The Market Distorting Effects of "Free Land" at Kerinci Seblat National Park

Encroacher dwelling inside KSNP

I just returned from a trip to the field where I visited an area that is experiencing a pretty high rate of forest encroachment.  One of the hypotheses that I had when I started doing my fieldwork is that the park has become a kind of subsidy for the districts around it.  According to this hypothesis, people farming illegally in the park produce commodities that are then sold on the market, which provides income to the district.  At the same time, I assumed that because the park absorbs excess labor, the surrounding districts are under less pressure to spend money for things like job training or other programs that would increase opportunities for those that have none.  Thus I was expecting to find encroachment on the part of small-scale farmers and the occasional industrial plantation that had planted some oil palms or other tree crops in the park on the sly.  I have found both of these, but it is the existence of another driver of forest encroachment that has led me to the idea that I'm going to describe in this post.  In many places around the park where encroachment is rampant I've found that local officials, including district headmen, police officials, army officers, and the higher-ups at the various district offices have actually "invested" in park land; they have opened up land in the park and hired laborers to cultivate it.

The Kerinci Seblat National Park Gold Rush....

Forest encroachment is currently the number one threat to the integrity of Kerinci Seblat National Park.  "Encroachment" means that someone, either an individual or a corporation, clears park land and converts the forest to agriculture.  Thousands upon thousands of hectares of forest land have been lost to encroachment, and the park seems to be powerless to stop the trend.  This has been a problem for a long time, but the trend seems to have increased since regional autonomy laws were passed in the wake of the fall of longtime dictator Suharto in the late 1990s.  These reforms devolved a lot of power to the district governments, which formally had been part of a top-down authoritarian system directed from Jakarta.  Now districts have more control over their budgets and who gets hired to work for the district government.  Also significant is the fact that district assemblies and headmen are democratically elected.

As I mentioned in the introduction, a significant amount of encroachment is indeed done by individuals, and there are some corporations that "cheat" on their concessions (which are often at the edge of the park) by cultivating in the park.  Much of this is because of a lack of enforcement, but to be far the park doesn't have nearly the requisite manpower needed to effectively patrol its 2500-kilometer border.  But I've also found that a great deal of land opened up in the park is "owned" by district officials.  One village secretary in an encroachment-prone area told me as much as 30% of the land was owned by district officials.  These people don't actually work the land themselves; rather they pay laborers to do it.  Sometimes these laborers are other farmers that work the land as a side job, sometimes they are people from outside the region that are attracted to the park because of work opportunities.  These newcomers often become landowners themselves after some time working as laborers.

Much of the park's land is quite fertile because it's never been farmed and the soil is volcanic in origin.  High yields draw people in, but besides that the park land is essentially free in most cases for anyone that wants to open it up.  Thus illegal farmers often experience very high rates of return for short periods of time; I've heard that the standard rule is that people expect a 100% return on their initial investment in a period as short as 2 years.  As you can imagine, with so many local government officials gaining from illegal cultivation, there isn't much incentive on the part of the local government to do anything about the problem.  On the other hand, there is a great deal of incentive to make infrastructural improvements, like better roads, to encroachment areas, because this increases profit by decreasing transport times and costs.  Higher profitability will in turn draw more people to the area to open up more land.  

Encroachment and the Market for Land...

Another phenomenon I've noticed in my fieldwork is that the farmers often use relatively unsustainable, inefficient methods to grow crops.  They tend to use a lot of fertilizer and pesticides, and they really push the land for maximum yields, which in the medium and long term will exhaust the soil making it virtually useless.  There is a lot of erosion as well.  When I ask farmers why they do this they tell me that they don't know any other way to farm.  However there is a small percentage of farmers, maybe 20%, that have actual training in agriculture.  The yields as well as the long-term sustainability of these farmers far out-perform those of their less-skilled neighbors.  This has always perplexed me because this is an agricultural society, and they've been farming for hundreds of years.  Thus I expected that there would be a fairly high level of "traditional ecological knowledge" (TEK) which has been handed down from generation to generation.  But this isn't the case.

