From Digging to Planting: A Sustainable Economic Transition for Berau, East Kalimantan

The report analyzes the economic fragility of Berau, East Kalimantan, caused by its heavy reliance on coal mining, which contributes over 60% of its GRDP. While the district is shifting toward palm oil, the study warns that mono-cropping palm oil risks replicating the same commodity-dependency trap. It recommends a transition plan based on increasing productivity and efficiency over land expansion, diversifying into high-value crops like pepper and cocoa, and developing downstream processing refineries to capture added value. Additionally, the report suggests optimizing government revenue through 'Own-Source Revenue' and implementing innovative ecological fiscal transfer mechanisms to reward sustainable land management.

• Berau's economy is highly vulnerable to price shocks due to its extreme dependence on coal, which regularly accounts for more than 60% of the district's Gross Regional Domestic Product (GRDP) and provides about 24% of government revenue via royalties.
• The rapid expansion of palm oil in Berau has led to a lack of economic diversity, with palm oil now occupying roughly 90% of the planted area and 31% of plantation land, while other estate crops like coconut, rubber, and cocoa have declined.
• Berau's palm oil productivity is significantly lower than national benchmarks; Fresh Fruit Bunches (FFB) yields are under 17 tons/ha compared to the national best practice of 22 tons/ha, and Crude Palm Oil (CPO) yields are 2.0–2.8 tons/ha against a national average of 3.5 tons/ha.
• There is a significant opportunity to increase economic value by establishing local refineries, as Berau currently lacks a single refinery and must export raw CPO to eight refineries across Indonesia and Malaysia.
• Diversifying into other estate crops could be more profitable than palm oil; specifically, pepper production value per hectare has averaged more than three times that of palm oil FFB smallholders and nearly double that of private companies.
• The growth of the palm oil sector has not translated into significant local government revenue, as only 2% of the total tax contribution from the sector returns to Berau via the Revenue Sharing Fund (DBH).
• The report suggests implementing ecological fiscal transfer mechanisms, such as the Ecology-based Provincial Budget Transfer (TAPE) and Ecology-based District Budget Transfer (TAKE), to reward the protection of forests.
• Jurisdictional RSPO certification for the entire district could increase added value by an estimated IDR 31—158 million per year, leveraging global price premiums of 1–4% for certified sustainable palm oil.

APA

Mafira, T., Muluk, S., & Conway, S. (2019). From Digging to Planting: A Sustainable Economic Transition for Berau, East Kalimantan. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/08/From-Digging-to-Planting.pdf

Chicago

Mafira, Tiza, Saeful Muluk, and Sarah Conway. From Digging to Planting: A Sustainable Economic Transition for Berau, East Kalimantan. Climate Policy Initiative, 2019. https://www.climatepolicyinitiative.org/wp-content/uploads/2019/08/From-Digging-to-Planting.pdf.

Wikipedia

{{cite report |last1=Mafira |first1=Tiza |last2=Muluk |first2=Saeful |last3=Conway |first3=Sarah |title=From Digging to Planting: A Sustainable Economic Transition for Berau, East Kalimantan |publisher=Climate Policy Initiative |date=August 2019 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2019/08/From-Digging-to-Planting.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mafira2019from, author = {Mafira, Tiza and Muluk, Saeful and Conway, Sarah}, title = {{From Digging to Planting: A Sustainable Economic Transition for Berau, East Kalimantan}}, institution = {Climate Policy Initiative}, year = {2019}, month = aug, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2019/08/From-Digging-to-Planting.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }