The Jakarta Post
Forestry and Environment Minister Siti Nurbaya Bakar revealed at a seminar last week that almost 96 percent of the 42.2 million hectares of forest conversion areas had been allocated to private companies, most of which manage oil palm and pulpwood plantations and operate in the timber industry.
Certainly, the figure was a cumulative total up to the end of 2017, but the data still indicated the rapidly increasing inequality in the agricultural sector. It was encouraging, though, to learn from the minister’s report that the Jokowi administration, which came to power in late 2014, seemed to have realized the extent of the gap.
The current government has issued only 25 licenses between 2015 and 2017 for converting 796,000 ha of forests into pulpwood plantations, and has instead focused on social forestry programs. These programs give legal access to communities living in and around forests to manage forest resources through five management schemes: community forests, village forests, community plantation forests, partnership forests and customary forests. The easier, free-of-charge land certification program for farmers has also been accelerated.
An inter ministerial team has mapped 12.7 million ha of forest areas that could be developed under the social forestry program, and a development target of 4.5 million ha has been set for 2019. But up to March, only 1.5 million ha of the target has been realized.
Naturally it will take many more years to develop the 12.7 million ha under the new social forestry scheme, which requires many capacity-building efforts to empower farmers and flesh out bureaucratic and consultative procedures to ensure legal certainty. But given the massive , growing inequality in the agricultural sector, notably plantations (tree crops), the social forestry program is inadequate to resolving the problem alone.
The program needs support from a much higher pace of inclusive growth in the plantation subsector, through mutually beneficial partnerships between big estates and smallholders. Big estate firms should serve as development agents providing technical, financial and marketing assistance under a market-driven mechanism.
The great concern is that allowing big companies to expand plantations, especially oil palm and pulpwood, at the annual current rate of more than 100,000 ha, could worsen the income and wealth gaps, causing more land conflict and threatening sustainability of the plantation industry, even macroeconomic stability.
The foundation for such partnerships is in the 2014 Plantation Law, which requires plantation companies to allocate at least 20 percent of their estates’ total acreage to smallholders through bank financing, processing and marketing cooperation arrangements. The rationale is that harmonious and mutually beneficial cooperation between big plantations and smallholders is the most effective way of expanding tree crop plantations without further widening landholding inequality.
The government only needs to strengthen enforcement of the compulsory partnership and ensure that companies licensed to expand their plantations fully adhere to the legal requirement of empowering smallholders; otherwise, it should revoke the permits for their expansion programs.