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Article
Publication date: 26 January 2021

Almasdi Syahza and Mitri Irianti

The purpose of this study is to analyze strategies for controlling potential environmental impacts as a result of developing oil palm plantations.

Abstract

Purpose

The purpose of this study is to analyze strategies for controlling potential environmental impacts as a result of developing oil palm plantations.

Design/methodology/approach

Research sites in the first year have been carried out in potential areas for the development of oil palm plantations, both through plasma through Badan Usaha Milik Negara (state-owned enterprises) and Badan Usaha Milik Swasta (private-owned companies) and self-help by the community. The research locations were carried out in the Riau mainland areas, including Kampar, Rokan Hulu and Kuantan Singingi regencies. In contrast, the Riau coastal areas were Pelalawan, Siak, Bengkalis, Indragiri Hilir, Indragiri Hulu and Rokan Hilir. The two research areas have different productivity caused by differences in soil fertility. The method used for data collection is the rapid rural appraisal method, which is a participatory approach to obtain data/information and general evaluation in the field in a relatively short time.

Findings

Oil palm commodities are the most popular, especially in the Riau region. This is evidenced by the rapid development of oil palm plantations, namely, 1,119,798 ha in 2001 and increased to 2,372,402 ha in 2013. During the 2001–2013 period, the average growth rate was 6.46% per year, whereas other plantation commodities such as rubber and coconut have decreased. #R2.6 An increase follows the expansion of the plantation area in the production of fresh fruit bunches (FFB). Crude palm oil (CPO) production from 1,792,481 tons in 2001 increased to 7,570,854 tons in 2013, with an average annual growth of 12.76%. CPO production capability in Riau is supported by 172 palm oil mill (POM) units with a processing capacity of 7,800 tons per hour. POM is not spread evenly but is concentrated in nucleus and plasma plantations. Independent smallholders with their scattered land located far from the existing POM. This condition causes the low quality of FFB to the mill due to the distance between the plantation and POM.

Originality/value

The virtue of this research is to find an institutional arrangement strategy for oil palm agriculture to spur growth through the development of the downstream palm oil industry. The strategy is intended to create economic added value so that efforts to accelerate community economic development can be increased.

Details

Journal of Science and Technology Policy Management, vol. 12 no. 1
Type: Research Article
ISSN: 2053-4620

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Article
Publication date: 4 April 2019

Almasdi Syahza

The purpose of this paper is to develop strategies for potential environmental impacts as a result of institutional arrangement and development of oil palm downstream…

Abstract

Purpose

The purpose of this paper is to develop strategies for potential environmental impacts as a result of institutional arrangement and development of oil palm downstream industry both regionally and nationally.

Design/methodology/approach

The research location is in the areas potential for oil palm plantation development, either by plasma through BUMN and BUMS or self-supporting by the society. The research location will be divided into two parts, namely, the land area and the coastal area. The Riau land areas are Regency of Kampar, Rokan Hulu, and Kuantan Singingi, while Riau coastal areas are Regency of Pelalawan, Siak, Bengkalis, Indragiri Hilir, Indragiri Hulu and Rokan Hilir. Both research areas have different productivity due to the different soil fertility levels. The sustainability level of oil palm plantation from the socio-economic and environmental aspects is analyzed using the multi-dimensional scaling approach modified into Rapid Appraisal-Index Sustainability of Palm Oil Management.

Findings

In Riau Province, the development of oil palm is quite rapid. This is reasonable for several reasons which include the following supporting factors: the geographical condition of the Riau region is very supportive; the high demand for palm oil derivative products; the existence of market guarantee for oil palm farmers; the higher income oil palm generates than other plantation crops; and the relatively flat area. Most of the problems faced by oil palm farmers are the use of less good seeds, the length of the fruit laying at the location of the plantation, the inadequate production road, the relatively far distance to palm oil mill (POM) (National Agency of Drug and Food Control), the tendency of determining the unilateral revenue of the POM, the collectively measurement of revenue and the general revenue information. The development of oil palm plantations has created an entrepreneurial capability for farmers who are able to capture business opportunities in the agricultural sector, especially the plantation sub-sector.

