Extracto
Contents
Preface
Figures and Tables
Acronyms, Abbreviations and Conversions
1 Introduction
2 Theoretical and Analytical Framework
2.1 Structural Violence: an umbrella concept
2.2 Exploitation and Oppression: from Marx to the present day
2.3 Livelihood and Vulnerability: a critical approach
2.4 Analytical Framework
3 Methodological Framework
3.1 Research Methods and Techniques
3.5 Ethical considerations, reliability and validity
4 Context
5 The Main Factors of Production. Part I (Land)
5.1 Land Concessions and Development Plans
5.2 Allocation of Land as Mirror of the Bargaining Power
5.3 The Ownership Status of the Land Surrendered
5.4 Compensation and Land Accumulation
6 The main Factors of Production. Part II (Capitals and Labour)
6.1The Smallholders' Dilemma: entrepreneurs or labourers?
6.2 Dependent and Independent Smallholders: the peculiar case of palm oil
6.3 Credit and Indebtedness
6.4 Oil Palm Income and Smallholders' Livelihood
7 Arrangements and Practices
7.1 Sale of FFBs: terms, conditions and practices
7.2 Intermediation: Cooperatives and Brokerage
7.3 Other means of production: Fertilizers and Machineries
8 Conflicts and Resistance
8.1 Promises, Pressures and Criminalisation of Dissent
8.2 Ethnicity and the Customary 'adat' Law
8.3 Everyday Forms of Resistance
9 Conclusion and Recommendations
Epilogue
References
Appendix I: Informed Consent (ENG-IND)
Appendix II: Codebook and Questionnaire (ENG-IND)
Preface
The following pages are the passionate culmination of an intense process, which started almost one year before. This thesis represents the successful conclusion of the Master in Development Studies at Radboud University Nijmegen.
Since the very beginning of this programme, I have been encouraged to follow my interests and decide the research's topic accordingly. I had the chance to develop my research proposal by respecting my personal inclinations and theoretical interests. Indeed, thanks to this research, I could go through some of the theoretical issues that I brought with me from my Bachelor. In this sense, my theoretical interest in structural violence, exploitation, neo-liberalism and the dynamics of global capitalism could be expanded with fieldwork experience that allowed me to look at them empirically.
By paraphrasing Gabriel García Márquez, it can be said that there are stories that do not belong to those who wrote them but rather to those who suffered them. This is one such narrative. The focus of this thesis is the condition of the local farmers embedded in the Indonesian palm oil industry through smallholders' schemes or, more precisely, partnership agreements with companies. It consisted of an analysis of the relations of production occurring between them and those palm oil companies, as well as, the arrangements and practices that actually determine their position in such an industry. To them goes my greatest wish for a better future.
In every phase of this process - from the identification of the research's problem, to the very last moment of writing, across the research design, the data collection and analysis - I knew that, in case of need, I could rely on the precious guidance of my supervisor Dr. E.B.P. de Jong. He has unrelentingly believed in me and in my research, more than I myself actually did it during the most difficult moments. He was the first to decode, understand and, finally, address my academic interests in the right direction. I took maximum advantage from his great guidance and oversight. To him goes my sincere gratitude and esteem.
A hundred pages would not be enough to properly thank every person who, somehow, contributed to this work but I will however try to acknowledge those who actually deserve it. Firstly, I want to thanks Prof. Renato Cavallaro, sociologist and friend, for his teachings and inspiring influence on me. I am immensely grateful to my interpreter Dilo because he added humanity and friendship to his great professional service. His pivotal contribution to the research did not just end with the mere translations but rather touched almost any aspect of the fieldwork experience. I share with him the credit for collecting the data that sustain this work. In reality, I am also thankful to the two assistants, Dika and Dadi. Without their enthusiastic help, it would not have been possible to administer the questionnaires in such a short time, considering all the hurdles of the context. There are no words to thank Hannah who patiently checked this thesis and made it considerably better. I hope that her pure generosity was at least partially accompanied and rewarded by an inquiring interest for the topic.
Meeting three compatriots in a class composed of only a dozen people is just a coincidence. Discovering in them a brotherly friendship is destiny. I am terribly glad I met Lorenzo, Giulia and Camilla because they made me understand that home is simply the place that you are willing to share with friends. If I felt at home for one year in Nijmegen, this is mostly thanks to them.
A special thanks goes to Claudia who, regardless of the distance, made me always feel her lovely support and never failed to encourage me. Eventually, the last and warmest thanks goes to my family, my beloved parents and sisters. They sincerely believed in me and I would have not gone through this experience without their precious help and sincere support.
Marco Mercuri Nijmegen, July 2015
Figures and Tables
Figures
Figure 1.1 Palm Oil Supply Chain Schematic
Figure 2.1 Analytical Model
Figure 5.1 Falrness of Ratlo(Land allocatlon)per companles
Figure 5.2 Condition of plasma plots:example of soil erosion
Figure 5.3 Compensations per Land size
Figure 6.1 Year when it was joined the partnership scheme
Figure 6.2 Size of smallholders'plasma plot
Figure 6.3 Contrlbutlon of palm oil to the household'slncome(%)
Figure 6.4 Contribution of palm oil to the household's Income: per companies
Figure 6.5 Contribution of supplementary activities to the household's income (%)
Figure 6.6 Contribution of supplementary activities to the household's income:per companies
Figure 7.1 Distance to the mill(in km):per companies
Figure 7.2 Distance to the mill(in minutes):per companies
Figure 7.3 Conditions of roads in Sanggau
Figure 7.2 Ownership of machineries and trucks used by smallholders
Figure 8.1 Level of Smallholders' Satisfaction about controversial topics
Figure 8.2 Free, Prior and Informed Consent: Level of agreement per each statement
Figure 9.3 Dayak dance for the new PTPN Xlll manager's assignment
Figure 9.4 Dayak cerimony for the new PTPN XIII manager's assignment
Table
Table 3.1 Methods utilised : aim, unit of analysis, research unit, sampling and registration
Table 6.1 Reasons for joining the partnership agreements. Frequencies (Multiple Response Question)
Table 6.2 Years needed to repay the debts ANOVA-test per companies
Table 6.3 Type of supplementary activity. Frequencies (Multiple Response Question)
Table 6.4 Reasons for continuing withsubsistencefarming
Table 7.1 Deductions subtracted during the FFB ssale
Table 7.2 Where fertilizers and pesticides are bought 5.. Crosstabulation per Company
Table 8.1 Ranking ofthe main causes of conflicts against companies according to oil palm smallholders
Table 8.2 Company's commitment to create Infrastructures, roads and services. Crosstabulation per company
Table 8.3 Conflicts and Resistance in PT MAS and PTPN XIII (1998-2001)
Acronyms, Abbreviations and Conversions
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1 Introduction
Palm oil is one of the most utilised and yet most contentious products in the world. It is massively exploited in the food, cosmetic and home-products industries. Globally, the demand for vegetable oils increases not only for industrial uses but also for cooking purposes and bio-fuel production. The controversial palm oil expansion across Southeast Asia derives directly from that growing demand (Pye and Bhattacharya 2013; Colbran and Eide 2008; Corley 2009).
The palm oil case is an emblematic example of commodity production, which lies on global value-chains' contradictions and the relative North-South relations. Those relations, in turn, are embedded in post-colonial dynamics and neoliberal development model (Neilson 2014; Brewer 2011; Gereffi et al. 2001). For example, the agrarian transformation in Indonesia, the first global producer and exporter of CPO (crude palm oil), results in an extremely contentious dispute between transnational activist movements and transnational corporate interests (Caoutette and Turner 2009; Pye and Bhattacharya 2013). Therefore, the palm oil issue can be analysed as a multiple crisis of capitalism, meaning that the climate crisis is connected to biodiversity loss, human/labour rights impairment and controversial development patterns (Pye 2009). Actually, the development paradigm, advocated by pro-oil palm narratives (McCharty and Cramb 2009; Pye 2009), is the underlying nexus of that controversy, where the global dispute around agro-fuel plays a key role (Pye 2009; Colbran and Eide 2008; Obidzinski et al. 2012; McMichael 2010; White and Dasgupta 2010).
The global palm oil industry is receiving considerable attention from NGOs, activists, policy makers, consumers and the media. This is mostly due to the environmental issues involved with the production of this commodity, namely deforestation, biodiversity loss and climate consequences. However, the social impacts on local communities and workers - in terms of livelihood, vulnerability, land and human rights - appear as marginal issues within the mainstream discourses, although these topics are widely studied by researchers and scholars (Obidzinski et al. 2012; Rist, Feintrenie and Levang 2010; Marti 2008; Wakker 2005).
Several reports about exploitation and modern day slavery in palm oil production have been produced by different organizations. The US Department of Labor (DOL) reports, in its List of Goods Produced by Child Labor and Forced Labor (periodically uploaded online), critical conditions for palm oil workers in the South East Asia. The International Labour Organization (ILO) constantly denounces the same forms of trafficking, child labour and forced labour. Recently, Accenture prepared for Humanity United a detailed and well- documented report significantly titled Exploitative Labor Practices in the Global Palm Oil Industry (2013). The International Trade Union Confederation in Annual Survey of Violations of Trade Union Rights - Indonesia (2012) reported systematic violations of trade union rights and abuses, which occurred within the main conflicts related with palm oil issue. Likewise, local movements and NGOs, especially Sawit Watch, continue to denounce the same violations and conflicts.
In spite of a widespread awareness of the presence of exploitation of oil palm plantations' workers (as well as child and forced labour, abuses and human rights violations against them), the rhetoric about smallholders inclusion into the global market tends to conceal their exposure to vulnerability and risks behind the miraculous benefits of the self- entrepreneurial model. An exaggerated and simplistic emphasis on the mere income- generation, without considering the actual effects and conditions, may hide and conceal the constraints that burden smallholders in terms of 'unequal exchanges' and 'unfair practices'. Therefore, to look beyond the self-entrepreneurial myth means, first of all, to cautiously analyse the relations of production between the actors involved in the upstream phase of the palm oil industry (see Figure 1.1), especially the relation between local smallholders and companies.
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Figure 1.1 Palm Oil Supply Chain Schematic Source: Accenture 2013, 15
Amongst those actors, economic arrangements, partnership agreements, credit bonds and commercial practices may disclose the inverse flows of profits (bottom-up) and risks (top-down) so as to unveil the presence of new forms of oppression, exploitation and structural violence alongside the largely promoted monetary benefits. Oppression and exploitation here have to be understood as economic concepts included into the Marxist critique to capitalism. These two concepts refer to the capitalistic control on the means of production (e.g., land, machineries, et cetera) and to the surplus extraction from workers, respectively. Meanwhile, structural violence is taken to mean the avoidable impairment of human agency and living conditions caused by socio-economic structures, which prevents individuals and groups from reaching their full potential.
The idea behind this research is that nowadays there exist new forms of surplus extraction beside the traditional wage-labour power exchange. The agrarian working class in the Global South is particularly exposed to those new forms of surplus appropriation since their nominal ownership of little plots of land and their supposed entrepreneurial status do not prevent them from being exploited. Such an idea is sustained by the belief that the capital, currently, does not necessarily exert control over production throughout the direct ownership of all the means of production. The capital utilises innovative forms of control over production, which allow, for instance, the release of ownership of the land in the hand of local farmers. Therefore, alongside surplus extraction, those workers are now charged with the burdens typical of entrepreneurship. Financial, environmental and health risks are shifted onto farmers as consequence of their supposed entrepreneurial status.
Hence, the main research hypothesis is that the ownership of a small plot of land (one of the factors of production) - by local smallholders in the Global South - does not prevent them from being exploited throughout global market mechanisms and its uneven relations of production. The research objective is to identify the constraints that burden local smallholders among the countless folds of the partnership agreement (arrangements and practices); to understand the true nature of the relations-transactions between smallholders and companies; to reveal the 'unequal exchanges' and the 'unfair advantages' within such relations-transactions; to show how profits and risks are distributed between local smallholders and companies. That is, to enquire into the veiled power relations within the market, which only appears to be a fair and neutral field. The indirect aim is to shed light on the nature of new forms of exploitation embedded into the global commodity chains. This will serve to foster social awareness, provide recommendations for policy changes and contribute to the theoretical debate around global capitalism and its consequent neoliberal paradigm, largely advocated for developing countries. The key dynamics of capitalist modes of production (i.e. surplus extraction, capital accumulation, et cetera) will be observed, analysed and used as leverage to deepen the understanding of the current forms of exploitation of both labour and commodities, by way of analysis of ties among states, corporations and farmers (Yoshihara and Veneziani 2013; Ngai and Nolan 2012, Brewer 2011; Nelison 2014).
In Indonesia, especially around the forest frontier zones, the massive agrarian transition from subsistence farming to cash crop monoculture for the global market is generally seen as an essential instrument for poverty reduction. This may provide positive livelihood outcomes through generating new incomes otherwise missing in such economically depressed areas. Those outcomes and their economic multipliers are still controversial (Obidzinski et al. 2014; Rofiq 2013). The pro-oil palm discourse is advocated by a heterogeneous transnational alliance (Pye 2009) composed of governments, international development organizations, corporations, market-led actors and neoliberal think tanks. Despite this mainstream discourse, it has to be said that this agribusiness transition can actually expose smallholders to vulnerability. The oil palm growth is characterized by large- scale processes of exclusion from access to land or adverse incorporation of smallholder farmers within that agribusiness-driven agriculture (McCarthy 2010). Food security, volatility of prices and land grabbing are some of the most contentious aspects involved in this transition. The land grabbing is here understood as a new stage of 'primitive accumulation' in the Global South: a modern form of 'enclosures' (Hall 2011 and 2013; Davis et al, 2014; Akram-Lodhi 2007). Therefore, the palm oil development represents a questionable issue in terms of both environmental and social sustainability. The boom that occurred during the last decades seems to be doomed to continue relentlessly in order to answer to the global demand for oil. That inexorable growth can be easily predicted, while the same cannot be said for the outcomes of its externalities, which deserve to be continually studied.
The critical relevance of palm oil for the Indonesian economy, and the leading role of that country in this industry, drove my choice to conduct research there. Similarly, Sanggau district (West Kalimantan) was chosen because it is an emblematic case of a frontier area where the agri-transition to palm oil already started more than 25 years ago and is still in progress, thanks to the massive amount of land and forests deemed attractive for oil palm plantations (SPKS 2006; Gillespie 2011; Potter 2012; White and White 2012). The fieldwork research took place from 15th January 2015 until 15th April 2015.
Main research question: To what extent are oil palm smallholders in Sanggau district, Indonesia, vulnerable to exploitation through their relation with palm oil companies?
2 Theoretical and Analytical Framework
To protest in the name of morality against excesses or abuses is an error that hints on active complicity. There are no abuses or excesses here, simply an all-pervasive system.
- Simone de Beauvoir, Hard Times: Force of Circumstance, Volume II
2.1 Structural Violence: an umbrella concept
Concepts like power, surplus extraction and relations of production will be utilized by taking into account their traditional positioning on Marxist and Critical theories as well as their implementation into current analysis of global dynamics and the development field (Bottomore 1991, VV.AA 1994, 2012; Gillespie 2012). As an 'umbrella concept', structural violence will go along all these notions in order to deconstruct and analyse the social mechanisms of oppression, collectively hidden, and to pursue the politicization of what has been normalized and naturalized (Farmer et al. 2006; Quaranta 2006; Das 1997).
Structural violence, a term coined by the Norwegian sociologist and mathematician Johan Galtung (eminent founder of Peace Studies) during the 1960s, refers to social structures that stop individuals, social and ethnic groups or even societies, from reaching their full potential. It concerns the usual functioning of social structures in their everyday operation, with the naturalized and acceptable status quo reproduced by institutions throughout political and economical choices. 'According to Galtung, it is the avoidable impairment of fundamental human needs or... the impairment of human life, which lowers the actual degree to which someone is able to meet their needs below that which would otherwise be possible' (Farmer et al. 2006, 1686), potentially, in the absence of such violence. The theme of peace is central in Johan Galtung's work, in which he opposes the violence rather than the war. This is understood as a broader and more inclusive category, which is able to describe in the best way the pathogenic role of social structures and institutions, which prevent the development of human potentialities (individuals and groups). Nonetheless, this threatens directly and/or indirectly the wellbeing of people, the satiation of their needs and the protection of fundamental rights (Galtung 1969). In everyday language, the word violence is usually understood as a physical action put to use by a well-defined actor against another. Whereas, according to Galtung, structural violence consists of an actual impairment of agency, where the satisfaction of fundamental human need is systemically reduced below the potential threshold by social, political or economic structures, which basically wreaks an impairment of human life (Galtung 1969; Farmer et al. 2006). This definition involves two characteristic-criteria that allow us to recognize structural violence: 'avoidability' and 'missed-potential.' Therefore, analytically, compromised capabilities and constrained agency become the main indicators to recognize this kind of violence.
When talking about capabilities and agency ¡t is indispensable to mention Amartya Sen and to acknowledge his contribution to economy and development studies. The capability approach puts the personal capability 'to do or to be' to the centre of debate in terms of substantial freedoms. This approach stresses the importance of functioning as 'being and doings' (Sen 2010). That means we should consider the capitals and resources that a person may possess not only in the form of owning, but also in a wider sense, as personal and social dimensions. Capabilities have to be seen moreover as a person's opportunity to achieve an end. Therefore, even poverty can be better read as capability- deprivation and not just as a lack of resources. The freedom-based capabilities approach of Sen has been re-elaborated and operationalised by Marta Nussbaum, who made it more concrete and better rooted on political and philosophical ground. Nowadays, this approach is predominant within policy debates around human development. Several indexes are based on Sen's intuition regarding capabilities, which accentuate the multi-dimensional nature of well-being and as well as the relevance of individual freedom in choices. Unfortunately, this approach is often interpreted and reworked in such an under-socialized way, that usually it ends up neglecting even the likelihood that those capabilities and the relative agency may be compromised and constrained by social structures.
With reference to agency, Pierre Bourdieu (1992) claimed that 'the real is relational' to stress the centrality of relations among agents. This consequently underlines the fact that the individual cannot be considered 'the proper object of social science' because the relevant nexus of social science remains independent to individual consciousness. Conversely, the proper object of social science lies in the objective relations and their consequent positions. According to Bourdieu, these relations are objective, in the sense that they exist, as Marx argued, regardless of the individual will and awareness. Similarly, the positions objectively exist and can be easily recognised by their impositions upon agents, in the structure that determines the distribution of power (or capital) and the corresponding profits. Therefore, any objective relation can be defined in terms of domination, subordination or homology depending on its objective position in the field (Bourdieu, 1992, 97). The field is, first of all, 'the locus of relations of force ... and of struggle aimed at transforming it, and therefore of endless change' (Bourdieu, 1992, 103). Since the true object of social science cannot be the individual, who exists just as an agent, neither can agency exist or being studied outside of the structures in which it is embedded. They both exist in a dyadic relation, better as a duality (Giddens, 1984: 25-28).
Along the same line of thought, Mark Granovetter (1992) claims that economic action, like any other human action and institution, cannot be explained just by individual motives because it is socially situated. 'It is embedded in ongoing networks of relationships rather than carried out by atomized actors' (Granovetter, 1992, 25). The same idea of embeddedness can also be found within the discourse on structural violence: 'The term structural violence is one way of describing social arrangements that put individuals and populations in harm's way ... the arrangements are structural because they are embedded in the political and economic organization of our social world; they are violent because they cause injury to people, typically, not those responsible for perpetuating such inequalities' (Farmer et al. 2006: 1686).
Structural violence does not directly refer to specific actors, it rather shows its inescapable brutality behind the systemic way of how it is distributed. Inequality provides a perfect example of structural violence, including in the previously mentioned criteria of 'avoidability' and 'missed-potential.' The inequalities for Farmer (2005), in terms of unfair chances of life, are directly caused by the unequal distribution of resources. However, the underlying problem is that the power of decision-making over the distribution of such resources is, in turn, unevenly distributed. Galtung (1969) argued that structural violence has to be considered indirect since it is not directly imposed by a specific observable agent. Rather, it is embedded and integrated into social structures and can be revealed in power inequalities and consequently in uneven chances in life. Thus, this violence is implicated in structures based on unequal distribution of power. The outcome of this unequal distribution of power (and resources) results, in turn, in an active constraint to agency. It is exactly the world's poor, the exploited working class in Global South ( that is the 'wretched of the earth' in the era of global market) whose agency has repeatedly compromised, to see the actual implementation of their basic needs systemically reduced below the potential threshold: a condition which, according to Galtung's and Farmer's theory, allows recognition of the presence of structural violence.
This concept, which is extremely controversial, has met several critiques due to its excessive generality and abstractness. One famous example is the dispute between Galtung and Boulding (1977), according to whom the concept of structural violence is too inclusive to be used as a tool for understanding the underlying dynamics of violence. Boulding deems it an effective metaphor but nothing more. For Boulding, violence is limited to a precise and determined action rather than a state or condition, as in the case of structural violence. As matter of fact, the concept of structural violence was taken up again and enhanced by other disciplines that showed, in spite of Boulding's opinion, that the constitutive flexibility and generality of that concept does not restrict its analytical potential. Rather, those characteristics improve the concept's ability to provide good leverage for understanding complex social phenomena, on the condition that is accompanied by methodological accuracy and a deep awareness of the concept itself. Structural violence may appear elusive and hard to recognize due to its apparent abstractness, which relegates the concept to a theoretical level. Actually, the difficulties outlined above are constitutive of structural violence itself, as they are produced and reproduced in the process of ideological institutionalization of social phenomena.
Structural violence is, usually, accompanied by well-developed ideologies that advocate the view that a particular form of structural violence is 'normal' and therefore cannot be considered properly as violence. Thompson, in Studies in the Theory of Ideology (1984) explained the three phases at the base of an ideology's operation for the maintenance and reproduction of power's relations: a) institutionalization, b) dissimulation, c) reification. The legitimacy for the status quo is accomplished by the proliferation of ideas that promote it and by the denigration of those who contest it. Dissimulation prohibits conflicting ideas and yet hides this ban through a kind of organized, not-verbalized logic; the problems created by the system, for example, can be reworked as individual problems. The reification presents the status quo as changeless and immutable, simply as the way things must be (Thompson 1984). Reification complies with the highest degree of violence's naturalization and normalization.
Paul Farmer, an American anthropologist and physician, has contributed significantly to the operationalization of the Galtung's concept. His eminent contribution was essential in the acknowledgement ofthat concept in other scientific fields. He prefers to emphasize the role of social structures that incorporate such violence into steady institutions and in everyday experience (Farmer et al. 2006). From this perspective, the idea of structural violence is linked closely to social injustice devices and social mechanisms of oppression. Ivo Quaranta (2006), an Italian anthropologist sensitive to the theme of social suffering, argues that the revitalization of the concept of structural violence appears first as an invitation to analyse the social mechanisms of oppression, which are seen as 'anyone's fault'. He advocates that we should focus primarily on suffering produced by social structures and institutions during their regular operation, on their deep inequalities that result in pathologies: those that Farmer calls 'pathologies of power' (2004). By structural violence, in fact, Farmer means that particular type of violence that is exercised in an indirect manner, which does not need a precise and defined actor to be exerted. 'Farmer sheds light on the historical processes, political and economic factors, that have produced and continue to produce such violence, so that this ceases to be 'guilty of none' to be understood as the result of choices and human action. ... The statistical risk and a mocking fate turn into political responsibility, and the commitment of anthropology goes beyond the examination of local moral worlds to stand as a tool for political critique and transformative action' (Quaranta 2008, 7).
2.2 Exploitation and Oppression: from Marx to the present day
As can be deduced from the theoretical debate, from Galtung's intuition to the latter elaborations, structural violence is centred on exploitation, is historically determined and often economically driven (Galtung 1969; Farmer 2004; Ho 2007). The notion of exploitation here can be read as exploitation of both natural resources and human beings; that is to say, in economics terms, exploitation of factors of production. Junankar (1994) describes exploitation as 'being an unfair/unethical extortion of someone else's labour for the benefit of a favoured group or class ... another common meaning is the exploitation of natural resource' (Junankar 1994,139).
Susan Himmelweit, in A Dictionary of Marxist Thought (1991) claims that Marx used exploitation in two senses. The first, as a general 'making use of an object for its potential benefits; thus the exploitation of natural resources, of a political situation or of moral hypocrisy' (Himmelweit 1991, 182). The second, as the foundation of class society and specifically of the capitalistic one: 'exploitation occurs when one section of the population produces a surplus whose use is controlled by another section' (Himmelweit 1991, 183). Surplus extraction from one class to another is, therefore, at the basis of exploitation. Those classes exist only in relation to each other, a relation that defines the 'form of exploitation occurring in a given mode of production (Himmelweit 1991, 183). The capitalist mode of production generates surplus from labour, meaning that even though capitalists buy workers' labour-power at a wage equal to its value they still, by being in control of production, extract labour greater than the equivalent of that wage' (Himmelweit 1991, 183). This process is called appropriation of surplus value or surplus extraction; Marx argued that the source of profits cannot be the exchanges because they are zero sum games, therefore profits are instead derived from the mode of production itself, and this appropriation 'comes about, not because of the existence of monopoly power or by cheating, but as result of a normal capitalist process of production' (Juanankar 1994. 139).
The form of exploitation, in Marxist analysis, changes depending on the social system, 'in slave or feudal society, exploitation is open and obvious to all participants ... in a capitalist society with 'voluntary exchange exploitation is veiled' (Junankar 1994, 138). Himmelweit claims that none of the previous social systems, namely modes of production, required such intellectual effort to 'unearth, display and rebury their method of exploitation ... capitalism is unique in hiding its method of exploitation behind the process of exchange ... exploitation is obscured too by the way the surplus is measured' (Himmelweit 1991, 183). Exploitation, for Marx, is veiled not only from the workers' gaze but also from the view of their exploiters. Unaware capitalists often believe they are trading equally with workers (Junankar, 1994).
Elster (1978, 3) reminds us that 'both Marxist and neo-classical theories of income distribution agree that the worker is exploited if he gets less than he produces.' Exploitation, in Marxist terms, may be defined as a state that negates both the principles: 'from each according to his ability, to each according to his needs.' The neo-classical idea of exploitation is rather based on two distinct notions: 'the primary idea certainly is that a factor of production is exploited if it received less than (the value of) its marginal product. A secondary ¡dea ... is that exploitation takes place if there is some pure entrepreneurial profits left after both factors have been rewarded' (Elster 1978, 8). For neo-classical theorists, exploitation may occur just in imperfect capitalism, whereas for Marxists, exploitation occurs in 'all capitalist economies, however perfect' (Elster 1978, 9). Both neoclassical and Marxist approaches to exploitation may be used for analytical purposes: 'when workers revolt against the system we may say that they revolt against exploitation in the Marxist sense; when they revolt within the system against abuse of the system, they revolt against exploitation in the neoclassical sense' (Elster 1978, 9).
Through a cross-national perspective, Terry Boswell and William J. Nixon (1993) sought to explain the Marxist theory of rebellion. The failure of proletarian revolution across developed countries has often been cited as an example of a fundamental error in Marx's theories. Thanks to a regression analysis of violent rebellion in 61 countries, the authors have discovered in the global south a perplexing relation between economic growth and rebellion, likely encouraged by income inequalities and political changes. It provided new empirical support for Marx's prediction: 'Economic development fosters revolt because of its impact on proletarianization and class exploitation' (Boswell and Nixon 1993, 681). Thus, a proper understanding of Marx's theory of rebellion can be provided just by scrupulous analysis of class exploitation. According to Zwolinski (2012), it is capitalism itself which deserves our blame and not specific capitalists or even a supposed 'imperfection' of that system: 'capitalists have no real choice but to attempt to extract as much value from workers as possible, lest their business be undercut by a competitor with fewer moral scruples' (Zwolinski 2012, 158). Jon Elster argued that the relation between workers and capitalists is characterized by two features: a) the power of capitalists is always enforced by political domination; b) the exploitation occurs by means of an impersonal mechanism, better known as market. Both these features contribute to maximize the asymmetry of power between the two classes (Elster 1978, 4).
Matt Zwolinski in Structural Exploitation (2012), through analysis of wrongful exploitation within sweatshops, reconstructs the theoretical debate around exploitation and connects it with structural injustice. To exploit someone is to take advantage of him in a way that is unfair or degrading ... characteristically, exploiters interact with their victims [..] the victim might be harmed in the sense she suffers a setback to her interests relative to how she would have fared in the absence of any ¡nteract¡on'(Zwol¡nsk¡ 2012, 156). This aspect fits nicely into the definition of structural violence and emphasizes the likelihood that the exploitative transaction (usually wage-labour power) might even be 'fully voluntary, at least in the sense of being free from outright coercion, force or deception' (Zwolinski 2012, 156). This happens, basically, because capitalism, characterized by private control of means of production, 'forces workers to choose between working for the owners of capital and starving to death' (Zwolinski 2012, 185). Similarly, Juanankar claims that 'the social system forces the workers to accept work simply to obtain an income, given that workers do not have other income-earnings assets' (Junankar 1994, 141). Thus, people would accept work in wrongful, exploitative conditions mostly because their background situation is desperate, and in turn this desperation 'is often - or depending on one's theory ofjustice, almost always - a result of serious [structural] injustice' (Zwolinski 2012, 155). For Zwolinski, therefore, exploitation is not just a matter of specific transactions but hails from pre-existing social institutions that foster and promote those transactions. 'On this line of reasoning, the critics of capitalism might be right in finding exploitation in the capitalist system, but it is the system as a whole, and not the discrete actions of individuals within it, that is wrongfully exploitative' (Zwolinski 2012, 161). Zwolinski's focus on structural injustice - and its link with exploitation - is critical in the correct attribution of the responsibilities for situations of injustice, 'to identify political and economic institutions themselves as exploitative, and not merely as a means to identifying micro level transactions as exploitative' (Zwolinski 2012, 160)
Several critics have addressed the Marxist theory of exploitation, most of them relate to the criticisms of labour theory of value, with which it is linked. A vigorous attack on the Marxist concept of exploitation has come from Roemer, with his study of analytical Marxism. Roemer attempt to look at labour as any other commodity in order to overcome the Marxist idea of exploitation on behalf of 'an approach that highlights the inequalities in endowments that give an advantage to the wealthy in the distribution of commodities and leisure' (Fleurbaey 2014, 653). It results in an abstract theory, which misses the Marxist point of unequal relations and power between capitalists and workers. Since he deems labour as any other commodity, he can just focus on unequal income and wealth distribution (Junankar 1994, 142). Roemer claimed that 'unequal exchange is neither necessary nor sufficient for exploitation, which can be explained simply in terms of unequal property ownership independently of labour theory ofvalue' (Janunkan 1994, 141).
