Dynamics of Rural Economy: A Socio-Economic Understanding of Oil Palm Expansion and Landscape Changes in East Kalimantan, Indonesia

Abstract

<jats:p>The fast-growing palm oil economy has stimulated a significant expansion of oil palm plantations in Indonesia. The uncontrolled development of large oil palm plantations has raised complex socio-ecological issues, including changes of ecological landscapes, organization of production, and farming household livelihood systems. For two oil palm villages with different ecological settings, this article describes changes in land cover, how production is organized, and the income structure changes due to rural economic development. The research used survey approaches and analysis of earth maps, assisted by data obtained from satellite imagery. A qualitative approach was also used to support a survey via in-depth interviews. The research was carried out in two oil palm economy-based villages of Kutai Kartanegara District, of the Province of East Kalimantan of Indonesia. The first village is located very close to the center of regional administration and has evolved into a non-farming economy. In contrast, the other village is more isolated and solely relies on farming activities. The study found that changes of land cover caused by oil palm expansion could be categorized into two types, concentrated and spotted, following the influence of oil palm investment activities. It was also found that organization of the production of most smallholders existed in two types of arrangements, partial and total integration of production. From the perspective of livelihood, two different types of income structures emerged, diversified and uniform. This article concludes that responses of smallholders to palm oil spread varied depending on the ecological setting, the existence of the already established plantation economy in the region, the capacity of the smallholders to diversify economic activities based on palm oil, and the exposure to external economic activities.</jats:p>

Barriers and Benefits Arising from the Adoption of Sustainable Certification for Smallholder Oil Palm Producers in Malaysia: A Systematic Review of Literature

“…Ultimately, the key social benefit derived from the sustainable development of palm oil plantations has been the improvement in the living standards for rural communities as a whole [27]. Sustainable development has not only strengthened the economy but has also played a role in poverty eradication, rural development and improving the social network of the community [26].…”

Children’s Rights in the Indonesian Oil Palm Industry: Improving Company Respect for the Rights of the Child

“…Because of its relative versatility, durability, healthiness, and efficiency of production, palm oil is now an important component in many packaged foods and consumer products. Consequently it has rapidly expanded around the world, becoming one of the world's largest and most controversial agro-industries [5,48,90,91]. Key players in the palm oil industry include some of the world's largest food processing and consumer goods companies, such as Colgate-Palmolive, Kellogg, Nestlé, Procter & Gamble, and Unilever.…”

The Sustainability of Independent Palm Oil Smallholders in Multi-Tier Supply Chains in East Kalimantan Indonesia

“…A sustainable and efficient supply chain can maximize the utility of limited available resources and minimize the risks of social, economic, and environmental impacts that may occur [21][22][23][24][25][26][27]. The relative condition of the SHFs supply chain often does not pay attention to the volume and risk assessment of the supply from Non-Deforestation, Peat, and Exploitation areas in the upstream part of the plantation that meets Green Procurement Production standards [19,28].…”