Rice and fertilizer policies in Indonesia : a thesis presented in partial fulfillment of the requirements for the degree of Masters of Agricultural Economics, Massey University

To promote rice production, the government of Indonesia implemented various agricultural policies. Some agricultural inputs had been subsidised heavily, particularly fertilizers. The combination of lower inputs prices, improved technology and better infrastructure such as irrigation schemes increase rice production significantly. However, higher rice production and lower fertilizer prices encouraged farmers to use more fertilizers. In some areas the use of fertilizers has exceeded that recommended and in some areas production has even declined. It is likely that higher farm incomes that resulted from higher production and increased product prices affected the demand for fertilizers and other inputs to production. As demand for fertilizer increased the cost of the fertilizer subsidy became an important part of government expenditure. In recent years, the government of Indonesia has introduced policies to reduce the fertilizer subsidy. These policies have had substantial impacts on farmers' costs and incomes. On the one hand, the reduction of the fertilizer subsidy reduced demand for fertilizers. However, this policy was estimated to have little effect on rice production since the use of fertilizer was in general more than was recommended. On the other hand, while the rice price had been hold constant, increased farm costs reduced farmers' incomes. In order to offset the increased farmers' costs the government could allow the rice price increases. This study is concerned with the effects of the reduction in urea subsidy and the increase in rice support price to maintain self-sufficiency, or to offset the producers loss, due to the increase in urea price. A model developed by Baker and Hayami is adopted for this analysis, to examine their effects on demand for urea, rice production, producers surplus, government expenditure, and foreign exchange earnings. The results indicate that the joint policies can meet either the income compensation or self-sufficiency goals, but not without increasing government expenditure. In addition, these policy actions would distort the rice and urea markets

Ispo Certification and Indonesian Oil Palm Competitiveness in Global Market: Smallholder Challenges Toward ISPO Certification

Certification becomes a prerequisite for tradable products to get legality and access to global market. Each tradable product can choose certificate according to its market destination. However, the application of certification standards are very low in both international (RSPO and ISCC) and domestic (ISPO) standards. This study was focused on the ISPO certification. How large is the gap between current practices and ISPO standard? What are factors that affect adoption of ISPO certification? Does ISPO deliver more access to market for oil palm smallholders? Do smallholders have adequate capacity to meet ISPO standard? These questions have been assessed and discussed in this paper to find answer and alternative way out for smallholders to meet the ISPO standard. The objective of this study is to assess capacity and willingness of oil palm independent smallholders to meet the standard of ISPO certification. This study was conducted in Pelalawan District, Riau Province using a survey method. The result shows that a number of barriers are faced by smallholders to obtain ISPO certification while the opportunity to get better access to local and global market is still uncertain. The adoption of ISPO certificate was influenced by farmers’ knowledge on agricultural practices, business  legality, household income, and land-size

Evaluasi Investasi Perkebunan Kelapa Sawit Pola Pir di Desa Gading Sari Kecamatan Tapung Kabupaten Kampar

Increasig price of Fresh Fruit Bunch and high profit in palm oil platation business has triggedpeople interest in investing and implementing this business. This condition, in turn, hascaused increasing palm oil plantation area. The objective of this research is to evaluateinvestment performance in Nucleus Estate Smallhoders palm oil plantation in Gading Sarivillage, Tapung District, Kampar Regency. This study analyse investment performance of theNES by calculating NPV and IRR criteria and using primary and secondary data. The resultsof this study shows that, with the value of NPV Rp 53.404.339 and IRR 561%, the NESbusiness is profitable and prospectus

ANALISIS PRAKTEK PERKEBUNAN TERBAIK PEKEBUN SWADAYA DESA BENTENG HULU KECAMATAN MEMPURA KABUPATEN SIAK

This research was conducted at the Sawit Jaya Cooperative in Benteng Hulu Village, Mempura District, Siak Regency. The purpose of this research is to find out what the social characteristics of oil palm smallholders are, what the economics of implementing governance by oil palm smallholders are, and how it applies between smallholder governance versus RSPO standard governance. The research population is independent oil palm smallholders who use quantitative and qualitative analysis. Measurement of the implementation of smallholder oil palm plantation governance is carried out using a scale starting from the achievement of indicators, criteria, and principles in RSPO certification. The population in this study were the oil palm farmers of the Sawit Jaya Cooperative in Benteng Hulu Village, Mempura District, Siak Regency. The achievement of implementing RSPO principles in the governance of oil palm plantations owned by independent smallholders is very far from the RSPO standard. The results showed that the implementation of the RSPO standard was still low. The farmers and their cooperatives should be upgraded and their skills on the RSPO standard

