Factors Influencing the Conversion of Cocoa Lands into Oil Palm in
Asahan District of North Sumatra
Tavi Supriana
1
, Siti Khadijah Hidayati Nasution
1
, Tasya Chairuna Pane
1
and Siti Syarifah Hanum
2
1
Faculty of Agriculture, Universitas Sumatera Utara, Medan, Sumatera Utara, Indonesia
2
Department of Agribusiness, Institut Pertanian Bogor, Bogor, Jawa Barat, Indonesia
Keywords: Land Conversion, Cocoa Lands, Land Size, Pests and Diseases Attack, Farm Income, Farming Experience
Abstract: The cocoa area in Indonesia has declined in recent years due to land conversion. The conversion of cocoa
lands into oil palm is one of the causes of this happening. This study aimed to analyze the factors
influencing the conversion of cocoa lands into oil palm in Asahan District of North Sumatra. The factors
influencing the conversion of cocoa lands into oil palm were analyzed by binary logistic regression. The
results showed the variables that have the positive and significant influence were the land size, the cocoa
pests and diseases attack, and the farm income, and the variable that has the negative and significant
influence was the cocoa farming experience.
1 INTRODUCTION
Cocoa is one of the leading plantation commodities
in Indonesia. Cocoa plays an essential role in
Indonesian economy as a source of income and
foreign exchange by contributing third largest total
export after oil palm and rubber for plantation
subsector. Cocoa also plays a role in agroindustry
and regional development. Cocoa plantations
provide jobs and absorb labor because most of them
are smallholder's plantations.
The cocoa area in Indonesia has declined in
recent years due to land conversion that often occurs
on agricultural lands. Land conversion occurs due to
population growth that encourages the development
of various infrastructures as well as the lack of
incentives in the agricultural sector (Mustopa and
Santosa, 2011). Increase in public income will
increase the need for land for non-agricultural
activities such as houses, offices, and other
infrastructures and need for such lands tends to be
converted from agricultural lands (Lagarense,
Kapantow, Kumaat, and Lorraine, 2015).
Land conversion is done by replacing
commodities planted with other commodities that
are considered more prospects. Smallholder's
plantations that have been planted with cocoa are not
only used for infrastructures development but also
replaced with other agricultural commodities. One of
the agricultural commodities that farmers are
interested as a substitute for cocoa is oil palm
commodity. Oil palm is chosen as a substitute for
cocoa because, in addition to more demand, this
commodity also has convenient and economically
viable market access (Guampe, 2014).
The government has issued various policies to
ensure availability of cocoa beans in the domestic
market as raw material for cocoa processing
industries which is expected to develop the
downstream of domestic processed cocoa products.
The conversion of cocoa lands into oil palm will
cause a decrease in domestic dry cocoa beans
production. If the decline in area and production
continues, the government will fail to take advantage
of prevailing policies to provide opportunities for
development of the domestic cocoa downstream
industries. Besides, this strategic commodity may
lose its place as one of the leading plantation
commodities in Indonesian. Study on cacao land
conversion needs to be undertaken to understand the
decline phenomenon of cocoa cultivation area
further.
North Sumatra Province is the region that
occupies the 8th position of cocoa producers in
Indonesia. The cocoa plantation area in North
Sumatra Province in 2012-2016 fluctuated and
tended to decrease, while oil palm plantation area
continued to increase (Badan Pusat Statistik, 2016).
Asahan regency is plantation center in North
Supriana, T., Nasution, S., Pane, T. and Hanum, S.
Factors Influencing the Conversion of Cocoa Lands into Oil Palm in Asahan District of North Sumatra.
DOI: 10.5220/0010079000310036
In Proceedings of the International Conference of Science, Technology, Engineering, Environmental and Ramification Researches (ICOSTEERR 2018) - Research in Industry 4.0, pages
31-36
ISBN: 978-989-758-449-7
Copyright
c
 2020 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
31

Sumatera with the largest cocoa area and also
experienced the most significant decrease of land
area in North Sumatra in 2012-2016 (Badan Pusat
Statistik, 2017). The conversion of cocoa lands into
oil palm is one of the causes of this happening.