I think this is because the land in the park is free, and so it distorts the market value of all the land in the districts causing land to be used in less-than-efficient ways.  If you have to pay for land, you will make sure that you get the most out of it.  But if land is free and readily available, you have less incentive to ensure that the land continues to produce over the long term.  In addition, in most places here the rural population is growing.  Now according to orthodox economic development theory, you would expect to see, in a developing country like Indonesia, people leaving the land to move to urban areas.  They leave because there are no opportunities in the village.  While this influx of people into metropolitan areas comes with its own raft of problems, it provides a ready supply of cheap labor for industrialization and economic development in the city.  And according to the orthodox thinking, while most new city residence will experience a certain degree of misery since they live under overpasses or along train corridors and other marginal places, eventually they will move out of these areas as they integrate themselves into the urban economy.  So it's a stepping stone.  While we observe this dynamic in Jakarta on Java, where all the land has been exhausted, it doesn't seem to be happening to the same degree here on Sumatra.  I think this is possibly because protected forests have assumed at least some of the role cities are supposed to have in the absorption of excess labor.  Instead of moving to the city, people just stake a claim in a national park or other protected area.  I believe this has negative impacts not only for the environment, but from a macroeconomic standpoint for the greater economy in general.

Capital Formation and Development...

From the standpoint of economic development, one key determinant in healthy, growing economies is capital formation.  "Capital formation" refers to "the transfer of savings from households and governments to the business sector, resulting in increased output and economic expansion".  In other words, capital formation happens when surplus income from lots and lots of households is gathered together, forming a pool of money that can be used to invest in businesses.  Theoretically banks play a really key role in this process because people save their money in banks, and then the banks loan out the money to businesses or individual entrepreneurs to invest in some enterprise that will bring greater returns down the road.  So if you have a great idea for a business but don't have enough money to get it started, the idea is that you can go to the bank, convince them to give you a loan, and implement your vision.  Stock markets, at least theoretically, are supposed to operate along the same lines.  Thus according to this minute bit of economic theory, savings rates are very important in economic development.  In fact if you look at analyses of the Japanese Miracle period of development in the 50s and 60s when that country was shattering all previous records for economic growth, or at South Korea and Singapore as more recent examples, you'll find that the traditionally high rates of savings in those countries is considered to be instrumental in the high economic growth rates.


Why is this important for Kerinci Seblat National Park?  Well, I believe there is a strong possibility that the "gold rush" I described above undermines capital formation at the local level.  Since so many people are "investing" in land within the park, there is less capital available to entrepreneurs and other enterprises.  In addition to this, the high rates of return on illegal cultivation skew people's expectations about returns on investment.  Remember, we are talking about a 100% return on investment within 2-4 years.  However, when you invest in a bank the best rate you are going to get is somewhere around 3%, which leads to a 100% return on your investment in a bit more than 23 years.  With the stock market the best you are going to get is 10%, and that's really good, but you only double your money every 7 years at that rate.  So as you can see, it makes more economic sense to invest in park land as long as you can get away with it.  In addition to limiting capital available for economic development, I think the easy availability of free land also probably stymies local creativity; instead of trying to identify a new way to make money people that have a surplus simply open up new land.  At the same time capital formation makes money available to local governments in the form of bonds.  In the US, when a municipality or county government wants to make improvements to say, the sewage system, they probably don't have enough tax revenue to pay for the expensive improvements all at once.  In this case they will often sell bonds to the public, which is essentially a loan.  Thus they can raise a lot of money all at once to pay for infrastructure improvements.  People buy the bonds because there is an interest rate and so they get a return, and because the bonds are issued by the government they feel reasonably confident that there isn't going to be a default.

