Oil-palm village vs non-oil palm village: lesson learned from a mix method study involving village development index

Abstract

Indonesia has acknowledged the oil palm industry as a blessing in disguise. Despite being most critically discussed commodity, it has generated considerable benefits not only economically and socially, but also ecologically for the archipelago. Many debates have gone against it. That evidence had been investigated at the micro-scale level or individual farm level spot by spot, but only a few have been discussed in a nationally representative manner. Many had also claimed that palm oil might spill over to farm individual prosperity, reducing deprivation and even promoting structural transformation in the ground. However, not much has been evaluated to what extent the improvement process is transferred at the village level, as the most immediate administrative level governs the oil palm farmers. Thus, this work is aimed to evaluate the impact of oil palm adopting-villages compared to that of the non-oil palm adopting-villages in terms of its village development index (IDM, Indeks Desa Membangun). The study uses mix-method analysis, which combines propensity score matching (PSM) to assess the impact quantitatively, and text mining analysis to confirm the former result qualitatively. The process is supplied with village characteristics from the eight most prominent oil palm-producing provinces, such as Riau, North Sumatra, West Kalimantan, Central Kalimantan, East Kalimantan, South Sumatra, Jambi, and Aceh. The result indicated that oil palm plantation has emerging benevolent outcomes in terms of economic, social, and ecology aspects at the village level. Yet, it is revealed that some issues remained questioned