Marc Fleurbaey, in his recent The Facets of Exploitation (2014), has divided the concept into four different sorts of possible exploitation. The first two categories are respectively linked with the above-mentioned debate. The first, namely 'unfair advantage' refers to inequalities in endowments (Roemer's approach); whereas second, called 'unequal exchange' seems to fit better within the Marxist approach (Fleurbaey 2014).
'Roemer defines individuals to be exploited if the labour they extend in production is greater than the labour embodied in the goods they can purchase from the revenues they gain from production' (Himmelweit, 1991). This definition intentionally mentions individuals instead of classes and neglects social relations of productions in order to prove that neither wage-labour nor any other class structure is a necessary pre-requisite of exploitation. Therefore, workers may hire means of production or vice versa and still be exploited. 'The purpose of this exercise is to show that the unfairness of capitalism is based not [only] on wage-labour relations between classes but on the differential ownership of alienable means of production between individuals' (Himmelweit 1991, 184). Given that, it is just the capital's control over labour process that allows the exploitation. Any model which underestimates, rejects or 'does not recognise that social characteristic of capitalism will, of necessity, fail to capture its essential relation of exploitation' (Himmelweit 1991, 184). Although Roemer's approach, based on modern microeconomics, lose sights of important aspects of Marx's endeavour - such as the inquiry over the laws of motion of capitalism - some of his intuitions can be profitably used nowadays to analyse process of exploitation within current global relations of productions. The capitalist control on production has undertaken new unexpected forms alongside traditional wage-labour power exchange, especially in the Global South where the exploitation of commodities appears strictly related with the exploitation of labour.
Global commodities are generally considered raw materials and basic foodstuffs extracted or grown in one area - usually in the global south - and sold on the global market for industrial or consumer use elsewhere. Scholars found it fruitful to study single commodities to highlight social relations of production in the current global capitalism. 'Labor historians focusing on the point of extraction/production or tracking the production and circulation of specific global commodities have gained insight into the development of global capitalism, in particular relations between colonized and colonizer, developing countries and advanced industrial countries' (Ngai and Nolan 2012, 4). The concept of global commodities should be revised in a larger sense - considering how commodity production in the Global South has expanded - including both basic commodities and finished products for the global market. However, the border between the notion of 'raw' and 'finished' has always been too vague (Ngai and Nolan 2012, 4). Traditionally, alongside mining, fuel and coal extraction, the Global South has specialised in textiles (garment industry) and refined sugar. Nowadays, refined oil palm, and agro-fuel in general, are the confirmation of that difficulty to define commodities just as 'raw.' A key example is provided by 'contemporary retailers like Wal-Mart that have come to occupy a commanding position in the global economy, exploiting cheap labour in the developing world to manufacture goods for mass consumption worldwide' (Ngai and Nolan 2012, 4).
Yoshihara and Veneziani, in Exploitation of Labor and Exploitation of Commodities: a New Interpretation (2013), review the 'Fundamental Marxian Theorem' and the Okishio- Morishima' approaches to exploitation. They conclude that 'the existence of profits is proved to be equivalent to the exploitation of labour. However, it can also be proved that the existence of profits is equivalent to the exploitation of any goods. Labour and commodity exploitation are just different numerical representations of the productiveness of the economy' (Yoshihara and Veneziani 2013, 517). In order to enhance understanding about the functioning of current capitalism and to unveil inequalities connected to its mode of production, they seek a definition of exploitation that also grasps social relations between agents. In Marxian terms, exploitation is linked to unequal exchange between capitalists and workers, therefore the presence of profits is the constitutive proof of such exploitation and the 'associated inequalities in the distribution of well-being freedom' (Yoshihara and Veneziani 2013, 518). In this sense, labour exploitation is just a numerical representation of the existence of surplus and so profits, but not the only one. This property is not a labour's prerogative. According to the 'generalised commodity exploitation theorem', the exploitation is nothing more than a 'technologically efficient use of any commodity as a productive factor' that results in the existence of profits. The problem with this notion is the analytical difficulty in distinguishing exploitation of workers from the exploitation of any other commodity since 'they are just alternative representations of the existence of a surplus product by the means of different numéraire (Yoshihara and Veneziani 2013, 518). This approach, which focuses on technical aspects, considers exploitation as a bare depiction of the presence of surplus, therefore an asocial phenomenon. In truth, exploitation is first of all a social phenomenon, meaning that is embedded in social relations between agents. 'The relation between exploitation and profits, then, has not only to do with properties of the existing technology and its efficient use by capitalists. It reflects social relations of production and distributions among individuals' (Yoshihara and Veneziani 2013, 518).
John F. Henry (1975) provided a worthwhile and interesting differentiation between exploitation and oppression. Starting from Adam Smith's different definitions of productive and unproductive labour, he followed Marxist theory concluding that 'is quite evident that only productive labour can be exploited - produce more value than it receives in the form of wage-goods' (Henry 1975, 38). This does not necessarily mean that only productive labour can be oppressed. In Marxist terms, the capitalists, in order to remain in power, have to prevent workers from taking the 'control over the economic environment.' That is to say, they must oppress the workers by depriving them of means of production (e.g. land, machines, etc.). Obviously, this oppression is not exploitation yet, but it is at the basis of the latter. Workers would not sell their labour power for a wage if they still had control over those means of production, and consequently capitalists could not exploit them. 'Thus, primitive accumulation is nothing more than the creation of an exploitable class through depriving a large group (primarily peasants) of productive resources' (Henry 1975, 38). The contemporary forms of 'global land grabbing' (Derek 2011) may be included in that notion of oppression since the land dispossession which is occurring in the Global-South has been attributed to primitive accumulation (Derek 2013; White 2012). Such accumulation , which deprives farmers and local communities of their land rights, can be considered a form of 'New Enclosures', inasmuch as it is reminiscent, in a modern vein, of the British process of land conversion from common to private as described by Marx (Akram-Lodhi and Haroon 2007).
2.3 Livelihood and Vulnerability: a critical approach
It is particularly evident that all the concepts analysed so far may badly affect the living conditions of workers. Academics since the 1980s have focused their attention on livelihood frameworks and their further elaborations. The scientific interest for livelihoods emerged in response to the dominant macroeconomic perspective, considered too structuralist, which pursued poverty reduction through universal receipts, namely 'Structural Adjustment Programmes.' Dissatisfaction with these structuralist approaches brought scholars to focus on the multidimensionality of poverty, on agency and on capabilities rather than constraints. The starting point was the belief that the poor are not passive victims of structures but rather active agents endowed with agency (de Jong 2013, De Haan et al. 2004). The pivotal shift of perspective had enormous consequences, both theoretically and in terms of policy orientation. The Sen's school of thought provided a significant contribution to that process with its capabilities approach. Livelihood is rooted in a bottom-up and actor oriented view; it bases its interest of study on informal sectors and in the survival and coping strategies of the poor (De Hann et al. 2004). Livelihood studies are usually interested in the way poor people cope with disasters, or economic and political adversity. Within the actors-structures dilemma, the concept of livelihood stands on the actor-side, in name of a benevolent people-centred perspective. The British Department for International Development (DFID) led the endeavour to develop an efficient framework for studying livelihood. One of the most widely used notions of livelihood comes from them: 'livelihood comprises the capabilities, assets ... and activities required for a means of living' (de Jong 2013, 33). Most of the concepts at the basis of the livelihood framework have been the subject of modification, a real semantic shift. For instance, capital used as an economic metaphor to indicate a broad variety of different things may be confusing and lose sense during its operationalization. As was properly stressed by Arce and Hebink (2002, 5) 'the concept of capital cannot be conceptualised independently of both power and specific regimes of production and consumption. This means an understanding of power relationships among groups in their struggle to access resources.' Paradoxically, although the livelihood approach emerged as a critique to the macroeconomic neoliberal approach, which led the World Bank (WB) and the International Monetary Fund (IMF) policies, it also converged with its further development. This occurred not in terms of victory over the previous perspective and consequent replacement but rather via integration: complementary instead of opposing. The absence of an adequate critique played on the same ground, that is macroeconomic, did not even scrape the hegemony of the general ideology underlying such a perspective. The livelihood framework appears nowadays as a perfectly compatible ramification of those perspectives that it opposed in the past. Instead of disrupting the whole 'scheme', livelihood has proved to be a micro-level framework suitably embedded in the same macro-level ideologies. Further elaborations of the concept seek to overtake that bond, for instance 'the attention to styles in livelihood studies can be seen as an attempt to move away from neoliberal thinking to a more structural approach' (de Jong 2013, 38). Nonetheless, the livelihood framework seems to remain incorporated within the neoliberal discourse over poverty, and as such represents an inoffensive fig leaf for the macro perspective originally opposed.
Vulnerability to risks and coping ability appear as concepts that are more fruitful. Chambers (1989) distinguished vulnerability in an 'external side' and an 'internal side.' The latter consist of a subjective defenceless-state, which means a lack of skills and personal tools to cope, while the 'external side' refers to a contextual state of risk to which individuals are exposed. Usually, in the livelihood literature, what is termed 'vulnerability context' is often related to rapid shocks and perturbations generally linked with environmental issues (soil erosion, floods, storms, resource scarcity and environmental changes). Neither social causes nor responsibility are sought in this perspective, the focus remains on individual resilience and, at the highest level, can reach the household's capitals. While here, the concepts of vulnerability will be used in a way that does not confine itself to the analysis of individual coping skills to resist, tolerate and absorb the shocks. Therefore, sustainable livelihood will not be reduced to a bare 'art of surviving', in spite of injustices, oppression and abuses of power. The concept of sustainable livelihood must be something more than the uncritical praise of passive resistance.
The narrow focus on agency and capabilities is no more unbiased than the narrow focus on structures. For instance, the over-emphasis on adaptation, survival and coping strategies jeopardises the analysis of poverty: 'there is the risk of adopting too narrow a view of ignoring the context of structural constraints ... one of the consequence of such neglect is that a positive image of poverty is created' (de Haan et la. 2004). Furthermore, this approach risks contributing to the concealment of the causes of poverty and, furthermore, the collective responsibilities for poverty itself. For instance, there is the risk that by overestimating the usage of the concept of 'social capital', the relevance of 'economic capital' on poverty could be eclipsed in such a way as to diminish the severity of poverty. Furthermore, it could serve to veil the systemic contradiction at the basis of capitalism. Such strict focus on the poor's agency and capabilities may even re-work poverty as an issue of personal guilt by neglecting the structural causes. 'This is not only not in line with reality but even dangerous, as it diminishes the urge to address structural causes of poverty such as unequal power relations and unequal access to resources' (de Haan et al. 2004).
This topic turns the discussion to the constitutive role of the social sciences, which should be always preserved. 'For Marx, the role of a social scientist is to get beneath the 'appearances' to the 'reality' or 'essence' of things' (Junankar 1994, 138). Das (1997) highlights the exclusive task reserved to social science of unveiling the suffering imposed on individuals as membership-dues for being part of a society. This author recognises that it is only the social sciences that possess the ability - and therefore the commitment - to undermine the silence of society in respect ofthat suffering. The invitation offered by Das is to reflect on the social mechanisms of oppression and their difficult identification. Indeed, they are silent mechanisms exactly because they are embedded in same structures of our social organizations, into symbolic devices throughout which we think about reality and our existence in it. Quaranta (2006) reminds us that even Bourdieu, on the same line, argued that scrutinizing mechanisms of oppression does not mean neutralising them. Similarly, pointing out the contradictions does not mean resolving them. Despite this, no matter how much one might be sceptical about the effectiveness of sociological critique, we cannot diminish the effect it may have on those who suffer. Sociological critique allows the subaltern to discover the possible causes of their social suffering, and consequently, to let its social origin - collectively concealed - emerge in all its forms. The traditional human rights approach is very effective at meticulously reporting 'abuses', but less so at connecting them with collective responsibilities. Unlike this, however, the main attempt of this research will be to attribute the exploitation, violence and consequent social suffering to something beyond generic 'excesses.' The real attempt will be to reconstruct the links with socioeconomic structures and institutions of the system that cause this suffering during their regular operation. By doing this, it will be possible recognise the violence embedded within the system itself, through its uneven distribution of power and unequal chances of living.
The notion of structural violation of rights has been increasingly used in international arenas of Human Rights. According to Kathleen Ho (2007), there are at least two important aspects in this idea of 'systemic' violations of human rights that deserve to be analyzed. The first refers generically to forms of global inequalities, the second to the huge disparity between the rights formally recognized worldwide, and the massive violations of these rights.
To operationalise the concepts of exploitation and structural violence for research into Indonesian palm oil industry it was necessary, first of all, to shed light on the inverse flows of profits (bottom-up) and risks (top-down) typical of the current capitalism. Furthermore, it must illuminate the process of agribusiness-driven transition to cash-crop monoculture, and describe the farmers' inclusion within the global market and the counter- hegemonic forms of resistance (McCarthy 2010; Caouette and Turner 2009, Neilson 2014). The concept of structural violence is largely used in other social sciences and provides a political understanding of social suffering/injustice - in primis caused by economic structures and institutions. However, its implementation in within the field of development for analyzing exploitation and impairment of living conditions within a specific commodity-chain is somewhat innovative. In truth, Waver, in Neoliberalism and Commodity Production in Mexico (2012) proved the existence of a relation among commodity production, neoliberal reforms, structural adjustment programmes and structural violence. Similarly, exploitation within an agriculture context - through forms of surplus appropriation in a developing country - has been deeply analyzed by Basóle and Basu in Relations of Production and Modes ofSurplus Extraction in India: Part I - Agriculture (2011).
2.4 Analytical Framework
In this way, surplus extraction occurs through a global market mechanism with no necessary need to use more formal types of imperialism such as military conquest. In both types of imperialism, then, the ends remain the same: the extraction of surplus value, profits and raw materials from subordinate regions, while the means may differ.
- Doug Stokes in New Directions in US Foreign Policy: Routledge 2009
In light of the theories presented above, it is evident that the current research is focused on understanding the material conditions under which the smallholder farmers work, and the manner in which they are exploited and oppressed regardless of their awareness and their private ownership of 'land' as a means of production. As the position of actors and the relationships amongst them exist regardless of their will and awareness, the voluntary character of an exploitative exchange does not exclude the presence of exploitation itself. Therefore, the innovative form in which unpaid surplus labour is extracted from the direct producers is something that deserves to be considered further. Hence, the general idea is that, beyond the traditional wage-labour power exchange, there are several new forms of surplus appropriation, which affect in particular the agri-working class in the Global South, where the nominal property of little plots of land does not prevent farmers from being first oppressed and then exploited. The concept of smallholder farmers will be further operationalised in chapters 6 and 7, taking into account both the smallholders' schemes, which are institutionally enforced by partnership agreements and the local practices, related with commercial arrangements.
The underlying assumption is that the capitalistic control over means of production is no longer exerted only through property rights but that the unfair advantage of capital over labour power is also manipulated by more sophisticated and impersonal mechanisms, namely market rules. These mechanisms expose farmers to the vulnerability typical of bonded labour, the volatility of global prices, and food insecurity, etc. While surplus continues to be extracted from workers by way of traditional mechanisms, the workers are simultaneously charged with the negative externalities linked to the ownership of the land and their new entrepreneurial role. Financial risks are unloaded onto farmers along with the environmental consequences of intensive agri-business production (e.g. soil erosion, infertility, pollution), which will remain linked to the land alongside the property rights over it. In this sense, the capital even has an advantage in ceding a portion of property rights to farmers and thereby unloading the relative risks onto them, whilst maintaining control over production and the ability extract surplus by the impersonal means of the market. This control of land no longer needs capitalist ownership, which could even be inconvenient, but it is instead essential that a new regime of land tenure occurs in place of the common land regime.
Initially, those who were generally considered as farmers became smallholders through the ongoing process of primitive accumulation currently known as land grab. Therefore, the accent was shifted from what they do, to what they own. This represents not only a shift of land tenure regimes - from common to private - which have dispossessed local communities of ancestors and common lands. It is the necessary premise for the inclusion of new 'virgin lands', in the sense of pre-capitalist economies, within the expansive global capitalist system. Bauman (2011) argues that the Rosa Luxemburg's intuition about the inability of capitalism to survive its own contradictions without colonising other economies was repeatedly proven by its inherent inclination to expansion. Once called imperialism, nowadays it is veiled by impersonal mechanisms included into global market rules. Although it would be more correct to talk of 'global lack' of rules; except for, obviously, those rules that protect free-markets and laissez-faire. The essential 'anarchy' of global capitalism generates a field in which the illusion of a fair game persists, where every agent has all the same power, agency and opportunities. No classes, structures or constraints are admitted into this narrative. Nothing could be further from the truth.
Structural violence is here utilised to look at smallholders' living conditions with a lens that does not neglect agency but at the same time takes into serious account the possible impairment of these conditions by socio-economic structures. The focus on 'avoidability' and 'missed-potential' will provide a tool-set with which to enquire into structural inequalities and social suffering caused by unequal distribution of both power and resources. Along with this, compromised capabilities and constrained agency can be identified by looking at power relations, especially the relations of productions. Forms of capitalistic control over the means of production (oppression) will be researched considering the innovative dynamics of surplus extraction (exploitation) within that global commodity chain. Roemer's idea of 'unfair advantage' will be linked to the Marxist idea of 'unequal exchange', so as to think about the exploitation of smallholders as something that is not just independent of their awareness but even unconnected - or at least not strictly connected - to the mere property rights over a small plot of land. Other forms of 'unequal exchanges' may occur out of the traditional wage-labour power exchange and Roemer's contribution can be helpful in operationalising the concept of exploitation in a manner which includes the market's mechanisms of surplus appropriation regardless of land's ownership. Within the livelihood framework, the concept of vulnerability will be applied in order to dodge the limits, mentioned above, of the current livelihood perspective and the mainstream understanding that surrounds it.
As shown in the analytical model (see Figure 2.1) the relations of production within the upstream phase of the palm oil industry were analysed, taking into account the distribution of the main factors of production (land, capitals and labour) between local smallholders and companies. The positions of these actors along the line that represents the palm oil chain are anything but fortuitous. Such a disposition mirrors not only their respective positioning within the global commodity chain but also the unequal power relations between them. The arrangements and practices that exist on the ground were studied alongside the relations of production, in order to recognise the main features of the partnership agreements that tie local smallholders to palm oil companies.
The ownership or the control of other means of production, such as machinery and trucks, was utilised as an index needed to clarify the relations of production within this industry, and the 'real nature' of smallholders' endeavour. The role of the mills, specifically, was observed in order to understand how capitalistic control over production is exerted in spite of the farmers' ownership of the means of production 'land'. It was important to understand how 'oppression', in Marxist terms, works on such complex dynamics. The study of both relations of production and arrangements-practices allowed for the recognition of 'unequal exchanges' and the 'unfair advantages' that determine the 'exploitation' of local smallholders, regardless oftheir presumed entrepreneurial status.
The overview gained thanks to the previous steps was capitalised upon in order to identify the 'inverse flows' of profits and risks that typify such an industry: its uneven relations and, more generally, the contradiction of current capitalism. The latter relies nowadays on the self-entrepreneurial myth, as well as on the impersonal mechanisms of the market, which allow the continued extraction of surplus from labourers through more sophisticated ways in order to exert the control over production. Such an innovative approach allows the capital to release most of the financial, entrepreneurial, environmental and health risks by shifting them onto the shoulders ofthe presumed entrepreneurs. Indeed, it is made possible exactly by the pervading self-entrepreneurial rhetoric that contributes, globally, to the invention of new forms of wage-labour power exchange. Since they permit the unloading of risks onto labourers, these new forms capitalistic control over production maximise the benefits for the capital and, at the same time, reduce the labourers' power in parallel to their self-perception as class.
The whole scenario provides the right evidence to attribute the constraints that burden smallholders and the unfairness of the partnership agreements to the concept of structural violence. Eventually, the analysis of the smallholders' capabilities and agency was not limited to the enumeration of constraints but, moreover, it was focused on the overt and covert forms of everyday resistance, both individual and collective. The idea of resistance includes and goes beyond the mere definition of livelihood strategies, with the aim of reading the smallholders' reactions not only as a set of individual coping's skills. Resistance is something more than the passive 'art of surviving', since it brings back into the discourse the unequal power relations. In a nutshell, it permits the politicization of the injustices that were previously naturalised. In order to achieve the research objectives, the main research questions and the three sub-questions have been formulated as follows:
Main research question:
To what extent are oil palm smallholders in Sanggau district, Indonesia, vulnerable to exploitation through their relation with oil palm companies?
Sql: What are the relations of production between smallholders and companies in the upstream phase ofthe palm oil industry in Sanggau district, Indonesia?
Sq2: In what ways do partnership agreements challenge and limit local smallholders?
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Figure 2.1. Analytical Model
3 Methodological Framework
This chapter will discuss the way in which the research aims were achieved, the different methods utilised and the main risks in terms of both ethics and bias. The sample strategies, the methods of data collection, sorting, triangulation and analysis will be deeply explained below. Each choice will be justified by taking into account the peculiarity of the context and the need for scientific rigour.
In order to strengthen the reliability and validity of the gathered data, a Mixed Methods design was chosen and different levels of triangulation were adopted to assess significance among results. Although in each phase equal attention was paid to both QUALITATIVE and QUANTITATIVE data, the research was conducted following a quasiparallel design, meaning that during the exploratory phase a survey was prepared and validated (through pilots) but no QUANTITATIVE data could be practically gathered during that phase. In order to better meet the needs of a Mixed Methods research model and manage the complexity of the field, a team was established, composed of an interpreter and two assistants, in addition to the researcher.
The fieldwork began in the middle of January and concluded in the middle of April. It took place in Sanggau district, West Kalimantan (Indonesia). The district was chosen for its relevance of the palm oil industry in the area, and for the historical development of the latter as well as its room for further expansion. Furthermore, the district was purposely selected after considering both scientific and practical criteria. It would have been preferable to investigate a less researched area, but due to temporal and financial limitations it was inconvenient to focus on previously unresearched areas. Indeed, having at one's disposal previous research, maps of the area, and other data, proved to be significantly useful for the secondary data analysis and fruitful for the relevance of the whole research. Also the subdistricts (Parindu and Sanggau Kapuas) were intentionally chosen for both practical reasons (limits in time and resources) and for the historical process of oil palm's expansion in the whole district. So, whilst on the one hand the long distances and the condition of roads and infrastructures influenced the decision, on the other hand the two sub-districts were chosen after undertaking serious consideration the local characteristics of the palm oil industry, its historical process of growth and the trend of oil palm development in the district. Parindu and Sanggau Kapuas are the sub-districts where the oil palm expansion started before anywhere else and where there is still more room for expansion. Beyond this, these subdistricts, reflect the general characteristics of the palm oil industry in Sanggau district in terms of plantation size, the nature of investments or ownership, and years of establishment, et cetera.
The methods utilised are schematically represented in the Table 3.1. They will be scrutinized, according to a chronological criterion, alongside presentation of the different steps taken in the field. Such a choice is justified by the fact that any decision taken on the ground can be really understood only by considering its foundation in the previous steps. Therefore, to make those steps clear, the fieldwork research will be disclosed in four different phases: Preliminary, Exploratory, In-depth and Wrap-up. These phases should not be considered as rigid reflections of the fieldwork experience, such division is rather an abstraction arbitrarily operated ex post by the researcher with the aim of showing, in detail, the steps and the decisions taken on the field.
Table 3.1 Methods utilised aim, unit of analysis, research unit, sampling and registration
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3.1 Research Methods and Techniques
The preliminary phase started in The Netherlands with documentary reviews. It then continued in Yojakarta where the researcher attended an intensive course of Bahasa Indonesian language and was able to access other secondary data. Fruitful contacts were made with the Faculty of Cultural Studies of Universitas Gadjah Mada, in the person of Dr. Pujo Semedi Hargo Yuwono, who provided the letter of invitation essential for the VISA application. The time spent at the Universitas Gadjah Mada was used not only to seek an interpreter and research assistants. During this time, the field experience of Dr. Pujo Semedi Hargo Yuwono in the district of Sanggau (West Kalimantan) and his knowledge of the palm oil case, was capitalised upon to accomplish the aims of this phase's analysis. That is to say, the opportunity to communicate with Dr. Pujo Semedi Hargo Yuwono facilitated the gain of an overall view of the palm oil case in Indonesia and deepened understanding about the nodes of the relations of production within this Global commodity chain.
The peculiarity of the context was initially explored thanks to the Secondary Data Analysis (such as maps, diagrams, and statistics) and some academic resources from previous research in the area. Literature, as well as numbers and facts, contributed a situated overall view of palm oil expansion in Sanggau district, through maintaining the awareness of both pro-oil palm and anti-oil palm discourses. The secondary data method consists of analysing existing data collected by others. This method is efficient with regards to time and resources, as it allows for the investigation of larger scale data sets than would otherwise be possible. Therefore, the relevance of this method was not abandoned at the end of the first phase but yielded even further insights through the assessment of convergence and divergence between primary and secondary data during the whole process of research on the field. It represents a first level of triangulation that, by comparing the trends from different sources, permits one to strengthen confidence in findings (Brewer 2007). Alongside to these advantages it is important to stress the inherent problems related to the Secondary Data Analysis: a) location and accessibility of data; b) understanding the data set; c) different purposes of data collection; d) different sample; e) data quality (Devine 2003). This means the risks of bias related to this method and its peculiar limits should be never underestimated. Secondary data represents a tricky mine of insights that shall be treat carefully and with deep ethical awareness.
The exploratory phase started with the transfer to West Kalimantan. The city of Pontianak became the headquarters where the fieldwork in Sanggau district was organised and planned. During this stay the researcher established the knowledge needed to define the specific research area. The criteria, as explained above, were both practical and scientific. The presence in the area of different kinds of plantation and estates (state-owned, private based on national investments and private based on transnational investments) became the preferential criterion of selection, beside the year of the plantations' establishment. This phase served as preparation of both a questionnaire and a topic-list for interviews. Nevertheless, by the end of this phase, four interviews with key-informants were made. Indeed, the method utilised to grasp a preliminary understanding of local practices related to the smallholders' schemes and the underlying relation of production was the semi-structured in-depth interview, which belongs to the broad array of PA techniques. The main characteristic of PA is its inherent effort to rebalance the power relations between the researcher and the subject of his/her research. All the PA techniques come from the principle of empowerment and are based on anthropological practices of both observation and participation (Desai and Potter 2006). Snow-ball sampling was considered the most apt technique in this phase, to reach the key-informants. Academics, local authorities (formal and informal), NGOs officers, leaders or members of farmers' union and rural movements represented the preferred target categories. During this phase four semi-structured interviews were made to ground the knowledge needed to support the next steps. The researcher conducted the interviews personally with the help of the interpreter, who was previously trained regarding the topic and the aim of the whole research. The aim of this was to make the interpreter aware of the interview-guide, which was composed of check-list questions and 'hot' topics that ought to be touched. The first key informants interviewed were:
1. Mr. N.A. (officer at Walhi Pontianak- NGO)
2. Mr. I.F. (officer at Elpagar Pontianak- NGO)
3. Mr. B.E. (director ofthe Institute of Dayakology - Research Centre/ NGO)
4. Dr. I.R. (Institut Agama Islam Negeri, Pontianak- Academic)
These key informants were chosen in order to grasp not only local perception but also a broader dimension due to their in-depth knowledge of the problem. The insights gathered from these key-informants were critically considered, taking into account the influence of their personal opinions and ideological stance. The semi-structured interviews were recorded and the transcriptions adequately coded and analysed with the help of MAXQDA 11.
These interviews also provided the foundation for the questionnaire design. Preexisting surveys' models, apt for smallholders' livelihood and vulnerability, were used only as inspiration, but they could not be even partially integrated into the survey itself since it was not possible to rearrange them for the purpose of this specific research. The contribution of the research assistants was crucial for their deep understanding of the local context. The survey touched upon mostly objective relations, (commercial arrangements, credit bondage, regimes of land tenure and the terms of the partnership agreement) but also on the smallholder perceptions, since it is important to not neglect their subjective perceptions about the process of oil palm expansion and their incorporation within the palm oil industry. The survey was administered during the following phase.
The in-depth phase coincides with arrival in the district of Sanggau. This phase can be considered as the core ofthe fieldwork experience, since most ofthe primary-data collection was completed at this time. Indeed, this phase was characterised by the effort to concurrently collect another four in-depth interviews with key-informants, five FGDs with local smallholders and to administer 80 questionnaires to local smallholders. The 'snowball sampling strategy' was used to reach the key-informants. Though the criteria to define the unit of analysis of the last four interviews were already defined, once on the ground, beside NGOs officers, academics and leaders of farmers' unions, who were included into the unit of analysis the decision was made to also include a plantation manager and a responsible of Credit Union, in order to better understand some practices and relations within the palm oil industry. The last four key-informants interviewed here were:
5. Mr.R (smallholder and leader AMAN Sanggau - NGO)
6. Mr. A. D. (smallholder and leader SPKS Sanggau -Trade Union)
7. Mr. W. (Plantation manager)
8. Mr. D. (Treasurer at Credit Union - Parindu)
Simultaneously, during the in-depth phase five FGDs have been conducted. In that case, the unit of analysis was directly the oil palm smallholders themselves:
1. Smallholders dependent 'plasma' PT SIA (Nyandang)
2. Smallholders independent (Sanjan)
3. Smallholders dependent 'plasma' PTPN XIII (Parindu)
4. Smallholders dependent 'plasma' PT MAS (Tapang Kerunang)
5. Smallholders dependent 'plasma' PT MPE (Lintang Kapuas)
For the FGDs - another PA technique (minimum six, maximum 14, with an average of eight participants) - a purposive sampling strategy was used to achieve representativeness of the typical case of palm oil smallholders (Teddlie and Yu 2007). In order to understand the 'purposive sampling strategy' adopted for the FGDs, the complexity in operationalising the concepts of 'dependent and independent' smallholders, which was faced on the field, must first be taken into account. Four out of five FGDs were conducted among dependent smallholders, those that were able to begin with oil palms only thanks to the partnership agreement with the company (see chapter 6). Only one out of five FGDs was conducted in a village famous for its resistance to the companies: one of the few villages in the district where the oil palm farmers were supposed to be 'pure' independent smallholders. The aim of the FGDs was to grasp the negotiated collective voice of smallholders incorporated in the palm oil industry. It was an indispensable step in gaining awareness of the subjective viewpoints and the different powers of influence on discussion at the disposal of each participant (Desai and Potter 2006).
