The Role of Capabilities in Increasing the Income of Oil Palm Farmers and Poverty Alleviation: Evidence Resource Utilization

Abstract The inability of farmers to increase farm productivity is due to weak capability development. The study was conducted in Rokan Hulu Regency, one of the areas in Riau Province, to examine the capabilities of smallholder oil palm farmers in increasing income and alleviating extreme poverty. Farmer capability is reviewed from four variables: economic, socio-cultural, technological, and management, which were analyzed using the Smart-PLS structural model. The results of the study indicate that the variables of economy, socio-cultural, technological, management, social, financial, total income, total costs, and quality of human resources, play a positive role in increasing oil palm production, farm income, and poverty alleviation. The research findings are that capability serves as the foundation for improvement and development. Farmers are encouraged to adopt a more selective approach in utilizing production resources, ensure production levels align with the standardized planting area, achieve income that exceeds expenses, and surpass the poverty line. These steps aim to empower farmers to break free from extreme poverty.