Oil palm expansion in West Sumatera; Opportunity or Threat?

JARITANGAN Sumatera Yayasan SETARA Jambi

Wahana Liar West Sumatera Suported By Misereor

Report of a local research in Palembayan, Agam, West Sumatera

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Contents Part1 Introduction 4 Research Objectives 6 Research Methodology 6 Expected Output 6 Part2 The Minangkabau people and their land management Knowledge 8 Part3 Oil palm estates; the face of modern agriulture in

Palembayan Sub-disrict 13 Part4 Local commodities and oil palm; An economic comparison 20 Part5 Conclusion 26

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Part 1

Introduction Oil palm plantations in Indonesia has been growing significantly, doubling from 4.1 million hectares in 2000 to 8.2 million hectares in 2011. And the size will continue to expand given the Indonesian government’s plan to become the world’s largest CPO producer. Despite the growth, oil palm expansion has been raising much concern as it now targets not only lowlands and forests but also community’s management areas and even settlement areas. The expansion seems to take no care of the suitability of the land as field facts show that oil palm has been grown in highlands. While on lowlands and forests oil palm plantations have left trails of social conflicts and caused food insecurity, on highlands they will even sharpen the problems. The district of Agam in West Sumatera, which lies at the elevation of 2891 m above sea level with temperature ranging from 20°C to 30°C and 88% humidity, is a witness of how oil palm has encroached into highlands. Oil palm plantations have started to cover the hills and mountains of the naturally beautiful district in West Sumatera. As recorded, the district had 56,744 ha of oil palm plantations up to 2011, producing 3,000 tons annually. The size is certain to grow as the district government has been promoting its jurisdiction as prospective oil palm area in the future. Up to 2011, 4 large oil palm companies were operating in the district, namely PT Agra Masang Plantation, a subsidiary of the Wilmar Group controlling 8,000 Ha in Palembayan Sub-district, PT Perkebunan Pelalu Raya in nagari Salareh Aia in Palembayan Sub-district controlling 550 Ha, PT Mutiara Agam in Lubuk Basung Sub-district controlling 8,660 Ha and PT KAMU controlling 3,000 Ha. Two new concessions will be

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granted in 2012 to 2 companies: PT Tri Mitra Mega (Medco Group) and PT Sinar Pratama, spanning across 15,000 Ha. It is clear that the local communities and the environment are those that are most affected by the oil palm expansion. Like what has been happening in many regions of Indonesia, social conflicts, environmental disasters and even food insecurity will slowly follow oil palm expansion in hilly and mountainous regions dominated by forests and protected areas, i.e. regions where much of the cropland is managed traditionally. For a long time, the farmers in Agam District have managed their lands based on their traditional patterns and knowledge. They grow mixed species on different types of lands: on wet and fertile lands they have grown species that depends on the weather such as rice, corns, peanuts, chili and vegetables, and on dry lands they grow sugarcane, rubber, cinnamon, nutmegs, coffee, areca nuts, coconuts, etc. Limited availability of land for agriculture due to the designation of protected forests has taught the farmers in Agam District to use their lands wisely and avoid over-exploitation. However, the presence of large-scale, organized, monoculture, exploitative and modern oil palm plantation model in the last 10 years has disrupted the traditional agricultural model, which has maintained environmental balance, sustained sources of livelihood and culturally bind the communities. What is worse, the district government seems to be powerless in restricting the development; instead, it has been promoting oil palm as a promising species for the future that is able to address economic and climate issues, and even food insecurity. Given all the bad facts arising from oil palm expansion in many regions in Indonesia and the concern of food crop farmers in Sumatera (incorporated in Jaringan Petani Pangan Sumatera/JARITANGAN Sumatera) that oil palm expansion will eliminate the agricultural system that has long supported their lives, Wahana Liar and Yayasan SETARA Jambi, supported by farmers of JARITANGAN Sumatera, set out a study in several nagaris in Palembayan Sub-district, Agam District. The 5-month study focused on the following important topics:

Ø What land management model has been developed by food crop farmers in these nagaris?

Ø How far has the traditional management system, notably the production pattern, been able to maintain environmental balance, sustain sources of livelihood, create food security and culturally bind the nagari communities?

Ø What impacts are created by modern agricultural model (in this case large-scale oil palm development) on the traditional agricultural model in these nagaris?

“In the next five years (2011-2015), the provincial government of West Sumatera plans to gradually increase the volume of palm oil export, from 795,450 tons in 2009 to 1,010,645 tons. The ambition is reflected in the Provincial Spatial Use Plan, which even allows conservation areas to be opened for plantations.” (Sukardi, Head of SPI West Sumatera)

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Research Objectives

The study is intended to:

1. Find out how the food crop farmers in the studied nagaris have developed both lowland and highland management;

2. Find out the relationship between traditional agriculture as a land management model or production pattern to sustain environmental balance, sources of livelihood, food security on the one hand, and land management as social and cultural bond in the studied areas on the other hand;

3. Develop an economic comparison (expenses and revenues) between traditional agriculture and modern agricultural models (large-scale oil palm and monoculture development) in the studied areas;

4. Establish documentation for JARITANGAN Sumatera serving as an advocacy tool for it and some other NGOs involved in it;

5. Make the study outputs a reference to improve and change policies in Sumatera, particularly those relating to land use and management.

Research Methodology

The study was driven by concerns of food crop farmers incorporated in JARITANGAN Sumatera about the recent situations where oil palm has been developed without taking land carrying capacity and suitability into consideration. To achieve the expected outputs, the study involved many field discussions (FGDs), in-depth discussions and literature studies. The research team consolidated all the data gathered, including those from workshops, which were attended not only by food crop farmers from Palembayan Sub-district but also by farmer’s representatives from Jambi, South Sumatera and Riau. The farmers contributed greatly when the research team analyzed the economic comparison between mixed traditional agricultural system and modern monoculture system. The research was developed collaboratively, including the methodology, with the food crop farmers.