Analisis Keragaan Petani Kelapa Sawit Pola Plasma di Desa Mekar Jaya Kecamatan Kampar Kiri Tengah Kabupaten Kampar dan Pola Swadya di Desa Bukit Lembah Subur Kecamatan Ukui Kabupaten Pelalawan

Rapid growth of palm oil demand has provoked land expansion to grow oil palm. However, deforestation caused by land expansion has negative impacts to the environment. Some internaltional non-governmental organizations have established certification program to mitigate these impacts. The objective of Roundtable on Sustainable Palm Oil is to promote sustainable production in Palm Oil supply chain. The standard of RSPO certification consists of Principles and Criteria that must be complied by oil palm growers to be included in Palm Oil supply chain. The objective of this study is to analyse the performance of scheme and independent smallholders, to compare the performance of the two model of smallholders, and to assess the gap between the existing performance and the RSPO standard. Using a survey method the data were collected from selected farmers from the two farmers' group. The result shows that the performance of scheme smallholders is better than the independent smallholders. The assessment on productivity and farm income also shows that scheme smallholders are higher than the independent smallholders. Finally, the scheme smallholders applied good agricultural practices more than the independent smallholders

Studi Komparatif Keragaan Kebun Kelapa Sawit Pola Swadaya Rspo dan Non-rspo di Kecamatan Ukui Kabupaten Pelalawan

Oil palm produces vegetable oil used in various products including food, non-food, and biodiesel. Increasing demand for crude palm oil has provoked demand for fresh fruit bunches. The oil palm growers respond the higher demand by development of new planting. Land expansion become an important issue since it creates not only positive impacts but also negative impacts such as deforestation, biodiversity loss, forest fire and land conflicts. RSPO certification was established to mitigate the negative impacts and to promote sustainable production of palm oil. The growers must comply the Principles and Criteria of RSPO. Independent smallholers are the most susceptible growers to be included in the oil palm supply chain. How does the farmers manage their plantation to meet the standard while they face various barriers to run their business? The aims of this study are to analyse smallholders' performance, to assess the application of RSPO Principles and Criteria, and to compare productivity and farm income of oil palm plantations between the RSPO and non-certified independent smallholders. A survey method is used to collect data from the selected samples, 78 of RSPO-certified and 59 of Non-certified smallholders. Using quantitative and qualitative analyses, the result shows that the RSPO-certified smallholders have a very good performance and applied all the RSPO standard. The non-certified smallholders have a good performance and they are in the process of certification to meet the criteria. There are no significant differences in productivity and farm income between the two models. The RSPO-certified and non-certified smallholders located in the same area, therefore, most of the non-certified smallholders have seen the best practices and start applying some of the best practices by themselves

Analisis Persepsi Petani Kelapa Sawit Pola Swadaya Menghadapi Sertifikasi Rspo di Kecamatan Ukui Kabupaten Pelalawan

Oil palm plays an important role in Indonesian economy. Development of palm oil supply chain creates a large number of employment, reduces poverty, increases foreign exchange earnings, and improves rural welfare. However, oil palm expansion has been claimed to be the source of deforestation, biodiversity loss, GHG emision, land and forest fires and land conflicts. Some private and non-governmental organizations have established a certification system, “the Roundtable on Sustainable Palm Oil”, to mitigate the negative impacts of oil palm production. All oil palm growers have to comply with the Principle and Criteria of RSPO to be included in the global market. However, the smallholders are the most vulnerable party to meet the standard because of their limited access to various inputs, finance, and information. Certification is a new challenge for smallholders in a global oil palm supply chain. The objective of this study is to analyse farmers' perception on RSPO certification. This research use the likert scale to measure farmers' perception. The data were collected through a survey on the farmers. The size of sample selected from the population are 59 independent smallholders. The result shows that the farmers' perception on certification is “very good”. There are an increasing awareness of the farmers on sustainable oil palm production. The study also found that most of the farmers participate in the process of certification. However, the implementation of the Principles and Criteria carried out by oil palm growers is still below the certification standard i.e., only 57.17%