Long-Term Savings as a Source of Oil Palm Replanting Financing

In the last decades, oil palm cultivation has increased rapidly to meet the rising demands for vegetable oils worldwide. While in the 1970s, two million tons of palm oil on 3.3 million hectares of land were produced worldwide, production levels have increased by 36 times in 2019, to around 72.3 million tons on 28.3 million hectares of land. There are two main reasons for the rapid expansion. Oil palms can produce more tons per hectare compared to any other crop. In addition, it is very versatile in its use and can be used in the food industry, for cosmetics, industrial and agrochemical products, and biodiesel.
\nIndonesia has been the biggest oil palm producer worldwide since 2008. The oil palm boom has brought economic benefits such as increases in incomes and living standards for the producers and others along the value chain. Besides the economic benefits that the oil palm industry has entailed, the massive land-use transformation and the common management practices applied have led to immense environmental degradation that affects the local population, rural and urban, but also beyond borders. 
\nAgainst this background, the focus of this dissertation is on the economic and environmental trade-offs of oil palm cultivation. The dissertation also addresses the environmental dimension of oil palm cultivation by examining climate change perceptions, environmental concern, and pro-environmental behavior among the local population. The present dissertation comprises three essays and addresses three broad research objectives: First, to assess the adoption decisions of an agricultural technology that generates positive environmental effects among small-scale oil palm farmers to support sustainable oil palm cultivation; second, to examine the environmental concern and pro-environmental behavior among the local population in a setting characterized by a rapid land-use transformation in the Global South; and third, to understand climate change perceptions among small-scale oil palm farmers in a setting of rapid land-use change. The analysis of the three essays relies on primary data collection in Jambi, Sumatra, Indonesia, from 2019 and 2020 and consists of a total of 757 respondents, where 408 are oil palm farmers and 349 are respondents from Jambi City. This research was conducted in the frame of the Collaborative Research Center (CRC) 990: Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation System (EFForTS) in Indonesia. 
\nThe first essay focuses on the adoption of an agricultural technology that is socially desirable and generates positive environmental effects with delayed private benefits for the adopters. In the case of welfare-enhancing technologies such as improved seeds or fertilizer, scholars have shown that subsidies can be an adequate instrument to motivate adoption. Yet, for agricultural technologies such as native tree planting, that are socially desirable and need maintenance evidence remains limited on how to stimulate adoption, tree survival, and additional investments into this technology effectively. We implemented two policy interventions with oil palm smallholders to analyze the adoption of native tree planting, tree survival, and engagement in additional planting efforts. In the first treatment, oil palm farmers received information with regards to native tree planting and three native tree seedlings for free (subsidy treatment). In the second treatment, oil palm farmers received the same information about native tree planting and had then the opportunity to buy three native tree seedlings through an auction mechanism (price treatment). Our results show that under a subsidy scheme, farmers have a higher probability to plant the tree seedlings they received and they also plant more tree seedlings compared to the treatment where farmers had the opportunity to buy the seedlings. The higher planting intensity in the subsidy treatment led to a higher tree survival rate. Yet, we find a tendency towards more additional planting efforts in the price treatment pointing towards crowding-out effects of farmers in the subsidy treatment. The cost-effectiveness analysis that we conducted, reflects our results when focussing only on the trees that we provided. More tree seedlings were planted in the subsidy treatment which was also more expensive compared to the price treatment. The cost-effectiveness is higher for the price treatment when including additional planting efforts. This is driven by few farmers though.
\nThe second essay addresses environmental concern and pro-environmental behavior among the local population living in an oil palm cultivating hotspot in the Global South. Scholars have shown that negative environmental repercussions have an effect on environmental concern and the engagement in pro-environmental behavior of individuals. Environmental concern and pro-environmental behavior both indirectly or directly influence decisions made about the sustainable use of natural resources. For policymakers, it is highly relevant to understand how the local population thinks and behaves to develop more targeted policy and outreach instruments to support sustainable land-use changes. While there exists literature on environmental concern and pro-environmental behavior in industrialized nations focusing on rural-urban differences, evidence is scarce for societies in the Global South. In this study, we examine environmental concern and pro-environmental behavior in the Global South where people live in an oil palm cultivating hotspot and in a setting characterized by a rapid land-use transformation. Our results reveal that overall rural residents are significantly more concerned than urban respondents. This is true for general environmental concern, as well as for the specific oil palm concern which shows that oil palm farmers might be aware of the environmental effects of oil palm cultivation. We also find that connectedness with nature, connectedness with oil palms, and the preference for more heterogeneous landscapes are important determinants for environmental concern. For pro-environmental behavior, we find that rural respondents engage more. A higher connectedness with oil palms decreased the engagement in pro-environmental behavior among the respondents while the hours participated in other environmental activities are positively correlated with pro-environmental behavior.
\nThe third essay of this dissertation analyzes climate change perceptions of Indonesian small-scale oil palm farmers. The implications that climate change has on agriculture and vice versa are already visible today. On the one hand, the number and severity of climate change-related weather events have increased. On the other hand, agriculture contributes to climate change with the release of huge amounts of CO2. Much of the global warming that is experienced today and for the next 30 years is based on emissions that have already been released into the atmosphere. Yet, the degree of future global warming highly depends on emissions of today and the near future. Hence, adaptation strategies have to become a central strategy today to slow down and decrease the implications of climate change and agriculture on each other in the long term. To do so, climate change perceptions of individuals need to be well understood to develop suitable strategies. In this regard, scholars have shown that farmers seem to be aware of climate change and its potential effects to varying degrees. Important sociodemographic factors that are associated with climate change perceptions are education, age, and wealth amongst others. Yet, evidence remains limited for climate change awareness and the perceived affectedness of small-scale oil palm farmers living in a setting of rapid land-use transformation. In this study, we analyze determinants of climate change awareness and perceived affectedness of small-scale oil palm farmers. Our results reveal that about three-quarters of the respondents are aware of climate change and almost 60 percent feel personally affected by it. Important factors associated with climate change awareness and perceived affectedness are education, age, and wealth. Finally, the experience of extreme weather events seems to not strongly be associated with the climate change perceptions of the oil palm farmers.
\nThis dissertation contributes to the actual state of research with regards to the economic and environmental trade-offs of oil palm cultivation as well as to the environmental dimension by examining climate change perceptions, environmental concern, and pro-environmental behavior among the local population. The results indicate firstly, that the adoption of native tree planting can be enhanced by a policy mix that involves the distribution of subsidized tree seedlings as well as value chain development to address multiple barriers to native tree seedlings. Secondly, environmental concern and pro-environmental behavior differ significantly between rural and urban residents, and hence, to overcome a lack of disconnectedness between the general public and the agrarian transformation and strengthen environmental concern and pro-environmental behavior, the spread of information and environmental education seem to be promising. Finally, to support the development of suitable climate change adaptation strategies relevant knowledge needs to be spread among the farmers to create more climate change awareness. Furthermore, as the financial means of the farmers differ but are associated with being better equipped regarding adaptation measures, especially, the poorer farmers need to receive suitable support when it comes to the adoption of adaptation measures taking potential barriers, e.g. financial means, into account.

