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 agriculturalprotectionis ma 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. BEERSan d 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 no fsuga rfactorie si nJav a 113 8.8 Potentialo fpeasan tcan egrowin g 116
9 IMPROVEMENT OF PEASANTS' AGRICULTURE, ESPECIALLY RICE GROWING 119 9.1 Thephysica linpu t 119 9.1.1 Theus eo ffertilizer s 120 9.1.2 Irrigation 123 9.1.3 Improvedseed s 124 9.1.4 Pestan ddiseas econtro l 125 9.1.5 Otherimprove dagricultura lpractice s 126 9.2 Theeconomi cenvironmen t 127 9.2.1 Pricepolic y 128 9.2.2 Marketingincentive s 129 9.2.3 Creditpolic y 131 9.2.4 Landrefor m andsiz eo fholdin g 132 9.3 Educationan dresearc h 133 9.3.1 Education 133 9.3.2 Research 136 9.4 Organizingagricultura l development 138 9.4.1 Agriculturalextensio nservice s 139 9.4.2 Creditinstitution s 140 9.4.3 Cooperatives 148 9.4.4 Publicadministratio n program 149 9.4.5 Communitydevelopmen t 150 9.4.6 Transport andcommunicatio n facilities 151 9.5 Concludingremark s 151 9.5.1 Thesetu po fth eThre eYears 'Progra m 152 9.5.2 Evaluation ofth eThre eYears 'Progra m 152
10 APPRAISAL OF THE RESULTS OF PAST PLANS AND POLICIES 155 10.1 Why has agricultural development not been successful? 155 10.2 Multitude and inconsistency of government's objectives 156 10.3 Absenceo fclear-cu tdoctrina lconcep t 157 10.4 Concludingremark s 160
11 PROSPECTS FOR THE FUTURE 163 11.1 The inability of peasant agriculture in Java to absorb the population increase 163 11.2 Expansion ofnon-agricultura l employment 168
11.3 Resettlementi nth eOute rProvince s 168
12 CONCLUSIONS 173
SAMENVATTING 175
SELECTEDBIBLIOGRAPH Y 179
LIST OFTABLE S 181
AUTHORS'INDEX 185 1 Introduction
Due to the usually fertile soil (especially in Java), the prevailing warm and moist climate well-suited to agriculture, and theindustriousnes s of the farmers,jus t before World War II Indonesia was practically self-supporting in primary articles of food, especiallyrice ,Indonesia' s staple.Sinc e 1957, riceimport s haverise n to an average of about 1,000,000tons ,o r 8procen t ofth econsumption , and itha s costth e government about 100 million US dollars a year: a substantial drain on its foreign exchange holdings.1 Another fact istha t Indonesia stilldepend s on agriculturefo r over6 0percen t ofhe r foreign exchangeearnings .Afte r thewa r output of agricultural export crops,wit h the exception of rubber, decreased. But, unfortunately, in the last few years rubber production, Indonesia'smai n exportcommodity , normallyaccountin gfo r athir d to a half of its export earnings, also shows a decline. The rapidly growing population of Java, and the impossibility to expand the agri cultural area, have resulted in a further decline of the average farm size since World War II. As non-agricultural activities have shown themselves unable to absorb the increase of Java's population, the pressure on agricultural land in this island has be come more and more severe. Against this background, the need for replacement of food imports, for greater export of agricultural products and for a relief in the population pressure on land in Java, this study of prospects for increasing agricultural production has been under taken.
Thepresen tstud ywil lfocu sit sattentio n onspecifi cmeasure staken , ort ob etaken ,b y thegovernmen t to solveth eproblem s outlined above.I t alsoattempt s to analysewh y thegovernment' s efforts have, or havenot ,bee nu p to expectations,t o arrive at some basic conclusions. Next, the question of how effectively the government had used its agricultural resourcesi s dealtwith .Finall yth e author willtr y to indicate theperspec tivesfo r agricultural development inIndonesia . As twothird so fit spopulatio n is con centrated in Java and the data for this island are more complete than those for the other islands, this study is primarily concerned with Java.
1 Import of rice seems tohav e declined during 1965 and 1966.Ric e output has been about 10millio n tons in both years and it is possible that the time will come soon when the goal of selfsufficiency in rice production will be reached. Rice import for 1965 was 796,000 tons and for 1966 (up to 30Sep tember) 223,000 tons. See D. H. PENNY and D. THALIB, Survey of recent development, Bull. Indon. Econ.Stud. 6,Febr . 1967,pp .25-26 .
1 Agriculture in Indonesia has two aspects: the usually small-scale peasant agriculture and theestat e agriculture. Peasant farming varies between the extensive type of shifting cultivation and the most intensive culture as exemplified by double cropping in Java and Bali. The con cept of a small holdingi sa relative one,especiall y before the enactment of the Basic Agrarian Lawo f I9602:th esmallholde r in oneare a ofIndonesi a may beconsidere d a fairly large farmer in another area, depending on the local agricultural pattern, the crop or crops involved, the amount of available arable land and the type of land tenure.Generall yhire dlabou r islittl euse d and notmuc hcapita l is involved. Thepeasan tprimaril y producesbasi cfoo d commodities for himself and his family. Besides that, he produces cash crops for local and export markets, depending on regional circumstances. For local marketing only surpluses are sold, which generally are small. Also the total amount of cash crop product per farmer is usually small. Nevertheless,th enumbe r offarmer s iss ogrea t that their combined surpluses may be substantial. Several crops raised by the farmers, both for consumption and for export are further processed by the farmer himself or in factories which purchase the crop. If suchprocessin grequire slittle ,i fany ,capita l ortechnica l knowledge (ascopra) ,thi si s doneb yth epeasant sthemselves .I fprocessin gneed smor ecapita l andwide r technical knowledge, the crude product is sold to processing enterprises, sometimes through a dealer. Examples are the remilling enterprises for the peasant's rubber and the pro cessing of cassava-flour. Thelarge-scal eproductio n ofworl d commodities on so-called estates is a commer cial enterprise. Land, usually comprising a fairly large area, is obtained by renting uncultivated 'waste land' on a regular long-term basis or by purchasing it (in the old days)fro mth egovernmen t(so-calle d'particulier elanderijen') .Her elabou ri snormall y paidi nmone yan dsubstantia lcapita li semployed . Estate agriculture, as arule ,i sno t limited to thecultivatio n of crops: in most cases,th e crude product is processed ina factory connectedwit hth eestate .O nth ewhole ,moder n and scientifically established methodso fcultivatio nan dprocessin gar eused .Th eestate sproduc ecas hcrop sfo r the internationalmarkets . Another form of estate agriculture occurs in the production of sugar. Here the enterprise owns only the factory (mill) and rents its land from the farmers. Thus it wouldb e better if the wordfactor y be used here instead of estates. The same applies to a number of enterprises which process tobacco and other annual crops (such as cassava).Th efigures o fproductio n area and other economic data of the crops grown forthes efactorie s areinclude di nth etable sfo r theestat ecrops .
This study isprimaril y based on data collected from various publications, especially thoseo fth eCentra l Bureauo fStatistics .Bu tthes estatistic sar eno t allequall yreliabl e orcomplete .Fo r example,n o sufficiently detailed studies on thenationa l incomean d
8 Thesiz eo fagricultura l landholdingsi srestricte db ythi slaw .
2 its composition were available. Data from the population census,conducte d in Octo ber 1961 are still being processed and only some of its results could be included.
Results of the agricultural census,execute d in October 1963,wer e even more difficult to obtain. There are good data on production in particular sectors, on some elements of the balance ofpayment s and on retail pricesi n Djakarta, compiled by the Central Bureau of Statistics. Some of the gaps could befilled b y the author's own reports on theaspect so fagricultura l development planningwhic hh edre wu p sinceh ejoine d the Indonesian State Planning Bureau in 19523.
Although technical,political , socialan d otherproblem swil lb etouched , thenatur e of this study is primarily economic. The problems of agricultural development are its central objective, and therefore agricultural considerations play a decisive role. Of course the author feels the limitations of such a presentation, but readers who are interested in Indonesian agricultural development in a broadercontex t should consult other studies.Th emos t important are included in the bibliography.
As to the set-up of this publication the following scheme has been followed. Chapter 2 gives in brief the theoretical background of why agriculture should be developed and how this applies to the Indonesian situation. The next three chapters contain a brief description to the historical development of agriculture in Indonesia since 1815 uptil lnow :Chapte r 3 indicatesth edevelopmen t ofth ewhol eo f Indonesia with special emphasis on the islands outside Java (the so-called Outer Islands), Chapter 4i s focussed on the agricultural development in Java, and Chapter 5 treats the effects of population pressure in Java. Chapters 6t o 9describ e the approaches, the policies and the measures adopted by the government to face the problems after World War II as outlined in the previous chapters.The y briefly discuss the successive agricultural development plans launched after World War II (Chapter 6) and themeasure s to relieve pressure on land in Java by agricultural resettlement (Chapter 7);th e attempts to increaseagricultura l exports and the rehabilitation of the sugar factories as an example are given in Chapter 8, whereas Chapter 9 discusses the measures to improve peasant's agriculture with special attention to rice production. Chapter 10 analyses the significance of the failure of the agrarian policy of the Indonesian governmentt o overallagricultura ldevelopmen ti nJava . Chapter 11identifie s the need to integrate the agricultural development of Java in theeconomi cdevelopmen t ofth ewhol eo fIndonesia . Finally Chapter 12summarize s the main conclusions of the study.
3 Most of theseshor t studies areissue d as Reports of the StatePlannin gBureau , which was abolished in 1959. These reports may be obtained at the Biro FINEK (Economic and Financial Bureau), Sekretariat Negara, Djakarta. BecauseIndonesi aha sexperience d apersisten tinflatio n sinceWorl d War II, exchange ratesfo rhar dcurrenc yhav epresente d aproblem . Sincen o exact data on this subject areavailabl e(th eofficia l ratesd ono trepresen tth eactua lsituatio n onth efre e market), it wasattempte dt omak ea nestimate ,thoug h iti sonl y a roughon efo r the years after 1960. Theresul ti sgive ni nTabl e 1, whichals oinclude sa perio d before World WarII .
Table 1. Exchangerates of the US dollar}
Official Free market Official Free market rate rate rate rate
before 1934 2.50 1955 11.40 30.00 1934/1936 1.50 1956 11.40 32.00 1936/1940 1.80 1957 11.40 40.00 1945/1949 2.65 1958 11.40 60.00 19594 45.00 75.00 1949a 3.80 19.00 1960 45.00 100.00 1950 3.80 19.50 1961 45.00 150.00 1951 3.80 16.25 1962 45.00 250.00 s 1952 11.40 20.00 1963 250.00 500.00 1953 11.40 25.00 1964 250.00 2,500.00 1954 11.40 28.00 1965 10,000.00 20,000.00
'BeforeWorl dWa rI Iexpresse di nDutc hguilders . 'FromSeptembe r20,1949 . "FromFebruar y4,1952 . 'FromAugus t25,1959 . Source:Severa lpublications . 2 Theoretical andfactua l starting points
The reasons for improving agriculture in developing countries have been discussed in detailb yvariou s authors4.Thei r standpoints can bebriefl y described byth e following arguments,draw nu pb y MOSHER5. "Firstly, becausei tproduce sth efood , mucho fth efiber, an dman y of the other indus trial raw materials on which a rising level of living depends." "Secondly,becaus e it is such a large segment of the total production of each people that it needst o bemad ea sefficien t aspossible. " "Thirdly,becaus e in early stages of industrialization a great deal of industrial equip mentneed st ob eimporte d andfo r manycountrie s theexpor t of agricultural products is an important potential earner of foreign exchange." "Fourthly, becauseever ykin d ofdevelopmen t depends upon investment, and most of this investment has to be financed by domestic savings. Since for many countries agriculture is the largest industry, it must be sufficiently productive to allow for the accumulation of capital out of agricultural earnings. This capital is needed both in making agriculture stillmor e productive and infinancing investmen t in other typeso f industry that thecountr y needs." "Fifthly, because if non-agricultural industry is to develop in a country it has to be ablet osel lit sproduct .I t hast ob eabl et osel lmos t ofit sproduct swithi n the country. Most of the potential domestic purchases of industrial products get their livelihood from agriculture. If the net income of farmers are not high enough to allow them the purchase of industrial products in the form of consumer goods, the non-agricultural industries cannot prosper." Thoughth eeconomi cplan sfo r developingcountrie shav einvariabl yrecognize d the strategic role of agriculture, it is industry which has been expected to constitute the most dynamic element in economic growth. However, the experience in many coun tries has shown that they willno t become genuinely industrialized without solving at the sametim eth eagricultura l problems.I n thepresen t socialan d economic settingo f theworld ,economi cdevelopmen t requirescomplementar y growthi nal lmajo r sectors of society and economy, whichi sno t possible if industrialization means an increased
4 J. H. L. JOOSTEN, Landbouwontwikkeling en macro-economische orde, Landbouwk. Tijdschr. 76 (1964), pp. 122-124. Seealso : J. W. MELLOR, Theeconomics of agriculturaldevelopment, Ithaca, NY, 1966. A comprehensive literature study on this subject is given by J. GrrriNGER, The literature of agriculturalplanning, Washingto n DC, 1966. 5 A. T. MOSHER, Agricultural development, The Agricultural Development Council, New York 1963 (mimeographed), pp. 3-4. burdenfo r thefarmers . Buti ti sbecomin g more and more clear that there will not be a rapid economic development if there is not an expanded market for the increased produce, which only a developing non-agricultural sector can sustain. This means that, if an industrial sector is to emerge and further sustain itself, the agricultural sectormus tals oincreas eit stota l output,righ tfro m the beginning. But experience in some developing countries has shown that domestic food pro duction failed to keep pace with the growth in population, or that supplies of raw materialsfo r thenewl y established industries did not come forth in sufficient quanti ties. In some countries agricultural exports have even fallen short of the moderate growth in world demand. Foreign exchange expenditures on imported food and materials haveincrease d and in somecase s export earnings have declined. Industrial growth has consequently been impeded, either by the recurrent need to restrain domestic expenditures in order to dampen inflationary pressure on urban food supplies,o rb yshortage s ofimporte d capital equipment and industrial materials. Iti s a reflection ofthes eexperience s that current plans have generally givenspecia l atten tion to agricultural development, and, in particular, to food production and the for eignexchang e implications of agricultural growth. Itshould ,however ,b ekep ti nmind ,tha ti nsevera lcountrie sth edevelopmen t ofth e economy has been retarded not only by economic disparities but also by poor ad ministration, political unrest and political ideologies.
Table 2. Estimatedincome of Indonesians, bysource (1939).
Dfl. x 1,000,000 %o f total %from Amount rural from ru- Java + Outer Indo- Java + Outer Indo- sector ralsector Madura Provin- nesia Madura Provin- nesia ces ces Foodcrops 518 258 776 39.7 36.0 38.4 100 776 Export crops 31 127 158 2.4 17.7 7.8 100 158 Livestock incl.poultr y 71 32 103 5.4 4.4 5.1 100 103 Fisheries 10 7 17 0.8 1.0 0.8 100 17 Forestry 5 8 13 0.4 1.1 0.6 100 13 Plantations + mines, 78 73 151 6.0 10.2 7.5 151 wages 100 Ditto,ren t 22 22 1.7 1.1 100 22 Manufacturing 225 75 300 17.2 10.5 14.9 90 270 Government 98 54 152 7.5 7.5 7.5 66 101 Trade 105 30 135 8.0 4.2 6.7 80 108 Communications 21 8 29 1.6 1.1 1.4 Services 35 11 46 2.7 1.5 2.3 50 23 Houseren t 70 30 100 5.4 4.2 4.9 80 80 Professions 16 4 20 1.2 0.6 1.0
sia,^ollmidan^euanSnmf^^ taxb urden andeconomi cdevelopmen ti nIndone - tax. g "•ly34'pp- 567>- Included areonl yth eIndonesian spayin gn oincom e We know that there are severe limitations on the capacity of developing countries to do everything at once in view of the complementary nature of agricultural and industrial growth. But it is precisely this consideration whichunderscore s the impor tance of developing agriculture in such a way as to both minimize its demand upon resources most needed for industrial development and maximize its net contribution to the capital required for general economic growth. But it would be erroneous to suppose, that most developing countries did not recognizeth eimportanc e ofusin gthei ragricultura l resourcesa seffectivel y aspossible . There is no question about the political, sociological and economic importance of a large and serious program for increasing domestic agricultural production. The trouble, however, is that in meeting the objectives for which they are working, the governments forget the crucial position of the farmer himself in achieving agri culturaldevelopment .I nth een di ti sth efarme r whoha st orealiz eth ewante dincrease d production on his farm. The central problem which determines the decisions of the government is not that the developing countries should increase domestic food production and agricultural exports, but how to accomplish an identity of purpose and common responsibility betweenth egovernmen t and thefarmer s inthi s respect. Primarily due to the non-existence of a clear-cut doctrinal concept of the govern ments' agrarian policy in many of the developing countries as regards the policital attitude towards the farmers, their efforts to achieve rapid agricultural development have been greatly wasted. This study on agricultural development in Indonesia will attempt to clarify this point.
Indonesia is one of the countries in which agriculture plays an important role in the economy (seeTable s2 an d3) .Thi simportanc e canb eshow nb ysevera lfigures suc ha s itsshar ei nnationa l income,employmen t pattern and exports,whic har eillustrate d in the following pages.
In making a detailed analysis ofth e Indonesian economy as earlier explained, we are hampered by unreliable estimates of the national income and its composition. But wear ejustifie d in using them, sincew ear e more interested in their trends than in the absolute figures. Accordingt o PAAUW6, POLAKi sconsidere dt ob eth efirst wh oattempte d to calculate the Indonesian national incomefigures fo r the period before the second world war. His efforts have been succeeded by NEUMARK and others after World War II. PAAUW himself made a comparative study of POLAK'S and NEUMARK'S national incomefigures an d came to the following conclusions: "There had been a significant shift resulting in part from the structural change in the economy induced by the declining role ofprivat eforeig n enterprises aswel la sb y differential rates of economic
' D. S. PAAUW, The tax burden and economic development in Indonesia, Ekonomidan Keuangan 7, 1954,pp . 566-569. Table 3. Nationalincome by source, Indonesia, 1952.
National income % from rural Amount from in 1000 US $ sector rural sector
Agriculture peasant food crops 30,054 100 30,054 peasantexpor tcrop s 7,650 100 7,650 estatecrop s 2,823 75 2,117 livestock 3,132 100 3,132 fisheries 2,688 100 2,688 forestry 1,246 100 1,246 totalagricultur e 47,592 46,886 exportdutie san dstatistica lta x 1,507 37 558 netagricultur e 46,085 46,328 Mining 1,846 33 609 Industry 6,700 50 3,350 Transport and communications 2,492 - - Trade,bankin gan dinsuranc e 10,943 varies 6,586 Hotels,restaurant san dcaterin g 224 - - Entertainment industries 168 - - Privatebuildin gan d construction 945 33 315 Rent 5,300 80 4,240 Freeprofession s 500 - - Domesticservic e 550 50 275 Centralgovernment ,includin g defence 4,055 67 2,703 Localgovernmen t 1,250 67 833 Government,incom efro m property,excl . estates 581 - - Netdomesti cproduc ta tfacto rcos t 81,639 - 65,240 Source:Ekonomi dan Keuangan 7,1954,p . 568.
Table 4. Valueof agricultural exports of Indonesia, 1894-1940.
Totalexport s in Percentage of total from Percentage of total from million guilders Java and Outer Pro estates peasants Madura vinces 1894 154 82 18 89 11 1913 419 65 35 76 24 1928 1,237 58 42 65 35 1933 306 50 50 59 41 1937 660 35 65 54 46 1938 426 43 57 60 40 1939 495 46 54 63 37 1940 593 40 60 63 37 Source:A .Vm. Colonial agriculturalproduction. London , 1946,p . 24. TableS. Estimates of nationalIncome of Indonesia,1958-1962, by source, at 1960prices (in 1000 mil lionrupiah).
