Sustainability Analysis of Smallholder Oil Palm Plantations in Several Provinces in Indonesia

Abstract

The cultivation of oil palm plantations as a strategy for regional and rural development in Indonesia has significantly strengthened the economic system and livelihoods of agricultural communities. However, despite its growth, sustainability challenges persist, as evidenced through issues such as deforestation, labor concerns, land conflicts, and low worker welfare. The purpose of this study is to evaluate the index and sustainability status of smallholder oil palm plantations in several provinces of Indonesia, as well as to evaluate the index and sustainability status in each dimension (i.e., economic, social, environmental, institutional, and technological). After conducting a structured survey of oil palm farmers who have been operating a plantation for more than 1 year and are members of the Indonesian Planter Society, yielding responses of 757 farmers from Riau, West Kalimantan, Central Kalimantan, and Bangka Belitung Islands provinces, a multidimensional scaling method was utilized to assess the values of the sustainability index, considering attributes related to economic, ecological, social, technological, and institutional factors. The resulting sustainability index is 44.97, placing smallholder oil palm plantations within the less sustainable category. The findings obtained underscore the pressing need for government intervention and support to improve the sustainability of smallholder oil palm plantations in Indonesia. Addressing these concerns requires comprehensive policy interventions and assistance to advance the sustainability of agricultural practices.

1. Introduction

The development of oil palm plantations as a regional and rural development strategy is believed to have successfully strengthened the economic systems and livelihoods of farming communities in rural areas of Indonesia [1]. Oil palm plantations are now growing rapidly and are spread over more than 200 districts in 26 provinces, generating a national income for central and local governments [2] and a steady income for smallholders involved in the production chain [3]. The regional and rural development strategy through the development of oil palm plantations was initiated by combining large-scale plantations and smallholder plantations under a partnership scheme, with the aim of improving the welfare of rural agricultural communities in Indonesia [1].

Several provinces in Sumatra and Kalimantan are known as oil palm plantation development areas in Indonesia. Despite the growing prospects for the oil palm business, the oil palm plantation area in Indonesia, based on land use data from the Indonesian Central Statistics Agency [4], will continue to experience an almost stagnant increase from 2019 to 2022. In 2022, the estimated area of oil palm plantations was 15.34 million ha, covering 26 provinces, namely all provinces on the islands of Sumatra and Kalimantan, West Java Province, Banten, Central Sulawesi, South Sulawesi, Southeast Sulawesi, West Sulawesi, Gorontalo, Maluku, North Maluku, Papua, and West Papua. In 2022, Riau province was still the largest oil palm-producing province, with an area of 2.87 million ha, which comprises 18.70% of the total oil palm plantation area in Indonesia and produces 8.74 million tons of CPO (crude palm oil) [5]. According to the state in 2022, the area of oil palm plantations is still dominated by large private plantations, accounting for 8.58 million ha (56%) of the national oil palm plantation area, followed by smallholder plantations, which represent 6.21 million ha (40%); the remaining 0.55 million ha (3.57%) are owned by large state plantations [5].

Smallholder oil palm plantations are part of the palm oil agribusiness supply chain, which is slowly being required to implement sustainability measures. Sustainable certification appears to be an obligation to enter the market, while plantations that do not have managerial capabilities are limitations for farmers. Fulfilling the sustainability aspects of smallholder oil palm plantations is not easy, as economic motivations still dominate the cultivation practices of smallholder oil palm plantations; however, this is not an excuse for policy makers to not achieve sustainable oil palm farms. The manifestation of sustainable smallholder oil palm plantations is the sustainability certification issued by sustainable institutions for plantations, including the Indonesian Sustainable Palm Oil (ISPO) and the Roundtable Sustainable Palm Oil (RSPO). The ownership of smallholder oil palm plantations spread throughout Indonesia is concentrated in only seven provinces, namely North Sumatra, Riau, Jambi, South Sumatra, West Kalimantan, East Kalimantan, and Central Kalimantan. The total number of groups incorporated is 51 farmer groups, with a total managed land area of approximately 33,000 ha covering 15,000 farmers. This means that only approximately 0.2% of the land of oil palm farmers has been certified as sustainable palm oil. The ownership of a certificate is not the end of sustainability, but rather the beginning of encouraging farmers to carry out plantation activities that meet sustainable considerations. Therefore, it is necessary to analyze the sustainability status of smallholder oil palm plantations in various regions of Indonesia.

