Socioeconomic and environmental effects of smallholder rSPO certification in Indonesia

Sebastian Renner, Anette Ruml, Jann Lay, Tabea Lakemann, Nunung Nuryartono, Marife D. Corre and Aiyen Tjoa

No 365903, 2023 Seventh AAAE/60th AEASA Conference, September 18-21, 2023, Durban, South Africa from African Association of Agricultural Economists (AAAE)

Abstract: Sustainability standards, such as the Roundtable for Sustainable Palm Oil (RSPO), can potentially mitigate the trade-offs between economic benefits and environmental harm of agricultural expansions. Yet, little is known about the socioeconomic and environmental trade-offs of RSPO certification among smallholders. This study fills this gap by analyzing whether RSPO certification can increase land productivity and profits while reducing production-related environmental harm, using a sample of certified and non-certified oil palm producing smallholders in the province of Jambi, Indonesia. Household data from 2017 and 2018 are analyzed using regression analyses, accounting for certification awareness among the households. We find a positive relationship between certification, land productivity and profits, and indication for higher agrochemical application rates. The socioeconomic benefits are explained through changes in production methods and mainly driven by households who are aware of their certification status, which carries important implications for sustainability certifications.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 21
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae23:365903

DOI: 10.22004/ag.econ.365903

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