1958 1959 1960 1961 1962
Agriculture: farm foodcrops 124.3 127.9 132.0 129.6 140.1 farm non foodcrops 26.6 29.5 26.9 26.6 30.0 estatecrop s 12.9 12.6 11.7 11.7 10.5 animal husbandry 17.3 17.4 18.1 18.7 18.0 forestry + hunting 8.1 8.4 9.0 9.4 8.8 fishing 5.7 6.4 6.4 7.5 7.6 totalagricultur eetc . 194.9 202.2 204.1 203.5 215.0 Mining + quarrying 9.7 10.8 12.0 12.2 12.9 Manufacturing: largeestablishmen t + medium establishment 21.5 20.5 19.4 21.5 21.5 small establishment 29.8 28.3 28.7 31.3 30.0 Construction 6.8 7.1 7.1 7.2 7.5 Electricity + gas 0.8 0.9 0.9 1.0 1.0 Transport + communications: railroad transport 0.7 0.8 0.9 0.9 1.0 air transport 0.2 0.3 0.3 0.3 0.3 communication 0.3 0.4 0.4 0.4 0.4 other transport 10.3 10.9 11.6 11.9 12.2 Wholesale + retail trade 57.8 56.4 59.2 68.2 62.7 Banking + otherfinancial intermediaries : banking 2.4 2.5 2.6 3.4 2.8 cooperative credit 0.1 0.1 0.1 0.1 0.1 societies others 0.3 0.3 0.6 0.6 0.4 Ownership of dwellings 7.2 7.3 7.4 7.6 7.9 Publicadministratio n + defence 25.6 20.7 16.1 17.8 8.9 Services: personal services 13.7 14.1 14.3 14.5 15.1 community services 7.1 7.4 7.4 7.6 7.8 recreational services 0.4 0.4 0.4 0.4 0.4 Net domesticproduc t 389.6 391.4 393.7 410.4 407.9 Netinvestmen t incomefro m abroad 3.1 3.5 3.0 3.9 4.5 Net national product 386.5 387.9 390.7 406.5 403.4
Source:Centra lBurea uo fStatistics ,preliminar ydata . progressi nth erura l andnon-rura l sectors.I n 1952, 81 % of the total national income as computed by NEUMARK originated in the rural sector, while in 1939 the amount from this sector was 68 %". But the terms rural and non-rural are not identical to the terms agriculture and non-agriculture.Therefor e anattemp t has been made to calculate the contribution of agriculture. A breakdown by industrial origin was computed by POLAK only for the ethnic groupo fIndonesians ,sinc eincom earisin g from the other groups isbase d onincom e taxdata . He alsoestimate dtha t the totalvalu eo fagriculture ,excludin gth eestates ,amounte d toD F 1,067 millionsi n 1939. Assumingtha t thetota l value of the exports isequa l to that of the production of the estates and that there were no substantial changes in stocks of those products (which for 1939,th e beginning of the World War II, was a reasonable assumption) we arrive at a total value of agricultural production in that yearo fD F 1,377 millions,o r 46.9 % ofth enationa l income, as calculated from Table 4. NEUMARK'S calculations in 1952 resulted in agriculture contributed to 50.7% of the nationalincome . POLAK'San dNEUMARK' Sfigure sindicat etha tth eshar e ofagricul ture increased from 46.9%i n 1939t o 50.7%i n 1952.Thi s trend continued, as indi cated byfurthe r nationalincom e studiesmad e by the State Planning Bureau and the Central Bureau ofStatistic sfo r theyear s 1953 to 1962(se eTable s 5an d 6):i n 1962i t was 53.5% (onbasi so f 1960 prices),an d 58.4%(o n current prices).
Theplac e ofagricultur e inth e economy isals o shown by the number of professional workers in thisfield. Th e only reliable data available on the size of population, the
Table6. Percentagedistribution of national product by source 1958-1962,at 1960prices.
1958 1959 1960 1961 1962
^ricuIture 50.4 52.1 52.3 50.1 53.3 Mining + quarrying 2.5 2 8 3 1 30 3.2 Manufacturing 13 3 12g ^ 13Q 128 £°nSt-UCt,0n 1.8 1.8 1.8 1.8 1.9 E.ectnaty + gas 02 Q2 02 Q1 transport* communication -in ,, ,, , , 74 Wholesale + retailtrade £% ** *£ ^ 155 Banking + otherfinancial intermediarie s 0 7 OR O'R in 08 Ownershipofdwellings JJ J " J "
Publicadministratio n + defence 66 53 . 22 Services ,, *-1 *• 5-5 5.7 5.7 5.5 5.8 Net domestic product 1mo ,„ ,„, , Netinvestmentincome ^ ^ 100-8 101-° 10 " Netnationalproduct .^! ~°-9 "°-8 -1"0 "H _^^ 100.0 100.0 100.0 100.0 100.0
Source: CBS. seefootnot eTabl e5 .
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I-; ON r- W) ON © r~ •*r - •* M C- r-'© ' •ri C-" ©'C O od >/i ON vi NO M" u-ir t NO' NO m m CO CO co © m CO M M ON CO r- © M M' © ON M CN M CN r-' M M ON ©' M ON M CN © M° CN K"l NO t- CO M M © M M © M M NO M M t- M M O H m ©' ©' © o' © M © ©' © ©' ©' ©' ©'©'©' CN ©' ©' ON M co M_ •* •* CN r- M co ON co © CO © CO ©_ "0 1/1 M M CN CN NO- M" M M Tt ©' M' NO M' CN U") M' M' CO ON M r~ ON M co ON •* CN ON CN t-; © ON CO Tf ON CO CN r) »i t' in •O t-' M' NO co•* ' CO Tl-' NO o'M ' CN co • NO ON CN CN wo cN co CN CM M M M © CN M CN co r~ © ©' ©' © ©' © © ©©'©'©' ©•©©' © © © CN © M © J o r-. ©_ ON NO © ON M © NO 00 •* CN NO_ » Tt ON m co co •* co •* CO ON NO ON ON r-' M co r- t-~ NO t- NO NO CO a D to •O 8 o C3 CO MC £3 > C rt S3 ^ * c — 1J-M3 3 O .2 t5 P O P t5 ? ° E 22 § & " o 3 C -^ o o a u 3 a H C/i B 3 13 Table10. Exportby economic groups 1, Indonesia, 1938-1940and 1958-1962 (millionrupiahs). Total agricultural Mineral products Other products Total products 1938 473.0 206.3 7.8 687.1 1939 538.8 226.3 8.6 773.7 1940 656.7 274.0 8.2 938.9 1958 4,937.7 4,058.9 22.0 9,013.6 1959 6,841.0 3,716.1 55.7 10,612.8 1960 25,171.2 12,511.5 152.5 37,835.2 1961 21,792.9 13,584.8 89.8 35,467,5 1962 19,204.5 11,433.0 67.9 30,675.4 *Excludin ggol dan dsilver . Source:Statistical pocketbook of Indonesia 1963, p . 133. Table11. Agriculturalexport as a percentage of total exports for Indonesia, 1938-1940and 1958-1962. 1938 1939 1940 1958 1959 1960 1961 1962 68.9 69.6 70.0 54.8 64.5 66.5 61.5 62.6 Source:Statistical pocketbook of Indonesia 1963,v. 133. rateo fgrowth ,it scompositio nb yag ean dit sothe rcharacteristic sar efro m thePopu lation Censuseso f 1930an d1961 . The 1930Censu sfigures indicat e that 68.9% of the population found their living in theproductio n ofra wmaterial s originatingfro m agriculturean d mininga s can be seeni n Table 7. Assumingtha t the workers in mining constitute about 0.3% o f the labour force, then in 1930 we could derive from the two figures above that about 68.6% o f Indonesia's population made their livingi n agriculture. Thisfigure i s sup ported by GEERTZ7. The 1961censu sfigures indicate d that 71.9%o f the Indonesian population isengage di n agriculture asillustrate d by Tables 8an d9 . The general conclusion is, that there are more people engaged in agriculture now than before WorldWa r U. Inth eexpor tbusiness ,agricultura lproduct sstil lpla ya ver yimportan tpar ti nearnin g foreign exchange,a sca n be seenfro m thefigures i n Tables 10an d 11. They indicate thatbefor eth ewa rabou t6 9% ofth eexport swer econtribute db yagricultur ean d that this percentage has declined to 62-64% after the war8. Moreover, there have been changes within the composition of the agricultural sector not shown in this table. Amor edetaile danalysi swil lb egive nlate ri nthi sstudy . ' C. GEERTZ, Agriculturalinvolution. Theprocess of ecological change inIndonesia, Berkeley and Los Angeles, 1963,p . 131. 8 It isdifficul t to bemor e specific about thepostwa r period because of large annual fluctuations. 14 Summarizing it can be stated that the backbone of Indonesian economy was and still is agriculture, and that its importance has rather increased than decreased after the war. And as regards to export earnings, although they have slightly decreased in importance, they still are considerable. Therefore it is obvious, that a substantial part of the resources for economic development in Indonesia have to be derived from agriculture, and that economic development can be accelerated by using the agricultural resources as fully and as effectively as possible. To see how this has been accomplished will be discussed in the following chapters. 15 3 Short historical survey of the agricultural development in Indonesia Agriculture in Indonesia istraditionall y discussed in terms of a division between 'estate agriculture' and 'peasant agriculture'. This traditional division is followed in our survey of agricultural development, which is divided into twoperiods , namely before andafte r WorldWa rII . 3.1 Theperio d before World WarI I 3.1.1 Estate agriculture Themos t interestingissu ei nIndonesia n agricultural developmenti sth e contribution byestates . Duringth eBritis hinteri madministratio n of the NetherlandsEas tIndie sfro m 1811 to 1816, aplantatio n systemwa s introduced by RAFFLES.Amon gothe rthing sh egav e extensive land concessions to private enterprises to develop estates employing indigeneouslabour. 9 After the return of the East Indies to the Netherlands Government there wasa transitional period in governmental policy, which was characterized byth e struggle between continuing RAFFLES' policy, in which participation of private enterprises was to be encouraged, or to that of the Netherlands East Indies Company, which desired there-introductio n ofcompulsar y labour and forced deliveryi nth escop eo f a statemonopoly. 10I n 1830th eNetherlands ' governmenfinallyt decide di nfavou ro f what ultimately becameth e'Cultuurstelsel ' advocated byVA N DEN BOSCH. The basis of this systemwa s that theJavanes e should cultivate onefifth o fth e village's arable land with export crops designated by the government, or work 66 days a year in 9 H.J . BOEKE, Objective andpersona l elements incolonia l welfare policy, in:W .F . WERTHEIM, Ed., Indonesian economics. Theconcept of dualism intheory and policy, The Hague, 1961,pp .281-28 2an d 288. Also cited byA . PIM, Colonialagricultural production. The contribution madeby native peasants and byforeign enterprise, Oxford, 1946, p. 15.Se e also: G. GONGGRUP, Schets ener economische geschiedenis vanNederlandsch-Indie, 1949, pp.71-7 8 andC . ROBEQUAIN, Malaya, Indonesia,Borneo and thePhilippines: A geographic, economicaland political description of Malaya, theEast Indiesand thePhilippines, London, 1954, p.314 . 10 BOEKE, op. cit. (fn. 9),pp . 281-288; PIM, op. cit. (fn. 9), pp. 15-18; GONGGRUP, op. cit. (fn. 9), pp. 79-139; ROBEQUAIN, op. cit. (fn. 9), pp.314-319 . 11 BOEKE, op. cit. (fn. 9), pp. 294-299; PIM, op. cit.(fn. 9), pp. 18-20; GONGGRUP, op. cit. (fn. 9), pp. 139-170;ROBEQUAIN , op. cit. (fn. 9), pp.319-327 . 17 government owned estates orenterprises . Inretur n they would geta small payment and refund of land taxes. This forced delivery of crops resulted in restrictions on privateenterprises. 11I n187 0th e Dutchabandone dthi sstat emonopol yove rIndonesia' s agrarian resources and opened upth epossibilit yfo rprivat e entrepreneurs to acquire land for growing commercial crops on a large scale. This land could be obtained either by renting cultivated lands from the local population or,o na longterm lease, uncultivated 'wasteland 'fro m thegovernment. 12 Thela wprohibite d thesal eo fpeasants ' land (except ofsmal l urban lots)t oother s than native Indonesians. Simultaneously abil l was introduced byMiniste r DE WAAL for the gradualabolitio no fth e'Cultuurstelsel' . The opening up of Indonesia to individual commercial enterprises attracted a great number of'planters'. 13 The development ofthei r estates andthei r distribution by size under thevariou s landrights from 1875-1937 is illustrated by Table12 . Their total areaincrease dfro m 304,000h ai n187 5t o2,435,00 0h ai n 1937.14A t first, theestate swer econcentrate di nJava .B yth ediscover y ofDel i(East-coas t of Sumatra) as tobacco land this type of agriculture spread to Sumatra and then to the other islands. Sinceth ebeginnin g ofth e twentieth century, theare a occupied byestate si n the Outer Islands even outstripped that ofJava. 15 Most ofthe m were establishedo n long-term contracts. Their total area reached its maximum in 1927;a t that time approximately 3.4 million hawer e under estates; ofwhic h about onemillio n ha in Java and 2.4millio ni nth e 'Outer Islands'.16 The distribution ofthes e estates and their planted areas aregive n in Table 13. It showstha t the estateswer econcentrate d inJav a and Sumatra. Their average size in Sumatra was nearly 2.2time s that in Java, butth e average percentage area under cultivation was lower.Thi sca nb eexplaine db yth enee dfo r morelan dfo rth ecultiva tion ofth eDel i tobacco, which can only be grown onth e east coast of Sumatra.T o getth especifi cqualit yo fthi sfamou s tabaccoa lan d rotation ofeigh t yearsi sneeded . Allestate sworke d withhire dlabour . Inth e over-populated Java this presented no problem.Bu tth eincreas e ofavailabl elabou r inth erura l sector and inth e cities kept wagesan d working conditions low. This induced the migration ofJavanes e landless farmers andfar m labourers to the Outer Provinces, especially to the eastcoast of Sumatra, wherethe ycoul d gethighe r wages.Becaus e this area is sparsely populated, many ofth e estates depended almost entirely onsuc h imported labour, either from Java or, aswa sfrequentl y the casebefor e thewar , from south China. Therefore,th e estates in Sumatra concentrated on special crops which require a low labour-land product» CUltiVatCd " Smalkr fange °f commodities> mostly specializing in one 12 See footnote 11. "See footnote 11. »A^JONKERS) ^haartszorginlruione^een^chiedenisenperspectieL^m^ 1948, p. 68. 18 Theamoun t ofcapita l invested inth e estatesi s difficult to estimate, but it is thought to have been considerable. Around the year 1900, total private investments in the Netherlands East Indies were calculated at 750 million guilders, in 1915 at 1,500 million,18i n 1929-1930a t4,00 0millio nfo r the totalcapita linveste di nbi genterprises 19 and in 1939 they amounted to 4,800 million guilders.20 How much this went to the estates is not known, but the preponderance of agricultural undertaking has been obvious.21Roughl y calculated, moretha n 75 % of all privateinvestment si n 1939 were of Dutch origin.22 Tobacco, sugar, rubber, coffee, tea, palmoil and cinchona wereth eprincipa l estate crops. Their success can be gauged by the exports asindicate d by Table 4unde r 2. Up to 1930 the export of agricultural products expanded considerably. Then followed a severe decline, due to the world-wide economic depression. Thereafter, exports partially recovered, a recovery interrupted by the outbreak of World War II. Someo fth eexpansio n could beaccounte d for byth eincreas ei n thenumbe r of small holders producing export crops, but by far the major portion was the result of estate activity. In 1939,th e estates still produced 63%o f the total agricultural exports. But their sharewa sdeclining ,a swa sals o showni nTabl e4 . The success of the estates was mainly due to the progress of scientific methods applied in agriculture. The Dutch scientists in thisfield ha d become famous for the improvementsthe ymad ei ntropica lagriculture .Th eprivat eexperimen tstation so fth e estate corporations in Bogor (primarily for rubber, tea,an dcinchona) ,Pasurua n (for sugarcane), Djember (for coffee), Klaten (for tobacco), Medan (for tobacco, rubber, and palmoil) enjoyed special fame throughout the world. Amongst their successes most spectacular were the revolutionary increases in yield of sugarcane23 and the improvement in rubber production per acre.24 3.1.2 Peasant agriculture It is not possible to give an accuratepicture of the development of peasants'agricul ture for the whole of Indonesia as prewar data for food production are available for Java and Madura and not for most of the 'Outer Provinces'. However, Table 14 indicates a very rapid expansion of peasants' export crop production: its share in 18 ROBEQUAIN,op. cit. (fit. 9),p . 323.H emention s 750,000 florins, which the author thinks must be a printing error. 19 Big enterprises employ 50 or more workers. See: J. M. VAN DER KROEF, Economic origins of Indonesiannationalism, in :P .TALBOT ,South Asia in theworld today, Chicago , 1950, p.177 . 20 ROBEQUAIN,op. cit. (fn. 9),p . 323. ByGONGGRIJP , op. cit.(fn. 9),p .205 , estimated at400 0million . 21 ROBEQUAIN, op. cit. (fn. 9), p. 323. 22 VAN DERKROEF , op. cit. (fn. 19), p. 177. See also GONGGRDP, op. cit. (fn. 9), p. 205. 23 Themos tfamou s sugarstrai nwa sPO J2878 . 24 Rubber production per acre increased from 450 lb. to 4400 lb. Although the 4400 lb. per acre is only reached at theexperimenta lfields th e achievement isstriking . See ROBEQUATN,op. cit. (fn. 9),p . 344. 19 totalexpor to fagricultura lproduct sincrease dfro m 10.9%in 1894t o 37.4%in 1939.25 In the sparselypopulate d regions outside Java, the peasant can use large areas for newcrop s without encroaching on the spaceneede d for his own subsistence. He has onlyt omak eus eo fth e'ladangs '(shiftin g cultivationplots )t orais efoo d cropsa swel l ascas hcrops .Th ebes t examplei srubber . If rubber prices are high, the peasant may neglect hisfoo d crops and concentrate on the rubber; when the price of this product declines, he may fall back on his food crops and abandon his commercial crops. Thus he is secured from the type of economic crisis that develops on estates.26 The flexibility of peasants' rubber production, its low costs and the expanding world demand, have resulted in a rapid increase in output. The area under smallholders' rubberha sbee nestimate da t 1,200,000ha. 27Mor edetail swil lb ecovere di n 3.2.2. Iti sdifficul t toestimat eth eare a cultivated by other export products as ladangs are scatteredabout .I ti sals ono tknow nho wmuc ho fthi slan d wasdevote dt ofoo d crops asthi s proportionfluctuated fro m year to year. Therehav eals obee nsom eeffort s byth egovernmen tt o increase food production in the Outer Provinces.I n 1910i t started the construction of irrigation works. Between 1910 and 1938a total of 17millio n guilders was spent in these efforts. In the years before the war expenditures were greatly increased, especially for the migration of Javanesefarmer st oothe rislands .Importan tproject swer estarte di nth eresidencie so f Palembangan d Lampung of southern Sumatra aswel l as in Celebes. The inadequacy of statistical information of peasants' agriculture of the Outer Provinces before World War II necessitated concentrating primarily on the develop mentsi n Java,whic hwil lb etreate d in Chapter 4. 