Sustainable oil palm plantations are an application of the concept of sustainable agriculture, which is an agricultural system oriented toward economic, social, and ecological balance. This demand is met through the implementation of ISPO and RSPO in oil palm plantations. However, to date, there are still many unsustainable plantations and so the negative impacts of oil palm plantations are still felt in various regions. Forest deforestation due to the impact of improper land cultivation in oil palm plantation areas [6,7,8,9], employment [10,11], land conflict [12,13], and low labor welfare are all implications of unsustainable plantations [14,15].

Sustainability is a normative notion of the role of humans in acting toward nature and taking responsibility for each other and future generations [16]. Sustainable development is a process of change in development that requires resources, investment, technology, and institutions [17]. The core concept of sustainability is that economic, social, and environmental goals must be interrelated and mutually supportive in the process of sustainable development. Ref. [18], it was stated that sustainable development is the ability to maintain ecological, social, and economic stability in the transformation of biosphere services to humans and that sustainable development is capable of meeting and optimizing the needs of present and future generations in infinite time.

This study examines sustainability in five dimensions: economic, social, environmental, institutional, and technological. These dimensions are used to determine the sustainability of oil palm plantations in terms of the livelihood of communities. The indicators used to evaluate the sustainability of oil palm plantations in this study are based on the principles and criteria for the sustainability of smallholder oil palm plantations issued by ISPO and RSPO. The purpose of this study is to assess the index and sustainability status of small-scale oil palm plantations in several provinces in Indonesia, as well as to assess the index and sustainability status in each dimension (i.e., economic, social, environmental, institutional, and technological).

2. Methods

This research was conducted by testing indicators through questionnaires and interviews to assess sustainability status. The sustainability index and leverage attributes were determined using the multidimensional scaling (MDS) method assisted by the RAPFISH program in Microsoft Office Excel [19]. The latest RAPFISH approach uses the R program version 4.3.1 (2023).

The evaluation of the sustainability status of oil palm utilized MDS through the RAPFISH program for the fisheries system [20]. It used in many objects such as the sustainability model of the management of ruminant slaughterhouse business [21], the design of the sustainable beef cattle farming system to support regional autonomy in the south of Bengkulu [22], and the sustainability of the sustainable agribusiness of beef and dairy cattle production in the tourist area in the Bogor Regency [23]. Ref. [19] recommended five steps to be followed in the RAPFISH procedure, namely:

(1)

The determination of the assessment criteria and identifying current conditions.

(2)

Assessment of each indicator score.

(3)

Ordination of each indicator.

(4)

Analysis and sensitivity.

(5)

Sustainability analysis

The information used to gauge the degree of sustainability of oil palm agriculture in Indonesia encompasses a range of dimensions, such as economic, social, environmental, technological, and institutional. Each aspect has various attributes that were assessed [24,25,26,27] as follows:

• Economic aspects include the ownership of STD-B (Surat Tanda Daftar Berusaha), oil palm, the sustainable investment plan and cooperation with collectors or companies. Economic profitability is an important factor that supports the sustainability of oil palm farming.
• Ecological aspects include palm waste management program, biodiversity conservation program, environmentally friendly agricultural practices, fire prevention, suppression program, and no-burn land clearing. Ecological aspects are factors that support environmental preservation and also contribute to the sustainability of oil palm farming.
• Social aspects include the participation of family members, participation of the local community, participation in farmer groups and cooperatives, participation in courses and training activities, and access to health and safety insurance facilities. Social aspects are important factors related to the response and adoption of information that supports sustainable palm oil cultivation.
• Technological aspects include access to agricultural technology resources, the use of information technology, access to capital systems, and access to agricultural information. Technological aspects are necessary to achieve business efficiency and support the sustainability of oil palm cultivation.
• Institutional aspects include understanding and compliance with ISPO regulations, the completeness of documents according to ISPO, spatial and environmental suitability for plantations, and the ownership of environmental management and monitoring certificates. Institutional aspects are a prerequisite for efficient and sustainable palm oil cultivation.

More details on the attributes, scores, and rating scale used for evaluating the sustainability level of oil palm farming are summarized in

Table 1. Attributes, scores, and rating scale (source: adapted from [24,25,26,27]; modified description and score).

