Assessment of Profitability of Land Use Systems in Tanjung Jabung Barat District, Jambi Province, Indonesia

Abstract

The purpose of the research was to compare the profitability of existing land uses in Tanjung Jabung Barat, Jambi province, Indonesia, for formulating a strategy to reduce emissions from deforestation and degradation (REDD). Net Present Value was used for comparing profits of different types of investment (e.g. different type of land use). Rapid Rural Appraisal was used to gather information on farm budget data for each land use, including prices, production, labor and other input. The results of the profitability analysis showed that all land uses, both on mineral soil and peat land, were profitable. Oil palm, both in large plantations and smallholder gardens, was the most profitable land-use system. However, the profit- ability of smallholder oil palm on peatland was lower than on mineral soils yet oil palm was still more competitive than rubber on mineral soils. The competitiveness of mixed gardens with oil palm was higher on peatland and the threat of converting other land uses to oil palm was higher on mineral soil than on peat. For crop systems, irrigated paddy had the highest profitability.