 Good morning everybody. My name is Christopher Bezinski. I've been here for a long time. I think most of you know me so I don't need an introduction but perhaps for colleagues who may be online and watching this I'm in the governance portfolio and I'm working with Pablo Pacheco and other colleagues in flagship on forest trade and investment. So like Robert mentioned in the introduction today I'm going to be talking about one of the papers a paper that we published earlier this year which talks about oil palm investments in forest or remaining forest frontiers in Indonesia and the implications of these investments for economic growth, poverty alleviation and economic development essentially in those regions. Just a little bit of background before I jump in the paper I would like to say a few things about oil palm you know I'm not going to say a lot because we all know what oil palm is but I think I think we all agree that oil palm is one of the most controversial tree crops in the world it's a major part of global national subnational discussions about economic growth, agriculture expansion, energy, poverty alleviation, a whole range of things and it gives sort of raise to you know variety of views perceptions and emotions and there's no question that economically oil palm is is one of the most important agricultural commodities and its importance is continuing to rise and oil palm essentially is found in many things that we use daily in fact there is a very interesting infographic on the Guardian website which shows that oil palm is found in around half of the things that we use daily from you know for food, snacks, cosmetics and other things oil palm is there so it's everywhere and as a result oil palm often is called a sort of a wonder crop or golden crop you may say because of the sort of high returns per unit area because of quick returns and also because of sort of comparatively high yields per unit area compared to other crops so as a result it's an important part of the economy it's a very important part of the agriculture sector in Indonesia it's in fact the foundation of growth in agricultural sector in Indonesia and it's a major part of development policies in Indonesia on sort of acceleration of economic growth MP3 which was launched by the president SBY back in 2009 and also you know underpins this philosophy of rural development in Indonesia which is said to be pro-growth pro-poor and pro-job usually you know this kind of economic view of the economic potential associated with oil palm is also in many cases linked with some concerns about sort of environmental implications and social implications and I'm not going to go into those too much just to say that sort of the most prominent among these concerns is the issue of deforestation forest degradation and greenhouse gas emissions additionally there are these lingering issues associated with community rights land rights labor rights and sort of the distribution of benefits from oil pump so we kind of take note of all this sort of dynamic field of discussions about you know what oil pump does and doesn't do and all these concerns and we in this particular paper we focus specifically on the economics okay not economic side of oil pump and we particularly focus on the mission that oil pump has been given in Indonesia which is to drive economic development in rural sort of isolated let's say parts of the country and be this driver of pro-poor pro-job and pro-growth economic development and we do that by sort of looking at this question to what extent oil pump investments in in in rural areas actually are an efficient means of driving economic growth and poverty reduction and and and creating incomes for all livelihoods we do that in fact in the province of Papua which is one of the last remaining forest frontiers in the country and also one of the major destinations for oil pump investment because of the lands that are still available there essentially what we do in this paper we use input output analysis to understand the linkages between oil pump sector and other parts of the economy and we also combine input output analysis with the national economic survey data to understand the implications of oil pump investment on household on household income levels so essentially what we find is not very surprising it's not ground shaking and it's not evolutionary but I think it's still quite interesting and in terms of economic growth what we find is that yes oil pump can very you know can be a very important driver of economic expansion but what happens is that it's it's very much the growth is very much confined to the plantation sector itself because of the lack of integration and sort of limited connectivity between oil pump sector and other parts of the economy in the province this growth is very much centered in oil pump and in plantations and it's not really contributing to to kind of a multiplier effect in other parts of the economy in terms of employment yes oil pump can generate a lot of jobs there's no question about that in fact what we see is under under each scenario that we examined in this paper and in fact we looked at five scenarios ranging from 50,000 hectare expansion all the way up to something like 5 million hectares expansion we are talking about a lot of jobs that will need will be necessary and we are actually facing a question of labor shortage and possibility for or necessity for labor importation or contract labor or immigration and that that also has some implications for relationships with local population and in terms of income distribution what we see is that oil pump can raise household incomes yes but when you look a little bit closer you will find that the impact of oil pump investments tends to be highest on households which are kind of medium to high level income meaning households which have had some kind of education and have had some kind of experience and also some resources to invest and actually take advantage of these opportunities and and create benefits for themselves most of the poor sort of local indigenous communities do not have these kinds of skills so we kind of round up and we say okay in terms of implications we acknowledge the sort of theoretical or the potential of oil pump to really be a driver of change in these places but under certain conditions we say that basically oil pump investment in those kind of rural areas forest frontiers has to be thought about in kind of a long term integrated way you know it can't be done in this sort of boom vast situation where you know all of a sudden people are you know there are big investments going on land is allocated and yes it's going on for a few years and then everything fizzles out and sort of it's not clear what what has happened but it has to be a part of a long-term process integrated planning approach which emphasizes interconnectivity between between between different sectors of the economy you know