Human Ecology

, Volume 46, Issue 1, pp 107–116 | Cite as

The Economics Behind an Ecological Crisis: Livelihood Effects of Oil Palm Expansion in Sumatra, Indonesia

  • Christoph KubitzaEmail author
  • Vijesh V. Krishna
  • Zulkifli Alamsyah
  • Matin Qaim


While the negative ecological effects of the rapid expansion of oil palm in Southeast Asia are far-reaching and relatively widely studied, the socioeconomic consequences have received much less attention in the literature. We examine whether local farmers in Indonesia benefit from cultivating oil palm. We also look at the impact dynamics and possible spillover effects on other farmers. Our analysis builds on panel data collected from 680 farm households in Jambi Province, Sumatra. We show that oil palm cultivation has significant positive effects on farmers’ livelihoods. The economic gains allow farm households to increase their consumption. Oil palm has lower labor requirements than alternative crops. Hence, oil palm farmers can cultivate larger areas and also reallocate saved labor time to non-farm economic activities, which contributes to additional secondary gains. Policies aimed at regulating further oil palm area expansion will have to account for the economic benefits of this crop for the local population.


Farmer welfare Land-use changes Farm household survey Spatial modeling Jambi Province, Sumatra Indonesia 



This study was supported financially by Deutsche Forschungsgemeinschaft (DFG) as part of the German-Indonesian Collaborative Research Center CRC990: Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia). The authors gratefully acknowledge the willingness of the sample farm households to participate in the survey. We also thank two anonymous reviewers for valuable comments.


This study was funded by Deutsche Forschungsgemeinschaft (DFG) (CRC 990).

Compliance with Ethical Standards

Conflict of Interest

The authors declare that they have no conflict of interest.

Ethical Approval

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards.

Informed Consent

Informed consent was obtained from all individual participants included in the study.

Supplementary material

10745_2017_9965_MOESM1_ESM.docx (78 kb)
ESM 1 (DOCX 77.9 kb)


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Agricultural Economics and Rural DevelopmentUniversity of GoettingenGoettingenGermany
  2. 2.Socioeconomics ProgramInternational Maize and Wheat Improvement CenterTexcocoMexico
  3. 3.Department of AgribusinessUniversity of JambiJambiIndonesia
  4. 4.Center of Biodiversity and Sustainable Land Use (CBL)University of GoettingenGoettingenGermany

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