Introduction: Oral agreements that occur between oil palm farmers and oil palm agents where the agreement is buying and selling oil palm orally. However, there is a problem where the palm oil agent turns out to be in default. This writing is to examine the oral agreement between oil palm agents and oil palm farmers in Teluk Dalam Village. Purposes of the Research: The purpose of this research is to know the legal force of oral agreements between oil palm agents and oil palm farmers in the village of Teluk Pulai. Methods of the Research: The research method is normative juridical with the type of library research and field data. Results Originality of the Research: The results of the oral agreement on the sale of oil palm between the oil palm agent and the oil palm grower which of course this is considered valid due to the fulfillment of the elements and conditions that have been determined. The agreement made must be serious, in good faith and know the provisions of the object, price and capacity between the parties, it is necessary for the parties to comply with these provisions to ensure the validity and enforceability of the sale and purchase agreement in the context of civil law in Indonesia.

Krueng Itam village is one of the villages where the majority of the residents work as palm oil farmers and depend on palm oil plantations. In marketing to sell FFB (Fresh Fruit Bunch) palm oil farmers still rely on collector traders (agents) which in this case is referred to by the term "Tauke Sawit" (toke sawit). In the beginning, the relationship between palm oil farmers and the Tauke was limited to economic relations, such as the sale and purchase relationship between sellers and buyers. But in its development, the relationship turns into a relationship of dependence and interest that leads to a patron-client relationship. This study used a descriptive qualitative method with data collection techniques through observation and interview process that is expected to be able to provide an overview of the social relationship between tauke and farmers. Based on the results of the study, the relationship between tauke and palm oil farmers is a patron- client relationship where palm oil tauke as the patron and palm oil farmers as clients. Palm oil farmers need tauke to accomodate the harvest of palm oil FFB and tauke needs palm oil FFB from farmers to be sold to Palm oil mills. In this cooperative relationship, farmers will usually borrow money for capital needs and others to the tauke, this makes the farmers' dependence on the tauke become greater so that each of them will maintain the relationship by respecting the existing norms so that the relationship has been established will not be broken easily. The relationship of patron-clients is more visible in the relationship between tauke and small farmers, this is because there is a clear difference in socio-economic status between the two, so that the tauke as a patron play a big role.