Question Description in Each Dimension	Score	Score Description
Economic dimension:
(1) Do you have an oil palm plantation business license or “Surat Tanda Daftar Budidaya” (STD-B)?	0, 1, 2, 3, 4	0: None 1: No 2: Management process 3: Extension 4: Available
(2) Give an estimate of the amount of oil palm production per hectare per year?	0, 1, 2, 3, 4	0: Very low (<5 tons/ha) 1: Low (5–<10 tons/ha) 2: Medium (10–15 tons/ha) 3: High (>15–20 tons/ha) 4: Very High (>20 tons/ha)
(3) Do you have a sustainable investment plan to improve the production and efficiency of your oil palm plantation?	0, 1, 2, 3	0: No 1: Short-term plan 2: Medium-term plan 3: Long-term plan
(4) Do you have any cooperation with collectors or companies to receive palm fruit?	0, 1, 2, 3	0: No 1: Collector only 2: Company only 3: Collectors and companies
Social dimension:
(1) Do you involve family members in the management of the oil palm plantation?	0, 1, 2, 3, 4	0: No 1: 1 person 2: 2 people 3: 3 people 4: All involved
(2) Do you have a program to involve local communities in the management of your oil palm plantations?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
(3) Are you a member of a farmer group and cooperative as a common platform to fulfill the aspirations and needs of members?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
(4) Have you participated in any courses or training activities related to agriculture or oil palm cultivation?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
(5) Do you have access to occupational health and safety insurance facilities from the government or related institutions?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
Ecological dimension:
(1) Do you have a sustainable palm oil waste management program?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
(2) Do you have a program to conserve biodiversity around your oil palm plantations?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
(3) Do you use environmentally friendly farming practices, such as the use of organic fertilizers?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
(4) Do you carry out fire prevention and suppression together with the surrounding population and the nearest relevant agencies according to the Fire Prevention and Suppression Guidelines?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
(5) Do you carry out land clearing according to the No Burn Land Clearing Guidelines?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
Institutional dimension:
(1) Have you understood and complied with the applicable ISPO regulations?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Know Enough 3: Never been audited 4: Yes
(2) Do you have the necessary documents and records to comply with ISPO?	0, 1, 2, 3, 4	0: No 1: 25% fulfilled 2: 50% fulfilled 3: 75% fulfilled 4: 100% fulfilled
(3) Do you have an Environmental Management and Monitoring Letter (SPPL)?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Not sure 3: List process 4: Yes
(4) Is the location of your plantation in accordance with the spatial and environmental planning for oil palm plantations?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Not sure 3: List process 4: Yes
Technological dimension:
(1) Do you have adequate access to technological resources, such as modern farming equipment?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to Try 4: Yes
(2) Do you use information technology (e.g., mobile phones, internet) in the management of your oil palm plantation?	0, 1, 2, 3, 4	0: Don’t Know 1: No 2: Difficult 3: Want to try 4: Yes
(3) Do you have easy access to capital systems such as banks or cooperatives using digital access?	0, 1, 2, 3, 4	0: No 1: Cooperative 2: Bank 3: Cooperatives and Banks 4: All services
(4) Do you have easy access to information on agriculture/plantations/prices of agricultural goods?	0, 1, 2, 3, 4	0: Don’t know 1: No 2: Difficult 3: Want to try 4: Yes

, in the form of a matrix that was also used as a structured questionnaire for analysis.

The information obtained consisted of two types: main data and supplementary data. The main data collection was carried out through a survey utilizing questionnaires and in-depth interviews, with pre-arranged interview guidelines. The use of questionnaires was carried out via a Google Form shared on the Indonesian Planter Society community discussion forum, as well as through interviews. The total number of respondents who responded were 757 farmers, as shown in

Table 2. Total of respondents by province group (adapted from [28]).

Group	The Total Number of Respondents
Groups of oil palm farmers by district:
1 Riau	276
2 West Kalimantan	220
3 Central Kalimantan	211
4. Bangka Belitung Islands	50
Total	757

and described in Figure 1. Supplemental data was taken from various relevant references from various sources, including the government and associations.

