Risks and opportunities from key importers pushing for sustainability: the case of Indonesian palm oil

Yaghoob Jafari, Jamal Othman, Peter Witzke, Sufian Jusoh

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Growing concerns in the major importing countries on the socio-environmental sustainability of oil palm farming may affect the import demand of palm oil and hence the economy of the exporting countries. This paper develops a comparative static, partial equilibrium model to examine the impact of potential reductions in EU imports of Indonesia’s palm oil on palm oil output, prices, factor markets, trade, deforestation, and peatland conversion in Indonesia. Results suggest that there would be only small impacts on the major environment-economic variables in Indonesia in a scenario with a moderate reduction EU import demand, for example, due to sustainability concerns. However, the impacts would be more profound if sustainability concerns also affect other import regions and trigger a similar decline in import demand in other markets. The way forward for Indonesia and other palm oil producers and exporters is to adopt a common set of sustainability criteria, encompassing the elements of transparency, regulatory compliance, best agricultural practices, environmental responsibility, the livelihood of small farmers, as well as human and community rights.

Original languageEnglish
Article number13
JournalAgricultural and Food Economics
Volume5
Issue number1
DOIs
Publication statusPublished - 1 Dec 2017

Fingerprint

Indonesia
palm oils
imports
Conservation of Natural Resources
markets
good agricultural practices
Agriculture
Practice Guidelines
environmental sustainability
Compliance
Elaeis guineensis
peatlands
Oils
deforestation
livelihood
compliance
Economics
farming systems
palm oil
Palm oil

Keywords

  • Agricultural trade policy
  • Forest conversion for oil palm
  • Indonesia
  • Sustainability criteria
  • Sustainable palm oil
  • Trade-environment linkages

ASJC Scopus subject areas

  • Economics and Econometrics
  • Agricultural and Biological Sciences (miscellaneous)
  • Food Science

Cite this

Risks and opportunities from key importers pushing for sustainability : the case of Indonesian palm oil. / Jafari, Yaghoob; Othman, Jamal; Witzke, Peter; Jusoh, Sufian.

In: Agricultural and Food Economics, Vol. 5, No. 1, 13, 01.12.2017.

Research output: Contribution to journalArticle

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