Impact of Land Conversion on Oil Palm Production and Income

Abstract

Objective of study was to evaluate impact of land conversion on oil palm production, evaluate its impact on income of oil palm, and explore effect of social-economic aspects to land conversion of oil palm. Research used cross section data of 200 respondents. Data was analysed using qualitative and quantitative method. Results showed that a significant factors affected oil palm production which included land acreage, labour and capital. Significant factors affected income were selling price and capital. Then, socio-economic factors affected land conversion of oil palm such as education, income and saving. It found that paddy fields are more converted to oil palm fields, in which paddy fields were more in dryland than technical irrigation. Then, in terms of farming analysis, efficiency smallholder oil palm was higher than efficiency paddy (B/C on paddy was of 1.02 and B/C on oil palm was of 1.71).