To evaluate the level of sustainability of oil palm farmers, primary data obtained through structured surveys of oil palm farmers were analyzed in terms of each research object for Riau Province, West Kalimantan, Central Kalimantan, and Bangka Belitung Islands using the multidimensional scaling (MDS) method. These four locations represent the majority of oil palm farmers and were chosen because they are among the largest areas of smallholder oil palm plantations in Indonesia [28]. In simple terms, the sustainability value scale was determined as a function of the attribute values in the economic, ecological, social, technological, and institutional aspects using the following formula:

$${\mathrm{I}\mathrm{K}}_{\mathrm{b}}=\mathrm{f}\left(\mathrm{E},\mathrm{L},\mathrm{S},\mathrm{T},\mathrm{K}\right),$$

where

• IK_b = The sustainability index;
• E = the economic score;
• L = the ecological score;
• S = the social score;
• T = the technological score;
• K = the institutional score.

The detection of sustainability level in this study was carried out using multidimensional scaling (MDS). MDS is a multivariate statistical analysis method that uses multiple variables to determine the position of an object based on similarity or dissimilarity. The process of this analysis involves several stages, including the following.

• Sustainability metrics were established in five aspects: ecological, economic, social, institutional, and technological. Each facet is evaluated through its specific attributes. The sustainability index for each facet can be depicted concurrently through a kite diagram. The symmetry of the kite diagram reflects the sustainability index for each facet (ecological, economic, social, institutional, and technological). Moreover, the sustainability index for each facet is illustrated in the diagram.
• The evaluation of each attribute on an ordinal scale was guided by the sustainability standards of each dimension. The assessment of every attribute within each dimension was carried out according to the expert opinions of the respondents, as required. The ordinal evaluation ranged from 0 to 4 or varied based on the nature of the attribute, resulting in levels of evaluation from lowest (0) to highest (4).
• The sustainability index was computed and the status of sustainability was evaluated. The projected score for each dimension is presented on a scale ranging from 0% (least sustainable) to 100% (most sustainable). The sustainability index represents the score for each dimension, indicating its sustainability level. The index values are detailed in

  Table 3. Value of the sustainability index.

  Index Value	Category
  0.00–25.00	Poor (not continuous)
  25.01–50.00	Less sustainable
  50.01–75.00	Quite sustainable
  75.01–100.00	Good (very sustainable)

  Source: adapted from [29].

  .

To identify the attributes most influential on the sustainability index, a sensitivity analysis was carried out based on variations in the root mean square (RMS) along the x-axis [19]. Additionally, to assess the impact of errors on the estimation of ordinate values, a Monte Carlo analysis was performed.

The quality of fit in multidimensional scaling (MDS) is represented by the stress value S, derived from the S and R² values. A lower S-stress suggests a better fit, whereas a higher S-stress suggests a less accurate fit. Within the RAPFISH framework, an effective model is characterized by a stress value less than 0.25 (that is, S < 0.25). An R² value near 1 is considered ideal. The process of performing the sustainability analysis with MDS is illustrated in Figure 2.

Indicators that proved to be the most responsive in supporting sustainability were analyzed for changes in ordination patterns through the root mean square (RMS) on the x-axis. In this case, there is a higher value of greater RMS change, making it more sensitive than the selected indicators. The distance determination technique based on Euclidian distance using the following formula was utilized:

$$d_{\mathrm{1,2}}=\sqrt{{(X_1-X_2)}^2+{(Y_1-Y_2)}^2+{(Z_1-Z_2)}^2+\cdots }$$

(1)

Notes:

• d_1,2 = Euclidian distance;
• X, Y, Z = Attributes;
• 1, 2 = Observation.

The Euclidian distance between two points (d_1,2) in MDS is projected to be a two-dimensional Euclidian distance based on the regression formula in the following equation:

$$d_{\mathrm{1,2}}=a+b d_{\mathrm{1,2} }+c\dots$$

(2)

Notes:

• a = intercept;
• b = slope;
• c = error.

The data used to determine sustainability status are included in the primary data. The data include attributes related to the sustainability of community oil palm management, and includes ecological, economic, social, technological, and institutional dimensions.

This MDS analysis will also produce R², stress values, and Monte Carlo analysis. The stress value determines the goodness of RAPFISH. A low stress value indicates a good fit and vice versa. A good model is indicated by a stress value smaller than 0.25 (S < 0.25) while a good R² value is close to the value of 1. Monte Carlo analysis can determine the error in assessing the uncertainty in MDS. If the difference between the MDS value and the Monte Carlo value is small, then the MDS analysis to determine sustainability is good enough with a 95% confidence level.

