Independent Smallholders Research Articles

Institutional strengthening model of oil palm independent smallholder in Riau and Jambi Provinces, Indonesia

The oil palm independent smallholder (farmer) is one of the important actors in maintaining the continuity of the production cycle in the oil palm agro-industry supply chain in Indonesia. Various fundamental problems faced by the independent smallholder are related to land legality as well as their limited ability to manage good agricultural practices, access funds and information on current prices, and use of quality and agricultural production facilities. The institutional strengthening of the independent smallholder requires attention and support from government and other business actors in the supply chain of the oil palm agro-industry. This study aims to obtain a model of institutional strengthening through the application of the enrich seven steps of soft system methodology. The assumptions that must be fulfilled in strengthening this institution were described. The institutional strengthening model was developed in three stages, i.e., the establishment of smallholder corporations, the establishment of independent cooperatives, and the revitalization of the Indonesian oil palm independent smallholder association. Various individual strengthening actors were investigated and then integrated. The suggested institutional strengthening model involved cooperatives, smallholder farmers groups, and the oil palm mill, supported by regulatory, financial, and input provider agencies with a mutual partnership program.

ANALISIS DAN PENENTUAN STRATEGI PERBAIKAN NILAI TAMBAH PADA RANTAI PASOK KELAPA SAWIT (STUDI KASUS PROVINSI RIAU)

Palm oil has become a leading commodity for improving the economy in Indonesia. At present, many people depend their lives on the plantation and oil palm agro-industry sectors through the establishment of supply chain links. In the palm oil supply chain, there are business actors from upstream to downstream. However, nowaday, every actor has different added values ​​for each level. This study aimed to measure the level of added value at each level of the palm oil supply chain and at the same time determine the strategy of added value improvement in the future. Based on calculations made by the Hayami method, added values at the level of independent smallholders, traders, and factories were 18.6%, 20%, and 28%, respectively. While the profits obtained by farmers, traders, and factories were Rp 4,125,900, Rp 56,400,000, and Rp 4,127,324,500, respectively. Then, by using the Non-numerical Multi Expert Multi Criteria Decision Making Method, recommended strategies have been obtained, among others through improving GAP, and development of cooperation and partnerships. Keywords: added value, palm oil, supply chain, strategy

Creating Strategic Competence of Independent Smallholders for Sustainable Palm Oil

Penelitian dilakukan di kabupaten perbatasan melalui wawancara mendalam terhadap 120 petani swadaya dalam kerangka Minyak Kelapa Sawit Berkelanjutan Indonesia (Indonesian Sustainable Palm Oil/ISPO), mencakup aspek hukum, pengelolaan dan pemantauan lingkungan, organisasi petani dan aspek manajemen untuk mewujudkan kompetensi strategis menggunakan diagram sungai dan diagram tangga. Hasil penelitian menunjukkan bahwa target inisiatif kinerja kompetensi terkait aspek legalitas dan manajemen lingkungan serta aspek pengawasan adalah mempelajari dan menerima praktik pengetahuan secara bertahap dalam semua kelompok petani, termasuk pengetahuan terkait tindakan pencegahan dan pengendalian kebakaran dan peningkatan bisnis secara berkelanjutan. Selain itu, target inisiatif kinerja kompetensi terkait aspek pencegahan dan pengendalian kebakaran dan keanekaragaman hayati adalah menerima transfer pengetahuan. Namun, daerah yang memiliki kompetensi lebih tinggi atau kesenjangan kompetensi yang lebih rendah dapat menjadi penyedia penerima pengetahuan dengan mempertimbangkan adopsi teknologi dan metode motivasi yang sesuai. Oleh karena itu, upaya mengatasi pengetahuan dan kompetensi petani rendah atau kesenjangan yang tinggi antara pengetahuan dan kompetensi dilakukan dengan pendekatan menangkap pengetahuan dengan cara memastikan bahwa semua petani belajar dan dapat mengakses layanan dan inovasi; dan pendekatan berbagi pengetahuan melalui program pendidikan dan pelatihan, praktik budidaya yang tepat, sertifikasi, dan kemitraan dengan universitas, perusahaan, pemerintah dan masyarakat.

