Potential of Palm oil's production to alleviate poverty depends on where it's grown, claim researchers.
According to the study published in the Journal of World Development unsustainable livelihoods, socioeconomic inequality and environmental issues remain major challenges in the oil palm industry.
However, the expansion of oil palm production in remote forest areas requires careful planning and evaluation if the communities are to benefit.
Earlier improved socioeconomic welfare was found where the villages already had a market-based economy, typically in areas with low forest cover.
The opposite was found in remote villages relying on subsistence-based livelihoods and with higher forest cover, as well as in more recent palm plantations.
Overall, and regardless of location, villages saw slower improvements to social and environmental well-being if they grew oil palm compared to those that didn't.
Lead researcher, Dr. Struebig said: 'The research tells us that the potential for oil palm to alleviate poverty depends crucially on the social and environmental context of where it's grown. Countries should think twice about expanding agriculture in forested regions if they are to maximise benefits to local people'.