Expected Outputs

1. Deep understanding of land management models developed by farmers, particularly those relating to agricultural models and production patterns to maintain economic viability, food security and environmental balance;

2. Diverse traditional agricultural models and shifting cultivation as alternatives to modern plantation models (in this case, large-scale and monoculture oil palm development);

3. Documentation for food crop farmers in Sumatera and for advocacy against destructive oil palm development;

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4. Recommendations for decision-makers so that oil palm will not be developed in important areas such as food land and community’s management areas as well as ecologically critical areas such as hilly and mountainous areas;

5. For the study to become a learning foundation for food crop farmers, who are currently shifting from traditional to modern (monoculture) farmers.

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Part 2

The Minangkabau People and their land management knowledge Respecting nature is respecting Bundo Kanduang1 The land of Minangkabau is a unique one throughout Sumatera Island. While the other areas in Sumatera adopt the patrilineal system, the land of Minangkabau or West Sumatera adopts the matrilineal one, especially with regard to the customary inheritance system, in which women rule. The system which treats women (Bundo Kanduang) with great respect has long been observed. Although the women control customary inheritance, the men are involved in the arrangement upon women’s approval. From the discussions held with the farmers in several nagaris, the following inheritance (pusaka tinggi) structure is identified: 1 Bundo Kanduang is the Minang tribe’s term for ‘mother’.

Grandmothers

Man (uncle/mamak)

Woman (mother)

Woman (child) Man (child) Woman (child)

Woman (grandchild)

Ninik (datuk)

Woman (grandchild)

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The Green narrow is the structure regulating inheritance of customary land (pusaka tinggi) to women. The Blue Narrow, on the other hand, regulates inheritance of customary land to men. The democratic system and respect for women have long been observed in the Minangkabau culture, as are in the study area, i.e. Palembayan Sub-district, Agam District. In addition to the inheritance system, which favors women, the Minangkabau do not recognize the buying-and-selling system of customary land, particularly that inherited to women in Darek2. They do, however, have a sharing system, in which families wanting to manage an inherited land should obtain an approval from the maternal Ninik Mamak. It is the absence of the buying-and-selling system of land that makes the Minangkabau unfamiliar with cultivation of hard tree crops. The assumption is that planting hard tree crops on customary land (pusaka tinggi) means eliminating the right of other families within one clan to manage such land. Diverse and shifting, a concept of sustainability and food security Being one of the Dareks, the community in Palembayan Sub-district in Agam District still observes the traditions, in particular the women-controlled land management and land tenure. The farmers also recognize the limited land available for cultivation due to the cold climate as well as the hilly and mountainous landscape. Their wisdom in land use can be seen in their long practiced agricultural model, i.e. shifting cultivation, which is in accordance with the season, land suitability and mixed species.

2 Darek is the land where the indigenous Minang originated; darek is composed of tigo (three) Luhak, namely Luhak Agam, Tanah Datar and Limo Puluh Koto.

The traditional farming at Nagari Koto Silungkang

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The wisdom is reflected in the Minang’s old sayings: Nan lereng tanami padi (on slopes we grow rice) Nan tunggang tanami batuang (on tunggang we grow bamboos) Nan gurun jadikan parak (on deserts (sandy land) we set up plots) Nan bancah jadikan sawah (on wet lands we set up rice fields) Nan padek ka parumahan (on solid/hard ground we set up settlements) Nan munggu jadikan pandam (on highlands we set up cemeteries) Nan gauang ka tabek ikan (on deep part of rivers/lakes we set up fish ponds) Nan padang tampek gubalo (on savanna we let the cattle graze) Nan lacah kubangan kabau (on muddy land we let buffalos bathe) Nan rawan ranangan itiak (on swamps we let ducks swim) The agricultural model developed in Palembayan Sub-district is unique in that it involves harmonious arrangements, or in our words today it has spatial use that is based not only on economic aspects but also families’ food security and even land suitability (carrying capacity). For example, relatively dry lands are used for growing fruits or long-lived hard tree crops such as rubber, cocoa, areca nuts, sugarcane, and other economically valuable species. “For educational costs or other needs, we grow chili, cocoa, rubber, sugarcane, areca nuts or other hard tree crops. Many also grow tobacco. Vegetables can be grown between banana trees (intercropping) and areca nuts are grown on the side of the plots. But on wet lands, we still grow rice,” said a farmer in Nagari III Koto Silungkang. Palembayan farmers are used to mixed-crop cultivation in which various species are grown on a piece of land. As such, they are not used to monoculture agriculture such as oil palm plantations.

“We are used to utilizing dry lands by practicing intercropping. Like me, I plant my plot with peanuts and corns in addition to chilies – the main crop. The corns, chilies, and peanuts are

The Corn will harvest after 3 month

The Peanut will harvest after 3 month

The Chili will harvest after 3 mont, and will produce chili for 3,5 month

The intercrops model for manage the land before the raining season or paddy season.

not for sale but for self-consumption; we sell only any excess. Beinproduce more yields and hence we sell more chilies than the other crops. I work my plot with the help of my wife only. We hire people only when sorting the harvest and sowing seedsPak Rianda Sugandi of Nagari Baringin, or casualhow he manages his land. On the highlands of Palembayan, such as Nagari Baringin, the local community mostly cultivates mixed species and has a sharing philosophy, i.e. harvest is shared among the workers and the land owners. “I have limited land as my nagari lies on hills. I grow not one but many species such as chilies, corns and peanuts. Of all these species, I make special arrangements of how to use the produce, for example the corn is used to fund land preparation and weeding; the peanut is to pay the workers and the chili is for my families and my savings.” Pak Datuk said that the local agricultural model has a good philosophy, i.e. economic viability and sharing with other parties such as the workers.

June (planting with the corn, Chili, peanut and others)

September-October

(harvesting the

vegetables)

November (cleaning and preparing for

planting paddy)

The traditional of cropping calendar in Baringin and other

consumption; we sell only any excess. Being the main crop, chilies produce more yields and hence we sell more chilies than the other crops. I work my plot with the help of my wife only. We hire people only when sorting the harvest and sowing seeds

Rianda Sugandi of Nagari Baringin, or casually addressed to as Pak Datuk told us about

On the highlands of Palembayan, such as Nagari Baringin, the local community mostly cultivates mixed species and has a sharing philosophy, i.e. harvest is shared among the

e land owners. “I have limited land as my nagari lies on hills. I grow not one but many species such as chilies, corns and peanuts. Of all these species, I make special arrangements of how to use the produce, for example the corn is used to fund land

ration and weeding; the peanut is to pay the workers and the chili is for my families and my savings.” Pak Datuk said that the local agricultural model has a good philosophy, i.e. economic viability and sharing with other parties such as the workers.