3.2 Theperio d after World War II 3.2.1 Estate agriculture The postwar period, up till 1965,wa s characterized by a declining output of estate crops2*,a sca n besee ni n Table 15.Thi sdro pi sdu et oth edecreasin g'mature 'are ao f tixe planted acreage (seeTabl e 16).Anothe r important factor is the falling yield per hectare For example sugar output per hectare dropped from 162quinta l in 1938t o 1, Tww w ^ P°Stwar Paction of rubber was not substantially lower &an tot before World War II, becauseimmediatel y after the war, the areas planted with highly valuable newvarietie s had matured29 For 1966 the goverment's targets for the main estate crops' production are set 26 PM, op.cit. (fit. 9) ,p . 35 recovery trom the depression of theearl y thirties. S e ment ers ective u n ^ " -f P ^"dproPosalsfor USeconomic aid, p 68 20 higher than that of the previous years (Table 15). But it is not known whether those targetswer ereall yreached . Thenumbe r of all estates and ofth etota l acreage ofplante d areas also diminished, as is shown in Tables 17-19. In 1961 there were 1,125 estates with a total planted area of 852,000 ha, as against 2,395estate s with 1,171,000h a in 1938. The quantity of estate products strongly declined between 1940 and 1962(se e Table 20); its value declined from 43% o fth etota l export in 1940t o 25% in 1962(se eTabl e21). 30 Table12. Area occupied by estates under various landrights in Java and the Outer Provinces, 1875-1937, in1000 ha. 1875 1890 1905 1920 1927 1935 1937 Java:1 long-term leasefro m princes 230.0 249.4 234.1 224.5 75.0 51.6 60.4 inthe Vorstenlanden' ' short leasefro m local farmers 10.0 75.2 120.0 208.8 226.8 52.0 93.9 long-term leasefro m State domain 23.6 264.0 544.0 660.5 662.6 609.4 595.8 government estates 0.6 1.0 1.8 14.9 15.8 18.0 20.5 total 264.2 589.6 899.9 1108.7 980.2 731.0 770.6 Outer Provinces: agricultural concessions 39.7 343.0 546.8 1146.5 1344.0 1124.6 1063.6 long-term leasefro m State domain 0.5 52.3 223.9 877.1 1106.7 720.7 600.8 total 40.2 395.3 770.7 2023.6 2450.7 1845.3 1664.4 Total 304.4 984.9 1670.6 3132.3 3430.9 2576.3 2435.0 1 Excludingth eso-calle d'particulier elanderijen ' (largeprivat eestates) . Source:se efootnot e 14. Table13. Numberof estates and planted areas in Indonesia (1938). Number of Total area Averagesiz e Total area Averagesiz e Averageper estates in ha in ha planted in ha of planted centage area per planted of estatei n ha total area Java 1,187 1.079.2021 909 597,865 504 55.4 Sumatra 607 1,249,850 2,509 515,887 850 41.3 Borneo 200 61.794 309 17,813 89 28.8 Celebes 220 42,991 195 21,796 99 50.7 Moluccas 149 36,742 245 14,441 97 39.5 LesserSundalsls . 39 14,795 379 3,119 80 21.1 Indonesia 2,402 2,485,104 1,035 1,170,891 487 47.1 * Includingth eso-calle d'particulier elanderijen *(larg eprivat eestates) . Source: C.J . J. VAN HAL and C. VAND E KOPPEL. Delandbouw inden Indischen Archipel, Vol.1 (1946)392 . 1Se eBull. Indon. Econ. Studies 5,1966 and 6,1967. 21 Table 14. Percentageof estates' and smallholders'' production inthe total agricultural export of Indone sia, 1894-1939. Java and Madura Outer Provinces Indonesia estate small estate small estate small holders holders holders 1894 94.3 5.7 67.7 32.3 89.1 10.9 1902 90.4 9.6 48.7 51.3 79.7 20.3 1906 90.2 9.8 43.5 56.5 79.7 20.3 1910 84.2 15.8 30.0 70.0 72.7 27.3 1917 91.6 8.4 62.4 37.6 83.1 16.9 1921 88.8 11.2 56.4 43.6 79.4 20.6 1925 86.1 13.9 40.6 59.4 63.3 36.7 1927 88.2 11.8 46.8 53.2 68.7 31.3 1929 82.3 17.7 41.0 59.0 63.5 36.5 1932 77.1 22.9 48.0 52.0 64.2 35.8 1934 79.9 20.1 51.2 48.8 64.7 35.3 1936 73.2 26.8 56.0 44.0 63.3 36.7 1937 75.4 24.6 42.8 57.2 54.2 45.8 1938 76.9 23.1 48.0 52.0 60.3 39.7 1939 82.4 17.6 45.5 54.5 62.6 37.4 Source:se efootnot e14 . Table 15. Production of mainestate cropsin Indonesia, in 1QQQ metric tons> m8-1940, 1958-1966. 1938 1939 1940 1958 1959 1960 1961 1962 1963 1964 196519661 8 Canesugar 1400 1576 1607 771 855 672 651 585 650 649 790 825 Hevearubbe r 175 19828 3 243 224 219 229 217 216 213 213 211 Coffee 46 58 39 13 19 18 19 12 18 7 14 21 Tea 68 71 69 49 44 46 43 47 39 46 48 48 Oilpalmproduct s 275 297 260 183 171 174 180 174 181 195 189 220 Tobacco 35 35 21 6 7 7 8 8 10 7 Hard fibres 33 36 39 28 23 20 17 9 4 4 5 Cinchonabar k 11 12 16 4 4 4 3 2 2 _ — — Cocoa 2 2 2 1 1 1 1 1 1 - - 1 Targets. • Includingpeasan tcan eprocesse db yth e factories ™moZal mdPlanted °real °feState* <•"Citation, Indonesia, 1938-1940 and 1957-1961 1938193 9 1940 1957195 8 1959 2 Total area 1960 1961 2485.1 2495.8 2491.4 Planted area 1818.9 1803.3 1700.4 1704.3 1723.8 1170.9 1206.1 1197.7 841.8 826.9 828.7 841.8 851.6 Hiredfro m principalities 45.2 48.142. 5 3.7 4.1 4.1 4.0 1 Including'hire dfro mprincipalities' . 1 Forth eyea r 1961 inaccordanc ewit hth e Agrarianla wno . 5,1960. Source:Statisticalpocketbook of Indonesia 1963, pp. 80-81. 22 u O »1 Ov >0 tt H IO CM' NO od r--' r-i fi ri I I O H o B o t^wit^f-("n\0Ov0^H 3 C/3 c o "S <2 s 1 wi * t' » in * i»i pi M' O C3 ~* ^H T-H J3 © © oo f-j >n •<* •* ON s8 Sg, rt vd oo' ri NO oo' od ON O r- t- r- ON 00 00 00 00 ON NO e C3 s 2 S O *HN O tn ON m ON t~ o en N IOU \ NO ONO O o o o O O s s vo g 4» ON S 22 2 g =3 C 0\ U 3 c ,o NO -* t—' ^ ri oo ON © oo o\ O T-H CJ rn s mcoTf»n»nvovovovD 23 Table18. Totaland planted area of estatesin exploitation indifferent regions, 1961( X 1000ha). Total area Planted area Javaan d Madura 626.7 385.5 Sumatra 1030.3 438.8 Borneo 35.6 10.9 Celebes 11.9 8.3 Moluccasan dWes tIria n 8.9 5.7 LesserSund aIsland s 10.9 2.4 Source: Statisticalpocketbook of Indonesia 1963,pp . 80-81 Table 19. Number ofestates in exploitation in Indonesia, bycrops, 1938-1940and 1958-1962. 1938 1939 1940 1958 1959 1960 1961 1962 Sugarcane 97 102 100 54 54 53 54 54 Hevearubbe r 1202 1119 1221 746 742 746 730 732 Coffee 401 377 369 174 175 172 158 153 Tea 337 337 338 168 161 161 142 148 Cinchona 107 110 108 51 51 44 34 32 Coca 38 37 39 49 44 41 30 29 Oilpalm 60 66 64 49 50 49 47 46 Fibrecrop s (44) (36) (33) 8 7 9 7 6 Tobacco 87 88 78 39 40 41 36 Ficusrubbe r 70 68 69 4 4 2 0 Guttaperch a 3 3 3 1 1 1 1 Coconutpalm 665 680 684 111 114 122 112 Kapok 211 206 208 46 48 51 42 Pepper 43 38 39 8 8 9 7 Cocoa 52 50 50 13 13 11 11 Nutmeg 34 32 35 13 12 12 7 - Essentialoil s 103 88 93 4 5 3 2 Cassava (28) (35) (40) 2 2 3 3 Total 2402 2401 2395 1541 1135 1146 1125 XT_i - N°teS: &1£KE£L«» » «"»« ^ °- * the Total; numbers between Source: Statisticalpocketbook of Indonesia 1963, p . 82. Table 20. Export from Indonesiaby main economic grouPs in million kgs, 1938-1940 and 1958-1962. Estate products Farm products Mineral products 1938 2 1571 : : So0 1940 ,W^•O« 1,2871,021.-°0 7-7,690.468-3 8 lilt uli 778-3 15,284.5 1960 5897 I,058>° 12>179-0 953 4 1961 ' 595'4 - 14.291.8 1962 <;-'565.„0 1'153-7 15,964.5 88u 12,526.6 Source: Statisticalpocketbookof Indonesia 1963, p . 133. 24 ^ f~; OS SO 00 fvj 00 \© Oj IH w oo O 2 vo ^t oo' so' T-H ^- fn © as is| Tf r-_ -H K-i « p» t O cd t^ h-' os m cd so S "^ •"* os oo © © © os * ifi vo », f; s * o •*" so" >o" »-T oC (S tS r^ § »H 1-1 © « en "H r-_ q 1 N N r( w> vi t—' 00 00 *-< ** •<* 3 w% in co oo o n t "i ri r~ oo -q- en O f; n N « p oo N N m f; £ P H N N M "i OsoS ts so © oo os © oo q .53 OS •3 a 3 so os' os' ©' cs I rM\Om OS t- 00 00 g od oo oo' OS to so 00 Os an d Liv e aimal s nima l oduct s s <0 « « B, io CO •Si oo ON o 00 0\ O H N m rn TJ- iO <0 VD VO VO Os ON OS ON ON ON ON ON 25 Reconstruction is proceeding slowly and with difficulty. As has been said before, estates' export earnings failed to expand or even to maintain their output after the war.Thi sfailur e canb eattribute dt o anumbe r offactors . From the outbreak of World War II until 1957,th e position of the foreign-owned enterprises was increasingly uncertain and the re-investment program sharply di minished. Another problem was that during the Japanese occupation, from 1942- 1945, large areas of estate lands were given to the peasants. Especially on the east- coast of Sumatra, which was a rice-importing region before the war, the Japanese encouraged the local population to grow food. Another factor was the Indonesian government's reluctancet o removesquatter s from the stateplantations . Furthermore it did not undertake vigourously the rehabilitation program for rubber and other estate crop, after taking over the foreign estates. Difficulties in developing adequate management and administration were another important factor. When most of the Dutchexpert sdeparte di n 1958, lessexperience dIndonesian sha dt ocarr yon , whereas labour troubles and rising costs impaired the reconstruction of the estates. Theexpor tfigures o festat ecrop smigh thav ebee nconsiderabl yhighe ri fth e foreign exchange earnings had included losses due to smuggling and underinvoicing. The falling rupiah earnings in the legitimate export trade and the burden of uncertainty from chronicinflatio n resulted in loss of confidence in the rupiah which, in turn, led to an increase in these disagreeable practices. This situation will continue so long as therei sn obasi cfinancial refor m to check inflation. The crops found primarily in estates of the 1960's (oilpalm products, cinchona, cocoa, hardfibre, te a and sugar) were also primarily estate crops during the 1930's. Withregar dt oth epresen testat ecrops ,th emos timportan t changei nrecen tyear sha s beenth e sharp declinei nexpor t of centrifugal sugar,whic h reflects curtailedplantin g and destruction of factories during the Japanese occupation and thereafter.31 The problem of sugarwil lb edeal t withi n Chapters 4an d 8. 3.2.2 Peasant agriculture On peasants' non-food crops only figures for the period after 1957 are available. Before thewa r the area under peasants' rubber was estimated at 1,200,000ha ; it has increased to 1,300,00 0h a atth epresen ttime . For thecrop s other than rubber, the total harvested area increased from 2,400,000 hai n 1957 to 2,501,000h ai n 1961, anincreas e of 4%. Thegreate rpar t of these farm landsi scultivate dwit hcoconut :i n 1961 about 1,666,000h a (seeTable s2 2an d23) . The development of the production of peasants' non-food crops can be seen in Table24 : rubberan dte aproductio nsho wa continuou sincrease ,whil eth eproductio n of other cropsfluctuates fro m year to year. 5^7 oSX!*' SmaUh0!der * tIOpical export CT°P Production, Food Research Institute 26 The main peasant export crops are rubber and copra, while sugar, tobacco, tea, cassava,peppe r andkapo k arerelativel ymino rexpor tproducts . Sinceth ecrop s other than rubber, copra and pepper areprimaril yJavanes ecrops ,the ywil lb edeal t withi n Chapter 4, in the Javanese situation. The development of rubber, copra and pepper area s follows. Rubber. After 1950, peasants' production has expanded relatively more than before World War II, because government policy generally favoured the smallholder above further development of the estate agricultural system. Thedevelopmen t ofsmallholders 'rubbe rexpor tafte r thewa ri sshow nb yTabl e25 . The main production areas of peasants' rubber are West Borneo, South and East Borneo, Palembang, East Sumatra, Djambi, Tapanuli and Lampung. Their relative importance can be seen in Table 26. The rapid expansion of peasant rubber was possible because a large part of the peasant acreagewa stappe d practicallywithou t recourset o outsidelabour . Suchi sth e casei nPalemban g and WestBorneo .Bu teve nwher etappin gi sdon eb yhire d labour, as in the case of Djambi, it is generally carried out on some kind of share basis, in volving hardly any cash expenditure. Only the purchase of coagulants, the hire of a manglean d localtranspor t to themarke tinvolv e smallcas hcosts .Th e owner ofth e larger smallholdings frequently has to rely on outside labour, but because it is only used for tapping (again often on a share basis), his cultivation and overhead costs remain small. This low cost and, as indicated earlier, the flexibility to return to growing his own food when rubber prices are low, are the main reasons why peasant rubber is more suited to respond to the fluctuating world demand of natural rubber in the postwar period. However, thislo wproductio n costi spartl y counterbalanced byth e relatively lowyield . Between 1952-1959,dr yrubbe r output ofpeasant svarie d between 320an d 395k g per ha as against 538t o 755k g per ha for estates. In addition, smallholders' rubber is generally of a lower quality.32 The export figures show the growing importance of the peasant rubber and the lead over estate production. Thepeasants 'proportio n increased from 40%i n 1920t o 49% in 1939.I n 1949,i t had increased to 60%,t o 63% in 1957an d to 70%i n 1962. Theyea r 1965,however , showed a declinet o 60%. 33Althoug h theexpor t of peasants' rubber had developedrapidl y after World WarII ,ther ear estron gindication s that its future position as the main foreign exchange earner willb e threatened. This is based on the high proportion of overaged trees. Though exact data on the age distribution 3S Seefootnot e 27,p .69 . 83 WICKIZER, op. cit. {fn. 31).Fo r thefigures til l 1957an d for 1962:Statistik konjunktur 1963,p . 47. Rubber production and exports are of major importance to the Indonesian economy. In the period 1950-1958 rubber has contributed between 30t o 50% of the total value of its exports as can be seen from Tables 27an d 28.Export s of estate products including rubber averages 65% a s compared with 1938, excluding rubber only 41% . More striking is the case of peasant crops; included rubber it is, compared with 1938,182%,andonly57%ifrubberisexcluded. 27 of peasant rubber trees are not available, a study based on an intensive field survey estimated that from 50t o 60percen t of smallholders' planting are no longer produc tiveo rproduc es olittl ea st ob euneconomi cexcep twhe nrubbe rprice sar ehigh. 34Th e replanted acreage with high yielding trees has not been satisfactory to offset the declining production per hectare. Between 1959-1961 probably no more than 3%o f the 1959 stock of smallholders' acreage was replanted; thus replanting is not suffi cient.35 This means that in rubber Indonesia has been livingo f prewar capital and is nowi na vulnerabl eposition . Onth e onehan di tmus td omuc hplantin g torestor eit s capital, but, on the other hand, supplementation in sufficient quantities involves a further losso fexpor t earningsfo r several yearsi n the future. In addition, Malaysia, Indonesia's main competitor in natural rubber export, is successfully developing and planting new high yielding trees, which produce two to four times as much rubber per hectare.36 And at the same time synthetic rubber threatens to become an almost full substitute for natural rubber, and competition betweennatura l and synthetic intensifies. Copra. Thedevelopmen t of copra, another main peasants' export product in Indone sia, shows an other picture. Area and production have been more or less stable since 1957a s can be seen from Tables 22an d 23. But exports in 1962 dropped con siderably comparedwit hth eprewa rfigures (Tabl e29) .Thi si sprimaril y caused by an increase in domestic consumption: Java, before thewa r an exporter of this product, has now to import it from the Outer Islands. Asillustrate d inth e figures from 1953 to 1961,copr a purchased in eastern Indone sia,whic hu pt o 1958wa sth emai nregio nan dsourc eo fcopr apurchase db yth eIndu k Koperasi Kopra Indonesia (IKKI, the Central Copra Cooperative) for export and domesticconsumption ,turne d outt o declinei n 1958an d 1959.However , Borneo and other regionswer egrowin gi nimportanc e duringthos eyear s(se eTabl e30) . The decline,experience db y Eastern Indonesia throughout 1958,wa scause d by the revolt of the Permesta37 in Northern Celebes and also by transportation difficulties. In 1960-1961, after the Permesta uprising was more or less suppressed, there was again an increase in the export of copra from this region. In 1962i t dropped again, caused by moreintensiv e smuggling (seeTabl e29) . Due to all these difficulties, the short-run prospects of exports of smallholders' copra are declining; the long-term outlook is even bleaker, owing to overagingtree s and insufficient replanting.Thu sIndonesi ai s not replacing its prewar investments in copra too. Pepper. Beforeth ewar ,Indonesi awa sth eleadin gsupplie r ofth eworl dpeppe rmarket . Table3 1show sth edecreas e ofth eexpor ti nth epostwa r period. ** US GOVERNMENT, op. cit. (fn. 27), p. 70. »/« 28 Table22. Plantedarea of principal commercial farm crops,excl. rubber, Ind., 1957-1961 (x 1.000ha). 1 1957 1958 1959 1960 1961 Coconuts 1597.1 1651.2 1561.3 1649.3 1665.9 Coffee 192.4 198.9 208.9 230.8 240.2 Tea 60.1 60.1 62.9 64.3 64.4 Kapok 212.4 220.1 172.9 138.5 146.1 Arecanuts 54.9 55.5 53.6 59.4 60.0 Pepper 27.5 33.4 34.3 33.7 34.7 Cloves 29.2 29.3 35.3 36.6 43.2 Nutmeg 9.5 9.0 9.8 10.4 12.0 Sugarcane2 38.0 43.3 43.3 35.8 34.6 Tobacco2 180.7 178.3 132.5 129.0 196.1 Total 2401.8 2479.1 2314.8 2387.8 2497.2 1 Totalplante dare arefer s toth eare aa tth een do fth eyear . 8Harveste darea . Source:Statisticalpocketbook of Indonesia 1963. pp .74-77 . Table23. Production ofprincipal commercial farm crops, exclusiverubber, Indonesia(1000 tonsof dry product) (1957-1961) 1957 1958 1959 1960 1961 Coconuts 1092.8 1077.8 1169.4 12391 13611 Coffee 60.0 54.1 65.3 77.6 891 Green tea 22.3 23.7 32.1 37.4 37.7 Kapok 29.0 28.8 25.8 20.8 20.2 Arecanuts 40.5 12.0 41.2 45.0 46.6 Pepper 22.0 16.8 14.1 12.2 13.7 Clovers 5.1 3.8 4.7 6.0 7.1 Nutmeg 7.4 4.1 4.0 5.2 5.8 Brown sugar 263.8 285.6 283.2 255.4 3051 Tobacco 68.5 61.0 49.1 691 75.9 1 Correcteddata ,supplie db yth eMinistr yo fFinance . Source:Statistical pocketbook of Indonesia 1963. pp .74-77 . Thefal l inpeppe rexport si sprimaril ycause db ysmalle rproduction .Th e rehabilita tion of white pepper, which is grown in Bangka, has not been satisfactory. Only a small percentage of the prewar area has been put back into production.38 Neither is the development of black pepper, which is grown in the Lampung area, very encouraging. Production has fallen through neglect, and exports have decreased because oftransportatio n difficulties and highcost s of marketing.39 38 Before World War II, white pepper was chiefly grown by Chinese farmers. During the war the fieldswer e damaged and they were not fully restored thereafter, as many Chinese left the island. 89 Based onth eauthor' s observations inth epeppe r areaafte r World War II. 29 Table 24. Mainpeasants' non-food production in Indonesia in 1000 metric tons, 1960-1966. 