Critical Literature Review


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Agricultural and economic activities in a region are performed towards the end of bettering the livelihood of the members of communities. Among such activities is palm oil production, which is a critical economic activity for the people of Indonesia among other parts of South Asia. With the importance of palm oil production in the region, it is imperative to evaluate the impact it has on the people within the country and the affected communities, both on their livelihood, economic well-being, and the consequent impact on the environment. From a theoretical sustainability point of view, a number of authors have investigated the impact of palm oil production in the county and Asia. The review focuses on the articles and texts that have developed around the topic of sustainable livelihood, life environmentalism, and diverse economies as relates to oil palm practices in the region. The initial part of the discussion is a review of the literature, the second part is on the areas of agreement and disagreement, while the last section is on the problems, limitations, and gaps in the literature.

Review of Literature

Indonesia is among the leaders in the production of oil palm globally (Feintrenie, Chong & Levang, 2010, p. 1). The oil production increased in the region as a function of the growth in the demand for the palm oil in the global market. The country has been increasing the production, especially from 2008 due to the increase in demand. The product is a major source of income for the people and governments in the country. At the same time, the authors explore the potential impact of the production on the livelihood of the people and the ecological impact. The authors indicate a great deal of livelihood impacts, including the conflicts between palm oil companies and communities. Though unclear, there is the possibility that some of the underlying causes of the conflicts include issues relating to land tenure and the lack of effective management of the smallholders’ cooperatives in the region focused by the authors, Bungo district in Indonesia (Feintrenie, Chong, & Levang, 2010, p. 6). Evidently, the authors appear to conclude that the smallholders do not adequately benefit from the production of palm oil in smallholders, and potentially in other parts of the country.

Other studies have investigated specifically the biodiversity and climate ramifications of the production of palm oil in Indonesia. The study is founded on the agreement that there is an expansion in the production of palm oil in South Asia. While the crop is produced towards the end, bettering the livelihoods of the people in the communities where it is produced, there is evidence of major negative impact (Rist, Feintrenie & Levang, 2010, p. 1014). The article provides evidence of abuse of the rights of the farmers leading to negative livelihood outcomes. Palm oil companies have a history of exploiting the members of the communities involved in the production of oil. The reality of the conflicts between the smallholders and the investors, especially the oil companies is evident (Feintrenie, Chong & Levang, 2010, p. 6; Rist, Feintrenie & Levang, 2010, p. 1014). The results indicated contradicting results, positive effects on rural farmers and conflicts between the palm oil companies and communities.

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The expansion of palm oil production in South Asia has been expected to come with loads of benefits for the people involved in the production. Smallholders in the producing communities have their expectations frustrated by the reality of the negative consequences of the increased production of palm oil in the region. The social, economic, and ecological, among other related rights of the people in the producing communities are expected to be protected (Colchester, 2011, p. IV). Expansion of palm oil production was widely and openly accepted with the hope that the rights of the members of the producing communities would be respected and that they would reap the benefits of the production. However, the reality has been far from the expectations. The expansion led to the encroachment of the land rights of the smallholders by the rich landowners (Colchester, 2011, p. 11). In addition to the effects on the rights of the smallholders, there are environmental ramifications of the production, including loss of biodiversity as a result of increased production through large-scale palm oil plantations.

Major challenges are facing the increased production of palm oil in Indonesia. The challenges are the basis for the demands for more sustainable practices in the production of palm oil. The members of the communities where production is carried out are largely left out from the benefits accrued from the oil palm production (Lee, Ghazoul, Obidzinski & Koh, 2014, p. 507). It is possible that a growth in the yield will be achieved through greater involvement of the smallholders in the production. Nonetheless, low yields are not the sole challenge in the palm oil production. Compensation and management of the smallholders is another issue that is associated with the production (Lee et al., 2014, p.509). The results of the study concluded that the actual challenge emanates from harvesting rotation and smallholder management practices used in the country (Lee et al. 2014, p. 511). With the increasing global demand for palm oil, it is only by improving the income of the farmers and implementing sustainable management practices that the whole country will benefit.

Huge controversy surrounds the expansion of the production of palm oil in South East Asia. Besides the challenges affecting the human and economic side of the production, the ecological destruction is another largely explored side of the controversy. Whether palm oil production is the path to sustainable development or a ticket to environmental destruction is an important question to ask before making the decision to invest in the production (Sheil, Casson, Meijaard, Van Noordwjik, Gaskell, Sunderland-Groves, Wertz & Kanninen, 2009, p. 1). Important realities are evident in the review carried out by the authors. One of these realities is the commercial viability of palm oil production. The productivity and profitability of investing in the production is undisputed. As a function of the growth in the demand for the product, large-scale farming can be highly beneficial (Sheil et al. 2009, p. 7). However, the production is not without a dark side, which should be comprehended if the benefits have to be realized. The negative side relates to exploitation of the farmers, market instability, and ecological damages.

Areas of Agreement and Disagreement

There is agreement that Indonesia produces a major proportion of the supply of the palm oil in the world (Feintrenie, Chong, & Levang, 2010, p. 1). Worth noting is that the production of palm oil in Indonesia and the South East Asia has been expanding. A consensus exists in that the region is conducive for the production of palm oil and due to the growth in the demand for the crop, there has been increased production (Colchester, 2011, p. 1). The expansion of the production has been accompanied by an increase in the interested stakeholders, from smallholder farmers to the large-scale plantation holders to the oil companies, which are the main buyers of the product. Evidence from research indicates the ongoing need to have more production of the crop to cater for the growing demand (Lee et al., 2014, p. 509). There is evidence on the need to ensure that there is growth in sustainable production of palm oil to cater for the demand while at the same time protecting the interests and rights of the smallholder farmers who are subjected to high levels of exploitation.