December-march

(planting the paddy)

March-April (harvest the

paddy)

May (Cleaning and preparing for vegetable

crops)

June (planting with the corn, Chili, peanut and others)

November (cleaning and preparing for

planting paddy)

The traditional of cropping calendar in Baringin and others nagari in Palembayan which have limited water sup

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g the main crop, chilies produce more yields and hence we sell more chilies than the other crops. I work my plot with the help of my wife only. We hire people only when sorting the harvest and sowing seeds,”

told us about

On the highlands of Palembayan, such as Nagari Baringin, the local community mostly cultivates mixed species and has a sharing philosophy, i.e. harvest is shared among the

e land owners. “I have limited land as my nagari lies on hills. I grow not one but many species such as chilies, corns and peanuts. Of all these species, I make special arrangements of how to use the produce, for example the corn is used to fund land

ration and weeding; the peanut is to pay the workers and the chili is for my families and my savings.” Pak Datuk said that the local agricultural model has a good philosophy, i.e.

April (harvest the

which have limited water supply

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Managing land, creating cultural and social bonds Another unique thing in almost all nagaris in Palembayan Sub-district is their wisdom in rice-field management. To meet families’ food need, the farmers and the nagari communities in Palembayan cultivate rice on lands, mostly lying on high lands and hills, where they build terraced fields (locally termed sawah batingkek). Like the subak system in Bali, terraced fields allow the distribution of water from the upper fields to the lower fields, which have less water volume. In local term, this arrangement is called baraia sawah di ateh, lambok sawah di bawah (watery on the upper, humid on the lower). The term is understood as a kind of wisdom in utilizing water collectively, not individual control of water. The philosophy is embraced by the farmers and the communities in Palembayan Sub-district, guiding them to share with one another. The land management in Palembayan through traditional agriculture not only embraces environmental wisdom but also social one. Economic viability through mixed agriculture and production times, and full involvement of women in the activities are obvious. Respect for bundo kandung, pusaka or inherited land passed down to women has a significant value in this agricultural model. But will the value still be prevailing in the face of modern monoculture and exploitative agriculture? The question arises as the traditional land management model and farmers’ land management wisdom, particularly that in the six nagaris where the study was conducted, are disturbed by modern agricultural (i.e. large-scale oil palm development). In Nagari Salareh Aia, one of Palembayan’s nagaris bordering West Pasaman District3, modern agriculture has been developed since the 1980s. In the beginning plantation companies established only nucleus (inti) estates; over time they started to involve local communities around the estates under a sharing partnership scheme4. Slowly, farmers, who previously cultivated food crops and horticultural plants as well as growing rubber, cinnamon, clove, nutmeg and areca nuts on dry lands, have started to grow oil palm on both dry, fertile lands, and even on rice fields. In the beginning, only one large company, PT Agra Masang Plantation, came and planted oil palm on 3,000-hectare land; then, another company – PT Palalu Raya – came and established a 550-hectare oil palm estate. Both companies have controlled about 57% of the total 6,200 hectares (62 km2) of Nagari Salareh Aia’s land. Having been established in Nagari Salareh Aia, oil palm has started to move upwards to Nagari Koto Silungkang. Although no investors have made any investment there, the local small farmers have started to grow oil palm on lands previously planted with rubber, areca nuts, cloves, cinnamon and nutmegs. The environmentally-friendly land management patterns are now being threatened by the modern one that is exactly opposite the ones understood and practiced by the farmers and the communities in Palembayan. Large-scale, monoculture, industrial, massive, destructive and environmentally-unfriendly oil palm estates have now become a tough challenge to Palembayan land management and agricultural models. The farmers are now going head-to-head with oil palm development that promises much economic benefit and welfare.

3 The district of West Pasaman is the one having the largest oil palm estates in West Sumatera, encompassing up to 200,000 Ha 4 In a discussion with the ninik mamak, and the cooperative management, it was revealed that the partner farmers, the ninik mamak and the cooperative management each have a different view of partnership models and schemes.

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Part3

Oil palm estates: the face of modern agriculture in Palembayan Sub-district The farmers and the communities in Palembayan Sub-district first knew the plant (oil palm) in the 1980s, through a large-scale estate model. The plant was first developed by one of the Indonesia’s largest company – the Wilmar Group – in Nagari Salareh Aia. The presence of the company in Salareh Aia was probably due to the nagari’s location that borders the district of West Pasaman5, which has a long history of large-scale oil palm development. Up to 2011, oil palm estates in West Pasaman encompassed 200,000 ha out of the total 388,777 ha (3,887.77 km2) of the district administrative area. It was probably due to the limited land availability in Pasaman for further expansion that the development moved to Nagari Salareh Aia in Palembayan Sub-district, Agam District. With regard to welfare, West Pasaman District, which has the largest oil palm estates and which has the longest history of oil palm development in West Sumatera Province, ranked 3 among the poorest districts in West Sumatera; Pesisir Selatan District, which was also a plantation center, ranked 1.6 “We have recently been familiar with oil palm, notably when some companies came to operate in our nagari and we became their partner as smallholders (plasma farmers). Previously, we only knew how to grow rice, vegetables and hard tree crops such as areca nuts, rubber, cinnamon and cloves,” said Pak Bahtiar, who is also addressed as Datuk Orang Kayo Sirajo. 5 The district of West Pasaman has seen oil palm development in its jurisdiction since 1930. 6 Data on the receivers of Raskin (rice aid for the poor) in West Sumatera in 2011

