Abstract
<p>The research aimed to formulate an investment decision for oil palm plantation in tidal wetlands of PulauRimau, Banyuasin South Sumatra Indonesia. The research summarized that Land productivity and input amount will determine some differences of each soil suitability (S<sub>1</sub>, S<sub>2</sub> and S<sub>3</sub>). The more land suitability level is, the more Fresh Fruit Bunches of Oil Palm (FFB) productivity per ha is produced and the less input is given. Net B/C Ratio, NPV and IRR for all land suitability classes are financially feasible for oil palm plantation development, however the most feasible and the most Expected Rate of Return (IRR) is in tidal wetlands with S<sub>1</sub> land suitability (very suitable), followed by S<sub>2</sub> (suitable) and S<sub>3</sub> (marginally suitable). Sensitivity analysis to feasibility for three land suitability is still economically feasible to build and to develop oil palm plantation, especially in large scale, thus its decision for capital investment is suitable.</p>
Highlights
After four decades, approximately 40,263 ha of PulauRimau, Banyuasin South Sumatra has been reclaimed and cultivated for food crops
This study aims to formulate oil palm investment decision in tidal wetlands of South Sumatra, Indonesia and to analyze their financial investment in various types of land suitability and to establish the suitability of Journal of Wetlands Environmental Management most financially feasible for investment decisions in oil palm plantations
For someareas with suitable level (S2) covers around 2,554ha (15.29 %) which are able to produce19-24tons of Fresh Fruit Bunches of Oil Palm (FFB) perha/year.As for areas of moderate to low potential which have some limiting factors for the development of oil palm, namely(Armantoet al., 2013): 1) The roots condition (r) that includes inhibiting factors, namely soil drainage class, soil texture and rooting depth
Summary
Approximately 40,263 ha of PulauRimau, Banyuasin South Sumatra has been reclaimed and cultivated for food crops (such as rice, corn and cassava). Field and laboratory data indicated that the reclaimed PulauRimau wetlands are less suitable for food crops. Management of pyrite soils and peat soils are difficult and if wetlands are mismanaged, they cannot be planted again because of high soil acidity (Armanto, 2014). The development of oil palm large-scale plantations is sometimes not accompanied by careful planning and good technical knowledge, especially in relation to land suitability. This study aims to formulate oil palm investment decision in tidal wetlands of South Sumatra, Indonesia and to analyze their financial investment in various types of land suitability and to establish the suitability of Journal of Wetlands Environmental Management most financially feasible for investment decisions in oil palm plantations
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