1 1960 1961 1962 1963 1964 1965 1966 Rubber 403 476 496 490 510 510 536 Copra 1239 1361 1387 1379 1193 1249 1350 Sugarcane 255 305 184 176 438 414 433 Tea 37 37 37 39 41 42 42 Coffee 78 89 99 127 80 91 107 Tobacco 69 76 72 81 52 72 111 1 Targets. Source: Datasupplie db yth eMinistr yo fFinance . Table. 25. Exportof'smallholders''rubberfrom Indonesia, 1953-1959. Export in Value in Export in Value in 1000 tons million US $ 1000 tons million U S 1953 395.3 133.9 1960 387.8 243.2 1954 495.8 166.4 1961 443.8 184.6 1955 476.7 259.7 1962 482.3 196.9 1956 429.3 206.2 1963 - 147.4 1957 418.2 203.6 1964 - 135.2 1958 377.7 153.2 1965 _ 135.4 1959 485.3 275.9 Source: For the Quantities: StatistikKoniunktur, monthly survey November/December 1962, p.47 .Fo rth evalues : WartaBiro Pusat Statistik 1 (7), December 1966,Tabl e8 . Table 26. Exports of smallholders' rubberfrom the mainproduction areasin Indonesia (in metric tons ofdry rubber), 1938 and 1955-1959. 1938 1955 1956 1957 1958 1959 WestBorne o 30,354 77,895 74,168 84,853 82,523 74,671 Southan dEas tBorne o 27,390 69,627 52,664 62,698 61,275 66,954 Palembang 23,964 84,950 77,645 59,247 51,767 96,496 East Sumatra 20,280 58,243 53,705 52,881 54,731 64,863 Djambi 22,206 57,244 56,283 43,876 35,237 55,791 Tapanuli 4,044 6,077 9,254 8,248 5,823 10,366 Lampung 5 15,288 28,794 29,306 22,216 35,784 Otherarea s 18,353 95,922 60,833 66,047 55,419 69,703 Totalreporte d exports 146,596 464,876 413,346 407,156 368,991 474,628 Note:Ther ei sa discrepancybetwee nth efigures give nabov ean d those inTabl e 25 due to the facttha tTabl e2 6report sonl yth eexport sreporte dt oth ebank . Sources:Report of the Bank Indonesia 1958-1959. p. 185 and 1959-1960, p. 158. After 1959th e publicationo fthi sban kwa ssuspended . 30 Table27. Production indexnumbers 1 ofprincipal export products, Indonesia, 1958-1961(1938 = 100). 1958 1959 1960 1961 Estateproduct s rubber 140 130 125 131 tea 60 55 57 54 palmoi l 65 61 62 64 coffee 28 42 40 41 cinchona bark 37 37 33 26 hardfibres 30 24 21 18 canesuga r 55 61 48 46 tapiocaflour - - 6 - tobaccoleave s 17 15 18 18 tobacco,cu t 9 20 16 12 weighed average (includingrubber ) 72 69 65 65 weighed average (excluding rubber) 47 48 43 41 Farm products2 rubber 252 325 258 293 coffee 60 82 91 150 tapiocaflour - 1 - - copra 24 25 31 44 pepper 23 53 23 34 weighed average (incl.rubber ) 147 185 155 182 weighed average (excl.rubber ) 29 38 38 57 Mining products crudepetroleu m 218 246 278 288 tin 85 79 83 68 bauxite 140 58 161 171 coal 41 44 45 38 average 185 206 231 236 General average (incl.rubber ) 124 137 139 145 Generalaverag e (excl.rubber ) 108 118 128 131 1 Basedo nLASPEYRE Sformula . * Productsfo rexport .Th eexpor tdat aindicat eth eprogres so fproduction . Source:Statistik Konjunktur Nov.lDec. 1962, p . 11. 31 Table28. Sharesof the principal products in the export of Indonesia, 1928,1938and 1950-1958. Rubber Copra Tea Tobacco Palm oil Sugar Other ex + kernels port pro ducts 1928 17.6 6.8 6.2 6.1 0 23.8 39.5 1938 22.6 5.7 8.3 3.9 2.8 6.5 50.2 1950 41.8 7.7 3.7 2.9 3.4 0 40.5 1951 51.9 10.2 2.9 2.2 3.0 0 29.8 1952 46.0 5.6 2.6 1.9 3.3 0 40.6 1953 33.0 6.9 2.9 2.9 4.1 1.2 49.0 1954 30.9 6.7 4.6 3.8 3.6 2.6 47.8 1955 46.0 4.6 3.3 3.0 2.9 2.0 38.2 1956 40.3 4.4 3.4 3.3 3.4 1.9 43.3 1957 36.0 4.4 3.1 3.5 3.1 1.8 48.1 1958 34.6 2.2 3.3 4.0 3.6 1.2 51.1 Source: B. NAPITUPULU, Die Probleme der indonesischen Aussenwirtschaftseit 1950, Hamburg, 1962, p. 103. Table 29. Exportof copra from Indonesia, 1938 and1954-1965. Quantity in Valuei n Quantity in Value in 1000ton s million US5 1000ton s million US 1938 556.5 21.3 1959 131.2 27.6 1960 107.4 29.1 1954 298.1 51.4 1961 156.6 34.7 1955 234.4 35.4 1962 76.0 14.8 1956 260.4 39.2 1963 - 13.6 1957 297.4 40.5 1964 - 23.5 1958 116.9 18.2 1965 - 17.9 Source:Compile dfro m severalpublications . Table 30. Coprapurchased by the Copra Foundation inIndonesia (in 1000tons net), 1953-1961. East Indonesia West Borneo Other Areas Total 1953 406.0 55.3 _ 461.3 1954 351.8 50.0 _. 401.8 1955 309.7 56.1 . , _ 365.8 1956 281.3 44.2 13.6 339.1 1957 107.3 19.2 7.4 139.3 1958 3.9 43.7 55.0 102.6 1959 1.5 37.5 66.3 105.3 1960 236.9 32.0 16.7 285.6 1961 237.2 23.9 8.7 269.8 Source: Compiledfro m severalpublications . 32 Table31. Export ofpepper from Indonesia, 1938 and1954-1962. Net weight Valuei n Netweigh t Valuei n in 1000ton s million US) in100 0me millionU S tricton s 1938 54.5 4.7 1958 12.6 5.0 1959 29.3 12.1 1954 12.9 12.7 1960 12.7 10.5 1955 13.7 10.4 1961 19.1 15.0 1956 19.4 8.9 1962 11.0 6.6 1957 17.7 8.3 Sources: Statistical pocketbook of Indonesia 1941,p . 82, and Statistik Koniunktur Nov./Dec. 1962, p.4 7an dp . 51. Table32. Harvested areasof most importantfood cropsin Indonesiain 1000ha 1, averagesfor 1953/ 1962, andyears 1960-1963. 1953/1962 1960 1961 1962 1963 Paddy 6,872 7,285 6,858 7,283 6,727 Maize 2,412 2,640 2,462 3,175 2,534 Cassava 1,207 1,417 1,478 1,449 1,559 Sweetpotatoe s 382 394 366 544 444 Peanuts 338 377 365 372 348 Soybeans 560 651 625 594 540 Total 11,771 12,764 12,154 12,417 12,152 1 Nodat aavailabl eafte r 1963. Source:Centra lBurea uo fStatistics ,Production of principal foodstuffs inIndonesia, 1963, pp. 1- Table 33. Harvested areasof most importantfood crops in Indonesia, 1953-1962 (in 1000 ha). Irrigated Non-irri Total Maize Cassave Sweet Peanuts Soy paddy+ gated paddy potatoes beans gogoran- paddy tjah 1953 5380 1085 6465 1969 1042 325 292 457 1954 5469 1144 6613 2518 1071 285 324 525 1955 5517 1053 6570 2042 1077 279 298 515 1956 5701 1001 6702 2232 1125 384 317 502 1957 5748 1050 6798 2087 1221 404 341 525 1958 5914 1076 6990 2702 1341 449 331 594 1959 5936 1217 7153 2290 1456 394 364 612 1960 5975 1310 7285 2640 1417 393 377 651 1961 5534 1273 6858 2462 1478 366 365 625 1962 - - 7283 3175 1449 544 372 594 Sources: Statisticalpocketbook of Indonesia 1963, p. 69;fo r 1962:Centra l Bureau of Statistics, Productionof principal foodstuffs inIndonesia, 1963, pp. 1-8. 33 Table 34. Production of most importantfood crops inIndonesia in 1000tons; averagefor 1953j1962, andthe period1960-1966. s Average 1960 1961 1962 1963 1964 1965* 1966 1953/1962 Milledrice * 8,009 8,430 7,950 8,556 7,628 8,896 9,800 9,986 Maizekernel s 2,012 2,460 2,283 3,243 2,359 3,769 2,283 3,005 Cassavaroot s 9,477 11,376 11,190 11,386 11,575 12,223 11,274 10,845 Sweetpotatoe s 2,296 2,669 2,464 3,680 3,015 3,931 2,724 2,309 Shelled peanuts 213 256 252 261 231 261 279 293 Shelledsoybean s 351 442 426 397 353 392 356 353 1 Preliminary figures. *Targets . •Rati oo fdr ystal kpaddy :clea nric e = = 100:52. Sources:Centra l Bureau of Statistics. Production of principal foodstuff's in Indonesia,1963 , pp. 1-8fo raverag e1953/1962 ;fo r 1960-1966:dat asupplie db yIndonesia nauthorities . Table 35. Production of most importantfood crops inIndonesia, 1953-1962 (in 1000 tons). Irrigated Non-irri- Total Maize Cassava Sweet Peanuts Soy- paddy + gated paddy1 (shelled) (fresh potatoes (shelled) beans 1 gogoran- paddy roots) (fresh (shelled) ti^1 roots) 1953 12,655 1,409 14,064 1,815 8,953 2,176 204 306 1954 13,342 1,719 15,061 2,720 9,569 2,111 248 400 1955 12,985 1,447 14,432 1,971 9,317 1,898 207 346 1956 13,308 1,311 14,619 1,965 9,131 2,638 218 357 1957 13,242 1,435 14,677 1,860 10,118 2,653 232 339- 1958 13,881 1,463 15,344 2,634 11,278 3,103 232 418 1959 14,228 1,722 15,950 2,092 12,697 2,877 256 431 1960 14,876 1,984 16,860 2,460 11,376 2,670 256 443 1961 13,935 1,965 15,900 2,283 11,190 2,464 252 426 1962 14,855 2,256 17,212 3,243 11,386 3,680 261 397 i 1Dr ystal kpaddy . Sources:Statistical pocketbook ofIndonesia 1963, p. 71; for 1962:Centra l Bureau of Statistics, Productionof principal foodstuffs in Indonesia, 1963,pp . 1-8. 34 Table 36. Averageyield of most importantfood cropsin Indonesia,in 100 kg per ha,for the period 1953J1962(average) andthe years 1960-1963. Average 1960 1961 1962 1963 1953/62 Paddy 22.41 23.14 23.19 23.50 22.68 Maize 8.34 9.32 9.27 10.21 9.31 Cassava 75 80 76 79 74 Sweet potatoes 60 68 67 68 68 Peanuts 6.30 6.79 6.91 6.99 6.63 Soybeans 6.26 6.80 6.82 6.68 6.53 Source: CentralBurea uofstatistics ,Production ofprincipal foodstuffs in Indonesia, 1963,pp. 1-8. Table37. Harvestedareas (in 1000 ha) ofprincipal farm food cropsin different regions, 1962. Irrigated Non-irri Total Maize Cassava Sweet Pea Soy paddy + gated paddy pota nuts beans gogoran- paddy toes tjah Java and Madura 3707 384 4091 2352 1136 350 293 514 Sumatra 933 507 1440 85 80 49 24 21 Borneo 403 258 661 19 33 5 2 3 Celebes 498 134 632 398 78 40 26 8 Moluccas/West Irian - 7 7 8 9 9 2 - Lesser Sunda Islands 313 132 445 281 71 94 24 48 Source: Statisticalpocketbook of Indonesia 1963, p. 69. Table38. Productionof principal farm food cropsin different regions, 1962 (in million kg). Irrigated Non irri Total Maize Cassava Sweet Pea- Soy paddy + gated paddy1 (shel (fresh pota nuts beans gogoran- paddy1 led) roots) toes (shel (shel tjah1 (fresh led) led) roots) Java and Madura 9305 695 10000 2450 8120 2000 202 337 Sumatra 2954 847 3801 84 1170 603 15 17 Borneo 709 287 996 14 333 29 2 2 Celebes 1241 209 1451 397 631 245 18 4 Moluccas/West Irian - 5 5 7 90 31 1 - Lesser Sunda Islands 838 123 961 249 630 830 20 36 1 Drystal kpaddy . Source: Statisticalpocketbook of Indonesia 1963, p . 71. 35 r^ oo » w o\ r- t> w. "* 9 t o 3 vo \6 ^o ^o ^ - 5. s (T) V> *"^ ^ ^ n rf ^ N M es (-4 tN •a 4-* o e ct] o NO o »H r- „ rt ts o in io o ON rf -^l* -^ od — ect u ON ^' !C 0J » co QO oo t^ h u •o 00 O 9 CM a "^ rt * ^ o a 60 a *-05* 00 "A "I t^ CJ cN v\ cN oo p O« '5 f!) oo i> P o> o CoO « h •, " flS o »c O M -1 3 •O NO NO —1 ** ON NO r- •* _ •a § ° n o 2 tj yj oo Tt -H" a 22«"" « P 2 (X, -, „ rt _ _ 1 •3a o •^ cd p p r^ oo o O u oo' rj r~" r--' o & ?i ti "> '-0' ^H T-t ^ o «N tN -H cN « (Nl £ 1 00 (^ NO o\ ON oo en ON to m 18 i£? a N •"* &3 •I ON ON O ON ON 3 O 05 Si oo ON _ . y. O0 o O H N in cr» N§sO NO NO en en NO \o NO I ON ON ON ON ON ON ON ON ON ON 36 Table40. Importsof rice in Indonesia, 1938-1940and 1958-1964. Gross weight in Gross weight in 1000 tons 1000 tons 1938 334 1960 966 1939 278 1961 1,065 1940 109 1962 1,064 1963 1,070 1958 921 1964 9001 1959 891 1Estimate . Sources:Fro msevera lpublications . FoodCrops. The development of the harvested area, production and averageyiel d of the most important food crops can be seeni n Tables 32-36. The total acreage ofharveste d area ofth emai nfoo d cropsi n Indonesia reached its peak in 1960 and afterward showed a declining trend. Further, the figures stress again the importance of the acreage devoted to rice production (in 1963abou t 55 percent of the total acreage). As can be seen from Tables 37 and 38, rice is grown practically everywhere in Indonesia.Cor ni smostl ygrow ni nJava , Celebesan dth eeaster n LesserSund a Islands. Cassava isprimaril y aJav a crop asar e sweetpotatoes ,peanut s and soybeans. Paddy, maize, cassava, sweet potatoes, soybeans and peanuts follow in importance in the order in which they are listed. Since 1960th eare aunde rpadd yha sshow na fluctuating tendenc ydu et oth eweath er conditions, and soha s production. However, averageproductio n showed a diffe rent trend; it went up between 1960-1962,bu t dropped again in 1963. The area under maizereache d itspea k in 1962 (3,175,000ha ) but dropped again to 2,534,000 ha in 1963,wit h corresponding declines in production (see Tables 32 and 34). The development of the average production shows the same picture as that of rice,namel yaris e between 1960-1962an d adro pi n 1963(Se eTabl e36) . Theincreas eo faverag eproductio n botho fric ean dmaiz ei sprimaril ycause db yth e intensification program of the government, especially in Java. Thiswil lb edeal tmor e elaborately in Chapter 9. Regarding the consumption of the principal food crops, Table 39 gives the quantity availableper capita. For each ofth ethre eimportan t groupso ffoo dcrops ,cereal s(ric e and maize), root crops (cassava and sweet potatoes) and pulses (peanuts and soy beans), it also gives the proportion of the production consumed in Indonesia. Asfa r as possible account has been taken of the growth of the population. It shows that 37 these foodstuffs supply an intake of about 1900calorie spe r day, which is about the average for a country in Asia and the Far East.40 Furtherw eca nrea dfro m thistabl etha t domesticric eproductio n isalway s smaller than consumption, indicating the need to import rice after World War II (Table40) . As far as maize, sweet potatoes, peanuts and soybeans are concerned, domestic productionha sjus tbalance dth econsumptio npe rcapita. Forcassav aroots ,ther e isa tendency to consume more and more, so that there is less available for export (see further Chapter 4). Thelarg eimporte d quantities of riceafte r thewa r can also be seeni n Table 40.A s to their distribution, the 1959 JUBM (Jajasan Urusan Bahan Makanan, the Food Foundation) figures show that about 50% went to Java, namely: Java 469,000ton s Celebes 42,000ton s Sumatra 255,000ton s Moluccas + WestIria n 27,000ton s Borneo 86,000ton s Bali + Lesser Sunda Islands 11,000ton s SinceWorl dWa rI I Indonesia hasbecom ea larg eimporte r offoo d instead ofa small exporter, as was the case in 1940. The main reason has been that Java, with her rapidlygrowin gpopulation ,i shavin gdifficultie s infeedin gherself .Java ,whic h before the war exported rice to the Outer Islands, has become a food importer (primarily corn, among others from South Celebes), despite its fertile soil. The people on this island aremainl y engagedi nlabou r intensivesubsistenc e peasant farming, handicraft and small scale manufacturing industries for domestic consumption. Nevertheless textiles and other important consumer goods have to be imported, for which the Outer Islands earn the foreign exchange, as the main development of agricultural estates and labour extensive peasant agricultural exports occur there. Here also are the mines, most oil fields and some highly efficient large-scale industries. Yet only one-third of the total Indonesian population lives scattered through these enormous areas. It is small wonder that such discrepancy in economic conditions, stresses and strainsoccur sbetwee nJav aan dth eOute rProvinces .Therefore ,th ecentra lproble mo f agriculture in the scope of economic development for thewhol e of Indonesia should be focussed on Java. If a way could be found to get economic development in Java moving,th ebac k ofth e problemfo r thewhol e ofIndonesi a would be broken. However, before we can suggest any practical solution, we should explore more thoroughlywh yan dho wthi sdevelopmen tha s occuredi n Java.Thi swil lb e discussed in the next chapter. The development of agriculture in Java willb e discussed in the same manner as that of the whole of Indonesia, i.e. by making a division between 'estate' and 'peasant agriculture'. «•Direktora t Pertanian Rakjat (Agricultural Extension Service), Sumber Hydrat Arang, 1964, p. 1. 38 4 Agriculturaldevelopmen ti n Java 4.1 The period before World War II 4.1.1 Estate agriculture Before 1870agricultura l production for export was practically confined to Java. The main products were coffee, sugar, indigo and tobacco. There were about hundred estates which leased their land from the government. Their average size was 200 to 280ha , mostly cultivated with coffee.41 In addition, therewer e 150 enterprises based onfre e lease agreements with village elders;thes e estates weremostl y cultivated with sugar and tobacco. In the later part of the nineteenth century estates producing Assam tea, rubber, and cinchona were added.42 Thedevelopmen t of the estates after 1870i s illustrated by Table41 . In 1937 7% of the cultivated area of Java was under estates, which were planted withvariou scrop sa sshow ni nTabl e42. 43I ntha tyear ,i nterm so fth eare a devoted to eachproduct , rubber rankedfirst, followe d bytea . The estatesi n thehill s and moun tains ('bergcultures') hadbecom eles simportan t than those on the lowlands. Up to 1930, sugar was the most important product, occupying some 60,000 per manent and more than 700,000 temporary workers. The economic crisis in 1930 reduced the area from 200,000h a to 32,000h a whereas labour employed was only a fraction of the previous force.44 In 1940,thoug h its area rose again to about 90,000 ha, there appeared to be no prospect of the industry recovering its former impor tance.45 The estates engaged in the cultivation of coffee, tea, cocoa, palmoil, cinchona and rubber obtained their land from the government. For sugarcane and tobacco a somewhatdifferen t arrangement wasmade. 46Th eplanter srente dth e landfro m village communities "either by registered communal agreements accepted by two thirds of 41 PIM, op. cit.(fit. 9), p. 18. 42 ROBEQUAIN, op. cit. (fn. 9), p. 332. 43Ibid., p.331-332 . 44 PIM, op. cit.(fn. 9), p. 25. 45Ibid., p . 25, and Statisticalpocketbook ofIndonesia 1941, p.40 . 4* GEERTZ, op. cit. (fit. 7), pp. 86-87. Generally estate sugar cane was grown on the most fertile and best irrigated soils and it is estimated that the estates occupied 20 to 25% of the sawahs, primarily located in the lowlands of Central and East Java. (See ROBEQUAIN, op. cit., fn. 9, p. 332). Tobacco plantations werebase d ona simila rsystem ,bu tth eripenin g ofth ecrop stake s onlya few months. 39 the co-shares for periods up to 21£ year s at a rent fixed by the government on the basis of the land revenue, or by similar private agreements but with no security of tenure beyond two crops ahead (3J years)". The lessee could occupy at most one third of the village land at a time, the other two thirds being at the disposal of the peasants. All labourers needed for the estates could be secured from surrounding villages. In addition to the landless peasant who had to earn his living by wage work, there Table 41. Areaof estates in Java and Madura 1, in1000 ha, 1875-1937. Year Area Year Area 1875 264.2 1927 980.2 1890 589.6 1935 731.0 1905 899.9 1937 770.6 1920 1,108.7 1 Exclusivelarg eprivat eestate s('particulier elanderijen') . Source: Seefootnot e14 . Table 42. Plantedarea of estate agriculture by crops in Java and Madura, 1937.1 Crop Area in 1000h a Crop Area in 1000 ha Rubber 222.8 Coconut 7.2 Tea 103.6 Cocoa 6.0 Coffee 89.2 Pepper 2.4 Sugarcane 82.4 Nutmeg 1.6 Tobacco 29.2 Other crops 2.4 Kapok 22.8 Cinchona 15.2 Total 584.8 1 Exclusivecassav aan dsisal . Source: C. ROBEQUAIN,(seefootnote9)pp .331-332 . Table 43. Export ofagricultural products from estates andpeasant farms inJava, in millionguilders (1931-1940). Estate Peasants' Estate Peasants' production production production production 1931 234 56 1936 112 41 1932 165 49 1937 175 57 1933 115 38 1938 140 42 1934 123 31 1939 187 39 1935 102 31 1940 193 38 Source: Statisticalpocketbook1941, p . 