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Oil palm and the increasingly broken kinship system Like in other regions in Sumatera, or even throughout Indonesia where oil palm is developed, village communities are sometimes unaware that their forests, plots and even rice fields have been controlled by companies through the HGU (right of exploitation) granted to them as it is the district governments that have the authority over licensing. This has often led to horizontal conflicts, i.e. conflicts among communities, as large companies are given control over community’s land, which narrows down community’s management land. Nagari Salareh Aia, one of the regions that open their areas for oil palm development, is also torn with unsettled social conflicts arising as a result of the unclear partnership scheme with oil palm companies. “In the beginning we expected much from the presence of the companies, for example employment opportunities and partnership. Out trust that we could improve our life was shown in allowing our forest (customary land) to be converted into oil palm estates. We let the district government take care of the process, and it gave up our land under a partnership scheme. We did not know what agreement it made with the company. Years later, we were disappointed having partnered with the company as the partnership was unclear. The partnership even created suspicion and distrust among us, between us and the ninik mamak, and the Cooperative (KUD) management, who were also our relatives (anak kemenakan). We no longer believe in partnership. If we have vacant land, we’d better manage it ourselves.” “Up to now, we just know that we are the smallholders (plasma farmers) under a 70:30 sharing system. Each month we receive our share via the Cooperative. Sometimes we get 1 million, sometimes 2 millions, meaning that our incomes are fluctuating. The Cooperative said that the share fluctuates in line with the world price of CPO. When it drops, we receive less; when it rises, we get more. Yes, we just accept it as we don’t have the partnership agreement document or the copy. We just know that the documents are held by the Cooperative. It is said that the land under the partnership will be divided into 2-hectare plots and be certified under the name of the respective ninik mamak of the land owners. Like the partnership agreement documents, the certificates are held by the Cooperative. The land we’ve given in for partnership is our customary land, whose control lies in the hands of Rajo and the ninik mamak. About 2,600 ha of our customary land has been given to the district government to be put under a partnership with PT AMP,” Pak Bahtiar gave a detailed explanation of the partnership model they entered into with the company. In another discussion, we found out that the smallholders only receive their shares via the Cooperative, which also manages the estates. Many of the farmers have no idea of how much the production of their land as it is managed by the Cooperative. According to Pak Damrah, the Head of the Cooperative (KUD Plasma Nagari Salareh Aia), the partnership the farmers entered into is the Primary Credit Cooperative for its Member (KKPA) scheme with 50:50 benefit sharing system. “The land converted into plasma estates for the community of Nagari Salareh Aia spanned only 512 Ha, with each household receiving a 2-hectare estate. The plasma owners started

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to receive their shares in 1997-1998 via the Cooperative. Previously, the share received by each family was not much as part of it had to be spent to pay (by monthly installments) for the debt/loan they used to establish the estates. PT AMP was never transparent with regard to the records of the remaining debt so the Cooperative rejected to pay off the remaining debt, which according to PT AMP amounted to 2.8 billion rupiahs. Based on our calculation, the debts were all paid off. Since 2006, the estate management has been taken over by the Cooperative and it no longer makes any payment to PT AMP. Since 2007, the Cooperative has made an MoU (memorandum of understanding) on estate management with PT AMP, which regulates technical maintenance and harvest. As for the partnership agreement between the district government and PT AMP, we – the KUD Plasma management in Nagari Salareh Aia – have never been informed of the content nor have we ever seen the document, let alone keeping it. As for the land certificates, since 2007 certificates have been distributed to the plasma farmers but the estates have still been managed by the Cooperative. Concerning the plasma farmers’ income, in August our FFBs were bought by the company at IDR1,725/kg, according to the price set by the government. Therefore, in August, each of the plasma farmer received IDR3,000,000 after deduction for the operational costs.” Discussions with some parties revealed that the Cooperative, the plasma farmers, the district government and the company each have a different view of the agreed partnership model and scheme. What the farmers still believe is that eventually they will each get 2-hectare estate, like in the PIR-Trans scheme. The differences in understanding will likely create horizontal conflicts as currently indicated by the increasing suspicion and distrust within the Cooperative management, who are in fact relatives (anak kemenakan7), as well as among the ninik mamak (the pro-partnership vs. the anti-partnership). Planting oil palm; single species, many disaster “There’s something we fear about this oil palm system, in particular when it is developed in our land: that is, its destructive nature, especially when developed in large-scale. It must

7 Anak kemenakan is the child (ren) of one’s sister.

Base on the data from the Center for Environmental and Natural Resources Research (Pusat Kajian Rona Lingkungan dan Sumber Daya Alam) of the University of Riau Universitas Riau, oil palm expansion in the last 20 years has created adverse impacts on ground water deposits as oil palm does not keep water but absorbs a lot of water (one oil palm tree needs 8-12 liters of water daily). This means that the presence of large-scale oil palm estates will lead to floods in the wet season and droughts in the dry season.