In the meantime, the surveys were administered to 80 dependent smallholders by using a cluster sampling strategy (Teddlie and Yu 2007) in order to shed light on the different companies' agreements and local practices (See Appendix II). The cluster sampling strategy consists of a purposive division of the population into separate groups, in this case, preexisting groups. Four companies that have partnership agreement with local smallholders were selected, and then 20 questionnaires were administrated for each (40 respondents in Parindu and 40 respondents in Sanggau Kapuas):
1. (20) Smallholders dependent PT SIA
2. (20) Smallholders dependent PT MAS
3. (20) Smallholders dependent PTPN XIII
4. (20) Smallholders dependent PT MPE
To achieve representativeness, the four companies were purposively chosen (for both Questionnaires and FGDs with dependent smallholders) to reflect the general scenario of palm oil industry in Sanggau district and to hopefully include different styles of management in the sample: one state-owned company (PTPN XIII), two corporations based on foreign private investments (PT SIA and PT MAS) and one based on domestic private investment (PT MPE). Each of them is characterized by different plantation' size, different year of establishment, different mill capacities and, basically, by different partnership agreements. Further information about these four companies will be provided in the next chapter. Comparing them to find differences, similarities and common features might help to understand the relations of production within the upstream phase ofthe palm oil industry in Sanggau and, perhaps, even point out good and bad practices. The same sample size per each cluster may provide less precision since it does not proportionally reflect the reality (as the random or stratified samplings should do) but, on the other hand, it is a reasonable choice if the purpose of the questionnaire is not merely descriptive but rather intends to reveal differences and similarities among the clusters themselves.
The wrap-up phase (the last one) was the phase of parallel triangulation between QUALITATIVE-QUANTITATIVE data, which provided the first findings of data analysis. A careful overall check of the data previously gathered was conducted in order to obtain a clear overview of what had been done up to that point and in some cases to correct, improve or deepen certain aspects so long as the researcher was on the field. During that phase all the already-transcribed interviews and FGDs (QUALITATIVE data) were imported, coded and analysed in MAXQDA 11 (for Mac), while the questionnaires were first registered in a Excel file and then imported in a SPSS 20 dataset. A first descriptive analysis of QUANTITATIVE data (frequencies and crosstabs) took place mostly during that phase.
3.5 Ethical considerations, reliability and validity
The increasing relevance ofthe ethical issues within academic research is evidenced by the proliferation of many different codes around the same subject (e.g. sociology); they are all based on informed consent and driven by principles of justice, autonomy and selfdetermination, non-malfeasance and beneficence. Although those codes represent a breakthrough in the direction of preventing previous mistakes, they are not nearly close to being a definitive solution to the long-standing issue of ethics in academic debate and still present several criticisms; such as the risks of constraining the research, distorting results and even harming participants (Flick 2009, 36-38).
Therefore, regardless of codes, the attempt to balance scientific quality with welfare of participants and preserve their rights/dignity remains an essential effort for every scholars committed on a fieldwork research. One of the main tasks of a researcher is to obtain informed consent by explaining to actual participants the purpose of the study, how it will be conducted and how the results are going to be used (see Appendix I). In the case of this research, it was also essential to assure the protection of anonymity, since the controversial struggle about the oil palm development might put any respondents in danger.
Instead of unrealistically pursuing a completely value-free research in social science, every researcher should be aware of his/her own values to reduce the risk of biases, especially within development field (Wilson 1992, 181). For this reason, the position of the author within Marxist and critical theories has been clearly stated. The research at hand involves this ethical problem since it concerns the relations of production within a specific global commodity chain and, in turn, the possible exploitation of the farmers involved. Therefore, this topic can easily touch personal believes and morality. In this sense, the need for advocacy on the behalf of a certain oppressed group needed to be mitigated to achieve reliability and leave the opportunity to discover unexpected facets open. As clearly explained by Wilson (1992, 181) there is a single, univocal and authentic oppressed voice that needs to be presented only within the romantic myths of western-trained intellectuals. Hence, it was necessary to approach the smallholders' issue cautiously and not to look at them as a monolithic group.
It should always be kept in mind that the members of a group that might be seen as in need of advocacy might perceive themselves in a very different way from our preconceived ideas. Therefore, it was important to explore their subjective perception as well as their objective conditions and relations with other actors, considering that social agents are not necessarily completely aware of the social structures in which they live. Moreover, their perception could be embedded, for instance, on a pro-oil palm narrative and a pervasive development discourse. Similarly, key informants, interpreter and research assistants were selected considering this aspect. It is fundamental to remember that they can have a strong influence not just over the data gathering process but also even over the direction and success of the research itself. It was a researcher's duty to build a sound professional relationship with them and protect them from any kind of risk related with the field research, by preventing the outbreak of inconveniences that could occur as a consequence of research activities when they are not clear enough or somehow misunderstood (Wilson 1992, 190). Particular attention was reserved to personal relationships. The creation of such relations is essential for a good fieldwork provided that are based on mutual respect and openness. However, it was important to stay aware of the weight of these relations - especially the one with the interpreter - because of their consequent power of influence on our understanding of the research's topic (Wilson 1992: 191).
The role of interpreter is essential yet problematic at the same time. Not any native speaker would necessarily have been a good interpreter since this work is something more than a mere sequence of translations. It involves processes of decoding and encoding through a dual flow of feedbacks. The interpreter chosen was linguistically and culturally fluent in speaking (English, Bahasa Indonesia and even the local Dayaknese dialect) and in addition was well-trained to grasp any verbal and non-verbal signs of all people within discussion, especially during group discussion, when the risk of losing important information and insights is higher (Beamer 2001, 47-49).
4 Context
Vegetable oils are nowadays used for a countless amount of products and different purposes. A large variety of commercial and industrial applications have been developed outside of food. Last but not least: biofuel. The per capita use of vegetable oils and the growing global population contribute to greater the global demand: from just 25.57 million metric tons (MT) in 1970 to 144.76 million MT in 2010 (Accenture 2013). In relative terms, the most relevant increase of vegetable oil consumptions occurred in Asia and South America, though western regions (Europe, North America, Oceania) remain the main consumers in absolute terms, also due to the recent policy about biodiesel. The demand of vegetable oils seems to be linked to the economic growth of a region: India and China, for instance, became massive consumers ofvegetable oils during the last decades.
To meet that demand, globally more land planted with oil crop is needed. The agricultural research to increase productivity, as well as managerial strategies, proved insufficient. Switching to higher-yield crops seems to be the most profitable strategy. That explains palm oil's expansion and its popularity in tropical climates countries. Compared to the others oil crops (soybeans, rapeseed, sunflowers, seed cotton, groundnuts, and olives), the fresh fruit bunches (FFBs) of palm tree are the most prolific producers of vegetable oil and so the most economically profitable ones.
Therefore, the production and consumption of palm oil is tremendously propagating. High productivity and low production costs have made palm oil the preferred oil in the global market. 'The consumption of palm oil has increased at a compound annual growth rate of 7.8 percent between 1970 and 2010. In 2012, 53.89 million MT of palm oil was consumed globally. In relative terms, palm oil accounted for only 9.6 percent of total global vegetable oil consumed in 1970. By 2010, palm oil accounted for 33.7 percent of the total global vegetable oil consumed - more than any other vegetable oil' (Accenture 2013, 10).
Nowadays, 75% of the palm oil produced is traded internationally; it accounts for more than 67% of all vegetable oils globally traded and the vast majority comes from Malaysia and Indonesia. In 2005 Indonesia become the primary producer and so, along with Malaysia, these two countries produce the 87.9% of the palm oil traded globally, while another twelve exporters-countries collectively contribute to the global palm oil market just 5.5%. 'On the other hand, 180 countries imported palm oils in 2010. Excluding Malaysia and Indonesia, seven ofthe top ten consumers of palm oil are significantly dependent on imports from Malaysia and Indonesia to meet domestic demand for palm oil: Europe, China, India, Pakistan, Egypt, the United States, and Bangladesh' (Accenture 2013, 12).
The current process of conversion from customary/ancestor (adat) land to private ownership land tenure can be easily attributed to new stage of 'primitive accumulation', somehow a modern-day form of 'enclosures'. The differentiations among farmers, peasants and smallholders come from that land-tenure shift. In Indonesia, and especially in palm oil field, the concept of smallholder is strictly related to the private property right on a small plot of land (kapling), usually composed of two hectares (Potter 2009) and in turn, that property right is linked with practices ofcommon lands' dispossession.
In Indonesia, about 38% of plantations are owned by smallholders (Accenture 2013). They can be divided in 'dependent smallholders' and 'independent smallholders.' Only a small part of them are truly self-organised farmers, independent of larger-operators (corporations, estates, mills, etc.) and have developed palm oil plantations on their own lands, thanks to their own capital and resources (Colcester and Jiwan 2006). Palm oil has high start-up costs that usually cannot be faced by farmers alone. Therefore, various different arrangements exist between smallholders and companies. Most oil palm plantations use a variety of different schemes to tie smallholders to a specific mill or estate. It was explained by Accenture - for Humanity United (2013) - as follows:
'Dependent smallholders are plantations whose land is owned by individuals, not corporations, but there is a contracted or non-contracted dependency on large, corporate private estates. ... Under these schemes, individual smallholders maintain ownership of the land but remain highly integrated with private estates. Through this relationship, private estates can encourage and support the application of many practices commonly used on their own land - essentially expanding the planted areas of oil palm without making the investment in land themselves. Under these schemes, dependent smallholder estates are typically bound to sell FFB (fresh fruit bunches) to the central private estate at a predetermined, nonmarket price' (Accenture 2013, 18).
Some common characteristics are shared with the different partnership agreement: 'the various plantation models or labour regimes share some common features including the division into the 'nucleus' (inti) area that belongs to the company and the smallholder (plasma) area that is allocated to smallholder contract growers. Local people who agree to be smallholder oil palm farmers have to surrender a certain amount of their (customary tenure) land in order to obtain a smaller area planted with oil palm trees' (White and White 2012, 999). That arrangement is usually based on a system of land allocation between local people and companies. For instance, 7:2 ratio which means that smallholders from local communities surrender 7 hectares of land in return of two hectares plot planted with oil palm trees. In this way, the company obtains direct control of the remaining 5 hectares, namely the 'nucleus' zone (inti). Plasma smallholders are linked to the company to the extent that they can sell their fresh fruits just to the company's estate mill. 'In these schemes farmers transfer a proportion of their land to an oil palm company for establishment of an estate plantation (referred to as 'inti'); the remaining land is also planted by the company but retained as individual smallholdings by the farmers (referred to as 'plasma'). Typically, households are asked to give up 10 ha of land to the company, and in compensation are allocated 2 ha of oil palm plantation' (Ríst et al. 2010, 1011).
Most of the smallholders are participants in smallholder-nucleus estate schemes (NES). 'Since the 1970s, often with financial support from international agencies like the World Bank, schemes have been established on the islands of Sumatra and Borneo ... Many estates are also supplied with workers and smallholders as 'transmigrants', participants in the government's programme of moving landless peasants from Java and Madura to the less densely populated outer islands' (Colcester and Jiwan 2006, 3). Within those smallholder- nucleus estates, the control is often exercised by the cooperatives formed directly by the company. Forms of cooperatives estates (KUD) provide tools, seedlings, fertilizers, etc. to smallholders, that are obliged to pay them back the debts and plus some extra-fees to the companies for roads' maintenance and transports. 'Smallholders on NES schemes are obliged to sell their produce to the estates' mills ... KKPA (Koperasi Kredit Primer Anggota) differs from NES in not tying smallholders to specific estates and mills but still assigns farmers to KUD and encumbers them with debts ... in practical terms, KKPA and NES schemes have similar implications and outcomes' (Colcester and Jiwan 2006, 3).
It is important to stress some technical and financial constraints that tie smallholders to larger-operators and limit their autonomy as independent producers. Starting from the land, palm oil plantations need an onerous amount of preparation, often characterized by installation of expensive drainage and terracing systems, which is usually done by machines. Oil Palm seedlings are usually supplied by oil palm companies because of the prohibitive costs for smallholders. The oil palm tree becomes productive after three years (at least) and completely profitable only after about eight, and thence concludes its life cycle around 25 years. Few farmers can affords the Investments needed; almost none of them have the machines and can resist to the delays In Income returns without getting Indebted. 'Although they have surrendered a larger area of their own land In exchange for their smallholder plot, the farmers still have to repay (amortization) credit for the plot(s) they obtained, through deductions from their monthly harvest Income. Aside from these deductions for the (re)purchase of their land, the contract farmers' harvest Incomes are further reduced by deductions for Infrastructure maintenance, transportation, fertilizers and other Inputs, etc. As smallholders may only sell their palm fruit to the company, the model Involves both monopoly and monopsony practices' (White and White 2012, 999). These practices put smallholders In a disadvantageous and subordinate position towards the company's estates. Last but not least, the pricing-issue seriously affects smallholders' livelihood outcomes In terms of vulnerability. 'Prices for Crude Palm Oll (CPO) on International markets can vary widely and overall have declined by two thirds since I960. For all these reasons, smallholders tend to be tied, often by debt and by technical constraints, to large palm oil concerns, limiting their ability to negotiate fair prices or manage their lands according to their own Inclinations' (Colcester and Jlwan 2006, 2).
Indonesia Is doomed to maintain Its leading role In global palm oil production due to the huge amount of suitable lands that might sustain further expansions. 'Indonesia Is planning to Invest heavily In new oil palm plantations In the provinces of Kalimantan and Is projected to double Its area planted with oil palm by 2020' (Accenture 2013, 17). West Kalimantan Is already considered one of the most suitable areas for the next palm oil expansion, thanks to Its low-density population rate and the massive amount of land that can be converted Into palm oil plantations. In 2010, the palm oil planted area In West Kalimantan accounted only for 3.7% out of over 14 million hectares (Accenture 2013, 17). 'The provincial government of West Kalimantan has recently raised Its target for expansion oil palm plantation from 1.5 million to 4.5 million hectares (Ha) by 2025' (White and White 2012, 995). The area currently planted with oil palm Is only 0.75 million hectares, therefore there is significant room for massive expansion of plantations In that region and, according to the Ijiin Usaha Perkebunan (Plantation Business Permits) previsions, the political will seems to point In that direction (White and White 2012).
With the process of decentralization, started after the fall of Suharto regime, the need for each region and district to raise Its own revenue caused (especially In the poorest areas) the race for corporate Investments and the consequent support to agri-business transition. 'Between 1984 and 2005 the area under oil palm production In West Kalimantan Increased exponentially, from 5000 hectares (Ha) to 382,000 ha ... Although government estates were the first to be established, private enterprises are now dominant ... During the mid-1990s more than 60 per cent of the land planted In oil palm In West Kalimantan was occupied by smallholders; since decentralization this has declined to below 50 per cent' (Potter 2009, 108). As said above, according to Accenture (2013) nowadays In Indonesia only 38% of plantation Is held by smallholders. Such a reduction represents both a massive shift of land tenure (from common to private) and an alarming process of ongoing accumulation, which can be easily linked to the 'primitive accumulation' mentioned before.
The smallholders' schemes and the process of land dispossession from ancestor land to private land will be debated gradually at a later stage. Now it is rather important to stress some numbers and facts related with the palm oil expansion in Sanggau District. 'The first large-scale oil palm plantation in Sanggau District was established in the 1980s with an area of 14,000 ha, operated by the state-owned company PTP VII (now PTPN XIII). Since then, oil palm plantations have expanded until by 2008 there were as many as 20 oil palm companies operating inali of Sanggau's 15 sub-districts. Four of these corporations are based on foreign investment, 15 on domestic private investment, and one (PTPN XIII) is state-owned. Oil palm now dominates the export crop sector in Sanggau District with 145,477 ha (about 11 percent of Sanggau's total land area), having now exceeded the area under rubber (99,059 ha)' (White and White 2012, 998). Some general information about the district and its historical process of oil palm development are efficiently resumed in the following quote:
'Sanggau district is one of eight districts in West Kalimantan province (the westernmost province of Indonesian Borneo). It has a strategic position having direct access to international transportation linking it to Malaysia and the wider world by road and through the port in the regional capital, Pontianak. Comprising 8.8% of the province, the district has an area of about 1.3 m ha. and is divided up for administrative purposes into 15 sub-districts (kecamatan), 6 municipalities (kelurahan), 159 villages (desa) and 586 hamlets (kampong) with a total population 372,489 people. The population density is about 29 people per square kilometre and average population growth over the last ten years is 1.23 percent per annum. The majority population in Sanggau district is made up of various Dayak indigenous peoples who make up about 64% of the total, while Malays (23%) and other ethnic groups (13%) make up the rest. Official statistics show that Roman Catholics make up 51%, Muslims 33%, Protestant 16%, Buddhists 1%, with very small numbers professing Hindu or other faiths. ... Oil palm was first introduced in West Kalimantan by a State-owned company, which established the first oil palm plantation in Parindu sub-district of Sanggau district in 1979. The company further expanded its plantation areas further south in the Pontianak area in Landak sub-district in 1980s. At that time, the development of oil palm plantations was slow and limited to quite small parts of indigenous peoples' lands in the two districts. ... Palm oil only became the main emphasis for investment and business expansion in the 1990s. The government of Sanggau district argues that oil palm plantations now make a significant contribution to district revenue, amounting to some 17% of annual regional domestic income in 2002. Therefore, the government of Sanggau district provides policy incentives to create a climate conducive for oil palm plantation investments. This has been done through establishing an Integrated Economic Development Region (Kawasan Pengembangan Ekonomi Terpadu - КАРЕТ), set up in 1998. Sanggau district is also one of several districts ... implicated in President Susilo Bambang Yudoyono's policy to develop the world's largest oil palm project along Indonesia-Malaysia border areas in West Kalimantan and East Kalimantan.' (Colchester et al. 2006, 93-95)
The four companies - selected to conduct the FGDs with dependent smallholders and to administer the questionnaires (see the chapter 3) - were chosen to reflect the different kinds of companies present in the district and, in turn, their partnership schemes with smallholders. PTPN XIII Parindu is a state-owned company, the first to be established in Sanggau. PT MAS is a private company that emerged during the economic crises of 1998 as joint venture of both domestic and foreign investors. This kind of partnership was highly encouraged by governmental policy in order to overcome the crisis and it is one of five cases of merges that occurred, at that time, between a Malaysian and an Indonesian company. PT SIA is a private plantation company entirely based on foreign investments; more precisely, it can be considered a Malaysian company. The private PT MPE is the only domestic investment company included in the sample, unfortunately it has not been previously researched therefore there is not that much information about it (see box 4.1).
Box 4.1 Background information on the exemplary companies PTPN XIII: The state-owned
'The oil palm plantation under the management of PTPN XIII in the Sub District of Parindu is important... since it is one of the oldest plantations in Sanggau District. The plantation, one ofthe country's first Nucleus Estate Smallholder schemes (Perkebunan Inti Rakyat - PIR) [established with World Bank support], illustrates many of the problems associated with plantations, particularly with respect to legal, social, cultural and economic matters. ... The establishment of PTPN XIII in West Kalimantan was organised according to a pre-planned programme established by the central government. The plan envisaged local government merely implementing the policy adopted by the central government without any flexibility to adjust it to suit local realities. Such an approach was strongly advantageous for PTPN XIII, in starting a business in West Kalimantan based as it was on taking over community land according to a process that entirely lacked any commitment to principles of transparency, equality and justice'. (Colchester et al. 2006, 102)
PT MAS: The transnational join venture
'PT Mitra Austral Sejahtera (PT MAS), [is] ... a joint venture between Indonesia and Malaysia which merges two companies Austral Enterprises Berhad, Malaysia, and PT Ponti Makmur Sejahtera (PT PMS), Indonesia. The PT MAS plantation is established in an area already dense with oil palm plantations and industrial tree plantations concessions (HTI). PT MAS also has the biggest Crude Palm Oil (CPO) mill in West Kalimantan with an installed capacity capable of handling 30-60 tonnes of fresh fruit bunches per hour. The huge plant cost IDR 80 billion to establish, includes waste disposal ponds, and is claimed to be the best CPO mill in Sanggau district. The mill was first put into operation on February 7, 2004, after being inaugurated by the governor of West Kalimantan H. Usman Ja'far'. (Colchester et al. 2006, 96-97)
PT SIA: The Malaysian company
'The Sime Indo Agro Limited Company (PT SIA) is a foreign direct investment company from Malaysia. It has established a nucleus estate, with associated smallholdings and mill, in Parindu Subdistrict, Sanggau District, West Kalimantan. The total oil palm estate of PT SIA covers 14,000 hectares and includes two units for milling and processing fresh fruit bunches. PT SIA developed the estate in stages, with 2,000 ha. being acquired in 1996-1997, 4,000 ha. in 1997-1998, a further 4,000 ha. 1998-1999 and a final 4,000 ha. in 1999-2000. The company commenced installation of the processing factories on the edge of Senggoret River in 2000. The two mills have a production capacity of 60 tons and 30 tons of CPO per hour. ...
As required by Indonesia law, after 15 years of commercial production, PT SIA should lease a share of their company to the Indonesian public. On August 28, 1995, the President of the Republic of Indonesia issued a letter approving PT SIA's investment plan. PT SIA, thereby, obtained an investment permit for 30 years starting from the date of commercial production of palm oil. (Colchester et al. 2006, 125)
PT Μ PE: The domestic private company
The Multi Prima Entakai (PT MPE) is the only domestic private company included in the sampling. Established in 1984, nowadays covers an area of about 38.000 ha. PT MPE has about 750 employees and an undefined numbers of smallholders partner. They are able to process 200.000 tons of Fresh Fruit Bunches (FFBs) per year and produce about 50.000 tons of Crude Palm oil (CPO). Their company's capital reaches Rp. 50.000.000. Since this company has not been researched before, it is not possible to provide more detailed information. (Author, 2015)
5 The Main Factors of Production. Part I (Land)
This chapter will examine the relation of production within the upstream phase of the palm oil industry in Sanggau - West Kalimantan - through the analysis of the main factors of production. This part will focus specifically on the factor of production 'land' and, consequently, the process of land shift or dispossession mentioned several times above. Such process will be discussed starting from the land concession provided by the government to companies, according to their development plans, and it will continue with an analysis of the bargaining-power of the actors involved. This will be done by presenting some evidence about the 'ratio of land allocation' included in the partnership agreements. It will then turn to discuss the ownership status of the land surrendered by local communities to join those partnership schemes, then conclude with the compensation that companies are supposed to pay for that and, eventually, with the phenomenon of land concentration.
In order to gain a preliminary understanding of such relations it is essential to review the main actors involved and some peculiar characteristics of the industry itself. The following quote provides a quick overview and might help to clarify the role of each actor.
'Let me explain it better, [at the blackboard he writes the name of different actors: e.g. Bank, Governments, Company, Local People, etc.] The government has the power to give the concession but it needs money. The bank has the money and so can give the loans. The company has some money and management (managerial- skills) but it still needs more capitals. That's why they ask for credit from the bank. The local community has just the land and the labour force. So the companies go to the government to show their project of investments in the region or in the district. The governments are attracted by investments so they ask companies 'what do you need?' The companies answer 'we need land.' The government will seek the land still available. Of course, that process has no transparency ... In that scenario the military are involved too. Their role is to stifle and repress the conflicts. They enforce that top-down process of decision-making by the use of force. Indeed they always support the governmental decisions and stand at the side of the companies.' (Mr. N.A. - NGO officer at Walhi Pontianak)
The role of government is varied. It serves to give land concessions to the companies; facilitate the process of 'socialization' of information among the communities touched by the development-plans of oil palm expansion; settle the monthly price of FFBs together with companies; and produce legislation about partnership agreements (company-smallholders) and any other aspect of production. The oil palm companies can be state-owned (PTPN) or private; the latter can be based on domestic or foreign/transnational investments. These companies are usually the link between the local context and the global market; that is, the connection between the production of the raw materials (FFBs) and the rest of the global commodity chain. They keep themselves in such a position thanks to the transformation process (mills). Banks and investors cannot be seen as a homogeneous category but their function can be easily resumed as the interest of investing capital on such profitable business: the global demand of CPO makes this commodity one of the most interesting agribusiness investments in economic terms. Then the military, as well as any police force, are supposed to ease the oil palm development by enforcing every decision taken at governmental levels; theirtask is to discourage struggle and any attempt of resistance.
Eventually, the role of local smallholders within such industry will be deeply analysed throughout this and the next chapters, since their conditions are at the very core of this research. Therefore, any facets will be studied in relation to local smallholders by assuming their perspective as a starting point. First of all, it must be said that almost all of them are Dayak people; that is not only due to their quantitative pre-eminence (in demographic terms) in West Kalimantan but also to the stiff 'ethnic-based division of labour' which mirrors over the current mode of production some of the pre-capitalistic class divisions within the region. The issues related to ethnicity will be furtherdiscussed later, as well as the composition of the oil palm smallholders. For the time being, it is just necessary to mention the two main factors that determine the relevance of local farmers in the palm oil industry: land and labour power.
The following sections describe the process of agrarian transition caused by oil palm expansion. The issues related to land, one of the main factors of production, deserve to be debated before anything else since they are intended to provide a preliminary insight into the relations of production between smallholders and companies. Furthermore, they are an essential precondition to understanding the massive land tenure shift, from common to private, which has occurred on the ground.
5.1 Land Concessions and Development Plans
Locally, the development of palm oil industry usually starts with the companies' requests for land concession or, more often, directly with the pioneering establishment of a state-owned plantation as an answer to the governmental plans for the region. The PTPNs companies in general represent the trailblazers of the local palm oil industry since they build the conditions for local expansion by way of roads, mills, infrastructures, knowledge and the foundation of many satellite activities.
The process of decentralisation, which started during the post-Suharto era, significantly contributed to the expansion of oil palm plantations among some specific zones that were naturally suitable for the purpose and, often, economically depressed. This decentralization led local governments to crave private investments, the main 'problem is that Indonesia has a system of regional and local autonomy. Therefore, the regions struggle and compete with each other to grab as much investment as possible. Obviously, regions like Kalbar are tempting for their natural characteristics. They attract a specific kind of investor, those interested in commodities and, recently, mining. That decentralization makes the local governments really business-friendly. They are always really happy to meet investors and see their business-plan. That's where all these concessions for our land's exploitation come from.'(Mr. N.A. - NGO officer at Walhi Pontianak)
The importance of national development plans for the oil palm expansion was stressed by several respondents and their effects, in terms of promises and pressures, will be extensively illustrated in chapter 8. For now, however, it is essential to further describe the whole process of land concession, included the phase known as socialization.
According to Dr. I.R., a professor at Institut Agama Islam Negeri in Pontianak who has studied palm oil expansion for many years, the socialization 'is the process whereby the local communities have been informed by the governments about their local plans of developments.' The director of the Institute of Dayakology, Mr. B.E., summed up the influence of such development plans on local communities' choices as follows: 'the point, basically, is that the investors contact the government first asking for the concession of land. Just after they get the permission they go to talk with local communities. When they [locals] see the concessions, they cannot stand against the national development plans and therefore local people whether they like or not they must to give up their land.' Similarly, with regards to the process of decision-making, Mr. N.A., an NGO officer at Walhi Pontianak, stated that 'local governments have their own institutions that are charged to evaluate the plans of the companies without involving local communities. ... The local people only know about the decision when regional leaders have already taken it. It is usually publicly announced by leaders in a process called socialization, where ironically local people have no real choice.' The process of land concession should follow specific steps from the information about the land still available up until permission is given for the actual land usage. Once again, Mr. N.A. efficaciously summarized these steps: 'the first step is the information about the land in the area and it occurred at the governmental level. This is called I.P. (Informasi Lahan). The second step is the permission related to a specific location and is called I.L. (Izin Lokasi). The third step is called I.U.P. (Izin Usana Perkebunan) and in that phase the company actually starts to establish its plantation. The last one, H.G.U. (Hak Guna Usaha) is the definitive concession. No one knows how much time required that process.'
As was just shown, as the government can provide land concession only to companies then it is in their interest to encourage local communities to surrender their land and the best way to do so is to propose that they join a partnership agreement, rather than just buying their land outright. Local people would be unlikely to sell all of their land and the government would not let it happen since the oil palm is seen as an instrument for local development and wealth-production. Despite this, the companies might have a different interest, which is here clearly stated by a plantation manager:
'Local people have just the land. Companies have capitals, knowledge and management, basically, power. The company cannot buy all the land for themselves because of governmental laws; they have to involve local people in the schemes. That's the agreement. Because it is supposed to bring wealth and incomes. ... When companies arrive to a new area, they have no land at all so they go to the government to get the concession and once they get it still they need to clean that land. How? They have to buy it or encourage local people, the owners, to join a scheme, which is more or less the same thing. ... Now I talk as a company man. If we could just buy the land without any partnership agreement we would be happier: if we could establish just our own plantation, without sharing the land and so losing in productivity, for us that would be amazing. The main problem nowadays in the field is the social issue, so if we could just buy their land without any other relations with them it would be better. We could plant faster, manage the land better, optimize productivity, and so on... And mostly we would have no problem from them. The government does not let that happen because people need jobs, you see?!' (Mr. W. - Plantation Manager)
The reasons why the local people are not just hired as labourers will be discussed in chapter 8.3, since they are related to ethnicity, but it is obvious that the common expectation concerning the income-generation provided by smallholder's schemes cannot be denied. Since the land previously used for subsistence farming is nowadays massively converted for agribusiness purposes, local people expect to take somehow part at this cake's division. Given that companies are unlikely hire local people, the partnership agreements
may also represent an opportunity for the allocation of local labour-force and provide an answer for its need of income. In this sense, the partnership schemes cannot be seen just as an arrangement between two equal entrepreneurial parts, but rather as an innovative form of both land's control and labour-power acquisition.
5.2 Allocation ofLand as Mirror of the Bargaining Power
The historical process of land concession was briefly summarized by Mr. I.F. (NGO officer at ELPAGAR): 'the history of Konesi Lahan (Land Concession) in Kalbar and especially in Sanggau is characterized by two different phases. The first one, from 1980 until 1998 while the second one took place beginning in the '90s until nowadays. During the first phase the land concession's agreement in the schemes were based on the ratio 7:2. Which meant for every seven ha that local communities surrendered to the company, two of them came back to smallholders in the form of plasma plot and five became company's land [known as inti].'
The ratio of land allocation within different partnership agreements is never fortuitous, it basically shows the distribution of bargaining-power between the parts and, therefore, it changes with the changes in balance of such bargaining-power.
