FEASIBILITY OF INTEGRATING SHEEP AND CROPS WITH SMALLHOLDER RUBBER PRODUCTION SYSTEMS IN INDONESIA

Diversified production systems are considered important tools for stabilizing the income of smallholder rubber producers in Indonesia. Based on empirical data collected from smallholder rubber producers in the Nucleus Estate Smallholder (NES) development project, estimations were made of the economic feasibility of integrating sheep and selected crops into smallholder rubber production plantations. The dynamic optimization procedure is used as an evaluation technique. This study finds that integration of sheep and crops into smallholder rubber production is economically feasible, particularly for those who utilize family labor for hand harvesting grass and grazing sheep. Integrating sheep alone increases the net present value of future income by 20%. The combination of sheep and soybeans with smallholder rubber production increases the net present value of future income by 38%.