Journal of Contemporary Issues in Business and Government Vol. 27, No. 1, 2021 P-ISSN: 2204-1990; E-ISSN: 1323-6903 https://cibg.org.au/ 1221 Determinants of Oil Palm Farmers’ Welfare in Aceh, Indonesia Muhammad Haykal 1 , Saifuddin Yunus 2 1 Faculty of Economics and Business, Universitas Malikussaleh, Lhokseumawe, Indonesia 2 Sociology Department, Universitas Malikussaleh, Lhokseumawe, Indonesia Corresponding author: saifuddinyunus@unimal.ac.id Abstract: This study examines the determinants of the welfare of oil palm farmers in Aceh, Indonesia. The main focus of this study is on the current price of oil palm, whether it affects the level of welfare of oil palm farmers or not and what efforts the government has made to improve the farmers’ welfare. This research applies quantitative descriptive approach. The number of samples was 70 Aceh farmers in 24 districts in east Aceh. The selected famers who have been designated as farm owners and workers. The sampling technique used is judgment sampling. The research data collected by using a closed questionnaire. The results of the study found that when the price of palm oil is unstable, farmers must be able to process by-products in an effort to maintain the welfare of their families. In testing the two models, the same results were obtained, this cost could not be controlled by the farmers, especially the maintenance costs using industrial processed products such as fertilizers and pesticides. Therefore, the government must further intensify the economic empowerment programs for oil palm farmers. More programs for people are still required. During the Pandemic Covid-19, farmers only relies on the sale of fresh fruit bunches (FFB) at fluctuating prices which decreases farmers' income thus making them unable to improve their welfare. Keywords: determinants, government, welfare, and oil palm farmers 1. INTRODUCTION Indonesia has become a major producer of palm oil in the world with a production output of 20 million tons of Crude Palm Oil (CPO) with an average growth of 10-12%. This condition has provided economic benefits to agro-industrial companies and several millions small land owners (Fricke, 2009). The role of the palm oil industry in Indonesian economy is substantial since it has become one of the leading sectors and a strategic state industry that is able to absorb a workforce of more than 17.5 million people and to provide welfare of 2.3 million small farmers (Laoli, 2020). Thus, the role of the oil palm plantation sector is supposedly significant on reducing the poverty rate in Indonesia. However, current level of welfare for oil palm farmers is still low even though Indonesia is the largest producer and exporter of palm oil in the world. Independent oil palm smallholders have difficulty accessing markets, capital, skills and technology. Other constraints come from legality of plantation land (Saifuddin et al., 2017). Community empowerment in the plantation sector can be a solution to reducing poverty but requires a structural approach. Until March 2020 the poverty rate in Aceh was still 14.99% (Ria, 2020). The plantation sector is a top priority in Aceh Province. At present, the total area of oil palm plantations in Aceh is in the ninth position of national level oil palm