In Indonesia, at least in the places I work on Sumatra, they don't use the bond system.  Rather to fund projects most district governments, because they aren't able to raise very much money themselves, rely on grants from the central government.  But these funds are directed from the top down; in other words the district government doesn't get to decide what the money is spent on.  I've heard many district officials complain about how funds from the central government aren't consistent with local needs.  And because the money comes from outside the district there is usually a pretty high level of corruption involved (skimming money off the top, inflated budgets, etc).  I think that relying more on bonds would have two positive effects: 1) it would allow the district governments more freedom in deciding how money is spent, and 2) since the debt would be "owned" by local people there would be more accountability in how the funds are spent.  People aren't likely to buy bonds if they know a good bit of the money is going to be wasted on corruption.

This is my current thinking on the structure of encroachment at the park, and though there are a lot of assumptions this model seems to fit all the data I've gathered in the field and everything I've seen and heard while on the ground.  There is a lot going on here, and it will take me some time to really analyze my data to see if I'm right.  In addition, though I have some passing knowledge of everything I've described in this post, much of it, including the parts about capital formation, are outside my expertise as a geographer.  So when I get back to the University of Hawai'i and start writing my dissertation I'll have some work to do to bring myself up to speed on these issues.  But as a working model I think this is pretty good because it goes to show how complex the encroachment problem actually is, and how to really understand it we need to see it in the context of the bigger economic and social picture.  

What is Palm Oil and Where Does it Come From?

Oil palms on school ground in Bengkulu Utara.  Even
the area around the mosque is used for oil palms.

I remember flying into Kuala Lumpur International Airport a few years ago to begin the year of research funded by my first Fulbright award.  From around 25,000 feet the Malay Peninsula appears to be covered by a blanket of what you would assume to be lush, tropical rainforest.  As you descend for landing though, you notice that it's not primeval rainforest, but rather kilometer upon kilometer of a certain type of palm tree which extends as far as the eye can see in all directions.  As you ride away from the airport you notice that the trees are spaced in neat, exact grids, and beneath them grows nothing at all.  This was my first look at the oil palm (Elaeis guineensis).  Last week when I traveled to Bengkulu province on the southwest coast of Sumatra I saw another oil palm-dominated landscape.  Since palm oil grows well in tropical lowlands, the coastal regions around Sumatra have gone over to the tree crop in a big way. 

Palm Oil: The Basics

Photo from FAO oil palm page

Elaeis guineensis originally comes from West Africa, where the fruit of the plant has been used for thousands of years.  During the Age of Exploration (15th-17th centuries) the plant made its way to the New World and from there on to Southeast Asia, where it thrived.  In 1960s Malaysia's Department of Agriculture started doing research on the tree crop which led to widespread cultivation on the Malay peninsula.  Oil palms are mainly grown for their fruit, which yields palm oil.  The tree itself yields 10-40 kilogram bunches of small fruits that kind of look like dates.  Palm oil has a lot of saturated fat, but not nearly as much as coconut oil, which comes from another type of palm.  It's used mainly by the food industry (82.3%) and according to the Rain Forest Action Network it's "used in 50% of all consumer goods, from lipstick and packaged food to body lotion and biofuels" (1).

According to the Food and Agriculture Organization (FAO), by 2008 there were more than 13 million hectares of palm oil in the tropics, a 300% increase since 1961.  Indonesia and Malaysia are the world's leading producers of palm oil (together they produce about 85% of the world's palm oil), and in both of those countries palm oil is on the increase.  It's estimated that since 1990 more than half of the huge increase in palm oil has come at the expense of forests.

What's driving the expansion?  Well, palm oil is extremely profitable, and the prices have increased rapidly over the years.  In 2006 crude palm oil (CPO) fetched $478 per ton, but by 2008 the price had more than doubled to $1,196 per ton.  Palm oil is harvested twice a month after the third year after planting, and so it provides a ready source of cash to villagers that cultivate it, but most oil palms are grown on huge estates operated by large companies using high-yielding clones and efficient processing techniques.  The market for palm oil is tied to other vegetable oils, and so global trends and events directly and indirectly affect the price.  For instance, a substitute for palm oil is soybean oil, which is a major crop in the US.  However, in the mid-to-late 2000s, much soybean land in the US was given over to production of other crops to be used in ethanol (soybeans are used in a lot of foods), and so the demand and hence the price of palm oil increased dramatically.  Increasing incomes in South, East, and Southeast Asia are also driving palm oil production, since most of it is exported (the major importers are China, Europe, and India) for the food processing industries of emerging countries.

