Simulating jurisdictional approach and scenario for sustainable palm oil using value chain dynamic model

Abstract

Abstract In Indonesia, the jurisdictional approach is one of a key strategy for enhancing sustainability for agricultural export commodity production such as palm oil. However, the implementation still faces some challenges, including monitoring and accountability. This research aims to develop a value chain dynamic model called JAPOS (Jurisdictional Approach Modelling for Palm Oil Sustainability) that can simulate the impact of scenario and intervention, including policy, on the various indicators of sustainability at the jurisdiction level such as palm oil production, Greenhouse Gases (GHGs) emissions, deforestation, and revenue from palm oil trade. We applied the model to simulate the results of multistakeholder processes at Sintang District, Indonesia, for the Sustainable Palm Oil Regional Action Plan (RAD KSB). The simulation shows that implementing the No Deforestation, No Peat, and No Exploitation (NDPE) policy will significantly impact (89%) the GHGs emissions reduction from the oil palm sector after ten years of implementation. However, it will cause around 24% production loss and an 18% loss in the revenue from the palm oil trade in Sintang District. Our model suggested that if NDPE is implemented along with intensification and premium price incentives, it will still significantly impact GHGs emission reduction and recover palm oil production and economic loss. This study shows the usefulness of the value chain dynamic model for policy scenario development in supporting the implementation of the jurisdictional approach.