IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v159y2022ics0305750x22002248.html
   My bibliography  Save this article

Oil palm cultivation improves living standards and human capital formation in smallholder farm households

Author

Listed:
  • Chrisendo, Daniel
  • Siregar, Hermanto
  • Qaim, Matin

Abstract

Oil palm cultivation is a controversial topic because of its manifold sustainability implications. Recent research in Southeast Asia suggests that oil palm cultivation is associated with income gains for many smallholder farmers, but whether these income gains also translate into longer-term improvements in household living standards remains unclear. Here, we use three rounds of panel data from smallholder farmers in Sumatra, Indonesia, to analyze effects of oil palm cultivation on various indicators of living standards. Results suggest that oil palm cultivation improves nutrition, dietary quality, and expenditures on education, all important indicators of human capital formation with expected positive long-term implications. Furthermore, we find positive associations between oil palm cultivation, household asset ownership, and electricity consumption, after controlling for possible confounding factors. We conclude that oil palm cultivation improves living standards and human capital formation in smallholder farm households in this setting.

Suggested Citation

  • Chrisendo, Daniel & Siregar, Hermanto & Qaim, Matin, 2022. "Oil palm cultivation improves living standards and human capital formation in smallholder farm households," World Development, Elsevier, vol. 159(C).
    • Handle: RePEc:eee:wdevel:v:159:y:2022:i:c:s0305750x22002248
    DOI: 10.1016/j.worlddev.2022.106034
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X22002248
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2022.106034?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chrisendo, Daniel & Krishna, Vijesh V. & Siregar, Hermanto & Qaim, Matin, 2020. "Land-use change, nutrition, and gender roles in Indonesian farm households," Forest Policy and Economics, Elsevier, vol. 118(C).
    2. World Bank, 2020. "The Promise of Education in Indonesia," World Bank Publications - Reports 34807, The World Bank Group.
    3. Euler, Michael & Krishna, Vijesh & Schwarze, Stefan & Siregar, Hermanto & Qaim, Matin, 2017. "Oil Palm Adoption, Household Welfare, and Nutrition Among Smallholder Farmers in Indonesia," World Development, Elsevier, vol. 93(C), pages 219-235.
    4. Duflo, Esther, 2004. "The medium run effects of educational expansion: evidence from a large school construction program in Indonesia," Journal of Development Economics, Elsevier, vol. 74(1), pages 163-197, June.
    5. Sekabira, Haruna & Qaim, Matin, 2017. "Can Mobile Phones Improve Gender Equality and Nutrition? Panel Data Evidence from Farm Households in Uganda," GlobalFood Discussion Papers 256215, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    6. Joshua Graff Zivin & Matthew Neidell, 2013. "Environment, Health, and Human Capital," Journal of Economic Literature, American Economic Association, vol. 51(3), pages 689-730, September.
    7. Ayu Pratiwi & Aya Suzuki, 2017. "Effects of farmers’ social networks on knowledge acquisition: lessons from agricultural training in rural Indonesia," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-23, December.
    8. Ahmad, Sohail & Mathai, Manu V. & Parayil, Govindan, 2014. "Household electricity access, availability and human well-being: Evidence from India," Energy Policy, Elsevier, vol. 69(C), pages 308-315.
    9. Linxiu Zhang & Hongmei Yi & Renfu Luo & Changfang Liu & Scott Rozelle, 2013. "The human capital roots of the middle income trap: the case of China," Agricultural Economics, International Association of Agricultural Economists, vol. 44(s1), pages 151-162, November.
