Land rents drive oil palm expansion dynamics in Indonesia

Abstract

Increasing global demand for oil palm drives its expansion across the tropics, at the expense of forests and biodiversity. Little is known of the dynamics that shape the spread of oil palm, limiting our potential to predict areas vulnerable to future crop expansion and its resulting biodiversity impacts. Critically, studies have not related oil palm expansion to the role of agricultural rent and profitability in explaining how and where oil palm is expected to expand. Using a novel land rent modelling framework parameterised to oil palm expansion across Indonesia between 2000 and 2015, we identify drivers of crop expansion and evaluate whether Indonesia's Forest Moratorium might reduce the rate of future oil palm expansion. With an overall accuracy of 85.84%, the model shows oil palm expansion is driven by price changes, spatial distribution of production costs, and a spatial contagion effect. Projecting beyond 2015, we show that areas under high risk of oil palm expansion are mostly not protected by the current Forest Moratorium. Our study emphasises the importance of economic forces and infrastructure on oil palm expansion. These results could be used for more effective conservation decisions to manage one of the biggest drivers of tropical biodiversity loss.