Positive and Negative Impacts of Oil Palm Expansion in Indonesia and the Prospect to Achieve Sustainable Palm Oil

The aim of the study is to deepen understanding the role of palm oil on Indonesian economy, poverty elevation and to investigate the positive and negative impacts of oil palm expansion, due to the burden of GHG emissions; and prospect to be more sustainable palm oil industry. The statistics show that average rural poverty tends to be lower and Gross Regional Product tends to be higher in provinces which have greater levels of oil palm cultivation. Indonesian oil palm will grow from 10.6 in 2013 to 13.7 million ha by 2020. This will release 135.59 million tons of CO2 if nothing is done to mitigate BAU emissions. Unless there are sustained efforts to redirect development and expansion of oil palm, plantation growth will continue to encroach on intact forest and peat land.. In fact Indonesia has large areas of degraded land, an estimated total 19,144,000 ha is available for planting oil palm and other crops. A large-scale expansion program driven by estate companies needs to be accompanied by effective smallholder development program in order to achieve the best outcome for local farmers and avoid the conflicts.