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Socioeconomic and environmental effects of smallholder rSPO certification in Indonesia

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Listed:
  • Renner, Sebastian
  • Ruml, Anette
  • Lay, Jann
  • Lakemann, Tabea
  • Nuryartono, Nunung
  • Corre, Marife D.
  • Tjoa, Aiyen

Abstract

Sustainability standards, such as the Roundtable for Sustainable Palm Oil (RSPO), can potentially mitigate the trade-offs between economic benefits and environmental harm of agricultural expansions. Yet, little is known about the socioeconomic and environmental trade-offs of RSPO certification among smallholders. This study fills this gap by analyzing whether RSPO certification can increase land productivity and profits while reducing production-related environmental harm, using a sample of certified and non-certified oil palm producing smallholders in the province of Jambi, Indonesia. Household data from 2017 and 2018 are analyzed using regression analyses, accounting for certification awareness among the households. We find a positive relationship between certification, land productivity and profits, and indication for higher agrochemical application rates. The socioeconomic benefits are explained through changes in production methods and mainly driven by households who are aware of their certification status, which carries important implications for sustainability certifications.

Suggested Citation

  • Renner, Sebastian & Ruml, Anette & Lay, Jann & Lakemann, Tabea & Nuryartono, Nunung & Corre, Marife D. & Tjoa, Aiyen, 2023. "Socioeconomic and environmental effects of smallholder rSPO certification in Indonesia," 2023 Seventh AAAE/60th AEASA Conference, September 18-21, 2023, Durban, South Africa 365903, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae23:365903
    DOI: 10.22004/ag.econ.365903
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    References listed on IDEAS

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    1. Euler, Michael & Hoffmann, Munir P. & Fathoni, Zakky & Schwarze, Stefan, 2016. "Exploring yield gaps in smallholder oil palm production systems in eastern Sumatra, Indonesia," Agricultural Systems, Elsevier, vol. 146(C), pages 111-119.
    2. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    3. 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).
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