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Peat Policy and Its Implications on Value Chains of Indonesian Palm Oil

dc.contributor.authorBudi Indra Setiawan
dc.contributor.authorFalatehan Faroby
dc.date.accessioned2017-07-21T09:00:07Z
dc.date.available2017-07-21T09:00:07Z
dc.date.issued2017-05-30
dc.identifier.urihttp://hdl.handle.net/11540/7270
dc.description.abstractPalm oil and its derivative products are strategic commodities that play an important role in the economic development of Indonesia which, along with Malaysia, is a major exporter to the global markets. Global as well as national demands on crude palm oil are increasing, not only as food but also as raw material for biodiesel. To increase production, the extensification of oil palm plantations in Indonesia is still the preferred option. Since there are limited fertile mineral soils, marginal land such as peatlands have become targeted areas to open new plantations. Due to recurring fire and haze problems, while attempting to restore degraded peatlands, the government issued By Law No. 57 in 2016 to protect and manage the peat ecosystem (Peat Policy). This peat policy, which mainly aims to prevent environmental degradation, would to some extent reduce planting areas and impact on production, stretching to the supply and value chain of palm oil and its derivative products. This study assessed how the peat policy affected the planting areas; production; economic value; growers, especially the farmers; and export quantity and value. We applied numerical approaches followed by simulations of certain scenarios. Compared to 2015 figures, the peat policy would reduce the palm oil plantation area by 10%–18% and production by 12%–15%, with the potential to reduce: 1) economic values by 12%–15%; 2) the number of farmers by 12%–15%; 3) exported palm oil by 21%–24% and export value by 22%–24%; and 4) the cost of fresh fruit bunch by 6%–8%. These reductions will severely affect the economic development of the country and threaten the welfare of the farmers. The government and practitioners should therefore make policy choices that are conducive to the sustainable development of oil palm plantation in the peatlands, i.e. how to promote intensification programs to increase productivity and to manage sustainable production.
dc.languageEnglish
dc.publisherEconomic Research Institute for ASEAN and East Asia
dc.titlePeat Policy and Its Implications on Value Chains of Indonesian Palm Oil
dc.typeDiscussion Paper
dc.subject.expertEcosystems
dc.subject.expertEnvironmental Planning
dc.subject.expertEcology
dc.subject.expertFishery development
dc.subject.expertFishery projects
dc.subject.expertDevelopment policy
dc.subject.expertEnvironment impact assessment
dc.subject.expertEnvironmental management
dc.subject.expertEnvironmental Damage
dc.subject.expertEnvironmental Conservation
dc.subject.adbEnvironment
dc.subject.adbSociocultural Environment
dc.subject.adbMarine Environment
dc.subject.adbEnvironmental Problem
dc.subject.adbEnvironmental Law and Legislation
dc.subject.adbAquatic Environment
dc.subject.naturalMarine ecosystems
dc.subject.naturalEnvironmental impact statements
dc.subject.naturalEcological risk assessment
dc.subject.naturalEnvironmental auditing
dc.subject.naturalEcological monitoring
dc.subject.naturalEnvironmental impact evaluation
dc.subject.naturalEnvironmental quality management
dc.subject.naturalCoastal ecology
dc.subject.naturalSocial ecology
dc.subject.naturalFisheries monitoring
dc.subject.naturalMarine habitats
dc.title.seriesERIA Discussion Paper
dc.title.volume2017-02
dc.contributor.imprintEconomic Research Institute for ASEAN and East Asia
oar.themeDevelopment
oar.themeEnvironment
oar.adminregionAsia and the Pacific Region
oar.countryBangladesh
oar.countryBhutan
oar.countryIndia
oar.countryMaldives
oar.countryNepal
oar.countrySri Lanka
oar.countryBrunei Darussalam
oar.countryCambodia
oar.countryIndonesia
oar.countryLao People's Democratic
oar.countryMalaysia
oar.countryMyanmar
oar.countryPhilippines
oar.countrySingapore
oar.countryThailand
oar.countryViet Nam
oar.countryCook Islands
oar.countryFiji Islands
oar.countryKiribati
oar.countryMarshall Islands
oar.countryFederated States of Micronesia
oar.countryNauru
oar.countryPalau
oar.countryPapua New Guinea
oar.countrySamoa
oar.countrySolomon Islands
oar.countryTimor-Leste
oar.countryTonga
oar.countryTuvalu
oar.countryVanuatu
oar.countryAfghanistan
oar.countryArmenia
oar.countryAzerbaijan
oar.countryGeorgia
oar.countryKazakhstan
oar.countryKyrgyz Republic
oar.countryPakistan
oar.countryTajikistan
oar.countryTurkmenistan
oar.countryUzbekistan
oar.countryPeople's Republic of China
oar.countryHong Kong
oar.countryChina
oar.countryRepublic of Korea
oar.countryMongolia
oar.countryTaipei,China
oar.identifierOAR-006891
oar.authorSetiawan, Budi Indra
oar.authorFaroby, Falatehan
oar.importTRUE
oar.googlescholar.linkpresenttrue


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