Can't See the Forest for the Oil Palms...

As I mentioned in a previous post, palm oil is the crop of choice in the districts of Mukomuko and Bengkulu Utara in Bengkulu province.  I described some of the environmental impacts of the oil palms themselves, including the fact that they are very thirsty trees, and are thought to be lowering the water table in the region due to their high water demands.  This in turn makes the coastal regions more susceptible to erosion, which is a big problem in the region.  But there are also problems with the palm oil business; most of the land in these districts has been granted to big companies, and the local people, who are mainly farmers, are forced to grow their crops further away from the coast in the direction of the mountains.  Though most of them also choose to grow oil palms, the price they can get is lower because the condition of the roads and the distance to market cuts into their profits. 

I started thinking about this a bit more today as I was doing some background reading for a project I might be working on in the near future.  The project is related to the REDD+ (Reducing Emissions from Deforestation and Forest Degradation) framework which aims to reduce greenhouse gas emissions by addressing forest clearance, which is said to account for about 18% of all carbon dioxide emissions.  In theory REDD programs provide support (money) directly to local communities in an effort to get them to stop cutting and burning trees.  The idea is to help them to find alternative livelihoods and enlist them as partners in the fight against global warming.

Anyway, REDD is really big in Indonesia now, and there are a lot of international organizations interested in getting REDD programs going in Indonesia.  Some of these efforts are aimed at slowing the spread of oil palm cultivation, since oil palms, though they are trees, sequester about one-tenth the amount of carbon as an equivalent area of rain forest (26 megagrams of carbon per hectare as opposed to 225 megagrams for an average hectare of rain forest).  The objective of many REDD programs is to alter the cost-benefit calculations of farmers since it's assumed that they make their decisions based on how much money they can make for a particular activity.  Thus in order to convince a farmer not to convert forest to oil palms, you have to make the forest more valuable to him in terms of cash money.  One of the studies I read, though, found that under the current REDD framework, given the way the programs are implemented and funded, it will always be in the farmer's best interest to convert forests to oil palms.  This is pretty discouraging.  You can see accumulated profitability curves in the graph below.  

However, the authors of the study brought up some exceptions.  REDD could be more profitable if the soil is bad, thus limiting the productivity of the oil palms.  Or if the infrastructure (roads) are so bad that they increase the costs of production for the farmers so that it's actually better to join a REDD program.  I immediately began thinking of Bengkulu Utara and Mukomuko, since my rear end still hurts from riding my motorcycle across tens of kilometers of bumpy, gravelly roads.  The people in these districts deal with these conditions all the time, and they complain that it really makes it difficult to make a living.  Nevertheless, villagers are still converting forests to oil palm.  So why not target these areas for REDD projects?  It seems to make more sense in these areas where the economics support the project rather than some other places where you're swimming against the tide.  And if villagers opted to participate in REDD initiatives, it would decrease the pressure on the district government to provide roads to new plantation areas (though it would not relieve the district government of its responsibility to improve the roads to the villages themselves, an area in which they've been terribly remiss).  

I'll likely write more on REDD in the coming weeks if I get more involved in it.  Since it seems to be "the next big thing", there's a lot to talk about.  

Notes

(1) Take this with a grain of salt because the Rainforest Action Network is sometimes wrong about stuff.

References and For Further Reading

There's a lot of information out there on palm oil, but the study I cited in this post is

Butler, Rhett A, Lian Pin Koh, and Jaboury Ghazoul.  2009.  REDD in the Red: Palm Oil Could Undermine Carbon Payment Schemes.  Conservation Letters 2, pp67-73.

