children under five. Dietary diversity indicators, however, explain underweight in children to a small extent. We call for more research on intrahousehold allocation of food and stress the implications of our research for the design and targeting of food and nutrition support programs.     

Land allocation to meet sectoral goals in Indonesia—An analysis of policy coherence

Land is a scarce resource affecting the implementation of many sectoral policies. In Indonesia, the expansion of palm oil plantations has led to non-sustainable land use practices in past years, particularly deforestation. More recently, the government has set ambitious targets for the adoption of biodiesel which will require expansion of oil palm plantations, thus putting further pressure on land. Meanwhile, the need to guarantee food supply, forest conservation and climate change mitigation also imply challenges when it comes to land allocation and use. This paper examines the role that land plays in the implementation of sectoral policies in Indonesia, exploring the availability of land to satisfy the multiple goals defined in national policies. We explore land competition resulting from allocations made in official policy documents starting with biofuel policy. The analysis of policy goals and coherence when it comes to land allocation is made in relation to agriculture, climate and forestry policies. We conclude that adjustments need to be made in the policies to avoid overlappings and misinterpretations when it comes to land allocation. The area made available for meeting each sectoral policy goal when taking into account cross sectoral interactions is: 14.2 Mha for agriculture, 43 Mha for climate mitigation measures, 9.2 Mha for forestry, and 20.9 Mha for biofuels. A more uniform land classification and development of a common reference database will increase transparency on land allocation and use, and help to monitor land use change, ultimately supporting the achievement of multiple national goals.     

Opposing interests in the legalization of non-procedural forest conversion to oil palm in Central Kalimantan,Indonesia

Demand for forestland for non-forest uses, mostly oil palm, has increased dramatically in the past few years and has become a chief driver of deforestation in Central Kalimantan. In this paper, we aim to shed light on how multiple levels of government create a facilitating environment for oil palm expansion. In our research, we employed three different methods: content analysis of key policy documents, participant observations, and expert interviews. We found that the technical complexities of formal procedures for the conversion of forest to oil palm are relatively easy to bypass. Contradicting laws and regulations have created a situation where the Ministry of Environment and Forestry (MoEF) and local governments have relatively equal legal mandates and authority over land-use and allocation. This is further complicated by the ambiguity of the decentralization policy. Enabled by the spatial planning law and the decentralization laws, local governments have aggressively issued plantation licenses for forest areas without the formal release of the forest from the Ministry of Forestry. The issuance of plantation permits has also been legitimized by other policies within central government, which have made oil palm a national priority.     

Noneconomic Distortions in International Agricultural Trade:

A U.S. import demand model for palm oil empirically addresses the objectives of ascertaining whether significant shifts in U.S. import patterns for palm oil followed an American Soybean Association negative informational campaign against "fatty" tropical oils and whether factors such as exchange rates significantly affected the decline of U.S. palm oil imports after the campaign. Evidence suggests that structural change in U.S. import demand for palm oil followed commencement of the campaign, including significant changes in the own- and cross-price responsiveness of palm oil. Results also indicate that exchange rates did not contribute to declining U.S. palm oil imports.     

New evidence regarding the effects of contract farming on agricultural labor use

Contractual agreements between smallholder farmers and agribusiness companies have gained in importance in many developing countries. While productivity and income effects of contracting in the small farm sector were analyzed in many previous studies, labor market and employment effects are not yet well understood. This is an important research gap, especially against the background of continued population growth and structural transformation. Here, we investigate the effects of two types of contractual agreements between large international processing companies and smallholder farmers on agricultural labor use, household labor allocation, and hired labor demand in Ghana's palm oil sector. We use cross‐sectional survey data and a willingness‐to‐pay approach to control for unobserved heterogeneity between farmers with and without contracts. We find that agricultural labor intensity is substantially reduced through the contracts, because contracting in Ghana is associated with the adoption of labor‐saving procedures and technologies. Simple marketing contracts lead to reallocation of the saved household labor to off‐farm employment, whereas resource‐providing contracts lead to a stronger reallocation of labor within the farming enterprise. Household labor is more affected by labor savings than hired labor.     

福建省木本粮油产业的贡献及潜力分析

基于福建省人多地少,粮油供需矛盾尖锐的现状,首先测算福建省人均膳食营养摄入量,得出福建省居民膳食营养结构不均衡,而木本粮油产品的营养素构成特点有利于平衡福建居民膳食营养结构。通过收集1995~2013年福建主要木本粮油品种产量数据,构建了食物当量计算公式,从营养元素的角度估算木本粮油产品对稻谷的替代情况,并根据稻谷的单位面积产量估计木本粮油的耕地节约能力。基于研究得出的主要结论是木本粮油产品有助于优化福建居民膳食营养结构,缓解福建耕地资源压力,具有较大的发展潜力。     

Gender norms and intrahousehold allocation of labor in Mozambique: A CGE application to household and agricultural economics

We model intrahousehold dynamics in two rural provinces of Mozambique through the lens of computable general equilibrium (CGE) methods. The main features of our modeling framework are as follows: (a) a household social accounting matrix that captures allocation of labor and resources, and transfers among household members; (b) the explicit use of social norms in labor allocation across gender; (c) a mechanism that links agricultural production to time poverty; (d) identification of leisure as a commodity that is being produced. Simulation results and sensitivity analyses show how social norms interact with the allocation of labor and resources at the household level to impact farm production or limit the gains from technological improvements.     

Diet diversity,malnutrition and health: Evidence from Kenya

We investigate the effects of diet diversity on health outcomes indicated by the body-mass index (BMI) of Kenyan women in their reproductive age (15–49 years). We estimate the demand for diet diversity (which is a proxy for diet quality) and analyse its relationship with BMI by allowing the effect of diet diversity to vary along the conditional BMI distribution. Results show that diet diversity is associated with a beneficial effect on the lower and upper tails of the BMI distribution, that is, dietary diversity improves BMI for underweight individuals while, at the same time, it reduces BMI for overweight/obese individuals. Specifically, doubling the diet diversity is associated with a 14.7% increase in BMI for underweight women and a 7.0% reduction in BMI of obese women. These results support the hypothesis that diet diversity is associated with optimal BMI and, thus, better health, contributing to the policy discourse concerning the double burden of malnutrition in developing countries.