Holistic analysis of stakeholder financial trade-offs in land use switching: Case study of oil palm promotion in Thailand

Abstract

Stakeholder involvement is crucial to the success of biofuel policy implementation. While many approaches are used to assess potential impacts on stakeholders, these approaches do not consider stakeholders holistically. This research is an attempt to develop a metric of the financial impact on stakeholders derived from land use switching caused by biofuel development policy in Thailand. The results regarding the impacts of land use switching from the analysis of secondary data from the input-output national accounts of Thailand reveal that switching paddy areas to oil palm cultivation would clearly provide better contributions to the stakeholders in the supply chain and to the whole economy. However, the impact of switching land use from rubber to oil palm would benefit some stakeholders (input providers and transporters at the crop farming stage and input providers and entrepreneurs at the industrial processing stage), while the farmers and other stakeholders would lose. These findings imply that the overall positive financial trade-offs of land use switching from paddy rice to oil palm are an important factor that should cause the government to ignore unintended consequences that undermine the effectiveness of policies by allowing oil palm expansion to replace paddy rice area.