Indonesian farmers: exploited from all angles


A report titled "Democracy is still buried", compiled by 11 Indonesian human rights organisations and alternative research groups, was released last month by the Jakarta Legal Aid Foundation. As well as condemning widespread corruption and lack of human rights, as we reported last week, the document outlines the situation of farmers and the rural population. MAX LANE continues his report.

Seventy per cent of the Indonesian population lives in the village, and 57% — an estimated 20 million families — depend on the agricultural sector for their livelihood.

But the agricultural sector is less and less able to absorb the growth in the labour force, and industry is estimated to be able to absorb only 12 %. This provides a massive pool of surplus labour which explains why Indonesia has the lowest labour costs in Asia. The minimum wage in the textile industry in Indonesia is between Rp800 and Rp2100 (60 cents to $1.40) per day, compared to $38 in Japan, $5 in Thailand and $3.50 in Manila.

The report criticises the "floating mass" policy, which bans political activity in the villages. Despite this policy, the report documents one case in a village in East Java where the local leadership of GOLKAR, the government party, implemented a compulsory levy on all village officials. The report goes on to quote an analysis by a university academic commenting on the decline in the autonomy and integrity of village government.

Thousands of rural villages all have an administration. Although the village head is supposed to be elected, most appointments are the result of a decision further up the ladder of provincial administration. There are also military posts in most villages. This makes the example of the GOLKAR levy fairly typical.

Other writings indicate that villagers are being hit with a hundred and one fees. You need a new ID card — you pay. An authorised copy of your birth certificate — you pay. A letter of good character so that you can leave your village — you pay. Nearly every act that a person plans requires half a dozen different documents from the authorities. For the hard pressed Indonesian farmer, eking our a living on a tiny plot of land, all this mounts up to a heavy burden.

Corruption in cooperatives

One hangover from the struggle for independence and the more

progressive policies of previous governments is the existence of a network of government-sponsored "cooperatives". These, however, have long ceased to be genuine cooperatives.

The report cites the leading Indonesian academic economist, Mubyarto, as explaining that these Village Unit Cooperatives (KUD) have long since become simply an extension of the government bureaucracy.

Numerous cases of corruption in the KUD have been reported in the Indonesian press. The total figures amount to hundreds of thousands of dollars.

The central government allocates funds to cooperatives to provide credit to farmers. However, the cooperatives invent fictional recipients of credit, whose debts are later written off as bad. In other cases, a portion of the money was simply used as an "income supplement" by local officials. Other examples were of money being loaned to third parties at more lucrative rates than could be paid by farmers.

A new trend has been for the KUDs to use their money to help private companies start agribusiness enterprises. The reports cites, for example, the case of a Jakarta-based company working with KUDs in six villages to establish a 10,000 hectare maize and soya bean farm.

Land ownership

The issue which has resulted in the most protests by farmers over the last year or so has been land ownership. There are both millions of landless farmers in Indonesia (who have not yet raised their voices) and millions of farmers with very small plots of land, ranging from less than a quarter of a hectare up to two hectares. Many small farmers, for whom their land is their only possible stable source of income, have had their land taken from them without any real compensation.

The report documents many such cases. In the West Java district of Sukabumi, the farmers of Gunung Batu village had to surrender 331 hectares to a private company setting up a coconut plantation, with no real compensation. In the East Java district of Jember, farmers had to surrender 372 hectares to another plantation company. The expropriation was justified on the grounds that the economy required more foreign exchange from exports.

In South Sumatra, 4114 families had to surrender their land, totalling 10,000 ha, to three companies belonging to the same conglomerate. In Gorantalo in Sulawesi, 3900 farmers had to give up 25,000 hectares to the Sweet Dragon Plantation Company. In this case, the farmers received only Rp25 (1.5 cents) per square metre for good fertile land.

In situations, farmers have become more and more outspoken, taking their grievances to both local and national parliaments. Although these actions have helped broaden the political agenda, they have rarely succeeded in preventing the expropriation or obtaining full compensation.

Cloves and Suharto's son

One issue being widely discussed and causing some protest is the imposition of a monopoly in the trading of cloves. Cloves production is a very big industry in Indonesia because of their use in kretek cigarettes. Most cloves are grown by thousands of small farmers.

Previously the farmers sold their crop through small traders. Last year, however, President Suharto signed a decree establishing the Clove Support and Trading Board or BPPC with a monopoly on all purchasing and reselling of cloves. It is headed by one of Suharto's sons, Hutomo "Tommy" Mandala Putra.

A follow-up decree set prices between Rp7000 and Rp8500 per kilogram. The board's agents at the local levels would be the KUDs. Anybody operating outside this system would be subject to arrest under a 1962 law against economic sabotage.

Official justification for establishment of the board was propping up prices for the farmers. However, the monopoly has forced them down to levels much lower than farmers used to receive. The KUDs, knowing that the farmers can sell nowhere else, have been offering only Rp4000-Rp5000 per kilogram, forcing many into poverty.

In some areas farmers have trekked miles, even hundreds of miles, to dump their cloves on the doorsteps of the local authorities in protest at the treatment they have been receiving.

Tommy Suharto's response has been to urge the farmers to destroy half their crops so as to force up prices. However, oversupply is not the problem but the monopoly itself.

At the same time, some KUDs which are buying the cloves at reasonable prices, or even the depressed prices, are complaining that the board is not paying up.

People are now asking what has happened to the several millions of dollars of credit given to Tommy to finance the board's operation. At the time, the credit was controversial, because the government had announced a tight credit policy. Now, according to the report and other media articles, the KUDs have huge stock of cloves but no sign of the board actually buying them.


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