7 May 2019 (Eco-Business) Palm oil companies dangle the promise of a better quality of life for people in rural villages where they develop plantations, but is this really happening?

The promise of jobs and prosperity often helps palm oil companies convince sceptical local stakeholders to accept development on their lands. However, there has been little objective evidence showing whether a village is better or worse off after allowing a plantation to move in to its backyard—until now.

A new study analysing standards of living over a 14-year period across more than 5,000 villages in Kalimantan, the Indonesian part of Borneo, finds that oil palm development can have both positive and negative impacts on various aspects of a village’s well-being. The key difference: how intact their forest was, to begin with.

Researchers from the University of Queensland and Borneo Futures found that villages that had already transitioned to a market economy—which typically correlates with higher level of previous forest degradation—saw more benefit from plantation development than communities that still relied on subsistence economies.

“Subsistence livelihood villages tend to have large communities with indigenous backgrounds,” lead author Truly Santika told Mongabay, “which means that these communities have stronger ties to ancestral land and livelihoods, and they are also dependent more on forest and environmental income.”

Although oil palm plantations may increase employment and economic opportunities in the area, these communities are less adapted to benefit from those changes, and the balance of jobs tends to go to migrants who inevitably follow in the wake of new development, eventually displacing the traditional communities.

“Market-based villages, on the other hand, are generally more culturally diverse, and the communities mostly have livelihood[s] outside the forestry sector, since the forests are generally already lacking,” Santika said. Therefore, the local population is better equipped to adapt to the new jobs and handle the increased circulation of wealth.

Indonesia is the world’s top palm oil producer, accounting for nearly half of global supply.

Subsistence livelihood villages tend to have large communities with indigenous backgrounds which means that these communities have stronger ties to ancestral land and livelihoods, and they are also dependent more on forest and environmental income.

Truly Santika, lead author

To assess the changes in the well-being of villages over time, the research used data gathered by the Indonesian Bureau of Statistics roughly every three years, known as Potensi Desa (PODES). These surveys assess each village area, or desa, based on multiple criteria in several categories.

The “basic” category captures standard living conditions, with villages graded by the number of households with access to electricity, cooking fuels and similar necessities.

Infrastructure is captured in the “physical” category, which includes distance to health care and school facilities, while the “financial” category assesses access to financial development schemes and counts the number of small industries. Conflicts among communities and suicide rates are included in the “social” category, and water and air pollution severity is ranked as part of the “environmental” assessment.

After the researchers matched comparable villages based on factors such as topography, accessibility and climate, they were able to directly compare changes in PODES reporting for those villages with no oil palm versus those that had new oil palm developments established from the years 2000 to 2014. Given the frequency of PODES assessments, they were able to quantify the benefits or detriments of oil palm development over the short term (two to three years), medium term (6-8 years) and long term (11-14 years).

As a whole, villages across Kalimantan saw an increase in basic, physical and financial well-being from 2000-2014, regardless of whether plantations became the primary land use nearby or not. At the same time, social and environmental well-being generally decreased across the island.