Monitoring the Socioeconomic Impact of the 2008/2009 Global Financial Crisis in Indonesia - Impact on the Livelihoods of the Oil Palm Plantation Community in Riau

Bambang Sulaksono • Herry Widjanarko • Arifudin • Kausar
Report SMERU Research Institute • October 2009 Indonesia

Abstract

Since the 2008/09 global financial crisis (GFC), the price of crude palm oil has fallen sharply. This has had a negative impact on the people of one village in Riau who depend on oil palm plantations and processing. Their incomes have slumped drastically due to the fall in the price of oil palm fresh fruit bunches, fewer shifts and reduced working hours in palm oil factories, fewer opportunities for employment as freelance workers in oil palm plantations, and a rise in the price of fertilizer, agricultural chemicals, and staple food. Oil palm plantation laborers have suffered the most from the crisis. When the price of fresh fruit bunches reached its lowest point, many freelance workers lost their jobs, young people stole the oil palm fruit and rubber sap, the wives of plantation laborers were forced to seek odd jobs, and some high school students were forced to drop out of school. Although the price of fresh fruit bunches has started to climb again, the increase has not been significant and is still not capable of improving the economic condition of the community to the pre-crisis level.

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Publisher

SMERU Research Institute

Since its establishment in 2001, SMERU has been a leader in poverty and inequality research in In... see more

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Bappenas

DFAT | AusAID