Land-use dynamics, economic development, and institutional change in rural communities - Evidence from the Indonesian oil palm sector

This dissertation is an empirical investigation of the implications of the Indonesian oil palm sector for rural village communities located in Jambi province, on the island of Sumatra. It consists of three contributions to the scientific literature on land-use dynamics, economic development, and institutional change. In Chapter 1, I introduce the reader to the general topic of this research and give a brief overview of the development of the Indonesian oil palm sector, embedded in a historical context. I further outline how this study contributes to the existing literature and present the overall research objectives that will be addressed in the subsequent individual chapters. Specifically, this study examines land-use dynamics and attempts to explain land-use by various determinants at the village level (Chapter 2); it analyzes factors predicting the inclusion of village communities into the oil palm sector and evaluates the effects of market integration on economic development at the village level; finally, it explores the effects of market integration on village institutions (Chapter 4). In Chapter 2, I examine land-use dynamics at the village level of three major land-use systems: oil palm, rubber, and forest. The dynamics are analyzed by looking at land-use over time. In particular, I am interested in explaining village-level land-use in 2002 and 2012 by several lagged land-use systems as well as socioeconomic and policy variables. Econometrically, a seemingly unrelated regression model is applied which accommodates a simultaneous estimation of various equations and accounts for the likely correlation of the land-use equations. I find that in spite of significant oil palm expansion, rubber remains the dominant crop. The data also suggest that oil palm has not been a major driver of deforestation but indirect effects are possible since oil palm expands in areas with ongoing logging activities. Regarding socioeconomic and policy factors, especially a relocation program seemed to be instrumental to the oil palm development. In Chapter 3, I investigate the factors that determine the inclusion of villages into the oil palm sector through contract farming schemes and evaluate the impact of this form of market integration on economic development. Since the adoption of contract farming arrangements is conditional on an investor who visits a village to propose a contract, I investigate contract adoption as a two-step model. In particular, I employ a bivariate model with selection. This allows me to estimate the impact of various factors on the probability of contract adoption by accounting for the factors that predict the probability of investor visit. At the same time, I can account for a possible selection bias. To identify the model, a topographic measure is used as an instrument. I find evidence that, conditional on being visited by an investor, no access to electricity at the village level was the only significant factor predicting the adoption of contract farming schemes. Overall, it appears that, at the village level, contract farming schemes have not been entirely equally accessible; however, I do not find evidence that the rural poor were excluded either. Furthermore, to examine the effects of market integration on economic development at the village level I use village wealth that is based on shares of households owning various assets as a proxy. A recall dataset is used to analyze wealth effects over time, in particular between 2002 and 2012. The estimation exercise reveals that villages in which a contract was signed have a higher wealth index compared with villages in which no contract was adopted. Moreover, larger groups of farmers under contract are associated with higher levels of village wealth. I also find a time effect: the wealth index is higher in villages that signed a contract earlier than those which did so more recently. In Chapter 4, I explore the effects of increased formalized market integration on village institutions. Specifically, I want to understand how contract farming schemes, that introduce institutional changes towards more formalized and anonymous business relationships, affect generalized trust preferences at the village level. In using both survey data and behavioral data elicited through an experiment, I show that villages in which a contract was signed exhibit larger aggregated trust preferences, compared with villages where no contract was signed. This is due likely to a change in village institutions induced by the emergence of formalized relationships between contract farmers and anonymous business actors. Further analysis at the individual level reveals that market integration of villages has a positive effect on generalized trust preferences for all village inhabitants, contracted or not. Possibly, apart from contract participation increased investments in transportation and market infrastructure also increased the integration of non-contract villagers into more formalized and anonymous markets. In Chapter 5, I conclude by summarizing the overall study and by stressing the key findings. I further present some derived policy recommendations and state the limitations of this study along with avenues for future research

Crop resistance and household resilience – The case of cassava and sweetpotato during super-typhoon Ompong in the Philippines

Extreme weather events can have devastating effects on agricultural production. As rural households in developing countries largely depend on agriculture, climatic shocks have the potential to undermine food security. In this paper, we explore how crop resistance contribute to household resilience in extreme weather events. As case study, we used cassava and sweetpotato, two root and tuber crops (RTCs), in the context of super-typhoon Ompong that wreaked havoc in the northern parts of the Philippines in 2018. Primary data were collected from 423 households who were affected by the super-typhoon. Methodologically, we employed a multivariate probit model to jointly estimate various household disaster responses, and applied propensity score matching techniques to control for potential endogeneity. The findings suggest that RTCs can contribute to households' resilience capacity due to their resistance to climatic shocks being underground crops. In addition, RTCs appear to be important in influencing the households’ responses to typhoon. Our findings suggest that RTC cultivation reduces the need to resort to negative coping strategies, such as using household savings and requesting assistance from neighbors and friends, and that higher consumption of sweetpotato is linked to longer spells of reduced mobility. Furthermore, in the case of super-typhoon Ompong, affected households exploited the short production cycle of sweetpotato and cassava and planted them in the typhoon aftermath, a strategy that helped to gain faster access to food. Based on these findings some policy recommendations are proposed

Impacts of COVID-19 on the fisheries and aquaculture sector in developing countries and ways forward