Native people in Jambi, they are affected by Wilmar plantation

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invite a lot of pests, and water must get scarce for irrigation. What will become if there are large estates around us? Rice fields must be drying and the farmers have to shift to oil palm. Given the hilly and mountainous landscape, mostly being forests that we are not allowed to cultivate, the land for rice cultivation itself is limited. If the farmers cultivate oil palm, they won’t be able to make ends meet. And they will get poor as the income generated from 0.5 hectare of oil palm estate will be less than that generated from 0.5 hectare of rice field or cropland. If we may ask, we don’t want to have oil palm estates in our land. It is enough that it is developed in the lower nagari, please don’t let it be expanded here; otherwise, we will be all ruined,” said PPL nagari Sipinang. Maybe we can start from Sumatera. The presence of large-scale oil palm estates has created serious impacts on the forests. Thousand hectares of the forest have been cleared and cultivated with oil palm. The mountains and the hills are leveled and the rivers are dried only to open way to oil palm development. When the environmental balance is disrupted and the carrying capacity is reduced, natural disasters will occur, i.e. floods, and even flash floods. For example, the flash flood in September 2012 in Padang was a result of the stripping of the forest in the headwaters, so the soil was loose and was easily washed away by water.8 Such a disaster might potentially still threaten Padang City, the capital of West Sumatera Province as destruction continues in the upstream areas (illegal logging, establishment of large-scale oil palm estates and mining operation). In addition to the natural disaster (i.e. floods) caused by forest conversion into oil palm estates, soil quality is declining due to extensive use of chemical fertilizers and pesticide. “Many oil palm farmers do not know the proper amount of fertilizer and pesticide to be used and have overused both. This is surely dangerous as excessive use will harm the soil and the plants therein. What is worse, the ground water, carrying the fertilizers and pesticide, flows to the rivers, from which the community gets water for drinking, and pollutes them,” said Pak Datuak from Nagari Marambuang Baringin. “In our Nagari, the impacts of oil palm development have been more obvious; one being much hotter days. Our nagari used to be cool due to the high elevation and the mountains in the surroundings. The rivers are drying up. Many of the rice fields have dried up due to lack of water and this happens not only in our nagari but also in the lower nagaris. Should this continue, we can no longer grow rice in the next 5 years and the farmers will shift to oil palm,” said Pak Asmardi from Nagari Salariah Aia. Oil palm and potential food scarcity Besides being developed by large companies, oil palm has now been cultivated individually by farmers, particularly those in Nagari Salareh Aia. Some of the farmers of Nagari Silungkang also grow oil palm although there are no oil palm facilities in their nagari. They sell the FFB to middlemen, who come to their nagari for oil palm bunches. In small discussions with the farmers of Nagari Salareh Aia, we learn that the development of oil palm in the nagari is driven by economic benefit and the availability of a market for it (i.e. the presence of oil palm companies). Easy access to the market has lured the farmers to

8 http://news.okezone.com/read/2012/07/25/340/668223/penyebab-banjir-bandang-di-padang-versi-walhi

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grow oil palm although they in fact do not know how to cultivate it and many cannot even distinguish between good and bad seeds! Things might have been very different if other commodities, notably local food species, had been in the same situation, i.e. the availability of a market for the products. They might not have ever decided to grow oil palm. Some of the farmers told us that they had to grow oil palm on their rice fields as the field dried up or lacked water. According to them, the presence of extensive oil palm estates in their area was responsible for the declining water supply9. If one oil palm tree needs 8 liters of water daily, and if one hectare of land can have as many as 140 trees grown on it, there are 497,000 trees in all the 3,550 hectares of oil palm estates in Nagari Salareh Aia. This means that 3,976,000 liters of water is needed daily for the oil palm. Imagine how much water will be needed in a year and how many hectares of rice fields and croplands will be drying up. Cultivating oil palm; temporary gain, everlasting loss “Come to think of it, oil palm is very profitable. Imagine that we don’t have to work hard to manage the plot, just hire some workers and all we have to do is wait at home for the harvest. However, small plots of 1-2 hectares in size are not economically profitable. In addition, oil palm is productive only for 35 years. Afterwards, the soil is damaged and needs a lot of money to be cleared. In the end, the plot is sold to middlemen or companies and the owners end up becoming companies’ workers,” admitted Pak Sukirman, a farmer from South Sumatera on 17 October 2012. Discussions with the farmers of Nagari Salareh Aia reveal that oil palm has continued to be developed due to the presence of oil palm companies that opens a market for it. The market for other commodities such as rubber is far away; besides, many of the previously wet lands have now dried up due to the presence of oil palm estates, adding the force to grow oil palm. Discussions with the farmers of Nagari Silungkang, on the contrary, reveal that farmers shifting to oil palm have now regretted their choice as the species does not live up to the promised benefits it has boasted. “I regret having shifted to oil palm; it takes a lot of hard work to maintain the species, the amount of fertilizers applied must be right and I don’t have the knowledge of the cultivation. I have planned to replace my oil palm with rubber,” said Pak Tarmizi from Nagari Silungkang. Oil palm promises economic benefits for as long as 35 years, and the price is dictated by the global market and demand.10 After the 35-year period is over, the farmers are faced with a difficult choice: regenerating/replanting the estates takes a lot of money and, in most cases, oil palm farmers, especially individual farmers, do not have enough savings for such work. Such farmers usually end up giving up their estates to landlords or companies as it is almost impossible for them to plant other species on their ex-oil palm estates. Oil palm; a system that neglects Bundo Kanduang11 The traditional land management in Palembayan highly respects environmental balance as nature is regarded as Bundo Kanduang or mother and women play a very important role in

9 According to some sources, one oil palm tree needs 8-12 liters of water daily and 1-hectare oil palm estate can have 140-150 trees grown on it. 10 Since September-December 2012, the price of FFB has been declining sharply, from IDR800/kg to IDR300/kg, at smallholder level. 11 Bundo Kanduang means mother, and mothers are women

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the land management structure and in Minangkabau culture. (Large-scale) Oil palm development, on the contrary, is exploitative and completely different and opposed to the traditional land management. Another thing is the 35-year productive lifespan of the species, which means that for 35 years the species will occupy the land where it is grown. Given the fact, the species is not suitable for pusaka (inherited) land, which belongs to the women, because the opportunity for other families to collectively manage the land will be very limited. Women will also be losing their role as the protector of pusaka land if the land is given up to or put under the partnership scheme with companies. An example comes from Nagari Salareh Aia, where the pusaka land is given up to the district government to be put under the partnership scheme. Although the status of the land in question was rimbo (i.e. forest) and under control of rajo and the ninik mamak, and had not yet been inherited, the transfer of the land had diminished women’s right. Simply put, nagari land with rimbo status is part of the pusaka tinggi as well as the ‘savings’ of the nagari community, which, when later managed by a clan, will be inherited to women of the clan. The inherited land will surely be traditionally managed by all the families in the clan under rotational and benefit-sharing systems. The chart below shows the land tenure structure in Palembayan Sub-district Based on the structure above, it is clear that giving up land to a company, although it is still forested land, means giving up land to which women are entitled. And although land under the partnership scheme will be returned to the owner clan, women will no longer be entitled to the land as the transfer is not done through the inheritance structure above but through company’s arrangement, whose decision excludes women. Modern agriculture with oil palm development model will be changing the model and pattern of land management in Palembayan Sub-district. Although only 2 out of the 6 nagaris in the sub-district are adopting the system, it is very likely that the other nagaris, which are currently applying modern agriculture based on traditional wisdom, will lose to oil palm development if nothing is done to stop it. It is not impossible for oil palm to keep flourishing. It was previously believed that oil palm could not be grown on peat land; the fact is that it can grow well on peat land. Oil palm was believed to be impossible to be

When a rimba given to the clans to be managed under ninik mamak’s supervision is to be inherited, it is inherited to the women as the protector of the clan’s inheritance.

