Over the past few decades, some countries in Asia have been more successful than others in addressing poverty and malnutrition. The key question is what policies, strategies, legislation and institutional arrangements have led to a transformed agricultural sector, effectively contributing to poverty alleviation and addressing malnutrition. The great majority of national policymakers within and outside the Asia-Pacific region are keen to understand the causes of agricultural development and transformation in successful countries in Asia.

Participation of actors is essential for achievement of the United Nation’s (UN) Sustainable Development Goals (SDGs). With respect to sustainable agriculture the UN has introduced a collaborative framework for food systems transformation encompassing: 1) food system champions identification; 2) food systems assessment; 3) multi-stakeholder dialogue and action facilitation; and, 4) strengthen institutional capacity for food systems governance. The last two actions are the focus of this thesis.

Structural transformation of agriculture typically involves a gradual increase of mean farm sizes and a reallocation of labor from agriculture to other sectors. Such structural transformation is often fostered through innovations in agriculture and newly emerging opportunities in manufacturing and services. Here, we use panel data from farm households in Indonesia to test and support the hypothesis that the recent oil palm boom contributes to structural transformation. Oil palm is capital-intensive but requires much less labor per hectare than traditional crops.