40 wereowner-cultivator swit hsuc hsmal lplot stha tthe yha dt osupplemen t their income byoccasiona l outsidework .I t was estimatedtha ton eou to fever yfou r Javanesemale s depended on estate agriculture for at least part of his income.47 In the decadejus t before World War II, some of theagricultura l products could be accountedfo r bypeasant-produce d exportcrops ,bu tTabl e4 3 indicatestha tb yfa r the major portion was still the result of estates' activity. Until the thirties sugar was the main export product.48 Even after the economiccrisis ,i t still remained an important crop. The value of this product exported from Java in 1937 was only slightly lower than that of rubber.49 In 1939, Java was still capable of supplying a considerable share in the world's needsfo r tropical products: 13 % of the world's tea, 7% of its rubber, 5% of its sugar and 91 % of its cinchona bark.50 Largeinvestment s made in estate agriculture initiated aproces s of economic devel opment. Roads, railroads, irrigation works, and other overhead capital works were constructed.51 Estates and sugar factories provided hundreds of thousands labourers with addi tional income. Thousands of farmers received a cash revenue from the rent of their land leased to sugar and tobacco estates. Yet this all did not basically transform the peasant agricultural economy in Java: it remained mainly a subsistence agriculture with additional cash incomefro m the purchase of cashcrops ,surpluse so ffoo d crops and employment on estates, in factories and in trade. 4.1.2 Peasant agriculture The total arable areas of peasant agriculture in the period 1900-1940 are given in Table 44. It shows that a separation can be made between sawah's (wet cultivation) and dry fields. Wet Cultivation (Sawah's). PELZER indicated that the first European irrigation system was laid down in Buitenzorg (now Bogor) during the regime of Governor 52 General VAN IMHOFF(1743-1750). According to GEERTZ in 1833, 1,270,000h a was being irrigated.53 However, the great expansion occurred between 1880-1940.54 PELZER said that the first large project was built in the 1880's in the residency of 47 J. E. METCALF, Theagricultural economy of Indonesia, Washington , 1952,p .50 . 48 GEERTZ, op. cit. (fit. 7), p. 86. 49 ROBEQUAIN, op. cit.(fit. 9), p. 332. 60 N. ZINKIN, Asia andthe West,Ne w York 1952,p . 133, and Statisticalpocketbook of Indonesia 1941, p. 37. 51Afte r 1910 the construction of irrigation works by the government was mainly carried out in the non-sugar region of Java. The irrigation works established before 1910wer econcentrate d in the cane growing areas, often with financial assistance of the sugar companies. (Professor JOOSTEN, personal communication). 41 Semarang, where famines were frequent. Since then irrigation systems in Java have been steadilyenlarged .A t theen d of 1938 thetota l wet-rice area ofJav a and Madura amounted to 3,368,000 ha. Of these, 1,204,000h a were technically irrigated, an ad ditional 1,500,000h awer ecare dfo r bypeasants 'works ,an dth eremainin g664,00 0h a dependedupo nrain-water. 55 Since 1938 thetota lirrigate dare aha sno t increasedver y much. Exact data on the introduction of big irrigation projects are difficult to obtain. A modern technique is necessary to harness the large rivers, a feat for which the tradi tional skill of the peasant isquit einadequate . The expansion of the sawah area also resulted in an increase of the percentage of land being ablet o produce two crops ayear ; this double cropping causes the data in the last column of Table 45t o exceed 100%.Wher e sufficient water is available, the second cropi s also rice.Otherwis e crops such as maize, cassava, sweet potatoes and soybeansar ecultivate ddurin gthi sseason . Notwithstandingthi sexpansion ,an d the additional application of better working methods and new crop varieties, the increase in production could not neutralize the rapid population growth in Java. After therice harves tth e sawah's areinundated , and in that waythe y servet o raise fish, highlyimportan t asa supplement to thedie twhic hi sgenerall y poor in proteins. Small fresh water fish ponds are often an adjunct to the kampong (village) and. by keepingthes epond swel lstocke dth evillager salway shav efres hfish o n hand. Dryfield cultivation. Just before World War II, 4,500,000 ha out of 7,900,000 ha of cultivated land of smallholders in Java was utilized for dry field cultivation. These dryfields ar eknow n astegalan ; corn, cassava,peanuts , soybeans and sweet potatoes areth eprincipa lfoo d cropsgrow nthere. 58The yinclud eth e compounds which make an important contribution to agricultural production because they contain a wide variety offruit s and vegetables such as beans, cucumbers,melons ,bananas , papayas and mangoes. The acreage of such gardens in Java has been estimated at about 1,300,000ha 57 They are also useful for raising chickens.58 u K. J. PELZER, Pioneer settlementsin theAsiatic tropics:Studies in landutilization and agricultural colonizationin southeastern Asia, Ne wYork , 1948, p. 54. " GEERTZ, op. cit. (fn. 7),p . 34. 64 The increasing concern with the welfare of the peasants, beginning in 1880, caused that attention wasdirecte d towardsth eproble m ofirrigatio n works.Th eexpansio n of peasant agricultural land in Java and the distribution between irrigated and dryfields hav e already been illustrated in Table 44. 58 PELZER, op. cit. (fit. 52), p. 54. ••J . J. VAN HALL and C. VAN DE KOPPEL, De landbouw inde Indische Archipel,Th e Hague, 1946-50 (3 volumes)Vol .I ,p .363 . " Ibid.,p .364 . 68 METCALF, op. cit. {fn.47) ,p . 18. According to TERRA the diet ofth eJavanes efamil y ismor e varied primarily by the extreme intensification of the compounds (see GEERTZ, op. cit. fn 7, p. 96). The increased variation in the diet after 1915 compensates the declining consumption of riceper capita. 42 Table44. Arableland for peasants' 1agriculture in Java and Madura, in 1000 ha (1900 to 1940). Sawahs Dry fields Total Sawahs Dry fields Total 1900 2,700 2,900 5,600 1931 3,288 4,370 7,658 1921 3,136 3,793 6,929 1933 3,299 4,404 7,703 1924 3,194 3,897 7,091 1937 3,363 4,487 7,850 1927 3,222 4,243 7,465 1940 3,384 4,544 7,928 1930 3,274 4,372 7,646 Source:A . JONKERS,(seefootnot e 14)pp . 65-66. Table45. Totalarable and harvested area of farm cropsin Java and Madura, 1931-1940. Arable area Total harvested area Harvested area in % in 1000 ha in 1000h a of arable area 1931 7,658 7,687 100.3 1932 7,685 7,992 103.9 1933 7,703 8,311 107.9 1934 7,726 8,011 103.6 1935 7,753 8,404 108.5 1936 7,799 8,778 112.5 1937 7,850 8,703 110.9 1938 7,871 8,768 111.4 1939 7,900 8,939 113.2 1940 7,928 9,122 115.2 Source:Statistical pocketbook of Indonesia 1941 :pp .36-37 . Table46. Harvestedareas of farm cropsin Java and Madura, (1930-1940) in1000 ha. Paddy Cassava Soybeans Tobacco Other Total and and and crops harvested maize sweet peanuts area potatoes 1930 5,584 929 653 150 496 7,812 1931 5,475 955 612 172 473 7,687 1932 5,691 989 674 142 496 7,992 1933 5,982 980 725 130 494 8,311 1934 5,579 1,051 707 168 506 8,011 1935 5,871 1,126 737 147 523 8,404 1936 6,102 1,210 784 131 551 8,778 1937 5,936 1,262 799 150 . 556 8,703 1938 5,966 1,262 837 147 • 556 8,768 1939 6,058 1,323 862 139 557 8,939 1940 6,072 1,393 895 166 596 9,122 Source:Statistical pocketbook of Indonesia 1941, p . 37. 43 Table 47. Productionof principal food crops in Java and Madura, (1931-1940) in 1000 tons. Stalk paddy Maize Cassava Sweet Peanuts Soy from from (shelled) roots potatoes (shelled) beans sawahs dry fields (shelled) 1931 6,483 532 1,931 5,926 966 142 128 1932 6,884 543 1,902 6,222 958 161 149 1933 7,007 525 2,127 5,831 1,142 161 181 1934 6,624 462 1,720 5,793 1,069 149 175 1935 7,226 453 1,989 6,343 1,360 144 203 1936 7,476 509 2,220 7,481 1,317 167 247 1937 7,447 442 2,037 7,637 1,182 181 269 1938 7,866 477 1,926 8,149 1,206 202 288 1939 7,915 446 1,985 8,311 1,268 181 318 1940 8,477 492 1,900 8,415 1,418 197 294 Source: Statisticalpocketbook of Indonesia 1941, p .37 . Table 48. Productionand consumption per head of the principal food cropsin Java (1929-1940). Cereals Root crops Peanuts Table 49. Riceimports of the Outer Provinces by origin (1931-1938), intons. From Java From the other parts From abroad ofthe Outer Provinces 1931 22,411 29,770 1932 317,336 6,234 17,087 1933 269,519 19,981 27,051 1934 245,845 32,844 54,100 1935 210,932 31,544 47,811 1936 263,173 92,822 56,574 1937 213,202 186,970 64,087 1938 67,452 157,534 74,565 303,389 Source: C. J. J. VANHAL L en C. VAND EKOPPE L DP rT^i Vol.I ,p .377 . Landbouw inden Indischen Archipel, 1946, 44 Table50. Percapit arice consumption in kg inJava, for theperiod 1850-1940. Consumption Consumption 1850 103 1900 103 1860 97 1910 113 1870 100 1920 101 1880 120 1930 95 1890 102 1940 86 Sources: For 1850 till 1930; A.M .P .A . SCHELTEMA, The foodconsumption of the native inha bitantsof Java and Madura. 1936, p. 12; for 1940:Statistiscal pocketbook of Indonesia 1941, p. 142. Table51. Export oftapioca products, excluding waste {1932-1940). Net quantity in Net quantity in 1000 tons 1000 tons 1932 226.0 1937 417.0 1933 171.7 1938 246.8 1934 144.8 1939 279.7 1935 156.8 1940 226.5 1936 285.4 Source:Statistical pocketbook of Indonesia 1941, p. 84. Detailed studies made of garden culture show that the share of land allotted to them byth efarme r and theintensit y ofcultivatio n increases asth etota l cropland per head decreases. The growing use of dryfields an d the cultivation of crops such as maize, cassava, sweet potatoes and soybeans have gained greatlyi n importance to meet the needs of theincreasin g population.59 Thisdevelopmen t is ofa relativel yrecen t date:i twa sno t until the 1885 depression that the Dutch government actively promoted the intro duction of these crops, which are called collectively 'polowidjo' or 'palawidjaja.'60 Most ofth e peasant agricultural land isuse dfo r annual crops which are primarily for food production. The development of peasant farm crops during 1930-1940 can beillustrate d by Tables4 6an d47 . The area covered by peasant crops for export in Java was estimated at about 550,000h a in 1940,whic h wasles stha n onefifteenth o f the land under cultivation.61 The chief export product from the lowlands grown by the farmers was derived from the so-called secondary crops. These crops included maize, cassava, groundnuts and soybeans.A sindicate d earlierthe yar egrow no nsawah' s or ondr yfields. Dat a of the 59 J. VANGELDEREN,m: Indonesianeconomics (fn. 9),p .136 . 60 GEERTZ, op. tit. (fn. 7), p. 92. 61 ROBEQUAIN, op. tit. (fn. 9), p. 349. 45 export were given by BOEKE (see Table 48). For each of the four most important groups - cereals (rice and husked maize), root crops (cassava and sweet potatoes), peanutsan d soybeans- hegav eth etota lproductio n and consumption per head and the ratio of those figures. The production ofrice an d maize fluctuated with good and bad harvest years, but consumptionpe r head remained much on the same level. The volume of root crop productioni n194 0increase dabou t4 0% a scompare dwit htha ti n 1929. Theconsump tion of home produced cereals decreased because of the greater export to the Outer Provinces.Th eric eimpor t ofth e Outer Provincesi sillustrate d byTabl e49 . Percapita rice consumption in Java is given in Table 50. Between 1850e n 1940 it dropped from 113k g to 87 kg. There was a counter-balancing increase in the con sumption of cassava and otherfoo d crops,whic har einferio r to ricea sfa r as protein and vitamins are concerned. With the increasing production of rootcrop s and pulses, the menuo f theJavanes e householdchanged. 62 Buti nspit eo fth eincreasin gconsumptio n ofcassava , therewa s still an important export of this product; indeed it was the biggest peasant export crop.63Th e export of tapioca or cassava flour is presented in Table51 . From the other two important peasants' cash crops, viz. sugarcane and tobacco only the latter is exported. The area cultivated with tobacco amounted in 1938 to 147,000ha. 64 Theexpor to fpeasan tagricultura lproduc efro m Javashowe da rapi d expansion, as llustrated earlier in Table 4 under 2. This expansion has been possible primarily becauseo fth erol eo fth eChinese ,wh ower eth emiddleme ni nth eJavanes etrade , and the considerable influence of the banks and great trade firms (European, American, Japanesean d Chinese)wit hthei rman ybranche san dagencies .Du et oth e 'open door' policy of the Dutch there was a keen competition between thesefirms an d they tried to expand their business by accepting a low rate of profit.65 4.2 Theperio d after World War II 4.2.1 Estate agriculture In 1958, 75%o f the estates, planted with sugar-cane, coffee, tea, cinchona, cocoa, tobacco and kapok werelocate d in Java.66 Rubber, though also an important estate crop in Java, wasprimaril y produced in the Outer Islands, especially in Sumatra. 92 For further particulars onth eImpac to fth echangin g diet ofth eJavanes e people seefootnot e 58. 63 ROBEQUAIN,op. cit. (fn. 9),p . 351. 64 VAN HALL and VAND EKOPPEL , op. cit. (fn. 56), Vol. 1, p. 364. M ROBEQUATN,op. cit. (fn. 9), p. 350. «•E . JACOBY, Agrarianunrest in Southeast Asia, London, 1961,p . 71.Sinc e the production of some estate crops is concentrated in Java, the development of these crops in Java and Madura after the war actually reflects the development ofthos efo r thewhol eo f Indonesia. 46 The declining importance of the estates in Java and Madura is illustrated by Tables 52-54. Sugar.Productio n of sugar in 1963amounte d to 650,563 tons, a decrease of about 53% as compared with 1938. The number of sugar-mills participating in the pro duction for 1963wa s 56, with a total planted area of 81,800 ha. In 1938 there were 97 mills with an area of 84.800 ha.67 The decline in mills and area were 42 and 6% respectively.Thi smean stha tproductio n decreasedmor etha n totalplante darea , ori n other words: production per ha declined. The average yield after World War II was indeedjus t about one half of that before the war.68 According to the figures of the Central Bureau of Statistics, the exports of sugar showeda declinefro m 1,071,100ton si n 1938t o 32,900ton si n 1962.69Par t ofthi sca n beexplaine d bya greate r consumption athome . Further details of thesuga r factories' development will be discussed in chapter 8. Tea.I n 1963,te a output amounted to 27,918 tons, which is a decrease of 55% since 1938.Th enumbe r of estates dropped 56%an d theplante d area 44%. Here again the average yield per ha decreased, primarily to be attributed to lack of imported mate rials, such as spare parts and insecticides. There are no separate figures for Java's exports, but thefigures fo r the whole of Indonesia seem to be sufficiently represen tative.70 Coffee. Coffee output in 1963amounte d to 19,075tons , a decrease of 52% as com paredwit h 1938. Thenumbe r ofestate sdroppe d 57% andth eplante d area 53% .Thu s theaverag eyiel dpe rh awa sabou tth esame .Agai nn oseparat efigures ar eavailabl efo r Java's export, but the situation will not have been basically different.71 Tobacco. Thedevelopmen t ofestat etobacc o canb esee nfro m Table 55.Productio n of Java's estate tobacco in 1958 amounted only to 3,856 ton as compared with 20,924 tonsi n 1938,o r adecreas e of 86% . Nofigures ar eavailabl efo r Java'sexports ,bu t the figures for the whole ofIndonesi aindicat etha tthes eexport sdecrease d considerably.72 "See Tables52-54 . 68 See3.1.1 . 69 Statisticalpocketbook ofIndonesia 1963, p. 151. 70 According to CBS-figures, the export of tea during 1962 showed a decline of 42,700 tons: from 71,900ton s in 1938t o 29,200ton s in 1962.Thi s decrease was due primarily to the decline in produc tion. It is believed that pressure or internal demand also limited the export(se e Statistical pocketbook ofIndonesia 1963, p .147) . 71Th e CBS-figures show that theexpor t during 1962decline d from 69,000ton si n 1938t o57,20 0tons , a decline of 11,800 tons. The same factors, already mentioned for tea are the main causes of this decline(se eStatistical pocketbook ofIndonesia 1963, p.148) . 72 The publication of the Report of the Bank of Indonesia was suspended after 1960,s o that the 1958 figures on estate tobacco are the latest available. According to the figures of the Central Bureau of Statistics' the export of estate tobacco showed a decline of 37,000 tons from 48,000 tons in 1938 to 11,000ton si n 1962.(Se eStatistical pocketbook ofIndonesia 1963, p .149. ) 47 Rubber. FromTabl e3 4i tca nb esee ntha t estaterubbe r production increased in 1963 by about 1%a s compared with 1938.Th e number of estates dropped 32% and the acreage 16%, but the average production increased. Among other causes, this increase was due to overlapping. The production in 1963coul d have been greater if import requirements, such asfo r equipment and chemicals, had been met. However, the long-run prospect of estate rubber for the whole of Indonesia, as earlier indicated, is not very encouraging. The average yield on estates has declined after 1952 primarily due to the inability of most estates to undertake a normal replanting program and also to the gradual decline in yield per hectare as the trees become older and areno t replaced. Cocoa andCinchona. Cocoa and cinchona production in 1963 decreased by 64 and 78% respectively ascompare d withth e 1938figures . Though of minor importance in the total agricultural exports, cinchona is of interest because of the almost complete monopoly in the world's production which Java held for many years before World War II. During World War H, after supplies from Java were cut off, this monopoly was broken by synthetic anti-malaria drugs. In the post-war period output and export remainedconsiderabl ybelo wth eprewa rlevel ,an dth eoutloo ki sno t encouraging.73 In conclusion it is difficult to indicate precisely the trends of export of estate crops from Java since there are no specific figures published. However, it is generally accepted that the export of estate crops, with the exception of rubber, decreased substantially. This isdu e to the fall in production caused by several factors men tioned while discussing the specific crops, and to increased domestic consumption. Table52. Number of estates in exploitation by principal crops in Jam andMadura, 1938,1962and 1963. 