Indonesia’s palm oil plantation is dominated by three actors. Among three actors, the productivity of smallholder farmers has the lowest productivity. This study aims to analyze the value of technical efficiency and factors affecting the technical inefficiency of palm oil plantations in Indonesia by using the stochastic frontier analysis based on the translog production function. The data used in this study are taken from the Central Statistics Agency (Agricultural Business Household Income Survey) in 2013. The number of samples used was 14,367 farmers. The results revealed that the average value of technical efficiency (58.32%) is still far to reach its optimal, showing that there is still to increase in the efficiency of palm oil plantations in Indonesia. The production function suggests that increasing the number of trees can help to increase the number of outputs. To enhance the technical efficiency, education, age, planting system, seed quality, extension service, and plasma farmer are the significant factors.

Indonesia has become the country with the largest palm oil production. However, the level of productivity of oil palm per land in Indonesia tends to remain stagnant. The main objective of this study is to evaluate oil palm lands of smallholders that experience land inefficiency. In analyzing land efficiency, this study used cross-section data obtained from Statistics Indonesia (BPS). This study uses an input distance function approach with stochastic frontier analysis tools. Our estimation results found that on average, smallholders oil palm plantations face land inefficiency. The land inefficiency of smallholder oil palm plantations is not proportional to the negative impacts it has caused. The intensification of oil palm plantation land is one of the ways to reduce the rate of deforestation and optimize available land. Land intensification can be done through the selection of potential lands, renewal programs for oil palm trees, supporting facilities and infrastructure, and plantation technology development.

In trade-environment literature, increasing concern has been more focused on the goods trade and environment nexus with less focus on services. To this end, within the context of the Environmental Kuznets Curve (EKC) hypothesis, this study explores different channels through which services trade affects environmental pollution (CO2). The study decomposed the effect of trade into the scale, technique, and composition effects in a panel of 47 African countries. Finding from the dynamic GMM estimate revealed that the scale effect increases CO2 emissions and degrades the environment. The technique effectively reduces CO2 emissions which is only temporary as there is evidence of N-shaped nexus between GDP and CO2 emissions. Moreover, trade statistically and significantly increases CO2 emissions and there is no evidence of a turning point in the trade and CO2 emissions nexus. Energy and composition effects were found to increase emissions. Furthermore, the result indicates the existence of the pollution haven hypothesis (PHH) and there is no robust evidence supporting the factor abundance effect. There is also evidence of the harmful mediation effect of trade through energy intensity as it increases CO2 emissions. In line with the study findings, policy recommendations were made to mitigate the harmful environmental effect of growth and services trade in African countries.