Quantifying the Economic Value of Ecosystem Services in Oil Palm Dominated Landscapes in Riau Province in Sumatra, Indonesia

Ando Aulia,Harpinder Sandhu,Andrew Millington

doi:10.3390/land9060194

Ando Aulia, Harpinder Sandhu + Show 1 more

Open Access

https://doi.org/10.3390/land9060194

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Abstract

Ecosystem services in oil palm plantations owned by smallholders in four villages in the Riau Province, Indonesia were identified and valued. Nine provisioning, three regulating and maintenance, one cultural ecosystem service, and a single ecosystem dis-service, were identified from interviews with 62 farming households. Direct and indirect market valuation methods were used to estimate the total economic value (TEV) of these services, which averaged USD 6520 ha−1 year−1 (range = USD 2970–7729 ha−1 year−1). The values of provisioning services were USD 4331 ha−1 year−1 (range = USD 2263–5489 ha−1 year−1), regulating and maintenance services were valued at USD 1880 ha−1 year−1 (range of USD 707–3110 ha−1 year−1), and cultural services were USD 309 ha−1 year−1. We conclude that identifying and valuing ecosystem services offers an opportunity to improve the environmental and economic sustainability of smallholders in oil palm landscapes in Indonesia.

Highlights

Oil palm cultivation and expansion pose significant threats to biodiversity and contribute to large amounts of greenhouse gas emissions, leading to global climate change [1,2,3,4,5]
Other provisioning ecosystem services directly related to oil palms include palm fronds, which are used for roofing thatch and as fodder for cattle [83,84]
This study argues that these benefits derive not just from oil palm, and from other crops and livestock that share the landscapes with oil palm plantations

Summary

Introduction

Oil palm cultivation and expansion pose significant threats to biodiversity and contribute to large amounts of greenhouse gas emissions, leading to global climate change [1,2,3,4,5]. Increasing global demand for palm oil in industrial applications and food processing makes it economically attractive. The Indonesian and Malaysian governments have promoted the expansion of oil palm by providing policy support to both large- and small-scale producers. These two countries supply more than 85% of the world’s palm oil production. In 2016, Indonesia was the leading palm oil producer with 36 MT produced from approximately six million hectares. Agriculture contributes 12.8% (USD 133.8 billion) to Indonesia’s GDP of USD

Results

Discussion

Conclusion