Where Does Chocolate Come From? Cacao Cultivation on Sumatra

In the previous two posts I've described some of my experiences from my trip up through the province of Sumatra Barat (West Sumatra) last week.  I made the trip at the request of my very good friend Nat, who is co-founder, owner and manager of Madre Chocolate, a small but growing chocolate company based in Hawai'i.  Nat asked me to visit the cacao farm to check out the operation and take pictures, because he's interested in buying cacao directly from the farmer.  Most chocolate companies buy cacao through a middleman, and so the farmers aren't able to realize the full market price for their product.  One of Nat's goals is to buy directly from the source so that farmers will harvest more of the benefits of their labors.  I'll write more below about Nat and Madre Chocolate, but first I want to talk a little bit about cacao farming and my experience at the cacao plantation I visited.

A Visit to a Cacao Farm

Drawing from botanical.com

Cacao is the primary ingredient in chocolate and comes from the seeds of the fruit of the tree Theobroma cacao, which originally grew in South America.  Cacao was used in a variety of drinks, foods, and medicines in pre-Columbian (before Columbus) America.  It was then taken to Europe by the Spanish.  However, cacao won't grow in Europe because it gets too cold there in the wintertime.  Cacao needs consistently warm temperatures and a lot of water distributed evenly throughout the year (it also has specific soil and shade requirements), so the Europeans transported cacao to their colonial possessions in Africa and Southeast Asia.  Currently Indonesia is the world's second largest producer of cacao (after Cote d'Ivoire in West Africa), producing about 20% of the annual global crop.

While some cacao is grown in large plantations, the farm I visited is relatively small scale.  I was shown around the 8,300 square meter (a little smaller than a football field) farm by Datuak Damo Anso (Pak An), who, along with this plot owns a total of 3 cacao parcels. He told me that the 667 trees in this plot were planted 19 months ago, and that they start to bear fruit after about a year.  Pak An's manager, Rahmat, told me that they grow two different varieties of cacao.  One has red fruits while the other has green; they said the red one is better for making chocolate.  I asked why they don't grow the red ones exclusively and Rahmat told me that the local planters can't tell the difference when they put the seeds in the ground.  They also do grafting, which means that they take a stem from a more desirable variety and attach it to trees that aren't producing as much as they'd like.  Eventually the new stem starts to grow and they cut off the old stem, and so the fruits that are produced are of the better variety.  They also grow "protection trees" (tanaman pelindung) between the rows of cacao trees because cacao likes shade.  Pak An taught me a lot about growing cacao, but to learn more about what happens after the fruit is harvested, I asked Nat.

After the Harvest

I first met Nat 4-5 years ago when he moved to Hawai'i after he finished his PhD in ethnobotany.  We had a mutual friend and Nat needed a place to stay for a couple of weeks while he looked for an apartment, so he crashed at my place.  We quickly became friends.  In addition to his chocolate expertise Nat is an expert forager, and so I learned a lot from him about the wondrous variety of edible fruits and leaves that grow in Hawai'i.  Over the past few years Nat has pursued his dream of starting a company to produce small batches of high-quality chocolate that emphasizes flavor and fairness over profit.  Now Nat's company is starting to take off, and it's been pretty inspirational to see how all his hard work and dedication is starting to pay off.  I emailed Nat to ask him what happens after the fruit is harvested, and he was kind enough to mash out the following steps in making chocolate:

Cocoa butter crystal forms from Chocolate Alchemy.

