Promoting sustainable performance of smallholder oil palm farmers: an analysis of key determinants and strategic priorities

Jajang Supriatna, Ahmad Badawy Saluy, Deden Kurniawan and Djumarno Djumarno

International Journal of Productivity and Performance Management, 2024, vol. 74, issue 5, 1644-1675

Abstract: Purpose - This study investigates the factors affecting the performance of smallholder oil palm farmers in Indonesia, with an emphasis on sustainable productivity. Design/methodology/approach - The study involved interviews with regulators, practitioners and experienced farmers in Riau, West Kalimantan, Central Kalimantan and the Bangka Belitung Islands, Indonesia. A confirmatory and explanatory approach was used to explore the relationships among farmer competency, social capital, institutional support, sustainable productivity and overall performance. Data from 757 farmers were analyzed using partial least squares structural equation modeling (PLS-SEM), while the analytical network process (ANP) method identified strategic priorities. Findings - The results indicate that the sustainability of oil palm farming was low. Social capital, institutional support and sustainable productivity are the key performance factors. Sustainable productivity mediates these relationships. Farmers’ competence indirectly affects performance through sustainable productivity, social capital and institutions. Institutional support needs to be improved. Research limitations/implications - This study suggests expanding sustainability indicators by following the latest standards of RSPO principles and criteria, simplifying language for better farmer understanding and assessing sustainability before and after policy implementation. Practical implications - The proposed policy framework emphasizes social capital, institutional support and sustainable productivity to improve sustainability and effectiveness. Social implications - This study highlights the critical role of social capital, institutional support and sustainable productivity in enhancing Indonesian palm oil farmers’ sustainability and performance. Originality/value - This unique integrated approach combining PLS-SEM and ANP methodologies provides a comprehensive understanding of the factors affecting smallholder performance and data-driven strategic priorities for policy interventions.

Keywords: Oil palm industries; Performance factors; Smallholder farmers; Sustainable productivity; PLS-SEM; ANP (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijppmp:ijppm-12-2023-0647

DOI: 10.1108/IJPPM-12-2023-0647

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