Smallholder Oil Palm Research Articles

Factors Affecting Independent Oil Palm Smallholder’s Decision to Participate in Government Replanting Assistance Scheme in Malaysia

The Malaysian government has introduced the replanting assistance scheme under the National Key Economic Areas (NKEA) program to accelerate the oil palm replanting activities among smallholders. This program intends to accelerate the ongoing replanting efforts by smallholders to replace their low-yield and old oil palm trees with new and high-yielding oil palm seedlings. However, their participation in the scheme is low. Therefore, this study is conducted to determine the factors that affect independent oil palm smallholders’ decisions to participate in the replanting assistance scheme. Interview administrated questionnaires are employed to 375 respondents among the recipients of the replanting assistance scheme. The significant factors that affect smallholders’ decisions are the Fresh Fruit Bunches (FFB) selling price, influence from family members or business peers and long-term investment choice. This study also describes the cross-tabulation of respondents’ age and their employment status against these factors. This research is expected to help policymakers and the government realign the timing to introduce the replanting scheme at the right time for the right target groups of oil palm smallholders.

Smallholders participation in sustainable certification: The mediating impact of deliberative communication and responsible leadership

The initiative to ensure oil-palm smallholders around the world participate in sustainable certification is increasing. Different efforts were strategised including increasing awareness and providing financial support. Despite that, the number of smallholders’ participation in sustainable certification is relatively low. This study embarked on the objective to identify the role of social structure, namely social interaction ties in affecting smallholders’ participative behaviours. Moreover, this study is also looking on the mediating impact of deliberative communication and responsible leadership in explaining the relationship between the two previously stated constructs. Using a quantitative research design, this study collected data from 440 smallholders as its respondents. Samples were randomly selected, and questionnaires were distributed to obtain their responses. Data collected were then analysed using PLS-SEM to test the developed hypothesis. Accordingly, the findings indicate that social interaction ties have a significant impact on smallholders’ decisions to participate in sustainable certification. Furthermore, both deliberative communication and responsible leadership were proven to be significant mediators. This study provides insights on how smallholders’ participation in sustainable certification can be improved by tapping on the social structure elements as well as adopting deliberative communication and responsible leadership as a method to communicate and lead with the smallholders. This shall expand literature related to organisation psychology in rural areas and sustainability.

Exploring Into the Awareness Level and Sustainability Practice among Palm Oil Independent Smallholders towards MSPO Certification

Objective - This study aims to examine the factors that influence the success or failure of the Malaysian Sustainable Palm Oil (MSPO) certification among independent smallholders. Methodology/Technique – We analysed 67 respondents from the Kedah region between February and March 2021. Our curiosity is piqued, about how awareness and sustainability practices influence the certification or non-certification among independent palm oil smallholders. Finding – Based on our survey, the finding shows that most of the respondents are aware of, and understand, the value of MSPO certification and use relevant sustainability practices on their farm. However, the result of the regression analysis suggests that sustainable practice is insignificant in explaining the failure in having the MSPO certification. The finding also shows that awareness is crucial in assisting independent smallholders to accept MSPO certification. Novelty – This study would provide insight into the Malaysian Palm Oil Board (MPOB) because it is one of the country’s most important bodies for addressing environmental and social concerns voiced by both local and international organizations and consumers. Type of Paper: Empirical JEL Classification: Q01, Q56 Keywords: MSPO certification; Independent smallholders; Sustainability; Awareness; Palm oil industry Reference to this paper should be referred to as follows: Ahmad, N; Shahar, H.K; Azhari, A. (2022). Exploring Into the Awareness Level and Sustainability Practice among Palm Oil Independent Smallholders towards MSPO Certification, GATR-Global J. Bus. Soc. Sci. Review, 10(3), 180–189. https://doi.org/10.35609/gjbssr.2022.10.3(7)

Analysis of the Sustainability Level of Smallholder Oil Palm Agribusiness in Labuhanbatu Regency, North Sumatra

Palm oil is a leading export commodity for Indonesia and the country’s highest foreign exchange earner. This commodity also has a fairly important role in the economy in regions in Indonesia, especially in Labuhanbatu Regency as one of the centers of oil palm production in the Sumatran Archipelago. This study aimed to analyze the level of sustainability of smallholder oil palm agribusiness in Labuhanbatu Regency. The study was designed using quantitative methods and a proportionate stratified random sampling approach with 249 oil palm farmers as research respondents. The data were analyzed using the multi dimensional scaling (MDS) method assisted by the Rap—Palm Oil (RAPPO) software (version 1.0). The results showed that the multidimensional sustainability of the smallholder oil palm agribusiness in Labuhanbatu Regency was in the “fairly sustainable” category. This illustrates that the oil palm agribusiness needs stakeholder support to improve its sustainability status. The highest value is the economic dimension because it is the main source of livelihood for oil palm farmers, while the lowest value is the environmental dimension. The value obtained was influenced by the use of production inputs that were not in accordance with the recommendations.