1. After picking the pods are cracked, the wet seed taken out and fermented for 508 days under banana leaves.  This moves a lot of bitter alkaloid compounds like theobromine and caffeine to the shell out of the seed and develops the flavor of the seed immensely.
2. The seeds are dried in the sun, having to moved in and out of the sun if it rains.
3. The seeds are let sit for 7-30 days.
4. The seeds are then sold usually through a middleman to chocolate makers.  
5. They are then roasted for a short time to bring out the flavor and kill pathogens on the shell.
6. They are then cracked into "nibs" to help remove the shell.
7. They are next winnowed using air flow to completely remove the astringent, bitter shell
8. The shell is sometimes sold for making "cacao tea", as garden mulch, or used in the soap
9. The remaining nibs are refined down to about 10-20 microns between steel or granite rollers into what is called "cacao liquor" although it is not alcoholic at all
10. For some portion of the world's cacao, this liquor is then placed in 10,000 lb heated hydraulic presses to squeeze out the fat (cocoa butter), leaving behind the cacao press cake which is ground up and sometimes alkalized to make cocoa powder the cocoa butter is used by the cosmetics industry and by some chocolate makers.
11. For chocolate bars, the cacao liquor is conched (mixed with low hear) for 1-4 days long with sugar, extra cocoa butter (optional), vanilla (optional), lecithin (optional, an emulsifier that lowers energy use, usually derived from soy so creates allergies for some people), and milk powder only for milk chocolate.  This conching develops and blends the flavors through the Maillard reaction where proteins "caramelize" like the browning of steak on a skillet
12. Once the chocolate reaches the desired flavor it is tempered to grow the right cocoa butter crystal, cocoa better has 6 crystal forms and only 2 have a nice shine and snap, whereas the others are dull and crumbly.  So just like carbon can be coal, graphite, graphene, carbon nanotubes, or diamond (all the same atom, just different arrangements), we want the diamond form of cocoa better.  This is achieved by heating the chocolate to 120 degrees f, cooling to 80 degrees f and heating again to 88-91 f, all while stirring thoroughly.
13. Once the chocolate is tempered, it is poured into molds which are chilled for 10-30 minutes
14. The chocolate bars are removed from the molds.
15. The bars are foiled and paper wrapped
16. Phew!  finally done, 1-2 months after the cacao fruit is picked from the tree!

Nat also told me that most Indonesian cacao isn't used for chocolate making but is instead sold directly to cosmetic companies for making cocoa butter, which is used in skin care products.  Since this doesn't require the cacao to be fermented, the farmers don't normally invest in fermenting facilities, and they only get the basic market price for their product.  One of the by-products of the cosmetic uses is cocoa powder, which is sold to big chocolate companies, who add a bit of cocoa butter and milk to replace the missing fat that is removed when the cocoa butter is taken out.  Thus what you eat when you buy an average chocolate bar is diluted and adulterated chocolate.  In addition this removes a lot of the healthful aspects of the cacao.  

Picture from Madre Chocolate

Nat also told me that Indonesian cacao, if it's fermented properly, has a distinctive hazelnut flavor that isn't found in cacao from other countries.  He's not sure why this is the case; it could be the soil, the fermentation microbes, or something in the way the farmers grow the cacao.  Nat is hoping to work with the farmers to bring out this unique flavor.  As I mentioned previously, part of Nat's (and Madre Chocolate's) philosophy is to make the farmers a more integral part of the production operation, which includes increasing their participation and ensuring they reap more of the rewards for their work.  In Nat's words:

Another part of chocolate making that we're trying to change is that most cacao growers never taste the chocolate made from their cacao, so the feedback loop is never closed and they don't know how changes in their growing and fermentation effect the final chocolate.  We try to send back a bar of chocolate made from the growers' chocolate so they can see the effects, and where we've done this in Mexico, Hawai'i, and Indonesia, we've seen the growers eyes light up with understanding when they taste it.

I had a really good time with Pak An learning how cacao is grown.  The cacao farm is located in the heart of the Minangkabau culture region of Indonesia, so I suggested to Nat, that if he does end up sourcing cacao from An that they call the resulting product the "Minangkabar" (1).  I even took the picture below so that he can use it on the wrapper.  Note the cacao tree in the foreground.  We'll see if Nat realizes the brilliance of my marketing strategies.  In the mean time, if you want to learn more about Madre Chocolate, where to get it, or the chocolate-making classes they offer, click here.  It's good stuff.  

Notes 

(1)  Which also might be a good name for a newspaper or gossip show....