Faktor Penentu Produksi pada Perkebunan Rakyat Kelapa Sawit di Kabupaten Mamuju Utara

There are three patterns of smallholder oil palm plantation in North Mamuju regency, ie plasma, IGA (Income Generating Activity), and mandiri (independent). Independent smallholder plantations are plantations managed by the community themselves without the involvement of others. While the partnership patterns can be divided into plasma and IGA. The partnership is a form of fostering of smallholders plantations by large private plantation in this area. This study aims to determine the amount of oil palm production on smallholder plantations and the factors that affect. The research was conducted in North Mamuju Regency, West Sulawesi Province which has the widest smallholder oil palm plantation in Sulawesi Island with various pattern. Four villages in two sub-districts were chosen purposively consideration with having three patterns of smallholder plantations. The sampling of farmers using snowball method after stratification in each pattern. Selected 35 plasma farmers, 70 IGA farmers, and 55 independent farmers. Data analysis was performed with Cobb-Doulas function model in the normalized logarithm, using Eviews 6 software. The findings are the average production of 56,840 kg, with productivity of 20,300 kg/ha. Input of land area, NPK fertilizer, age of oil palm crops, outside family labor, frequency of estate sanitation and distance of estate to river is the determinant input to production. Input land area is found as the most elastic input. However, land use for oil palm plantations should still refer to existing legislation.

Oil Palm Plantation Monitoring from Satellite Image

Malaysia is one of the largest palm oil producers in the world. To meet the production, its plantation needs to be monitored accordingly. Manual monitoring is no longer feasible due to energy, cost and time consumption. Remote sensing technology such as satellite images can be utilized for palm oil monitoring as they are cost effective, time and energy saving, and able to enhance the possibility of classifying the vegetation through spectral and texture analyses. Due to its impact towards Malaysia economy, an effective monitoring of palm oil plantation can be done by using satellite image to maintain the sustainability of palm oil in Malaysia. This project utilized the computation of Normalized Difference Vegetation Index (NDVI) and Soil Adjusted Vegetation Index (SAVI) to determine the plant health. Relationship of NDVI and SAVI with respect to temperature and precipitation is studied based on the data obtained from Malaysian Meteorology Department. By using regression model technique, the relationship of the plant health based on NDVI analysis, nitrogen content based on SAVI analysis and temperature is found out to be highly correlated while plant health and precipitation is found out to be no or low correlated. The results can be utilized by the plantation operators, especially independent smallholders in monitoring the health status of the palm oil trees to ensure high productivity.

Pemberdayaan masyarakat melalui penataan dan pembinaan organisasi PKK dalam memanfaatkan limbah sawit di Kampung Sialang Palas, Riau

Kegiatan pengabdian kepada masyarakat ini bertujuan meningkatkan pengetahuan dan keterampilan organisasi PKK dalam mengelola kelompok dan mengolah limbah sawit dan ternak. Kegiatan ini dilatar belakangi oleh kondisi Kampung Sialang Palas, Kabupaten Siak tahun 2001 sebagai wilayah tumbuh cepat di provinsi Riau. Daerah ini menjadi salah satu sasaran utama penerapan kebijakan pembangunan perkebunan kelapa sawit yang paling intensif dan ekstensif di Riau. Namun pola pemanfatan lahan dan limbah sawit belum optimal. Kondisi ini berimplikasi kepada pola pendapatan rumah tangga masyarakat. Muncul pertanyaan bagaimana limbah dapat dimanfaatkan? Untuk menjawap pertanyaan tersebut dilakukan kegiatan pelatihan dan penyuluhan dengan metode pelatihan dan penyuluhan model open governance danTeknologi Tepat Guna (TTG) Kegiatan dilakukan secara berkelompok dengan materi pengetahuan kepemimpinan, manajemen dan teknologi pengelolaan limbah sawot dan ternak. Hasil kegiatan pengabdian berupa: Pertama, pengetahuan dan keterampilan mengelola kelompok. Kedua, keterampilan mengolah limbah sawit dan ternak sapi menjadi piring, tikar, briket dan pupuk. Produk pengelohan limbah ini diharapkan menjadi alternative pendapatan rumah tangga masyarakat dan petani sawit swadaya terutama dalam masa peremajaan kelapa sawit (replanting).