Originality/value

The originality of this paper shows the comprehensively control strategy, potential of environmental impact and palm oil plantation. The method used for data collection was rapid rural appraisal method because accurate information is needed in a limited time as it relates to decisions related to village development that must be taken immediately. The study area was conducted in Riau Province because Riau Province is one of the biggest palm oil producers in Indonesia. The study sites will be divided into two, namely, the land area and the coastal area.

Details

Management of Environmental Quality: An International Journal, vol. 30 no. 5
Type: Research Article
ISSN: 1477-7835

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Article
Publication date: 12 February 2018

Md. Khaled Saifullah, Fatimah Binti Kari and Azmah Othman

The purpose of this paper is to study the socio-economic condition of indigenous households involved in the production of palm oil and natural rubber in Peninsular Malaysia.

Abstract

Purpose

The purpose of this paper is to study the socio-economic condition of indigenous households involved in the production of palm oil and natural rubber in Peninsular Malaysia.

Design/methodology/approach

Discriminant analysis is used in this study.

Findings

This study finds that 49.70 percent of natural rubber plantation owners and 37.3 percent of the palm oil plantation owners live under the national poverty line. Discriminant analysis shows that natural rubber plantation size has a significant difference between income below the poverty line and above the poverty line. But palm oil plantation size is not significantly different between income below and above the poverty line, mainly because small-scale palm oil farms receive help from the government and other agencies. This study also finds that the majority of indigenous people do not have ownership rights to their land.

Practical implications

This study suggests that small-scale plantation holders should be provided with training to upgrade their skills to increase productivity. Furthermore, finding an appropriate land ownership model helps to understand the fundamental issue of poverty among the small-scale plantation holder of indigenous people in Peninsular Malaysia.

Originality/value

Primary data are used in this study. The results show different scenarios than the existing studies.

Details

International Journal of Social Economics, vol. 45 no. 2
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 8 March 2019

Almasdi Syahza and Brilliant Asmit

The purpose of this paper is sixfold: first, to know the ability of area carrying capacity to the development of downstream oil palm industry; second, to know the…

Abstract

Purpose

The purpose of this paper is sixfold: first, to know the ability of area carrying capacity to the development of downstream oil palm industry; second, to know the potential for the development of downstream oil palm industry in efforts to improve the community through employment and business opportunities in the regions; third, to find eco-friendly institutional arrangement strategies of oil palm farming in order to spur economic growth and development; fourth, to formulate strategies for potential environmental impact as a result of institutional arrangement and development of downstream oil palm industry, both in regional and national scope; fifth, to predict the economic multiplier effect as impact of institutional arrangement and development of oil-palm-based downstream industry; and sixth, to include production centers and development areas of oil-palm-based downstream industry in potential areas.

Design/methodology/approach

Research location was in potential areas of oil palm plantation development, either in the form of plasma through state-owned enterprises (BUMN) and private-owned enterprises (BUMS), or in the form of self-supporting by community. The research locations were divided into two parts, namely the land area and the coastal area. The land area of Riau consisted of Kampar, Rokan Hulu and Kuantan Singingi Regency, while the coastal area of Riau consisted of Pelalawan, Siak, Bengkalis, Indragiri Hilir, Indragiri Hulu and Rokan Hilir Regency. Both research areas had different productivity which was caused by differences in soil fertility. The required data were primary and secondary data.

Findings

Plantation activities have increased the mobility of goods in the villages, causing plantation activities to also open business and employment opportunities for people who are able to accept these opportunities. Since post-1998 crisis, the growth of oil palm plantation area in Riau increased sharply, namely in 1998, the area of oil palm plantations was 901,276 ha, in 2012, 1,119,798 ha and increased to 2,103,175 ha at the end of 2017. Through economic activities that produce goods and services required during the plantation process and the development, downstream industries will have backward linkages. The development of oil palm plantations in Riau has had an impact on economic activities in rural areas. The result of the research in the field is that the average income of farmers in the plantation subsector (especially oil palm) is Rp4,576,696 per month or $5,781.09 per year. The impact on investment in the estate subsector has been felt by rural communities. This condition also affects the purchasing power of the people, resulting in the increase of mobility of goods and people. During the period 2009–2016, rural communities enjoyed a high level of prosperity. During this period, the price of fresh fruit bunch at the farm level was quite profitable. On the other hand, the production of the plantation area also increased compared to the previous period. The impact of rising prices and increasing production of farmers is that the farmers’ welfare index in the countryside had a positive value of 0.43. This index showed the increase of farmers’ welfare from the previous period by 43 percent.