    10. Santika, Truly & Wilson, Kerrie A. & Meijaard, Erik & Budiharta, Sugeng & Law, Elizabeth E. & Sabri, Meindra & Struebig, Matthew & Ancrenaz, Marc & Poh, Tun-Min, 2019. "Changing landscapes, livelihoods and village welfare in the context of oil palm development," Land Use Policy, Elsevier, vol. 87(C).
    11. Nadjia Mehraban & Christoph Kubitza & Zulkifli Alamsyah & Matin Qaim, 2021. "Oil palm cultivation, household welfare, and exposure to economic risk in the Indonesian small farm sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 901-915, September.
    12. Hoyt Bleakley, 2010. "Health, Human Capital, and Development," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 283-310, September.
    13. Mazur, Allan, 2011. "Does increasing energy or electricity consumption improve quality of life in industrial nations?," Energy Policy, Elsevier, vol. 39(5), pages 2568-2572, May.
    14. Charles Seaford, 2011. "Time to legislate for the good life," Nature, Nature, vol. 477(7366), pages 532-533, September.
    15. Wasantha Athukorala & Clevo Wilson & Tim Robinson, 2012. "Determinants of Health Costs due to Farmers’ Exposure to Pesticides: An Empirical Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(1), pages 158-174, February.
    16. Malapit, Hazel Jean L. & Quisumbing, Agnes R., 2015. "What dimensions of women’s empowerment in agriculture matter for nutrition in Ghana?," Food Policy, Elsevier, vol. 52(C), pages 54-63.
    17. Sekabira, Haruna & Qaim, Matin, 2017. "Can mobile phones improve gender equality and nutrition? Panel data evidence from farm households in Uganda," Food Policy, Elsevier, vol. 73(C), pages 95-103.
    18. Mehraban, Nadjia & Debela, Bethelhem Legesse & Kalsum, Ummi & Qaim, Matin, 2022. "What about her? Oil palm cultivation and intra-household gender roles," Food Policy, Elsevier, vol. 110(C).
    19. Mark Western & Wojtek Tomaszewski, 2016. "Subjective Wellbeing, Objective Wellbeing and Inequality in Australia," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-20, October.
    20. Christopher Gilbert & Wyn Morgan, 2010. "Has food price volatility risen?," Department of Economics Working Papers 1002, Department of Economics, University of Trento, Italia.
    21. Matin Qaim & Kibrom T. Sibhatu & Hermanto Siregar & Ingo Grass, 2020. "Environmental, Economic, and Social Consequences of the Oil Palm Boom," Annual Review of Resource Economics, Annual Reviews, vol. 12(1), pages 321-344, October.
    22. Santika, Truly & Wilson, Kerrie A. & Budiharta, Sugeng & Law, Elizabeth A. & Poh, Tun Min & Ancrenaz, Marc & Struebig, Matthew J. & Meijaard, Erik, 2019. "Does oil palm agriculture help alleviate poverty? A multidimensional counterfactual assessment of oil palm development in Indonesia," World Development, Elsevier, vol. 120(C), pages 105-117.
    23. Bethelhem Legesse Debela & Esther Gehrke & Matin Qaim, 2021. "Links between Maternal Employment and Child Nutrition in Rural Tanzania," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 812-830, May.
    24. Parinduri, Rasyad A., 2014. "Do children spend too much time in schools? Evidence from a longer school year in Indonesia," Economics of Education Review, Elsevier, vol. 41(C), pages 89-104.
    25. Ruml, Anette & Chrisendo, Daniel & Iddrisu, Abdul Malik & Karakara, Alhassan A. & Nuryartono, Nunung & Osabuohien, Evans & Lay, Jann, 2022. "Smallholders in agro-industrial production: Lessons for rural development from a comparative analysis of Ghana’s and Indonesia’s oil palm sectors," Land Use Policy, Elsevier, vol. 119(C).
    26. Marc F. Bellemare & Casey J. Wichman, 2020. "Elasticities and the Inverse Hyperbolic Sine Transformation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 50-61, February.
    27. United Nations UN, 2015. "Transforming our World: the 2030 Agenda for Sustainable Development," Working Papers id:7559, eSocialSciences.