According to the result of the survey, the most prevailing ratios, in the researched area, are nowadays 7:3 and 7:2, with 33.8% and 36.4% respectively (70.2 cumulatively), meaning that the majority of the partnership agreements have been established during the '90s. Indeed, a crosstabs-check in SPSS shows that the ratios are somehow related to the years when the respondents joined the partnership agreements. For instance, the cross tab check confirmed that the ratios 7:3 and 7:2 are rather concentrated around the mid '90s. It represents a clear evolution, across time, of the bargaining-power mentioned above. Furthermore, it is evidence of the difference in such distribution of bargaining-power between actors that can be observed also among the companies' schemes. Thanks to the ANOVA means plot (see Figure 5.1), it can be seen that the PTPN (state-owned) company is the one with, on average, the most fair land allocation, while PT MAS is the one with the worst mean in terms of land distribution.
illustration not visible in this excerpt
Figure 5.1 Fairness of Ratio(Land allocation)per companles
That is, the PT MAS scheme is the one where the company holds, on average, the biggest portion of land and so gives back to local smallholders the smallest oil palm cultivation per each plot surrendered by them. In effect, PT MAS is currently the company - among those analysed - where the smallholders' struggle related to land issues is spreading most.
The land allocation is also seen as an index of the power balance by a plantation's manager who was interviewed, Mr. W. Mr. W, believes that 'one way to encourage local communities to remain tied to the companies is to increase their share in the agreements. You know in the beginning it used to be an advantage to the companies, it cannot be like that anymore. The ratio in the beginning was 10:2, then 10:3, 8:2; 8:3 and nowadays we end up with 5:3. Maybe in the future a new partnership could be negotiated around fifty-fifty. This could be a solution, even though this is not a win-win game. It has never been so and it will never be.' Also the quality of the land allocated to smallholders (plasma) seems to diverge from that of the land that companies keep for themselves (inti). Some testimonies of unfair land allocation are gathered in the Box 5.1. An example of the conditions of oil palm plasma plots is reported in the Figure 5.2.
Box 5.1 Inti vs. Plasma: Testimonies of unfair land allocation
'According to our information the first step is always the settlement of inti and only later will the plantations for plasma be established. Why inti first?! Well, because they took the better land for themselves while the land set aside for plasma is always the worst. ... The inti is not just near by the centre of the company's plantation. It represents the core. While the land reserved for plasma is far away. Moreover, it is far from the mill. The company always gives priority to inti so even the quality of seedlings and consequently of the trees is different. Plasma plantations get the worst quality and usually their plots have less palm trees per each hectare compared to the inti one. That's why the latter is usually more productive, it is not only a matter of skills and management'. (Mr. N.A. Walhi Pontianak)
'About the differences, inti is always the best; it's more fertile and accessible. The land allocated for the inti is always close to the access, close to roads, electricity, etc... Even though they put the same amount of trees per hectare, the ones in the plasma are always worst in terms of quality and productivity. But, of course, the productivity depends also on fertilizers and pesticides'. (Mr. I.F. Elpagar Pontianak)
'They have lied to us about the condition of the land. The conditions of plasma's plots are very bad and so far, the palm trees did not produce any FFB yet; because of the conditions in which they gave us back the land. What they gave back to us can be categorised just as abandoned plantation. That's why we consider it as a lie. We are really disappointed with company that promised a lot, even fertilizers but up until now, we are still waiting the first FFBs'. (Mr. R. Smallholder and AMAN leader)
'The main difference is the quality, in inti plantation the trees are good and their maintenance is done very well while, for us, it is very hard to get access to fertilizers. ... What is really disappointing for us is not just the ratio but how they did the planting in the land that we surrendered. For my own experience, my family surrendered about 10ha which are already reported in the map but, in reality, not even 6 ha are actually planted with palm oil...
Consequently, my family will never get the size we expected'.
(FGD Smallholders PT SIA smallholders)
'It is really easy to notice such difference, the quality and quantity of the trees is not even comparable. The inti is amazing: I believe that there is some kind of purpose. That difference does not happen by chance, I mean, that they abandoned our land or the difference in the quality. I am sure that is made on purpose. Even though we had a strong cooperative on our side the company wouldn't care about it. They try to describe it as a problem of miscommunication but in fact it is just a scam and a robbery: As you can see, at the side of the roads every trees is well maintained but as soon as you go further inside the plantations you can see abandoned trees, a real mess... and even the FFBs cannot be gathered because the trees are sick and so the fruits get rotten'. (FGD Smallholders PT MAS smallholders)
'[inti and plasma were] definitely different. Our land was an abandoned area, while their [land] appeared totally clean. At the very beginning, we could not even understand such differences. Everything was new for us' (FGD Smallholder PTPN)
illustration not visible in this excerpt
Figure 5.2 Condltlon of plasma plots:example of soil erosion
The ratio determines the size of land that local smallholders can actually cultivate with oil palms. Almost half of respondents (43.6%) own exactly 2 hectares of plasma oil palm plot, which coincides to one kapling, the local unit of measure for land. That might explain why that conventional size is so widespread among the partnership agreements. Starting from this finding, a new variable was created in order to divide the respondents between those that possess < 1 kapling and those that possess > 1 kapling·. 72.5% own one kapling or a portion of it, while 27.5% own more than one kapling. This categorization has been normatively settled according to the traditional unit of measure to better grasp the situated condition of local farming scenario. The dichotomous variable, so derived, can be fruitfully utilised in further analysis and tests (e.g. t-test).
In conclusion, as illustrated above, in order to join a partnership scheme, local farmers must surrender a plot of land, which is then divided between the company and the farmer according to the ratios discussed above. From the interviews and FGDs it appears that, indeed, every respondent had to surrender a plot to join the partnership agreement with the company in order that they could then start with oil palms. However, 8.8% of the questionnaire's respondents stated that they did not surrender any plot although they also joined a partnership scheme.
There might be several reasons that explain their answer. In order to discover the circumstances of their joining a partnership scheme, the cases of those respondents were observed more deeply. One of them is Javanese, and could be an example of those farmers that supplanted local smallholders by buying their plasma plots. Dr. I.R., professor at Institut Agama Islam Negeri, tried to connect this phenomenon with the issue of capital and knowledge that these farmers probably acquired somewhere else; therefore 'when local people sell their land - because of the lack of knowledge about palm oil cultivation and financial vulnerability - the buyers are usually from North-Sumatra and Java... they usually made their fortune by working for PTPN and even when the buyer is a Dayak, he usually come from another regions but he made his fortune in the same way.' Unfortunately, it cannot be confidently stated because no questions were asked about such an unexpected issue. Another one of the respondents who did not surrender any land in fact owns not even one hectare and it could be the case in which groups of smallholders collectively join a partnership scheme to reach at least 1 kapling and share the profits, which is fairly common practice on the ground. Thanks to some transect walks and observations across the oil palm plantations during the harvests, it was possible to meet groups of smallholders that collectively work the same plot and, often, each quota is just a negligible portion of hectare. An emblematic example of such cases emerged during a FGD with PT SIA smallholders, where it came to light that there is a plot worked by 17 smallholders and each of them own less than one hectare. In truth, the land surrendered by them to join the scheme did not necessarily belong to all of them. Someone could even have taken part at this shareagreement only by virtue of his or her labour-power; the familial relationship can strongly contribute to settle this kind of pact. Indeed, 4 of the cases mentioned above claimed the family-ownership ofthe land surrendered.
There is also another possible explanation for that unusual answer, which is related to land conflicts and to the attempt, on the part of smallholders, to avoid any statements that might be misunderstood. In this sense, the verb 'surrender' could be viewed suspiciously by those involved in struggle against companies where the core of the controversy is often the land surrendered and the meaning of it.
5.3 The Ownership Status of the Land Surrendered
Regarding ownership status, despite ofthe anti-oil palm discourse, only 24.4% of respondent indicated the status of the land they surrendered as common adat land. The way in which some issues are utilised by NGOs and smallholders themselves as form of resistance for their struggle will be analysed in chapter 8. However, it is important to say that determining the ownership status of land is not that easy, since the local smallholders usually are not in possession of certifications that might prove their ownership. Generally, the companies provide those certificates together with the partnership agreements. Furthermore, the issue of land ownership is complicated because some practices, on the ground, make any distinction even harder. For instance, local farmers sometimes 'clean' a portion of forests or common adat land with the aim of surrendering it to join a partnership scheme. A significant prominence of common land usage has been spotted especially among those respondents that are in partnership with the PT MPE company (15 respondents out of 20).
With regards to private ownership, it is important to stress that both individual (28.2%) and family ownership (37.2%) are traditionally taken from the common lands and provided according to the customary law. A pivotal role is usually played by the chief of the village, who might have a significant influence in the quality of the land allocation and, in general, of the oil palm expansion in the area. Professor I.R. narrated the story of one village where he 'saw one family, consisting of father, mother, sons and daughters., well, all of them received one kapling back from the company. In the same village another family only got one kapling, only 2ha for the whole family. The family that got more land was the family of the local adat leader, while the others were just ordinary local people.' The private ownership of land or the control over common land is, therefore, crucial in order to join a partnership scheme and in determining the size of the oil palm plot. When Mr. I.F. (NGO officer at ELPAGAR) was asked to describe how it happens that some become smallholders and others do not, he replied that 'it is complex, not easy to say. Mostly is a community's leader decision and depends on land. For instance, for communities that cannot prove the customary tenure of their land it's harder to bargain. In that case, they have anything to give to the company but labour-power.' Even more interesting is the testimony of the former chief of Sanjan (Parindu), famous for being the only village in the area that consciously rejected companies' projects for their land. He proudly narrated that moment by stressing his own role as well as the collegiality of such a decision: 'I have been the chief of the village when we decided to decline their offers. We understood that being an independent means that you can send your children to school on the base of the land's result. If companies entered here we knew that the company would have made a good living for a lot of people but not us ... someone else but not us, not here. Instead we can make our living by choosing independently what to cultivate and how, rubber, oil palms or whatever else.'
The issue of land ownership can be an actual reason for conflicts among members of the same community, as well as among different neighbour-communities. The topic of conflicts will be scrutinised in the chapter 8, but now is important to underline the intricacy in determining the ownership of the land that was surrendered to the companies for the purpose of oil palm. Some cultural aspects, such as the customary adat law or the traditional Dayaknese nomadic farming, might contribute to such conflicts. As shown above, the PT MPE smallholders are those that, according to the survey, surrendered more common adat land than the other respondents. During a FGD with them, another facet of this issue related to the status of the land they surrendered was brought to light: 'what we surrendered was actually just a small piece of our land. Most of the land that we surrendered as ours was in truth matter of conflicts with other villages... We surrendered a land, to join the partnership scheme, which actually does not belong only to us but also to other villages. In fact is not even nearby here.' The traditional status of land in the Dayaknese culture conflicts with the current ownership system, since the first used to be part of their traditional farming and therefore it is not really compatible with the new agri-business model: 'the main point is that according to the nomadic history of Dayak people when they opened a rice-field they opened it in the area of adat land. Therefore just the rice-field area belongs to them, while the remaining part was considered still adat land. And they wouldn't settle there but they would rather continue to move around. So the private lands were just clusters within the bigger area of adat land. That was the process of ownership of Dayak land, they only used to open a rice-field to acquire the land ... It is not really common anymore.'
5.4 Compensation and Land Accumulation
The land surrendered to the company should be compensated through a payment called derasa and its amount should be settled according to the customary law considering the size of the land at issue. As a matter of fact, those that own < 1 kapling received, on average, significantly less of those that own bigger plots of land: 429,324 rupiah compared with 611,500 (t-test).
One of the survey's questions intended to enquire whether the respondent has ever received any pecuniary compensation for the land he or she surrendered to the company: 55% of them answer YES, while 33.8% NO, and the rest preferred to not answer at all. This might be explained by the controversial meaning of the compensation itself. It is still a matter of struggle between company and farmers, the latter usually want to stress that such a transaction is not part of a buy-sell agreement but rather a small and ritual reimbursement for the temporary usage of land. PT MAS smallholders cleared up that point during a FGD: 'Yes we receive it but it's a compensation, only for land usage based on our adat law. We call it derasa, it has anything to do with selling. It is usually really a small amount, 75,000 or 80,000 rupiah. I have to make clear that it is a term that refers the fact that company borrowed our land and not compensation for lands selling like someone pretends to say.' Even when someone inadvertently mentioned the verb 'buy' during his speech someone else immediately step in to correct the wayward path. This is the case of a FGD with PT MPE smallholders where one smallholder stated that 'the company paid us in order to buy our land. The company gave us the placement and some goods, especially rice, enough to make our living for one year., that's what they did.' To the request of clarification they unanimously answered 'no, no., it was just a derasa. We did not sell our land.' Mr. A.D., smallholder and SPKS (union) leader, clarified that 'it is not completely correct to say that local community surrendered their land. It never happened. The companies used a specific term, which means 'borrow' and in our culture can be used to compensate the land usage but is not at all a sell-buy issue. In Dayak culture and language there is no trace of a word that means we can sell our customary land, forests and cemetery. The term tancap beliung is sometimes translated as compensation. That is compensation for land usage. It doesn't mean buy our land.'
Regarding the differences among companies' schemes, every smallholder of PT SIA smallholders answered that they received compensations, while among the PT MAS smallholders and PTPN most declared that they never received any pecuniary compensation for the land surrendered (Cross-checked). Therefore, the different company's schemes seem to influence the chance that local smallholders will receive compensation. Although the amount received does not proportionally increase with the size of the land; those who own the biggest plots received even three times more than the average (see Figure 5.3).
Figure 5.3 Compensations per Land size
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The land's size is relevant not only when we talk about compensation; obviously the chances of making a good living increase with the size of the oil palm plot. The chance of making a good living, in turn, is influenced by the amount of land that one can surrender. When PT SIA smallholders were asked about the right amount of oil palm plot to make a good living one of them answered 'it depends, for instance, if I surrender just 2 ha what I got back is not enough, but if I surrender about 10 ha the plot I receive back is about 3 ha, definitely better.' Similarly, Mr. B.E. the director of the Institute of Dayakology, answered to the same question as follows: 'depends on the smallholder kapling's size. For example for only two ha of plot you will earn very little income from that so will be much longer to repay it back than it would be otherwise possible with a bigger plot. If you want to have a significance income you should have at least ten ha. Of course if you want to have 10ha you are supposed to surrender much more to the company.'
Such concentration of land can be achieved in many different ways but capital is still one of the most crucial aspects. Capital sometimes comes from someone within the community but, as has been already mentioned, more often it comes from other islands. The PTPN smallholders PTPN, during a FGD, illustrated the importance of capital, that it allows you to 'expand more, you can even buy land from someone else and surrender it to the company to join the scheme. More capitals you have and more are the chances to get a good living. ... Yes, is true. If you have just few capitals or you do not have at all, you can just give your own land away and it's hard to make your living.' Similar results can be found in the literature: Lesley Potter, after a fieldwork research in Sanggau, reported such a phenomenon as follows: 'very few could find 7.5 ha for release to PT SIA. One exception was an entrepreneur who had bought land in the village. A former agricultural extension officer, he provided 15 ha, and still had land for cloned rubber (selling seedlings to villages), fishponds and other initiatives' (Potter 2009, 118).
Besides capital, pressure seems to be another instrument for land accumulation. This aspect was described by the director of the Institute of Dayakology, Mr. B.E., during a discussion about the concentration of big plot of land: 'who can handle it usually possess the land beforehand, but there are certain practices that contribute to create this scenario. In one case, someone within the community that has so much money buys the land beforehand. For instance, I buy 100 ha from my people and then I give them to the company. In another case that concentration of land is achieved by pressure. Usually who can do that comes from army. That's why most of the local people that surrender only their land to the company will not see their life getting better, could be even worse than it was before.' Further considerations about the smallholders' incomes and livelihoods will be provided in the next chapter.
6 The main Factors of Production. Part II (Capitals and Labour)
This chapter is the continuation of the previous one, since the focus remains on relations of production within the upstream phase of the palm oil industry in the district. In order to grasp the complexity of those relations of production, this second part will present analysis of the other two main factors of production, namely capitals and labour. By way of an 'anatomy' of local smallholders the real nature of their endeavour will be inspected, alongside the extent of their dependency on companies and eventually the indebtedness or credit bondage that can constrain them.
6.1 The Smallholders’ Dilemma: entrepreneurs or labourers?
Operationalising the concept of 'oil palm smallholders' is way more complicated than for smallholders involved in other cash crops. This complexity is due to the structure and features of the palm oil industry. First of all, the high start-up costs and the natural characteristics of the oil palm fruits (that need to be necessarily processed at the mill within 48 hours from the harvesting) strongly affect the relations of production among actors. A representative example of those effects is the power held by those whom control the mill (transformation-process). Later, the differences between dependent and independent farming within the palm oil industry will be deeply scrutinized, but ¡t is indispensable to focus first on what an oil palm smallholder really is.
The smallholders' dilemma mentioned in the title refers to the difficulty in determining whether local oil palm farmers should be considered as entrepreneurs or as labourers. To resolve such a dilemma, the main feature oftheir endeavour has been taken as a criterion. It basically means to assess whether that endeavour is more 'capital-based' or 'labour-based.' Any other criteria were considered too normative and simplistic by the author. Their 'smallness' cannot be assessed only through a threshold arbitrarily set on the size of the land they possess, likewise the 'true nature' of their endeavour cannot be automatically assumed as such. The idea is to look beyond the subjective perception of the smallholders themselves, which might be deeply influenced by the self-entrepreneurial rhetoric. It is therefore necessary to also take into consideration the objective conditions and relations at the basis of their venture and at the very core of the partnership agreements with the companies. In the questionnaire, smallholders were asked whether it would have been possible for them to start as oil palm smallholders without the partnership agreements with companies. Though 35% of questionnaire's respondents declared that it would have been possible for them, in the following and consequent multiple-response question (only for these 'yes' respondents) 50% indicated 'lack of capitals' as reasons that led them to opt for the partnership scheme while 33.3% of the respondents pointed to ' lack of knowledge.' 26.7% also stressed the relevance of being sure 'to sell the FFBs' (see Table 6.1).
Table 6.1 Reasons forjoining the partnership agreements. Frequencies (Multiple Response Question)
Similar answers about the importance of capitals and knowledge were gathered during the in-depth interviews and FGDs. Mr. A.D, smallholder and SPKS (union) leader, stated that 'the first thing is a matter of capitals and secondly what you can consider lack of education. Specifically, lack of knowledge related to such business-oriented cultivation. Lack of knowledge even about how to start our own plantations.'
When PT SIA smallholders were asked why a local farmer would not prefer to start independently rather than to join a partnership scheme, one of them clearly explained that 'is not a matter of choice. We don't have enough capitals to start as independent.' Similarly, the PT MAS smallholders confirmed this statement and added something more about the actual process of decision-making: 'the first and main problem was that we did not have enough capitals, the second one was that we did not have enough resources, for example human resources., in the sense that we had no knowledge about it. The third main issue was that we, local people, sink into the company's promises. ... Actually we did not want to be plasma smallholders but at that time it was the best scheme possible, or better, the only real opportunity to start with oil palm. We did not want the partnership with the company but there were no other options ifyou wanted to work with oil palms.'
The case of PTPN smallholders is noteworthy in that, although they answered similarly: 'we did not know anything about palm oil at that time. It was the first time for all of us. ... Of course we did not have any capitals, and for sure we did not have enough to start alone', their answers also do not really match with their perception of themselves. This is a prime example of what has been said about the existing gap between the subjective perceptions and the objective conditions: during the same FGD (PTPN smallholders) when these smallholders were asked directly whether they see themselves more as entrepreneurs or labourers, they answered unanimously 'mandiri', which means entrepreneurs.
The distinctiveness of the PTPN scheme needs to be stressed, as it is not only the only state-owned company but also the first one established in the district. Furthermore, by comparing the means among companies (ANOVA test) the PTPN smallholders are shown to be, at once, those that joined the industry first (see Figure 6.1) and those that, on average, own the biggest oil palm plots (see Figure 6.2)
Table 6.1 Reasons for joining the partnership agreements. Frequencies (Multiple Response Question)
illustration not visible in this excerpt
Similar answers about the importance of capitals and knowledge were gathered during the in-depth interviews and FGDs. Mr. A.D, smallholder and SPKS (union) leader, stated that 'the first thing is a matter of capitals and secondly what you can consider lack of education. Specifically, lack of knowledge related to such business-oriented cultivation. Lack of knowledge even about how to start our own plantations.'
When PT SIA smallholders were asked why a local farmer would not prefer to start independently rather than to join a partnership scheme, one of them clearly explained that 'is not a matter of choice. We don't have enough capitals to start as independent.' Similarly, the PT MAS smallholders confirmed this statement and added something more about the actual process of decision-making: 'the first and main problem was that we did not have enough capitals, the second one was that we did not have enough resources, for example human resources., in the sense that we had no knowledge about it. The third main issue was that we, local people, sink into the company's promises. ... Actually we did not want to be plasma smallholders but at that time it was the best scheme possible, or better, the only real opportunity to start with oil palm. We did not want the partnership with the company but there were no other options ifyou wanted to work with oil palms.'
The case of PTPN smallholders is noteworthy in that, although they answered similarly: 'we did not know anything about palm oil at that time. It was the first time for all of us. ... Of course we did not have any capitals, and for sure we did not have enough to start alone', their answers also do not really match with their perception of themselves. This is a prime example of what has been said about the existing gap between the subjective perceptions and the objective conditions: during the same FGD (PTPN smallholders) when these smallholders were asked directly whether they see themselves more as entrepreneurs or labourers, they answered unanimously 'mandiri', which means entrepreneurs.
The distinctiveness of the PTPN scheme needs to be stressed, as it is not only the only state-owned company but also the first one established in the district. Furthermore, by comparing the means among companies (ANOVA test) the PTPN smallholders are shown to be, at once, those that joined the industry first (see Figure 6.1) and those that, on average, own the biggest oil palm plots (see Figure 6.2)
illustration not visible in this excerpt
Figure 6.1 Year when it was joined the partnership scheme
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Figure 6.2 Size of smallholders'plasma plot
These peculiarities might have an influence on their perception of themselves as smallholders but do not necessarily explain their contradictory answers. This ostensible contradiction is indeed an epitome of the pervasive effects of the self-entrepreneurial discourse. It proves the importance of also taking into account some objective factors besides the subjective perceptions of the respondents. In this case, the lack of capitals and knowledge (here meant as both technical and managerial knowledge) contributes to understand the concept of oil palm smallholders beyond their own claims. Indeed, capitals and knowledge should be at the very core of any entrepreneurial endeavour since they should sustain the entrepreneurial idea, its development, the start-up phase, the acquisition of means of production as well as the undertaking of the full-responsibility for its success. That is clearly not the case amongst oil palm smallholders in Sanggau
In this respect it might be interesting to mention Mr. W, plantation manager. When he was asked whether the smallholders should be considered more as entrepreneurs or labourers he replied as follows: 'maybe in future they will be more entrepreneurs, nowadays not even fifty-fifty. They have the entrepreneurial risk just as any other entrepreneurs, but the nature of their agreement with companies reduces them to be just another kind of labourers. If something goes wrong with the harvest they are entrepreneurs, but the conditions of the agreement make them so bonded that is hard to say they are nowadays more than any other labourers are. Probably in the future it will be different; as I said before, the partnership schemes need to be deeply re-negotiated.' Mr. W. has clearly in mind what 'entrepreneurship' really means and therefore his statement, as insider and manager, acquires a significant importance.
6.2 Dependent and Independent Smallholders: the peculiar case of palm oil
According to Accenture (2013, 18) 'smallholder estate models are intended to be systems for distributing wealth to lower-income households and ... can be separated into two groups, dependent smallholders and independent smallholders.' The definitions provided by Accenture in Exploitative Labour Practices in Global Palm Oil Industry (2013), though far from being exhaustive, represent the perfect starting point to discuss dependent and independent smallholders in palm oil industry. Their definition of the dependent ones was already provided in the context (see chapter 4), while the one of independents is here reported, 'Independent smallholder estates are small estates that are not formally tied to a private estate. Independent estates may be small, family-operated plantations or may be larger estates operated by a hired management team and labour force. Without ties to a corporate private estate, these plantations are typically less capitalintensive, and sophisticated operations and specific practices vary significantly based on the capital and experience of the estate's owner or manager. Independent estates sell FFB on the open market and so are highly exposed to the fluctuating price of FFB. Given the prompt degradation of FFB once harvested, these estates are frequently highly exposed to the influence of downstream processors of FFBs.' (Accenture 2013: 18-19)
Theoretically, the independent smallholders should be considered full-independent agents that play au pair with other actors in a neutral and fair field, namely, open market. In reality, one aim of this research is to show how they may be nonetheless tied to companies through several practices and informal arrangements. The independent farming of oil palms in Sanggau district, as well as in the rest of the region, is a rather recent and marginal phenomenon. Mr. W. was asked whether there are more independent or dependent smallholders in Sanggau and he answered that 'for sure the majority is still plasma. We started to listen about independents just during the new millennium, maybe since 2002 or 2003, but it is still a little minority.'
The reasons for such marginality can be directly attributed to the difficulty faced local farmers in genuinely starting as independents. The history of oil palm development in the region and a meticulous analysis of the current relations show that, without any state- owned company or private estates, the local palm oil industry would not even exist. It is not a coincidence that the state-owned plantations were usually the first to start with palm oil in several districts. Neither dependent nor independent smallholders could cultivate oil palms without the presence of big companies on the territory that invested on infrastructures (roads, mills, etc..) and, moreover, pledge the purchase of the FFBs locally produced. According to Mr. N.A. (Walhi Pontianak) 'the independent smallholders could sell their product to anyone. But in reality they are bonded throughout specific agreements. Not necessarily formal contracts. They are theoretically free to reject those agreements at any times but it hardly happens because ofdifferent reasons.'
The issue of FFBs selling is at the very core of the problem since companies control all the mills and they tend to buy only from their partner smallholders. That is, those smallholders that cultivate oil palm seedlings provided by the companies themselves. The quality of the FFBs seems to be the main reason for that choice but, on the ground, it deeply contributes to the maintenance of the leading role of the companies, exerted through the 'top-down' control of the transformation-process. The consequence of this policy is the proliferation of illegal practices related to brokerage of FFBs, which reduce even further the extent of profits for smallholders. The dependent smallholders penalized by the bonded relationship with companies, often try to improve their livings with the help of those practices. Some ofthem are at the same time farmers and middlemen.
The smallholder and SPKS (Union) leader, Mr. A.D., highlighted how independent smallholders sell their FFBs, 'it should be hard for them, since they don't have agreement with the companies, but it is somehow really easy. Let's say that they can 'join' plasma smallholders, or to say it better, to sell throughout them. ... The plasma smallholders of course charge something for that service. There is a sort of agreement based on the quality ofthe fruits. I have to see, if it is the same as mine it's fine, I can grab yours with mine but., if I am not a good middleman I would buy them anyway for a price lower than what will be paid at the mill.' Similarly, Mr. R., smallholder and leader of AMAN (local NGO) stated that 'the independent smallholders use the plasma membership cards to sell their FFBs. Basically they sell through some plasma smallholders. The FFBs are brought at the mill together and they are all considered as result from plasma harvest. You know if you have a friend who is plasma, you don't sell your FFBs to him. Let's say that you just sell through him, not to him. ... The only deduction charged to the independent is the transportation and also, of course, there is a sort of fee that the independent has to pay to the plasma smallholder.'
The independent smallholders have been directly consulted about the same topic and they stated that in some cases they can sell to the companies 'but if we don't have the certificates ofthe seedlings we cannot sell to them so we use the middleman. ... He is usually a plasma smallholder from a specific company, and he can do it because he has a ТВ, that's the certificate that allows, and at the same time obliges, the plasma smallholders to sell their FFBs to the company's mill. ... The middleman buys from us for a price that's actually lower than what the company's mill will pay him, so yes, there is sort of fee charged for the service.' Although the PT MPE smallholders are quite sceptical about the idea of replanting again in partnership with a company, they are definitely aware about the importance of seeing their products purchased: 'being the company's partners or not depends on us. At the present moment we are quite sceptical about it. ... If the company wants to work with us without any bondage we can remain in partnership with them. So we do not work for them like today but we rather work for ourselves and then we just sell our product to them. But if they do not agree we will take another way. ... The problem is always the same, that is what we are thinking right now: if we are purely independent how and to whom we can sell our FFBs?.'
The capitalistic control over production seems therefore to be held thanks to the transformation-process and is managed, in turn, with the certification of seedlings. The PT SIA smallholders seem to be conscious of all the relevant conditions needed to restart as independent and again, besides capitals, they mentioned the importance of being sure to sell their fruits and it requires the right seedlings: 'I would like to start as independent as soon as possible, all of us. ... I am really aware about that, we would need the capital first and then the land, mostly we would need their [the company's] seedlings.' The PTPN smallholders also unanimously stated their will of becoming independent but then when they were asked to whom they would sell their product then they replied that 'it is just a dream now, because at the moment is hard to make previsions. We do not know if it will be possible. We would need another agreement with them [company]. We do not really know if they would agree.'
Indeed, 38.8% of the questionnaire's respondents declared that at the end of the partnership's agreement they will continue as plasma, against the 31.3% that would rather prefer to restart as independent and the 30% that preferred to not answer. Therefore, whether, on one hand the dependent smallholders generally tend to emphasise their disappointment in the partnership agreement by highlighting their desire of independence, on the other hand, at least one third of them seems to still be worried about the consequences of it. They perceive and understand the crucial importance of the companies, due to their leading role.
In this sense, the PT MPE smallholders reported that 'from the very beginning, since the company came here, we had several issues and concerns in mind, but at that time we only wanted to manage an oil palm plantation and then what became a problem for us was to understand how can we sell the FFBs once we will be out of the partnership agreement with the company, without any bondages anymore.' Even more direct is the statement of PTPN smallholders about the dependency that ties them to the company: 'I want to say that we really need the company because we couldn't do that much without them. We need them to take care of land, they have knowledge and in the future maybe we will need some training, stuff like that... It's important they do not abandon us.'
The issue of dependent or independent farming cannot be underestimated because it will determine the shape of the palm oil industry in the future. The main worry for the companies is related to the expansion itself of independent farming, which might, in a longterm, undermine and damage their control over the whole production, as Mr. W., plantation manager, clearly expressed:
'Plasma smallholders really want their land back and if they have been good at saving and collecting some money maybe now they have the capitals that they did not have in the beginning to start as independent. It will be a real issue, a real problem for companies. When the smallholders will claim to have their land back it will be a problem. If they succeed, the companies will not have land anymore. I think and I am sure that the government will not stay quiet waiting for that to happen, they have to do something to avoid it and I am sure they will. Otherwise, if the government does not face such an issue, we will have big companies without land, they will just keep control of the mill, which is good nowadays as they have a lot of land, but could not be enough in the future. If the company collapses, the first to be effected here would be smallholders and the local community in general. It became a mutual relationship; first both the parts understand it and it's better for everybody.'
