Oil palm agroforestry yield and financial estimation modeling

Development of oil palm plantation in Indonesia is often blamed by international society as the major cause of tropical rainforest deforestation. On the other hand, oil palm industry in Indonesia related to livelihood of about 16 million people who depended on oil palm from upper to downstream industries and in which from 11.6 million hectare oil palm plantation about 41% are smallholders. Long-term research collaboration between Indonesian universities (Bogor Agricultural University, Jambi University and Tadulako University) and Goettingen University of Germany has been started since 2012 in which a sub-project on Biodiversity Enrichment Experiment in Oil Palm Plantation is conducting to find out among any others a solution for the establishment of oil palm plantation that ecologically friendly and economically beneficial. The experiment is established at the oil palm plantation of a private company - PT Humusindo in Jambi Province of Sumatera Island, in which 52 plots (48 plots planted with tree species and 4 plots are control) in sizes of 25m2, 100 m2, 400m2 and 1600m2 were established and placed systematically at distance about 100 m to each other over about 250 Ha oil palm plantation. There were 6,354 trees of 6 species (Parkia speciosa, Durio zibethinus, Archidendron pauciflorum, Peronema canescen, Shorea leprosula, Dyera polyphylla) planted in 48 plots with 0, 1, 2, 3, and 6 diversity levels, created tree islands on the sea of oil palms. This paper will present the modeling based financial analysis to find out the best agroforestry model that combined tree species with oil palms. Tree yields (timber and fruits) were estimated using LISTREL program and agroforestry financial is analyzed using criteria of Net Present Value, Benefit Cost Ratio and Internal Rate of Return. About 3 years after planting it was observed that 3 out of 6 tree species planted in the plots showed very good growth performance, i.e. Peronema canescen, Archidendron pauciflorum, and Parkia speciose, so the agroforestry model used these 3 species which were analyzed financially. Research results shows that at the age of 25 years, Peronema canescen is estimated to reach an average diameter of about 41 cm, average height of about 25 m and will yield wood about 2.37 m3. Parika speciose is estimated to starting produce fruits at 5 years old and reached the peak at 11 years old with fruit production about 24 kg/tree. While Archidendron pauciflorum will start to produce fruits at 5 years old too and reach the productivity peak at 10 years old and produce fruits about 24.15 kg/tree. Establishment and maintenance of tree islands as biodiversity enrichment experiment will not increase the cost of plantation at PT. Humusindo in the long run (25 years oil palm cycle). The low maintenance of trees compare to oil palms especially in the fertilizer application reduced the total cost for about 22.12%. Biodiversity enrichment in oil palm using high economic value tree species in island plots of 1600 m2 at every 3 ha oil palm plantation area give higher benefits, not only ecological benefits but also economic benefits. Enrichment oil palm plantation with Peronema canescen, Archidendron pauciflorum, and Parkia speciose, give higher Net Present Value, Benefit Cost Ratio and Internal Rate of Return compare to monoculture oil palm.