Several factors are influencing the conversion of
cocoa lands into oil palm. It is necessary to study
factors that may affect the conversion of cocoa lands
into oil palm. The government can develop policies
in the management of plantation land to ensure
availability of cocoa beans in the domestic market as
raw material for domestic processing industries. This
study aims to analyze the factors influencing the
conversion of cocoa lands into oil palm in Asahan
District of North Sumatra.
2 METHODS
Study location was determined purposively with a
consideration that Asahan District is District with
largest cocoa plantation area in North Sumatera
which experienced the most significant decline
during 2012-2016. Data were collected in five
subdistricts in Asahan District, which are Sei Dadap,
Air Batu, Tinggi Raja, Silo Laut, and Air Joman
Subdistrict because these subdistricts previously had
cocoa auction place, and also have many cocoa
farmers and oil palm farmers. Data retrieval was
conducted from February to April 2018.
First, the study performed by looking at the
characteristics of cocoa farmers and oil palm farmers
who had converted land of cocoa. Then, performed
the analysis of the factors influencing the conversion
of cocoa lands into oil palm. Factors tested were the
land size, the cocoa pests and diseases attack, the
farm distance from farmer's residence, the farmer's
age, the cocoa farming experience, the percentage of
price increase of oil palm fresh fruit bunches, and
the farm income. Respondents of this study are
cocoa farmers and farmers who have converted
cocoa lands into oil palm.
The factors influencing the conversion of cocoa
lands into oil palm were analyzed by binary logistic
regression to determine which independent variables
significantly influence farmer's tendency to convert
their cocoa lands into oil palm and the influence of
each variable on the tendency of land conversion.
Logistic regression is a regression model used to
analyze relationship patterns between a set of
independent variables of categorical or qualitative
dependent variable (Rosadi, 2012). Primary data
collected was processed using SPSS version 24. The
logistic regression model was chosen because the
dependent variable in this study is divided into 2
categories, by the following equation:
( 1 )
Description:
P(
) = The farmer's odds to convert cocoa land
(1 = land converted to oil palm, 0 = land not
converted to oil palm)
= The land size for farming cocoa/oil palm
(hectare)
= The cocoa pests and diseases attack
(1 = high; 0 = low)
= The farm distance from farmer's residence
(kilometer)
= The farmer's age (year)
= The cocoa farming experience (year)
= The percentage of price increase of oil palm
fresh fruit bunches (percent)
= The farm income (million Rupiah/hectare)
3 RESULTS AND DISCUSSION
Result of the model fit test with the Omnibus Test
showed the Chi-square value of 21.482 with the
significance of 0.000 (< 0.05), which means there is
a significant difference (improvement) in -2 Log
likelihood and coefficient of each addition of
independent variables into the model, so the model
can be said to be fit already. The Nagelkerke's R
square value of 0.684 means that 68.4 percent of
dependent variable function has been able to be
explained by the variation of the seven independent
variables, while other factors outside the model
influence the remaining 31.6 percent. Result of the
model goodness test with the Hosmer and
Lemeshow Test showed the Chi-square value of
7.937 with the significance of 0.440 (> 0.05), which
means there is no significant difference between the
empirical data with the model prediction result, so
the model can be said good and able to be used to
predict based on the empirical data. The overall
percentage value of 90.7 percent means the model
prediction accuracy is 90.7 percent, so the model is
acceptable.
Table 1: Results of the analysis of the factors influencing
the conversion of cocoa land into oil palm.
