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Determinants of Smallholder Farmers to Participate in the People’s Palm Oil Replanting Program in Indonesia: Do Non-Economic Factors Dominate?

Author

Listed:
  • Jaenal Effendi

    (Faculty of Economic and Management, Bogor Agricultural University, Bogor 16680, Indonesia)

  • Ranti Wiliasih

    (Faculty of Economic and Management, Bogor Agricultural University, Bogor 16680, Indonesia)

  • Hariyadi Hariyadi

    (Faculty of Agriculture, Bogor Agricultural University, Bogor 16680, Indonesia)

  • Anna Fariyanti

    (Faculty of Economic and Management, Bogor Agricultural University, Bogor 16680, Indonesia)

  • Iman Kasiman Nawireja

    (Faculty of Human Ecology, Bogor Agricultural University, Bogor 16680, Indonesia)

  • Wiwik Robiatul Adawiyah

    (Faculty of Economic and Business, Trisakti University, Jakarta 11440, Indonesia)

  • Abdul Qoyum

    (Faculty of Islamic Economic and Business, State Islamic University of Sunan Kalijaga, Yogyakarta 55281, Indonesia)

  • Imas Hasanah

    (Faculty of Islamic Economic and Business, State Islamic University of Sunan Kalijaga, Yogyakarta 55281, Indonesia)

Abstract

The People’s Palm Oil Replanting (PSR) program is a national strategic initiative of the Indonesian government that is aimed at rejuvenating aging oil palm plantations to enhance productivity and sustainability among smallholder farmers. However, participation rates remain below policy targets, indicating the presence of constraints beyond financial considerations. This study aims to identify the determinants of smallholder farmers to participate in the PSR program. Using 348 farmers as samples, and by employing SEM-PLS, the study revealed that non-economic factors, proxied by two variables (farm and location), are the most significant factors that determine the decision of farmers in joining the PSR, while governance and technical procedure have no significant impact on farmers’ decisions to join the PSR Program. An interesting finding was also documented in this study, in which the economic factor has no significant impact. Overall, the findings showed that the economic factors alone are insufficient to drive smallholders into joining PSR programs. Instead, institutional support, access to reliable information, governance alignment, and farm conditions are more crucial. Hence, a proper policy mix is required to maximize the impact of the program for the farmers.

Suggested Citation

  • Jaenal Effendi & Ranti Wiliasih & Hariyadi Hariyadi & Anna Fariyanti & Iman Kasiman Nawireja & Wiwik Robiatul Adawiyah & Abdul Qoyum & Imas Hasanah, 2026. "Determinants of Smallholder Farmers to Participate in the People’s Palm Oil Replanting Program in Indonesia: Do Non-Economic Factors Dominate?," Sustainability, MDPI, vol. 18(3), pages 1-17, January.
  • Handle: RePEc:gam:jsusta:v:18:y:2026:i:3:p:1373-:d:1852343
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