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Prospects for Agricultural Development in Indonesia

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Prospects for Agricultural Development in Indonesia Prospects for agricultural development in Indonesia With special reference to Java PROEFSCHRIFT ter verkrijging van de graad van doctor in de landbouw- wetenschappen op gezag van de Rector Magnificus, Dr. Ir. F. HELLINGA, hoogleraar in de cultuurtechniek, te verdedigen tegen de bedenkingen van een commissie uit de Senaat van de Landbouwhogeschool te Wageningen op vrijdag 22 maart 1968 te 16.00 uur 1968 Centrefor Agricultural Publishing and Documentation Wageningen POSTULATES The absence of a clear doctrine in the agrarian policy of many developing countries, in particular towards the small farmer, retards agricultural expansion. Thisthesis . II In the process of economic growth, development in agriculture and in the other sec­ tors of theeconom y areclosel ylinked . Thisthesis . in Effective economicplannin g needsadequat e statistics.Fo r Indonesia thisimplie s that allrelevan t data should betransferre d to the Central Bureau of Statis'tics.T ofulfi l its task, this Bureauneed s appropriate expansion. IV To exploitit sminerals ,t o raisefar m yields,t oincreas e the output ofit sworkers ,an d to launchne windustries , acountr ymus t knowit sresources . Reportan dRecommendation so fth eU S Agencies forInternationa lDevelopment , Atlas ofIndonesia nResources , Djakarta 1962, p.1 . Whether industrializing from an advanced or from a primitive agriculture society, therei sneve r aplac efo r agricultural protectionisma t anystag eo f development. F. LIST,Da snational eSyste mde rpolitische nOekonomie , 6.Aufl. ,Stuttgar t1877 ,S . 276- 280. VI In developingcountrie s thefinancia l appraisal ofa projec t iso fmor eimportanc e than the so-called economic one. vn Sustained growth of agriculture in developing countries canonl y be achieved ifth e farmers areconvince d that they can benefit substantially from agricultural science.I t is incorrect to assume that quicker results will be reached bycompulsion , but in spe­ cial situations this may temporarily be unavoidable. VIII The purpose ofsociolog y ist o find the characteristics ofth e society. For agricultural development the characteristics should not be ignored orcontravened , butmobilize d and activated. DC As agronomy, sociology has totes t results found in one place before applying them elsewhere. X A national plan for agricultural development without guidance from farm manage­ ment research and extension is like a big schooner without wind in its sails: it is beautiful to look atbu ti ti sno t getting anywhere. R. SCHICKELE, Farmmanagemen tresearc hfo r planningagricultura l development.India n ' Journal ofAgricultura l Research 31 (2), 1966,pp . 10-11. XI The essence offarm ,managemen t is the use offact s and logic to make decisions on farming operations, instead ofmakin g them on the basis ofemotio n and tradition. O. J. WHEATLY, Therol eo ffar m management in developing economics. Proceedingso f theNationa lCentr eo nFar m Management,Rawalpindi ,Pakistan ,Jun e 1962, p. 20. XII It isrealisti ct o base foreign aid on mutual profit. Proefschrift van ir. SIE KWAT SOEN Wageningen,2 2maar t1968 . Tomy parents Tomy wife Thisthesi swil lals ob epublishe da sAgricultura lResearc hReport s70 5 © Centrefo rAgricultura lPublication san dDocumentation ,Wageningen ,1968 . Nopar t ofthi sboo kma yb ereproduce d and/or published inan y form, by print, photoprint,micro ­ filmo ran yothe rmean swithou twritte npermissio nfro m thepublishers . Acknowledgements Without the assistance of many persons and institutions this work would never have been possible. My specialthank s are due to Professor J. H. L. JOOSTEN,wh ono tonl yaccepte dthi s papera sa doctora lthesi sbu twhos eguidanc ean dpatienc ehav esupplie d an invaluable contribution to its final shape. I am most grateful to my country, the Republic of Indonesia, for the opportunity its government has given me to complete this study. Without the generosity of the Agricultural Development Council, New York, for thefinancial suppor t to carry out mywor ki n theNetherlands ,thi spape r would never have been published. I am most grateful to Professor H. BEERS and Professor P. GIT- TINGER for their assistance in this matter. The Centre for Agricultural Publications and Documentation (Pudoc) in Wage- ningen helpedfinancially i n the publishing of this study for which I am thankful to Mr. A. RUTGERS. My thanks are to the officials of this organization for their tech­ nical aid, in particular to Dr. E. MEIJER DREES for helping me to prepare the manus­ criptfo r thepress . Professor E. DE VRIES has guided me in my study during the illness of Professor JOOSTEN, and provided much of the material for my study. I benefited considerably from the information and