1938 1962 1963 Percentage increase (1938=100) for 1963 Sugarcane 97 54 Hevea rubber 56 -42 609 427 Tea 400 -34 297 137 Coffee 131 -56 314 140 Cinchona 134 -57 96 30 Cocoa 28 -71 30 23 Oilpalm 20 -33 6 4 Hardfibres 1 4 -33 39 2 Tobacco - 40 - - Cassava 28 — - 'For 1938rai l fibres. 1938 Ibid. De lanlbouZ™, ™2 and J^Oecember 1963. pp. 2-57; for i938 ibid.»gZ£22Z%™£™»%*r {*£•_»*"* *5 ^mpe^S^TST^'"' m2' PP"16 ^4: f0r SU8arCanein : HaSU 48 Table53. Plantedarea in ha of principal estatecrops in Java and Madura, 1938,1962 and 1963. 1938 1962 1963 Percentage increase (1938=100) for 1963 Sugarcane 84,829 82,541 80,114 - 6 Hevea rubber 288,911 192,612 193,643 -16 Tea 105,054 58,126 58,978 -44 Coffee 88,585 42,285 41,574 -53 Cinchona 15,179 3,869 3,475 -77 Cocoa 6,172 6,585 6,259 + 1 Oilpalm 890 892 892 0 Hard fibres 19.7211 1,000 1,206 -94 Tobacco 28,809 - - - 1 1938:a U fibres. Sources:fo r 1938:De landbouwexportgewassen, seefootnot e Table 52; for sugarcane in 1963: Hasilsensus perkebunan 1963, table4 ; forth eothe rdata ; CentralBurea u of Statistics, seefootnot e Table 52. Table54. Productionof principal estate crops in tons in Java and Madura, 1938,1962 and 1963. 1938 1962 1963 Percentage increase (1938=100) for 1963 Sugarcane (tel quel) 1,375,510 588,714 650,563 -53 Hevea rubber 63,606 65,425 64,345 + 1 Tea 62,235 37,025 27,918 -55 Coffee 39,697 12,094 19,075 -52 Cinchona 10,276 2,094 2,431 -78 Cocoa 1,576 631 569 -64 Palmoil 887 1 960 66 \ 70 59 \ 60 -96 Palm kernels 73 J 4 1 W Hard fibres 33.564 11,42 2 810 - Tobacco4 20,924 5,7822 3,856s -85 •For 1938:al l fibres. •Figurefo r1957 . 3Figur efo r 1958. 4Fo r 1938,1957an d 1958:Bank Indonesia Report 195911960, p .178) . Sources:fo r 1938:De landbouw-exportgewassen, seefootnot e Table 52;fo r sugarcane in 1963: SeeTabl e 15;othe r datafro m Central Bureauo fStatistics . Table55. Productionof estate tobacco in Java (1938 and 1953-1956), in tons. Production Production 1938 20,924 1956 3,921 1954 4,185 1957 3,782 1955 3,548 1958 3,856 Source:Bank Indonesia Report 195911960: 178. 49 4.2.2 Peasant agriculture The development of the harvested farm crop area in Java and Madura after World War II can be seeni n Table56 . It appears that the total harvested area in Java and Madura expanded 13% durin g the period 1939-1962. This increase can be specified as follows: 8% by the more intensified use of arable land through double cropping and 5% t o new arable land. Thesefigures agai n demonstrate the limitations in constructing new irrigation works and to bringne warabl elan dint oproductio n in Java (seefurthe r Chapter 11). Datao nth eharveste dare afo rth eprincipa l farm food crops in Java and Madura are shown in Table 57. It can be noted from the table that the area under paddy practically did not increase over the period 1940-1942. The development of the production of principal farm food crops can be seen in Table 58.I n 1962 riceproductio n (dry stalkpaddy )wa s 11 %abov e that in 1940,tha t of maize was about 29% higher, and that of cassava 3% lower. For the post-war periodth econclusio ni stha tth evolum eo fth eprincipa lfoo d cropsfluctuated withou t any clear trend. Theplante dare aan dproductio n ofothe rcrop sare ,wit hth eexceptio n of sugarcane and tobacco, only available for 1961(Tabl e 59). Main food crops. The same method as applied before is followed to estimate the amounts of exportedfoo d crops.Fo r eacho f the sixprincipa l items Tables 60an d6 1 give the total production and the consumptionper capita and the percentage of the production consumed by the population. Production of cereals and rootcrops increased 18%,whil e the increase of popula tion was 22%fro m 1953t o 1962.7* If wecompar e the increase of food production in relation to the population increase for the 1940-1962period , the picture is even less favourable: production in Java and Madura increased 7%, while the population increased 33%. 75Thi s resulted in a decrease in the principal foodstuffs availableper capitafro m domesticproductio n inJav a and Madura sinceth e war. The consumption figures were kept more or less constant by the import of rice from abroad and maizefro m the Outer Islands, especially from South Celebes. The amount available for export of cassava, the peasant's main export crop from Javabefor e WorldWa rII ,i sdeclinin ga sca nb esee ni nTabl e 62.Th emai n reason for this decrease is the expanding home consumption due to the population increase. 73 WICKIZER,op. cit. {fn. 31), p. 92 Statisticalpocketbook of Indonesia 1963, p .1 1 andpp . 69-70. ' 50 Table56. Harvested areas of farm crops in Java and Madura during the period 1939-1941 and 1953-1962, in1000 ha. Cereals1 Root- Pulses3 Tobacco Sugarcane Other Total As percentage crops2 crops of all arable land 1939 6,058 1,323 862 139 17 540 8,939 113.2 1940 6,072 1,393 895 166 18 578 9,122 115.1 1941 6,329 1,349 926 145 19 582 9,350 117.5 1953 5,516 1,269 917 89 22 546 8,359 102.6 1954 6,157 1,231 1.014 123 28 556 9,109 109.6 1955 5,767 1,253 967 104 43 540 8,674 104.0 1956 6,002 1,379 998 143 43 565 9,130 110.3 1957 5,867 1,499 1,054 166 35 604 9,225 110.7 1958 6,495 1,629 1,155 151 42 646 10,118 121.4 1959 6,006 1,700 1,151 166 40 633 9,696 115.5 1960 6,249 1,646 1,247 152 36 700 10,030 119.6 1961 5,815 1,593 1,153 165 29 665 9,420 112.3 1962 6,443 1,705 1,330 136 24 501 10,139 121.0 1 Irrigatedplu snon-irrigate dric ean dmaize . ! Cassava,swee tpotatoes ,potatoes ,etc . 3Peanuts ,soybean san dothers . Source;Statistical pocketbook of Indonesia 1963, p. 67. Table57. Harvested areas of principalfood crops in Java and Madura, 1938-1941 and 1953-1962 (in 1000 ha). Irrigated Non-irri Total Maize Cassava Sweet po Peanuts Soybeans paddy and gated riceare a tatoes gogoran- paddy tjah1 1939 3,653 375 4,028 2,030 992 197 241 415 1940 3,724 365 4,089 1,983 1,041 209 251 418 1941 3,743 357 4,100 2,229 1,003 205 259 440 1953 3,768 249 4,017 1,499 868 216 240 422 1954 3,897 260 4,157 2,000 866 174 270 478 1955 3,925 264 4,189 1,578 876 176 253 462 1956 4,076 224 4,300 1,702 899 260 264 447 1957 4,069 242 4,311 1,556 987 277 289 462 1958 4,124 265 4,389 2,106 1,075 302 283 533 1959 4,056 273 4,329 1,677 1,188 258 300 531 1960 4,006 314 4,320 1,929 1,145 250 313 577 1961 3,668 324 3,992 1,823 1,142 213 294 541 1962 3,707 384 4,091 2,352 1,137 350 293 514 1 Gogorantiah: rice planted on dry sawahs,wit h sufficient rainfall later on irrigated, or there verse. Source:Statistical pocketbook of Indonesia 1963, p .68 . 51 Table 58. Production ofprincipal food cropsin 1000 tonsfor Java and Madura (1938-1941 and1953- 1962). Irrigated Non-irri Total Maize Cassava Sweet po Peanuts Soybeans paddy and gated paddy (shelled) (fresh tatoes (shelled) (shelled) gogoran- paddy roots) (fresh tjah roots) 1939 7,915 446 8,361 1,985 8,311 1,268 181 318 1940 8,477 492 8,969 1,900 8,415 1,418 197 294 1941 8,467 526 8,994 2,433 8,736 1,475 210 338 1953 8,239 282 8,521 1,302 6,468 1,231 164 274 1954 8,878 385 9,263 2,154 6,430 1,064 204 362 1955 8,525 289 8,814 1,462 6,519 1,008 178 306 1956 8,902 244 9,146 1,431 6,420 1,503 178 311 1957 8,839 277 9,116 1,309 7,168 1,595 192 299 1958 9,237 307 9,544 2,012 8,100 1,750 192 380 1959 9,386 332 9,718 1,475 9,082 1,490 200 375 1960 9,234 423 9,657 1,779 8,624 1,394 211 388 1961 8,740 495 9,236 1,706 8,443 1,216 203 376 1962 9,305 695 10,000 2,450 8,120 1,200 202 337 Source:Statisticalpocketbook of Indonesia 1963, p . 70. Table 59. Plantedarea andproduction ofprincipal farm grown (non-estate) commercialcrops in Java, Area in 1000h a Productionin100 0 tons Coconuts drycopr a 534.1 Coffee 275.2 drybean s 56.5 Tea 9.1 drygree nte a 64.4 1 Kapok 37.7 seeded fibre 131.4 Arecanuts 18.5 dry,cu tnut s 11.0 Pepper 4.3 dryseed s 1.4 Cloves 0.3 dryflower s 7.3 Nutmeg 0.1 drynu t + mace 0.1 Sugarcane brown sugar s 27.1 193.6s Tobacco dried s 161.8 64.3 1Includin gth eproductio n ofwe tlea fpurchase dan dprocesse db y estate factories. This quanti tyamounte dt o700 0ton s(calculate do ndr ygree nproduct) . •Inclusiv eth eproductio no fcan euse dfo r chewingan d that processed byestates 'factories .Th e latterquantit yamounte dt o58,27 0ton so fbrow nsugar . 8Th eare arefer st oth eare aharveste ddurin g1961 . Source:Statistical pocketbook of Indonesia 1963, p .74,75 , 76, 77. 52 r4 so •n •n CM CM 1 OS "n CO CM © s •a o VI o ^ 00 88 o »—1 •a C I a •* In co SO co »—1 u - *3 m' SO SO so' SO iri SI J3 :>> 3 !Z1 o 6 3 wi CO OS 00 a C 00 OS •* •6 SO CN O OS so os_ r-^ OS oo' OS Os' t--' o Mn! o •? O H •a' o CM OS_ SO t C-; D. w r- co CO ON t- so OS OS OS so 00 00 00 OS oo' oo' ("-' 0 ^ Ui a 3 O) o i c/l O F-l •8 O f to so so co a c e - r~ u •* CM CM' co co T3 o oi H T3 1jn § OS OS Os (/I ^ 88 o 3 o so OS os t> 00 00 *-H co' CN CM' CM p_ _ _ rt rt rt •* *s I C-; Os •* 00 CO o 00 (N d l" 00 o c OS r~ oo in >n O, M»- H -H^H H t-H- Hs*- H— ^H « *-H so OS OS Os 8 "3 Os OS Os o OS OS 8 8 *i 1 1 o »-H e •* CM CO •* (--_ to to •8? o 00* •n jp >n U-l CO OS CO o • Table 62. Exportof tapioca products excluding waste,from Java,(1938-1940 and 1958-1962), in 1000 tons. 1938 246.8 1959 144.3 1939 279.7 1960 104.2 1940 226.5 19611 78.9 1958 21.1 1962 10.0 Note:postwa rdat aprio rt o 1965 notavailable . Source: Statisticalpocketbook of Indonesia 1963, p. 155. Table 63. Averageyield ofpreasants' sugar per ha inJava, 1957-1961. Yeaf 1957 1958 1959 I960 1961 Averageproductio n inton s Pelha 6-92 6-60 6.54 7.13 8.68 Source: Statisticalpocketbook of Indonesia 1963, pp. 74-77. Table 64. Averageyield of peasants' teaper ha inJava, 1957-1961. ^ 1957 1958 1959 I960 1961 Averageproductio ni nton s !!^! °-371 0-394 0.510 0.587 0.585 Source:Statistical pocketbook of Indonesia 1963,pp . 74-77. Table 65. Exportof kapok from Java,1938-1940 and 1958-1962. Year 1938 1939 1940 i958 1959 I960 1961 1962 QuantityinlOOOton i6,3 21.8 16? ^ ^ ^ ^ ^ Source: Statisticalpocketbook of Indonesia 1963,p . 154. " Production in 1938wa sestimate d to K» f,f. inn * Whkh 14 549 Wereex rted seeVANHALL and VANDEKOPPEL,op.cvTse tol 1 iT Tt'u ' P° < aad taWe 56 for the c " Total export of tobaccIndullo^f f ^ivatedare ai n1939) . fromth epeasant ,Th e^S^^^TJ 0 22'°6°tons °f ^ich only 841 tons came Statistikkonjunktur, May-June 1963 n 4fi »JT, ? , a (see: Central Bureau ofStatistics , '•Itappear ,tha tth e JLnJ^^S^T1 T" 'W P" ^ ofit simportanc ea s arevenu eearner . woaccomanufacturin g industry, perhaps because 54 Sugarcane. In 1958 peasants' sugarcane covered an area of 42,000 ha as against 24,000 ha in 1962. But the postwar cultivated area has always surpassed that before thewar ,a sca nb esee nfro m Table 56. Production showsa nincreasin gtendenc yan ds o hasth eaverag eproductio n asca nb esee ni nTabl e 63. The increase in averageproductio n per hectare may beexplaine d by the assistance given by the 'Jajasan Tebu Rakjat' or 'Jatra' (the Smallholders' Sugar-cane Founda tion), instituted by the Ministry of Agriculture and byth e 'Kantor Penjelidikan Gula Tebu Rakjat' (Smallholders' Cane Sugar Research Office) in Solo.79 The Jatra helps thefarmer s with credit. The research office in Soloattempt s to improve thequalit yo f smallholders' cane and to encourage the development of smallholders' sugar enter prises. It also designs milling machines for the small cane planters. Most of the peasant sugar-cane is consumed locally. Tea. The area under peasant tea wasmor e or lessconstant 80, but production perhec tare showed an increase so that the average yield went up, as can be seen from Table 64.Thi s increase is primarily due to the re-establishment of security in the tea growing area in West Java after 1958, which made it possible for the peasants to combat the blister blight successfully, with the assistance of the Extension Service. Part of the product is sold to the estates as can be seen in Table 59. But export decreased,whic hWICKIZE Rexplain sa sfollows : "Whenth epeasant s ofJav ahel d3 5% ofth etota lte a acreageo fIndonesi a in 1940,the yaccounte dfo r 18% ofth evolum eo f tea exports. Disregarding the extreme fluctuations occasioned by the war and the earlypostwa r period of adjustments,th esmallholders 'shar ei n 1954wa sstil l 18% o fa considerably reduced volume of the total export, but thereafter the proportion fell rapidly to 12%i n 1955an d to 8%i n 1956,whil eestat e output and exports remained steady."81 This decrease could be primarily explained by the increase in home con sumption. Copra. The area under the other cropsmentione d in Table 59ar eprimaril y cultivated with coconut.Afte r World War II,th eexpor t ofcopr a decreased, mainly duet o ade clinei nproductio npe rtre ebecaus eo fagin gan dt oth eincreas ei ndomesti cdeman db y thegrowin gpopulation .Java ,befor eth ewa ra nexporte ro fcopra ,becam ea nimporter . Kapok.Expor t of kapok, a minor Indonesian export product and primarily grown by peasants in Java, has also declined as shown by Table65 . Before the war, Indonesia was byfa r the leading exporter of kapok, but in recent years shipmentshav ebee nreduce dt o afractio n ofit spreviou slevel .Declin ei n world demand, owing to the development of various substitutes in numerous uses, is the principal cause. '• But the main cause of the increase in average production isth e use of more fertilizer per ha. 80 As compared with the prewar figure, which in 1938 amounted to 66,000 ha, it remained about the same. 81 WICKIZER, op. cit. (fn. 31), p. 65. 55 Summarizingi tca nb econclude dtha tpeasants' te aan dtobacc oi nJav a haveregaine d their prewar production level, while sugar and cassava have surpassed it, whereas copra decreased slightly. However, as far as exports are concerned, two of the three principal prewar peasants' export crops, namely tea and cassava, show a decline. In the case ofcopra ,Jav a has event o import it from the Outer Islands. The decrease of thevariou sexport safte r thewa rwa st ob eexpecte di nth econtex to fa rapidl ygrowin g population, since peasants' agriculture exports consist primarily of food items and tableluxuries . 4.3 ConcludingRemark s Asexplaine dunde r 4.2.2,eve nth e smaller export of cassava and the larger import of rice could not prevent a lower consumption of principal foodstuffs, as illustrated by Tables6 0an d 61.T ofac e thismos t unfavourable situation, the government launched a three-year program to achieve self-sufficiency in rice. This program was called the 'Swa Sembada Beras' (SSB, Self-sufficiency in Rice Production). It is primarily designed for Java and required an increase of paddy output sufficient for home con sumption from 1962 west monsoon rice harvest onwards. This three year plan, initiated in 1959,i sincorporate d in the Eight Year's National Overall Development Plan 1961-1969fo r agriculture,alon gwit ha numbe r of otherproject s in thefoo d and fibre area whichwil l be discussed more elaborately in Chapter 6. Thequestio n offoreig n exchangeearnings ,thei r allocation and the whole politico- economicproble minvolved ,i sa ver yseriou son efo r thegovernmen t to besolved ,du e to theprecariou s position of overcrowded Java.Thi sisland , with about two thirds of Indonesia's population, contributed only 15%t o the export earnings in the postwar period but uses most of the total earnings to finance its imports, with the foreign currency mainly provided by the Outer Provinces. In addition, non-agricultural employment isno t able to absorb the net increase of the rapidly growing population so that agriculture has to take most of the burden. Sincefo r decadesther eha sbee na shortag eo flan dan da surplu s oflabou ri nJava , all ttusmean stha tth eJavanes eeconom yha sthu s descendedt o a very serious situation. Something should be done to lift Java from its present state In thefollowin g chapters the attempted measures of the government to relieve the populationpressur eo nJav awil lb ediscussed .Bu tt ounderstan dth escop eo fth epro - blem and the conditions giving rise to those measures, it will be helpful to precede with a brief description of Java's agriculture (Chapter 5). 56 5 Theagricultura lsituatio ni nJav a Productivity in agriculture is a function of soil, climate and the skill of the farmer. Nature certainly has favoured Java's agricultural development. Yet it is evident that the rapid population growth of thisislan d isa facto r of primary importance in deter miningth efutur e course ofagricultura l development. In an agrarian economy of the type found in Java, any increase in the number of inhabitants isfollowe d bya n attempt to extendth eare aunde rcultivation . Butwher e new land becomes increasingly scarce, pupolation growth is also followed by more intensive cultivation methods. This is the case in Java where little room for further extension of the agricultural area islef t andwher e labour intensity under the existing conditionsi s approaching itslimit . Fortunately therei sroo m for much improvement inmethods , such asth eus eo ffertilizers , better seed,an dth edistributio n ofirrigatio n water,whic hclearl ycoul drais eproductivity .Th eposibilitie so fchange s in techniques will be discussed in Chapter 9. As an alternative solution, efforts have been directed towards agricultural resettlement in less densely populated parts of the Outer Pro vinces. This will be discussed in Chapter 7.82 To understand the scope of the problem and the conditions giving rise to the various agricultural development programs, it will be helpful to give a description of the agricultural situation in Java. This can beaccomplishe d bya discussion of the size of land holdings, the tenure arrangements and land productivity. 