Palm Oil Plantations Vs. Villagers on Sumatra

Picture from here

Over the past month or so two land disputes on the island of Sumatra have gained a significant amount of media attention.  The first case gained coverage worldwide as farmers in Lampung province alleged that at least 32 farmers have been murdered by palm oil companies since 2008.  The second case so far has been limited to the regional papers and is still unfolding.  In Jambi province villagers have repeatedly attacked the base camp of a palm oil plantation, claiming that they have been wrongfully evicted from their land by the company.  In the most recent attack the villagers destroyed heavy equipment, set fire to buildings, and severely injured (one subsequently died) personnel from the company.  In my mind these two incidents illustrate two separate problems related to land tenure on Sumatra.  I'll begin with the first case.

Case #1: Mass Killings in Mesuji

Graphic from Jakarta Post

On December 14, 2011 several residents of the Mesuji region of Lampung (the Southern part of Sumatra) journeyed to Jakarta seeking a meeting with members of the House of Representatives.  They were accompanied by a retired army general, who served as a kind of spokesperson for the group.  The group claimed that since 2008 dozens of farmers have been killed (hundreds injured) by private security forces working for two palm oil companies: PT Sumber Wangi Alam and PT Silva Inhutani.  Clashes between the companies and the villagers stemmed from conflict over land; the villagers claimed rightful ownership while the companies insisted they had been granted use rights by the government.  The group showed video of gruesome killings, including beheadings and mutilation of bodies, allegedly perpetrated by the security forces.  The accusations sparked outrage within the government and across the country, and President Susilo Bambang Yudhoyono promised to launch a full-scale investigation into the issue.

Poster from here

Since the story initially broke a significant amount of confusion has emerged surrounding the land conflict.  One of the most embarrassing things that has come out concerns the origin of the videos used.  Close examination reveals that they were most likely made in the Pattani region of southern Thailand, where separatists have been locked in a bitter struggle with government forces.  No one disputes that killings actually took place, though.  The main point of contention lies in identifying the aggressors; as mentioned in the previous paragraph the villagers claim they are the victims of brutality perpetuated by private security forces, whereas the companies claim that the villagers have ambushed their work camps, killing several personnel.  The team dispatched by the House of Representatives to investigate concluded that at least 9 people were killed in April (1).  But there is still a lot of back and forth about who is to blame.

This whole conflict boils down to the control of land, which is a pretty big issue in Indonesia.  Land "ownership" is complex problem and can be understood in a number of ways, but to really get to the heart of it we need to understand a little bit about land in Indonesia.  Under the Dutch, who controlled most of the territory that would become Indonesia, a western system of ownership (domein) was introduced.  In many places this system of private and state ownership was in conflict with local systems of management, which as a general rule are more communal in nature.  Moreover, across the 17,500 islands of the archipelago there is tremendous variability in local systems of land management, but the colonial authorities replaced these with a one-size-fits all simplified system.  When Indonesia became independent in 1949 the new leaders inherited the Dutch system.  During the early years of the Republic some minor reforms were enacted, but the most significant move to codify land use regulations was contained in the Basic Agrarian Law (#5/1960) which outlined the main forms of tenure recognized across the country:

1. Hak Milik (right of ownership): this is what most people think of when they think of "land ownership"; there is no time limit and land can be transferred and mortgaged
2. Hak Pakai (right to use): applies to usufruct rights but doesn't imply ownership of the land.
3. Hak Guna Usaha (right to exploit): this arrangement was established mainly so that extraction companies (mining, plantations, etc) could use government land for a certain period of time.
4. Hak Guna Bangunan (right to build): means you can construct structures on the land, but not own the land.

Though there were token efforts to incorporate traditional (adat) systems into the overall legal framework stalled when Suharto came to power in 1967.  In fact, with the passage of the Basic Forestry Law (#5/1967) the national government, in the form of the Ministry of Forestry, granted itself ownership and the right to manage all land classified as "forests", which amounted to about 75% of the country.  In "forest" areas this law replaced the Agrarian law and gave a huge amount of power to the central government while at the same time marginalizing virtually every local user group and system in the country.  In other words, even if people had been working land for generations, the central government could (and very frequently did) take the land and award it to some mining, plantation, or logging company.  Any opposition was harshly put down by the army and national police. 

