| dc.description.abstracteng | Changing consumption patterns and a growing world population have resulted in
an increased demand for vegetable oil. Due to its price advantages and suitable
chemical properties, in particular the demand for palm oil has increased making
it globally the most widely used vegetable oil in 2019. Palm oil production is
geographically highly concentrated in Indonesia and Malaysia that alone provide
over 85% of the global supply. These countries also harbor important parts of
moist tropical forests which are one of the world’s most biodiverse ecosystems and
global carbon sinks. While the area under oil palm cultivation has been growing
continuously in the last decades, the area under rainforest has declined. Part of
this decline can be directly attributed to oil palm expansion.
Oil palm induced land use changes are associated with environmental degradation.
The repercussions are not restricted to the regional or local scale through
e.g. a distortion of water and microclimate regulating services, but have global
consequences such as biodiversity loss and carbon emissions. Yet, oil palm expansion
has contributed to poverty reduction and income growth for many smallholder
farmers. The contrast between negative environmental consequences and positive
welfare effects highlights the trade-offs associated with oil palm expansion. The
present dissertation aims at identifying policies and oil palm management practices
that could mitigate these trade-offs.
This thesis comprises three essays. The first two essays focus on policies aiming
at biodiversity restoration in oil palm dominated areas. The last essay explores
management practices to close yield gaps and to increase soil organic carbon (SOC)
in smallholdings. All essays area based on primary data collected from oil palm
smallholder farmers in Jambi Province, Indonesia. Jambi Province is one of the
hotspots of oil palm expansion and has experienced tremendous land use changes.
The planting of native trees inside or at the border of the plantation has been
suggested as one way to increase biodiversity in oil palm plantations. However,
little evidence exists on which policy instruments are effective to promote native
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tree planting in oil palm plantations. The first essay of this dissertation addresses
this research gap. The agroforestry adoption literature and focus group discussions
suggest that missing information and restricted access to seedling markets represent
constraints to tree planting. In case these constraints are binding, providing farmers
with access to seedlings and information should increase tree planting adoption. To
test this hypothesis, a randomized controlled trial was implemented in 2016 and
two interventions were designed. The first provided information on tree planting
and management through a manual and a video. The second combined information
with input provision. In addition to the video and the manual, farmers received six
native tree seedlings for free.
We estimate intention-to-treat effects on farmers’ tree planting decision in oil
palm plantations with a double-hurdle model. Both interventions significantly increase
the number of trees planted per hectare in oil palm plantations in comparison
to the control group. Under both interventions, a small share of farmers plant many
trees in their plantations. However, free seedling provision in addition motivates
many farmers to adopt low intensity tree planting. We also analyze tree survival
rates. We find that farm-level tree survival is significantly lower for the farmers
who received seedlings for free than for the adopting farmers in the control group
and for those only receiving information. Non-correspondence between farmers’
preferences and the seedlings received can be identified as one driver.
The effective support of ecosystem services operating at larger scales requires to
take on a landscape-level perspective. For biodiversity conservation and the support
of related ecosystem services, there is evidence that a critical size of conservation
area at the landscape level and its spatial connectivity are of importance. The second
essay of this dissertation looks into how payments for ecosystem services (PES)
schemes for tree planting need to be designed in order to meet these requirements.
PES are compensation mechanisms through which providers of ecosystem
services, e.g. farmers putting their land under conservation, are compensated for
the resulting costs by the respective beneficiaries. The experimental literature
has suggested separate design options to reach a critical size of conservation area,
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and to improve its spatial connectivity. However, evidence is missing on how to
simultaneously meet both requirements. To close this research gap, we implemented
a framed field experiment in 2018. In a hypothetical scenario, farmers needed to
decide whether to keep their land under oil palm cultivation or to switch to a mixed
system that integrates other trees. While oil palm cultivation is linked to higher
income, the mixed system increases biodiversity. To mirror the landscape-level
requirements, biodiversity is only improved if a critical number of farmers plant
the mixed system. Moreover, effects are higher if mixed systems are grown on
bordering land. To explore the effects of potential PES designs, we analyze two
incentive schemes. In the first one, the area threshold, farmers who plant the mixed
system are compensated if at least three out of six farmers in a group do so. In the
second one, an agglomeration payment, adopting farmers receive compensation if
at least three farmers in the group plant the mixed system on bordering land. Our
results show that both PES designs increase the likelihood that farmers plant the
mixed system in comparison to a baseline scenario without compensation payments.
However, once communication is allowed for, the area threshold outperforms the
agglomeration payment with regard to environmental effectiveness and overall
efficiency, while reaching similar levels of budget efficiency.
Tree planting can also support climate regulating functions by absorbing and
storing carbon dioxide. Soil organic carbon (SOC) restoration represents another
approach to improve the carbon sequestration in oil palm plantations. In addition,
it might strengthen the provision of yield supporting soil ecosystem services. Increasing
SOC can be achieved by adding organic material, e.g. through mulching
with empty fruit bunches (EFB). EFB remain after the oil fruits have been stripped
off in the palm oil mills. EFB are rich in nutrients and can be used as organic
fertilizer. This can help to increase smallholders’ yields that mostly lie below those
of industrial plantations.
Several studies have indicated that mulching can be beneficial to soil carbon
and yields. However, evidence is mostly derived from field-trial experimental data
in industrial plantations. These trials might not reflect the real-world conditions of
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smallholder farmers. This motivates the third essay in which we look at the effects
of EFB mulching on SOC contents and yields in oil palm smallholdings. Based on
yearly data covering the years 2015 to 2017, we estimate the effect of mulching on
yields with a random effects panel data model. Since the adoption to apply mulching
might be endogenous, we employ an instrumental variable estimation. Based on
soil samples collected in 2017, we analyze the effect of mulching on SOC. Finally,
we look into the impact channels and analyze whether and to what extent the
effect of mulching on yields operates through SOC increases. Our results support a
positive effect of mulching on SOC contents and yields. However, SOC contents do
not appear to be a significant predictor for yields. The effect of mulching on yields
therefore likely operates through other channels such as direct nutrient addition.
This dissertation suggests that policies and management practices could help to
mitigate environmental-economic trade-offs involved in oil palm cultivation. In case
of soil organic carbon restoration, environmental improvements and income generation
might be complements. Our results further indicate that biodiversity-friendly
farming practices can be promoted with non-monetary interventions. However,
to reach a larger share of the population, subsidized inputs or even monetary
incentives might be needed. | de |