Preparing Households for the Oil Palm Replanting Program: Is an Empowerment Program Needed?

Abstract

This article describes a new idea of how the level of intervention in household empowerment policies is based on an empirical study of the magnitude of the negative impact of the smallholder palm oil replanting (SPR) program. One of the negative impacts is the temporary loss of income (TLI) for farmer households due to the cessation of production of oil palm fruit bunches. This study aims to analyze the magnitude of the impact of the SPR program on household and regional economies as a basis for making decisions on the intensity level of community empowerment programs. The household survey research was conducted in three village centers for smallholder rubber plantations in Jambi Province, Indonesia: Purwodadi Village, Dataran Kempas, and Sungai Keruh. The research result shows that the average potential TLI in each household is IDR 2,364,644/month (equivalent to 74.55% of the oil palm household income or 39.78% of the regional economy) if replanting palm oil is carried out. Purwodadi Village is the village most vulnerable to regional economic disturbances due to the high potential for TLI, reaching 99.43% of the oil palm household income and 67.06% of the regional economy. The level of TLI is influenced by factors of age and area of old oil palm plants, the proportion of households that will undergo the replanting process of oil palm, and the level of dependence of regions on oil palm farming. Based on the research results, it can be concluded that there is still a need for innovation and expansion of empowerment programs to encourage household readiness in facing the community oil palm rejuvenation program.