Rimba/ Forest (in a nagari)

Regulated and controlled by the kind/nagari chief

Rimba will be given to the clans in the nagari to be managed

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grown on rice fields but in many regions in Sumatera rice fields have been converted into oil palm estates. Similarly, we never imagined that oil palm could be grown on highlands but the oil palm estates in Nagari Salareh Aia show that it can grow practically anywhere.

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PART4

Local commodities and oil palm; An economic comparison

Discussions with farmers in several nagaris in Palembayan Sub-district, Agam District reveal that in addition to the declining environmental carrying capacity due to the presence of large-scale oil palm estates in Nagari Salareh Aia, another dominant factor driving the local farmers to shift to oil palm is the economic benefits, promised by the development of the species. In fact, the farmers have yet to find any farmer being prosperous from their oil palm estates; however, oil palm keeps being campaigned by companies, backed up by the government, for its so-called capacity to deliver prosperity, well-established life and continuous access. To give balanced information to farmers, after comparing the social and cultural aspects and the role of women in the traditional agriculture/land management in Palembayan and in modern agriculture (oil palm development) in the previous chapters, we will present an economic comparison between the two models in this chapter.

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However, whatever decision is made by the farmers and communities, it is an informed, free and independently-made decision. Below is the comparison developed after gaining input from the discussions with the farmers about their experience. Cost components of various commodities for one-time planting on a 1-hectare plot

Cost components Commodities Note Rice Chili Tobacco Sugarcane

Seeds Self-owned and provided by the government (government’s aid)

+60 packs @IDR20,000 = IDR1,200,000

IDR300,000 (15,000 sticks)

5,000 sticks @IDR600 = IDR3,000,000

1. The fertilizer price assumption used is the price of subsidized fertilizers as of August 2012 applicable in Palembayan Sub-district (based on the outputs of the questionnaires and interviews)

2. The land cleaning/maintenance cost is based on the assumption that the work is done by workers each receiving IDR30,000- IDR50,000 per day

3. For tobacco, the majority of the farmers in Palembayan sell tobacco by stick at IDR2,000/stick; therefore, the harvest cost is charged on the buyers

4. Pesticide need is calculated only during the land clearing (grass poison/roundup). The actual need may be higher

Land Cleaning/Land Management (labor cost)

IDR1,200,000 IDR2,000,000 IDR1,450,000 IDR2,000,000

Planting/Maintenance (labor cost)

IDR400,000 IDR2,950,000 IDR850,000 IDR1,500,000

Fertilizers Urea : 4 sacks @ IDR120,000 = IDR480,000 SP 36: 3 sacks @ IDR170,000 = IDR340,000 NPK : 4 sacks @ IDR115,000 = IDR460,000 Total fertilizer cost = IDR1,280,000

Urea: 5 sacks@IDR120,000 = IDR600,000 SP 36: 8 sacks@ IDR170,000 = IDR1,360,000 KCl: 6 sacks@IDR100,000 = IDR600,000 NPK: 10 sacks@IDR115,000 = IDR1,150,000 Borax/borate: 16 kg@IDR40,000 =IDR640,000 Total fertilizer cost = IDR4,690,000

KCL: 2 sacks@IDR100,000 = IDR200,000 SP 36: 2 sacks@IDR170,000 = IDR340,000 ZA: 7 sacks@IDR150,000 = IDR1,050,000 NPK : 2 sacks@IDR115,000 = IDR230,000 Total fertilizer cost = IDR1,590,000

Urea : 11 sacks@IDR120,000 = IDR1,320,000 ZA : 14 sacks@IDR150,000 = IDR2,100,000 KCl : 3 sacks@IDR100,000 = IDR300,000 SP 36 : 3 sacks@IDR170,000 = IDR510,000 Total fertilizer cost = IDR4,320,000

Harvest (labor cost)

IDR500,000 IDR4,000,000 Done by the buyer* IDR2,000,000

Total Production Cost

IDR3,320,000 IDR14,690,000 IDR4,420,000 IDR13,120,000

Source: processed from the outputs of the questionnaires and the interviews with farmers in Palembayan Sub-district, Agam District

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Total Income in a year from a 1-hectare plot Income in a year Commodities

Rice Chili Tobacco Sugarcane Harvest 6,000 kgs of

GKG@IDR3,300 = IDR19,800,000 19,800,000 x 2 harvests/year = IDR39,600,000

3,000 kgs@IDR16,000 = IDR48,000,000 IDR48,000,000 x 2 harvests/year = IDR96,000,000

13,500 sticks@IDR2,000 = IDR27,000,000 IDR27,000,000 x 2 harvests/year = IDR54,000,000 Assumption: defect = 10%

Produce (processed into brown sugar) = 5.5 tons 5,500 kg@IDR8,000 = IDR44,000,000

Production costs IDR3,320,000 x 2 planting cycles = IDR6,640,000

IDR14,690,000 x 2 planting cycles = IDR29,380,000

IDR4,420,000 x 2 planting cycles = IDR8,840,000

IDR13,120,000

Net Income Harvest – Production Costs = IDR39,600,000 IDR6,640,000 _ IDR32,960,000/year

Harvest – Production Costs = IDR96,000,000 IDR29,380,000 _ IDR66,620,000/year

Harvest – Production Costs = IDR54,000,000 IDR8,840,000 IDR45,160,000/year

Harvest – Production Costs = IDR44,000,000 IDR12,820,000 _ IDR31,180,000/year

Source: processed from the outputs of the questionnaires and the interviews with farmers in Palembayan Sub-district, Agam District

Note: 1. Harvest price is based on the farmer-level price as of August 2012 2. Sugarcane processing into brown sugar is not calculated as a production cost

