Conflict Mitigation Strategies for Sustainable Agriculture in Palm Oil Expansion

Abstract

Palm oil prices on the international market have skyrocketed since the increased global demand for vegetable fats. However, the social-economic conflict between companies and smallholders has been an urgent issue in sustainable palm oil plantations. This paper proposes sustainable oil palm plantation strategies based on this problem. This research conducted a social analysis of community-scale oil palm plantation sustainability through in-depth interviews with 50 conflict land owners, palm oil smallholders, government officials, and former employees of a larger palm oil company in South Sumatra. The results of the interviews become the primary data to conduct strategic management system analysis using SWOT-QSPM analysis. SWOT-QSPM combination analyses are used to explore the internal and external problems of smallholder oil palm plantations and offer the best alternatives for smallholder oil palm plantations, where it is utilized to identify crucial internal and external factors influencing palm oil conflicts in Indonesia. The QSPM analysis with a score above 0.50 that is implementable to determining the relative significance of the SWOT analysis strategy shows that SO-ST and WO-WT strategies are suitable to be implemented to achieve sustainable palm oil smallholders plantation in Indonesia. This study concludes that there need alternative strategies for addressing sustainable palm oil plantations challenges in Indonesia, namely: 1) Palm oil companies should be sharing knowledge, training, and assisting palm oil smallholders to be included in their supply chain; 2) Recruiting local people to minimize inequality; and 3) The government to expand the land reform programs, with other alternative strategies eliminated for efficiency due to their significance scores falling below the threshold of 0.5. In conclusion, palm oil companies should prioritize supporting smallholders through knowledge sharing and training, while urging the government to expand Indonesia's land reform program, as these strategies hold significant potential for fostering sustainable development, reducing inequality, and enhancing welfare within the industry and local communities.