Trade-offs between ecological impact and economic efficiency of oil palm (Elaeis guineensis Jacq.) fresh fruit bunches production in Indonesia

Abstract

Balancing efficiency and sustainability of fresh fruit bunches (FFB) production remains a critical issue facing by oil palm (Elaeis guineensis Jacq.) producing countries like Indonesia. To address those issue, we analyze trade-offs of those 2 variables in plantation managed by smallholders and compare the result to the one of the companies. The trade-offs are estimated by dividing the GHG emission to the partial factor productivity (PFP) of FFB production based on data from previous LCA assessment. Our study revealed that current practices implementing by smallholders are economically less efficient and ecologically unsustainable comparing from the FFB production practices implementing by companies. For smallholders, the trade-offs of ecological impact and economic efficiency reached 0.86 kg CO2-eq/kg FFB or 2.6 times from the trade-offs of FFB production by companies (0.33 kg CO2-eq/kg FFB). Several changes in nutrient management such as adjusting the fertilizers rate at smallholders in Sumatera, improving the OER from 0.20 to 0.22 for smallholders and from 0.21 to 0.22 for companies, and applying biochar technology are the most promising practices to minimize the trade-off up to 81%.