Adoption of Sustainable Palm Oil Practices by Indonesian Smallholder Farmers

The Indonesian Sustainable Palm Oil (ISPO) was introduced as a mandatory sustainability standard for large oil palm producers in 2011. While these standards are voluntary for smallholder farmers, some of their crop management practices may converge with ISPO principles. Hence, this study investigates oil palm practices among smallholder farmers in Merangin district in Jambi province, Sumatra. We draw upon a three-year panel data set of 233 oil palm smallholder farmers. We assess the factors that explain the use of these practices first by means of a bivariate probit model for a sequence of practices defined as implementation thresholds. Second we apply a count model to examine the intensity of ISPO practices. Results show that the use of ISPO-type crop management practices is not widespread among oil palm smallholders. Sixty per cent of the farmers used four practices, and this share drops to 40 per cent for six practices. Among the factors that determine the use of practices were household characteristics, economic shocks and farmers’ perceived risk of diminishing oil palm productivity. This study provides a basis for developing an extension strategy of introducing ISPO practices for oil palm smallholders.