Uncertainty can be caused by errors in assessment, which is an iterative process. Furthermore, the comparison of sustainability between dimensions for each analysis unit can be visualized through a kite diagram [30]. In principle, RAPFISH performs a regression iteration process until it obtains the minimum e value and attempts to force the equation to intersect, equal to 0 (a = 0). The iteration will stop if stress < 0.25 [31]. For the number of attributes, the stress can be formulated as follows.

$$stress=\sqrt{\frac{1}{m}}\sum _{k=1}^m\left(\frac{{\sum }_i\sum _j{\left(D_{ijk}^2-d_{ijk}^2\right)}^2}{\sum _i\sum _i{d}_{ijk}^2}\right)\dots$$

(3)

Through the rotation method, the sustainability position point can be visualized through the horizontal and vertical axes with the sustainability value index of 0% (poor) and 100% (good). If the system under study has a sustainability index greater than or equal to 50%, it can be said to be sustainable and unsustainable if the index is less than 50%.

3. Results and Discussion

The analysis of sustainability in smallholder oil palm plantations has highlighted significant variances in different dimensions, pinpointing areas where interventions could potentially increase sustainability indicators.

Employing the RAPFISH ordination approach via the MDS method not only enabled the evaluation of the index and sustainability status of smallholder oil palm plantations from multiple perspectives but also facilitated the identification of critical attributes influencing the sustainability index of these plantations in every dimension through leverage analysis. The findings of both the RAPFISH and leverage analyses across each dimension are elaborated on below.

3.1. Economic Dimension

The findings presented in

Table 4. The sustainability index score scale (IKb) was used for each dimension.

Dimensions	Sustainability Index Value (Ikb)	Sustainability Status
Economy	37.54	Less Sustainable
Ecology	45.17	Less Sustainable
Social	48.94	Less Sustainable
Institutional	42.53	Less Sustainable
Technology	50.66	Quite sustainable
Average Ikb	44.97	Less Sustainable

Source: 2023 research data.

and Figure 3 reveal that the sustainability index for smallholder oil palm plantations in the economic dimension is 37.54, which is consistent with the value of the sustainability index for this dimension within the multidimensional framework. Consequently, the sustainability index value for the economic dimension falls into the less sustainable category.

According to the economic dimension (Figure 2), four attributes were considered to affect the sustainability of smallholder oil palm farms in Indonesia. The most sensitive attribute or factor that influenced the sustainability of smallholder agriculture was cooperation with collectors or companies to receive smallholder oil palm fruits. Farmers generally harvest fresh fruit bunches (FFB) from oil palms every two weeks. The ease with which farmers can sell their FFB to collectors or companies is important for their economic turnover. The channel most widely used by independent smallholders is the farmer–collector–factory channel, which has the highest margin and a low farmer share. The potential for higher earnings acts as a compelling motivation for farmers to grow an agricultural crop. In this context, oil palm plantations are considered to have a positive outlook if they are capable of improving the well-being of their farmers. Improving welfare requires increased productivity; however, if it is not followed by price improvements through cooperation with collectors and sustainable companies, the income will not be optimal [32]. Economically, oil palm plantations provide economic value by reducing poverty in oil palm plantation farming communities.

The primary reason for the low economic sustainability indicator is inefficient cooperation between farmers and collectors or companies. This inefficient market structure leads to low income for farmers despite the high economic value of oil palm. The improvement recommendation is to establish fair-trade cooperatives to ensure better prices for smallholder farmers and to reduce dependency on the traditional farmer–collector–factory channel.

3.2. Ecological Dimension

The data shown in Table 4 and Figure 4 indicate that the sustainability index for small-scale oil palm plantations in the ecological aspect is 45.17, reflecting the ecological dimension’s sustainability index value and corresponding with the overall multidimensional index value. This places the ecological dimension’s sustainability index within the less sustainable classification.

In the ecological dimension, five factors were identified as influencing the sustainability of oil palm farming, the most sensitive of which were environmentally friendly agricultural practices. One of the key factors in the management of oil palms is the level of soil fertility or health [33]. If oil palm plantation management does not apply the concept of environmentally friendly agriculture, it will result in a decrease in soil health which, in turn, will lead to a greater dependence on chemical fertilizers. The sustainability of agricultural businesses in the economic dimension is considered to be more influenced by factors of cooperation with collectors or companies. If this is not achieved, it will be difficult for farmers to meet the need for fertilizers to increase oil palm productivity under declining soil quality.

The poor adoption of environmentally friendly agricultural practices results in degraded soil health and increased dependence on chemical fertilizers, compromising ecological sustainability. The improvement recommendation is to promote and subsidize the adoption of sustainable and environmentally friendly farming practices, such as organic farming and integrated pest management.

