Alternative development strategies for large scale oil palm plantations in east kalimantan, indonesia

Masayuki Kawai*, Makoto Inoue

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapter


Oil palm plantations are rapidly expanding along with negative environmental and social effects, such as irreversible large-scale deforestation, biodiversity loss and wideranging land disputes in Indonesia. This chapter addresses some of the aforementioned problems by considering alternative development strategies for large-scale oil palm plantations, focusing on the smallholder development policies and institutions in Indonesia. The Nucleus Estate and Smallholders (NES) and Project Management Unit (PMU) schemes have existed since the 1970s during the era of Suharto's authoritarian regime. The former was supported by estate companies and mainly applied to oil palm plantations, while the latter was supported by government project management units and mainly applied to rubber and coconut plantations. The important aspect here is that the PMU scheme can avoid rapid and large-scale land expropriation by estate companies, which often becomes a problem in the NES scheme because the PMU scheme supports smallholders without the involvement of the companies, meaning that 'well thought-out' and 'unhurried' development, which is known as 'moderate industrialization,' can be considered to be one of the alternative development options. This moderate industrialization might be realized by establishing small, dispersed but modern high-yield smallholdings through the PMU scheme that at the same time maintains traditional forestry practices and diverse local livelihoods, such as swidden, orchard and rubber agroforest maintenance. The PMU scheme applied at the national level, however, is facing difficulties that stem from its institutional shortfalls, such as high input/investment and the lack of an effective credit repayment system and land tenure uncertainty in local communities. This chapter suggests some possibilities based on this case study to cope with these problems through a more flexible use of the PMU scheme. There is an urgent need to develop economically attractive but ecologically and socially sound smallholder support institutions that can alleviate the strong expansion pressure of companies that lead to large-scale oil palm monoculture and marginalization of local people through land expropriation.

Original languageEnglish
Title of host publicationMonoculture Farming
Subtitle of host publicationGlobal Practices, Ecological Impact and Benefits/Drawbacks
PublisherNova Science Publishers, Inc.
Number of pages32
ISBN (Electronic)9781634852128
ISBN (Print)9781634851664
Publication statusPublished - 2016 Jan 1
Externally publishedYes


  • Indonesia
  • NES
  • Oil palm
  • PMU
  • Smallholder

ASJC Scopus subject areas

  • General Engineering


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