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Smallholder Oil Palm: Space for Diversification?

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Smallholder Oil Palm: Space for Diversification? Smallholder oil palm: space for diversification? WaNuLCAS model-based exploration of the environmental and economic impact of intercropping scenarios for Indonesian smallholders MSc Thesis Plant Production Systems WaNuLCAS 4.3 Dienke Stomph January 2017 Smallholder oil palm: space for diversification? MSc Thesis Plant Production Systems Name Student: Dienke Stomph Registration Number: 930507808100 Study: MSc Organic Agriculture – Specialization Agroecology Chair group: Plant Production Systems (PPS) Code Number: PPS-80436 Date January, 2017 Supervisors: Meine van Noordwijk Ni’matul Khasanah Tom Schut Examiner: Maja Slingerland Disclaimer: this thesis report is part of an education program and hence might still contain (minor) inaccuracies and errors. Correct citation: Stomph, D., 2017, Smallholder oil palm: space for diversification?, MSc Thesis Wageningen University, 78 p. Contact [email protected] for access to data, models and scripts used for the analysis 2 ACKNOWLEDGEMENT Firstly, I would like to express my sincere gratitude to supervisors Meine van Noordwijk and Ni’matul Khasanah for their continuous support, assisting me, challenging me and allowing for independence. I would also like to thank Tom Schut for his helpful remarks, which were of considerable support in improving the structure of this final report. Furthermore, the fruitful discussions with people in my close surroundings at Wageningen University and the World Agroforestry Centre scientists are gratefully acknowledged. FOREWORD This MSc. thesis report describes the model development and simulation of plot-level diversification scenarios for oil palm cultivation. The study zooms in to the Indonesian oil palm context, with as a focal point smallholders on Sumatra. The report first lists the research aim and objective. After which the contextual components of importance to this study are made explicit. The WaNuLCAS model (van Noordwijk & Lusiana, 1999) is used as a tool to explore these scenarios, with the required inputs and generated output. Then follows a section on the diversification scenarios and the indicators of interest to measure and compare the scenario outcomes. As a last section in the methods, the calibrations and modifications are described that were needed to equip the model to be suitable as an explorative tool. Results of the scenario simulations are summarized and discussed in a broader context of recent developments as well as the impact of this study on future developments. 3 ABSTRACT This research aimed at challenging the assumption that oil palm is best suited to monoculture cultivation for smallholders in Indonesia, through a model-based exploration of the short- and long- term feasibility of a range of plot-level diversifications. The global palm oil production has increased over fourfold in the last two decades, by converting forests and agroforests into monocultures, under the assumption that monoculture oil palm cultivation is most productive. This deforestation caused biodiversity losses and environmental degradation and raised social, political and economic concerns. This study hypothesized that intercropping could serve as an integrative answer to several of these concerns. As intercropping can deliver agronomic, economic and environmental system improvements. Intercropping was explored through simulation of five scenarios in the Water, Nutrient and Light Capture model for Agroforestry Systems (WaNuLCAS) model. The 5 crops included were: cacao, rubber, cassava, groundnut and mucuna as a cover crop. The scenarios were simulated for a 25-year period, for four typical Indonesian oil palm weather and soil conditions. The prices of the farm inputs (e.g. seedlings, labour, fertilizers) and produce were based on those recorded for the Indonesian context. The intercropping scenarios were compared to the monoculture oil palm simulation based on 4 productivity and 6 environmental performance indicators. The model output was generated at plot- level and therewith ignores interactions intercropping could have at farm- or landscape level. The results showed that considerable economic and environmental system improvements can be achieved through intercropping. With the exception of returns to labour, all indicators showed that performance improvement was obtained. Compared to the monoculture, larger productivity per unit of land, and environmental performance improvements were predicted for all intercropping scenarios. Intercropping with cacao showed to obtain the largest net return to land, a 25% increase compared to the monoculture, and can serve as a risk coping strategy. Including annuals in the first years of oil palm cultivation resulted in the quickest investment recovery. Intercropping rubber performed poorly for the economic indicators, but achieved the largest environmental system improvement. It is therefore argued that diversification has a large potential to improve overall system performance at both plot- and landscape-level. To utilize this potential more insight in smallholders’ interest in diversification and suitable incentives to support diversification adoption by smallholder is required. 4 Table of Contents ACKNOWLEDGEMENT ..................................................................................................................................................... 3 FOREWORD ..................................................................................................................................................................... 3 ABSTRACT ....................................................................................................................................................................... 4 INTRODUCTION ............................................................................................................................................................... 7 AIM & RELEVANCE .......................................................................................................................................................... 8 BACKGROUND ................................................................................................................................................................. 9 Sumatran oil palm context .............................................................................................................................................. 9 The Sumatran environment .............................................................................................................................................................................. 9 A landscape in transition .................................................................................................................................................................................... 9 The Sumatran smallholder .............................................................................................................................................................................. 10 Mis(sing)-information ........................................................................................................................................................................................ 11 Certification trend within smallholder context .................................................................................................................................. 11 Smallholders and diversification ................................................................................................................................................................. 12 Oil palm cultivation ....................................................................................................................................................... 13 MATERIALS & METHODS............................................................................................................................................... 14 Data input & model description ................................................................................................................................... 15 Diversification scenarios ............................................................................................................................................... 16 Annual intercrops ................................................................................................................................................................................................. 16 Perennial intercrops............................................................................................................................................................................................ 17 Decision criteria ............................................................................................................................................................ 18 Productivity indicators ...................................................................................................................................................................................... 18 Environmental indicators ................................................................................................................................................................................ 20 Spatial levels and stakeholders .................................................................................................................................................................... 21 Model preparatory steps .............................................................................................................................................
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