Land conversion, Shrub land, Palm oil plantation, Cost-Benefit Analysis, Ecosystem services.


Palm oil is one of the most important commodities as a source of national income in Indonesia. Increasing demand for this commodity encourages land conversion from shrub land to palm oil plantation in Parinduregion, West Kalimantan. As the result thereof, the ecological function of shrub land is neglected. This research examines whether the full conversion of shrub land into palm oil plantation is worth using the concept of total economic value. This concept considers three ecosystem services from shrub land, which are regulating services, provisioning services, and cultural services. The valuation shows that the estimated economic value of shrub land for the local community is Rp830, 293 (for provisioning service), Rp20 to Rp40 (for cultural service), and Rp831, 613 to Rp831, 633 (for regulation service). This means that the economic value for shrub land until the next twenty years is in the range of Rp5,997,592to Rp7,782,421 (or equal to USD 454.019 to USD 589.131) per hectare. It is to prove that despite its small economic value, shrub land indeed appears to have considerable economic value. Hence, based on the cost-benefit analysis on the three ecosystem services, the palm oil plantations worth to build on shrub land. However, further research is suggested to complete the total economic valuation with other ecosystem services, since the cost of pollution decreases the monetary value of shrub land, so that in terms of long-term sustainability, the development of palm oil p

Full Text : PDF