Studi Diagnostik Tingkat Penerapan Kultur Teknis Kelapa Sawit Dalam Upaya Peningkatan Kesejahteraan Pekebun Sawit Swadaya: Studi Kasus Kabupaten Padang Lawas Utara

In line with the growth of independent smallholders, efforts to increase their productivity and sustainability are now a concern for policymakers. The main obstacle faced by independent smallholders is the low yield, as experienced by independent smallholders in North Padang Lawas District, North Sumatra. This study aimed to determine the current conditions of oil palm cultivation practices and develop policy recommendations to increase oil palm yield in North Padang Lawas District. The study was carried out through surveys and in-depth interviews involving 40 independent smallholders spread across the sub-district of Padang Bolak, Portibi, Halongonan, and Halongonan Timur. The results showed that lack of knowledge about oil palm legitimate seeds and standard practices of oil palm cultivation had caused the actual yield was only half of the potential yield of land suitability S3, especially for independent smallholders in the sub-district of Padang Bolak, Portibi, and Halongonan Timur. In addition, the process of selling fresh fruit bunches (FFB) that were not managed through farmer organizations (groups or cooperatives) caused a long chain of FFB marketing, thereby reducing the smallholder's income. Limited access to finance from banks burdened smallholders in implementing standard practices of oil palm cultivation, especially fertilization. Strengthening the role of local governments, banks and plantation companies are expected to change the mindset of smallholders regarding the importance of using legitimate oil palm seeds, adopting the best practices of oil palm cultivation, opening access to finance, and strengthening smallholders institutions so that the welfare and sustainability of independent smallholders in North Padang Lawas District can be realized soon.

The impacts of oil palm plantations on local and migrant smallholders’ incomes

In Indonesia, oil palm plantations have long affected income levels positively. Furthermore, Indonesia has developed oil palm smallholdings in 1980 to improve rural incomes. The success of this program has attracted other farmers and migrants to further developed oil palm plantations. Those who collaborated with companies were known as scheme smallholdings, while the others are known as independent smallholdings. In general, the lack of professional assistance has caused independent smallholdings to perform lower than the scheme ones. In addition, on average, the migrants also performed better as they were familiar with the collective actions of group activity management. Using as many as 210 and 219 scheme and independent smallholders from the Provinces of North Sumatra, South Sumatra, Jambi and Riau, such assumption were tested using the ANOVA compare means test of the four groups, namely schemed local and migrant, and independent local and migrant. Comparisons between the smallholders’ incomes and the Regional Minimum Wages of each province were analysed. The results showed that oil palm plantations have significantly improved the smallholders’ incomes in all provinces, although the impacts were observed to be higher for the scheme-migrant smallholders, not only concerning income, but also for productivity and selling price. However, this was likely due to the difference between scheme and independent rather than locals and migrants. This was partly explained due to the collective actions of all migrant-schemed smallholders in both the input purchases and the output sales and around 50% of the local-schemed, while almost all independents did it individually.

