Abstract
This study describes the companies’ feasibility determination on oil palm plantation investment. We also compare it with the oil palm plantation in swamp area, by considering economic, social and environmental aspects. We used total valuation method to valuing the environmental value of swamp area. Otherwise, investment analyzed by the model of benefit cost ratio (BCR), net present value (NPV), and internal rate of return (IRR). The study showed that the financial valuation of investment feasibility that is made and proposed by the plantation companies to banks (creditors), did not account the land value (economic, social and environmental values) of swamp ecosystems. The assessment on swampland value obtained Rp232, 570,833,400 or US$24,481 million per year for 10,000 ha area – US$2,448 per ha each year. Although the total value of economic environment is included in the valuation element of oil palm plantation investment in swampland, it still result insufficient value. However, by sensitivity analysis scenario of swampland plantation would become sufficient if the Crude Palm Oil (CPO) price is above US$1300 per ton. It also has a second scenario if the environmental cost can be pressed optimally into Rp9, 025,541 or US$950 per ha per year.
Highlights
Oil palm (Elaeis gineensis Jacq.) as one of plantation commodity that is considered as superior by Government of Indonesia
Calculation and analysis of oil palm plantation investment in swampland area are done with follow stages: First, we used valuation method approach for identifying the benefit and total economic value of swampland function, with formula (CSERGE, 1994;, Lucky, 2004; Manurung, 2011): Total Economic Value (TEV) =UV + NUV = (DUV + Indirect Use Value (IUV) + optional value (OV)) + (EP) + (SV)
In the management of natural and environmental resources, economic valuation of oil palm plantation investment and functions of the swampland area is adopted from the calculation of Natural Resources Management (NRM)
Summary
Oil palm (Elaeis gineensis Jacq.) as one of plantation commodity that is considered as superior by Government of Indonesia. Imbalance ownership structure of oil palm plantation in South Kalimantan continue to increase, with 701.876 ha area of the development plan (Norbah, 2011) included the swamp development plant of 217.270 ha which is aimed for the private plantation companies. It means most community livelihood of the swamp areas would www.ccsenet.org/mas change. The change of land-function is planted food crop as the main income resources into oil palm plantation These problems were disrupted the environmental equilibrium and created social conflicts between companies and communities. With the valuation assessment for certain area would help policy maker inside the government in decision making that related to the management and the use of swampland area
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