Abstract

Since 2006, Indonesia became the largest oil palm producing country in the world. For Indonesia, oil palm is a prime commodity because it has become a source of foreign exchange. The rapid development of the oil palm industry in Indonesia resulted in a debate on the positive and negative impacts caused by the plantations, especially related to the issue of land use change. This study summarizes the quantitative aspects and the social dynamics related to land use change to oil palm plantation on mineral soil, using a comprehensive and integrated assessment. The purpose of this research is to evaluate the financial feasibility of land use change in oil palm plantation from three aspects (economy, social, and environmental aspect) and to provide a descriptive explanation of the cause of land use change from ladang to oil palm by the community. The present study suggests that the changing paradigm of the local people in the case study area to convert their ladang to oil palm plantation cannot be avoided. They prefer to plant oil palm because of three main factors: (1) economic, (2) labor force, and (3) land area. Keywords: Oil palm; Land use Change; Integrated Assessment.

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