ANALISIS PRAKTEK PERKEBUNAN TERBAIK PEKEBUN SWADAYA DESA BENTENG HULU KECAMATAN MEMPURA KABUPATEN SIAK

This research was conducted at the Sawit Jaya Cooperative in Benteng Hulu Village, Mempura District, Siak Regency. The purpose of this research is to find out what the social characteristics of oil palm smallholders are, what the economics of implementing governance by oil palm smallholders are, and how it applies between smallholder governance versus RSPO standard governance. The research population is independent oil palm smallholders who use quantitative and qualitative analysis. Measurement of the implementation of smallholder oil palm plantation governance is carried out using a scale starting from the achievement of indicators, criteria, and principles in RSPO certification. The population in this study were the oil palm farmers of the Sawit Jaya Cooperative in Benteng Hulu Village, Mempura District, Siak Regency. The achievement of implementing RSPO principles in the governance of oil palm plantations owned by independent smallholders is very far from the RSPO standard. The results showed that the implementation of the RSPO standard was still low. The farmers and their cooperatives should be upgraded and their skills on the RSPO standard.

Analysis of Soil Fertility in Oil Palm Plantation (Elaeis guineensis Jacq) Smallholder Farmers in East Luwuk District, Banggai Regency

One of the factors that influence the production of oil palm plantations is the condition of the land favorable for their growth and development, especially regarding the physical and chemical properties of the soil and the status of soil fertility. The purpose of this study was to determine soil’s physical and chemical properties, as well as its fertility status on smallholder oil palm plantations. Soil sampling was conducted through a descriptive exploratory survey method, involving six sampling points and representing three oil palm ages (11, 16, and 22 years old). The soil chemical and fertility status were analyzed using the National Criteria of Soil Chemical Properties developed by Soil Research Institute and Five Major Soil Chemical Properties approach developed by Soil Research Center. All observed soil exhibited clay textures and varying soil color matrix. The soil had neutral acidity, medium to high base saturation/BS and cation exchange capacity/CEC, moderate P2O5, as well as low organic C and K2O. Soil fertility status on the entire sites were classified as low, which primarily caused by low soil organic C and K contents. In order to improve soil condition favorably for oil palm growth and development, further studies must be conducted using more direct approach, relating the oil palm requirement with current state of soil and land conditions.

Do Sustainability Standards Provide Environmental, Social and Economic Benefits for Independent Oil Palm Smallholders?

There is much inconclusive and unclear literature on understanding the benefits of environmental, social, and economic for the sustainability standards compliance of smallholders. The study aims to build a simultaneous relationship of the sustainable standard in the context of Indonesian Sustainable Palm Oil toward the benefit of sustainable dimensions using the concept of sustainable development, incentive theory, and the concept of agricultural extension of 150 independent smallholders. The results prove that farmers' organization is the most significant, followed by management of environmental monitoring and sustainable business development. However, legal is insignificant because of thought of as a nice to have. There is limited involvement in practical communities’ instruments so agricultural extension becomes an effort to reconstruct thoughts and actions to promote sustainability, especially social sustainability. Most indicators of sustainable standards toward the benefit of sustainable dimensions indicators are poor, except for fire prevention and control which had a moderately positive effect on the conservation of biodiversity. Thus, an integrated approach to area-based risks management, local institutions with religious and traditional leaders, Community-Based-Fire-Management, conservation area buffer zone, public-private partnerships, enabling conditions to access finance, and resource distribution with budgets and geographic proximity can be an effort to encourage compliance with sustainable standards.