Linkages of smallholders’ attitudes with the implementation of principles and criteria RSPO certification independent smallholder forum MRM Jambi Province, Sumatera Indonesia

Oil palm plantation industry in Indonesia is growing rapidly. Extensive development took place during 1999-2016. The total plantation area reached 11,118,795 hectares by 2016. Some 5,754,718 hectares was managed by private companies, 4,656,648 hectares by smallholders and 707,429 hectares by state-owned enterprises. Issues of oil palm plantation that are not environmentally friendly are continuously exposed. Therefore, Forum Petani Swadaya-MRM independent smallholder RSPO has obtained certification, meaning that this research is important to be carried out. Respondents in the study were 82 people. Data were analyzed using non-Parametric Chi-Square statistical tests. Smallholders’ attitudes and knowledge are cognitively 47.6%, affective 57.3% and conatively 63.4%. Achievement of RSPO principles and criteria; 1). Commitment to transparency is 69%, 2). Compliance with applicable laws and regulations 84%, 3). Commitment to long-term economic and financial viability 64%, 4). Use of appropriate best practices by plantations and factories 47%, 5). Environmental responsibility and conservation of natural resources and biodiversity 41%, 6). Responsible consideration of employees, and of individuals and communities affected by growers and mills 64%, 7). Responsible development of new plantings 71%, and 8). Commitment to continuous improvement in key areas of activities 82%. The relationship between attitude and implementation of principles and criteria for RSPO certification. From the results of parametric statistical tests using Chi-Square, 3.42 thit> ttable 1.68, the meaning of refusal H0 thank H1 means that there is a significant relationship between attitudes and implementation of RSPO certification principles and criteria, there is a tendency for a positive attitude, the implementation of the RSPO principles and certification is high. The assessment between the attitude and application of the principle and criteria shows the sustainability status for the forum certifications.

Communication Analysis of Swadaya Rubber Farmers in Subdistrict XIII Koto Kampar, Kampar District

This research aims to determine the internal characteristics and external characteristics of rubber farmers in self-help patterns and the communication process in Subdistrict XIII Koto Kampar, Kampar District.. Based on data on the area of ​​rubber plantations and the amount of rubber production in Riau Province has decreased in the last four years. This is caused by various factors, one of which is due to farmers' communication processes that are running poorly or not as expected. Therefore, it is necessary to analyze the internal and external characteristics of independent smallholder rubber farmers and the communication process through the elements of communication using survey methods, sample selection with purposive sampling method and Likert scale analysis tools and descriptive analysis. Based on Likert scale analysis, internal characteristics and external characteristics of rubber farmers in District XIII Koto Kampar, Kampar Regency are in the moderate category (quite good). The communication process in this study is seen from the elements of communication, namely communicators, messages, media, communicants, effects, feedback, place and time dimensions

Territorializing effects of global standards: What is at stake in the case of ‘sustainable’ palm oil?

Global private sustainability standards in agriculture today govern a range of commodities produced in the tropics. Our study analyses the most well-established of these standards, namely the Roundtable on Sustainable Palm Oil (RSPO). We show how, far from being a market device restricted to re-organising global markets in palm oil, RSPO standardisation has wider consequences spatially re-distributing power with territorial effects. Territorialisation occurs through two processes: a strategic and operational process linked to the fabrication and application of procedural rules; a socio-technological process linked to the valorisation of managerial approaches to sustainability. Over time, these twin processes have institutionalised a transnational political space of action with territorial properties. These include: new frontiers of political authority de-bordering national jurisdiction (geographically connecting local scale oil palm estates and plantations with a transversal global supply chain stretching from producing to consuming countries); historical connection; internal coherence and imposition of managerial practices and discourses, including managerial constructions of interdependencies between people, nature and artefacts; prime beneficiaries (large southeast Asian growers, international environmental NGOs and (mainly) European downstream firms); marginalised people (independent smallholders and communities in Malaysia and Indonesia). In this manner, RSPO reinforces its political power and authority over a managerial form of sustainability of palm oil production through territorialising it. Ultimately, this transnational political space of action comes into interaction (and, potentially, conflict) with other political spaces of action and territorial projects as pursued by local people, other NGOs or Malaysian and Indonesian state governments.

