HUMAN RESOURCE CAPACITY DEVELOPMENT AMONG INDEPENDENT OIL PALM SMALLHOLDERS AND RURAL ECONOMIC DEVELOPMENT IN RIAU PROVINCE, INDONESIA: A MIXED-METHODS STUDY

Fahrial Fahrial, Raden Rudi Alhempi

Abstract


The oil palm agribusiness sector is the backbone of Riau Province’s economy, yet its sustainability depends heavily on the quality of human resources (HR) among independent smallholders, who manage most of the plantation area. This study analyzes the dynamics of HR capacity development among oil palm farmers and its role in driving rural economic development. A sequential explanatory mixed-methods design was employed, integrating quantitative data from 300 independent smallholder households in Kampar, Siak, and Indragiri Hulu Regencies with qualitative data from 12 key informants (farmers, cooperative leaders, village heads, agricultural extension workers, a palm oil mill manager, and a provincial plantation office staff member). The quantitative results show that farmers’ HR capacity falls in the high category (mean = 3.71 on a 1–5 scale) and is strongly correlated with fresh fruit bunch (FFB) productivity (r = 0.796; p < 0.001) and the village economic development index (r = 0.777; p < 0.001). Membership in a village cooperative (Koperasi Unit Desa, KUD) emerged as a significant differentiating factor: member farmers exhibited substantially higher HR capacity, productivity, and village economic contribution than non-members (p < 0.001 on all indicators). Mediation analysis indicates that productivity and technology adoption serve as the pathway linking HR capacity to household income growth, whereas the effect on broader dimensions of village economic development is more direct. The qualitative findings corroborate the quantitative results and reveal four major themes: technical capacity gaps, KUD institutional dynamics, limited digital literacy, and transformative impacts on Village-Owned Enterprises (BUMDes) and Village Original Income (PADes). The study recommends strengthening continuous technical training, revitalizing farmer institutions, and optimizing the use of funds from the Oil Palm Plantation Fund Management Agency (BPDPKS) as an integrated strategy for oil palm agribusiness–based rural economic development in Riau Province.

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DOI: https://doi.org/10.31846/jae.v14i3.1124

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