5.1 Population growth and reduction in farm size Farm size can be expressed in land area and in terms of capital or labour input, sometimesi n annual production or sales.Bu t asi nJav a thelan d itselfi sth emos tim portantelemen ti npeasan tagricultura lproductio nan ds oth eare ao fcultivate dlan di s traditionally used as a measure for farm size.83 To studyth einfluenc e ofpopulatio n growtho nth esiz eo fth efarms , it is necessary to gather some information on the total area of available agricultural land. From Table 66i t appears, that Java did not much change in this respect between 1940an d 1962,i nspit eo fth erapi d population growth. 82Anothe r possibility to raise the income of theJavanes efarme r isth erehabilitatio n of the former estates, especially thesuga rfactories , whereth efarmer sca near na nadditiona l income.Th, swil lb e discussedi nChapte r8 . 83Th eare ao fcultivate dlan di spracticall yth esam ea sth eare ao farabl eland . 57 Table 66. Distributionof land use in Javaand Madura (1940 and 1962). Area in 1940 Area in 1962 in 1000h a inpe rcent . in 1000h a inpe rcent . Peasant agriculture 1 7.994 60.5 8,377 63.5 Estate agriculture 2 983 7.4 627 4.8 Forests 3,116 23.6 2,991 21.7 Otherland s 1,124 8.5 1,322 10.0 1 Inclusiveshiftin g cultivation. ' Including small holdings and horticultural areas occupied by foreigners. Sources: For 1940:Statistical pocketbook ofIndonesia 1941, p. 36. For 1962: Compiled from severalpublications . Table 67. Growthof population for Javaand Madura for theperiod 1815-1962. Total popu Average % Total popu Average % lation inmil annual lation in mil annual lions increase lions increase 1815 45 1920 34.4 0.93 1845 9.4 2.48 1930 40.9 1.79 1860 12.5 1.94 1940 48.4 0.40 1870 16.2 2.64 1950 50.4 1.93 1880 19.5 1.87 1955 55.7 2.24 1890 23.6 1.90 1960 61.9 2.24 1900 28.4 1.86 1961 63.1 2.24 1905 30.0 1.10 1962 64.6 Sources:K .J . PELZER. op. cit., p. 254;Statistical pocketbook of Indonesia 1963. p. 11. Table 68. Variousdata on population andsize ofpeasmt agricuUural Qrm .„^ ^^ Population in Number of Total arable Average area of arable millions peasants inmil area in million land in ha lions ha per peasant per landtax paying land owner 1900 28.4 - 5.6 1922 1938 _ ~~ - 1.15 1930 41.8 0.86 7.6 7.6 1940 48.4 1.00 1961 7.9 63.0 12.7 8.4 0.66 Sources:Th e population figure for 1900 amtthTw > ' " ' (fn. 52).p . 254; the population nTJr o^™1 are from K- J- PELZER. <*>•«'• Pocketbook ofIndonesia mTv She numbf r"0 "* 1961 m fr°m: Statis<™1 book butfo r 1941(p . 14)an d tnatfor '96?£v^*?^10™the s™°<*et- - The t0tal area figure is from A JONKERS, Welvaartszorg in IndonesiaL «~? } B^ m eenPerSPectief 65 66 - froma^ W*^JJGr;St - »• " - «* 58 Table 69. Numbersof farms (over0.1 ha) bysize of area, Java, 1963. Area (ha) Djakarta WestJav a Central Java East Java Jogjakarta Total 0.10-0.49 14,640 1,205,857 1,378,675 1,358,650 194,612 4,252,434 0.50-0.99 4,130 525,412 731,946 813,603 82,617 2,157,708 1.00-1.49 1,970 216,462 276,163 335,062 28,830 858,487 1.50-1.99 960 83,567 113,844 140,627 11,891 350,889 2.00-2.99 860 74,409 79,289 112,531 6,824 273,913 3.00-3.99 300 23,034 25,314 38,230 1,758 88,636 4.00-4.99 140 10,714 10,092 14,583 454 35,983 5.00 or more 120 11,929 8,020 13,147 651 33,867 Total 23,120 2,151,384 2,623,343 2,826,433 327,637 7,951,917 Livestocks holdings 20 537 700 731 - 1,988 Total holdings 23,140 2,151,921 2,624,043 2,827,164 327,637 7,959,905 Source:Centra lBurea uo fStatistics ,Hastl sensus pertanian 1963, p .1 . Table70. Per capita areaof arableland (in ha) ofpeasant agriculture in Java and Madura, 1939-19411 and1953-1962* 1939 0.170 1953 0.157 1958 0.147 1940 0.167 1954 0.157 1959 0.141 1941 0.166 1955 0.155 1960 0.138 1956 0.151 1961 0.138 1957 0.150 1962 0.135 1 Percapita o ftota lpopulation . 'Percapita o fth eIndonesia n population. Source:Statistical pocketbook of Indonesia 1963, p .66 . Ast o this growthi t can beremarke dthat ,befor e 1815,th edeat hrat e wasver yhig h becausemalaria , hookworm, and other diseaseswer ewidespread . The establishment of modern health services, initiated by the Dutch government, has mainly been re sponsiblefo r thefollowin gphenomena l population increasea sillustrate d inTabl e67 . Population increased with 122%, the area of peasant agriculture with only 50% during the sixdecades . In the beginning, this increase did not hamper development, as there was enough additional land available. But since 1922,ther e appearedmor emouth s to befe d than there was new land to be occupied. This resulted in a steadily increasing pressure on land,a sapparen t from Tables6 8 and 69.Thi sle dt oa reductio ni nth eaverag eare ao f arable land per farm from 1.00 ha in 1930t o0.6 6 hai n 1961, mainly caused by sub division of holdings whichwer e sometimes splitted up in as many asfive t o six small plots.Compariso n of the 1961 censuswit h anearlie r censusindicate stha t during the last3 0year sth eaverag earabl elan dpe rpeasan ti nJav ai sslowl ydecreasin gi n sizewit h the steady growth of population. In 1930, for example, the average arable land per 59 peasant wasabou t 1.00 ha, onehal f larger than in 1961.84 Of the 1.00 ha mentioned above, in 1930,0.4 3 ha was sawah, 0.57 ha belonged to dry fields or gardens.85 In 1961 these data were 0.28 and 0.38, respectively.86 This reduction alsoappear sfro m thefac t that thenumbe r of landowners who have to pay taxes increased at a faster rate than the area subjected to this tax (Table 68, last column).Th e postwar development shows a further reduction in farm size,a s can be seenfro m Table70 . The Javanese peasant can support himself and his family on his dwarfsize holding only through double cropping and intensive cultivation (apart from additional work outside hisfarm) . The consequence is,tha t he has to grow primarily food crops, so that little land remains for commercial crops and the cash receipts are small. This alsocause sth e structure ofth e agricultural labour to be characterized by the domin ance of the family unit. But such dwarf units are uneconomic because they do not require the full services of the family. This gives rise to idleness and concealed un employment. Occasionally this situation is partly solved by several members of the familyoccupyin gthemselve swit h handicrafts. 5.2 Tenure arrangements and debts TheAgraria n Lawo f 1870stipulate d that nativelan d ownership,bot h individual and communal, was to be protected by the government and that such land could not be soldt onon-natives .Thi sprohibitio n waso ffundamenta l importance,fo r itprevente d legalownershi po flan dfro m passingint oth ehand so fforeigners , manyo fwho mwer e anxioust oobtai nit . Though Indonesianswer eno t forbidden to sellthei r land to autochthonous fellow- citizens87, landlordism was not a severeproble m in the prewar period, as there were only a few rich Indonesian fanners. But after World War II there was a trend to increasinglandlordism. 88 Thecause sinclude d thebigge r saleo f land bypeasant s due to the insecure situation in some rural areas like in southeast Priangan, the growing speculation on land as a result of inflation, and the emergence of an Indonesian middle-class,whic hpracticall y didno texis tbefor eth ewar .Th egovernmen t considers this development as undesirable. To cope with this problem it enacted the Basic Agrarian Law of 1960, comprising the fundamental regulations on agrarian policy. Anuppe rlimi tbetwee n 5 and 20h awa sfixe dfo r thesiz eo f ownership,dependen t on thepopulatio n densityan d thefertilit y ofth esoi li n various regions.Th e expropiated land was to be redistributed to small farmers and landless peasants (see Chapter 9). 81 Seefootnote s 85an d86 . 85 JONKERS, op. cit.(fn. 14), pp. 65-66. " Statisticalpocketbook of Indonesia 1963, p .66 . " Fellowcitize nher emean so fIndonesia nnationality ,no to fforeig n origin. 88 Information supplied by officials of the Department of Agriculture and Agrarian Affairs; see also Table69 ,wher ei sindicate dtha t about0.4 %o fth enumbe r oflandholding sconsis t of 5h ao r more. 60 A program for reorganizing land use, and regulations of the various landrights were includedi nthi slaw . Therear en orecen tdat a onth eexten to ftenanc yi nJav aa sth edat a ofth eAgricult ural Census of 1963 are still being processed. The only figures for Java are from HASSELMAN'S study of 1903 (see ZINKIN89), when there were 90% owners and 10% tenants. The number of tenants today would be considerable higher, but it is still smalla scompare dwit hothe rsoutheas tAsia ncountries . However, HASSELMAN'Sfigures fo r 1903 fall short ofrevealin gth etru enatur e ofth e 90 problem. At least 38% (HASSELMAN'S estimate is 30% ) of the current agricultural working force on Java is estimated to belandles s wage owners. Prior to the war this group was primarily employed as estate labourers. In addition, there is a large but unspecified group of small landowners who, through shortlease or debt, have lost effective controlo fthei rholdings. 91 Amongthos elandowner swh ohav emanage dt oacquir ea moderat eare a ofagricul tural land, holdings generally consist of scattered small fields rather than large coherent estates worked by hired labour. The landowners then lease their land in small parcels to tenants on a share basis. The terms of the tenants' contract vary greatly and depend upon such local conditions aspopulatio n pressure,fertilit y of the soil, and especially upon customs. As regards rice, frequently it is one half of the yield, often deducted from the 'bawon', a form of harvest payment in kind. This usually amounts to 20% of the yield which the tenants can keepfo r themselves.Th e tenants then actually get 60%o f the total riceyields .Contract s varyals o inregar d to thedivisio no fexpense slik esowin gsee dan dta xpayment . To meet extraordinary expenses, or when in need of cash, the small peasants, excluding those who held shares of communal land, may mortgage their land. These shareholders can only lease their share to someone in the village and not to an out sider.Th econtrac t is seasonal andusuall yth e cashren ti s paidi n advance. PELZER said that "The payment is sometimes made one or two years before the land is actually put at the disposal of the lessee. The latter in most cases does not intend to cultivate thelan d himself but employsth elesso r astenant , or rather assub tenant, that is, he subleasesth elan d back toth eowne r on a sharebasi san d takes one half oreve nfive seventh so fth ecrop .Th ecreditor sar eusuall ymerchants ,wh ob ythi s methodassur ethemselve so fa chea psuppl yo fric eo roccasionall yindividua linvestors , whoi nthi swa yobtai nhig hinteres trates .Th elonge rth eren t is paidth elowe ri tis." 92 *» ZINKIN, op. cit. (fn. 50), p. 48. •° Ibid. 11Th e agriculture census questionnaire of October 1963 was designed to cover various aspects of agriculture including land tenure. But most of the results have not yet been published, so HASSEL MAN'Sfigure ha d to beuse d here. M PELZER, op. cit. (fn. 52), pp. 170-171 (for the situation before World War II). The same situation existed after World War II, maybe in certain areas even worse sincether e isa big demand and a short supply ofagricultura l credit. 61 Comprehensive data on the extent of indebtedness of the Javanese farmers before World War II, do not exist, but the percentage of farmers going into debt in this manner is considered to behigh . Although the situation as illustrated below isno t representativefo rJav a(thes efigures ar econsiderabl y highertha n the average accord ing to PELZER), yet it can be used to give some idea of how serious the peasants' indebtednesswa si nsom eareas .A surveymad ea tth ebeginnin g of 1939b y SOENARIO in the Tulungagung region (East Java), indicates that out of a total of 2,470 land- holdingpeasants ,74,2 %ha dlease d someo fthei r landi norde r to obtain cashan da s manya s33. 9% ha dlease dthei rwhol eproperty. 93 However, before World WarII ,th edevelopmen t ofmoneylender s or usurerswh o had a strong grip onth epeasant s asexperience d for instance in Burma, was made impossiblei nJava .Thi sca nb eexplaine db ythre efacts : (a)tha t alienation oflan dt o a non-Indonesian wasprohibite d byth eAgricultura l Lawo f 1870,(b )tha t from190 0 onwards government credit agencies were setu p to fight usury, and (c) that several small village banks andpawnshop s were established to help the peasants meet then- needo fcash . In the years of economic crisis, depression and paralyzation of the institutional credit organizations (aswil lb ediscusse dlate r on)th epeasant swer eforce d to borrow from privatemoneylenders ,o nver yunfavourabl e terms. Where, before World War II, in some regions of Java and Madura, e.g. in the regency of Indramaju, this kind of indebtedness threatened to have serious conse quences, the government immediately took measures to free the peasants from the inextricable neto f the private creditors, and debt redemption wasmad e possibleb y theUsur yOrdinanc eo f1938 . In 3ou t of the 21village s included in the survey made by SOENARIO, every land holderlease deithe ra par t oral lo fhi slan d andi n9 ou to f2 1village s9 0% o rmor eo f alllandholder sha dgon eint odeb ti nthi sfashion . Acredi tsurve yafte r WorldWa rI Iha sno tye tbee nconducte d andconsequentl yn o exact information exists ast o theindebtednes s ofth e peasants, their actual need for credit and their customary sources of credit. Butth e government is of the opinion that someselecte dregion so fJav a stillhav e seriousrura l credit problems. Many rural credit institutions have been re-established andne wone s have been added, butthe y are still inadequate to meet the need of the peasants.94 With high interests rates ranging from 10t o 25%pe r month onsmal l loans,peasant s who have no collateral areforce d tog ot oprivat emoneylenders. 95I nsom ecases ,th epeasan t isforce d either toleas ehi slan dt oth ecredito r aspaymen tfo rhi sdeb t andactuall ybecome sa share cropper onhi sow n land, ort o sellhi sproduc e before harvest time at non-profitable prices.96 •3Ibid. "Ibid., p. 172. " Theinteres t rate of 10t o2 5% pe rmont h was mentioned in 1962b ysom e officials ofth e Bank for Cooperates, Farmers and Fishermen. Themai n cause of this high rate is therapi d inflation since 1958.Th epresen t ratema yb eeve nhigher , sinceth einflatio n has continued. 62 5.3 Technology and productivity A surveyo fth e trendsi n agricultural production andfoo d consumption in Java must begin with rice, the key-product in Java's agriculture, as it provides over two-thirds ofth epopulation' scalorifi cintake . The shortage ofmoder n technology in ricefarmin g is shown in numerous ways:i n the applied traditional techniques, in the small use of both natural and artificial fertilizers, and in thenearb y failure to improve the breeds.97 Before thewar , artificial fertilizers were applied to only one percent of the crop land area on Java, although 13% (one million hectares) showed phosphate deficiency. Improved seeds were planted on only2 5% o fth e total area. On the other hand, large-scale construction of a modern technicalirrigatio n systeman d extension of theagricultura l area by double croppinggreatl yenlarge dth efoo d production between 1900an d 1941.I n thiswa yth e capacity of Java to support a larger population has been possible, as shown earlier. In 1939 irrigated land accounted for 40% of total peasant agricultural land, and harvestedarea samounte dt o 113% o ftota larabl epeasan tagricultura l land. After thewar , thegovernmen t attempted tointroduc efertilizer s and improved seed on a large scale to meet the demand of the increasing population. At present about 75% o fth eric efields i sfertilize d andabou t 50% ofthi si sgrow nwit himprove d seed; butbecaus eexpedient shav eno tbee nintensivel y orrightl yapplied ,th esucces sha sno t been up to expectation.I n spite of a strenuous effort from theAgricultura l Extension andth eIrrigatio n Servicest oincreas efoo d production byextendin gth eirrigate dare a at the same rate as the population increase, this has been only a partial success (see Chapter 9). In 1962 in Java the area of irrigated land was practically the same as before World War II and Java's harvested areas amounted to 120% of the total arablepeasan tagricultur eland . The production ofpadd y per hectareha s more or lessremaine d as before the war, namely218 0k gbefor ean d235 0k gafte r thewar. 98 Next,i t wasnoticeabl e that theinvestmen t madei n estates and peasant agriculture initially didrais eth epeasants' income .However , therapidl y growingpopulatio n and thelimitation s of available resources for further improvements in thepeasants ' econ- my, ultimately failed to raise the income of the Javanese farmers. Moreover, there occured no significant expansion outsidetraditiona l agricultural pursuits.Ye t a rapid expansion was noticed within peasant agriculture which is made possible by the perfection oflabou r absorbingproductiv etechnique swhic hrais eland , but not labour productivity. •* Duet oth erelativ ehig hfoo dprices ,a scompare dwit hothe rprices ,th eeconomi cpositio no fman y farmers inJav a and Madura whoow nlan d isbette r inth epostwa r than in the prewar period.Bu t thepositio no fth esharecropper san dth eagricultura llabourer si sworse . *'Th erestricte dus eo ffertilizer s mayb edu et oa nunfavourabl e ratiobetwee npric ean dcost srathe r thanth eshortag eo fcapital .Perhap ssocia lfactor stha t inhibit theus eo ffertilizer so rothe rimprove d productionpractice sals opla ya role . 98Statistical pocketbook of Indonesia 1963, p .66 . 63 Though there are still some possibilities left to raise agricultural productivity, as willb esee ni n Chapter 9,th ecentra lproble m istha tth erura l population isincreasin g sorapidly , andtha t the exceptionally smallfarm s areunabl e to absorb any additional labourforc ewithou t afurthe r declinei nth e alreadylo wleve l ofliving .Th e following chapterswil lillustrat eth emeasure sattempte db yth egovernmen tt ofac ethi sproblem . 