Sustainability of smallholder cashew production in West Nusa Tenggara Indonesia

The main objective of the study was to assess the sustainability of smallholder cashew production, focusing on selected ecological, economic, social and cultural indicators involving the Eastern Island Smallholder Cashew Development Project (EISCDP) and its participants in West Lombok - West Nusa Tenggara, Indonesia. T-test on the household characteristics of the respondents in the study area showed that there was significant positive relationships between the characteristics of EISCDP beneficiaries and non-beneficiaries. This means that participation in the project is a major reason for the household income of the participants, Rp 1,771,610 (US$196.85) for the non-participants, and Rp 1,179,800 (US$131.08). Test of relationships were done among the five economic variables: production infrastructure, market infrastructure, credit accessibility, labor use allocation, and input utilization. The probability values in all instances were the same, indicating that the four factors have positive interrelationship. For the three variables of ecological soundness: soil erosion, soil fertility, and soil moisture, all the relationships were found positive. All values are shown to be highly significant at 0.025 level. The project respondents shared more in the decision making process of their cashew production than did the non-project respondents. The project respondents adopted more of the technologies prescribed by the EISCDP than technologies adopted by the non-project respondents prescribed by government or other agencies. The project respondents were more cohesive in their organization. The income levels of the project respondents were much higher, and the income distribution was more equitable than those of the non-participants. The EISCDP is financially viable as measured by three computational tools, as follows: (a) The benefit-cost ratio (B/C) is 3.259. b) The net present value (NPV) of the project is Rp 10,058,081 (US$1,117.564); that is high. c) The internal rate of return (IRR) is 26 percent, which is higher than the interest rate, which is only 12 percent