Variable Coefficient Si
g
Ex
p(
B
)
Constant -0.965 0.747 0.381
The land
size for
farming
1.972 0.060 7.186
ICOSTEERR 2018 - International Conference of Science, Technology, Engineering, Environmental and Ramification Researches
32

cocoa/oil
palm (ha)
The cocoa
pests and
diseases
attack
(dummy)
3.074 0.038 21.618
The farm
distance
from
farmer's
residence
(
km
)
-0.223 0.400 0.800
The
farmer's
age (year)
-0.032 0.534 0.969
The cocoa
farming
experience
(y
ear
)
-0.206 0.013 0.814
The
percentage
of price
increase
of oil
palm fresh
fruit
bunches
(percent)
0.009 0.513 1.009
The farm
income
(million
Rp/ha)
0.176 0.022 1.192
Description: The bold text is the significant
variable
The analysis result shows the following logistic
regression model:
(2)
(3)
(4)
3.1 The Land Size
The land size has the significant influence on the
farmer's decision to convert their cocoa lands into oil
palm at the level of error tolerance of ten percent
with the significance of 0.060 (< 0.10), where the
cocoa farmer tendency to convert their cocoa lands
into oil palm will increase by a factor of 7.186
(
) for every increase of the land size of one
hectare.
Based on the respondent farmers, the average
land size of farmers who convert their cocoa lands
into oil palm is 1.736 hectares, higher than the
average land size of farmers who keep planting
cocoa of 0.941 hectares. It is due to inefficient oil
palm farming when cultivated on small land.
Production cost is high enough for cocoa farming in
a large land so that farmers with larger lands tend to
convert their cocoa lands into oil palm, while land
conversion to oil palm for a small land will harm
farmers (Nurmedika, Basir-cyio, and Damayanti,
2015).
Cocoa is a plant that requires more intensive care
than oil palm. Maintenance activities such as
pruning, and pests and diseases control should be
done regularly to keep cocoa plants well maintained.
Cocoa farmers tend to use family labor for farming
cocoa so that if cultivated in a large area will be
difficult to maintain, especially if labor in the
farmer's family is limited. In smaller lands, in
addition to more well-maintained cacao plants, more
frequent harvest frequencies may also be done by
farmers.
In contrast to cocoa, oil palm farmers use more
labor outside their family in cultivation. Harvesting
of oil palm is generally done by harvest workers
paid per kilogram according to number oil palm
fresh fruit bunches harvested. Harvesting of oil palm
on small farms is generally not willing to be done by
harvest workers, so it becomes a consideration for
farmers with small lands if they want to convert their
cocoa lands into oil palm. Since most farming
activities do not depend on family labor, oil palm
farmers have the freedom to farming on larger lands.
Therefore, the land size is one of the factors
influencing the farmer's decision to convert their
cocoa lands into oil palm.
3.2 The Cocoa Pests and Diseases
Attack
The cocoa pests and diseases attack has the
significant influence on the farmer's decision to
convert their cocoa lands into oil palm at the level of
error tolerance of five percent with the significance
of 0.038 (< 0.05), where if the pests and diseases of
the cocoa plants are high then the tendency of cocoa
farmers to convert their cocoa lands into oil palm
will be higher by a factor of 21.618 (
) than the
farmers who are low on pests and diseases.
In general, main types of pests and diseases of
cocoa plants are more than those of oil palm or other
plantation crops. There are as many as 15 stems and
branches borer, eleven leaf borer, eight leaf-sucking
Factors Influencing the Conversion of Cocoa Lands into Oil Palm in Asahan District of North Sumatra
33

pests, and one fruit pest, as well as six types of
diseases that can attack cocoa plants in Indonesia.
While in oil palm, there are only about eleven types
of pests and nine types of diseases that generally
attack the plants (Direktorat Jendral Perkebunan,
2015). Besides, with certified seed types, oil palm
plants can be more resistant to pests and diseases.
While the cocoa seeds which generally obtained by
cocoa farmers 26 years ago is still not a superior
clone so pests and diseases can be more easily attack
it.
