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Land-use change and livelihoods of non-farm households: The role of income from employment in oil palm and rubber in rural Indonesia

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  • Bou Dib, Jonida
  • Krishna, Vijesh
  • Alamsyah, Zulkifli
  • Qaim, Matin

Abstract

Many tropical regions are experiencing massive land-use change that is often characterized by an expansion of oil palm at the expense of forests and more traditional forms of agricultural cropping. While implications of such land-use change for the environment and for local farm households were examined in previous research, possible effects on the livelihoods of non-farm households are not yet well understood. This study analyzes the role of different types of agricultural and non-agricultural employment income for non-farm households in rural Jambi, one of the hotspot regions of Indonesia's recent oil palm boom. Data from a recent survey show that employment in rubber and oil palm are important livelihood components for non-farm households. Employment in oil palm is more lucrative than employment in rubber, so involvement in the oil palm sector as a laborer is positively associated with total household income. Regression models show that whether or not a household works in oil palm is largely determined by factors related to migration background, ethnicity, and the size of the village area grown with this crop. These results suggest that further expansion of the oil palm area will likely benefit non-farm households through gains in employment income. As non-farm households belong to the poorest segments of the rural population, these benefits should not be ignored when designing policies towards sustainable land use.

Suggested Citation

  • Bou Dib, Jonida & Krishna, Vijesh & 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," EFForTS Discussion Paper Series 21, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
  • Handle: RePEc:zbw:crc990:21
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Vijesh Krishna & Michael Euler & Hermanto Siregar & Matin Qaim, 2017. "Differential livelihood impacts of oil palm expansion in Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 48(5), pages 639-653, September.
    4. Michael Euler & Stefan Schwarze & Hermanto Siregar & Matin Qaim, 2016. "Oil Palm Expansion among Smallholder Farmers in Sumatra, Indonesia," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 658-676, September.
    5. Krishna, Vijesh V. & Kubitza, Christoph & Pascual, Unai & Qaim, Matin, 2017. "Land markets, Property rights, and Deforestation: Insights from Indonesia," World Development, Elsevier, vol. 99(C), pages 335-349.
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    Citations

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    Cited by:

    1. Kubitza, Christoph & Dib, Jonida Bou & Kopp, Thomas & Krishna, Vijesh V. & Nuryartono, Nunung & Qaim, Matin & Romero, Miriam & Klasen, Stephan, 2019. "Labor savings in agriculture and inequality at different spatial scales: The expansion of oil palm in Indonesia," EFForTS Discussion Paper Series 26, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    2. Bou Dib, Jonida & Alamsyah, Zulkifli & Qaim, Matin, 2018. "Land-use change and income inequality in rural Indonesia," Forest Policy and Economics, Elsevier, vol. 94(C), pages 55-66.
    3. Chrisendo, D.N. & Krishna, V. & Qaim, M., 2018. "Land-Use Changes, Nutrition, and Gender Roles in Indonesian Farm Households," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277267, International Association of Agricultural Economists.

    More about this item

    Keywords

    oil palm; rubber; non-farm households; labor markets; sharecropping; income;

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