Socio-economic analysis of oil palm farmers in Kuantan Singingi District, Riau

Abstract Oil Palm is one of the most important sources of vegetable oil today. It has become more critical when utilised as a renewable energy source. These advantages make it a commodity of choice for both farmers and corporations. Despite controversies such as deforestation, oil palm expansion is unstoppable because more and more people invest and convert their agricultural land into oil palm plantations. One of the cases happened in Kuantan Singingi District, where many farmers have converted their agricultural land into oil palm plantations. This study explains the factors influencing farmers to convert their plantation land into oil palm plantations. This study also demonstrates the impact of the conversion on improving their economy. The expectation of high profits in oil palm yields influences the diversion of the land. However, the conversion to oil palm is not always paralleled with improving farmers’ welfare. Through a qualitative approach using FGDs and interviews with oil palm farmers in two villages in Kuantan Singingi District, Land conversion to oil palm plantations carried out by Kuantan Singingi farmers is predominantly influenced by technical factors, market access and prices. The transformation that occurred has not been able to improve their economy. Some indications of this failure are a lack of business capital, limited land ownership, and limited knowledge of oil palm cultivation.