Most of the cocoa farmers who convert their
lands into oil palm suffer from high pests and
diseases in their cocoa plants resulting in decreased
production and quality of cocoa fruits. In addition to
pests and diseases that attack cocoa plants quite a
lot, proper handling of pests and diseases of cocoa
plants are also generally not been mastered by
farmers. Cocoa plants require more intensive care
than oil palms, especially those that are attacked by
pests and diseases. Pruning, pesticides spraying, and
maintenance of affected plants are required. Farmers
who do less maintenance on affected plants will
exacerbate the plant's condition so that its production
will decrease than expected. A reduction in
production and a state of serious pests and diseases
attack will encourage farmers to finally give up and
decide to convert their lands into oil palm
plantations.
3.3 The Farm Distance from Farmer's
Residence
The farm distance from farmer's residence has no
significant influence on the farmer's decision to
convert their cocoa lands into oil palm at the level of
error tolerance of five percent with the significance
of 0.400 (> 0.05), where the cocoa farmer tendency
to convert their cocoa lands into oil palm will
decrease by a factor of 0.800 (
) for every
increase of the farm distance from farmer's residence
of one kilometer.
The average distance of farm to the residential
area of oil palm farmers is higher than the average
distance of farm to the residential area of cocoa
farmers, which is 1.147 km for cocoa and as far as
1.203 km for oil palm. However, the difference is
not significant, and farmers tend to keep converting
their lands without seeing the distance of farm from
home.
3.4 The Farmer's Age
The farmer's age has no significant influence on the
farmer's decision to convert their cocoa lands into oil
palm at the level of error tolerance of five percent
with the significance of 0.534 (> 0.05), where the
cocoa farmer tendency to convert their cocoa lands
into oil palm will decrease by a factor of 0.969
(
) for every increase of the farmer's age of
one year.
The farmer's age who keeps planting cocoa has
an average of 59.391 years while the farmer's age
who convert their cocoa lands into oil palm has an
average of 55.850 years. The average age of cocoa
farmers is higher than oil palm farmers, but
generally, the age characteristics of farmers are not
significantly different since there are 69.5 percent of
cocoa farmers and 65 percent of oil palm farmers
aged over 50. It indicates that the farmer's age of
both commodities is not significantly different and
not one of the factors influencing the farmer's
decision to convert their cocoa lands into oil palm.
3.5 The Cocoa Farming Experience
The cocoa farming experience has the significant
influence on the farmer's decision to convert their
cocoa lands into oil palm at the level of error
tolerance of five percent with the significance of
0.013 (< 0.05), where the cocoa farmer tendency to
convert their cocoa lands into oil palm will decrease
by a factor of 0.814 (
) for every increase of
the cocoa farming experience of one year.
Along with the length of experience, the farmer's
knowledge about the ins and outs of the plants
increased, ranging from cultivation techniques to
pests and diseases management. Farmers who
remained to grow cocoa generally have experience
of cocoa farming for 26 years, while farmers who
have converted their lands into oil palm have an
average of as much as 17 years of experience. It
suggests that the farming experience is one of the
factors that significantly influence the farmer's
decision to convert their lands into the oil palm
plantations.
3.6 The Percentage of Price Increase of
Oil Palm Fresh Fruit Bunches
The percentage of price increase of oil palm fresh
fruit bunches has no significant influence on the
farmer's decision to convert their cocoa lands into oil
palm at the level of error tolerance of five percent
with the significance of 0.513 (> 0.05), where the
ICOSTEERR 2018 - International Conference of Science, Technology, Engineering, Environmental and Ramification Researches
34

cocoa farmer tendency convert their cocoa lands into
oil palm will increase by a factor of 1.009 (
)
for every increase of the percentage of price increase
of oil palm fresh fruit bunches of one percent.
Farmers who convert their cocoa lands into oil
palm are less influenced by the percentage of price
increase of oil palm fresh fruit bunches when they
convert their cocoa lands into oil palm. It is
evidenced by the persistence of farmers who convert
their cocoa lands into oil palm in the year prices of
oil palm fresh fruit bunches decrease.
Agricultural products prices fluctuate
continuously throughout the year. Supply-demand
conditions influence agricultural products prices,
and farmers tend to act as price takers on the prices.
