Tropical peat swamp forests retain large carbon stocks and support unique biodiversity, but clearance and drainage for agriculture have resulted in fires, carbon emissions and biodiversity losses. Initiatives to re-wet cultivated peatlands may benefit biodiversity if this protects remaining forests from fire and agricultural encroachment, but there are concerns that re-wetting could reduce yields and damage livelihoods, as relationships between drainage, on-farm biodiversity, and crop yields have not been studied. We examined oil palm fruit yields and bird diversity on 41 smallholder farms in Jambi (Sumatra, Indonesia), which varied in drainage intensity (12-month mean water table per plot from August 2018 to August 2019: −52 to −3 cm below-ground). We also compared farm bird diversity with a neighbouring area of protected peat swamp forest (11,000 ha, 21 plots; mean water table per plot −3 to +15 cm). Bird species richness (3–18 species per plot), species composition and oil palm yields (4.5–19.2 t fresh fruit bunch ha−1 year−1) varied among farms, but were not detectably affected by water table depth, although ground-level vegetation was more complex on wetter farms. Bird richness in oil palm (mean = 10.3 species per plot) was <50% of that in forest (26 species per plot), and only 3 of 35 conservation-priority species found in forest were recorded in oil palm. Synthesis and applications. Tropical peatlands in Indonesia have been drained to allow farmer access and improve farm yields, but we found no trade-offs between drainage depth, yields and bird diversity on smallholder oil palm farms in our study landscape within the studied range of drainage depths. Current restoration initiatives to re-wet peat may benefit farmers by reducing fire risk, without affecting yields. Wetter farms had increased understorey vegetation complexity, but this did not affect bird diversity, so we find no evidence that re-wetting improves on-farm biodiversity. However, on-farm fire reduction efforts in cultivated peatlands, including re-wetting, will be vital for reducing the risk of fires escaping into nearby forests, which contain unique and diverse bird species assemblages. Protection of remaining peatland forests from fire and clearance is key for biodiversity conservation, and for providing a source of seed dispersers and genetic material for future forest and landscape restoration efforts. Restoration of more biodiversity-friendly land covers will improve landscape permeability and help conserve species and the ecosystem services they deliver.
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