Improving Farmers' Welfare through Empty Fruit Bunch-Based Product Diversification in Oil Palm Plantation Areas

Abstract

The palm oil industry generates a significant amount of waste, particularly Empty Fruit Bunches (EFB), which have the potential to be converted into high-value products. This study explores the diversification of EFB-based products as a strategy to improve farmers' welfare and environmental sustainability in oil palm plantation areas. The research employs a mixed-method approach, incorporating literature reviews, economic feasibility analysis, market surveys, and SWOT analysis to assess the viability of EFB utilization. Findings indicate that transforming EFB into biochar, organic fertilizers, pulp and paper, and biodegradable packaging can significantly enhance farmers' income by 20-35%, reducing dependency on crude palm oil (CPO) prices. Additionally, EFB-based fertilisers have been shown to improve soil fertility and increase palm oil yield by 15%. In comparison, EFB-derived biochar demonstrates 30% higher energy efficiency compared to conventional coal. From an environmental perspective, EFB utilization contributes to 40% carbon emission reduction and decreases reliance on synthetic fertilizers by 30%, promoting circular economy practices. However, challenges such as high initial investment, limited processing facilities, and weak supply chains hinder widespread adoption. Policy recommendations include government incentives, technology transfer programs, and supply chain strengthening to facilitate market expansion. With global demand for biodegradable products growing at a rate of 25% per year, EFB-based industries can contribute 5-7% to national farmers’ income growth by 2030 while reducing EFB waste by 50%. This study highlights the need for further research in optimizing processing technologies and business models to ensure sustainable and inclusive EFB product development.