suggestions supplied by Professor J. TINBERGEN (Rotter­ dam), Professor O. SCHILLER (Heidelberg), Professor CH. PROU (Paris), Professor GUNNAR MYRDAL(Stockholm) , Professor COLIN CLARK (Oxford), Dr. D. WIGHTMAN (Birmingham), and Dr. E. F. SZCZEPANIK and Dr. E. H. JACOBY of FAO Headquar­ ters (Rome). My appreciations go to all of them for their valuable help. It is a pleasant duty to me to thank Professor TOJIB HADIWIDJAJA and Professor M. HILLE RIS LAMBERSwh o have always encouraged me in my study, and Professor TH. L. M. THURLINGS and Ir. R. A. L. LINCKLAEN ARRIENSi n Wageningen for their useful lectures. Mydeepes tthank s areals odu et o Mr. R.J . SMITHan d Mr.D .J . COLMANwh ohav e helped me with the English language and especially to Mrs I. PALMER in improving the stylean d the grammar. Sheprovide d extensive and detailed comments and critic­ ism, several of which could be incorporated into the text. The library staff members of the Agricultural State University (Wageningen), the Instituteo fSocia lStudie s(Th eHague) ,th eRoya lInstitut eo fth eTropic s(Amsterdam) , and the Netherlands Economic Institute (Rotterdam) provided me with the material needed for the study; their assistance is much appreciated. Mygratitud e isdu e to thevariou s agencies of mygovernment , in Indonesia and in theNetherlands ,whic hhav eprovide d mewit h almost allth enecessar y basicmaterial . I must also thank Ir. SUTIKNO EKADJAJAfo r sendingm e the material from Indonesia as quickly as possible. Acknowledgements are also due to my colleagues in various government agencies inIndonesi a who,durin gm yabsence ,hav ecarrie d on myforme r work there. I would like to express my gratitude to the International Agricultural Centre, Wageningen,especiall y to Ir. C.J . VAN BIJLERT,wh o has helped tomak e my stay and that of my wife in Wageningen more pleasant, and to the personnel of the depart­ ments of the Agricultural University residing at Diedenweg 18(especiall y Miss E. J. VAN DIJK and Miss A. NOORDDK) fot their assistance. Preface There exists much literature on agricultural planning, but there is a serious lack of detailed information in particular areas. This is also true for Indonesia. I hope that this analysis of the situation in Indonesia may give a foundation on which to build thecountry' s agricultural policy. Most ofth emateria l isfro m myow n experience and represents the situation up to 1964.A s the studyi s also for a doctoral thesis,som ecompromis e has beennecessar yi nth econtent s and the manner of presen­ tation. Although theofficia l Indonesian place-names may nowb epreferred , English names have been used for both the Prewar and Postwar Periods. The name Indonesia has been used in preference to the Netherlands East Indies or Dutch East Indies. Contents 1 INTRODUCTION 1 2 THEORETICAL AND FACTUAL STARTING POINTS 5 3 SHORT HISTORICAL SURVEY OFTH E AGRICULTURAL DEVELOPMENT IN INDONESIA 17 3.1 Theperio dbefor eWorl dWa rI I 17 3.1.1 Estateagricultur e 17 3.1.2 Peasantagricultur e 19 3.2 Theperio dafte r WorldWa rI I 20 3.2.1 Estateagricultur e 20 3.2.2 Peasantagricultur e 26 4 AGRICULTURAL DEVELOPMENTI NJAV A 39 4.1 Theperio dbefor e WorldWa rI I 39 4.1.1 Estateagricultur e 39 4.1.2 Peasantagricultur e 41 4.2 Theperio dafte r WorldWa rI I 46 4.2.1 Estateagricultur e 46 4.2.2 Peasantagricultur e 49 4.3 Concludingremark s 56 5 THE AGRICULTURAL SITUATION IN JAVA 57 5.1 Populationgrowt han dreductio ni nfar m size 57 5.2 Tenurearrangement san ddebt s 60 5.3 Technologyan dproductivit y 63 6 OBJECTIVES OF AGRICULTURAL PLANS AND POLICIES 65 6.1 Generalbackgroun d 65 6.2 Thesuccessiv eagricultura ldevelopmen tplan s 66 6.2.1 TheSpecia lWelfar eProgra m 66 6.2.2 TheFive-Yea rPla n 1956-1960 66 6.2.3 TheThre eYears'Ric eProgra m 1959-1962 67 6.2.4 TheNationa l OverallDevelopmen tPla n 1961-1969 67 6.3 Objectivesan dpolicie so fagricultura ldevelopmen ti nJav a 69 7 AGRICULTURALRESETTLEMEN T '*• 7.1 Organizedagricultura lresettlemen ti nth eOute rProvince s 71 7.1.1 Necessityan dprewa rdevelopmen t ofagricultur e resettlement 71 7.1.2 Considerationso npostwa rtransmigratio n 73 7.1.3 Quantity and quality oflan d availablei nth e Outer Islands 74 7.1.4 Administrativeorganizatio n oftransmigratio n 78 7.1.5 Selectiono fsettler s 78 7.1.6 Kindso ftransmigratio n 79 7.1.7 Economicorganizatio no fth esettlemen tare a 81 7.1.8 Obstaclest otransmigratio n 84 7.1.9 Costo fresettlemen t 87 7.1.10 Resultso forganize dagricultura lresettlemen t 92 7.2 Survey ofagricultura l resettlement during thepostwa r period 92 7.3 Willresettlemen tremai ndesirable ? 97 8 REHABILITATION OFTH ESUGA R FACTORIES 99 8.1 Thepoo rstat eo fsuga rproductio n 99 8.2 Theproble mo fth esoi l 102 8.3 Theproble mo flabou r 104 8.4 Theproble mo fth efactorie s 108 8.5 Thesuga rpolic yo fth egovernmen t 109 8.6 Productioncost s 111 8.7 Therehabilitatio
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