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Oil Palm Expansion in Riau Province, Indonesia

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Oil Palm Expansion in Riau Province, Indonesia OIL PALM EXPANSION IN RIAU PROVINCE, INDONESIA : serving people, planet and profit? OIL PALM EXPANSION IN RIAU PROVINCE, INDONESIA : serving people, planet and profit? Ari Susanti, Utrecht University, Faculty of Geosciences, Department of Human Geography and Spatial Planning, International Development Studies Group This thesis was written as part of the Sliding from Greasy land? Migration flows and forest transformation caused by oil palm expansion in Riau, Sumatra and East Kalimantan cluster and received financial support from the Netherlands Organization for Scientific Research (NWO/WOTRO) in collaboration with the Royal Dutch Academy of Sciences (KNAW) as part of the Agriculture beyond Food (AbF) programme. ISBN 978-94-6301-094-8 Eburon Academic Publishers P/O Box 2867 2601 CW Delft The Netherlands Tel.: +31 (0)15 2131484 / Fax: +31 (0)15 2146888 [email protected] / www.eburon.nl Cover design : Riyono Nugroho Cartography : Ton Markus Figures : Margot Stoete Pictures : Ari Susanti © 2016 Ari Susanti. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior permission in writing from the proprietor. © 2016 Ari Susanti. Alle rechten voorbehouden. Niets uit deze uitgave mag worden verveelvoudigd, opgeslagen in een geautomatiseerd gegevensbestand, of openbaar gemaakt, in enige vorm of op enige wijze, hetzij elektronisch, mechanisch, door fotokopieën, opnamen, of op enig andere manier, zonder voorafgaande schriftelijke toestemming van de rechthebbende. Oil palm expansion in Riau province, Indonesia: serving people, planet and profit? De uitbreiding van palmolie plantages in de provincie Riau, Indonesië: integratie van mens, planeet, en economie? (met een samenvatting in het Nederlands) Ekspansi kelapa sawit di Provinsi Riau, Indonesia: untuk masyarakat, menyelamatkan bumi, atau keuntungan semata? (dengan terjemahan dalam Bahasa Indonesia) Proefschrift ter verkrijging van de graad van doctor aan de Universiteit Utrecht op gezag van de rec- tor magnificus, prof. dr. G.J. van der Zwaan, ingevolge het besluit van het college voor promoties in het openbaar te verdedigen op maandag 19 december 2016 des middags te 12.45 uur door Ari Susanti geboren op 14 mei 1974 te Cilacap, Indonesia Promotor : Prof. dr. E.B. Zoomers Copromotor : Dr. P.P.M. Burgers CONTENTS CONTENTS ............................................................................................................. v LIST OF FIGURES ................................................................................................. ix LIST OF TABLES ................................................................................................... xi LIST OF BOX........................................................................................................... xii LIST OF ABBREVIATIONS ................................................................................ xiii ACKNOWLEDGEMENTS .................................................................................. xvi 1 INTRODUCTION ............................................................................................... 1 1.1 Background and motivation ......................................................................... 2 1.2 Debates on deforestation and oil palm expansion .................................. 4 1.3 Research question .......................................................................................... 7 1.4 Some concepts ............................................................................................... 8 1.5 Analytical framework..................................................................................... 10 1.6 Research site and methods ........................................................................... 11 1.7 Structure of the book .................................................................................. 13 References .............................................................................................................. 15 2 THE SIX DRIVERS AND THREE PHASES OF OIL PALM EXPANSION IN INDONESIA...................................................................... 23 2.1 Introduction .................................................................................................... 24 2.2 Crisis in the forestry sector and the need for alternative income ........... 25 2.3 Increasing demand for oil palm products .................................................. 27 2.3.1 Growing global demand ................................................................... 27 2.3.2 Growing domestic demand .............................................................. 30 2.4 Discovery of highly competitive oil crop .................................................. 32 2.5 Changing institutions, technology and business model ........................... 34 2.5.1 Enabling policies for oil palm expansion ....................................... 34 2.5.2 Advancement in agro-technology enables wider use of palm oil 36 2.5.3 New business models enable new actors to participate in oil palm production ............................................................................ 38 Contents v 2.6 Land availability in Indonesia ....................................................................... 41 2.7 Efforts towards achieving sustainable palm oil production ................... 42 2.8 The three phases of oil palm expansion ................................................... 44 2.9 Conclusion ..................................................................................................... 47 References .............................................................................................................. 47 3 OIL PALM EXPANSION AND DEFORESTATION IN INDONESIA: INSTITUTIONAL CONTEXT .................................... 59 3.1 Introduction .................................................................................................... 60 3.2 Oil palm expansion in Indonesia ................................................................ 61 3.2.1 The changing regulations: from large-scale monopoly to smallholders’ involvement ................................................................ 61 3.2.2 The oil palm boom ............................................................................ 62 3.3 Land governance and natural resources management ............................. 64 3.4 Regional autonomy and forestry decentralisation ..................................... 68 3.5 Competing claims for land and natural resources .................................... 70 3.6 Concluding remarks ....................................................................................... 72 References .............................................................................................................. 73 4 THE IMPACTS OF OIL PALM EXPANSION IN RIAU PROVINCE, INDONESIA ............................................................ 77 4.1 Introduction .................................................................................................... 78 4.2 Analytical framework ................................................................................... 78 4.3 Methods ........................................................................................................... 79 4.4 Oil palm as a development commodity ...................................................... 80 4.5 Impacts of oil palm expansion in Riau province ...................................... 84 4.5.1 Roads replaced the function of rivers ............................................. 84 4.5.2 Oil palm mills ...................................................................................... 84 4.5.3 Extended cities and urbanization ..................................................... 85 4.5.4 Contribution to regional income and employment ....................... 87 4.5.5 Changes in land use/cover ............................................................... 88 4.5.6 Peat fires and degradation ................................................................. 91 vi Oil Palm expansion in Riau province, Indonesia : serving people, planet and profit? 4.5.7 Vulnerable livelihood ......................................................................... 94 4.6 Conclusion ...................................................................................................... 95 References .............................................................................................................. 97 5 THE ROLES OF SMALLHOLDERS IN OIL PALM PRODUCTION IN RIAU PROVINCE, INDONESIA ............................................................ 105 5.1 Introduction .................................................................................................... 106 5.2 Analytical framework..................................................................................... 107 5.3 Research area .................................................................................................. 108 5.4 Characteristic of smallholders ..................................................................... 111 5.4.1 Demographic ..................................................................................... 112 5.4.2 Oil palm adoption .............................................................................. 112 5.4.3 Land acquisition strategies ................................................................ 115 5.4.4 Land title ............................................................................................
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