The Impact of Small-Scale Oil Palm Plantation Development on the Economy Multiplier Effect and Rural Communities Welfare
Almasdi Syahza, Dahlan Tampubolon, Mitri Irianti, Geovani Meiwanda, Brilliant Asmit
Abstract
This research aims to analyze the multiplier effect of small-scale oil palm plantations and the welfare of the community in rural areas during the first cycle.This developmental research conducted in Indonesia's largest oil plantation area, the Riau Province.Data were collected from farmers using the rapid rural appraisal technique through participatory approach.The data was analyzed to determine the regional economic multiplier number and the social welfare growth index.The results showed the magnitude of the multiplier effect index impacts the welfare index of rural communities.Oil palm farmers in rural areas have a more stable economy, and their consumption style follows the urban communities in creating an attitude of pride.The average family income of small-scale oil palm was more than five times bigger than non-oil palm farmers.In an effort to accelerate the economy in rural areas, especially in oil palm-producing areas in Indonesia, government policies related to pricing at the farm level are urgently needed to have an impact on increasing the income of small-scale farmers in rural areas.