Toward Sustainable Palm Oil in Indonesia: Reconciling Economic Development and Forest Conservation

Oil palm, a multipurpose crop, is in many ways emblematic of key economic, social and environmental challenges and opportunities. The rapid growth of palm oil demand worldwide, and the rapid expansion of oil palm plantations in the tropics, including in Indonesia, has put the crop at the center of controversies (Rival and Levang, 2014).

Palm oil has many uses, from food and energy to several other industrial uses. Palm oil can be used for cooking, and in making margarine, detergents and cosmetics. Since the last decade, palm oil has also been used as a key feedstock for biofuels in some countries as they try to diversify their energy supply (Soh et al. 2003; Murphy 2007; Ngando-Ebongue et al. 2012). Thus, the increased global demand for food, energy and other industrial uses products triggers an increased demand for palm oil.

For Indonesia, oil palm contributes significantly to the national development. In 2017, its export value reached USD 23 billion (Reily and Ekarina 2018; Tim Riset PASPI 2018). Oil palm also contributed 17% of the agricultural gross domestic product (GDP) in 2014 (MoA 2015). In addition, according to the 2013 agricultural census, about 2 million smallholders cultivate oil palm (BPS 2013).

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