In such a course, the role of Credit Union (cooperative micro-credit system) will be pivotal in providing knowledge and capitals for smallholders. Though this topic will be deeply scrutinized in the chapter 8.3, at this stage however it is important to stress their point of view about the difference between dependent and independent smallholders. Mr. D., treasurer and board's member of Credit Union Parindu, describes the difference between dependents and independents from his perspective:
'Plasma are those farmers that join a company's partnership scheme in order to open a new door, a business opportunity otherwise impossible for lack of knowledge and money. But as soon as they get more knowledge they usually get in touch with Credit Union and if they still have some spare land they try to plant as independent with our help. That makes them more independent ... the independents do not have any mediation, they are entrepreneurs. The main difference is on the result, in the partnership scheme the plasma share their results with the company, I believe more than the 50% of their income is lost through deductions and other stuff. While the independent that start with us have no extra deductions and have to pay only a small interest rate for the credit. That's why the income of independent is far higher than the one of plasma farmers.'
Therefore the main problem remains connected to capitals and the access to them. The importance of capitals to finance the investments that allow local people to join the oil palm business is also at the centre of the definitions provided by Mr. W, the plantation manager interviewed in Sanggau. The criteria that he used to define and differentiate the smallholders are also related to another fundamental mean of production, namely land:
'Well, actually they (smallholders plasma) are the owners of the land but they don't have any kind of power and for sure not enough money to plant oil palms by themselves. That's why they are obliged to join the company and it costs them the biggest part of their own land. Usually the company gives them back not more than 30% of the land that it receives from smallholders. So the company usually holds about the 70% of the land surrendered by local people. ... It depends just on capitals, if you have them you can plant independently and plant more. But if you are just a normal person you don't have them but you have land. The land is the most important thing. The land. That's why any issues and conflicts are about land. If you are a local person and you have only your own land but you do not have capitals it's impossible for you to start as independent. That's why people became plasma. If you have capitals you have more freedom to choose and even if you don't have land, you can buy it with capitals. Vice versa is impossible, if you only have land... no way. He who can start as independent is mostly someone with capitals who can then hire people. Some of them also have knowledge and previous experience in palm oil industry, but others they are just attracted by what they have heard about the business and so they invest in it, nothing more. They buy the land, they plant by themselves, they hire people that work for them.'
It is quite hard to build a profile of the typical independent smallholder, whilst it is the dependent one that can be automatically recognized since they are part of a formal partnership agreement. The latter are still the vast majority but further efforts will be needed in the future to illuminate the differences among them, that are still vague or, in some case, even evanescent. For instance, the dependent smallholders that still own small plots of land after they have joined a partnership agreement often commit it for independent oil palm farming, which significantly contributes to making their own living. Vice versa, some independent smallholders can, more rarely, even buy and take the control of a plasma plot. The PT MPE smallholder during a FGD stressed the importance of independent oil palm plots in making their livelihood, as follows: 'most of us here have seen improvements in our livelihood, especially those that also have a small independent plot of palms besides the plasma kapling.' Likewise, during a FGD with independent smallholders, three of them admitted to also running a plasma plot: 'yes we have some plasma plantations but not here, we bought their plots from others villages. ...We took their plasma land but we paid for that.'
Once again, capitals and knowledge seems to be crucial in giving the opportunities to genuinely start as independents. Cases in which smallholders come from other islands or regions to buy land and establish their own plantations are not rare. Neither are those in which locals get their knowledge and capitals somewhere else and then decide to come back to their area. It has been exhaustively explained by Mr A.D., smallholder and union leader, who stated 'my case is actually really common, I come from another region where I have learnt as plasma and got my technical knowledge there, which I can nowadays apply to an independent plot with enough capitals. Some plasma use the spare land I mentioned before to start a small-scale independent plot. We got a lot of experience also by travelling in places where the oil palm expansion occurred first.'
In conclusion, the categorization of oil palm smallholders remains an open question that deserve to be further researched in order to understand the ongoing evolution of palm oil industry in West Kalimantan. Nowadays, independent farming in the region is, quantitatively, still marginal but in the future it might be the keystone for the smallholders' emancipation and local development. The role of Credit Union in this and the perspectives of enhancement in terms of smallholders' independence will be analysed in the chapter 8.3.
6.3 Credit and Indebtedness
Another relevant issue connected with the lack of capitals is indebtedness. Since local farmers generally do not have enough capitals beforehand, as has been already explained above, they usually get into debt at the moment when they join a partnership scheme. Currently, Credit Union represents the favourite financial actor among smallholders' preferences but it is still in its very early stage and the vast majority of smallholders in Sanggau had no other option than get into debt directly with the company with which they got in partnership. Mr. I.F., NGO officer at ELPAGAR Pontinak, explained that 'the land preparation takes at least 4 years and it's really expensive. The smallholders couldn't face such onerous costs by themselves. They include seedlings, drainage canals and sometimes terracing. You can consider it the beginning of smallholders' indebtedness.'
For a long time until nowadays, access to traditional credit system has been massively limited for local farmers to such an extent that credit becomes a pillar of any partnership agreement. Thanks to such limitations, smallholders can access to credit only through the company, which, in turn, receives loans from banks and investors. To be more precise, the companies are those that get into debt and then partially unload that burden, with all the related financial risks, onto local farmers. When Mr. N.A, officer at Walhi Pontianak, was asked why smallholders get into debt he clearly stated that it was not correct, 'the companies are those that get loans ... Somehow the banks support the setting up of the plantation, included the plasma plots. Therefore the smallholders can access that credit only through the company. That's why the smallholders get into debt for such long time. It constrains them deeply. This is just business, a huge business where small actors could never have access without the company. The banks would never give the money directly to smallholders, they talk just with companies.'
Although every FGDs' participant mentioned the indebtedness as a real issue that directly affects the quality of the partnership scheme and so of their living, only the 66,3% of questionnaire's respondents answered YES when were asked whether they ever received any loan to start their entrepreneurial activity as oil palm smallholders. These results might be due to a researcher's bias that occurred in the formulation of the question itself. Indeed, the smallholders never applied for a loan and, in turn, never received the money directly. What they know about that credit is only the debt repayment that is subtracted fortnightly when they go to sell their FFBs. It is likely that most of those who answered NO found the question confusing or wanted to state clearly that they did not receive any money directly. Indeed, there are nine who mentioned in another question (cross-tab checked) 'debt- repayment' as one of the deduction's entries though they clearly said that they never received any loan.
The smallholders were also asked, according to their perception, how much such a loan weighs on their income (in %). The mean results to be 36.60% while the mode is exactly 30%. The t-test showed a strong difference between the means of those that own < 1 Kapling (33.85%) and those that own more than that (50.0%). Although it might appear obvious - since the start-up costs are proportionate to the plot's size - in truth their bigger plots should also provide larger incomes. It is, therefore, probably just a sort of denouncement of a perceived injustice, felt more strongly among those that, thanks to their land's size, would likely expect themselves to be less bonded with companies.
Thanks to the ANOVA-test, it can be said that the weight of the debt-repayment on farmers' income is, on average, stronger among PT SIA and PTPN smallholders. It is important to stress that among PT MAS smallholders there was no standard deviation: every respondent said that it weighs exactly 30% on his income. That homogeneity might be explained with the conflicting struggles they are currently facing, which impose them a widespread awareness about the features of the partnership agreement and a set of share claims. Also the time needed to repay that debt is, on average, highly differentiated on the basis of the company schemes. The ANOVA test below (see Table 6.2) shows these differences of mean. Paradoxically, the PT MAS smallholders (currently the most involved in struggles) are those that repaid, or expect to repay, their debts in the shortest time. While the PTPN smallholders (the firsts to start in Sanggau) are those that stated the highest time: on average 18.73 years, which is more than 8 years over the general mean.
Table 6.2 Years needed to repay the debts ANOVA-test per companies
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Source: Author, 2015
Contrary to expectations and some extracts from interviews, a big size of land does not make the debt repayment quicker but, possibly, even slower. The t-test seems to contradict Mr. B.E., the director of the Institute of Dayakology, according to whom the years needed to repay the debts 'depend on the smallholder kapling's size. For example for only 2 ha of plot you will earn very little income from that so will be much longer to repay it back than it would be otherwise possible with a bigger plot.' Indeed, those that own < 1 Kapling stated to need, on average, 8.79 years to repay their debts. While those that possess > 1 Kapling, apparently, would need 15.60 years on average. It is important to note that almost half of those that own a plot bigger than 1 kapling are actually PTPN smallholders. This might explain that ostensible contradiction since, as it has been just said, the PTPN smallholders are those that spent, or predicted to spend, more time to repay their debts.
The FGDs confirmed the presence of contrasting feelings towards the debt- repayment's system among the different companies' schemes. The PTPN smallholders denounced their indebtedness as follows: 'yes we are in debt with the company for the land and the seedlings. ... It is just like digging and filling a hole, that's the condition of our debt. It has been already almost 25 years and most of us did not finish repaying it.' Conversely PT MAS smallholders stated that the company 'put also the credit on our land.. The debt we have to repay for it is 17,783,000 rupiah per hectare. It is not that bad, compared to other companies it is smaller and also we can repay it back through deduction from our FFBs selling up to 30%.' A PT MPE smallholder considered himself lucky for the amount requested by the company in his partnership scheme: 'we had 9 million of debts and in 6 years we had to pay that. Luckily our family could repay such debts but we know for sure that other farmers that joined others plasma schemes have had to repay it back for a longer time, more than 6 years. Somehow we have been lucky.' Instead, the testimony provided by those PT SIA smallholders that lastly joined the scheme is dramatic 'we will be in debt for 25 years I guess, for each hectare the price is 160.000.000 rupiah. ... But of course we cannot pay them due to the bad result of harvesting., the quality of our plot does not allow us even to start repaying such debts. In this way it will take 40 years.'
Another factor linked to the time needed to repay the credit is the price of palm oil. Potter, reporting the case of PT SIA smallholders in Sanggau, stated that 'it was expected, in 2002, that it would take farmers 12 years to pay off the investment fee of Rp26 million (US $ 2,525 at 2002 exchange rates) per kapling, but five years later, with high commodity prices, this was revised downwards to just eight years. ... Nevertheless, prices of both palm oil and rubber have recently collapsed as a result of the present economic crisis, leading to further revisions' (Potter 2009, 119). Such volatility of prices directly affects the time needed to repay the debts and exposes local smallholders to vulnerability. This vulnerability, in turn, can be justified only by assuming their entrepreneurial status, which is rather controversial
(see 6.1). In conclusion, the debt-repayment Is one of the essential pillars of any partnership agreement and It bonds local smallholders to companies. As demonstrated, the extent of such bondage Is not uniform, It can vary significantly from one companies' scheme to another. Since local smallholders usually have not enough capitals, they are obliged to accept the debt-repayment In order to join the palm oil Industry though, often, they understand neither the terms of this agreement nor the motives.
6.4 Oil Palm Income and Smallholders’ Livelihood
As explained by Potter, the livelihood change due to 'the transition from subsistence to market and from self-resilience to dependency' have to be read cautiously: 'yet because of human agency Is Important, there Is considerable variability In the extent to which local farmers become Involved with the plantations or become dependent on them as their only source of Income' (Potter 2009, 105). In spite of that, he admitted that the foreign style of palm oil Industry 'reduces them [locals] to the status of labourers or smallholders out- growers on tiny plots. Their capacity for Independent decision-making Is then restricted for several years until they have paid their holdings, during which time their financial returns remain unclear and partly beyond their control' (Ibidem). The smallholders were asked how much the Income from their oil palm plot contributes (In %) to their households' livelihood and only 31.4% stated between 75 and 100 percent while 68.6% of them (cumulative percentage) stated less than 75% (see Figure 6.3). Thanks to the ANOVA-test It can be concluded that the different partnership schemes may Influence also the extent of Income generated by the oil palm plots. The results are, on average, highly differentiated according to the companies' schemes (see Figure 6.4). The PT SIA smallholders are those whose oil palm plots, on average, contribute less to their Incomes, whereas PT MPE smallholders see, on average, their oil palm plots contributing most In making their livings.
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Figure 6.3 Contribution of palm oil to the household's income (%)
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Figure 6.4 Contribution of palm oil to the household's Income: per companies
Thereafter, It results that 83.3% of respondents still maintain at least one activity which contributes to making their living, besides oil palm. Of these, when they were asked with which kind of activity the supplement their Income almost 80% of the cases answered 'alternative cash-crop' while 15.9% of them stated to be, at the same time, also a labourer and only 10.1% declared to run another entrepreneurial activity. Therefore the vast majority is permanently occupied on agricultural activities (see Table 6.3).
Table 6.3 Type of supplementary activity. Frequencies (Multiple Response Question)
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For 80.6% of respondents (cumulative percentage) those supplementary activities contribute less than 50% to their household's income (see Figure 6.5). By comparing the means per companies (ANOVA test) the percentage of income produced from such supplementary activities is highly differentiated and, as expected, the PT MPE smallholders are those that, on average, gain the least from them (see Figure 6.6).
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Figure 6.5 Contribution ofthose S.A. to the household's income (%)
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Figure 6.6 Contribution of those S.A. to the household's income: percompanies
When Mr. R., smallholder and AMAN (local NGO) leader, was asked whether it is common for smallholders to rely on supplementary activities to sustain their livings he replied as follows: 'for example here, my friend's family, they also have rubber since they have to wait for at least a month the cash from oil palms and it is never enough. That is not really common because not all smallholders still have enough land after the agreement with the company. Some also kept rice fields to be sure to eat something regardless of the market crises.' Similarly, the PTPN smallholders answered that 'our main activity is palm oil because we invest our land and our time there but we still have some small cultivation, mostly rice, and some animals, the rice field is a tradition for us... We have also small rubber's plots. ... Yes we have also rubber but at the present moment the price is too low.' In order to better grasp the relevance of subsistence farming was smallholders were whether they still cultivate any plots for their own food consumption, 75% answered YES and almost half of them explained their choice by the need of assuring access to food (see Table 6.4). Amongst those who answered NO, 41.7% stated that they do not have enough land anymore and only 8.3% said that they do not need it.
Table 6.4 Reasons for continuing with subsistence farming
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Source: Author, 2015
The director of the Institute of Dayakology, Mr. B.E., confirmed that 'since they [local smallholders] gave all of their land to the company in order to join the partnership scheme ... they don't have any place to grow some rice-fields, sometimes the oil palm plantation reaches their backyard.' The smallholders in partnership with PTPN clarified that 'it is not a matter of custom anymore, or at least not only that. If we do it is because we cannot rely on the money from rubber and oil palm if something goes wrong. We used to rely on palm oil income, it used to be enough and it could sustain our living but nowadays is not reliable anymore.' In the same FGD another smallholder tried to stress also the importance of subsistence farming for their tradition and immediately another rebutted him as follows: 'yes is for sure a matter of tradition, but especially nowadays we really need it to live. Without it, there would be definitely a more severe issue.' Regarding the size of the land earmarked for subsistence farming, another PTPN smallholders stated that what remains to them is "just a small [plot], we have to make it being enough for us. Whether it is enough or not, we have to make it enough.' The PT MPE smallholders pointed out the traditional importance of such a practice and during a FGD one of them stated 'as villagers we cannot be separated to our land.. Of course we need to do some cultivation like rice and vegetables because we cannot live without such practices.' Therefore, the need for subsistence farming involves many different facets and is nonetheless related to traditional forms of collective farming within the community.
Regarding the practices of collective labour, the local smallholders were asked whether they need extra labourers to cultivate, clean and harvest their plots and 85% of them answered YES. Thereafter, they were asked via multiple response question according to which agreement such exchange occurs, 83.3% of cases stated 'for daily-wage.' Only 4.4% stated 'for free', while 25.8% of the cases mentioned 'gotong royong', which is a traditional form of community aid, or better a mutual exchange of labour-force among members of the same community. Conversely, the percentage of those that stated to have ever worked for another oil palm smallholder is unexpectedly low, at only 40%. Out of these, 64.3% stated that it occurred 'for daily-wages' while 16.7% according to ‘gotong royong' and 2.4% mentioned 'payment in kind.'
The prevalence of 'daily-wage' as an agreement for labour exchange among smallholders represents a substantial change in the relations among community's members. This aspect will be recalled in the chapter 8.2, since it is connected to the effects of palm oil over the customary adat law and the traditional habits of Dayak people. It is however important to conclude this section with what Mr. A.D., smallholder and SPKS (union) leader, defined as 'labour in labour, which means that some smallholders end up working for other bigger smallholders, for example to clean their plantation or during the harvests. I have personally experienced that. I have worked for other smallholders to gain some extra money because what I earned with mine was not enough. At the present moment not even the others cash-crops plantations - especially rubber that is really cheap now - can help us to fulfil our daily needs and help us in making a good living. It's never enough. The point is that I would work anything as long as is productive and brings me money, I would do any work as soon as you don't ask me to become a robber.' His testimony says much more about the smallholders' livelihood and their difficulties than any other figures. Moreover, it represents an invitation for social researchers to look beyond the normative definitions with the aim of grasping, within the folds of complexity, the real nature of social relations, especially the relations of production.
7 Arrangements and Practices
The focuses of this chapter are the arrangements and practices that, on the ground, burden local smallholders. Some of the bondages that tie smallholders to companies have been mentioned already, such as the indebtedness and the land allocation, but several other aspects need to be analysed. The first section concerns the sale of FFBs on the side of local smallholders and how it affects on them by way of these formal arrangements and practices. The second relates to the forms of intermediation that connect local smallholders to the rest of the industry, namely brokerage and cooperatives. Cooperatives represent a peculiar instrument of control in the hands of companies while the brokerage can be seen, mostly, as an extra-service needed to overtake the stiffness of the partnership agreements. Eventually, the last section describes the capitalistic control over production, exerted through ownership or control of other means of production, such as fertilizers and machineries, will be discussed.
7.1 Sale ofFFBs: terms, conditions and practices
The relevance of FFBs trade and the need for local smallholders to ensure their sale was already partially mentioned in the previous chapters. At this stage, the practices and the terms of the partnership agreements with regards to the FFBs sale will be discussed in depth. In answer to the question of whether the partnership agreement allows smallholders to freely sell their FFBs to anyone, almost every respondent answered NO. As a matter of fact, only one smallholder (PTPN partner) stated the contrary. Though it cannot be confidently stated that this respondent is actually a 'company man' (see the box 6.1), beyond any reasonable doubt, the prohibition and limitation related to the sale of FFBs is, undeniably, a pillar ofany partnership agreement.
Box 7.1. The unique case of the smallholder that could sell his FFBs to anyone
The case at issue has been singularly examined in SPSS and it came to light that he is the only one that, answering to the questionnaire, did not give his age and one of the few that did not want to state the size of his oil palm plot. Even the name provided by him might, reasonable, be fake. It is difficult to believe that this smallholder, that apparently could freely sell his FFBs, benefits of such exclusive sale-terms since all the others respondents answered NO, regardless of their company's scheme. The hypothesis of a mistake due to inadequate awareness it is not plausible either because all the smallholders are definitely conscious of the sale's agreement, which is one of the most relevant in their agrarian activity. More likely this is the case of a 'company man', that is a regular smallholders which, simultaneously, maintains a close relation with the company as an insider mole. Indeed, at the end of the FGD with PTPN smallholders, three of the quietest participants confidentially reported to the researcher their difficulty to speak out about some controversial topics because of the presence of one 'company-man'. Afterwards, during a transect-walk along the PTPN plantation at the inauguration-day for the arrive of the new plantation manager, the same controversial 'smallholder' attached importance to show off his closeness with the top brass of the company and, moreover, a friend of him confided to the researcher the great advantages gained by the mole's family since the establishment of the national company. For instance most of the land where are allocated the company's offices used to belong to his family and it has been handsomely repaid with money and many other benefits. Usually, this kind of relationship is strengthened by the participation of the 'company-man' to the management of the cooperative or to a 'yellow union'. The suspected mole proudly declared to take part of both.
Such a restriction at the basis of any partnership agreement is ascribable to monopsony, which is an unfair form of market in which, conversely to monopoly, several sellers are somehow obliged to sell to only one big buyer, which controls the market itself as a price-maker. When Mr. N. A., officer at Walhi Pontianak, was asked to whom smallholders can sell their FFBs he replied that they 'must sell their product just to the company they have the agreement with'. Similarly, PT MPE smallholders stated that 'we are obliged to sell only to PT MPE. If you do the partnership with a company then you cannot sell to anyone else'. The unfairness of this prohibition was stressed by PT MAS smallholders who pointed out the responsibility of local governments in perpetrating the paradox whereby the companies are, instead, free to buy FFBs from anyone. When they were asked whether, according to their partnership agreement, they were free to sell their product freely, they answered as follows: 'those things have already been regulated by the local government.. Such regulations put us in some kind of bondage, between the company and us. The funny thing is that we cannot sell to third party but they can buy from third party.' Mr A.D., smallholder and SPKS (union) leader, confirmed that 'there is a sort of agreement among companies according to which they should not accept the FFBs that come from other schemes or plantations but often, on the ground, they really close both their eyes'.
Nonetheless, Dr. I.R., professor at Institut Agama Islam Negeri, attached importance also to considere the mutual dependency that ties both the company and the smallholders, which assure to the latter the purchase of their FFBs: 'the bondage due to the agreement oblige PTPN to buy the FFBs from their smallholders partners even though they have enough FFBs to process. It is part of the agreement.' In truth, the companies settle a quota to the amount of FFBs that they can buy fortnightly from each smallholder, according to the size of the plot and their needs. PT SIA smallholders related the monopsony to the indebtedness as follows: 'as long as we are still into debt with the company we are unable to sell our FFBs to anyone else.' This aspect was confirmed by Mr. A.D., smallholder and SPKS (union) leader, according to whom also the PTPN smallholders are not free to sell their FFBs to anyone 'before they finish to repaying their debts.'
The respondents of the questionnaire were also asked whether in reality, regardless of the partnership agreement, they are in the actual condition to sell to anyone and, in this case, the answers were quite different: 18.8% answered YES, meaning that exist, on the ground, some illegal practices that might help to overtake the above-mentioned limitation. Those practices are probably related to brokerage and therefore will be discussed in the next section. It is important to notice that none of the smallholders in partnership with PT MAS and PT MPE answered YES.
In regards to payment, 82.5% of respondents stated that they do not take part in setting the price of FFBs and 61.3% consider that process not fair and transparent enough. The exclusion of local smallholders from the process of pricing was reported by several informants and also by the smallholders themselves. Mr. B.E., director of the Institute of Dayakology, confirmed that the 'farmers have no access to the decision-making process that bring to the price. It is driven by companies.' Mr. A.D., smallholder and SPKS (union) leader, extensively explained that 'the companies never involve smallholders directly but they should theoretically be represented by the cooperative in that process. I don't know the details but for what I know the price is decided on the base of a sort of calculation or formula. As smallholders we don't know that calculation and we are not involved in it but I have a friend that usually follow that kind of process and really knows about that formula which is apparently settled by the companies with the Regency and Provincial authorities. ...
During the weigh-process at the mills' scale the smallholders are always present, while to settle the price they are never involved and I think most of us we don't know that much about it.'
The PTPN smallholders complained about the FFBs' price by connecting it with the final price of the products that contain palm oil, for them 'the main problem is for sure the price of the FFBs because we know that the price of oil palm is quite high, as well as the goods made by that, while the FFBs are poorly paid to us. ... I think that the company has the responsibility of it because the price is settled by them with the government.' In the same FGD when the smallholders were asked whether they take part in setting the FFB's price they replied that 'it is a duty of the cooperative; the KUD takes care of that.' The mediation offered by the cooperative was also mentioned by Mr. N.A., officer at Walhi, according to whom 'the companies decide the price and usually smallholders don't sell their product directly to them but through cooperatives.' The function of cooperatives deserves to be investigated more and, therefore, will be elaborated in the following section.
Regarding the payment, 96,3% of respondents stated that do not receive it immediately when they sell their FFBs to the companies. Mr. R., smallholder and AMAN (local NGO) leader, clarified such a delay as follows: 'we harvest twice per month and we actually get the money for each harvest about one month later. For example, ¡f I harvest today 17th of February and I bring the FFBs to the mill immediately I will not get paid before than 17Th of March. What I would get today is just a note ... a receipt which says how much should I get.' Any smallholders have provided the same explanation, regardless of the company.
Throughout the survey was also enquired whether there is any deduction subtracted from the payment that smallholders should actually receive and 86.3% answered of them YES. Out of these, 72.4% of the cases mentioned the FFBs transportation as motive for deduction, 64.5% the fees for cooperative, 59.2% the purchase of fertilizers and pesticides, 43.3% the road maintenance and 39.5% mentioned the debt-repayment; while the land clearing and land certification have been mentioned 26.3% of the cases and 25%, respectively (see Table 7.1).
Table 7.1 Deductions subtracted during the FFBs sale
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Source: Author, 2015
Similarly to what has been said about indebtedness (see chapter 6.3), local smallholders perceive, on average, the weight of those deductions around 30% of the amount they should otherwise receive in absence of such deductions. More precisely, 25.81% as a mean and 30% as both mode and median. Therefore, according to the smallholders' perception, on average, these deductions erode almost one third of their oil palm incomes.
The results of QUALITATIVE analysis (interviews and FGDs) arrive at the same conclusion. Mr. N.A., officer at Walhi Pontianak, explained the deduction as follows: 'the deductions are many and massive. Not transparent at all. So they end up being mysterious for smallholders that don't really know what they are for. The most onerous is the deductions for debt repayment that can reach even the 30% of the amount they should otherwise get. It is the biggest but not the only one.' Similarly, Mr. I.F., officer at ELPAGAR stated that 'the companies always withhold a big portion of FFBs trading as debt-repayment and, of course, the smallholders are also charged for the transportation to the mill.'
According to Mr. B.E., director of the Institute of Dayakology, the most unfair deduction concerns the assessment of FFBs' quality: 'the first one is tricky and underling. We talk about the quality of fruits, that's the first not-transparent deduction. Of course then there are several deductions because the smallholder is supposed to repay the price of fertilizers, pesticides. All of that prices subtracted are not actually transparent either. The company sets them too. Those deductions are also needed for debts repayment.' When he was asked about the weight of those deductions on smallholders' income he replied 'it is hard to say but probably around 20%. The bad conditions of infrastructures can easily make that percentage even worse and the deductions increase. Of course during the rainy seasons, just like at the present time, those deductions can be massive.'
Regarding the decreasing quality of FFBs after harvesting, the director of the Institute of Dayakology added that 'of course the quality decrease but this issue is also used as a leverage to further cut-down the price paid to smallholders, therefore to further increase their profits.' The smallholders themselves spoke out against deductions during the FGDs. For instance, PT SIA smallholders that voiced their complaints as follows: 'we are oppressed by a lot of deductions, the first one is the fee for the cooperative services, and then there is the plots' maintenance that should be done by the company, of course then fertilizers and pesticides, eventually transportation and in the end for the service at the mill.'
The PTPN smallholders, the first that joined the palm oil industry, are witnessing an evolution in the deductions-policy, which is oriented towards the reduction of company's responsibilities: 'the main deduction is due to condition of the FFBs, and of course the quality depends on the use of fertilizers too. ... Before, besides to the debt repayment we had to pay also for roads' maintenance but as we told you it is not anymore like that. Also fertilizers if we want to buy them we have to go to the shop, not anymore to the company, or in case we can also buy them from the cooperative, in credit, and it will be deducted from our income.' Conversely, PT MAS smallholders stated 'yes, we have some deductions, for example for fertilizers and pesticides because we have to buy them from the company, through the cooperative.' Eventually, PT MPE smallholders summarised their disappointment as follows: 'there are so many deductions [laugh and noises]. ... It's about the 30% of what we should receive ... mainly is for road maintenance and grading of FFBs quality. ... There are a lot of deductions that we do not really even understand what they are for. We do not have any idea about them.'
The monopsony, or buyer-power, within the palm oil industry is exerted throughout the control of the mills on the part of the companies. As mentioned in the previous chapter, the control over the transformation-process assures to whomsoever exerts such control a crucial power and unlimited advantages in the relations with other actors. The questionnaire's respondents were asked whether they are obliged to sell their FFBs to a specific mill and 81.3% answered YES. Since often the objective circumstances, such as the distance to the mill and the road conditions, may have a real influence over that answer, those that answered NO were then asked whether they have the actual opportunity to sell their product to other mills and 51.9% still answered NO. Therefore, more than half of those that, apparently, could sell their products to any mill, in reality are not in the actual conditions to do it.
According to the survey's responses, the average distance between the oil palm smallholders' plots and the mill is 17.71 Km and the latter takes, on average, 82 minutes to be reached. The disposition of the mill is never fortuitous and relates to the fairness of the land partition between inti and plasma areas (see Box 5.1). The distances between the mills and the smallholders plantation is, on average, highly differentiated among companies, as well as the time needed to reach those mills: PT SIA smallholders spend, on average, about 57 minutes for almost 25 km; PTPN smallholders spend approximately one hour for 11 km; reasonably, PT MPE smallholders (those that stated to be furthest from the mill) spend 126 minutes for 25 km. The case of PT MAS smallholders is strange: though the smallholders plantation seem to be the closest to the mill (only 8.87 km of mean), they stated to spend, on average, about 84 minutes (see Figure 7.1 and 7.2).
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Figure 7.1 Distance to the mill(in km):per companies
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Figure 7.2 Distance to the mill(in minutes):per companies
As stated above, such distance is not accidental; the mills are usually settled at the very core of the companies' plantations (inti area). Mr. B.E., director of the Institute of Dayakology, stressed the advantage assured by such land disposition as follows: 'as far as I know, the inti is always the main concern of the company and its position is strategically chosen. Roads, distance to the mill, infrastructures and electricity are just some examples. Therefore, the company even has an advantage by giving the worst land to smallholders. How? Well, by cutting down the price paid for their FFBs. The company wants, of course, to take a bigger profit from them and that's one of the ways.' Indeed, the deductions subtracted for the quality of FFBs, which decrease gradually over time, is one of the most common and unappreciated practices since smallholders cannot really understand the criteria at its basis. Thanks to this practice companies over-extract profits from smallholder's labour and so maximise their margins.
The roads' condition, therefore, is one of the main issues related to the FFBs' transportation and sale. The smallholders' perceptions about it was investigated throughout two different questions: 70% of respondents consider the road that goes from their respective oil palm plots to the mill to be very poor or poor (cumulative percentage), while 90% consider it to be very poor or poor during the raining season (cumulative percentage). According to 75% of questionnaires' respondents, there are extra fees charged to transport FFBs with special trucks, when is not otherwise possible with the regular ones. Such extra fees shall be added to the amount already deducted from smallholders. Mr. B.E., director of the Institute of Dayakology, pointed out the fact that when 'the company builds a road it is good for communities but the local people mainly use it for oil palm purposes. The kind of roads they make are mainly used by themselves and if the plantation is not productive anymore they will leave the roads abandoned.' The researcher could directly observe the intense traffic of heavy-goods trucks that transport FFBs to the mill; it almost never stops and destroys the already poor roads. Such traffic would need daily maintenance, for which local smallholders pay deductions but, in reality, this hardly ever happens (see Figure 7.3).
