Policy forum: Reducing expansion of oil palm plantations into forests through land intensification, agroforestry, and added value creation of processed palm oils

Meti Ekayani, Fitta Setiajiati, Nugraha Akbar Nurrochmat, Suria Darma Tarigan, Dodik Ridho Nurrochmat, Iskandar Zulkarnaen Siregar, Ulfa Adzkia, Arif Satria, Janne Siregar and Erwin Widodo

Forest Policy and Economics, 2025, vol. 178, issue C

Abstract: President Prabowo's statement at the end of 2024 about expanding oil palm plantations in Indonesia has become a contentious issue in national and international discourses. The discussion heated up because the expansion of oil palm plantations is suspected to be one of the causes of deforestation. However, increasing revenue cannot be achieved only through palm oil plantation expansion but also through land intensification. In addition, with an appropriate strategy, the extensification of oil palm plantations will not always result in deforestation. Based on the 2024 National Forestry Plan (RKTN) evaluation report, not all forest zones are physically forested. It is recorded that 29 million ha of the forest zone are heavily degraded or no longer forested. Thus, developing oil palm-based agroforestry will help to restore those degraded lands. In addition to oil palm-based agroforestry, promoting the added value of processed palm oil is also crucial for meeting state revenue targets with minimal oil palm expansion into forests. This study demonstrates the role of mainstreaming the export of processed palm oils, i.e., Refined Palm Oil (RPO), Oleochemicals (OLM), and Biodiesel, in increasing the added value of palm oil products. This study shows that downstreaming the national palm oil industry is thought to impact the environment positively, create significant economic benefits, and make the palm oil industry more sustainable.

Keywords: Added-value creation; Degraded forest lands; Oil palm agroforestry; Reducing deforestation; State revenue (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:forpol:v:178:y:2025:i:c:s1389934125001613

DOI: 10.1016/j.forpol.2025.103582

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