Beyond the ban - shedding light on smallholders' price vulnerability in Indonesia's palm oil industry
Reich, Chalotte-Elena / Tim Ölkers / Vanessa Bonke / Oliver MußhoffExterne Publikationen (2025)
in: Applied Economic Perspectives and Policy 48 (3), 653-678
DOI: https://doi.org/10.1002/aepp.70040
Open access
The Indonesian government imposed a palm oil export ban in April 2022 to address rising cooking oil prices. This study explores oil palm smallholders' vulnerability to the policy using descriptive statistics, Lasso, and post-Lasso OLS regressions. We analyze the perceptions of 382 smallholders in Jambi province and assess how the export ban affected their economic well-being, including factors shaping pre-ban sale prices and influencing the ban's price effects. Our findings show that the export ban led to an on average 63% decline in sale prices. Regression results show that households with off-farm income sources were more resilient, while partially certified farms faced worse outcomes. Our study highlights the need for market-based interventions and stronger smallholder integration to mitigate the adverse effects of future price shocks.