Farmers also cannot predict the increase or decrease
that will occur in the prices of agricultural products.
It makes the farmers less affected by the increase or
decrease in the price of oil palm in converting their
cocoa lands into oil palm. Besides, the price is one
of the farm income variable components. Farm
income variable that has the significant influence
indicate that farmers are more influenced by farm
income than the fluctuating prices in deciding to
convert their cocoa lands into oil palm or not.
3.7 The Farm Income
The farm income has the significant influence on the
farmer's decision to convert their cocoa lands into oil
palm at the level of error tolerance of five percent
with the significance of 0.022 (< 0.05), where the
cocoa farmer tendency convert their cocoa lands into
oil palm will increase by a factor of 1.192 (
)
for every increase of the farm income of one million
Rupiah/hectare.
The decision to convert their cocoa lands into oil
palm is one of the revolutionary decisions to be
taken by farmers. The decision means farmers have
to cut down the whole of their cocoa crops and plant
the new oil palm crops on their land. The process
also requires many labors both from inside and
outside their family. The land conversion, of course,
requires a cost that is not cheap, coupled with the
time of the oil palm young plant that can reach 2 to 3
years old so that farmers do not receive any income.
Farmers should consider this matter before
converting their cocoa lands into oil palm. Land
conversion requires much capital, therefore, the
higher the farm income, the more likely the farmers
to convert their cocoa lands into oil palm.
High income of oil palm and cocoa farming will
increase the tendency of farmers to convert their
cocoa lands into oil palm. Results of the farm
income calculation showed that the average oil palm
farm income is higher than cocoa. The average oil
palm farm income was Rp 22,141,642.846 per year
for 25 years, while the average cocoa farm income
was only Rp 14,267,322.804 per year. A massive
increase in income levels makes both oil palm, and
cocoa farmers who experienced an increase in
revenue will continue to convert their cocoa lands
into oil palm as they gain more capital to convert
their lands.
4 CONCLUSIONS
The variables that have the positive and significant
influence on the conversion of cocoa lands into oil
palm in Asahan District of North Sumatra are the
land size, the cocoa pests and diseases attack, and
the farm income. It means that the higher the land
size, the cocoa pests and diseases attack, and the
farm income, then the higher the farmers tendency to
convert their cocoa lands into oil palm. The variable
that has the negative and significant influence is the
cocoa farming experience, which means that
inexperience cocoa farmers tend to convert their
cocoa lands into oil palm. Several factors that lead to
low incomes of cocoa farmers are the low
productivity of cocoa due to pests and diseases
attack, the lack of fertilizers applied, and the age of
the plants that are old. Therefore, it is necessary to
apply superior cultivation technology concerning
seeds, fertilizers, and pests and diseases control to
maximize productivity.
ACKNOWLEDGEMENTS
The research was funded by Universitas Sumatera
Utara through the Non PNBP Fund Fiscal Year 2018
based on the Implementation Contract of Universitas
Sumatera Utara TALENTA Research Fiscal Year
2018 between the Rector and the Chairman of
Universitas Sumatera Utara Research Institute
Number: 2590/UN5.1.R/PPM/2018 dated 16th
March 2018.
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Badan Pusat Statistik, 2017. Luas Tanaman dan Produksi
Coklat Tanaman Perkebunan Rakyat Menurut
Factors Influencing the Conversion of Cocoa Lands into Oil Palm in Asahan District of North Sumatra
35

Kabupaten, 2016 [Land Size and Production of
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APPENDIX
Table 2: The characteristics of the sample farmers.
Characteristics
Average for
cocoa farmers
Average for oil
palm farmers
The farmer's
age (year)
59.391 55.850
The land size
for farming
cocoa/oil palm
(ha)
0.941 1.736
The farm
distance from
farmer's
residence (km)
1.147 1.203
The cocoa 26.000 17.100
farming
experience
(year)
The oil palm
farming
experience
(year)
- 9.300
The farm
income (million
Rp/ha)
14,267,322.804 22,141,642.846
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