Cost components during the investment/pre-harvest for rubber on a 1-hectare plot Cost components Rubber

Investment Year 1 2 3 4 5 Seeds 500 sticks @IDR7,500

= IDR3,750,000 - - - -

Land cleaning/land management (labor cost)

IDR1,500,000 - - - -

Planting/maintenance (labor cost)

IDR1,000,000 IDR410,000 IDR410,000 IDR410,000 IDR410,000

Fertilizers Urea: 3 sacks@IDR120,000 = IDR360,000 SP 36: 3 sacks@IDR170,000 = IDR510,000 KCl: 1 sack @IDR100,000 = IDR100,000 Total fertilizer cost = IDR970,000

Urea: 1 sack @IDR120,000 = IDR120,000 SP 36: 1 Sack @IDR170,000 =IDR170,000

SP 36: 1 sack @IDR170,000 = IDR170,000 KCl : 1 sack @IDR100,000 = IDR100,000

SP 36: 1 sack @IDR170,000 = IDR170,000 KCl: 1 sack @IDR100,000 = IDR100,000

Urea: 4 sacks@IDR120,000 = IDR480,000 SP 36: 4 sacks@IDR170,000 =IDR680,000 KCl: 3 sacks@IDR100,000 = IDR300,000

Harvest (labor cost) - - - - Total IDR7,220,000 IDR700,000 IDR680,000 IDR680,000 IDR1,870,000 Source: processed from the outputs of the questionnaires and the interviews with farmers in Palembayan Sub-district, Agam District

Note:

1. The fertilizer price is the subsidized price and it is assumed that there will not a significant raise in price.

2. Land cleaning/land management and planting costs are based on the assumption that the work is done by workers each receiving IDR30,000- IDR50,000 per day

3. Costs for bowls and tapping equipment are not included in the cost components.

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Calculation of income generated from rubber cultivation Costs Production cost during the investment period (5 years) IDR11,150,000 Production cost during 3-year harvests IDR1,870,000/year (assumption) IDR5,610,000 Total production cost: IDR16,760,000 Production Production in Tapping Year-1 = 1,500 kg/year; IDR15,000/kg IDR22,500,000 Production in Tapping Year-2 = 2,000 kg/year; IDR15,000/kg IDR30,000,000 Production in Tapping Year-3 = 3,000 kg/year; IDR15,000/kg IDR45,000,000 Total rubber sap production: IDR97,500,000 (Assuming that the average yearly price of rubber is constant ) Income during 3-year harvest Rubber sap production in 3 years – Production Costs = IDR97,500,000 – IDR16,760,000 = IDR80,740,000 Note:

1. Rubber trees start to be tapped at the age of 6. With good maintenance, the production will be increasing until the tree reaches the age of 15-18 years and will be declining when tree is 20 years old and above.

2. Assuming that the production lasts 1 year, 180 tapping days. 3. Rubber price in Palembayan in September 2012 ranged from IDR7,000 to IDR8,000 per

kilogram 4. Tapping was self-done (no paid workers) 5. Usually, the rubber farmers of Palembayan grow other plants between the rubber trees such

as cocoa

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Cost components during the investment/pre-harvest for oil palm on a 1-hectare plot Cost components

Oil palm Note

1. Assuming that the maintenance costs in Year-2 and Year-3 are the same, while calculating the pesticide costs and spraying costs (labor costs)

2. Assuming that the fertilizer price is the price of subsidized fertilizer

Investment Year

1 2 3 4

Seeds 135 sticks @IDR30,000 = IDR4,050,000

- - -

Land cleaning/land management (labor cost)

IDR2,000,000 - - -

Planting/maintenance (labor cost)

IDR1,550,000 IDR800,000 IDR800,000 IDR800,000

Fertilizers ZA : 3 sacks @IDR150,000 = IDR450,000 SP 36: 3 sacks @IDR170,000 =IDR510,000 KCl: 3 sacks @IDR100,000 =IDR300,000 NPK: 3 sacks @IDR115,000 = IDR345,000 Total fertilizer cost = IDR1,146,000

ZA: 4 sacks @IDR150,000 = IDR600,000 SP 36: 2 sacks @IDR170,000 = IDR340,000 KCL : 3 sacks @IDR100,000 = IDR300,000 Total fertilizer cost = IDR1,240,000

ZA: 5 sacks @IDR150,000 = IDR750,000 SP 36 : 3 sacks @IDR170,000 = IDR510,000 KCl : 5 sacks @IDR100,000 = IDR500,000 Total fertilizer cost = IDR1,760,000

ZA: 5 sacks @IDR150,000 = IDR750,000 SP 36 : 3 sacks @IDR170,000 = IDR510,000 KCl : 2 sacks @IDR100,000 = IDR200,000 Total fertilizer cost = IDR1,460,000

Harvest (labor cost)

- - - IDR600,000

Total IDR9,025,000 IDR1,940,000 IDR2,460,000 IDR2,860,000 Source: processed from the outputs of the questionnaires and the interviews with farmers in Palembayan Sub-district, Agam District

Calculation of income generated from oil palm cultivation Costs Production costs during the investment period (3 years) IDR13,425,000 Production costs during 3-year harvests IDR2,860,000/year (assumption) IDR8,580,000 Total Production Cost: IDR22,005,000 Production FFB Production in harvest year-1 = 7,200 kg/year; IDR1,375/kg IDR9,900,000 FFB Production in harvest year-2 = 12,000 kg/year; IDR1,459/kg IDR17,508,000 FFB Production in harvest year-3 = 18,000kg/year; IDR1,515/kg IDR27,270,000 Total FFB Production: IDR54,678,000 (Assuming that the average yearly price of FFB is constant) Income during 3-year harvest Income from 3-year harvests – Production Cost = IDR54,678,000 – IDR22,005,000 = IDR32,673,000 Note:

1. Oil palm starts to be harvest at the age of 4 years. With good maintenance, the production of FFB can be increased until the tree is 15 years old and will be declining when it reaches the age of 16 years.