At the same time, the authors appear to agree with other studies that have indicated the reality of conflicts with the potential of negative ramifications. For instance, Feintrenie, Chong, and Levang (2010) and Rist, Feintrenie, and Levang (2010) agree on the existence of conflicts between the oil companies and other investors, and the members of the communities involved in the production of oil palm. The Bungo district is the focus of the two studies given the importance held by the community in the production of palm oil. The greatest culprits in the conflicts are the smallholders of palm oil. The nature of the conflict is an area that is investigated by many authors although there is no agreement on the underlying factors. In fact, the studies that have discussed the conflict have also made recommendations for further assessment of the factors that lead to the conflict (Feintrenie, Chong & Levang, 2010, p. 6; Rist, Feintrenie & Levang, 2010, p. 1020). The studies that have established the conflict appear to agree that it is between the smallholders and the companies that buy the product as well as between the smallholders and the large-scale plantation holders (Lee et al. 2014, p. 509).

The reality that the economic benefits of the oil palm production come amid a high level of environmental degradation is agreed upon my some of the reviewed texts (Rist, Feintrenie & Levang, 2010, p. 1019). The environment is one of the victims of the growth in the production of palm oil. The land is being cultivated at a high rate, affecting the efforts to conserve forests in the region. There is the tendency to use unsustainable means of production to increase the yield and cater for the increasing global demand for the crop. The damage to the environment is the cost that has to be paid to cater for the growing demand for oil palm. The reality of this conflict is among the cause of the growing opposition to the continued expansion of the palm oil plantations.

Among the areas of disagreement is the controversy that surrounds the positive benefits of oil palm production to the smallholders. Rist, Feintrenie, and Levang (2010, p. 1019) is among the authors who have indicated that the smallholders have achieved some benefits in terms of economic well-being. In addition, the authors indicate that palm oil production has led to an improvement in the livelihood of the farmers in the rural parts of the country. The study indicates the reality that the lives of members of the communities within which the crop is grown tend to benefit from improved standards of living due to the economic benefits of the crop. However, the question on the cost of the crop to the environment and to the local communities challenges the existence of the positive gains from palm oil production (Sheil et al., 2009, p. 1). The opponents of the positive benefits will question the benefits founded on the impact on the livelihood of the people and the negative impact on the environment.

Problems, Limitations, and Gaps in the Literature

Most of the reviewed studies have indicated the existence of conflicts within the communities in which palm oil is produced. However, the studies are not clear about the actual source of the conflicts, leading to the proposed additional research to establish the actual cause of the conflict. There is proposal for more research on the impacts of palm oil production on livelihood despite the fact that farmers have always been eager to join the seemingly beneficial sector of the economy (Rist, Feintrenie & Levang, 2010, p. 1022). Another aspect of the discussion that is in disagreement is the influences of palm oil yield and income for the members of the community within which the crop is being produced (Feintrenie, Chong & Levang, 2010, p. 6). This leads to the need for more research on the decisions that should be taken, which will lead to increased yields and income for the smallholders harvesting the crop in Indonesia and other parts of South Asia. It is also critical to find solutions on how to achieve sustainability and preservation of the environment amid the need to increase yields to cater for the growing global demand for the palm oil.

There are also limitations in terms of the government and policy efforts to address the problem of lack of sustainability in the cultivation of palm oil. There is an agreement in research that there are issues relating to cultivation of the crop, including the conflicts and damage to the environment. It is also evident that there is poor management of the smallholders, leading to the exploitation and the related conflicts (Feintrenie, Chong & Levang, 2010, p. 6). Even in the event that the farmers have formed organizations to protect their interests such as cooperatives, they have not been effective in meeting the objectives. However, there is no indication of the effectiveness of the government policies and regulations in protecting the rights of the farmers against exploitation. Hence, research should focus on the role of the government towards the end of proposing effective measures to protect the people and the environment from more exploitation (Feintrenie, Chong & Levang, 2010, p. 8). With government intervention, there is potential for greater protection, but there should be evidence-based proposals for effective measures to achieve the objective.

Questions abound as to whether the proliferation of palm oil production is in the best interests of the local small-scale farmers. The questions are founded on the recognition of the growing number of investors in the producing countries to have a stake in the production process. Some researchers have shed some light on the reality of the investment, including the development of sustainability certifications being based on the western model of sustainability (Hidayat, Glasbergen & Offermans, 2015, p. 26). The impact of such moves on the livelihood of the smallholders cultivating oil palm in Indonesia is being investigated. It remains possible that certification will play a positive role in protecting the interests of the local smallholders entering the business of palm oil producing in the region. Setting standards and certification will resolve some of the problems that are arising from palm oil production. However, there is a need to find the ways of involving the smallholders in the setting of the standards and certification.


There are important findings that are evident in the articles and texts that are reviewed. They contain evidence of growth in the production of oil palm in Indonesia and South Asia in general. There are both positive and negative livelihood impacts of the production. The investment has the potential for increased living standards, but the rights of the smallholders are infringed in the process. Exploitation has led to a major conflict in the area such as Bungo district, which are huge cultivators of palm oil. The environment is another victim of the increased cultivation of palm oil in the country. The increased cultivation and the methods used are the main causes of the environmental degradation and development that has not met the sustainability standards. More research is critical to establish the necessary balance between the positive and negative effects of the increased cultivation of palm oil in Indonesia. There should also be critical steps to ensure that the sustainability and conflicts are addressed to improve the livelihoods of the communities that are cultivating the crop.


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