||Factors Determining Household Level Farmers’ Decisions to Expand Oil Palm Farmland in Indonesia
Alwarritzi, Widya ,
Nanseki, TeruakiChomei, Yosuke
568 , 2015-09-18 , Faculty of Agriculture, Kyushu University
The increasing demand of oil palm related products has led to a rapid expansion of oil palm plantation in Indonesia. Master Plan for Acceleration and Expansion of Indonesia’s Economic Development (MP3EI) stated that oil palm is one of agricultural major sector on the limelight of development, with Sumatera Island as focus for rapid production. The actualization of MP3EI brings opportunity for smallholder farmers in Indonesia to expand any available land for oil palm cultivation and makes oil palm as main sources of income. This research examines factors underlying the probability of smallholder farmers expanding oil palm farm size over two decades. Household level survey was conducted to point out potential problem in four neighboring villages in Riau Province in Sumatera Island of Indonesia in 2013 and 2014. It was found that 75% of smallholder farmers expand the oil palm farmland from small scale to medium scale and 60% of them were engaged planting since the era of 1990`s. Result of probit model estimated income earned from oil palm as the most important factor relates to farmers’ decisions to expand oil palm farmland. This study also highlighted the significant role of land tenure system, extension service, farmers organization and geographical condition to the probability of farmers to expand oil palm farmland.