Many tropical regions are experiencing a rapid growth of oil palm cultivation. In Indonesia, the world's leading palm oil producer, in addition to large companies, smallholder farmers are increasingly engaged in the oil palm sector. Smallholder oil palm cultivation may contribute to income gains and socio-economic development. However, land-use decisions by smallholders are not well understood. Without appropriate policies, negative social and environmental consequences can also occur. To improve the knowledge base, we use data about present and past land-use decisions from a survey of farm households in Sumatra. Employing duration models, we analyse the determinants and dynamics of oil palm adoption among smallholders.
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