Oil-palm yields in diversified plantations: Initial results from a biodiversity enrichment experiment in Sumatra, Indonesia

•We analyzed oil-palm yield effects in a biodiversity enrichment experiment.•Yields inside enrichments plots and of adjacent palms increased significantly.•Yield increases compensated for oil-palm thinning associated with the experiment.•Our results may help reconcile ecological-economic functions in oil-palm systems. The expansion of oil-palm plantations threatens tropical biodiversity and ecosystem functioning. While the expansion of oil palm has been associated with positive welfare effects, the strong dependence of local livelihoods on a single crop species also entails social and economic risks. Alternative management strategies could be important in mitigating negative ecological and socio-economic consequences. Yet, there is little empirical knowledge on the biological effectiveness and economic viability of such approaches. To bridge this gap, we experimentally established tree islands in varying sizes (25, 100, 400, and 1600m2) within a conventional oil-palm plantation and reduced the oil-palm density on these islands by thinning. After two years, we found enhanced yields per oil palm inside and also directly adjacent to the experimental plots. Estimating the net yield changes including opportunity costs and spillover effects for different sizes of tree islands, we found evidence that − in particular for larger tree islands − yield gains at least compensated for the reduced number of oil palms. Though these effect on yields may change as trees grow taller, the results obtained during the early phase of tree island establishment are promising in terms of identifying sustainable management options for oil palm that reconcile ecological and economic functions.