When Suharto fell in 1998 so did his authoritarian system of control.  Power swung back to district (kabupaten) governments, and people were emboldened to reassert traditional claims over land and other natural resources.  However, adat systems, though recognized at some levels, have yet to be integrated into the national system of land titling and tenuring.  Instead what has happened is that the formal and adat systems exist in parallel, with adat rules being subservient to formal rules.  Moreover, in order to be recognized, an adat system has to be recognized by the government, and most haven't reached this level.  This has created a significant amount of conflict, including the Mesuji case.

Complicating this is the fact that the system of land titling in Indonesia is fairly byzantine.  It is difficult and expensive (2) to get land ownership registered with the government, and so most people don't do it.  Over the past 40 years the national land authority (BPN, Badan Pertanahan Nasional) has registered about a third of the country's privately-owned land, but there are still approximately 60 million unregistered.  At the current rate of about 1 million registrations per year, it will take another 60 years to finish the job.  

The upshot of all this confusion is that there's really no good way to settle land disputes.  District governments grant usage rights to companies without regard to local claims in an effort to increase revenues.  Villagers are underserved by the system and are frequently in the dark about the legalities of land as well as district development plans.  No one really trusts the courts since they are open to outside manipulation.  

Case #2 Villagers vs. Oil Palm Developers in Jambi

Palm oil picture from here

The second example comes from Tebo district in Jambi province, where as many as 300 villagers last week rampaged though an oil palm camp belonging to PT Lesari Asri Jaya (3).  Newspaper reports describe the attackers as "encroachers" (perambah), which to me indicates a bias towards the company.  Other villagers prevented the police from reaching the seen of the attack.  The dispute is over claims to an area totaling about 60,000 hectares.  The difference between this case and the Mesuji case, though, is that the violence has been perpetrated by "pendatang", or people that have recently settled in the area.  According to Tebo district authorities the villagers come from other districts and acquire land through illegal transactions with locals.  This is a common occurrence on Sumatra; the group encroaching into Kerinci Seblat National Park in Merangin district, which I described in a previous post, were also from other districts and provinces.

This second case illustrates a dynamic that seems to have received less attention.  In Central and South Sumatra, at least, there is a phenomenon whereby local people sell land to outsiders.  This happens in protected forests and national parks.  What motivates local people to do this is unclear; they may view the land as rightfully theirs or they may be motivated by shear opportunism.  The reasons aren't really important for this discussion; what is important is that there are several enabling factors that allow this to happen.  The first is that in many places there is little enforcement or patrolling, so it's relatively easy to squat on land and be reasonably certain that nothing is going to happen to you.  another enabling factor is the lack of recorded titles to land; land is frequently bought and sold without survey and paperwork here.  A third enabling factor is the existence of a ready market of people that are willing to move to a new place and buy the land on the word of the villagers alone.  This market exists, according to many sources, because there are no other opportunities for the people.  What makes more sense to me, however, is that this movement into "frontier areas" is the result of all of the previously described land problems taken together.  

Cases like these are frequent in Indonesia.  USAID estimates there are at least 1500 major land conflicts that have yet to be settled.  The cases seem to be increasing since the fall of Suharto, which has in many cases created a power vacuum in which various local interests struggle to gain control over natural resources and land.  Though there are many capacity and advocacy NGOs working in the field to improve the situation, the recent violence shows that these issues are far from being resolved.

Notes

(1)  According to one account, tensions between PT Sumber Wangi Alam and the villagers came to a head when a grandson of a village leader was beheaded by security personnel for attempting to confiscate the company's harvest.  Several hours after the murder, approximately 200 villagers descended on the plantation, killing 5 SWA workers. 

(2)  According to USAID, the cost of registering land averages out to about 11% of the total value of the property.  This is three times greater than the average cost across Southeast Asia.  

(3)  "PT" indicates a corporation.