3.3. Social Dimension

The findings presented in Table 4 and Figure 5 reveal that the sustainability index for smallholder oil palm plantations in the social dimension is 48.94, in accordance with the sustainability index value for the social dimension, and aligns with the overall multidimensional index value. The sustainability index for the social dimension also falls into the less sustainable category.

In the social dimension, of the five identified factors (or attributes) that significantly impact the sustainability level of oil palm farming, access to health and safety insurance facilities provided by the government or relevant organizations, together with active participation in courses and training sessions, emerged as the most influential attributes (35–70%).

To improve the sustainability of oil palm smallholders, it is necessary to develop mechanisms for occupational health and safety and to actively promote participation in job training. Another thing to consider, in terms of the health of farmers, is the use of personal protective equipment (PPE), which is often ignored by workers (especially smallholders). As a result, work-related accidents still occur. This certainly deserves special attention from the government, as a provider of rural community health services, due to the difficulty of accessing health for farmers; this difficulty often leads farmers to take traditional medicines, thus posing a public health threat, especially to farmers.

The lack of access to health and safety insurance, as well as the lack of participation in training sessions, underscores social challenges. Negligence towards personal protective equipment further exacerbates the problem. The recommendations for improvement are enhancing access to healthcare and safety training and distributing personal protective equipment to reduce health risks.

3.4. Institutional Dimension

The outcomes illustrated in Table 4 and Figure 6 show that the sustainability index for smallholder oil palm plantations within the institutional aspect is 42.53, reflecting the value of the institutional dimension sustainability index and corresponding to the overall multidimensional index. Consequently, the sustainability index for the institutional dimension is classified as less sustainable.

According to the institutional dimension, the most sensitive factor influencing the sustainability level of small business owners of oil palms was the ownership of environmental management and monitoring letters (40–45), compared to the other attributes. This needs to be further reviewed, considering that the ownership of environmental management is very important in improving the sustainability index of oil palm smallholders and an effective and efficient mechanism is needed to involve community institutions and sectors, such that each stakeholder plays a role in accordance with their respective responsibilities.

The deficiency in ownership of essential environmental management documents indicates a gap in regulatory compliance and institutional support for sustainability practices. The recommendations for improvement are streamlining the process for obtaining necessary environmental management and monitoring documents, ensuring that smallholders can easily comply with sustainability standards.

3.5. Technology Dimension

The findings detailed in Table 3 and Figure 7 indicate that the sustainability index for small-scale oil palm plantations in the technological dimension is 50.66, aligning with the value of the sustainability index of the technological dimension and the comprehensive multidimensional index. Similarly to the other dimensions, the value of the sustainability index for the technological dimension falls within the less sustainable range.

Within the technological dimension, the most critical factor that affects the sustainability of oil palm cultivation was identified as the ease of access to agricultural information, which includes data on the costs of agricultural facilities and infrastructure (150–200). A lack of access to information obtained by farmers will weaken the level of oil palm productivity due to a lack of understanding of management, maintenance, and access to capital.

A relatively higher indicator in the technological dimension suggests that there is some level of access to agricultural information and technology, though it still falls within the “less sustainable” range, indicating room for improvement. However, there is still room for improvement by improving access to agricultural information through mobile technology platforms, providing farmers with easy access to best practices, market information, and financial services.

The MDS method uses the RAPFISH approach, which incorporates criterion attributes in each aspect as an important element for a rapid assessment of the sustainability status. This approach utilizes a nonparametric multivariate method known as multidimensional scaling to measure and rank attributes on an ordinal scale based on sustainability criteria. Subsequently, an MDS analysis was performed to determine the order and value.

The results of this analysis produce sustainability index values (IKb) for each dimension [30] (described in Figure 8). Based on sustainability status criteria, the economic, ecological, social, and institutional dimensions showed poor sustainability status values, which were in the index value range of 25 to 50 (with values of 37.54, 45.17, 48.94, and 42.53, respectively). Furthermore, the technology dimension had a sufficient sustainability index value, with an index value of 50.66 (within the index value range of 50 to 75). The average value of the sustainability index was 44.97; therefore, according to the index values, the considered smallholder oil palm plantations were classified as less sustainable.