Pro-environmental behavior among Indonesian oil palm smallholders: Understanding perceptions, intentions and actions

Various efforts have been made by the government in business development and improving the welfare of oil palm farmers. One of the programs announced by the government is the cattle and oil palm integration system program (SISKA). In general, farmers in Riau Province use non -organic fertilizers as input in oil palm plantations. However, with the SISKA program, oil palm farmers began to apply organic fertilizer from cattle waste to oil palm. Oil palm farmers who have applied organic fertilizer or precisely combined organic fertilizer with non -organic fertilizer are found in Sialang Palas Village, Lubuk District, Siak Regency. The use of organic fertilizer has emerged since the introduction of the SISKA program in Sialang Palas Village in 2013. This study aims to determine cultivation, productivity and income of oil palm plantation farmers who combine organic and non -organic fertilizers in Sialang Palas Village, Lubuk Dalam District, Siak Regency. The research method used is the survey method. Sampling was done with a simple random sampling technique. The data analysis used is descriptive analysis and agricultural analysis. Descriptive analysis was used to describe the nature of oil palm farming in Sialang Palas Village. Farm business analysis includes business cost, income and efficiency analysis. The results showed that the fertilizer given consisted of a combination of organic and non -organic fertilizers with the amount of fertilizer given that is cow feces 2,101 kg/ha/year, cow urine 700 kg/ha/year, KCL 20.83 kg/ha/year, Dolomite 252 , 80 kg/ha/year and Phonska 90.83 kg/ha/year. The productivity is 18,578 kg/ha/year with a plant age of 32 years. Total production cost Rp.7.717.345/ha/year which consists of fixed cost Rp.1.364.333.56/ha/year and variable cost Rp.6.353.012.42/ha/year. The net income received by farmers is Rp.16,859,773/ha/year.

ABSTRACT
 
 The conversion of lowland rice land to oil palm plantations has become a long debate because it is not in accordance with the vision and mission of Mukomuko Regency regarding food self-sufficiency, but in recent years there has been a change in the function of oil palm plantations to lowland rice. This is interesting to study because this phenomenon is considered unique when in other areas people flock to change the function of food land to oil palm plantations, on the other hand in Mukomuko District the community has shifted land functions from oil palm plantations to rice fields, even though so far the oil palm farming business . The location selection was carried out purposively and the determination of the respondents was carried out by the solvin method, which obtained 181 respondents. Collecting data using a survey method by distributing questionnaires to respondents. For data analysis using the private profit method and the private cost ratio. The results of the study explain private profitability and financial efficiency (private cost ratio). Where the private profitability of lowland rice (Private Profitability) is Rp. 38,173,833, - / Ut / Ha / Year - while for oil palm farming, the private profit is Rp. 28,308,303, - / Ut / Ha / Year. This means that when viewed from a private profit side, lowland rice is more competitive. However, if it is seen from the financial efficiency (Private Cost Ratio) of lowland rice farming, it is 0.31, while for oil palm farming it is 0.24 which means that the PCR values ??of lowland rice and oil palm farming are less than 1, so both of them have a level of competitive advantage and have competitiveness, when compared, the value of oil palm PCR <PCR for Paddy Paddy (024 <0.31) which means that in financial efficiency, oil palm farming is more efficient.

Oil palm agribusiness involves many upstream and downstream stakeholders, including the middleman in marketing activities. Traders play a significant role and influence the economy of oil palm farmers in Serdang Bedagai Regency. This research aims to evaluate the part of the middleman in supporting the performance of oil palm smallholders in Serdang Bedagai Regency, North Sumatra and the obstacles in marketing fresh fruit bunches (FFB) faced by farmers and the middleman. The samples of this study were 6 middlemen and 40 oil palm farmers. The sampling method used was purposive sampling. The method used in the analysis is a qualitative descriptive method, which explains the role of intermediaries in supporting the performance of smallholder oil palm farmers. The results showed that marketing support, capital and quality were the essential roles of the middleman as perceived by the smallholders. Apart from that, in the smallholder palm oil plantation, there are obstacles, namely in terms of price, road access and weight. Meanwhile, the barriers for the middlemen are in terms of price and buying and selling contracts. Policy recommendations for stakeholders include educating smallholder oil palm growers through counseling about access to information, improving access to the main roads in Serdang Bedagai Regency, periodic government monitoring, and drafting a written or legal sale and purchase agreement as not to harm both parties.