    28. Wei Ha & Ronald Mendoza, 2010. "The intended and unintended consequences of social protection on school dropout in post‐crisis Indonesia," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(8), pages 1115-1133, November.
    29. Muhammad Ibnu & Astrid Offermans & Pieter Glasbergen, 2018. "Certification and Farmer Organisation: Indonesian Smallholder Perceptions of Benefits," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 54(3), pages 387-415, September.
    30. Kirk, Angeli & Kilic, Talip & Carletto, Calogero, 2018. "Composition of Household Income and Child Nutrition Outcomes Evidence from Uganda," World Development, Elsevier, vol. 109(C), pages 452-469.
    31. Wasantha Athukorala & Clevo Wilson & Tim Robinson, 2012. "Determinants of Health Costs due to Farmers’ Exposure to Pesticides: An Empirical Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(1), pages 158-174, February.
    32. Bou Dib, Jonida & Krishna, Vijesh V. & Alamsyah, Zulkifli & Qaim, Matin, 2018. "Land-use change and livelihoods of non-farm households: The role of income from employment in oil palm and rubber in rural Indonesia," Land Use Policy, Elsevier, vol. 76(C), pages 828-838.
    33. Gatto, Marcel & Wollni, Meike & Asnawi, Rosyani & Qaim, Matin, 2017. "Oil Palm Boom, Contract Farming, and Rural Economic Development: Village-Level Evidence from Indonesia," World Development, Elsevier, vol. 95(C), pages 127-140.
    34. Van den Broeck, Goedele & Mardulier, Myrthe & Maertens, Miet, 2021. "All that is gold does not glitter: Income and nutrition in Tanzania," Food Policy, Elsevier, vol. 99(C).
    35. Ingo Grass & Christoph Kubitza & Vijesh V. Krishna & Marife D. Corre & Oliver Mußhoff & Peter Pütz & Jochen Drescher & Katja Rembold & Eka Sulpin Ariyanti & Andrew D. Barnes & Nicole Brinkmann & Ulric, 2020. "Trade-offs between multifunctionality and profit in tropical smallholder landscapes," Nature Communications, Nature, vol. 11(1), pages 1-13, December.
    36. Daniel Chrisendo & Hermanto Siregar & Matin Qaim, 2021. "Oil palm and structural transformation of agriculture in Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 52(5), pages 849-862, September.
    37. Murthy, Vasudeva N.R. & Okunade, Albert A., 2009. "The core determinants of health expenditure in the African context: Some econometric evidence for policy," Health Policy, Elsevier, vol. 91(1), pages 57-62, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chrisendo, Daniel & Siregar, Hermanto & Qaim, Matin, 2021. "Oil Palm Cultivation Improves the Long-Term Wellbeing of Smallholder Farm Households," 2021 Conference, August 17-31, 2021, Virtual 315061, International Association of Agricultural Economists.
    2. Ruml, Anette & Chrisendo, Daniel & Iddrisu, Abdul Malik & Karakara, Alhassan A. & Nuryartono, Nunung & Osabuohien, Evans & Lay, Jann, 2022. "Smallholders in agro-industrial production: Lessons for rural development from a comparative analysis of Ghana’s and Indonesia’s oil palm sectors," Land Use Policy, Elsevier, vol. 119(C).
    3. Mehraban, Nadjia & Debela, Bethelhem Legesse & Kalsum, Ummi & Qaim, Matin, 2022. "What about her? Oil palm cultivation and intra-household gender roles," Food Policy, Elsevier, vol. 110(C).
    4. Ruml, Anette & Chrisendo, Daniel & Osabuohien, Evans & Karakara, Alhassan & Iddrisu, Abdul Malik & Lay, Jann, 2021. "Smallholders in Agro-Industrial Production: Lessons from Rural Development at New Frontiers from a Comparative Analysis of Ghana’s and Indonesia’s Oil Palm Sectors," 2021 Conference, August 17-31, 2021, Virtual 315162, International Association of Agricultural Economists.
    5. Tabe-Ojong, Martin Paul Jr. & Ordway, Elsa M. & Nkongho, Raymond N. & Molua, Ernest L., 2022. "Oil palm expansion among non-industrial producers in Cameroon: Potentials for synergy between agro-economic gains and ecological safeguards," Forest Policy and Economics, Elsevier, vol. 135(C).