Originality/value

There are few previous studies which have comprehensively and specifically reviewed the regional economic empowerment through institutional arrangement and development of oil-palm-based downstream industry. The development of oil palm plantations aims to eliminate poverty and underdevelopment, especially in rural areas. In addition, it also pays attention to equity. In broad sense, agricultural development which is based on plantations aims to improve the welfare of the community so that there is a change in the pattern of life of the surrounding community. On the other hand, the success of plantation development that is based on oil palm agribusiness is expected to reduce income inequality between community groups and between regions.

Details

Management of Environmental Quality: An International Journal, vol. 30 no. 6
Type: Research Article
ISSN: 1477-7835

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Article
Publication date: 30 December 2020

Safriyana Safriyana, Marimin Marimin, Elisa Anggraeni and Illah Sailah

This study aims to construct models to classify independent smallholder farmers’ (ISFs) plantation suitability and its competitiveness index. It proposes the models with…

Abstract

Purpose

This study aims to construct models to classify independent smallholder farmers’ (ISFs) plantation suitability and its competitiveness index. It proposes the models with the objective to accommodate ISFs as the main source of raw material for the palm oil industry. It was predicted that the supply of oil palm fresh fruit bunch would depend on ISFs’ plantations due to the government policy that restricts the expansion of the plantations.

Design/methodology/approach

The study was designed using a geographic information system approach and analytical hierarchy process for mapping the suitability of smallholder farmers’ oil palm plantation in the Kampar Regency. The competitiveness index was measured using a modified Diamond Porter framework and competitiveness index quantification. The model was conducted on 177 respondents from five districts in Kampar Regency.

Findings

The results indicated that it mapped 128,936.759 hectares area of ISFs’ oil palm plantation in the Kampar Regency. The results of plantation suitability showed that only 13.88% of plantations owned by ISFs were potential, 71.21% of them were in the developing category and 14.91% of plantations were non-potential. The competitiveness index showed there were only 7.91% of them at the developed competitive position, 73.45% at developing a competitive position and 18.64% at the least-developed position.

Practical implications

The paper includes implications for developing ISFs’ capacity building and best practice management for oil palm optimization, resulting in bargaining positions and social well-being.

Originality/value

The study had succeeded to visualize ISFs’ plantation area suitability and competitiveness at Kampar Regency, Riau Province. The model provides a brisk understanding and valuable information about ISFs’ conditions spatially. It offers specific outcomes and becomes important in optimize and develop the existing plantations at the right time and exact location.

Details

Journal of Science and Technology Policy Management, vol. 12 no. 2
Type: Research Article
ISSN: 2053-4620

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Article
Publication date: 20 January 2020

Almasdi Syahza and Brilliant Asmit

This paper aims to present the development of palm oil sector and future challenge in Riau Province Indonesia, which includes sustainable plantation development.

Abstract

Purpose

This paper aims to present the development of palm oil sector and future challenge in Riau Province Indonesia, which includes sustainable plantation development.

Design/methodology/approach

This research was conducted through a survey with developmental research method. The research location is in the Province of Riau, which is the potential development of oil palm plantation. The land areas of Riau are Kampar, Rokan Hulu and Kuantan Singingi, while the coastal areas are Pelalawan, Siak, Bengkalis, Indragiri Hilir, Indragiri Hulu and Rokan Hilir. The socio-economic and environmental aspects of sustainability level of palm oil plantations were analyzed using a multi-dimensional scaling approach that was modified into a Rap-Insus-Pom.