The objective of this research is to study the farmscale efficiency of oil palm smallholders. In this context it will also be studied the change in shifting cultivation activity and distribution of oil palm farmer income.The research was done in East Kalimantan with samples of 350 farmers by "Stratified Random Sampling" technique. The oil palm development in the East Kalimantan has a high potential to improve its business scale efficiency. In case there will be opportunities to reduce the cost to increase the production with additional input of fertilizer. Another opportunity is expanding farm size of ≥ 2 hectares will give better income rather than <2 hectares. In the same level of the employing input, the oil palm farm 012 hectares will produce higher Fresh Bunches with lower input.The oil-palm farming in the East Kalimantan is indicated by a reversel relationship between size and efficiency. The analyze of results signify that the larger farm have lower productivity. Using the same input or factor of production, however, the oil-palm farm agribusiness with ≥ 2 hectares width will gain higher benefit with lowercost. The production cost 0/the oil-palm operation of the small holders in the East Kalimantan has not gain the level of the technical efficiency as well as the cost efficiency (allocative efficiency). The oil-palm business scale of the small holders indicates that the scale economy in decreasing return to scale.The development of the oil-palm farming of small holders positively affects to reduce the pressure of population on the forest land resource in the shifting cultivatin of 81.46 percent. The income distribution in low in equality. The a Gini Index of 0.196 ( the evently distributed income).It is consistent with the income distribution analysis result based on the land farm size ownership in percentile The economies of scale of the oil-palm small holders will be achieved by the land size of ≥2 hectares. In related the family labors available, the small holders of the East Kalimantan are enable to operate the oil palm plantation of 5.7 hectares per farmer family.

The city of Subulussalam is one of the destinations for the transmigration program, which started in 1982. The transmigration area was the first area to cultivate palm oil farming around 1995. Palm oil farming was selected as the primary commodity cultivated on land owned by farmers. Until now, the transmigration community is still dependent on the Palm Oil commodity. With the development of the times, and the increased community needs, the age of palm oil has reached 21 to 23 years. The purpose of this study is to determine whether palm oil farmers had received a decent farming income, as well as how much land does a farmer must own to achieve economic profitability. The research method uses an income analysis and the Break Even Point (BEP) approach. The results show that the income of palm oil farmers is still feasible, as seen from the average income of Rp. 1,220,983.84 per month. While the BEP for production and the selling price of FFB is still above the value of the BEP. Furthermore, the BEP for the land area is 1.01 ha, meanwhile, in Trans Bakal Buah, the average palm oil farmer has 1.93 ha of land.Keywords: BEP Land Area, Palm Oil, Income.

The replanting, which was carried out for the first time in the Kuamang Valley hamlet in 2018, which was funded by the BPDPKS grant, was carried out on an area of ​​110 hectares that participated in the registration of 51 oil palm farmers. However, in its implementation there are various obstacles that make the program not run well in Lembah Kuamang Hamlet. This research method uses a qualitative method with the selection of informants by purposive sampling. The results of the study found that the oil palm replanting policy at KUD Citra Merkadi Dusun Lembah Kuamang had not run according to the rules set out in the Minister of Agriculture Regulation No. 6 of 2018 concerning Palm Oil Relanting Guidelines which occurred due to various obstacles that arise in the implementation of replanting coconut plantations. oil palm in the hamlet of Lembah Kuamang, Pelapat Ilir sub-district, Bungo regency. Constraints in replanting are the difficulty of communicating with operators who handle the implementation of rejuvenation of oil palm plantations in the village of Kuamang valley, the absence of socialization to the community of oil palm farmers and the workforce who have experienced complete cessation due to non-current wages from contractors. As for the efforts made by the Village Unit Cooperative (KUD) in solving the problems that are happening in the valley of Kuamang, the village unit cooperative gives a warning to the contractors and operators and finally decides on a contract with the operator and looks for another contractor who is more professional.