    6. Krishna, Vijesh V. & Kubitza, Christoph, 2021. "Impact of oil palm expansion on the provision of private and community goods in rural Indonesia," Ecological Economics, Elsevier, vol. 179(C).
    7. Sibhatu, Kibrom T. & Steinhübel, Linda & Siregar, Hermanto & Qaim, Matin & Wollni, Meike, 2022. "Spatial heterogeneity in smallholder oil palm production," Forest Policy and Economics, Elsevier, vol. 139(C).
    8. Tabe-Ojong, Martin Paul Jr. & Molua, Ernest L. & Nanfouet, Marco Alberto & Mkong, Cynthia J. & Kiven, Vanessa & Ntegang, Venant Atem, 2023. "Oil palm production, income gains, and off-farm employment among independent producers in Cameroon," Ecological Economics, Elsevier, vol. 208(C).
    9. Arya Hadi Dharmawan & Dyah Ita Mardiyaningsih & Heru Komarudin & Jaboury Ghazoul & Pablo Pacheco & Faris Rahmadian, 2020. "Dynamics of Rural Economy: A Socio-Economic Understanding of Oil Palm Expansion and Landscape Changes in East Kalimantan, Indonesia," Land, MDPI, vol. 9(7), pages 1-20, July.
    10. Sibhatu, Kibrom T. & Steinhübel, Linda & Siregar, Hermanto & Qaim, Matin & Wollni, Meike, 2021. "Spatial Heterogeneity of Oil Palm Production in Indonesia: Implications for Intervention Strategies," 2021 Conference, August 17-31, 2021, Virtual 315222, International Association of Agricultural Economists.
    11. Chrisendo, Daniel & Krishna, Vijesh V. & Siregar, Hermanto & Qaim, Matin, 2020. "Land-use change, nutrition, and gender roles in Indonesian farm households," Forest Policy and Economics, Elsevier, vol. 118(C).
    12. Daniel Chrisendo & Hermanto Siregar & Matin Qaim, 2021. "Oil palm and structural transformation of agriculture in Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 52(5), pages 849-862, September.
    13. Nurul Atiqah binti Mohd Suib & Norlida Hanim Mohd Salleh & Md Shafiin Shukor & Norshamliza Chamhuri & Shahida Shahimi & Kamalrudin Mohamed Salleh & Khairuman Hashim, 2023. "The Influence of Good Agricultural Practice (GAP) on the Productivity and Well-Being of Malaysian Sustainable Palm Oil (MSPO)-Certified Independent Smallholders in Malaysia," Agriculture, MDPI, vol. 13(5), pages 1-19, April.
    14. Rowland, Dominic & Zanello, Giacomo & Waliyo, Edy & Ickowitz, Amy, 2022. "Oil palm and gendered time use: A mixed-methods case study from West Kalimantan, Indonesia," Forest Policy and Economics, Elsevier, vol. 137(C).
    15. Chrisendo, Daniel & Siregar, Hermanto & Qaim, Matin, 2020. "Oil palm and structural transformation of agriculture in Indonesia," EFForTS Discussion Paper Series 33, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    16. Hongyun Zheng & Yuwen Zhou & Dil Bahadur Rahut, 2023. "Smartphone use, off‐farm employment, and women's decision‐making power: Evidence from rural China," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1327-1353, August.
    17. Pallavi Rajkhowa & Matin Qaim, 2022. "Mobile phones, off‐farm employment and household income in rural India," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(3), pages 789-805, September.
    18. Ogahara, Zoë & Jespersen, Kristjan & Theilade, Ida & Nielsen, Martin Reinhard, 2022. "Review of smallholder palm oil sustainability reveals limited positive impacts and identifies key implementation and knowledge gaps," Land Use Policy, Elsevier, vol. 120(C).
    19. Nadjia Mehraban & Christoph Kubitza & Zulkifli Alamsyah & Matin Qaim, 2021. "Oil palm cultivation, household welfare, and exposure to economic risk in the Indonesian small farm sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 901-915, September.
    20. Sikhulumile Sinyolo & Catherine Ndinda & Conrad Murendo & Sithembile A. Sinyolo & Mudzunga Neluheni, 2020. "Access to Information Technologies and Consumption of Fruits and Vegetables in South Africa: Evidence from Nationally Representative Data," IJERPH, MDPI, vol. 17(13), pages 1-17, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:159:y:2022:i:c:s0305750x22002248. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.