Knowledge and Perception in Implementing Principle 1-4 of MSPO among Independent Smallholder Case of Sungai Rambai, Melaka

The oil palm plantations in Malaysia are largely based on the estate management system and smallholder scheme. The area planted was increasing rapidly from 1.8 million hectares in 1985 becoming a 5.81 million hectare in 2017. However, independent smallholders have possessed a major threat towards Malaysia such as lacking in term of documentation preparation, awareness and higher in cost implementation. Thus, it is perceiving that this sector is unproductive and inefficient as compared to the large-scale production system of the estate sector as they are tending to not achieve the standard principle in existing sustainability standard. This research was conducted to study about knowledge and perception of Principle 1-4 Malaysian Sustainable Oil Palm (MSPO) among independent smallholder in Malaysia. This study was conducted in Sungai Rambai, Melaka. The population size of this study is about 50 smallholders. For this study, 44 respondents had been samples. The questionnaires were distributed to the selected smallholders. Pearson correlation is used to analyze the relationship between independent and dependent variables which independent refer to knowledge and perceptions while the dependent variables is referring to principle 1-4 of MSPO. Finding from this study shows that the highest value of 43.6% from Transparency are explained by Perception and the lowest value of 19.4% from Management Commitment & Responsibility are also explained by Perception.

MALAYSIAN SUSTAINABLE PALM OIL CERTIFICATION STANDARDS

Credible oil palm certification assessments encompass much more than just auditing the planting, maintenance, harvesting, and milling practices and operations by accredited third party auditors. In the context of the Malaysian palm oil industry, presently there are at least three certification schemes under which a management unit or entity can be certified to provide assurance of compliance to agreed sustainability standards. The three main schemes are: (i) the Malaysian Sustainable Palm Oil (MSPO) Certification Scheme, (ii) the Roundtable on Sustainable Palm Oil (RSPO) Scheme and (iii) the International Sustainability and Carbon Certification (ISCC) Scheme. The MSPO Certification Scheme was developed as the national scheme in Malaysia for oil palm plantations, independent and organised smallholdings, and palm oil processing facilities which can be certified against the requirements of the MSPO Standards. MPOCC is the scheme owner and governing body for the MSPO Certification Scheme. The MSPO Standards used under the scheme cover a range of Principles and Criteria that consider the environmental, social and economic aspects in oil palm plantation management, palm oil milling and supply chain traceability systems. However, the depth and level of details in the MSPO Principles, Criteria, Indicators and its requirements vary in consideration of plantings by independent smallholders and organised smallholders. To complete the value chain of the Malaysian palm oil sector, the MSPO Supply Chain Certification Standard (SCCS) was launched on 1 October 2018. This paper reviews the establishment of MPOCC, the institutional set-up of the MSPO Certification Scheme, and the development and key compliance requirements of the MSPO Standards. The paper also highlights some of the issues and challenges faced by the scheme. Keywords: MSPO, MPOCC, certification scheme, oil palm, sustainability standards.

Human wellbeing outcomes of involvement in industrial crop production: Evidence from sugarcane, oil palm and jatropha sites in Ghana.

An extensive body of theoretical work has advocated the use of multiple human wellbeing indicators to assess the outcomes of agricultural investments in Sub-Sahara Africa (SSA). However, few studies have actually achieved it. This study investigates the human wellbeing outcomes of involvement in industrial crop production in Ghana by comparing the levels of different objective and subjective wellbeing measures for groups involved in industrial crop production as plantation workers and smallholders, and groups not involved (i.e. control groups). We use household income, adult consumption and the multidimensional poverty index (MPI) as indicators of objective wellbeing. We measure subjective wellbeing through self-reported levels of satisfaction with life, worthwhileness, happiness and anxiousness. Propensity Score Matching (PSM) analysis is used to assess whether involvement in industrial crop production increases household income and consumption. Overall, for most indicators of objective wellbeing industrial crop outgrowers, smallholders and independent smallholders are better off compared to other groups in their respective sites (in terms of mean scores), but involvement does not necessarily brings human wellbeing benefits (PSM analysis). On the other hand plantation workers are either worse off or have similar level of objective human wellbeing with control groups in their respective sites (in terms of mean scores), but involvement sometimes brings human wellbeing benefits (PSM analysis). However, workers tend to benefit from access to plantation infrastructure, which has a positive effect to their multi-dimensional poverty. In most cases the objective wellbeing measures do not correlate well with self-reported levels of subjective wellbeing. It is important to combine such indicators when evaluating the human wellbeing outcomes of agricultural investments in order to obtain a more comprehensive outlook of whether industrial crop production can become a valuable rural development strategy in SSA.

