Sustainability of smallholder palm oil production in Indonesia

Abstract

Palm oil is a widely used commodity and is part of a number of daily products. It is the most used vegetable oil, not just for food consumption, but also for soap and cosmetics. Recently the search for co2 neutral fuels have spurred demand for palm oil to be used in diesel cars. The large demand have led to a dramatic increase in production in Malaysia and Indonesia, and those two producers make up over total production. This dramatic increase in plantations have led to severe environmental problems, particularly relating to the clearing of peatland in Indonesia. The practices have been given much attention by non governmental organizations, and attempts are made to create awareness among consumers of palm oil products. Some sources suggest that the West African smallholders have sustainable practices in the production and that this is an example to follow. The first part of the discussion aim at delimiting and defining the concept of smallholders. There are various approaches according to the region addressed, and this paper relies on Netting for a definition of independent smallholders. In terms of sustainability, it is argued that this concept must be used according to the individual study. In this case a number of indicators are identified in order to provide a holistic approach to the sustainability discussion. The study concludes that it is not possible to copy the West African model in terms of smallholder agriculture. The scale of the production mode demands too much land to be directly transferred to Indonesia. There are however other variations of the smallholder theme which is already used in Indonesia, and which seems to contain a lot of the socioeconomic benefits seen in the West African model, but without creating the same impacts on the environment. There is an overall concern about deforestation, though, as this practice is the modus operandi in most cases of oil palm plantation establishment.