The development of oil palm plantation has been playing important roles in the economic development, which in turn increasing the income of rural community in East Kalimantan. However, this development will trigger the conversion of land function from forest and farming lands to oil palm plantations. This research applies unit analysis of sub-district/village in the region of East Kalimantan Province using pixel format (1 pixel was equivalent to 1.000 ha) through the process of geospatial model during the research period from 2000  to 2011.

            Secondary data were used in the process of regression model analysis of using OLS (Ordinary Least Square) and Probit Estimation to estimate the land use and the income of oil palm farmers. The results of model  shows that (1) land use for oil palm plantation, has a significant positive correlation with variables, deforestation and the area of oil palm plantation, but the area of forest land cover  has a negative correlation. The result also shows that there was a negative correlation between deforestation variable and forest variable. This was because not all of the lands used for plantation were derived from forest lands. (2) In terms of probit panel estimation model, it was found that there was a positive and significant effect of production oil palm plantation on expansion of oil palms and (3) income of households that have  oil palm plantations.

Forest land use and development needs to be controlled by taking economic factor into account; otherwise, it will give a negative impact on the income of the community.