ABSTRACT
In humid tropical countries oil palm is seen as the most profitable form of rural land use (Sayer et al. 2012). As such, it has come to dominate the economies of several Southeast Asian countries, notably Indonesia and Malaysia. The benefits of oil palm as a boom crop have prompted some to refer to it as ‘green gold’ for its promise of increasing state revenue and poverty alleviation (Meijaard and Sheil 2013). However, focusing on East Malaysia, the rapid and large-scale conversion of lands suitable for agriculture, often with state support, has opened up conflicts resulting from encroachment into lands claimed under customary rights as well as concerns over the long-term social, economic and ecological sustainability (Majid Cooke 2013; Cramb and Sujang 2016). Nonetheless, some local communities with landownership rights are participating in the production of oil palm by choice, participating largely as smallholders. Notably, smallholders make a significant contribution to the global supply of palm oil, accounting for some 40 percent of supply (RSPO 2016a). Thus, some profits from palm oil production are going to small farmers and directly contributing to the economic development of rural communities. This development is in accordance with the Malaysian government’s vision of oil palm as a source of poverty alleviation. Engaging with a market economy, however, brings disadvantages as well as benefits to small farmers. These disadvantages have been expressed as trade-offs: for example in terms of farmers’ loss of subsistence or complimentary food production in exchange for the expectation of an increased income from a commodity crop (Agarwala et al. 2014).
