The peneplain of Sumatra is characterized by six major landuse systems, those are shifting cultivation, non-timber forest products collection, rubber plantation, transmigration and shifting cultivation, large scale logging, and large scale plantations of palm oil and timber. Those activities involves various stakeholders, both individual and communities for subsistence level also large scale commercial enterprises. The palm oil and timber plantation are among prominent landuse system able to provide economical return significantly to the region. This has resulted to constant (and continous) conversion of tradisional landuse system into large scale plantation of these two commodities. Furthermore, the palm oil and timber plantation also have similar characteristics in term of technology to cultivate, labor absorbtion, and its contribution to regional development. This has resulted to competition on land utilization between two commodities. Therefore, there is a need to justify further in term of benefit distribution between these two large scale plantation. This study is a part of other six major landuse system study to support the program study of Alternative to Slahs and Burnt (ASB) conducted by ICRAF (International Centre for Agroforestry Research). This study tries to compare profitability of large scale plantation between palm oil and timber plantation. The data are collected from two companies in Riau province, during periode of September to November 1997. The result shows competititveness between palm oil and timber plantation beside its economical efficiency of each commodity as a result of policy applied to each commodities.
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