Risk Analysis for Sustainability of Oil Palm Smallholdings

Oil palm plantation is well known as a profitable business. In general, oil palm smallholders have a higher income than farmers of other commodities. However, most smallholdings have land sizes that do not reach the economic scale. Together with the lack of managerial skills, smallholdings are likely to be more vulnerable to production and price fluctuations, which in turn affects their business sustainability. This study was conducted to analyze the possibility and impact of production and price changes to the oil palm smallholdings’ sustainability. Data were collected from 240 schemed and independent smallholders in Asahan, Labuhan Batu, Labuhan Batu Utara and Labuhan Batu Selatan, which were selected with purposive cluster sampling. The production and market risk possibility and impact were measured with Value at Risk Method. The estimations showed that smallholders had a low risk possibility and impact, which partly stemmed from the enormously low threshold of both production and market risks. In fact, on average, smallholders’ productivity is less than 20% of the potentials, and many schemed smallholders receive low prices due to their aged trees. This may be harmful to smallholding sustainability. Since VaR only considers risks from variations of production and price, a low threshold is not considered as a risk for sustainability. Therefore, further studies using different thresholds or approaches are required. From the policy implication point of view, to address such a situation, the Indonesian government needs to improve smallholdings’ productivity and their composition of trees.

Analysis of Smallholders’ Progress in Implementing Sustainable Management in North Sumatra, Indonesia

The significant increase in oil palm areas has resulted in more concerns to the environmental issues - as majority of farming activities were not conducted in sustainable ways. To address the environmental issues, the Roundtable Sustainable Palm Oil (RSPO) organization has formulated principles and criterias (PnC) for sustainable practices of the oil palm plantation as a guideline, whereby it has to be adhered by all parties involved, including the smallholders. The study is therefore conducted to analyze the sustainable management implementation among smallholders in North Sumatra. In total, 320 and 137 schemed and independent smallholders from four oil palm plantations centers in North Sumatra were interviewed in 2012 and 2018 to see their progress. The levels of implementation for each group were determined based on their scores for each of the criteria, and were compared with the independent sample t-test. The influencing factors for implementation levels were estimated by using multinomial logit model. The results showed that the level of implementation for both schemed and independent smallholders were still low in both 2012 and 2018. Education, experience and participation were identified as factors that significantly influenced their sustainable management implementation levels. Therefore, it is suggested that trainings should be emphasized to improve the sustainable management implemenatation among oil palm smallholders.

Do wealthy farmers implement better agricultural practices? An assessment of implementation of Good Agricultural Practices among different types of independent oil palm smallholders in Riau, Indonesia

