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Using field data and information from a palm oil company and neighbouring independent smallholders in Sarawak, this research estimated the profitability and greenhouse gas (GHG) emissions of oil palm producers, and compared the outputs of estate and smallholder production systems. The results indicate that the estate and smallholders had unique operation styles and costs incurred, with the estate achieving greater productivity (and profitability) per hectare and higher GHG emissions per net profit when the emissions from land-use change were considered. Efficiency in terms of fertiliser application was key to explaining this difference. Nonetheless, it was evident that the overall cost efficiency of smallholders was not lower than that of the estate. If the effect of land-use changes is considered, estate production results in much higher GHG emissions (and hence greater environmental costs) than smallholder production. The results also indicate large variations in the costs, revenues and GHG emissions among smallholders. This may reflect less standardised aspects of operations and therefore a relatively high degree of flexibility in smallholder production, as well as other variables such as site conditions and the age of trees.
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In order to avoid degradation of oil quality, harvested fresh fruit bunches must be transported to oil mills and processed into crude palm oil within 48 h. Many estates find it advantageous to integrate oil mills into their plantation operations.
In reality, producers can be subdivided into several more categories. For instance, Cramb ( 2011) classified producers in Sarawak into five categories: (1) independent smallholders; (2) organised smallholders (under government schemes such as Sarawak Land Consolidation and Rehabilitation Authority [SALCRA] and Federal Land Consolidation and Rehabilitation Authority [FELCRA]); (3) private estates; (4) publicly owned estates; and (5) joint venture estates on customary land. All smallholders in this chapter are independent smallholders who enjoy complete autonomy over the management of their smallholdings.
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- Estate and Smallholding Oil Palm Production in Sarawak: A Comparison of Profitability and Greenhouse Gas Emissions
- Springer Singapore
- Chapter 24