Palm oil is an edible vegetable oil derived from the mesocarp (reddish pulp) of the fruit of the oil palm, primarily the African oil palm Elaeis guineensis. Oil palm is one of agriculture comodity that can increase farmers income, provide raw material on manufacture industry which can create added value. The expansion of oil palm farming in Indonesia has shifted the use of mineral land to suboptimal land which is currently available in many place in Indonesia. Generally the aim of this research is to anylize the competitiveness sensitivity of oil palm farming. Specifically this research wants to anylize the sensitivity on input-output changing, and to anylize the impact of government policy on input-output when facing fluctuation price. In order to reach the goal of this research we used Policy Anlayisis Matrix (PAM). The result of this research shows that partially the declining of price, declining of output volume and increasing input price PCR value and DRCR < 1, which means that the oil palm farming on suboptimal land has competitivenes, and the absence of government policy on determaining input price nor output price on oil palm farming in at suboptimal land. While simultanously shows that the fluctuation of input and output price causes value of PCR dan DRCR > 1 with PCR value 1,12 and DRCR value 1,04, means that oil palm farming on suboptimal land at Musi Rawas Regency not feasible and has no competitiveness. It means that government policy needed to protect input price in oil palm farming on suboptimal land. Therefore government support and guidence in oil palm farming technology on suboptimal land also needed to increase the production of oil palm farming on suboptimal land.

<em>This study aims to determine the replanting model carried out by oil palm farmers and to determine the readiness of farmers in facing repalnting in Rimba Jaya Village, Tapung Hulu District, Kampar Regency. The research method uses descriptive qualitative. The sample was determined by purposive sampling with a total sample of 30 farmers with the consideration that the farmers selected were currently reppanting oil palm. The results showed that the replanting model used by oil palm farmers was total replanting (TUT) of 70% and interplanting of 30%. Readiness of farmers in facing repalnting because they receive assistance from the government, have savings, have side jobs and own land other than what is replanting</em>

This research is motivated by the obstacles experienced by oil palm farmers in buying and selling palm oil transactions, making palm oil tokens have the opportunity to maintain relationships between them by making loans known as the stock planting system. The purpose of this study was to describe the stock planting system between oil palm farmers and toke palm oil. The theory used is the patron-client theory proposed by James C. Scott. This research approach is a qualitative approach with a descriptive type. The types of data in this research are primary and secondary data. There were 10 informants in this study. Data collection methods used are observation, in-depth interviews and document studies. The result of this research is the buying and selling transactions carried out are transactions between toke and farmers. In meeting the necessities of life, farmers make loans to toke called stock planting. In this stock planting system, oil palm farmers are required to sell their crops to the token, they must be loyal to selling to the token, they are not allowed to sell to other tokens. If this happens, then the oil palm farmers are obliged to pay or return the money that has been taken, the oil palm farmers are allowed to pay in installments or not and the oil palm farmers are also allowed to determine how many installments they want to be given.

The study examined farmers' perception of priority in oil palm production and processing. The study was carried out in Aniocha South Local Government Area of Delta State, Nigeria. One hundred and sixty oil palm farmers randomly selected from eight communities were sampled. A structured interview schedule was used for data collection, while percentage, frequency count and mean scores were used to summarize data. The findings of the study show that nine priority areas are crucial to increased oil palm production and processing. These are: credit facilities for oil palm farmers, favourable land tenure policy; establishment of agro-chemical and fertilizer companies; building of mechanized processing mills at strategic locations; construction of access roads to palm plantations; providing ready markets for oil palm products; and sponsoring research on high yielding varieties and low-cost processing techniques. The study also found low technology utilization among oil palm farmers. The study recommends that the priority areas identified in this study should guide future efforts of government in revitalizing the oil palm production sub-sector. Also, oil palm farmers should be sensitized by the agricultural extension agency on the need to use improved production technologies.

The study examined farmers’ perception of priority in oil palm production and processing. The study was carried out in Aniocha South Local Government Area of Delta State, Nigeria. One hundred and sixty oil palm farmers randomly selected from eight communities were sampled. A structured interview schedule was used for data collection, while percentage, frequency count and mean scores were used to summarize data. The findings of the study show that nine priority areas are crucial to increased oil palm production and processing. These are: credit facilities for oil palm farmers, favourable land tenure policy; establishment of agro-chemical and fertilizer companies; building of mechanized processing mills at strategic locations; construction of access roads to palm plantations; providing ready markets for oil palm products; and sponsoring research on high yielding varieties and low-cost processing techniques. The study also found low technology utilization among oil palm farmers. The study recommends that the priority areas identified in this study should guide future efforts of government in revitalizing the oil palm production sub-sector. Also, oil palm farmers should be sensitized by the agricultural extension agency on the need to use improved production technologies.