Palm oil has become a leading vegetable oil over the past 30 years and smallholder farmers in Indonesia, with more than 12 million hectare the world’s largest producer of palm oil, have massively engaged in oil palm (Elaeis guineensis) cultivation. In Sumatra, where more than 60% of Indonesian palm oil is cultivated, smallholders currently cover roughly 50% of the oil palm area. The rapid expansion of palm oil however did not happen without controversy. In current efforts by the Indonesian government, NGO's and private sector to improve sector performance, smallholders are often characterized as the Achilles heel of the oil palm sector due to poor practices and low yields compared to companies. However, ‘oil palm smallholders’ is a container concept and there has been only limited research into smallholder diversity beyond the organised versus independent farmer dichotomy. This research delves into the implementation of Good Agricultural Practices (GAP) among seven types of independent smallholders in Rokan Hulu regency, Riau province. The research area consisted of a relative established agricultural area on mineral soils and a relative frontier, mostly on peat. Smallholder types ranged from small local farmers to large farmers who usually reside in urban areas far from their plantation and regard oil palm cultivation as an investment opportunity. The underlying hypothesis is that larger farmers have more capital and therefore implement better agricultural practices than small farmers, who are usually more cash constrained. A wide range of methods was applied, including farmer and farm surveys, remote sensing, tissue analysis and photo interpretation by experts. These methods provided data on fertilizer use, nutrient conditions in oil palms, planting material, planting patterns, and other management practices in the plantations. Results show that yields are poor, implementation of GAP are limited and there is much room for improvement among all farmer types. Poor planting materials, square planting patterns, and limited nutrient applications were particularly prevalent. This implies that farmers across different typologies opt for a low-input low-output system for a myriad of reasons and that under current conditions, initiatives such as improving access to finance or availability of good planting material alone are unlikely to significantly improve the productivity and sustainability of the smallholder oil palm sector.

Decentralization and the environment: Assessing smallholder oil palm development in Indonesia.

Indonesia's oil palm expansion during the last two decades has resulted in widespread environmental and health damages through land clearing by fire and peat conversion, but it has also contributed to rural poverty alleviation. In this paper, we examine the role that decentralization has played in the process of Indonesia's oil palm development, particularly among independent smallholder producers. We use primary survey information, along with government documents and statistics, to analyze the institutional dynamics underpinning the sector's impacts on economic development and the environment. Our analysis focuses on revenue-sharing agreements between district and central governments, district splitting, land title authority, and accountability at individual levels of government. We then assess the role of Indonesia's Village Law of 2014 in promoting rural development and land clearing by fire. We conclude that both environmental conditionality and positive financial incentives are needed within the Village Law to enhance rural development while minimizing environmental damages.

Modeling peat- and forestland conversion by oil palm smallholders in Indonesian Borneo

The effect of industrial oil palm expansion on deforestation and peatland conversion in Southeast Asia has been well documented. Despite being the fastest growing producer group by area, the effects of smallholder expansion in contrast is yet to be fully understood. By combining spatial analysis with farm and farmer surveys, this article examines the types of land use changes associated with independent smallholder oil palm expansion in Indonesian Borneo. We furthermore estimate through predictive modeling how plot and smallholder characteristics influence the probability that smallholder plantation establishment involved peat- and/or forestland conversion. Results point to an increasing rate of especially peatland conversion due to rising scarcities of suitable lands on mineral soils. They also demonstrate how oil palm smallholders involved in environmentally detrimental land conversions are less likely to be experienced oil palm farmers and more likely to belong to indigenous groups, be incompliant of sustainability standards and have experienced fire. This highlights the importance of improved peatland management and targeted extension support in smallholder oil palm landscapes to both mitigate and reduce the impact of smallholder oil palm expansion.

A Management Framework of Islamic Micro Financing for Sustainable Palm Oil Farming

The growth of demand and production in palm oil has increased rapidly from time to time, as this scenario has a positive impact on the development of economy. However, in the long run,the scenariomay give a negative impact if it is not closely controlled; like the issue of haze. Therefore, thisstudy is aimed to create a sustainable mechanism framework of palm oil farming among smallholders using Islamic micro financing.This is because; the position of smallholders is an issue in the sustainability debate in the palm oil industry at the global level. Using library research, this study discovered the constraints and the challenges faced by independent smallholders to create sustainable palm oil farming. Hence, the study was developed around the specific objectives that looked into the Islamic microfinance form and appropriate mechanisms for the implementation. In doing so, this study employed the qualitative method. From the results, it was concluded that Islamic microfinance is indeed a source of funding for a number of independent smallholders of oil palm. Later on, Islamic microfinance may contribute to sustainable palm oil production. Furthermore, by introducing a workable mechanism, more Islamic financial institutions should be involved in providing Islamic microfinancing to smallholders.