Findings

Development of palmoil plantations results in land conversion, posing potential erosio. In anticipating environmental damage, the Government of Indonesia imposes the Indonesian Sustainable Palm Oil (ISPO) policy. The results of ISPO policy show that Indonesian crude palm oil products are environmentally friendly.

Originality/value

This research is one of few studies that investigate the development of palm oil sector and future challenge in Riau Province, Indonesia. Riau Province still needs 13 units of palm oil mills with capacity of 60 tons per hour. Find strategies to regulate palm oil farming institutions and derivative products to enhance growth and economic development in the region and find production centers and development areas for palm oil local industries in potential regions.

Details

Journal of Science and Technology Policy Management, vol. 11 no. 2
Type: Research Article
ISSN: 2053-4620

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Article
Publication date: 8 November 2019

Khairul Anwar

This paper aims to find the pattern of interaction of political actors in situations of tenurial conflict in the watershed through a review of cases of social conflicts of…

Abstract

Purpose

This paper aims to find the pattern of interaction of political actors in situations of tenurial conflict in the watershed through a review of cases of social conflicts of plantation villages around Siak watershed 2009-2014.

Design/methodology/approach

In harmony with the Research Master Plan (RIP) of Riau University, the socio-political of Riau Malay society and the fundamental scientific pattern of Riau university, the development of the resources of area and waters and Malay culture, since 2001, the writer has conducted a study related to the issues of natural resources policy, especially oil palm in the era of regional autonomy and decentralization. This is in line with the umbrella of research developed by the University of Riau namely studying various aspects of natural resources (especially oil palm) and human resources of Watershed (DAS). The writer's review is; first, the dynamics of politics in relation to the issue of oil palm plantation policy in Riau. This study shows that there are many central policies when implemented at the local level including watersheds clashing with local interests such as forests and land ownership. Second, the writer has also reviewed the policy issues and problems of oil palm plantations in Riau watershed in 2000. This study shows there are many issues and problems formulated differently by different people.

Findings

Mapping and strategy are examined through the study of political strategies on oil palm plantations and use them to answer the following two questions: what kind of political model which can be used to manage the watershed conflict since regional autonomy is implemented. Economic factors are influential in mapping and management strategies for the emergence of tenurial conflicts in the Siak River Rivershed 2009-2014. The tenurial conflict management model of Siak rivershed, which is considered relevant, is a conflict-based model of cooperation with a partnership pattern between local government, watershed civil society and plantation business actors. The change of agrarian structure is directed to the effort to open the space for the accesibility of society in decision-making.

Originality/value

Some of these studies have not reached the tenurial conflicts in the watershed areas, especially Siak watershed. In fact, about 80 per cent of Riau province region consists of watershed. This becomes the originality and gap of this study with previous studies. This research was conducted further as an effort to synergize Riau's development policy with Riau University's research in harmony with RIP that was created and aimed to find the pattern of interaction of political actors in situations of tenurial conflict in Watershed through a review of cases of social conflicts of plantation around Siak watershed in 2009-2014.

Details

Journal of Science and Technology Policy Management, vol. 10 no. 5
Type: Research Article
ISSN: 2053-4620

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Book part
Publication date: 11 November 2015

Paul K. Gellert

Placing expansion of oil palm plantations in Indonesia in the context of the global land grab, this paper analyzes the contemporary extent and early historical periods of…

Abstract

Purpose

Placing expansion of oil palm plantations in Indonesia in the context of the global land grab, this paper analyzes the contemporary extent and early historical periods of plantation expansion via the theory of accumulation by dispossession (ABD).

Methodology/approach

After reviewing the empirical debate about the land grab, this paper examines the importance of ABD to understand the land grabs in general and for oil palm plantations in Indonesia in particular. Rather than a new phenomenon of the last four decades of neoliberalism, ABD has a history of several centuries.

Findings

Accumulation by dispossession (ABD) is a powerful and appropriate lens by which to understand the land conversion and social displacement occurring in Indonesia. Building on historical understanding of ABD, this paper applies the theory to the Indonesian oil palm case, making the case that the multiple and uncertain sequences of engagement with oil palm expansion are reflective of a broader struggle against dispossession.