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Figure 7.3 Conditions of roads in Sanggau. Photo by Author
Indeed, PT SIA smallholders claimed for that as follows: 'it is company's responsibility, because they impose deductions on us for that. All the roads inside the plantations area - whether they are inti or plasma - should be under the responsibility of the company. That's what we pay for.' Without proper means of transport, local people see their right to mobility compromised. Regardless of the existence of roads, they still lack connections with neighbour villages, especially during the raining season. Mr. R., smallholder and AMAN leader, commented on this problem as follows: 'you can see by yourself the conditions of the roads used by the trucks of the company. We can barely reach our village and, often, there are such bad conditions that we are stuck there because it is impossible for regular means of transport to face these roads'. Smallholder PTPN felt abandoned and betrayed by the company that changed the terms of their agreements in regard of roads' maintenance:
'There are strong differences between what the agreement said and what happened in reality. For instance, in the agreement the company were supposed to take care of the roads' maintenance but now they have released their responsibility over it. ... The company told us 'if your plantation is now productive, if you can harvest your FFBs it means that the land belongs to you as well as any roads and infrastructures there, so also the maintenance is one of your duties. ... We really need the company to take care of infrastructures' maintenance; based on our own skill and resources we are not really able to do it by ourselves. Nowadays we are forced to do it anyway because we really need the road.'
Several queues at the mills have been reported by smallholders and directly observed by the researcher during the transect walks. Mr. A.D., smallholder and SPKS (union) leader, stated that 'sometimes we have queues for 24 hours, night and day. It [the mill] is not well organised, sometimes the companies' men seem to play hide and seek..' Such queues contribute to the deterioration of FFBs and consequently to the abatement of the price paid to smallholders. This loss in productivity is directly unloaded over smallholders and joins the other entrepreneurial risks that burden them. The questionnaire's respondents have been asked whether there exists at the mill any custom or priority-rule and 57.5% answered YES; among them only 36.2% consider such priority-rule unfair and not transparent. Indeed, Mr. A.D. confirmed that 'there is just the rule first come first served. What you mentioned used to happen in the past but ¡f I am not mistaken nowadays the mill apply just a sort of quota.' This result partially contradicts the anti-palm oil rhetoric, which often uses the unfair practices at the mill as instruments for its struggle. There are actually several unfair issues related to the companies' control of the mills but the priority-rule is, as matter of fact, not the worst one. The practices related to monopsony, deductions, FFBs pricing, represent the real issues that severely affect smallholders.
7.2 Intermediation: Cooperatives and Brokerage
The relationship between companies and smallholders is usually intermediated by cooperatives. These should be genuinely established by smallholders themselves to represent their interest and to increase their bargaining-power. In reality, companies themselves often establish such economic organizations in defiance of any cooperative principles that, on the ground, are widely betrayed. Beyond any reasonable doubt, such cooperatives have been steered by the companies since the very beginning and represent an instrument in their hands to keep the control over production, to homogenize the standard of productivity and, moreover, to avoid local smallholders authentically self-organising themselves.
The cooperatives are usually charged with any kind of intermediation between companies and smallholders, such as the FFBs' sale and transportation, the payment of smallholders with the related deductions, the distribution of fertilizers-pesticides and, sometimes, even road maintenance. For instance, when PT MAS smallholders were asked whether they pay for roads' maintenance they answered 'we are somehow obliged to take care of it by ourselves if we want to use them. The company should lend us the heavy constructions-machineries but we have to pass through the cooperative. The problem is that the machinery available is only one and just for one day per week.. Saturday. Sometimes it is even broken and we cannot use it when it's raining.'
Mr. I.F., officer at ELPAGAR Pontianak, clarified the 'real nature' of those cooperatives as follows: 'we are witnessing a proliferation of partnership's models with their own peculiarities. There are also cooperatives' schemes but there is not that much to say; almost all of them are established by companies.' Similarly Mr. B.E., director of the Institute of Dayakology, added the influence of government over them: 'the cooperatives are mostly established by the companies and the government usually controls them indirectly. They don't really take care about farmers. In recent scandals related to government's corruption you can often find cooperatives involved.' The treason of cooperative principles is also revealed in the testimony of Mr. A.D., smallholder and SPKS (union) leader, according to whom 'they [the cooperatives] are established by companies. ... [they] should work for smallholders but the reality on the ground is that there are some interventions conducted by the companies, not really transparent, to influence and control the cooperative.' Eventually, the smallholders themselves during FGDs reported their disappointment in the role of cooperatives; the case of PT SIA smallholders is significant since they stated: 'the cooperative is established by itself for their own needs. For sure we were never involved in that process. Cooperative makes themselves exist. ... It's hard to say which side they work for because, on the ground, they do so many things that make us confused. During the first expansion, the agreement was that it would be established only at the end of land preparation. ... They did establish the cooperative just at the end of that process but honestly we don't know what happened at that time.' During the same FGD when PT SIA smallholders were asked what they would claim most in front of a 'company- responsible', they replied as follows: 'it is hard to say, since we have never seen the company authorities directly. We have never had the chance to complain directly to them, we have always sent our complaints through the cooperative.'
The questionnaire's respondents were asked whether there is any cooperative involved in their partnership agreement with the company and 91.3% answered YES. Thereafter, they were asked whether they took part in the establishing process of those cooperatives and surprisingly 64.9% answered YES. This result is apparently in contradiction with what has been reported by informants and smallholders themselves during FGDs. Indeed, these cooperatives, regardless of their real mission and control room, are actually composed of smallholders and need them to exist since such cooperatives are directly financed by the deductions mentioned in the previous section. In this sense, the smallholders took part at the cooperatives since the very beginning of the establishment process. Their membership is not purely voluntary but rather a prerequisite of the partnership agreement itself or, at least, an essential precondition to sale their FFBs, given the existing practices on the ground. As a matter of fact, smallholders are not really free to reject the cooperative membership and when it happens is always a matter of struggle, as has been told by Mr. R., smallholder and AMAN (local NGO) leader, according to whom 'any process we're supposed to pass through the cooperative. We've had enough of it. That's why we refused to use their cooperative. Finally we use our own group now. We can save our money since we don't have to pass through them. ... When we still used the cooperative it took its toll for another 10% from our incomes. So much money we put in the cooperatives, I don't know how it was possible., well, no more money there! They always disappeared when they were needed. ... [even the debt-repayment] is supposed to be intermediated by the cooperative, we don't pay the company directly and actually the money is basically subtracted at the mill.'
There was only one counter testimony which was gathered during a FGD with PTPN smallholders; and accidentally occurred in their KUD (cooperative) headquarter. In the beginning the smallholders stressed the fact that they are the main financiers of that cooperative: 'yes, we are all members, it has been funded by us. It exists only thanks to our money.' Thereafter, when they were asked whether they felt satisfied and if they consider the cooperative an institution which advocates on their side they replied as follows: 'we are pretty satisfied. Everything that is explained by the cooperative is enough for us.' Apparently, with that answer, they bestowed their trust and confidence in the cooperative, whereas in reality, they did not answer to the question and their response seems rather to be a tactful attempt to divert the issue. They did not even mention whether the cooperative is made to stand on their side or not. As has been already said for the case of the only smallholder who could apparently sell his product freely (see box 6.1), at the end of that FGD the difficulty to speak out was reported by some smallholders. That difficulty seemed to be due to the presence of a 'company-man' and, more in general, to the location. The PTPN smallholders felt free to complain against the company and argue for their rights; basically the FGD occurred smoothly as long as controversial topics were not touched, especially those that involved the role of the KUD. It has to be said that the smallholders were gathered together there primarily to get their fortnightly payment and probably they did not want to end up in trouble with the KUD officers present.
Conversely to the cooperative, the middlemen are seen by smallholders as an instrument in their hands, often needed to elude the stiffness of the partnership agreements or to overtake several unfair practices. It may help to achieve better profits from their activity. However, brokerage remains an illegal procedure (since it goes against the monopsony embedded in the terms of any partnership agreement), a fact which makes smallholders uncomfortable talking about it. Despite that, 18.8% of respondents admitted that they tried to sell their FFBs independently to get a better result, while even 55% stated to know that brokers could provide this kind of service. In reality, it can be considered a 'public secret', meaning that everybody knows it, starting from companies. This definition was provided by Mr. R., smallholders and AMAN (local Ngo) leader, when he was asked whether companies are aware that most of the middlemen are plasma smallholders (see chapter 6.2), on that occasion he replied 'well yes, we can say that it is just a public secret, which means ofcourse everybody knows it.'
It can be said that companies somehow tolerate those practices and Mr. W., plantation manager, provided a reasonable explanation about it: not all the companies 'are really strict, also because the mills need FFBs to work at operating speed. Therefore sometimes they close their eyes.' Similarly, Mr. A.D., smallholder and SPKS (union) leader, after complaining for the organization at the mill explained that therefore 'we use the service of the middlemen to sell our FFBs in another company's mill. Just to make it clear, I think that there is an agreement among companies to not accept the FFBs from another plantations but often, on the ground, they really close their eyes.'
Local smallholders, though they acknowledge the existence of brokerage, usually tend to deny their participation to that practice, with the exception of independent smallholders who are, in general, more open to discuss about it. For instance, during a FGD with only independent smallholders they stated that 'we sell to the closest mill, through a middleman that usually travels to our village to tries to buy our FFBs. [Although] we should be obliged to sell our FFBs just to the company where we bought the seedlings.' When PT MPE smallholders were asked, confidentially, whether they resort to the middleman's service they answered as follows: 'we use the middleman and other ways to sell our FFBs but not those that come from our plasma kapling MPE, only those which we harvest in our independent plots.' It is hard to evaluate the truthfulness of this statement since this sensitive issue is strictly related to illegal practices implemented by smallholders as livelihood strategies. These and other livelihood strategies will be discussed in the next chapter given that the researcher attributes them to everyday-forms of resistance.
Although the evolution of the bargaining-power balance between companies and smallholders is largely unpredictable, the role of brokers will be, likely, crucial in the near future. This conjecture was somewhat confirmed by Mr. W., plantation manager, according to whom 'in the future the main winner will be the broker who offers his service to smallholders who cannot sell directly to the company.' The role and the function of brokers in the coming palm oil industry deserves to be expanded more throughout new and dedicated researches.
7.3 Other means of production: Fertilizers and Machineries
Since the intensive cultivation of oil palms massively exploit the soil and, therefore, produce the incessant need for fertilizers and pesticides in order to make every harvest - which actually occurs every fifteen days - significantly productive in economic terms. That precondition gives a strategic importance to those factors in the production of FFBs. The quality and the amount of FFBs harvested depend directly on the usage of such products, in addition to the quality of seedlings and the plot itself. Therefore, fertilizers and pesticides are a crucial mean of production, without which there are no real chances to make good results with oil palms.
Mr. B.E., director of the Institute of Dayakology, clearly explained such dependence from fertilizers and pesticides as follows: 'local people have never experienced how to manage the palm oil before. When they cultivated only rice fields, they didn't have to think about the fertilizers. When you have a palm oil plot you have to think mainly about fertilizers. No fertilizers, no result from the oil palms'. This claim was confirmed by a woman during a FDGs with PT SIA smallholders the day after the harvest, on that occasion she stated 'it is the first time I feel so tired after working and I don't see any results from such exertion. As you saw yesterday, we harvest 17 hectares but we only gathered 5 tons, it is due to the lack of fertilizers and pesticides. If we could afford to buy them, each hectare would produce approximately one ton.' Also Mr. R., smallholder and AMAN (local NGO) leader, stressed the importance of using fertilizers otherwise 'the condition of plasma kaplings would provide only unsatisfactory harvests.' Similarly, PTPN smallholders stated that 'the main deduction is due to condition of the FFBs, and of course the quality of them depends also on the use of fertilizers.' While Mr. I.F., officer at ELPAGAR Pontianak, roughly sketched out a vicious cycle by connecting them with the indebtedness: 'if they [local smallholders] want their land to be productive and earn enough money, in order to repay their debts, they need fertilizers and pesticides. On the other hand, buying fertilizers and pesticides means their debts get bigger and bigger.'
When smallholders were asked whether they usually utilise fertilizers and pesticides in their oil palm plot, 95% of them answered YES. Despite that, just 51.9% were in the actual condition to buy them any time as needed and only 21.5% declared that they receive subsidies to buy those products. PTPN and PT MPE smallholders are indicative of those, among respondents, that can get access to fertilizers and pesticides more easily, followed by PT SIA smallholders, while PT MAS smallholders are those that can only access such products with more difficulty and, however, not any time needed (crosstab-checked). In addition, 55.7% of smallholders stated that they usually buy them from the company or the related cooperative (cumulative percentage), while 19% from brokers and 24.1% directly from the agrarian shops. There are differences among the companies' schemes (crosstab-check), for instance PT MAS smallholders are those that use the cooperative more often to buy fertilizers and pesticides, while smallholder PT MPE those that resort mostly to the middlemen (see Table 7.2).
Table7.2 Where fertilizers and pesticides are bought 5.. Crosstabulation per Company
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Source: Author, 2015
In spite of several accidents that have occurred during the usage of fertilizers and pesticides, smallholders usually underestimate the health risks due to the wrong usage of those products. In almost all FGDs the topic of health precaution created a hilarious climate. Though it was the smallholders themselves that reported some accidents occurred in their area, when the researcher mentioned the health precautions, such as masks and gloves, usually started to laugh. Indeed, less than one third (30.4%) of questionnaire's respondents reported using health precautions while giving fertilizers and pesticides to their plots. For example, when consulted PTPN smallholders PTPN were asked whether they use any health precaution they first laughed and then answered unanimously 'no, we do not use them. ... It depends on the farmer himself. Most of us we do not use any precautions. We do not really know about the effect, that's why.' Similarly, PT MPE smallholders admitted that they do not use them at all but they are aware that 'according to the regulation we should but what happens, in the field, is that we smoke and drink at the same time we give such products on our plots.' The testimony of Mr. A.D., smallholder and SPKS (union) leader, is even more dramatic: 'it's hard to find someone that uses this kind of stuff [health precautions], we use them topless, with sandals and often without masks. Some of us even smoke in the meanwhile. It is pretty common that people reuse the bottles of pesticides to carry their drinkable water on the field, of course not directly after it got empty, they probably wash it but I don't know if it is safe or not.' He connected the responsibility for these behaviours with the lack of information, basically with what was neglected by companies since the first moment. Therefore, he considers it correct to thank 'NGOs, newspaper, and television. The companies didn't even mention the health risks, for example the toxicity of fertilizers and pesticides that you are obliged to use if you want to harvest something.'
The case of PT SIA smallholders deserve to be highlighted because their first agreement with the company included fertilizers, in the sense that at least for the first period the company should have had provided them. In reality, most of them never received fertilizers or pesticides though they reported that 'the company says that they have been already given to the cooperative.' Once again, the cooperative becomes a filter between the smallholders and the company, which makes it difficult to recognise the responsibilities. When these smallholders were asked whether they use health precautions, they answered as follows: 'if we give fertilizers to the tree in our plasma plots we don't use any kind of precautions such as mask and gloves. We only use our hands. But if we do it for the inti plantation there we wear mask and gloves. ... From those that have done this kind of work for the company we know that they use such kind of health precautions because the company subsidize them. But if we give the fertilizers in our plasma plot there are no subsidies for us. That's why we don't use those things. It means basically that they abandoned our plots and us.' During that FGD it came to light clearly that when smallholders are called as daily-workers in the inti plantation they use health precautions but when they work as smallholders in their plasma plot are basically abandoned. This is one of the dark sides of sustainable palm oil: in this way the companies green-wash themselves to appear sustainable, at least with regards to concerning labourers' safety, but in reality the partnership agreement allows them to shift serious risks from them to local smallholders, thanks to the self-entrepreneurial model. Since the smallholders are considered just pure entrepreneurs (see chapter 6.1) they are no longer protected from the laws and policies that regulate the traditional wage-labour power exchange. It represents an extraordinary benefit for the companies.
The lack of awareness about the risks of fertilizers and pesticides is supposedly connected to the lack of training dedicated to the usage of those products. Surprisingly, 57% of questionnaire's respondents stated that they have been trained to use them. When this topic was investigated with qualitative methods the answers were significantly in contradiction with the survey's results. PT MPE smallholders stated that they have never had trainings but they 'do it as autodidacts', while PTPN smallholders just explained that they have not even ever heard about such training. In reality, almost every respondent stated that never attended such training and those that stated the opposite, usually, received that training in different occasions, not necessarily as oil palm smallholders. Mr. A.D., smallholder and SPKS (union) leader, stated first that 'there is no such thing as companies giving training' and then supposed that 'usually farmers learn by looking what the company does in its inti plantation and they try to apply the same techniques in their own plots.' Similarly, a PT SIA smallholder stated that he received training while he was working as a labourer for the company. He narrated that occasion as follows: 'I have even forgotten when that training was actually conducted, for sure long time ago. The training was held by one of the company's managers and I still remember the composition., for one palm tree you should use approximately one kilo of fertilizers.' That training seemed to be focus more on technical aspects rather than prevention and health issues. It is not rare that unskilled daily-labourers are briefly trained to work in the most productive way but in those circumstances the labourer's safety and health is anything but the priority. The same question was also addressed to independent smallholders got, apparently, trained as well but not for palm oil: 'we had the training for the rubber but for the oil palms we have never had such kind of thing.' The independents were also the only ones that admitted to being aware of the health risks and provided an easy explanation for their behaviour: 'yes we are aware about the risks but it's already an habit, it is hard to change it.'
Other crucial means of production are machineries and trucks. The testimony of PT MAS smallholders that must borrow the heavy constructions-machineries from the cooperatives in order to take care of roads has been already reported. These are the same roads they are supposed to use to sell their FFBs. The issue of the ownership of machineries and trucks is not of secondary importance since it also relates to the smallholders' results and, in turn, their chances of making a good living. Moreover, it can further explain how practices can influence the bondage mentioned so far and shows, once again, the traits of smallholders' endeavour within the palm oil industry.
When Mr. B.E., director of the Institute of Dayakology was asked whether smallholders usually own machineries or trucks he answered, 'maybe just a few of them. The owner of the trucks that operate for plantations is usually an outsourced private individual. So, that means they have to pay for that service.' Indeed, though 97,5% of respondents stated that they need machinery or trucks, only 17,5% (cumulative percentage) actually possess them, individually or shared with other smallholders. The results of the survey confirmed the statement of Mr. B.E. about the outsourced privates: 70% of smallholders said that they usually rent machinery and trucks from private actors. Only 10% (cumulative percentage) stated to rent them directly from the company or the related cooperative (see Figure 6.4).
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Figure 7.2 Ownership of machineries and trucks used by smallholders
Regarding ownership, differences among the various companies' schemes emerged during the FGDs. For instance, PT SIA smallholders stated that 'we don't have such kind of things [machineries and trucks]. We don't have enough money to buy them. ... The trucks you saw yesterday in the plantation belong to the company.' PTPN smallholders added something more, connecting the topic at issue with cooperatives and the condition of roads: 'we do not have any of them, we have to rent them any time it's needed. ... We often rent privately because usually for the roads' condition the cooperative's trucks cannot help us.' Once again, the independent smallholders distinguished themselves by their answer, which proves, as if such proof were still necessary, that capitals and the control over the means of production remain the most crucial criteria to determine the entrepreneurial independence. During a FGD the independent smallholders clearly explained: 'we possess some machinery, for example those to fertilize the trees and we have also our own small-scale service to transfer the FFBs.'
Regarding machinery and trucks, the fact that the majority of dependent smallholders are not directly bonded to the companies does not necessarily prevent them from being bonded anyway. The creation of satellite activities, such as the outsourced service of machineries and trucks renting organized by a third party, allows the companies to release a non-strategic piece of production, with the advantage of unloading the related risks, reducing the costs and still maintaining control over the whole industry, for example throughout the mills (see the previous section).
8 Conflicts and Resistance
In this chapter the main reasons that stir up conflict and the consequent forms of resistance implemented by oil palm smallholders will be scrutinised and debated. In the first section the promises made by the companies and other forms of pressure utilised to encourage local communities to join the palm oil Industry are discussed: from the softest one (which was defined 'seduction' by respondents) to the direct violence.
8.1 Promises, Pressures and Criminalisation of Dissent
At the very end of the questionnaire, local smallholders were asked about the Issues that Inflate and trigger their struggles by means of a ranking. The possible choices were selected on the basis of the first In-depth Interviews with key Informants and FGDs. The respondents had the chance to rank from 1 to 5 (1= most Important; 5= less Important) six reasons Identified beforehand and to discard the least plausible according to their understanding. As shown In the Table 8.1 the main cause of conflicts, according to oil palm smallholders, are the betrayed promises. The second one Is the land allocation, directly followed by the quality of plasma plot and the debts repayment, while deductions and the pricing of FFBs seemed to be the less relevant.
Table 8.1 Ranking ofthe main causes of conflicts against companies according to oil palm smallholders
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Source: Author, 2015
Most of those topics have been widely debated In the previous chapters, apart from the one that resulted to be the most relevant for smallholders themselves. Hence, It Is now essential to focus mostly on promises and the linked troubles. When respondents were asked whether their partnership agreement Included the company's commitment to create Infrastructures, roads and services, 73.8% of respondents answered 'YES', while only 12.5% stated 'NO' and the remaining preferred to not answer. Thereafter, the respondents were asked whether they consider such commitments to be honoured by their partner-company and only 14.3% of them answered 'YES.' PT MPE smallholders are those that, apparently, received fewer promises from the company or, at least, preferred to not answer to such a question (see Table 8.2).
Table 8.2 Company's commitment to create infrastructures, roads and services. Crosstabulation per company
illustration not visible in this excerpt
Source: Author, 2015
Deeper Information about the companies' promises were gathered by way of Interviews and FGDs. Mr. N.A., officer at Walhl Pontlanak, explained this Issue as follows:
'they [the companies] say to the smallholder: you don't need to work anymore if you join us, because you will be the owner of two hectares of land, so you have just to worry about the harvest and to collect the money. The companies always say to smallholders that if they surrender their customary land to join the scheme they will bring them infrastructures, roads and any kind of facilities... such as schools, medical facilities, clean water, scholarships for their children and so on. In few words they promise wealth, development and welfare. All of these can be considered as the standard companies' promises. Those that make local communities and smallholders decide to trust and join the scheme.'
In truth, the betrayed promises may concern several different aspects. Most of them have been mentioned as reasons that trigger conflicts (see Table 8.1) or already discussed in the previous chapters. At this stage, is however important to say that the level of satisfaction of smallholders about certain issues, potentially related to the promises, was inspected during the survey and the average results are illustrated in the Figure 8.1. The respondent could answer on a scale (1-5) from very dissatisfied to very satisfied. Conversely to the antioil palm rhetoric held by most NGOs and the claims of smallholders themselves, the respondents showed, on average, a medium level ofsatisfaction.
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Figure 8.1 Level of Smallholders' Satisfaction about controversial topics
There are, however, significant dissimilarities among the different companies' schemes. In general, smallholders of PT SIA and PT MAS are, on average, the least satisfied about the land allocation, the productivity of the plot and the palm trees. While PT MPE smallholders are, on average, satisfied about the quality-quantity of palm trees and, in turn, of the productivity of their plots, though they seem to be dissatisfied with the services and infrastructures as well as the distance to the mill. PTPN smallholders are, on average, the most satisfied.
Such promises are sometimes formalised in official agreements - that is the case of PT SIA reported by Colchester et al. (2006) - but more often are just implemented within the companies' campaigns throughout the informal arrangements. During a FGD with PT SIA smallholders themselves, one of them clarified that there is 'a difference between what was written in the agreements and what happened on the field. The arrangement is not based on what is legally written in formal way. A lot of pacts of our arrangements with the company unfortunately are not written anywhere, bust still they have been taken orally, they are company's commitments.'
When Mr. B.E., director of the Institute of Dayakology, was asked which kind of pressures the companies utilised, he unexpectedly answered 'the seduction, the first thing is for sure the seduction.' Similarly, Mr. A.D., smallholder and SPKS (union) leader, stated that 'the first pressure is acted in a very soft way, a sort of seduction ... they had a very soft approach to encourage people, especially in the beginning and especially with local leaders.' This seduction can be played in many different ways, but in general it starts with the effort of convincing local leaders of the goodness of the oil palm plantations and it ends up taking the form of corruption. Mr. B.E. explained it as follows: 'the company's strategy has always been to befriend formal leaders. For instance, if you were a head of the tribe the investors would have ensured you and your family high living conditions, so in future you will be in moral debt on their regards. And Dayak communities usually tend to follow their leaders. ... At that time we did not know about the meaning of corruption, nowadays we know really well. It was more like collusion of local leaders with companies and investors. Usually, people wrongly think that corruption is related only with governmental officers or governmental money. Of course the collusions involved also the right-hand of politics, local leaders and governors.' Along the same line, it is important to present the detailed testimony of Mr. A.D., smallholder and SPKS (union) leader, that properly illustrated the content of those seductions as follow,
'Companies have never informed us about our rights and, even worse, they have never really explained the advantages and disadvantages of oil palm plantations. They [the companies] just talked about the positive things, when they wanted to open a plantation they used to send someone to say that it would have made our livings better, our roads better, etc.. There is a case of a local leader that protested against the company and went to ask for their promises.. In the very beginning they told to him 'nowadays your cigarettes have no filters but if you make accept our oil palm plantations by your people your cigarettes will change into Surya - the high price one - and also today you drink the plain water but one day you might drink Coca Cola if you will welcome us, your sons and daughters will go to school in America'. Of course none of that happened. There are several seductions that the companies use to convince people, for example one day a company's man said 'oh your village is very remote, far away from the city and there is no electricity but if you accept our oil palm plantation you will have just to scrub your wall and the light will come in your house... nowadays you don't have motorcycle and you don't have ever seen a car. But if our company comes here you will have your motorcycle and you will be even be able to have a car.'
During a FGD with independent smallholders, the former head of the village of Sanjan reported exactly the same kind of approach from the company's man that years before had unsuccessfully tried to convince him, and the whole village, to join a partnership scheme. He was aware that the promised benefits would have benefited someone else: 'I have been the chief of the village when we decided to decline their offers. ... We knew that if they had entered here the company would have made a good living for a lot of people but not us. For someone else but not us. Not here.' In such regard, Potter noticed that 'later, the leaders realised that they had been tricked, that they were not to be treated as 'managers' and that the aim was simply to use villagers as labourers' (Potter 2009, 113).
Also one ofthe PT MAS smallholders used, during a FGD, the word 'seduction' related to the company's promises: 'I would like to say more about the approach used by the company, they used a sort of seduction on our regards. They promised facilities like a sport- field, hospital, clean water, electricity, schools and they even promised to train local people on the base of their education level, so we could work for oil palm plantations. As you can see so far we do not have anything of that, one of us recently was almost placed in jail because we were struggling for an issue related to the electricity-line. We have raised our voices in any possible place.'
The question of the betrayed promises recalls directly the principle of 'free, prior, and informed consent' (FPIC) since it involves the fairness of both bargaining and decisionmaking processes. The FPIC is widely utilised by trans-national movements that struggle for land-issues on the side of indigenous people in the global-south and the palm oil case is not an exception. On the other side of the barricade, the FPIC has been increasingly utilised by agencies, companies and policy-makers as benchmark of social sustainability. Within the survey, a cluster of six statements was created to grasp the smallholders' feeling about FPIC. Per each sentence, they had the chance to state their level of agreement on a scale (1-5) from verydisagree to very agree. The results are illustrated in the Figure 8.2.
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Figure 8.2 Free, Prior and Informed Consent: Level of agreement per each statement
Source: Author, 2015
The average level of agreement to the statements seems to contradict the anti-oil palm discourse and, somehow, even the claims of smallholders themselves since they are both built on the idea that the companies cheated local communities. In reality, such unexpected level of agreement to the sentences above has to be read as reflection of the voluntary participation of local people in the palm oil industry. Obviously, oil palm smallholders do not have 'entirely negative feeling towards oil palm, which, under the right conditions, can deliver improved incomes' (Potter 2009, 106). Indeed, the spectrum above (Figure 8.2) shows a rather satisfactory attitude of smallholders towards FPIC. Oil palm smallholders prefer to narrate themselves, in the folds of their complaints, as free agents that might have been cheated while they were playing au pair with companies. Mr. R., smallholder and AMAN leader, perfectly illustrated this approach: 'the decision to join the scheme was based on the same mutual interest among the parts. Have never been here., things like the use of force or pressure here. What is really disappointing is the condition of the kapling they gave us back. It is really dissatisfying.' When he was asked directly about FPIC he replied,
'We know really well about FPIC and I can say that here it has been really respected. ... I really understand that company has secrets that it cannot share and expose to us. What used to belong to us now must to belong to them, I understand it but what they are doing nowadays is a continuous violation. They have lied to us about the condition of the land. The conditions of plasma's plots are very bad and so far the palm trees didn't produce any FFB yet; because of the conditions in which they gave us back the land. What they gave back to us can be categorised just as abandoned plantation. That's why we consider it as a lie. We are really disappointed with company that promised a lot, even fertilizers but up till now we are still waiting the firsts FFBs.'
Such a self-pitying approach allows smallholders to struggle without admitting their subordinated position in relation to the companies. That approach is not strategically decided or rationally chosen, it is rather the result of the already mentioned self- entrepreneurial myth. Their romantic self-perception is widely embedded in such a myth and into the neo-liberal model, where their class-consciousness (in Gramscian terms) is systematically undermined. Oil palm smallholders, once embedded into the self- entrepreneurial discourse, are not able to recognise themselves as members of the same class (seen as community of destiny) and so they become just unconscious monadic-actors in the service of the hegemonic class. Since they remain within that hegemonic discourse, they essentially contribute to reproducing the chains that currently constrain them. They exist as class-in-itself, that is regardless of their own awareness or will, but they are not able yet to act as class-for-itself.
