Economic Analysis of Improved Smallholder Rubber Agroforestry Systems in West Kalimantan, Indonesia - Implications For Rubber Development

Farm budget analysis is a tool for understanding the economic performance of agricultural practices - to assess the impact of technology interventions, price and policy changes. This helps provide better comprehension of the strengths and weaknesses of various farm operations. As a type of farm budget analysis, the farming system modelling software Olympe developed by a consortium of L’Institut National de
la Recherche Agronomique (INRA), Centre de Cooperation Internationale en Recherche Agronomique pour le Developpement (CIRAD) and Institut Agronomique Méditerranéen de Montpellier (IAMM), is an efficient piece of software for analysing and modelling farming systems performance. Olympe gives a comprehensive overview of farmers’ situations and links to technical innovations and practices. A range of analyses can be carried out including economic impact of technical choices, effects of climatic or economic uncertainties, and the environmental impacts of land use options. The Olympe application was used to analyse the impact of new Rubber Agroforestry Systems (RAS technology) in Sanggau, West Kalimantan, Indonesia. RAS technologies are developed for adoption by smallholder farmers with limited resources. The results show that while the RAS technology requires more capital input, both labour return and land return are higher than in farmers’ traditional systems. The labour return of RAS technologies can be higher than that of intensive monoculture rubber. The economic and environmental advantages of diversified RAS technologies over monoculture rubber and oil palm are evident.