Laccase activity as an indicator of peat degrading microbes in several types of peatlands use in West Sumatra, Indonesia

Land clearing and drainage activities on peatlands had boosted the decomposition rate of organic matter, caused by an increase in soil temperature and soil microbial activity. Enzyme activity is a sensitive indicator to measure changes in the decomposition process. The enzyme activity associated with the decomposition of organic matter is Laccase. This research aimed to study Laccase as an indicator of lignin degradation in several types of peatland use in Pesisir Selatan, West Sumatra, namely forests, shrubs, oil palm plantations, agricultural land, and bare land. The Laccase activity was measured by using the ABTS method. The results of our study show that Laccase activity in several types of peatland use from the highest to the lowest follows the order: agricultural land (LP) 3.20 μg.g-1.hour-1 > bare land (LT) 1.46 μg.g-1.hour-1 > shrub (SB) 1.17 μg.g-1.hour-1 > smallholder oil palm plantation (PSr) 0.66 μg.g-1.hour-1 > private company oil palm plantation (PSs) 0.70 μg.g-1.hour-1 > forest (H) 0.06 μg.g-1.hour-1. Soil characteristics that affect the enzyme activity are water content, which is negatively correlated with the Laccase enzyme. The higher the water content in the peat material, the lower the Laccase activity. Therefore, it is necessary to control the soil water content high to prevent the rate of peat decomposition. 
 Keywords: Laccase, enzyme, oil palm plantation, land use, peatland.

Scale Efficiency of External Factors to Productivity of Smallholder Palm Oil Agriculture

This study aims to evaluate palm oil productivity by the smallholders in Indonesia, which offered by particular external factors condition. This article consists of 400 smallholders from 5 different districts as respondents. Evaluation of the survey data was undertaken using inferential statistics, one-way and two-way analysis of variance (ANOVA), and regression methods. An increase of 1 USD income per day would translate to an increase of 2 kg of output. Local government support is more critical than the central government since it can boost up to 100 kg of output. Corporate support and Indonesian Sustainable Palm Oil certification help boosting the harvest up to 80 kg of output. The current farming association shows a sign of inefficiency. The plantation lifespan has a positive impact on output productivity, which will be achieved when the plantation lifespan has productive periods. That indicates that external factors affect the smallholder's productivity in its way.

IMPLEMENTASI KEBIJAKAN PEREMAJAAN SAWIT RAKYAT PADA PETANI SWADAYA DI DESA SARI GALUH KECAMATAN TAPUNG KABUPATEN KAMPAR TAHUN 2019-2021

To diminish issues in regards to the usefulness of smallholder oil palm manors through smallholder palm oil restoration, it is accepted to be the critical connection in expanding the efficiency of smallholder oil palm ranches and expanding the government assistance of ranchers. This study has a reason, specifically to decide the outcome of the smallholder oil palm restoration program for free smallholders in the Sari Galuh town, Tapung area, Kampar region and the variables that become hindrances in the execution of smallholder oil palm revival arrangements. The hypothetical idea that the analyst utilizes is the hypothesis of strategy execution by Edward III 2019. By utilizing subjective examination strategies and information assortment procedures in view of meetings, perceptions and documentation. The consequences of the examination that the creators get are the execution of smallholder oil palm restoration on autonomous smallholders. In Sari Galuh Town, there are as yet a few factors that become obstructions experienced by the Kampar Rule Estate Administration, so the execution of smallholder oil palm restoration on free smallholders has not been compelling and has not been carried out appropriately and ideal.

Edukasi dan Pendampingan bagi Petani Sawit Rakyat dalam Proses Pembibitan Kelapa Sawit dengan Alternatif Media Tanam Sekam Padi dan Tanah Top Soil

Edukasi dan Pendampingan bagi Petani Sawit Rakyat dalam Proses Pembibitan Kelapa Sawit dengan Alternatif Media Tanam Sekam Padi dan Tanah Top Soil

Institutional Development in the Supply Chain System of Oil Palm Agroindustry in South Kalimantan

Developing oil palm agroindustry in South Kalimantan involves internal and external factors for its sustainability. The long distance of each stakeholder requires a digitally connected system. The research aimed at identifying criteria, sub-criteria, and alternatives in the developed network model, determine the sensitivity to determine the relevance of actor's role, determine the effectiveness and efficiency before and after implementation of the system, and analyse the level of certainty and importance of assumptions developed. The methods used were surveys, focus group discussions, and questionnaires. Experts in the Analytical Network Process (ANP) method were from academia, business, society and government. Supply Chain Operation Reference (SCOR) method to analyse supply chain performance involved 178 respondents. The level of certainty and importance of assumptions was with Strategic Assumption Surfacing and Testing (SAST). The results of the analysis show there was an interdependence between the sub-criteria on the specified criteria and alternatives applied to achieve the goals. Pairwise comparisons showed the highest sub-criteria cluster was the replanting program with a weight of 0.662, for alternative cluster the highest priority weight in the system involving all actors playing a role was 0.391, with relevant sensitivity test results. The results of the analysis of effectiveness and efficiency before and after implementation of the system showed an increase in SCOR value for all actors. The results of SAST analysis were in Quadrant I with the highest level of importance and certainty of 7.6 meaning very important and certain. The implications of the research results can be seen in fostering the use of technology in realizing transparency, especially regarding the price, quality, and traceability of fresh fruit bunches, the realization of a monitoring system for policymakers and capital assistance for independent oil palm smallholders.