Originality/value

ABD is not just a global financial process of corporate-led neoliberalization but also shaped importantly by domestic state and local elites. These elites have shaped ABD differently in colonial, authoritarian, and neoliberal periods.

Details

States and Citizens: Accommodation, Facilitation and Resistance to Globalization
Type: Book
ISBN: 978-1-78560-180-4

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Article
Publication date: 5 November 2018

Roslina Kamaruddin, Norehan Abdullah and Mohammad Amizi Ayob

Oil palm is a labor-intensive crop where the labor issue is one of the most intransigent problems facing the industry. The negative perception toward this sector…

Abstract

Purpose

Oil palm is a labor-intensive crop where the labor issue is one of the most intransigent problems facing the industry. The negative perception toward this sector associated with the unattractive working environment which commonly refers to dark, dirty and dangerous has distress local youth to stay away from this occupation. Thus, the purpose of this paper is to explore the level of job satisfaction among oil palm plantation workers in Malaysia and analyze the factors that contribute to their satisfaction level.

Design/methodology/approach

The survey was conducted in 2014 through interviews from the selected samples of oil palm plantation workers who aged ranging from 16 to 40 years old, which was considered as youth category and staying within the location 5 km radius within the plantation area. The structural equation modeling is used to analyze the factors affecting job satisfaction among workers in the plantation sector.

Findings

The study found that the government and employer policies associated with plantation worker and economic profitability offered in this sector were the most significant factors that positively contribute to the joy of working among them. On the other hand, the negative relationship between working environment and perception of social job status with job satisfaction proven that these two factors were repulsion factors.

Research limitations/implications

Currently, with the local youth negative perception on the agriculture sector and Indonesia’s economy booming and wages on the rise, Malaysia is struggling to attract new expatriate workers and retain those already active in the sector. Oil palm plantation companies have to counter this by enhancing worker’s welfare to ensure their job satisfaction in plantation environment. This study is to convince the organization that worker’s job satisfaction is a crucial factor to enhance their performance. With the strategy recommended by this study, employees will be getting higher level of job satisfaction, thus increasing their performance and enjoying working in the plantation sector.

Originality/value

To the best of the author’s knowledge, there are yet to be studies that look at the agricultural employees’ job satisfaction particularly in the plantation sector. Most of the previous studies in the field of plantation sector highlight on the labor productivity, economic performance of palm oil plantation sector and environmental impact of oil palm plantation. Thus, this study provides a better understanding of the factors that contribute to job satisfaction among plantation workers.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 8 no. 4
Type: Research Article
ISSN: 2044-0839

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Book part
Publication date: 12 February 2021

Munirah Khamarudin, Norkhazzaina Salahuddin and Normalisa Md Isa

The Malaysian oil palm has seen steady progress. Started in Malaysia as an ornamental plant, it has turned into a huge industry. Oil palm production has yielded unlimited…

Abstract

The Malaysian oil palm has seen steady progress. Started in Malaysia as an ornamental plant, it has turned into a huge industry. Oil palm production has yielded unlimited economic profits and is currently an emerging Malaysian economic sector. Malaysia currently accounts for an overwhelming contribution to the production and export of palm oil worldwide, which is 39% and 44%, respectively. From around 4.49 million hectares of land, a massive 17.73 million tons of palm oil and 2.13 tons of palm kernel oil were produced. It has been widely use as food products, cosmetics, livestock feed, as well as in bioenergy industry. This is in line with the fast-growing global demand for the palm oil products. Nevertheless, it is currently experiencing a period of slow or less growth in terms of contributing naturally to gross national productivity. Issues such as extreme weather, aging trees, and plant diseases are most prominent among the natural factors that are hindering the growth of the industry. The global pandemic of COVID-19 is also contributing to the current slow growth of palm oil sector. Malaysia has a crucial role to play in meeting the growing global need for oils and fats, as Malaysia is one of the palm oil and palm oil products' major producers and exporting countries.

Details

Modeling Economic Growth in Contemporary Malaysia
Type: Book
ISBN: 978-1-80043-806-4

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