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Beyond the Ban—Shedding Light on Smallholders' Price Vulnerability in Indonesia's Palm Oil Industry

Author

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  • Charlotte‐Elena Reich
  • Tim Ölkers
  • Vanessa Bonke
  • Oliver Musshoff

Abstract

The Indonesian government imposed a palm oil export ban in April 2022 to address rising cooking oil prices. This study explores oil palm smallholders' vulnerability to the policy using descriptive statistics, Lasso, and post‐Lasso OLS regressions. We analyze the perceptions of 382 smallholders in Jambi province and assess how the export ban affected their economic well‐being, including factors shaping pre‐ban sale prices and influencing the ban's price effects. Our findings show that the export ban led to an on average 63% decline in sale prices. Regression results show that households with off‐farm income sources were more resilient, while partially certified farms faced worse outcomes. Our study highlights the need for market‐based interventions and stronger smallholder integration to mitigate the adverse effects of future price shocks.

Suggested Citation

  • Charlotte‐Elena Reich & Tim Ölkers & Vanessa Bonke & Oliver Musshoff, 2026. "Beyond the Ban—Shedding Light on Smallholders' Price Vulnerability in Indonesia's Palm Oil Industry," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 48(3), pages 653-678, July.
    • Handle: RePEc:wly:apecpp:v:48:y:2026:i:3:p:653-678
    DOI: 10.1002/aepp.70040
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