2. The FFB price above is the price set by the government in August 2012. At individual farmer level in Nagari Salareh Aia, FFBs of 5-6 years of age are sold at IDR1,035/kg; the price at factory (PT AMP) and broker/midle man (tauke) level is only IDR800/kg; the price at plasma farmer level is set by the government.

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3. The fertilizer costs above are based on the price of subsidized fertilizers. No subsidized fertilizers are allocated for oil palm in Nagari Salareh Aia and III Koto Silungkang.

Summary of the economic analyses of the two commodities 1 year/1 hectare Rice Chili Tobacco Sugarcane Production costs

IDR3,320,000 x 2 harvests = IDR6,640,000

IDR14,90,000 x 2 harvests = IDR29,380,000

IDR4,420,000 x 2 harvests = IDR8,840,000

IDR13,120,000

Income from harvests

IDR19,800,000 x 2 harvests = IDR39,600,000

IDR48,000,000 x 2 harvests = IDR96,000,000

IDR27,000,000 x 2 harvests = IDR54,000,000

IDR44,000,000

Net Income IDR32,960,000 IDR66,620,000 IDR45,160,000 IDR31,180,000

Rubber Oil palm Investment cost for 5 years before production

IDR11,150,000 Investment cost in 3 years before production

IDR13,425,000

Harvest costs in 3 years IDR5,160,000 Harvest costs in 3 years IDR8,580,000 Rubber production in 3-year harvests

IDR97,500,000 FFB production in 3-year harvests

IDR54,678,000

Net income IDR80,740,000 Net income IDR32,673,000

Table above shows the results of the analyses of farmers’ incomes and revenues from various commodities. It is clearly seen that the local food species, which have long been cultivated, still generate higher profit than oil palm, especially when farmers grow secondary crops alongside the main one (e.g. main: chili; secondary: corns and peanuts), as practiced by the farmers of Nagari Marambuang, Palembayan Sub-district. This mixed cultivation means that on a 0.5-hectare plot for example, the farmers not only grow one species (chili) but also other species (e.g. corns, peanuts, vegetables, etc.), meaning that there can be 3-4 commodities harvested on a 0.5-hectare or 1-hectare plot. Discussions with farmers in Palembayan, however, reveal that farmers shift to oil palm because of quick cash generation, lighter work, and availability of market (i.e. factory). With other commodities, farmers have to find a market and use more manpower. In addition to these, oil palm farmers enjoy higher prestige and easier access to banks (loans) than food crop farmers.

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Part5

Conclusion

1. The presence of large-scale oil palm operations has rapidly been impacting the traditional land management having long been practiced by farmers in Palembayan Sub-district, particularly in Nagari Salareh Aia. Potential horizontal conflicts, environmental degradation, food insecurity and elimination of women’s role in land management are threatening the communities and the area;

2. Oil palm, although it is new to farmers and was initially developed by the industry, has gradually been attracting farmers. It has become the most popular commodity among food crop farmers. At the same time, the government has been giving less support for and paying less attention to traditional land management and agriculture.

3. Food crop farmers’ decision to shift to oil palm is driven by government’s declining support for traditional land management and agriculture as well as the increasing environmental degradation that leads to declining ground water supply as a result of large-scale oil palm and industrial development in river basins and in the headwaters.

Recommendations 1. Similar to the recommendations put forward by Sumatran food crop farmers

incorporated in JARITANGAN Sumatera, we recommend that the government should immediately terminate the expansion of large-scale oil palm development and the granting of industrial plantation permits as many environmental issues and social conflicts as well as food insecurity threat arising as a result of oil palm operations have yet to be addressed.

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2. The government should protect food land and such protection should be incorporated into provincial, district and village spatial use plans.

3. The government should strengthen farmers’ economic institutions and make local food commodities generate economic benefits to food crop farmers.

4. The district government of Agam should also promote Palembayan’s land management models as a solution to establishing food security in West Sumatera Province.

5. Food crop farmers in Palembayan’s nagaris should continue promoting environmentally-friendly land management models to other parties; the research team’s findings show that such models contribute not only to environmental, social and cultural sustainability but also to families’ economic viability and food security.

6. Sumatran food crop farmers incorporated in JARITANGAN Sumatera should conduct studies on environmentally-friendly land management models in their respective areas like the Sonor study in South Sumatera and the Umo study in Jambi so that food crop farmers in Sumatera as well as in other areas can learn from various land management models practiced in Indonesia.

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Research Team Community research Team:

1. Mr. Rianda/Pak Datuak ( the farmer from Nagari Marambuang Baringin and from Farmer organization Kelompok Tani Lawan Baru)

2. Mr. Tarmizi ( the farmer from Nagari Koto Silungkang and from farmer organization Kelompok Tani Kharisma)

3. Mrs. Refnida (the farmer from Nagari Koto Silungkang and farmer organization Kelompok Tani Kharisma)

4. Mr. Safriul (The farmer from Nagari Salareh Aia and farmer organization Kelompok Tani Mutiara Terpendam)

5. Mr. Riza (The farmer from Nagari Sungai Puar) 6. Mr. Dami (The farmer from Nagari Koto Silungkang) 7. Mrs. Ida (The farmer from Nagari Marambung Baringin) 8. Mrs. Eri (The farmer from Nagari Koto Silungkang)

Research team from local NGO

1. Mr. Agus Teguh P (Wahana Liar West Sumatera) 2. Mrs. Rukaiyah Rafiq (Yayasan SETARA Jambi) 3. Mr. Rian Hidayat (Yayasan SETARA Jambi) 4. Mr. Wewen Effendi (Wahana Liar West Sumatera 5. Mr. Ilham (Wahana Liar West

Sumatera)The year 2013 will be the one we cannot forget. Our friend Ilham, who was also a member of our study team, passed away on January 6, 2013 in Bukit Tinggi, West Sumatera. We – all the other team members, JARITANGAN Sumatera (Sumatera’s Food Crop Farmers’ Network), Elang Riau, Walhi South Sumatera, Yayasan SETARA and Wahana Liar express our heartfelt condolences. May his spirit dwell on Allah’s side. Amen....

Foto Cover by Oeyanz