Fish is a major source of food and nutritional security for subsistence communities in developing countries, it also has linkages with the economic and supply-chain dimensions of these countries. Burgeoning literature has revealed the adverse impacts of COVID-19 on the fisheries and aquaculture sector, which serves as the major source of income and employment for numerous people globally. This study has employed a systematic literature review of the overall impacts of COVID-19 on the fisheries and aquaculture sector in developing countries using the PRISMA approach. This study reveals that COVID-19 has posed numerous challenges to fish supply chain actors, including a shortage of inputs, a lack of technical assistance, an inability to sell the product, a lack of transportation for the fish supply, export restrictions on fish and fisheries products, and a low fish price. These challenges lead to inadequate production, unanticipated stock retention, and a loss in returns. COVID-19 has also resulted in food insecurity for many small-scale fish growers. Fish farmers are becoming less motivated to raise fish and related products as a result of these cumulative consequences. Because of COVID-19’s different restriction measures, the demand and supply sides of the fish food chain have been disrupted, resulting in reduced livelihoods and economic vulnerability. In order to assist stakeholders to cope with, adapt to, and build resilience to pandemics and other shocks, this study offers policy recommendations to address the COVID-19-induced crisis in the fisheries and aquaculture sector

Rubber vs. oil palm: an analysis of factors influencing smallholders' crop choice in Jambi, Indonesia

The rapid expansion of the oil palm area in many tropical countries has raised concerns about its negative impact on local communities, food security, and on the environment. While the expansion of oil palm in early stages was mainly driven by large private and public companies, it is expected that smallholders will outnumber large estates in the near future. For policy formulation it is hence important to better understand who these smallholders are and why they have started to cultivate oil palm. In this paper, we used a rich dataset collected in the province of Jambi, which is one of the most important production areas for oil palm, to analyse smallholders’ decision making by combining qualitative, quantitative, and experimental methods. We identified agricultural expertise, lacking flexibility in labour requirements, availability of seedlings, and investment costs as the major constraints for farmers to cultivate oil palm. Important reasons for oil palm cultivation are the higher returns to labour and the shorter immature phase of oil palm. We also showed that oil palm farmers are neither risk-averse nor risk-loving, rather, they appear to be risk-neutral

Lempdes – Les Gibaudonnes et La Ponsole, Fontanille, Croix Saint-Masson (ZAC de la Fontanille II)

L’emprise de la future ZAC de la Fontanille à Lempdes est située entre les ronds-points de la Croix Saint-Masson et de Chazal. Les parcelles concernées par l’opération archéologique se trouvent au pied de la butte marnocalcaire de Chambussière, en bordure sud de la grande plaine de La Limagne, dans le secteur communément appelée les Marais. Cette opération, menée du 13 novembre 2006 au 23 décembre 2006 et du 8 au 26 janvier 2007, concerne un projet d’une surface de 375 776 m2 (BSR 2006, p. 10..

Family networks and income hiding : Evidence from lab-in-the-field experiments in rural Liberia

This study investigates the relationship between family network density and income hiding in rural Liberia. We link people's behaviour in a modified lottery experiment and a time preference game to detailed information about their family networks. We find that individuals with a dense family network are more likely to pay a fraction of their endowment to hide their earnings from the experiment. This association is mainly driven by male respondents. We also find that men with dense family networks have lower discount rates than those with smaller networks. Qualitative responses suggest that these men perceive us as an alternative bank: if they have no immediate purpose for the money, they prefer the research team to keep it for two weeks. This prevents them from spending it on things other than its intended use and may keep predatory members of the family network at bay. The negative association between family network density and investment decisions is stronger if these networks are characterised by members who sought financial support in the past. Taken together, our results offer tentative evidence that dense family networks, under some conditions, have adverse impacts on economic decision-making

Oil Palm Boom and Land-Use Dynamics in Indonesia: The Role of Policies and Socioeconomic Factors

We investigate land-use dynamics in Jambi, Sumatra, one of the hotspots of Indonesia’ recent oil palm boom. Data from a structured village survey are used to analyze the role of socioeconomic and policy factors. Oil palm is partly grown on large plantations, but smallholders are also involved significantly. We find that, in spite of significant oil palm expansion, rubber remains the dominant crop. Most of the oil palm growth takes place on previous fallow and rubber land. Oil palm has not been a major driver of deforestation. Much of the forest in Jambi was cleared more than 20 years ago, and rubber was an established cash crop long before the oil palm boom started. However, oil palm growth occurs in locations with ongoing logging activities, so indirect effects on deforestation are likely. The government’s transmigration program of the 1980s and 1990s was instrumental for the start and spread of oil palm in Jambi. Some autochthonous villages have adopted oil palm, but adoption started later compared to migrants from Java, and it happens at a slower pace. While the transmigration program benefited many of the participating families, it has contributed to the risk of unequal socioeconomic developments in Jambi

The contribution of root and tuber crops to enhanced resilience to climatic shocks: The case of super typhoon Ompong in the Philippines

Extreme weather events can have devastating effects on agricultural production. As rural households in developing countries largely depend on agriculture, climatic shocks have the potential to undermine food security. In this paper, we explore how crop resistance contribute to household resilience in extreme weather events. As case study, we used cassava and sweetpotato, two root and tuber crops (RTCs), in the context of super-typhoon Ompong that wreaked havoc in the northern parts of the Philippines in 2018. Primary data were collected from 423 households who were affected by the super-typhoon. Methodologically, we employed a multivariate probit model to jointly estimate various household disaster responses, and applied propensity score matching techniques to control for potential endogeneity. The findings suggest that RTCs can contribute to households' resilience capacity due to their resistance to climatic shocks being underground crops. In addition, RTCs appear to be important in influencing the households’ responses to typhoon. Our findings suggest that RTC cultivation reduces the need to resort to negative coping strategies, such as using household savings and requesting assistance from neighbors and friends, and that higher consumption of sweetpotato is linked to longer spells of reduced mobility. Furthermore, in the case of super-typhoon Ompong, affected households exploited the short production cycle of sweetpotato and cassava and planted them in the typhoon aftermath, a strategy that helped to gain faster access to food. Based on these findings some policy recommendations are proposed