Therefore, once again, it is necessary to enquire into the objective conditions alongside their subjective perceptions. When Mr. I.F., officer at ELPAGAR, was asked what the pressures acted by companies consisted of, he replied 'promises first, then intimidations followed by criminalization of discontent and repression of strife.' Therefore, any process of decision-making, which actually involved FPIC, should take into serious consideration the pressures exerted to encourage local communities to join the palm oil industry. Mr. I.F., explained further that 'theoretically, the local communities should be able to reject it [the partnership agreement], but in truth they suffer the pressures of authorities, any kind of authorities... regional and local governments, military and of course the pressure from the company itself.' The director of the Institute of Dayakology, Mr. B.E., clarified that 'the investors contact the government first asking for the concession of land. Just after they get the permission they go to talk with local communities. When they [local people] see the concession, they cannot stand against the national development plans and therefore local people, whether they like or not, they must to give up their land. In the past, they [companies] used to go directly to the local leaders but after few decades even local communities learnt that oil palm companies bring trouble and destruction, so it became more complicated for investors to bargain directly with local leaders that started to rise against them.' On the same line, Mr. N.A., officer at Walhi Pontianak, stated that 'formally, the smallholders could refuse to take part in the agreement, in reality, it hardly happens. The company first gets the governmental concession and ... then asks local communities if they want to join the scheme. At that point, they do not have the real opportunity to reject it anymore.'
Members of the community itself may exert some pressures to incite those who are still sceptical about palm oil. In that case, the pressure is rooted in the Thatcherian principle of 'there is no alternative', better known as TINA. This principle is transmitted by the companies and governments to local leaders and then internalised by local communities; it becomes part of their common sense. During a FGD with PT SIA smallholders, one of the youngest said: 'I do not know how the company approached us. A lot of my neighbours said that actually palm oil is dangerous for the environment but they also said that if we would not have accepted palm oil in our life, in our society and community, it would have been really hard for us to stand against it and make our living with other crops.' Similarly, a friend of Mr. R., smallholder and AMAN leader, stepped in during the interview to bring his testimony about this topic: 'to be honest I didn't want to join the company's scheme at all. I didn't want to get involved with them. But the land comes from our ancestors and we own it together in my family. The other members wanted to do it and of course I could not refuse.' At that point, Mr. R. himself decided to clarify this point:
'The pressure will come all around you, because of the promises of roads and services. There is a social issue: the thing is that we still live in a communal system so if you have something good we enjoy it together but if it is bad we have to take care together. Neighbours encourage you to join the scheme often by saying that if you don't join it and one day there is a road there, nearby your land, you cannot pass there. You will not be allowed if you don't join the scheme. It belongs to the company and its partners. That kind of intimidation actually works because if you have your plots among others that join the scheme and crossed by a road that you cannot use what can you do with that? Nothing. So better you join them.'
The companies themselves try to get advantage of the TINA principle with more sophisticated techniques, for instance by encircling local communities' land. This phenomenon was illustrated by Mr. B.E., director of the Institute of Dayakology: 'by taking advantage of the natural characteristics of oil palm, which is famous for absorbing a lot of nutrition from the soil ... they [companies] buy a portion of land that surrounds another plot they are interested in, so it become infertile and the holder is encouraged to sell it. They first buy the land all around and then the one in the middle, when the holder has not any other choice. And often they [locals] give up their land because in this way they expect to receive the infrastructures and the facilities that the government cannot give to them, such as roads.'
As explained by Mr. I.F., after promises the companies then draw upon intimidation, criminalization and, in the end, repression if needed. Such overt forms of pressure are usually exerted by police and military forces with the contribution of the companies' henchmen (private security forces), when present. To really understand what is meant by intimidations and criminalization within the Indonesian context, it is definitely necessary to remember the massacre of communists that occurred between 1965 and 1966, which is considered one of the worst mass-murders and crime against humanity of the previous century. Such mass killing gave the birth to the Suharto's dictatorship era. That event, though often diminished, neglected and concealed in Indonesia, has never been forgotten and the fear generated by such anti-communist purge is still fresh in the memory of people. Furthermore, the anti-communist stigma, consequent to that massacre and to the Suharto era, is still alive and widely internalised in even the most subaltern classes. Considering the purposes of those that planned, supported and carried out that mass murder, it was, from their point of view, definitely effective and the memory of it continue to produce the same results even nowadays. In Indonesia is still not easy to be communist and such stigma is strategically utilised to criminalise local people that stand against any 'development plan' that is imposed top-down.
Though PTPN smallholders resulted to be, on average, rather in agreement with the sentences about FPIC, they actually suffered the intimidations just as any other local smallholder. As reported by Colchester, 'PTPN XIII even used intimidation and terror tactics in order to accelerate the take over of Dayak community land. One of the members of Dayak Pandu tribe, Mr. Matius Anyi, explained how the 'socialization' process of the plan of oil palm establishment usually involved military persons, who often threatened any members of the Dayak community who intended to oppose the plan by accusing them of being members of the banned Indonesian Communist Party (PKI)' (Colchester et al. 2006: 102). The author has gathered similar results during interviews and FGDs. Mr. I.F., officer at ELPAGAR Pontianak, clearly explained such phenomenon as follows:
'So, the company says to the local communities: you must to give us your land, if you don't do it you go against the national-governmental development's programme. You don't want that, right?!. In this way they scared the local communities, by using the anti-communist stigma, which is still strong and effective. People still remember what happened here in Indonesia to communists in 1965. Even nowadays is not easy if you are accused to be a communist. You can be imprisoned if you are assumed to be a sympathizer of communists. The stigma is still strong. So local communities are scared to reject the company's offer, also because they are worried to be accused of communism.'
Starting from the 'New Order' (post-Suharto regime) the accusation of communism has always been anticipated by the ignominious label of 'provocateur', meant as enemy of the national interests. Mr. B.E., director of the Institute of Dayakology, illustrated such aspect as follows:
'The main stigma used by companies is the national interest. They say 'if you are against us and our plantation that means you are standing against the national development programmes'. That criminalization is based on the status of 'provocateur'. ... As far as I am concerned, I believe that the word provocateur came up during the transition from New Order to democratization era. At that time anyone against the government was labelled provocateur. Since then, that word became a term that is largely known, when the people hear it immediately think of something negative. Actually, in our law there is no track of the world provocateur, but it's a label that if you get will bring you a lot of trouble. If you are labelled as provocateur you can easily be accused ofany other negative crimes and be imprisoned for them'
Those who try to actively resist, usually, meet with repression. PT MAS smallholders narrated their experience of conflict and the following criminalization. The 3th August of 2007 was the peak of their struggle for the land: 'we did a big demonstration in front of PT MAS office, coordinated with farmers from other 4 sub-districts., we couldn't control every person there of course. There were some of them that did some sort of.. I would say 'soft vandalism', they tried to shake the fence, put marks on company's cars, some flowerpot was destroyed, that kind ofthing.' As consequence for such demonstration the police randomly captured some local people, the PT MAS smallholders continued their testimony as follows: 'we did not hurt anybody, the police took four of us randomly, without any specific reasons or direct responsibility. One of them is here with us now [during the FGD]. They used accusation of vandalism at that time. The point is that such kind of criminalisation brought problems even among us, among families. His brother (pointing to one of the participants) got divorced after that.' Another participant stepped in to share his own story and added something about the power relations: 'I have been treated with a different kind of criminalization, because I am also a teacher and the regent made me move to another village. ... If police capture you they do not care about the reason why you are struggling but they only care about the powerful people that can pay for them. Of course the company, and even the regent himself works only for the company, because during the election campaign it is the company that gave him the money, so of course he will work for them, for sure not for us.'
Even activists from social movements and NGOs are subjected to criminalisation and repression. For instance, Mr. B.E., director of the Institute of Dayakology, talking about the companies' pressure stressed the strong involvement of military and police: 'five years ago one of our activists was criminalised because he stood on the side of local people, by giving them education. He has been criminalised because of his effort in educating local people about the effect of palm oil industry. Guilty for giving education. He has been categorised as criminal, they call it 'provocateur.' That's one kind of pressure, besides that there is the military one, which is even worse. There are several activists still incarcerated.'
8.2 Ethnicity and the Customary 'adat'Law
Ethnicity is a crucial issue of the labour-division in West Kalimantan. In the very beginning, this aspect was rather underestimated by the author but its importance became clear as soon as the research-area was reached. Out of 80 questionnaire's respondent only five of them were Malays and one Javanese, all the rest were Dayaknese. All the non-Dayak smallholders possess one kapling or more. To be more precise, three of the Malay possesses exactly two ha, while two of them own four ha plots. The Javanese possess an oil palm plot of 10 ha. This information confirms the trend disclosed in the previous chapters about the land accumulation and the participation of farmers from other islands in the palm oil industry in Sanggau and West Kalimantan in general.
In spite of their demographic pre-eminence, Dayak people are largely discriminated against and not exclusively within the palm oil industry. The class division in the district is, somehow, still connected to the stiff 'ethnic-based' division of labour, which mirrors the current mode of production some of the pre-capitalistic class divisions. Some minorities hold the reins of political and economic power, while the vast majority of Dayak people are farmers. The Dayaknese are the subject of several prejudices and stereotypes: they are considered stupid, lazy and apt only for fatigue-jobs, as 'beasts of burden.' Such stereotypes are not directly internalised by the Dayaknese themselves, although they are often subjected to cultural hegemony. Mr. B.E., director of the Institute of Dayakology, has efficiently pictured the topic at issue: to understand the success of the companies it is necessary to look first at the cultural subordination suffered by Dayak people. The latter are 'really polite and totally open to outside cultures. A lot of people [Dayak] tend to see what come from outside as necessarily good or better. That is the result of the hegemony of the other cultures.'
As has been said, the companies prefer to hire transmigrants farmers from other islands rather than hire Dayaknese. It has been already been pointed to as one of the reasons that make the smallholders' partnership schemes necessary. In the unlikely case of Dayak people being hired, the wages would be lower for them compared to those that would be paid to other farmers. PT MAS smallholders narrated a prime example of such discrimination:
'Of course, there is a special treatment for us. For example in 2000 the company offered job vacancies to work as contract-labourers, for the locals the wage offered was 10,000 rupiah per hectare. We disagreed and we asked for at least 18,000 rupiah per hectare but the company told us they did not have such budget. What happened later?! For the trans-migrants from Suka Mulya (Java) they paid 50,000 rupiah per hectare, way bigger than what we had asked for. It happened in the same year. ... I have read with my eyes the wage for Suka Mulya transmigrants, the highest was 80,000 per hectare and the lowest 50,000 per hectare. They also had transportation to go to and from the plantation. There is no such treatment for us. ... Based on my understanding and thanks to some discussions I have had, even with the CEO, I can tell you why they pay us less than the others: such discrimination is based on the wrong idea that we are lazy.'
When asked why the company proposed that they join a partnership scheme if they are considered lazy, one of them replied: 'that's a good question. I believe they say we are lazy just because they do not have any real reasons to justify such discrimination. There is no reasonable justification for that. One of PT MAS managers, who came from Malaysia, said that we [Dayak people] are just like Africans. According to him we are lazy and we do not like to work, we just sit in front of our houses. The reality is that we work hard in our oil palm plots and beforehand we were already rice farmers. Is that not enough to prove we are not lazy?.' Apparently it is not enough. This is the opinion of Mr. W., plantation manager. When asked why is so hard for locals to get hired by companies he answered as follows:
'Local people have no experience in palm oil plantation and in general they do not have experience at all of working as employees. They are not used to being hired. They are just simple farmers that used to work the land to eat. When we tried to make them to work for us did not work. It is hard to handle with them as employees, it is a matter of state of mind. Also their productivity is so low that is not convenient to hire them. The job in a company's plantation is a continuous job we cannot depend on them. They are not reliable, we cannot manage them. You know.. They often took days-off, for some reason they are not good at working with our procedures.'
At this stage it is important to note that, when Mr. W. was asked why companies propose partnership agreements to local people, he replied 'If we could just buy their land without any partnership agreement we would be way happier. If we could establish just our own plantation, without sharing the land, and thereby losing productivity, for us it would be amazing. ... The government does not let it happen because people need job, you see?!.' Therefore the companies would easily avoid the partnership with Dayak people, as long as they could exploit the Dayaknese land (natural resources) and underpay the Dayaknese labour-power. Surprisingly, both PT MAS smallholders and Mr. W. mentioned the hypothesis of a 'win-win solution.' PT MAS smallholders argued it as follows: 'our intention is to find a win-win solution. But every time we try to pursue such intention we encounter their already- taken decisions.' While Mr. W., more realistically, stated that 'it is not a win-win game. It has never been so and it will never be.'
The discrimination related to the chances of being hired is not the only one that the Dayaknese have to face. Other examples are linked to the benefits promised by the companies, for instance the scholarship for smallholders' kids. Once again, PT MAS smallholders provided their important testimony about ethnical discriminations: 'the company promised scholarships here. ... The only things they have done so far were based on national standards, so our students are often washed-up because the requirements are too high and the criteria are standardised in places where they do not face our problems. Such an offer is nothing but a devil (vicious) circle. Why are dayak poor? Because they are stupid and not well educated. So why they are stupid? Easy, because they are poor. That circle continues because of such kind of ridiculous offers.' Another discrimination concerns the graduate students and their chance of being hired by the companies. One of the most combative PT MAS smallholders went for a forum in the local district parliament and asked why their graduate students have never been hired as assistant managers, 'the answer of the company's manager was that he took only the best students from the best university in Indonesia. During our investigation we discovered that the manager himself graduated in Huntan, our local University in West Borneo, exactly like our guys, and his assistant manager graduated from the same University too.. The only difference is that they are both Malay.'
The Dayak culture is dramatically suffering the expansion of palm oil and other exploitative activities of their natural resources, such as mining and logging for timber. According to Dr. I.R., professor at Institut Agama Islam Negeri, 'the main social change is the new-method of farming introduced with palm oil. Because at the past time the Dayak people only knew how to cultivate rice-field and other kind of crops. ... Because till the 1980s they used to cultivate completely different products. So, as I stated before, the first social change is due to the shift itself from rice-field to oil palm plantation. The second one is due to the fact that rice-fields provide results immediately, you can eat them, and not after 3 years. One is considered subsistence-cultivation, the other one cash crop, you see the difference by yourself.' Mr. I.F., officer at ELPAGAR, explained that in the local communities occurred 'a massive shift, people that worked the customary lands for subsistence farming together became labourers in the companies' plantation or smallholders. It changed not only the social structures but also affected the customary laws ... Moreover, it affected relations among members of the same community.' The social changes caused by the expansion of palm oil are seen by Professor I.R. as 'an irreversible shift from collective to private, [not] only in terms of properties but more in general ... of social structures. The gradual disappearance of the longhouses is the evidence of [that]. It represents the shift from a collectivist society based on solidarity to a private one based on individualism. Longhouses today have become just touristic places, while before they had a meaning for the local communities. ... This shift occurred thanks to another shift: from rice-field to palm oil, which is apparently just an economic shift. Anything but true. Even the incomes generated by that shift contributed to jeopardising the local cultures and brought a loss of identity.' Even Mr. W., the plantation manager, admitted that before 'they used to work together in the field, nowadays not anymore. You know, for economic reasons. We called it gotong royong, which means work for free for someone in your community and the next time you can be sure he will do the same for you. Nowadays, that is disappearing because money takes part in their agreement. Of course it changes the social relationships.' According to Potter, 'despite these warning, the central governments used a heavy-handed approach in attempting to 'civilise' the Dayaks by destroying longhouses and introducing Javanese transmigrants to wean local farmers in shifting cultivation from wet rice production' (Potter 2009, 110).
Mr. I.F., officer at ELPAGAR, stressed that 'what is really worrisome is the rising conflicts among people: transmigrants against locals, as well as inter-familiar conflicts and conflicts among villages. The social changes are massive and they are getting worst day by day.' As explained by Mr. B.E., director of the Institute of Dayakology, most of those conflicts among people are due to land issues: 'we are not talking about the conflicts against companies yet but those that occur a step before for land ownership. Conflicts among land holders, among brothers, cousins, uncles... Members of the same communities and family are having their own conflicts. ... For instance, among brothers if one of them does not want to give their land to the company. ... Of course there are also conflicts with neighbour villages and transmigrants. That is the second level of conflicts due to the lack of clear borders between local villages and transmigrants villages.'
Though Mr. A.D., smallholder and SPKS (union) leader, confirmed the existence of such conflicts, he tried to downsize the problem as follows: 'the conflicts among members of the same community, among neighbours or even relatives -1 have to say - usually get solved before you can see them as a real conflicts. They get solved as a family, as a neighbourhood or as a community. The trigger of the conflict is often due to the struggle for inheritance after the death of the head of the family or due to the high number of sons/daughters for a small plot that has to be divided.' Similarly, PT SIA smallholders confirmed that 'it [oil palm expansion] triggers some issues among us, in the families, since our system of land surrendering is, first of all, based on a family's agreement. Obviously, several issues occur between brothers and sisters. ... [but] what happen within the family never goes out.'
As matter of fact, smallholders seem to be quite willing to discuss any conflicts that involve companies but not as much about those that concerns themselves: among locals, villages and between themselves and transmigrants. Only 16.3% of the questionnaire's respondents admitted that there have been, in their area, conflicts between them and transmigrants, while just 35% stated that some conflicts occurred among local people due to the oil palm expansion. They were asked about the reasons that triggered such conflicts throughout open questions, the answers have been clustered and it emerged that what triggers the most conflicts with transmigrants is 'discrimination.' Also the second answers seem to be somehow related to the latter: unclear regulation, miscommunication, unfair treatment, etcetera. Indeed, thanks to qualitative data it can be said that local people consider it discriminatory that there exists an advantage for transmigrants who could join
the palm oil industry in their land, with all the benefits, without surrendering any plots. With regards to the reasons that trigger conflicts among locals, 72% (cumulative percent) mentioned issues related to land, such as land borders, certificates overlapping, or more generally land conflicts and land issues. Secondly, the smallness of the plots, the labour division, distributive problems (land and yield) and, once again, the promises betrayed by companies were also mentioned.
Mr. B.E., the director of the Institute of Dayakology, considers the shift mentioned above as a 'shift of dependency. Before Dayak people were dependent only on natural resources, nowadays they are dependent on the companies, as labourers or smallholders, while their natural resources are exploited. They became strangers of their own culture and environment.' He also stressed the importance of natural resources for Dayak culture while he was explaining the mission of the Institute of Dayakology: 'since the Dayak culture is constituted and sustained mainly by the natural resources. ... the Institute also works on natural resources advocacy. The most important thing to say is that the Dayak culture lies in a specific mentality, a state of mind; it is not only a matter of performances and cultural dances. A lot of people misunderstand the role of the Institute of Dayakology, they think it is just a cultural place, where we just talk about culture but we are working especially on advocacy for Dayak's natural resources. Those resources that are part of the Dayak culture.' Once deprived of natural resources the Dayak culture is reduced to be only a folkloric collection of ceremonies, performances and dances. An example of this was the ceremony for the PTPN XIII new-manager's assignment the 5th March 2015 (see figures 9.3 and 9.4).
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Figure 9.3 Dayak dance for the new PTPN Xlll manager's assignment
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Figure 9.4 Dayak ceremony for the new PTPN XIII manager's assignment Source: Author, 2015
The Dayak leader was in charge of the welcome-ceremony, which was a sequence of Dayaknese rituals that occurred in the middle of the national plantation, better known in the district as 'Batak company', meaning that it is ruled and composed mostly by Batak people, from North Sumatra. Therefore, the Dayaknese authorities are very welcome when traditional ceremonies are needed but not so much when their own natural resources have to be disposed and managed.
One of the most worrisome issues is the manipulation of Dayak culture and, particularly, of its customary adat law. Mr. I.F., officer at ELPAGAR, described such risk as follows: 'the worst thing, in truth, is the manipulation, which works at a cultural level. It reaches the point of making even the customary laws bow to their [companies] private interests. ... First of all there is a massive and effective endeavour of manipulation Honestly, the most alarming facet is the manipulation of customary law. The companies with the help of local authorities have reached the point of inventing some customary rituals ... They created traditions that never existed before by manipulating customary rules, with the collusion and connivance of local authorities. Not to mention their ability to produce new customary law from scratch.' Mr. B.E., director of the Institute of Dayakology, confirmed the presence of such manipulation and provided some clues to understand where the responsibility lies: 'I have several experiences about manipulation of customary law and customary rituals. ... there are some unions or agencies of adat law that have been established by the governments, their main function should be to protect the culture but this does not happen in the reality. They are more focused on business and politics. The society and local people think that is good that are established and promoted by the government. I do not want to say that it is necessarily bad but what happens, on the ground, is against their mission. Or maybe that is their real mission.'
In conclusion, the warning raised by Mr. B.E. in regards of the risks of cultural extinction needs to be seriously taken into account. He believes that 'the first problem is the [oil palm] expansion itself, because of that the Dayak culture is just awaiting the alarm of extinction. There are very few chances that the regulation will slow down this process and make the palm oil really sustainable for local communities.' It appears as a last ditch attempt to raise public awareness and sensitise policy makers about the destruction of the Dayak culture. The preservation of the latter meets both inside and outside resistances. As narrated by Mr. B.E. himself, 'when we go to document traditions and rituals people are suspicious and scared that we are going to sell their culture. Then there is another serious issue, from a religious point of view we have to be really careful. If we revitalised the real adat culture, the religions are worried that we are going to wake up the old local gods. They cannot accept it.'
8.3 Everyday Forms ofResistance
Lesley Potter, in Oil Palm and Resistance in West Kalimantan - Indonesia (2009), scrutinised both the overt and covert forms of resistance implemented by farmers in the western regency of Indonesian Borneo. His rigorous work is correctly grounded in the theoretical debate around resistance and sustained by a fieldwork experience in Paridu (Sanggau). Potter inflected the optimistic idea that 'where there is power, there is resistance' throughout a more complete quote of his author, Michel Foucault: 'there is a plurality of resistances, each of them a special case ... by definition, they can only exist in the strategic field of power relations'[1] (Potter 2009, 107). That quote is the necessary premise for the whole analysis of Potter, since the kinds of resistance in the region need more sophisticated tools to be recognised as such.
In order to do that, he tried out three different frameworks: Polanyi's idea of counter-movements, Gramsci's counter-hegemony and Scott's infrapolitics. The latter is meant as the set of hidden forms of resistance and everyday politics, therefore it represents an essential instrument to read the resistance within the palm oil industry. Polanyin's concept of counter-movements, at this stage, seems to be not really useful given the current situation within the context: 'the kind of counter-movements ... represented by groups such as Mexico's Zapatistas is also not immediately relevant to the Indonesian scene' (Potter 2009, 108). Since it is hard to recognise overt forms of organised and well-developed counter-movements, the Gramscian idea of counter-hegemony seems to be the one that best suits the case at issue: 'in West Kalimantan the hegemonic grouping of plantation, government, police and army bring Gramsci's ideas into prominence' (Potter 2009, 108).
As discussed previously, the oil palm smallholders are not currently able to express themselves as class-for-itself (in Gramscian terms), meaning that despite their struggle and infrapolitical actions, they are still unable to collectively act - with full self-consciousness - for a common purpose. Indeed, not even one third (27.5%) of respondents reported taking part at trade unions, NGOs, organizations or parties that stand on their side. However, some of their practices, both overt and covert, can be linked to the idea of counter-hegemony.
The most overt, according to Potter, 'have taken the forms of demonstrations, roads closures, destruction of planted oil palm, camp burning and seizure of machinery; while the most violent forms of resistance reflect extreme frustration as reasonable efforts at compromise and dialogue - some attempt over several years - have failed' (Potter 2009, 107). Potter has reported some of those overt forms of resistance in Sanggau, thanks to the news daily published by Kalimantan Review, edited since 1992 by the Institute of Dayakology. Three cases reported by Potter occurred in two of the four companies taken in exam in this research, namely PT MAS and PTPN XIII. Those cases, represented below (see Table 8.3), are extracted from the Table 6.1 (From demonstration to forceful action: conflicts between oil palm estates and local people 1998-2001) contained in Oil Palm and resistance in West Kalimantan (Potter 2009, 121).
Table 8.3 Conflicts and Resistance in PT MAS and PTPN XIII (1998-2001)
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Source, Author 2015. (Excerpt from Potter 2009, 121)
Similar testimonies were collected during FGDs and interviews. During the FGD with PTPN smallholders, despite the likely presence of a company man (see box 6.1), one of the farmers replied to a question about conflicts as follows: 'yes, of course... me personally, I have even been arrested because I struggled for the conditions of our land and the land allocation. But it's solved now.. I do not want to talk about it.' As seen, also during the FGD with PT MAS smallholder some testimonies of struggles and the consequent repressions were gathered. According to Mr. N.A., officer at Walhi, 'despite of such a bad scenario, there are a lot of different forms of resistance that you will meet on the field. Unfortunately, there are also several forms of intimidation, violence and criminal activities ... that are going on there. ... The space for those that try to struggle becomes smaller and smaller day by day, so much so that some of them cannot survive anymore.' Potter illustrated the limits of smallholders' strategy as follows: 'while oil palm smallholders in West Kalimantan have used everyday politics (as well as more overt methods) to demonstrate their resistance to oil palm plantations, the scale at which they have operated has been [small] while they have achieved some success, I do not believe that these can be generalised across the entire industry' (Potter 2009, 108).
The reasons for such failures can be found both on the de-politicisation of Indonesian society that occurred after the already mentioned massacre of 1965 (hence during the whole Suharto's dictatorship) and on the pervasive effects of the self-entrepreneurial myth over the farmers' self-consciousness. Indeed, this smallholders' lack (that is, the awareness of the divergent interests between them and the oil palm estates) seems instead to be a heritage of the plantation manager interviewed. Such awareness would be the essential premise for a correct self-consciousness and a first step to act as class-for-itself. Mr. W., plantation manager, rationally commented the overt forms of resistance and the consequent repressions as follow, 'I think it will happen again and again. Since there are different kinds of thinking and different kinds of needs there is no alternative other than conflicts. It is normal. As I told you before, there is no win-win solution in this game. The company works for its profits, the local people for their land and to gain an income. Land is still the main issue. Most of the conflicts came from the land issue and it will be still like that in the future. When the company needs land and the local people have the land there will be always conflicts.'
Given that the overt forms of resistance are episodic and the context lacks serious counter-movements, in conclusion, the attention will be focused on the covert forms of resistance implemented by oil palm smallholders in Sanggau. The latter has always resisted the unequal power relations between companies and smallholders, mostly 'at the level of Scott's infrapolitics or weapons of the weak' (Potter 2009, 127). These stress the importance of studying the most hidden, unorganised, and silent forms of everyday resistance. Indeed, since the oil palm smallholders are currently unable to collectively act as a class-for-itself, they mostly draw upon individual practices that overtake the mere concept of livelihood strategies to coincide with the idea of covert forms of everyday resistance. The latter can be consider as 'weapons of the weak' in the hands of local smallholders. Such weapons not only represent a daily way to make a better living but also, mostly, represent a claim against the unequal power relations unwittingly perceived by them. 'Though farmers originally did not perceive themselves as weak, their inferior position was forced upon them by the combined power of the government, army and plantation companies' (Potter 2009, 113). According to the Potter's study, the most common overt forms of resistance consists of seizing tools (machineries and trucks), blocking roads, demonstrating in front of the offices, while the most common covert ones are related to the continuation of traditional agriculture, that is the case of fertilizers diverted for rice-fields in order to revert to a 'typical extensive semi- traditional livelihood system' (Potter 2009, 114).
In reality, Potter neglected some issues that, according to the author, should be linked to the covert forms of everyday resistance. The case of brokerage implemented by smallholders themselves has already been mentioned but the main and the most unexpected result, about such kind of resistance, that came out from the fieldwork research, is the illegal and widespread practice of stealing FFBs. Mr. N.A., officer at Walhi, was the first one that mentioned this practice and connected it with the need for justice felt by smallholders after they understand the unfairness of the land allocation: 'we must say that sometimes plasma [smallholders] try to overtake such gap by resorting to illegal practices, for instance they steal FFBs from the inti plantation, so as to compensate the differences. It happens because between company and smallholders there already exists an uneven and unfair relationship. They see the discriminations and feel that have been cheated. That's why.' Mr. I.F., officer at ELPAGAR, narrated it in terms of being as a necessary strategy and however limited to a specific period: 'during the 4 years necessary for the land preparation [before the first harvest] the smallholders in order to survive, sometimes, harvest illegally from the inti plantation and then go to sell those FFBs to another company's mill. Since the smallholders understand... almost immediately... that have been manipulated, they decide to get their revenge. But it's a matter of necessity, given that they are supposed to repay the loan though they do not have a proper income yet.'
Unexpectedly, during the FGD with independent smallholders this topic came out as follows: 'what we know at the present moment is that we could be even accused to be thieves in our land. Companies often accuse plasma smallholders of stealing FFBs from the company plantation; they criminalise local people so they would even put us in jail. ... I want to explain a bit more about the practice of stealing FFBs conducted by plasma smallholders. It is not actually their intention. They are somehow forced to do so because their lives are always at risk.' It is interesting to notice how independent smallholders sympathize with the dependent ones: they end up justifying an illegal practice, such as the theft of FFBs, since is determined by an extreme condition of exposure to risks and vulnerability. In truth, one of them used to be a plasma smallholder and few minutes later came out into the open because of the sensitiveness of the topic. While the discussion reached the company's right to sell the plantation with the concession to another company he vividly intervened: 'that means they can freely sell our land to someone else, it creates confusion and brought local people to steal FFBs to make their own living. I was one of them, we did not do it on purpose but afterwards it was not even clear anymore which was the company's plantation and which one ours. If we would get caught harvesting their trees we could be put in jail but, apparently, they can sell our land without any problem.' This testimony shows how that illegal practice is not only a component of their livelihood strategies, needed to make a better living in condition of vulnerability, but it is moreover a clumsy revenge: an unorganised reaction to the perceived unfairness of the relations with the company. They instinctively perceive the arrogance and prevarications caused by the unequal power relations.
Obviously, this topic was a taboo for any smallholders. They always denied the existence of such practice during the FGDs and only in two cases, at the end of the meeting with the microphone switched off, some of them admitted it. Even in those cases, they never claimed responsibility for such a choice, but rather put forward justifications based on the unclearness of plantations' borders and the bad condition of their plots, which do not allow them to make a dignified living. Such justifications confirm the hypothesis of considering that illegal practice as a covert form of everyday resistance. It can be assimilated to both Scott's concept of infrapolitics and the Gramscian idea of counter-hegemony, though played out without the proper political self-consciousness. The smallholders instinctively perceive the value subtracted and extracted from them, their land and their natural resources and, therefore, resort to illegal practice to compensate, counterbalance and somehow resist these abuses. In this sense, according the author, the illegal practice of stealing FFBs should be attributed to a covert counter-hegemonic form of resistance.