The Expansion of Oil Palm Smallholders and Migrants’ Upward Social Mobility in a Frontier Area of Riau Province, Indonesia (English Translation)

The Expansion of Oil Palm Smallholders and Migrants’ Upward Social Mobility in a Frontier Area of Riau Province, Indonesia (English Translation)

Review of smallholder palm oil sustainability reveals limited positive impacts and identifies key implementation and knowledge gaps

‘Sustainable palm oil’ aims to eliminate deforestation, greenhouse gas emissions, land conflicts and labour abuses from palm oil global value chains while maintaining palm oil production as a vehicle for development in tropical countries. However, smallholder palm oil growers are a small minority of those who are certified as sustainable and persistently face multiple socio-economic challenges. We analysed 100 journal articles that address smallholders, oil palm and issues related to sustainability in order to critically examine the current state of evidence for sustainability upgrading in smallholder palm oil global value chains. We identify a focus on sustainability certification in the academic research agenda that has left key implementation and knowledge gaps on meeting smallholders’ needs outside of a certification framework. An implication of this is that buyers, policy-makers, and consumers do not recognise both the challenges and advantages of small-scale agriculture for sustainable palm oil. We found that certification standards struggle to resolve persistent smallholder challenges, such as low incomes, low yields and insecure land tenure. Certification appears to be a flawed method to conceptualize and measure the sustainability of smallholders. We, therefore, advocate broadening approaches to studying sustainability and smallholder palm oil production, particularly to target issues that are of immediate concern for smallholder farmers as opposed to prioritising productivity. Future research should take inspiration from diverse established fields of research in defining sustainable practices, such as agroecology or agroforestry.

Impact of the European Union Regulations on Indonesian Oil Palm Smallholder Farmers

In 2020 Indonesian smallholder farmers produced around 35 % of the total palm oil production, the most traded vegetable oil. Smallholders play an essential role in developing country economies – most strikingly due to their success at reducing poverty and improving social benefits. The cultivation of palm oil has proven benefits for the smallholders themselves and the local community. However, oil palm smallholders are at risk of being cut out of global supply chains by European union (EU) regulations. The EU’s discrimination against palm oil smallholders is wide-ranging, including the EU Renewable Energy Directive II and the forthcoming Due Diligence Regulation imposing restrictions designed to undermine Indonesian palm oil in the global marketplace. This paper elaborates on how palm oil smallholders contribute to desirable economic and social goals and how the approach of the EU is deliberately undermining those goals.

Morphological characterization of Trichoderma spp. isolated from the oil palm rhizosphere in peat soils and its potential as a biological control for Ganoderma boninense in vitro

Trichoderma sp. is a saprophytic fungus found in various environments, one of which is in the rhizosphere of oil palm plants which can be used to control Ganoderma and increase the resistance of oil palm plants from stem rot disease. This study aimed to characterize the morphology of Trichoderma spp. origin of peat land in oil palm plantations in Kampar Regency and screening the potential in controlling Ganoderma sp. Trichoderma spp. from oil palm rhizosphere was collected from the smallholder oil palm plantations in Deli Makmur Village, Kampar, Indonesia. This research was conducted by several observations, such as the hypovirulence test; identification of the morphology of Trichoderma spp. fungus; growth and diameter test of Trichoderma spp. fungus; test of the inhibitory ability of Trichoderma spp. fungus against Ganoderma sp. LPTUNRI-Gan002 isolate; test for hyperparasitism of the fungus Trichoderma spp., which has high antagonistic power against Ganoderma sp. isolate. Six Trichoderma spp. isolates had morphological characteristics similar to two species, i.e., Trichoderma harzianum (LPTUNRI-Trc001, Trc004, Trc005, and Trc006 isolates) and Trichoderma asperellum (LPTUNRI-Trc002 and Trc003). LPTUNRI-Trc003 had the highest diameter (90 mm), growth rate (32.66 mm/day), and the highest ability to suppress Ganoderma sp. LPTUNRI-Gan002 (91.03%) compared to the other five isolates.

