This paper is concerned with rising social and economic inequalities on smallholder oil palm blocks in three oil palm growing regions of Papua New Guinea. It examines resource allocation amongst co-resident households to better understand status hierarchies that control income to livelihood strategies such as education. Oil palm Land Settlement Schemes in Papua New Guinea have experienced considerable population growth since their inception in the late 1960s/70s. In Hoskins, West New Britain Province, population density has risen from approximately 7 people per block in the early 1970s to an estimated 18 people per block in 2010. These numbers are high considering the average block size is only 6.07 ha. It is now common for three generations and two or more families to share the resources from a single oil palm block.

The research results indicate that population pressure is leading to conflict between households over resources and increasing social and economic stratification between co-resident families. Inequality is most evident by the fact that children from families with no access to oil palm income have significantly lower education levels than those who regularly receive oil palm income. These results support the argument that not all families co-resident on smallholder blocks participate equally in oil palm production or share the income from oil palm equitably. Furthermore, smallholders on densely populated blocks have lower education levels than blocks with smaller populations and are more likely to pursue more individualised harvesting and production strategies, which are typically less productive than cooperative labour strategies. Current and future education levels of smallholders are critical development issues as educated farmers have a greater ability to adopt new agricultural practices and technologies. Beyond agricultural productivity, education is an important goal in itself, for example, the education of women is known to be one of the most effective strategies in stopping inter-generational poverty.