The irrelevance of this practice for the success of the smallholders claims was properly illustrated by Mr. I.F., officer at ELPAGAR, who believe that 'the companies know about it. As long as they see the debts repaid it is fine for them. There will always be another smallholder that will sell them the FFBs illegally harvested from another company's plantation. So, the companies even have some advantages in these practices, it ensures debt repayment and provides another company with a certain amount of low-cost, not-registered FFBs. The CPO produced in this way goes to swell the profits and generates a kind of black market, which is tolerated because eventually it will bring more benefits than losses to the companies.' The inadequate effectiveness of this individual practice, as a tool for smallholders' struggle, proves only that it is the result of self-unconsciousness, but it does not necessarily exclude the hypothesis of a desperate, spontaneous and instinctive attempt at resistance.
In the last years, oil palm smallholders have relied on Credit Union (CU) to overcome the limitations of the partnership agreement and to reduce their dependency to the companies. PTPN smallholders explained that 'as smallholders we really rely on CU, which is a sort of cooperative. If we are their members we can borrow a loan from them. It would be impossible in a regular bank.' Though it cannot be considered as a glaring form of resistance, it is often perceived as such by the smallholders themselves. Credit Union is a financial cooperative: owned, supported and controlled by its members. The history of Credit Union in Sanggau is strictly linked to the expansion of palm oil and the smallholders' schemes. Mr. D., the treasurer of Credit Union, presented it as follow, 'nowadays we have more than 160.000 members and 60% are farmers, almost all of them are oil palm smallholders. Talking about the educational level of our members, we have 60% that only reached primary schools, or even, with lower or no education at all. Despite that, Credit Union tries to help them in heading up their economic condition. One of our main concerns is to help the members to manage their income and save part of it, especially for their children's school. Our main mission is to help them to reach a sustainable level prosperity according to the principle of holistic wellbeing.'
Credit Union gained its reputation among smallholders thanks to its strategies and the services that it provides. Basically, it is a concrete support for entrepreneurship. Indeed, Credit Union is able to provide capitals and knowledge (see chapter 7) to local smallholders at the best conditions possible. Mr. D., the treasurer of Credit Union, explained the attention they pay to knowledge as follows:
'To become members of Credit Union people have to pass through the training mentioned. We call it basic education training, it contains 7 main subjects: the first things are human resources building and social analysis, to understand the society and see what means to be rich or poor, the last subject is income management. It means we want to help them before they start to manage their income for real. It is a matter of mentality. ... After that basic education programme, there will be a continuous work of training; we will continue to go to the villages every year., to see how things are going, to provide some sort of -training update courses and to give them the latest news about the current approaches, our development strategy, etc.. Nonetheless there is some technical training to help smallholders increase their productivity, and so the profitability, of their cash-crop business. Especially for smallholder plasma we have a pilot-project called the 'replanting programme' or 'revitalization' for the unproductive land, usually after 25 years. Thanks to that programme we can help plasma to replant their plot by providing capitals and trainings'.
Independent smallholders were the first to benefit from the services of CU, but recently dependent plasma have also been attracted to replant independently thanks to CU. During the FGD in Sanjan with independent smallholders, one of them stated that 'most of the people here have their own independent plantations, established during the last two or three years. We got most of the capitals from CU. ... It is better than a regular bank because they start any financial process with the education of farmers. ... The training concerns how to use money wisely and also how to manage the money, how to buy seedlings, fertilizers, etcetera. ... in order to repay the debts and calculate the interest.' PT MPE smallholders already know CU really well and they seem to be pretty satisfied: 'we are all members of CU. ... it is really helpful in my life. If you become member, you put in some capital but when you want to get a loan CU does not erode it, it only adds more value. That's the difference between CU and any other bank. ... They put very low interest on our loans and furthermore there is trust between them and us. We know each other personally; they know us as farmers, honest people. Whereas the banks do not take care of us and it is really hard to access to credit with regular banks.' While PT MAS smallholders know the services of CU really well, they are still quite suspicious: 'there is also the opportunity to join CU and get capitals from them, I know that now they represent and promote a new concept of oil palm smallholding but first we need them to study and research about this before it is applied to us. We will also seek foreign investments. ... We have still time to think about it.' Even Mr. W., plantation manager, bestowed on CU a crucial importance and a strategic position in the future scenario: 'if there is a company, you can be sure that around there you will find also a Credit Union. ... CU will play a crucial role in the future. From what I have heard ...Ifyou are a smallholder it will be easier and more convenient for you to get a loan from them rather than to go to the banks. They have simplified procedures and most of the people from CU come from the same villages as the farmers'. They all know each other. Even the confidence and trust among them is higher than it would be between farmers and banks.' That positive relation between CU and smallholders emerges also from the testimony of Mr. D., the treasurer of Credit Union, who explained that:
'When smallholders become members they can automatically ask for a loan, they will have some sort of consultation with our staff in which will try to arrange the best condition for their loan, based on their repayment ability. The members here also become co-owners of Credit Union, they know it. It makes Credit Union like a family; for example our staff come from their own villages, so they know that Credit Union is for them and among them. Our staff members are local people, their neighbours or relatives. We work at that community level, that's why they prefer us. Not to mention the transparency, we can assure to the smallholders the highest level of transparency. He will be informed personally about everything that concerns his loan and even more: interest rate; administration fees; investment strategies... Here, not even the banks are able to do the same. We have to add that there is a common background between us and the majority of the oil palm farmers, which helped us in establishing such a relationship; a background in terms of both ethnicity and religion. Especially in the beginning it creates trust among the people involved directly. It is just a matter of background that does not influence our strategy or mission but is relevant and has to be mentioned'.
The common background of smallholders and CU officers reinforces such trust. Though ethnicity and religion seem to not be reasons for discrimination, they actually have an underground function. Indeed, Credit Union in Sanggau is driven by Catholic principles and is mostly led by Dayak people. It makes this financial institution the one, which holds the most appeal for local smallholders. Mr. D. wanted to clarify anyway that 'Credit Union is open to everybody, to any religion and ethnical group. Of course there are Christian teachings in underlying our work - in the background - but it is definitely based on universality. In the background our principles work a lot but not in the everyday functioning of the institutions, we have members from any religion. We do not play according to religion. Our mission is the wellbeing of everybody; regardless of his or her religious belief. We serve everybody with Christian spirit.'
Thanks to the favourable conditions that can offer, CU is becoming even for plasma smallholders the most attractive and feasible hope for enfranchisement. Most of them see in CU the opportunity to continue with palm oil and, concurrently, to get at least partially emancipated from the dependent relation with companies. Obviously, the support to selfentrepreneurship offered by CU has nothing to do with Polanyi's idea of countermovements, nor with the Gramscian idea of counter-hegemony. There is no real attempt of counter-acting 'against', but rather to act 'within' the palm oil industry. Though the services offered by Credit Union can actually counterbalance the unequal power relations between plantation estates and local smallholders (since the lack of capitals and knowledge are the primary reasons that make smallholders accept the partnership agreements), in reality, they can only produce a reduction of the dependency mentioned above. They have no real chance to subvert it. In fact, it is not even part of the Credit Union mission. Credit Union works under the system of compatibility with the capitalistic mode of production and its unfair relations. Their aim is not counter-hegemonic since it is not directed to subvert such order. In this sense, it is compatible with the current mode of production and it perfectly suits to the self-entrepreneurial myth, which is at the very core of the smallholders' issue. In conclusion, it represents the most realistic attempt of creating a sustainable palm oil industry (at least in social terms), by providing to the latter a 'human face' rather than by struggling against it. The role of CU is not directly attributable to any form of resistance, not even covert, but it must to be said that the smallholders themselves invest several expectations in it. Since those expectations are driven by the desire of emancipation from the unfairness of the unequal power relations - as empirically perceived by them - Credit Union involuntarily becomes an instrument within the toolset of the 'infrapolitic' forms of resistance made available to local smallholders.
In conclusion, the three pillars that typify any partnership agreement implemented so far in the palm oil industry in Sanggau can be illustrated as follows: a) the land is surrendered by locals to take part at the agreement; b) the smallholders get bonded (into debt) with companies since they do not have capitals to face the start-up costs alone; c) the smallholders are oblige to sell their FFBs to a specific company or mill (monopsony). The favourable conditions that CU offers to smallholders might be, in the future, a solution for the first and the second pillar mentioned above and, therefore, represent a practicable alternative to the partnership agreements. Local farmers, thanks to Credit Union, could reject the companies' proposals: since they could easily access to credit to face the high start-up costs alone. So if they wished to establish an oil palm plot, it would no longer be necessary that they surrender their land. Even by assuming that Credit Union will succeed in achieving all its goals and, according to its mission, make the palm oil industry a fairer place for local smallholder, it will nonetheless never resolve the problem of monopsony since the capitalistic contradictions will not be tackled. As long as companies will exert the control over production - through control of the transformation-process, namely mills - there is no room for equal power relations. There is no hope of shifting the trend of monopolistic centralization, typical of the current global capitalism, without a complete critique of the latter. Such a critique does not even exist as long as the discourses that should be, apparently, counter-hegemonic are in reality deeply embedded into the self-entrepreneurial myth and the neoliberal dogma, both of which are devices which serve global capitalism and its process of monopolistic centralization.
During the interview with Mr. D., the author presented his uncertainties about the incompleteness of the CU project and tried to incite an answer for the last pillar mentioned above, the monopsony. Apparently, a solution could be the establishment of micro-mills, run by communities of smallholders, which would collapse the last dependency-ties between companies and local farmers. Consequently to such incitement, Mr. D, the treasurer of Credit Union, replied as follows: 'there are some projects but we have to see how they can be financed. I think that basically the idea of micro-mill is ok but the financing is still an issue. The idea is nice, people become more independent and we can only support that, of course. Maybe is not the first task of Credit Union, maybe in the beginning they have still to seek money within the traditional bank system, at least in the beginning.' Currently, nobody seems to be ready for this step in Sanggau, though there are interesting experiences of micro-mills under smallholders management in Sumatra and in other countries of the tropical belt (both in Africa and Latin America) that deserve to be further studied. Selling CPO rather than FFBs would have some beneficial effects for local smallholders but, at the same time, could not prevent them from being exposed to further vulnerability, for instance the one due to the volatility of the global price, not to mention the environmental risks due to the local proliferation ofthose small industrial facilities, that might be hard to control.
Lesley Potter in the end of his 'Oil Palm resistance in West Kalimantan, Indonesia' concludes that 'there is the need to develop an organization that is independent and ideological, with strong leadership' (Potter 2009, 127). Starting from the considerations contained in a critical article published by Kalimantan Review in 2006 - significantly titled 'Why does farmer opposition in West Kalimantan always fail?' - he suggested the 'successful Zapatista revolt in Mexico as a possible model, concluding that in an era of economic liberalism there is no hope that the state will protect the farmer from exploitation by the market: it is the expectation that some umbrella of protection will be provided through the strength of civil society' (Ibidem). Though the author agrees completely with the fact that there is a need for such an independent and ideological organization, he believes that it is extremely unlikely such an organization will emerge. The Indonesian context, once de- politicised with the help of terror and intimidation, does not bode well for any attempt of resistance that presumes political self-consciousness. Everyday forms of covert resistance will likely continue and will take different and unexpected shapes but, currently, there is no hope for a massive and ideological counter-movement.
9 Conclusion and Recommendations
To summarise the relations of production between oil palm smallholders and companies is not an easy undertaking. The constitutive complexity of this industry and the current global capitalism made it necessary to exert a significant effort in order to break up and examine each element with the aim of putting them in order and, eventually, recomposing the big picture. The analysis of the main factors of production (land, capitals and labour) in the upstream phase of the palm oil industry has shown, beyond any reasonable doubt, the existence of unequal power relations between smallholders and companies. These 'inequalities of power' reflect unfair and highly structured relations of production. It is not only a matter of what Roemer define 'inequalities in endowments', which is a mere distributive issue. Indeed, as shown in the previous chapters, the fact that local smallholders nominally possess a small plot (factor of production 'land') does not change their subordinate position in comparison with companies. The 'control over the economic environment' or, in Marxist terms, the 'control over production' perpetuates the unfairness ofthose relations and the inequalities within them.
This research was an inquiry in the real nature of those relations of production, to identify the position of the smallholders in this scheme and to assess the meaning of their supposed entrepreneurship. One of the core findings was that the assumption, according to which the local farmers are entrepreneurs as long as they own a small plot of land, is a fallacy. Oil palm smallholders, as well as many other workers in the Global-South production nodes, should instead be considered as labourers tied to companies with innovative and extremely flexible forms of dependent-employment agreements. As demonstrated, the entrepreneurial status of local smallholders cannot be assumed as such. When it is just normatively presumed, any further attempts of understanding are, automatically, invalidated. Conducting the research by remaining within the self-entrepreneurial discourse would have given no chance of recognizing inequalities and understanding the 'real nature' ofthose relations of production.
The capitalistic control over production, or oppression, is the necessary premise for the appropriation of surplus from labourers. As has been said, in this case, the capitalistic control over production is exerted top-down through the control of the transformation- process. The capital can even renounce direct ownership of the land, one of the main factors of production, yet maintain control over the whole production by means of the mills and thanks to the terms of the partnership agreements themselves. In the case of partnership agreements, companies leave the ownership of the small plot of land, one of the main factors of production, to the smallholders, but this is a tricky move since they preserve control over the whole production process. Thus, the partnership agreement still remains unbalanced, due to the fact that companies still have the control of the core practices and instruments along the production process, for example the mills. Indeed, several arrangements and practices have a double aim: on one side they serve to shift risks onto local farmers, in the name of their supposed entrepreneurial status, and on the other side they serve to extract surplus from them, as with every other labourer.
Three pillars characterise any partnership agreement between smallholders and companies: a) local people surrender their land to take part at the agreement; b) the smallholders get bonded (into debt) with companies since they do not have the capitals to face the start-up cost alone; c) the smallholders are obliged to sell their FFBs to a specific company or mill (monopsony). While some exceptions and alternatives exist for the first two pillars, monopsony results as the most pervading and pressing impairment for smallholders. Hence, it is also the most difficult to overcome.
The process of land shift, or dispossession, was analysed as a modern version of 'primitive accumulation' in the Global-South. The smallholders' schemes proved to be perfectly compatible with these 'new enclosures' since the land tenure shift occurred precisely to accompany that transition to agri-business. Despite the fact that local farmers may individually own small plots of land, and so be considered smallholders, the shift from common-land tenure to private is the greatest success for the capital. Indeed, as previously stated, the percentage of plantation held by local smallholders in the Indonesian palm oil industry is dramatically decreasing (see p. 26) in spite of the enthusiasm initially brought by the self-entrepreneurial myth. This drop is obviously due to the fact that a growing number of local farmers desperately give up their land but, basically, it represents the 'natural' process of monopolistic concentration that occurs within any capitalistic mode of production. If local smallholders nowadays hold only 38% of oil palm plantations, compared to more than 60% of the 1990s, it means that we are witnessing a massive accumulation of land in the hands of companies and transnational conglomerates. It is difficult not to notice similarities with the process of 'primitive accumulation' started at the time of the British 'enclosures'.
As long as the entrepreneurial status of local smallholders is wrongly assumed as such, it is very difficult to attribute their indebtedness (second pillar mentioned above) to bonded labour. The latter is consider one kind of forced labour and its first definition was included in article 1 of the UN Supplementary Convention on the Abolition of Slavery, the Slave Trade and Institutions and Practices Similar to Slavery (1956). Considering the absence of updated and revised definitions, in the Mini Action Guide (2008) published by ILO-ITUC (the International Labour Organization with the International Trade Union Confederation), there is an attempt to explain the UN definition as follows: 'the Convention's definition clearly distinguishes bonded labour from a normal situation in which a worker accepts credit for whatever reason and then repays the amount by working. In the latter situation the repayment terms are fixed and the capital sum borrowed is only subject to reasonable interest rates. In bonded labour cases these safeguards do not exist, as the terms and conditions are either unspecified or not followed, leaving the bonded labourer at the mercy of their employer or creditor. ... The employer may also adjust interest rates or simply add interest; impose high charges for food, accommodation, transportation or tools; and charge workers for days lost through sickness' (ILO-ITUC 2008, 21). The conditions of oil palm smallholders included in the Indonesian palm oil industry perhaps are not directly attributable to such a category and, for sure, further studies would be needed to prove it, but their indebtedness has several features in common with bonded labour. For instance, two practices resemble the criteria just mentioned: the uncertainty of both terms and duration of the debts, and the deductions unclearly subtracted from their rewards at the mill. These practices are justified by their entrepreneurial status, but since the nature of this status has been called into question beforehand, there should be an open debate on the hypothesis that bonded labour might affect even these smallholders. Several external variables influence their debts-repayment's capability. Once the entrepreneurial risks are shifted to smallholders, those risks become acceptable in the name of their supposed status, but they would be considered terribly unfair for any other labourers. If the result of a bad harvest was unfairly unloaded on labourers and the transportation's costs charged on them, compromising their debts-repayment's capability, it would be really easy to attribute such practice to bonded labour. The same indignation hardly occurs when it comes to smallholders. This is one ofthe most horrible effects ofthe self-entrepreneurial myth.
The monopsony, the last pillar that sustains the exploitative relation between palm oil companies and their smallholder-partners, can be only partially overcome by resorting to the service of brokers. Indeed, the whole market is controlled and led by just a few companies, and there are no real chances to elude them. In other words, the capitalistic control of this specific economic environment is total. The monopsony, in this sense, is currently the most powerful instrument for the 'oppression' of oil palm smallholders among a complete toolset of countless 'impersonal market mechanisms'.
The oil palm smallholders rely mostly on covert forms of everyday resistance at the 'infrapolitics' level. The research showed how some illegal practices, like the theft of FFBs from the companies' plantations, can be attributed to such covert forms of resistance. There are almost no traces of counter-movements and the few overt forms of resistance that ended up in protests were promptly repressed. The intimidation is nurtured through the memory of one of the worst mass murders of the previous century, the Indonesian massacre of communists of 1965. The criminalization of discontent is sustained by the use of the ignominious label: 'provocateur'. People that have this label stuck on them usually face several problems. In the end, oil palm smallholders are so embedded in the self- entrepreneurial discourse that their own self-perception as a class is highly compromised. It gives no chances for a pure counter-hegemonic reaction. Indeed, to use the Elster's definition of revolt (1975), the oil palm smallholders do not revolt, in Marxist sense, against the system but they rather revolt, in neoclassical sense, within the system, against supposed abuses.
The surplus produced by the smallholders' labour-power is extracted and diverted towards the companies through a complex combination of both formal arrangements and practices. That process is ideologically supported by the neoliberal discourse and its self- entrepreneurial myth. The kind of exploitation to which oil palm smallholders are exposed can be attributed both to the Marxist idea of 'unequal exchange' and Roemer's definition of 'unfair advantage'. Following Elster's line of reasoning (1975), as well as the economic analysis of exploitation made by Yoshimara and Veneziani (2013), it can be concluded that the mere existence of remaining profits in the hands of palm oil companies is the constitutive proof that not all the factors of production have been fairly rewarded: neither the land, nor the labour. Effectively, the exploitation of smallholders' labour-power in Sanggau, West Kalimantan, is accompanied to the massive exploitation of their own land. In this sense, the 'generalised commodity exploitation theorem' (see p. 10) provides a solid explanation of the exploitation of both labour and commodities. The fully voluntary participation of local farmers to smallholders' schemes can be attributed to Zwolinski's definition of Structural Exploitation (2012): local farmers, taking part voluntarily in the partnership agreements, might suffer a setback of their interests relative their possible conditions in the absence of those partnership agreements. Obviously, the smallholder's inclusion in the palm oil industry provides them with an income otherwise absent, but that does not necessarily mean that there is no exploitation. Since there is oppression, which corresponds to the capitalistic control of the economic environment, labourers have only two options: working for those who own the capital or being completely excluded from production. Nobody would deny the exploitation of the masses that moved from the country to cities during the historical processes of industrialization in Europe. However, it would be correct to add also that their previous condition could not assure them of the income that their exploiters could instead provide to them. This example proves that neither income generation nor the voluntary participation to an exploitative exchange are, in themselves, sufficient to negate the presence of exploitation. In the case of palm oil, it is the capital that reaches the country to find both labour-power and land ready to be exploited.
What has been said so far falls into the criteria of 'avoidability' and 'missed- potentiality' that define the structural violence. Within the palm oil industry in Sanggau, structural violence consists of an actual and avoidable impairment of local farmers' life, which is due to socio-economic structures (i.e. relations of production) that stop them from reaching their full potential. Hence, 'missed potential' refers to what would exist, or would not exist, in the absence of such violence. For example, considering the exploitative relations between palm oil companies and smallholders, the avoidable capitalistic control over means of production (oppression) and the consequent extraction of surplus from labour-power (exploitation) result in the impairment of those farmers' lives. This impairment, in turn, would not exist in absence of such capitalistic control over the means of production and its typical exploitative relations. Therefore, what restrains the achievement of their full potential is not the palm oil in itself but rather its capitalistic mode of production.
The main theoretical contribution of this research can be found in the attempt of connecting - probably for the first time - structural violence with the exploitation of an agrarian working-class of the Global-South, embedded into the global market through their specific commodity-chain. Even though any definition of structural violence leaves open the possibility of applying it to the impairment caused by economic structures, its implementation in an analysis of relations of production in order to study the exploitation within a specific industry is, certainly, a pioneering effort. The structural violence refers to social structures that stop individuals, social and ethnic groups or even societies, from reaching their full potential (see pp. 4-5). Thus, it can be fruitfully utilised in the Development Studies to elude, at least partially, any of the under-socialised approaches which are currently dominant. Sustaining the study of specific economic environments with the help of the concepts of structural violence means, first of all, admitting that a specific mode of production - with its organization, power relations, distribution of endowments, division of factors of productions and exploitative relations - can be structurally violent. This is not a prayer for non-violence but rather the acknowledgment that violence is the engine of any historical change or, to use the Marx's words, it is the 'midwife of every old society pregnant with a new one'. Even though the oil palm smallholders are not in the condition to express any attempt at class warfare, they are unaware victims of an everyday backwards class war played top-down by the capital, with sophisticated and impersonal mechanisms.
In conclusion, policy makers, activists, politicians and stakeholders are recommended to not normatively assume the entrepreneurial status of local farmers in the Global-South as such. Capitals and knowledge resulted to be two suitable criteria to determine the status of local farmers and, for sure, several others can be found and applied. What is definitely wrong is the normative assumption of their status derived from an, anything but neutral, economic paradigm. Agencies like RSPO (Roundtable on Sustainable Palm Oil) and ISPO (Indonesian Sustainable Palm Oil) should take under serious consideration this issue and laically analyse the status of oil palm smallholders without pre-determined suppositions, if they really want to foster social sustainability.
Epilogue
I enormously benefited from the fieldwork experience in Indonesia, both in academic and personal terms. It represents a milestone in my academic career and, more generally, in my life. It was my first time struggling within the researcher's role and I could perceive the encumbrance of a research project that was designed from scratch by me, and its success depended directly on my skills on the ground. I have learnt a lot from this research and it provided me with several reflections that I could capitalise upon in possible future experiences. The sensitivity of the topic and the complexity of the context made it necessary to recourse to informal strategies in order to overcome the obstacles that came out in Sanggau.
A prime example of this occurred during the first days of research, when a local guy tried to scare my interpreter and me by telling us horrible stories about police intimidation regarding other researchers who had previously investigated the palm oil industry in the area. The reason for such a coarse warning was that he was apparently able to provide a safe service that would have allowed me to reach any plantations without falling into trouble with either with the private security of the companies or with the official military forces. Although, at a later stage, other informants confirmed that one year before police had detained some researchers for some hours, seized their computers and destroyed all data they had gathered, my reaction at his proposal was to take time. Certainly, I was worried about ending up in the same way as the previous researchers but, in the meanwhile, I did not want to see my entire research driven by this man within his circumscribed network. The loss in terms of reliability and validity would have been considerable. It took me just few hours to decide, in accordance with my interpreter, to refuse his offer and cautiously start the exploration of the research area by ourselves. After few days it proved to be the right decision. By using informal strategies and networks we could reach any place we planned to go, and possibly even more, without being specifically tied to anyone. We passed through check-points controlled by the private security forces of the companies to reach a village entirely surrounded by plantations, we attended the ceremony for the new plantation manager at PTPN, we had a FGD with smallholders in a KUD (cooperative) office, under the company's eyes. That decision was not the result of a reckless reasoning or a foolish attitude. It was consciously made to leave open the opportunity of discovering unexpected results and to avoid falling into the trap of a standard 'travel-package' for western researchers. Obviously, after this kind of warning, any step in the field was made considering the safety of my interpreter, my assistants and myself. The correct approach that we assumed from the beginning, in terms of relations with local people as well as with formal and informal authorities, kept every door opened to us. Furthermore, thanks to that decision, I was more able to recognise the different roles and attitudes of my respondents, as they were not all extracted from the same network.
In conclusion, considering it was my first experience, I was astonished to see how I felt confident in that complicated research area. I have surely been helped by my informal and relational skills but what is really surprisingly is the amount of things I learnt to do in the last year thanks to this Master. I now know how to design a research proposal, how to manage the whole data collection, how to handle problems on the ground, how to lead and drive a team of assistants, how to relate theories with the empirical results of research, how to write-down a thesis in a language which is not my own. I could not be more satisfied with that experience and I am honoured for the opportunity that was granted to me.
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Appendix I: Informed Consent (ENG-IND)
Informed Consent for Oil Palm Smallholders Plasma (ENG)
My name is. I am a local assistants in an exploratory research about oil palm smallholders in the sub-districts of Parindu and Sanggau Kapuas. This research is held by University Gadja Mada of Yogyakarta with the partnership of Radboud University Nijmegen (Netherlands).
Purpose: The purpose of this questionnaire is to gather information about smallholders’ partnership agreement and their effects on the livelihood outcomes. The smallholders’ opinion and their satisfaction regarding those topics will be also investigated through this questionnaire. You have been selected to take part at that questionnaire as a smallholder’s plasma living in the research area.
Study procedure and duration: You will be asked to answer among a range of alternatives options. You will often have the opportunity to mention an answer not indicated among the options or even to not answer. The questionnaire will be administered by the investigators on a paper-version (hardcopy). We kindly ask your collaboration to listen the range of possible answers before you start to answer. It will make the questionnaire go faster and therefore will also save your time.
Benefits: There are no direct benefits to you for participating in the study. You will not be paid money to take part at the questionnaire. You may find an indirect benefit in knowing you have participated in an important study that could contribute to generate evidence about smallholders’ plasma schemes, shed a light on both good and bad practices and nonetheless end up in policy recommendations.
Confidentiality and anonymity: Your information will be kept confidentially. Your name will not appear on any circumstance, publication or report. Your answers will be utilized just for statistical analysis and research purposes only. Your participation in this study is completely voluntary.
Question: Do you have any question? Yes No (Please note the questions and provide responses.)
Consent to interview: Do you agree to participate in the interview? Yes No
Investigator’s statement:
I, the undersigned, have explained to the respondent in a language he/she understands the procedures to be followed in the study, its purpose and the eventual benefits involved. I confirm that the respondent agreed to voluntarily participate to the questionnaire.
Name of Investigator
Date
Lembar Persetujuan bagi Petani Plasma Kelapa sawit (IND)
Nama saya. Saya adalah asisten lokal dalam penelitian eksploratif mengenai petani kelapa sawit di kecamatan Parindu dan Sanggau Kapuas. Penelitian ini diadakan oleh Universitas Gadjah Mada Yogyakarta bekerja sama dengan Radbout University Nijmegen (Belanda).
Tujuan: Tujuan dari kuesioner ini adalah untuk mengumpulkan data mengenai perjanjian kemitraan petani plasma dan efeknya terhadap kehidupan sehari-hari. Pendapat petani plasma dan kepuasan mereka terkait dengan topik tersebut akan ditanyakan melalui kuesioner ini. Anda telah dipilih untuk ambil bagian dalam kuesioner tersebut sebagai petani plasma yang bertempat tinggal di wilayah penelitian.
Prosedur dan durasi penelitian: Anda akan diminta untuk menjawab berdasarkan beberapa pilihan jawaban. Anda akan berkesempatan untuk menyebutkan jawaban yang tidak terdapat dalam pilihan jawaban yang ada atau bahkan anda boleh tidak menjawab. Kuesioner ini akan diisi oleh pewawancara (asisten) dalam bentuk cetak (hard-copy). Kami meminta kerjasama anda untuk terlebih dahulu mendengar pilihan jawaban yang ada sebelum anda mulai menjawab. Hal tersebut akan membantu pengisian kuesioner lebih cepat dan akan menghemat waktu anda.
Manfaat: Tidak ada keuntungan langsung dari kesertaan anda dalam penelitian ini. Anda tidak akan dibayar untuk berpartisipasi dalam kuesioner. Anda akan menemukan manfaat tidak langsung bahwa anda mengetahui anda telah berpartisipasi dalam sebuah penelitian yang penting yang dapat berkontribusi untuk menyampaikan bukti mengenai skema plasma, sebuah titik terang mengenai praktek yang baik dan tidak baik yang mengarah kepada rekomendasi atas kebijakan yang akan diambil.
Kerahasiaan dan anonimitas: Informasi mengenai anda akan dirahasiakan. Nama anda tidak akan muncul dalam situasi, publikasi ataupun laporan apapun. Jawaban anda akan digunakan hanya untuk analisis statistik dan tujuan penelitian. Keikutsertaan anda dalam penelitian ini adalah sepenuhnya sukarela.
Pertanyaan: Apakah anda ingin bertanya? Ya / Tidak (Silahkan catatpertanyaannya dan berikan jawaban)
Persetujuan untuk wawancara: Apakah anda bersedia untuk berpartispasi dalam wawancara ini? Ya / Tidak
Pernyataan Pewawancara:
Saya, yang bertandatangan dibawah ini, telah menjelaskan kepada responden, dengan bahasa yang dapat dipahami, mengenai prosedur yang akan diterapkan dalam penelitian ini, tujuan dan manfaat yang akan diperoleh. Saya menyatakan bahwa responden setuju untuk berpartisipasi secara sukarela terhadap kuesioner ini.
Nama Pewawancara
Tanggal
Appendix II: Codebook and Questionnaire (ENG-IND)
illustration not visible in this excerpt
[1] Foucault, M. 2005 'Method' in The Wild to Knowledge: the history ofsexuality, vol. 1, London: Penguin
- Citar trabajo
- Marco Mercuri (Autor), 2015, Beyond the Self-Entrepreneurial Myth. Oil Palm Smallholders in Sanggau, West Kalimantan, Múnich, GRIN Verlag, https://www.grin.com/document/372868
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