linking oil palm other plantations with other parts of the economy to ensure that investments in a particular sector will trickle down and will drive economic development in other parts of the economy as well we also emphasize smaller size concessions there's a lot of experience in that part of Indonesia with sort of poor performance and poor productivity on of large-scale investments so you know and also this is associated as well with the necessity for social safeguards which in the setting of forest frontiers are important because in those areas you still have very much indigenous and sort of customary landowners and customary structures which are predominating and so those social safeguards are needed in order to ensure sort of prevent negative possible negative implications of these investments this is in a nutshell I would be happy to answer any questions that you may have I if there is some unclear you know unclear parts of my presentation I will do my best to clarify it in in the Q&A thank you thank you for expecting the 10 minutes perfectly questions comments yes will did you compare your old palm sort of transformation or you want you want to call it to other pathways that have happened somewhere else like you know in some other agri-industry or whatever coming in there in this particular paper we really just focused on this particular part of the country we referred to some literature from neighboring countries like Papua New Guinea and to see to see a relatively really similar context to see to see what kind of transformations took place then what were the implications of these oil palm investments and we found we found some similarities in fact that you know that these oil palm investments do take time to actually result in some tangible benefits for for these communities you know who which need time to acquire skills and and knowledge about this new crop so we looked at some literature from the region Papua New Guinea and so on we didn't really look beyond that you know into the sort of other geographical areas interesting presentation however in the oil palm we are talking about there's a boom situation and there's no bust situation and I would like to ask you if you can reflect a little bit how is that oil palm development in these frontier areas compared with that what will be the multiplier effects on all frontiers with oil palm has already been established that I think the situation can be quite different and probably Papua future could look a little bit like situation in areas where oil palm has already been established yeah yeah yeah thanks for this question yes and no Pablo you're right that you know the story of oil palm so far is all about boom because it's a it's generally speaking it's expanding and it continues in it's expected to continue to expand for some time but in those areas for example in this part of Indonesia you will see that a lot of land a lot of land has been allocated over the last 10 years and actually very little has come through in terms of effective actual plantation development a lot of it has been this kind of I would call it boom bust situation associated with for example this excitement about biofuels back in 2008 and then what else and then it all collapsed as a result of the financial crisis in 2009 10 or something like that done now it's rising again and more and more companies get activated but it has a lot to do in this kind of forest setting forest frontier setting with land speculation I think and sort of a diversification of investments in other parts of the country and other and other commodities so we I'm not sure exactly how to answer that question but I think I think there are some elements of this boom and bust there which which we which we paid attention to yeah thanks I just like to ask whether whether you either you or other people have actually looked at how smallholder really smallholder oil palm has entered into sort of diverse smallholder economies and diverse the sort of diverse use of labor with why they're within families or within small groups what I'm referring to is for instance in the past rubber for example got adopted and it was actually integrated into into other kinds of resource use so rubber became jungle rubber and and all in Indonesia is there any view of that how it's no longer quite the either the the economic model or the agricultural model but a new model that smallholders have developed around oil palm anywhere in Indonesia yeah I mean there's a lot of literature on on smallholder oil palm in Indonesia there's a lot of research ongoing research on this topic in at C4 right now and I I think a number of colleagues here would be very well placed to address this I think in the area where which you which is the focus area of this particular paper there's essentially there smallholder oil palm is extremely new and it's essentially just sort of emerging in front of our eyes because it's it's a frontier area and it's it's brand new so but if we look at other places with longer history of oil palm Kalimantan or Sumatra you will see we will see quite a range of arrangements in terms of smallholder growing of oil palm you know independent oil palm completely independent also sort of different outgrower schemes with companies and all these things have different sort of implications and different outcomes you know there's a general assumption that outgrower schemes you know between communities and companies usually are not particularly beneficial and that you have you know if you are an independent grower that that is much better and so on that's not always the case there are cases where you have outgrowers growing oil palm for companies for this you know sort of partnership agreement which is which is quite beneficial and they're making you know decent income on in other circumstances that is not so it's quite varied and it's I think generally speaking you would say that in Sumatra with Kalimantan you have a well developed smallholder oil palm which is which is you know well established and as you move east in Indonesia these things are newer and and less sophisticated less developed I think not so much yet I'm not quite sure I don't profess to be an expert on technological you know tools being used in smallholder agriculture but I think it is still very much sort of a manual kind of a job although I think there is more and more certain sort of technological improvements are being applied you mentioned that Papua is really a frontier area that Kalimantan is something more or less in the middle and Sumatra is already a well-developed area do you think it's it's just a trajectory that eventually Papua will become the same will look the same as East Kalimantan or or or or what do you think will be factors that that that will shape the landscape in a different way or oil palm developments in a different way well you could on one hand you can imagine that that yes you see you know oil palm