MARKET DEVELOPMENT
Editorial: Capping Land Ownership
Editorial: Capping Land Ownership
08/04/2013 (Jakarta Post) - The Indonesian Palm Oil Association (GAPKI) is expected to oppose the government’s plan to cap plantation companies’ land ownership at 100,000 hectares (ha) nationwide.
The point of argument raised by the association’s secretary-general Joko Supriyono makes economic sense — such a restrictive policy would slow down the expansion of oil palm plantations, which are labor-intensive businesses and contribute greatly to the country’s exports.
Indonesia, already the world’s largest palm oil producer with an annual output of over 26 million tons, has been expanding its oil palm estates by 200,000 ha a year, which are mostly developed by large companies.
However, economic development is not only a matter of increasing output without due respect of the environments and equitable distribution of income and assets.
In fact, the experiences of many countries have shown that economic development that entirely neglects the principle of equity is neither socially nor politically sustainable in the long term.
Allowing plantation expansion to continue at its current pace would not only endanger the natural environments but would also widen social inequality and could sow the seeds of social conflict if the expansion is predominantly done by big companies — as has happened over the past 15 years.
Look at how land conflicts between local people and big companies have increasingly occurred in various provinces, especially because most provincial administrations have not completed their spatial master plans.
The government plan (through the Agriculture Ministry) to issue a regulation is timely to prevent social conflicts from escalating due to a widening inequity in land (asset) ownership.
This simply revisits a similar policy included in the bill on plantations that was proposed in 2003. However, the articles that set the maximum plot of land for a plantation company at 20,000 ha in one province and 100,000 ha nationwide were removed from the final draft passed in mid-2004. The government, therefore, should act decisively when setting the land ownership limit.
Of upmost importance is that the new regulation should not be made retroactive because many estate companies now own more than 100,000 ha of land. Furthermore, the regulation would not be beneficial to the people if it only set policies on land ownership.
The new regulation, therefore, should also stipulate rules on the business ties between big plantation companies and smallholders under the concept of nucleus estate-and-smallholder (NES) program, in view of the weak bargaining position of farmers.
The NES concept, whereby big businesses and their plantations act as the agent of development for smallholders around them, is the best way to develop new plantations in socially and environmentally sustainable manners.
Certainly, the pace of developing plantations under such a concept would not be as high as the one conducted entirely by big companies but the former method is more socially, politically and environmentally acceptable.
A good regulation is supposed to primarily serve and protect the interests of the general public, in this case the farmers and smallholders.
The new policy measure, therefore, should be designed to empower smallholders and protect the interests of tribal-land owners from greedy investors and corrupt officials.
The point of argument raised by the association’s secretary-general Joko Supriyono makes economic sense — such a restrictive policy would slow down the expansion of oil palm plantations, which are labor-intensive businesses and contribute greatly to the country’s exports.
Indonesia, already the world’s largest palm oil producer with an annual output of over 26 million tons, has been expanding its oil palm estates by 200,000 ha a year, which are mostly developed by large companies.
However, economic development is not only a matter of increasing output without due respect of the environments and equitable distribution of income and assets.
In fact, the experiences of many countries have shown that economic development that entirely neglects the principle of equity is neither socially nor politically sustainable in the long term.
Allowing plantation expansion to continue at its current pace would not only endanger the natural environments but would also widen social inequality and could sow the seeds of social conflict if the expansion is predominantly done by big companies — as has happened over the past 15 years.
Look at how land conflicts between local people and big companies have increasingly occurred in various provinces, especially because most provincial administrations have not completed their spatial master plans.
The government plan (through the Agriculture Ministry) to issue a regulation is timely to prevent social conflicts from escalating due to a widening inequity in land (asset) ownership.
This simply revisits a similar policy included in the bill on plantations that was proposed in 2003. However, the articles that set the maximum plot of land for a plantation company at 20,000 ha in one province and 100,000 ha nationwide were removed from the final draft passed in mid-2004. The government, therefore, should act decisively when setting the land ownership limit.
Of upmost importance is that the new regulation should not be made retroactive because many estate companies now own more than 100,000 ha of land. Furthermore, the regulation would not be beneficial to the people if it only set policies on land ownership.
The new regulation, therefore, should also stipulate rules on the business ties between big plantation companies and smallholders under the concept of nucleus estate-and-smallholder (NES) program, in view of the weak bargaining position of farmers.
The NES concept, whereby big businesses and their plantations act as the agent of development for smallholders around them, is the best way to develop new plantations in socially and environmentally sustainable manners.
Certainly, the pace of developing plantations under such a concept would not be as high as the one conducted entirely by big companies but the former method is more socially, politically and environmentally acceptable.
A good regulation is supposed to primarily serve and protect the interests of the general public, in this case the farmers and smallholders.
The new policy measure, therefore, should be designed to empower smallholders and protect the interests of tribal-land owners from greedy investors and corrupt officials.