4. Policy Implications

The development of oil palm plantations in several provinces in Indonesia is considered economically capable of supporting the lives of the community, as evidenced by oil palm plantations as a livelihood (main/side). The various economic impacts associated with oil palm plantations also still require evaluation, based on attributes that are not yet in accordance with the principles of sustainable development. Smallholder oil palm plantations that have managerial limitations require institutions as forums that can channel the needs of the plantations. For this reason, farmers are expected to be able to follow and apply the right institutional aspects. Institutions that develop oil palm plantations are expected to be able to map oil palm plantations administratively. Furthermore, palm oil certification is a benchmark for the sustainability of oil palm plantations, allowing them to enter international trade. Smallholder oil palm plantations, as part of the palm oil commodity supply chain, are expected to be able to prepare for the sustainable certification process. Preparation for the sustainability of oil palm plantations should begin as early as possible, so that sustainable practices can be applied efficiently to smallholder oil palm plantations in Indonesia.

Comparative analysis with other studies, see Ref. [34], which also explored sustainability in oil palm cultivation, reveals common themes and differences. Ref. [34] highlighted the importance of the inclusion of smallholders in the palm oil value chain for economic sustainability, similar to the findings presented here. The researchers focused on the environmental impacts of oil palm cultivation, highlighting the need for sustainable practices to mitigate ecological degradation.

This study emphasizes the multidimensional nature of sustainability challenges in oil palm cultivation. Addressing these challenges requires integrated efforts that focus on improving market structures, adopting sustainable practices, improving social welfare, ensuring regulatory compliance, and using technology. Such strategies are pivotal not only for addressing immediate sustainability concerns but also for aligning with broader environmental conservation and socioeconomic development goals.

This analysis reveals a multifaceted scenario where economic viability, ecological preservation, social equity, technological advancement, and institutional robustness are critical for achieving overall sustainability. Despite providing economic benefits and supporting livelihoods in rural communities, predominantly less sustainable ratings in most dimensions indicate substantial room for improvement. This scenario stresses the importance of a holistic sustainability approach that balances economic growth with environmental stewardship and social responsibility.

Collaboration among all stakeholders, including smallholder farmers, government bodies, industry players, and nongovernmental organizations, is crucial to driving the transition to sustainable oil palm cultivation. By focusing on the sensitive factors identified in the sustainability dimensions and developing targeted interventions, it is possible to overcome the gaps and challenges, paving the way for a more sustainable, inclusive, and resilient oil palm industry in Indonesia. Adopting this approach not only ensures adherence to global sustainability goals but also ensures the long-term viability and competitiveness of the Indonesian oil palm sector on the international stage.

5. Conclusions

The comprehensive analysis of sustainability in smallholder oil palm plantations reveals significant variances in different dimensions, pinpointing crucial areas for intervention to potentially improve sustainability indicators. The study findings reveal the pressing need for concerted efforts to address the sustainability challenges in oil palm cultivation, especially in the Indonesian context. The economic dimension suffers because of inefficient cooperation between farmers and collectors or companies, leading to low income for farmers despite the high economic value of oil palm. Promoting fair-trade cooperatives and reducing dependence on the traditional farmer–collector–factory channel is recommended to ensure better prices for smallholder farmers. Ecologically, the adoption of environmentally friendly agricultural practices is notably poor, resulting in the deterioration of soil health and increased reliance on chemical fertilizers. This scenario underscores the urgent need to promote and support sustainable farming practices, such as organic farming and integrated pest management, to improve ecological sustainability. Social challenges are evident in the lack of access to health and safety insurance and the lack of participation in training sessions. This study recommends improving access to health and safety training and distributing personal protective equipment to mitigate health risks. Institutionally, the gap in regulatory compliance and institutional support for sustainability practices is highlighted by the lack of ownership of essential environmental management documents. Streamlining the process for obtaining these documents could significantly improve smallholders’ ability to comply with sustainability standards. Although the technological dimension scores relatively higher, indicating some level of access to agricultural information and technology, there is still considerable room for improvement. Enhancing access to agricultural information through mobile technology platforms could provide farmers with easier access to best practices, market information, and financial services. By focusing on the sensitive factors identified in all sustainability dimensions, targeted interventions can be developed to address gaps and challenges, paving the way for a more sustainable, inclusive, and resilient oil palm industry in Indonesia. This approach not only aligns with global sustainability goals but also ensures the long-term viability and competitiveness of the Indonesian oil palm sector on the international stage.