started in Indonesia in in North Sumatra hundred about hundred years ago and it spreads east and and and then to Kalimantan and now to eastern Indonesia as well but it's I mean the socio-economic and political conditions in these different places are quite different and and of course you've got now at play other forces which which are pushing for greater conservation of you know forested areas and you know linking to climate change so I don't think that we will see exact replication of what happened in Sumatra you know to you know in Kalimantan and and Papua I think there will be there will be some replication and you will see in some areas which have essentially you know mixed population and some of some of these kind of models which have been developed in Sumatra and Kalimantan replicated but but it's you know it's hard to say because you know Papua is kind of a specific place with special autonomy and and particular regulations for protecting indigenous land rights so I don't see the oil pump kind of spreading all over and kind of taking over the whole place I think there will be some expansion and some replication of these models but on a smaller scale. Hi Christoph my name is Chun-Sheng Goh I'm a visitor from Utrecht University in the Netherlands. Utrecht University in the Netherlands. I have a more general question. From your point of view what are the opportunities and barriers for small owners oil pump small owners development in Indonesia? What are the barriers and opportunities? Barriers and opportunities for small holders. I really should kind of convey that question to my other colleagues but I you know on one hand there are there's a lot of opportunities emerging opportunities you know the market is good the crop is producing the returns are quick so the also farmers let's say rural people in Indonesia in many parts are extremely excited about this and and so the growth in the small-scale sector and whether it's independent or or linked in one way or another to to larger companies is very strong so there's a lot of excitement about it but of course in terms of barriers the fact is that these small holders are you know are having some problems with linkages to the broader markets so for example you know they in order for them to sell their product produce you know they either have to have these partnership agreements with companies and be part of like outgrower schemes or they can be independent farmers but they still have to have arrangements with oil palm mills and and traders middlemen in order to get their products to the mill so the cracks of the matter usually is in between there you know what kind of arrangements do they have to get their product from the site to the mill from the site you know to the market and there are also some regulatory I think problems with the way these partnership agreements and partnership relations between small holders and companies and processors are codified in you know in terms of this partnership you know you know terms of this partnership hi Chris thank you Christophe it's here's my question you mentioned that people who get involved in the oil palm economy tend to be those with higher education and you also mentioned that there is the possibility of a labor shortage given how rapidly it's growing my question is is what proportion of a village community what proportion of the households gets involved in the oil palm economy given this these that the labor force is going in two directions mm-hmm yeah I mean I should qualify I shouldn't say that people with higher education get involved in oil palm people with some sort of education or with with with with some schooling and some exposure to you know to external markets to to interaction with other communities are more likely to engage in the oil palm and be more successful let's say also effective in it it's it's still a very small minority overall you know if you you know based on on our data in this paper if we look at these communities in in southern part of the province it's still very much small small fraction of these indigenous communities that actually get involved you have a high percentage of people in sort of mixed villages or mixed communities that are actually pursuing oil while while in those villages which are a little bit more remote it's still kind of adjacent to oil palm but but on the side the level of engagement is very very low it's still very much subsistence oriented sort of you know hunting gathering fishing and farming to some extent thank you Christophe I would like to see a little bit from different view of this expansion in Papua I imagine that it is also challenging to invite investment investor to Papua and maybe the oil pump is maybe the most the best choice that's that that happened there so you you say that it is good improve the productivity improve but less multiplier effect so are you proposing that we have the government of Indonesia have to stop this expansion so more considering other options do you have any second best option for investment in the particular area which may be infrastructure is less compared to Kalimantan and Sumatra yeah that's a great question I you know by no means we are saying that Indonesia the Indonesian government should should stop oil palm should somehow stop the development of oil palm I mean that's impossible first of all because oil palm is has become too important and it's you know and it's going to be increasingly important in the years to come but I think this there is there are important lessons that can be learned you know looking at all Sumatra looking looking you know historically at these other places that have been already affected that have hosted oil palm development so what we are saying in the paper that no I mean oil pump sure it is an effective means of driving economic development in many ways and you know creating employment and and and reducing or improving reducing poverty or improving people's livelihoods in rural areas but we have to learn from the past and we it requires certain conditions certain approach sort of stepwise approach integrated approach so and I think Indonesian government knows that understands that and they are doing doing that anyways you know in their own way within the spatial plans that they have and now they are linking that to the discussion about green economy green development you know which areas can be devoted to oil palm which ones cannot or should not so I think I think we want to link to that discussion and sort of say okay how can it can this be done in a in a more effective and sort of a more effective but at the same time more sustainable way we I think this is the message this is what we are trying to say we are not saying oil palm is bad don't do it in Papua I mean that's I don't think it's an effective message to communicate okay thank you we are almost at the end of our science attend give a big round of applause to Christophe again