The Contribution of Oil Palm Smallholders Farms to the Implementation of the Sustainable Development Goals-Measurement Attempt

Smallholder oil palm plantations play an essential role in the Indonesian economy, both on a national, regional, local, and household scale. However, no data or studies show how much smallholder oil palm plantations contribute to achieving in each sustainable development goals (SDGs). The development of smallholder oil palm plantations, like other economic developments, wherever conducted needs to provide benefits to the community such that it exceeds the costs incurred, including the costs of preserving and protecting the environment. To assess its contribution, it is essential to examine the Sustainable Development targets in which smallholder oil palm plantations contribute. Therefore, this study is aimed at examining sustainable development goals to which smallholder oil palm plantations can contribute. Based on focus group discussion and the literature review, there are 13 SDGs for smallholder oil palm plantations that contribute and play a role in achieving the targets set by the United Nations in sustainable development. These results are significant as a basis for further studies to prove the presumption concerning the role and positive contribution of smallholder oil palm plantations in each of the existing SDG targets.

Design and Simulation of Oil Palm FFB Loading Machine

The process of loading the fresh fruit bunches of oil palm to the truck requires a lot of manpower if it is done manually. In fact, either the palm oil plantation or the smallholder palm oil farmer still performs this task manually, so that it can lead to fatigue and can result in injuries for the worker due to heavy workload. The purpose of this research is to design and simulate a machine for lifting the fresh fruit bunches to the truck, so that the activities of lifting the fresh fruit bunches to the truck become easier and can have a bigger working capacity. This research was conducted using a functional and structural design approach consisting of several stages, including: problem identification, design concept formulation, engineering analysis, engineering drawings, material strength analysis, kinematics simulation, power consumption simulation, and digital scale simulation. A simple structure of electric motor-driven bucket elevator was designed to load the fresh fruit bunches on to the truck tailgate. Based on the simulation results, the fresh fruit bunches can be lifted up satisfactorily from the bottom to the top with an elevator mechanism. This elevator is designed with lightweight for easy installation and kept at the tailgate of the truck. The maximum electric power consumption for lifting the fresh fruit bunches was found to be 1466.24 watts with designed loading capacity 23 ton/hour.

Exclusion of Smallholders in the Indonesia Palm Oil Industry

Indonesia produces and exports the most palm oil in the world. In practice, palm oil farmers are regarded as one of the most important contributors to the global palm oil industry chain’s trajectory. Farmers were actively involved in the Core-Plasma Plantation mechanism with the Member Primary Credit Cooperative (KKPA) scheme. However, putting this ideal picture into practice proved difficult, resulting in a slew of issues. Conflicts frequently arose as a result of the KKPA in Riau Province, home to Indonesia’s largest palm oil plantation. Community advocacy teams in three villages in Tambang District, Kampar Regency, informed the Regent about the polemics that occurred in the KPPA nucleus-plasma scheme involving village unit cooperatives, the community, and parent companies. The goal of this article was to investigate how the KKPA was implemented, and how it resulted in smallholders being excluded. This qualitative study relied on interviews with cooperative management, farmer groups, PTPN (a state-owned enterprise in the plantation sector) as the core company, plantation officers and farmers in Riau Province. The study was conducted from May to June 2021, and it revealed that the KKPA’s implementation was far from ideal. Farmers were excluded from the development of the palm oil industry. Parties’ rights and obligations were subject to asymmetrical information or bias. Farmers have lost control of their own land as a result of the size of the deduction from their harvest. The data on the debts and total instalments that have been paid must be made public so that the public is aware of the shortfall and timeframe.
 Keywords: exclusion of palm oil smallholders, nucleus-people plantations, KKPA

Use of modern technology and innovations to increase the productivity of oil palm smallholders

There is an increasing application of technology in the agriculture industry as more innovative inventions become available. The Malaysian government, through MPOB, renders assistance to oil palm smallholders in the adoption of suitable modern technology while providing them technical advisory services either directly or indirectly. Nonetheless, the question remains as to whether the application of such technology has achieved its objective of increasing smallholder productivity in terms of crop and labor input requirements. Therefore, the purpose of this study is to identify the use of modern technology and innovation in increasing the productivity of smallholders in Banting, Selangor. This study employed a quantitative method based on correlation analyses. A total of 167 respondents were sampled. The results showed that the first questionnaire statement, namely ‘Application of modern technology eases work in palm oil production’ attained a mean score of 4.32, corresponding to an opinion ‘Strongly agree’ reached by 77 or 46.1% of the respondents. The analysis of this statement clearly shows that the application of modern technology in the oil palm plantation sector facilitates most of the work in oil palm plantations. This study is different from the other study because it shows which statement makes smallholders accept modern technology in their oil palm plantations to increase the productivity of yields and incomes. Therefore, the use of technology should be practiced by all smallholders in Malaysia to increase their productivity of smallholders.