Strengthening local institutions for the transition to oil palm agroforestry in Central Kalimantan, Indonesia

Abstract

Palm oil is an increasingly hot topic in Indonesia. While it is a strategic commodity for the country and provides jobs for millions of people, the rapid expansion of oil palm has brought environmental and social concerns: deforestation, land clearing, loss of biodiversity, land degradation, increase in greenhouse gas emissions, as well as land conflicts, human rights violations and challenges around food security. Although there are efforts towards more sustainable production of Indonesian palm oil, none of them deal with the existing 3.4 million hectares of oil palm plantations located in the forest areas, largely without clear land statuses and license to operate. According to current regulations, all of those plantations would need to be removed, cutting the livelihoods of 6 million rural Indonesians. The Strategi Jangka Benah was developed to reconcile the reduction of negative environmental impacts with maintaining the livelihoods of smallholder farmers whose plantations are in designated forest areas by implementing oil palm agroforestry. In order to be successful, Strategi Jangka Benah’s role will need to extend beyond sustainable forestry design, it needs to be embedded into the institutional system within which it operates. This requires institutional change. This research explored how local institutions can better facilitate the transition of smallholder oil palm farmers from monoculture plantations to oil palm agroforestry through a three-step institutional analysis process, starting with an actor analysis, followed by an analysis of the rules of the game. The last step was a capacity analysis for institutional innovation. The institutional analysis process conducted for the Strategi Jangka Benah also served as an experiment to review the existing processes, tools and academic literature related to institutional analysis, concluding that there is a need for shared understanding of institutions and institutional capacity across Development Studies, and for more research to understand how to facilitate the process of an institutional system adopting to change.