The Effect of Oil Palm Expansion on Farmers’ Household Food Security in Indonesia

Abstract

This study captures the ex post impact analysis of oil palm expansion on food security at the micro level in Indonesia. The main focus is to examine the effect of oil palm expansion on farm households’ food security situation, including food expenditure as well as daily calorie and nutrient intake. OLS and quantile regression models are applied to find the socioeconomic factors that influence farmers’ food expenditure and calorie intake, and to examine whether the effect of oil palm expansion on food security differs across quantiles. The findings highlighted significant influence of the income from oil palm expansion to calorie intake. Increases on farmers expanding farmland could lead farmers to consume more calories nutritious food, but the food budget on food decreases. However, the result pronouns income earning from oil palm plays a significant role in ensuring food security. As the first paper on providing the ex-post analysis of oil palm expansion, it is expected to show the distribution of food security impact across households’ income level in Indonesia. Previous studies on livelihood analysis of oil palm cultivation mostly focus on comparing the oil palm grower with other crops. Hence, it may lead to undirected implication on how to enhance the future oil palm expansion program. The result of this study is offered to support policy implication on the design of future oil palm expansion program by the Government of the Republic of Indonesia.

Keywords: oil palm expansion, farm household, food security, quantile regression