64 6 Objectives of agricultural plans and policies 6.1 General background The previous chapters have shown that the policies and actions of the government havea profoun d effect onth erat e and direction ofagricultura l development. MOSHER has stated: "These policies and actions are of many kinds.Th e policies include those regarding landownership and tenancy, taxation, foreign exchange, tariffs, domestic prices and public investments. The actions include programs of education, research, credit, market regulation, land development, construction of transport facilities and manyother sa swell . Nationalplannin gi sth eproces so fdecidin gwha tth egovernmen t is goingt o dowit h respect to each ofthos e policies and actions affecting agricultural development withina give nperio do ftime .I nmakin gthes edecisions ,th e government must face up to the question of what is needed at the moment to move agriculture forward and what preparation needst o bemad e now in order to meetneed s that can beforesee n inth enea rfuture . Itmus tals otak eint oaccoun tth eamoun t andnatur eo f its resources of money and manpower that can be applied to meeting the needs of agriculture."99 However, each government willformulat e its own objectives sinceal l do not desire the same things equally or in the same proportions. The priority given by each government to economic objectives will differ. These priorities, as reflected in the variousagricultura l developmentplans , expressth egovernment sattitudes , preference and principles. Therefore, first the general background of the objectives and policies of agricultural development in Indonesia will be given to show the government's attempt to increase the agricultural production. This background is also valid for Java. This chapter primarily discusses agricultural development plans and therefore agriculturalconsideration spla ya decisiv erole .Th eautho r doesfee l thelimitation s of this presentation. If thereade r wants to seeIndonesia n agricultural development in a broader context, as part of overall economic development plans, he should consult otherstudie san dpublication sa swell. 100 As explained in Chapter 1,th e government has to face the problems of large food imports, especially rice, and the declining importance of agricultural exports. There- *•A .T . MOSHER,Getting agriculture moving, Ne w York, 1966,p .169 . 100 For the convenience of the readers not familiar with the literature on economic development of Indonesia, alis t isinclude d inth ebibliographi c references. 65 fore, efforts havebee n madet o replaceth eimpor t of food and to promote the export of agricultural products, as appeared from the succesive agricultural development plansi nIndonesia .Thes eplan swil lb ebriefl ydiscusse d inth enex tsections . 6.2 The successiveagricultura l development plans 6.2.1. TheSpecia lWelfar e Program The first agricultural development plan after 1950 was launched in 1951,unde r the so-called'Rentjan a Kesedjahteraan Istimewa' (RKI), theSpecia lWelfar e Program.101 In order to promote food production the government drew up plans arranged in two parts: a short-term plan, implying intensification of agriculture in Java, and a long- termpla nimplyin gintensificatio n and extension ofric efield s in the Outer Provincies. Theavailabl efund s should servet o amor e general use of better strains, to the exten siono fth eapplicatio n offertilizers , tocomba tpest san d diseases,t o the improvement ofirrigation ,an dt obrin gne wrice fields int oproduction . This RKIi s acombinatio n of the so-called 'Kasimo Plan', which was launchedb y the Republic of Indonesia in Jogjakarta in 1948, during the revolution, and the 'Welfare Plan' of the Government of the Dutch East Indies,whic h was designed for the territories under their control. After the transfer of sovereignty by the Dutch government to the Republic of Indonesia in December 1949, the two plans were combined andcalle dth eRKI .Th escop eo fth eplan ,th egoal st o beachieve dan dth e amount offund s allocatedwer emodest . Thebudge t for this plan and the production targetsfo rth evariou scrop swer efixed annually . 6.2.2. TheFiv e YearPla n 1956-1960 The Five Year Development plan102 1956-1960 was prepared by the State Planning Bureauunde r the guidance ofth ethe n Minister ofNationa l Planning, Dr. DJUANPA. It included the twenty year projection of Indonesia's needs,populatio n growth rates, source offinancing an d an agricultural development plan. Thewhol epla n called for expenditurest oa tota lamoun t of Rp 30,000million .Th eagricultura l part, alsocalle d the Second Agricultural Plan, primarily written by the Minister of Agriculture with the assistance of foreign experts and the author himself, should receive 13% of the totalamoun tallocate dfo r theexecution. 103 Actually this plan is a continuation of the RKI, but added are the non-food agri- 101Rentjana kesedjahteraan istimewa, Ministry of Agriculture, Djakarta, 1951-1955. 102 Garis-garis besarrentjana pembangunan Lima Tahun1956-1960, Biro Perantjang Negara (State PlanningBureau) ,Djakarta , 1956an d 1957. 108 In the meantime the 13%ha d been increased to 20% as a result of an amendment on the Five YearPla nwher eemphasi s waspu t onfoo d production and shipping. 66 cultural development projects likefores t industries,th epromotio n ofexpor t products, etc.Developmen t expenditureswer eno t specifically earmarked for individual projects inth egovernmen tbudgets .Th etota lexpenditure si neac hcategor ywer eapproximatel y met in money terms, but the inflation caused much of the budgeted amounts to be absorbedi nth eordinar ygovernmen toperatin gexpenditures . The quintupling of rice imports in 1955 to 1956, the decision to nationalize the remaining Dutch interests late in 1957 and the spreading rebellion in 1958 created major obstaclesi ncarryin gou tthi sfive-year plan ;therefor e itwa sadjuste d toth ethe n existing conditions. In 1957majo r emphasis waspu t on the production of foodstuffs insteado fth eplanne dindustria lprojects . In early 1958 as the Dutch 'Royal Packet Company' (KPM) withdrew its vessels, thegovernmen tha dals ot opa ymuc hattentio nt omaritim eshipping . 6.2.3. TheThre eYears 'Ric eProgra m 1959-1962 During the execution of the Five Year plan, the Ministry of Agriculture launched its third agricultural development plan, which was better known under the name of 'Rentjana Swa Sembada Beras' (SBB, 'Selfsupporting in Domestic Rice Production Program').Thi srice progra m wasinitiate d in 1959an d aimed at selfsufficiency by the endofl962.104 Amor edetaile daccoun t ofth eSS Bwil lb egive ni nChapte r9 . 6.2.4. TheNationa l OverallDevelopmen t Plan 1961-1969 Before the Five Year plan was wholly executed, another plan was announced: the 'National OverallDevelopmen t Plan 1961—1969'.105Thi seigh tyea r plan givespriorit y to projects designed to provide more autonomy to the local government and a more self-reliant economy. For the first three years emphasis should be put on food and clothing. The agricultural part (the fourth agricultural development plan since 1950), whichwa sannounce di nAugus t 1960,include dth ethre eyears rice' pla n(followin g the initiatedpla n of 1959)alon gwit ha numbe r ofothe rproject s onfoo d and fibre. Thegenera lOveral lPla ni sdivide dint otw oparts : A Projects, 335i n number (plus 39provisiona l ones added later), are the core of the developmentprogra man dar eintende dt ocontribut edirectl yt onationa l development. Theyconsis t ofproject s to increasedomesti cproductio n for capital and consumption ofbot hintangibl ean dtangibl eforms . B Projects, fallingint o 8categorie sar eproject s whichar ehope dt oprovid eadditiona l 104 Rentjana Tiga Tahunproduksi beras,Departme n Pertanian (Ministry of Agriculture), Djakarta, 1960. 105 Ringkasan ketetapan madjelispermusjawaratan rakjat sementana, Republik Indonesia, No I dan II/MPRS/1960 (People'sConsultativ e Congress),Djakarta , 1960. 67 rupiah and foreign exchange revenues sufficient to cover the cost of the A projects. It is primarily concentrated on the increase of agriculture exports (e.g. rubber, tea, coffee, coprafish),, minera lexpor t(e.g .ti nan doil )an dtourism. 106 The A projects contain twelve major groups which, together with their expected expenditures,ar eshow ni nTabl e 71. TheB projects ,t ob estarte da tth esam etim ea sth eA projects ,compris eth eplanne d expansion ofagricultura lan dminera lexpor tproduction . Other Bproject s aremainl y increases of receipts from existing sources that are to be reserved for financing the Overall Development Plan. This plan aims at gross foreign exchange receipts of nearly $2500 million, equivalent to about 111,000 million rupiah at the official exchange rate in 1960( 1U S $=Rp 45) and gross rupiah receipts of 120,000 million rupiah, or a total equivalent to about 231,000millio n rupiah. Table 72 shows these Table71. 'A-projects'in Eight YearDevelopment Plan 1961-1969;money figures in thousandmillion rupiahs.1 Group of projects Project number Planned expenditures Allocation of expenditures amount percent . localcur foreign not all of total rency currency ocated Cultural 9 1.6 0.6 1.6 _ _ Educational 43 16.3 6.8 16.3 _ Research 16 2.7 1.1 0.8 1.9 _ Public welfare 11 6.2 2.6 6.0 0.2 _ Government 6 3.6 1.5 3.6 _ Food 8 25.1 10.5 14.0 11.1 _ Clothing 7 28.9 12.0 14.2 14.7 — Industry 81 52.0 21.7 28.2 23.8 _ Health 6 2.2 0.9 1.7 0.5 „ Transport and communications 144 60.2 25.1 36.2 24.0 _ motor transport* 11 30.9 12.9 23.9 7.1 railtransport * 1 7.0 2.9 3.0 4.0 „ seatransport * 4 10.1 4.2 3.2 6.9 __ airtransport * 5 4.5 1.9 2.2 2.3 othercommunica tions* 4 7.7 3.2 4.0 3.7 Financean d Tourism 3 11.3 4.7 10.5 0.8 Specialproject s (military) 1 30.0 12.5 _ _ 30.0 Total 335 240.0 100.0 133.0 77.0 30.0 converteda tth eofficia l exchangerat eo f1 US % = RP 45 ^ ~^^^ °^ in^ation as cited in: lndonesia. 1 Fishingi sinclude di nth eDepartmen t ofAgriculture . 68 Table72. Grossand net receiptson 'B Projects'and costs of'A Projects' in Eight YearDevelopment Plan1961-1969. In foreign exchange In 1000mill . Rp Total in 1000 in mill. $ in 1000mill . mill. Rp1 Rp1 Grossreceipt sfro m Bproject s 2,462.5 110.8 120.0 230.8 Expenditures for Bproject s 1,391.3s 62.62 38.03 100.6 Net receipts 1,071.2 48.2 82.0 130.2 Cost ofA projects4 2,213.0 99.6 140.0 240.0 Netreceipt sfro m Bproject s 1,071.2 48.2 82.0 130.2 Financingno t provided for 1,141.8 51.4 58.4 109.8 1 USDollar s expressed inrupiah s at theofficia l exchangerat eo f 1 S — Rp45 . ' Onth emos tunfavourabl e assumption ofR p62,00 0millio ncos to fcapita lan dconsume rgood s and the officially given 600millio n rupiah foreign exchangecos t of the tin projects. "Includes 33,750 million rupiah for purchasing foreign exchange from oil companies and4,23 0 million rupiah for reducing rubber and copra smuggling and for promoting tin and tourism projects. 4I t is assumed here that 75% o f the cost of the 'Special Projects' consist of foreign exchange cost,an d2 5% o frupia hcos t(se eTabl e71) . Source:a si nTabl e71 . Table.73. Expectedreceiptsfrom'B Projects'in EightYear Development Plan 1961-1969. Foreign exchangerevenu e Total revenue in 1000mill . Rp in millio million UusS $» in IUUin 100Umm 0mill . Kp. Rp* 1 Oil: government shareo fexport s 1,180 53.1 foreign companies'capita l in Rp 750 33.7 Timberexpor t increase 52.5 2.4 Savingo nfish impor t 12.5 0.6 Copra exportincrease 2 76 3.4 Rubber export increase2 320 14.4 Tinexpor t increase 15 0.7 Aluminiumexpor tincreas e 11.5 0.5 Tourism 45 2.0 Resulto f 1959'monetar yreform ' 10 Shareo fstat eenterpris eprofit s 32 Communitysavin g 8 Saleo fshare san d bonds 8 Saleo fcapita lgood s 16 Saleo fconsume rgood s 46 Total 2,462.5 110.8 120 1 Converteda tth eofficia l exchangerat eo fR p4 5pe rU S S. *Throug heffort s toeliminat esmuggling . Source:a si nTabl e71 . 69 sources more specifically. In the execution of the A projects, agriculture plays an importantrol ea sca nb esee nfro m thistable .Abou t 22.5 % ofth etota l investmentsi s allocatedfo r the execution of food and clothing projects which are primarily ofagri culturalorigin . Inth eimplementatio no fth e B projects,i norde rt oear nadditiona lforeig n exchange forfinancing th e Aprojects , about 20 % is expected from agricultural sources as canb esee nfro m Table 73. 6.3 Objectives and policies ofagricultura l development in Java Fromwha tha sbee ndescribe di nChapter s 3 to 5 it is obvioustha t thecrucia l problem of agricultural development in Indonesia is how to get agriculture moving in Java. Ifa solutio ncoul db efoun d toJava' sagricultura lproblems , agricultural development in the whole of Indonesia would be arelativel y easy task. Thus the objectives of agricultural development asexplaine dearlier ,namel yincreasin gfoo d production and earning more foreign exchange, are of general importance. Therefore emphasis has been put on the following measures: (a) providing adequate food for the growing population, (b) assistance in earning or saving foreign exchange, (c) alleviating the population pressure on land primarily by transferring farmers to the less populated areaso fth eOute rProvinces .Othe r objectivesare :(d )supplyin gra wmaterial sfo r the growing industrial economy, (e) building up the economic and social overhead capitali nth erura larea sfo r ahealth yan dprosperou srura l economy,an d(f ) reducing underemployment and increasing rural incomes through more intensive techniques. S een e a m StUdy JaVa S ulati , ! < i n «^ ^ ' ' P°P °a ^creased from 50.5millio n in 1950 to 64.6m 1963,a n increase of about 28 % in a period of 12 years.Th e absolute mag nitudeo fthi sincreas e (14.1 million)i s superimposed on an already huge mass,whil e el*'! ^ °Uter PrOVinCeS are SparseIy P°Pulated- Moreover, non-agri- TrTc/ 7 Tbeenabl et oabsor b*• netkcreas eo f p°pulation-Food andt T ^ Y* * °f ^ d0minateS the Cultural economy of thisisland , BeforeWT H W*T?* ^ **"* t0 M the raPidly basing population. ^^^TButft ^ 00 '"'^.^^^P^avitaT m1933 )an dlate rbecaus e °thfl erolwa eri ann theJavanes dth e revolutioneeconomy > . Z to*T rlbeen aWe t0 Fegain ^ f0rmer P°siti-- Therefore, accord- 2 avtZI T' fCreSCe m t0 bC threC mahl P°ssibilities of testing capital in e y DameIy (a) the transfer of Java SSZS^ T77 ' **e farmers to the rsutZtt^T ^ (b) t0 Pay Spedal attention to the rehabilitation of a^dTasS L t? T ^^ UDder StatC mana^ent, and (c) fertilization tTchmwZr^ '? ^ °fbette t Seed and other proved agricultural techniquest omcreas eth eproductio no fpeasants'agriculture . In^eTurZCnan tT%? 2"** **"P °SSibiUtieSt 0achieV eit s obJectives' InthefoUowmgChapteritwillbediscussedinhowfarsuccesswasmetwith. 70 7 Agriculturalresettlemen t 7.1 Organized agricultural resettlement in the Outer Provinces 7.1.1. Necessityan dprewa rdevelopmen to fagricultur eresettlemen t To gain a better insight into the scope of agricultural resettlement projects it may be helpful to start with a short description of land use and distribution ofpopulatio n in thewhol eo fIndonesia . In 1962onl y 9% o f thelan d areai n Indonesia wasregarde d asarabl e as illustrated by Table 74.107 But there is a striking difference between the intensity of land use in Java and Madura and the other major islands. Whereas 68% o f the land in Java and Madura is dividedint o smallfarm s or estates,i n Borneo,th e other extreme, only 1 % is under regular agricultural use. In total, about 60% of the country is covered by forest,whil e3 0% i surban ,wast ean dunclassifie d land. The last official census of Indonesia, in 1961, revealed that the total population amounted to 97,085million. 108 With a land area of 1,904,345squar e kilometers, this gives an average density of 51person s per square kilometer.109 Thisfigure doe s not reflect the real problem of population density, because it does not take into account the extremely uneven distribution over the archipelago. The population of Java and Madura alone was 63,059millio n in 1961, or nearly two thirds of the total; yet these islands make up only 7% of the land surface of Indonesia. The density of Java and Madura is2 5time sth eaverag edensit yi nth eOute rIslands ,a sca nb esee nfro m Table 75. Therei sa limi tbeyon dwhic hth ecultivate d areacanno tb eenlarge da tth e expenseo f the forest cover without serious consequences. This limit has already been passed on Java. Foresters have estimated that 30% of the land should be covered by forest to safeguard the water supply so vital to the sawahs of the island. Instead, forests now occupyonl y2 2% .(se eTabl e74) . Onth eothe r hand, theOute rIsland shav econsiderabl epossibilitie sfo r agricultural expansion, since much more land than necessary for the control of erosion is still 107 The actual figure of the land under agriculture may behigher , as the conventional figure given by the Ministry of Agriculture for arable land amounts to 16 million ha instead of 13.7 million ha mentioned in Table 74.Th e difference can be explained by the inclusion of land devoted to shifting cultivation inth e Ministry ofAgriculture' s figures. 108 Statisticalpocketbook ofIndonesia 1963, p . 13. 109 Ibid. 71 f-; t~; 00 a vo oy oo ^f o ^ 't n M •fl- m •* (N 001 lO o i? 3 5 » «-' § H ^ t~ 00 VO i-i - o! •* N —i f> ^ 5 f N N o\ O vo Vfl vo i- io e- SH vo cv t~- m OS £ •* VO' t in ov p Tf N d © <-< c4 oo —< as' vo' f! d rj »o t-. ^ VO t-- so en Tt- • —' vo « r-- ov I OS_ 00 N OS O <0 (M c4 c4 rn 00 S3 ro d i-i d o «n* 6, T3 s o ^ vo n t i/-> >~- d -H (N o O O O M I 3.S u £* 8 3 1 « N VO OS .-I M o d d d odd ts "-I O O O O "' I J>D» V O *d i—i '0 CO J* in CrtO ^ RRg 3 « ^' <•> •* « vo „ ^ a, , Q o Q +3 & vci vo O m as s •§ •8 I «<** oo- 55,3.232332 p. •3 a » O .N •S CO i .a !^t;* Pa < & j 3 •a C3 ca Population in 1961 Area in squarek m Density per square inmillion s km Java and Madura 63,059 132,174 477 Other islands 34,026 1,772,171 19 Indonesia 97,085 1,904,345 51 Source:Statisticalpocketbook of'Indonesia 1963, p. 13. under forest. Nothing would seem more natural than an attempt to solve Java's problemo foverpopulatio nwit hlarge-scal emigratio n to theOute rIslands . Transmigration hasa histor y that goesbac kt oth eearl ypar t of the present century whenth eNetherland s EastIndies ' Governmentinitiate d organizedresettlemen t toth e Outer Islands. From 1905 to 1941,204,00 0 persons moved from Java to the Outer Islands and 45,000 ha of new land were brought under cultivation. After some trial and error, the program was well under wayjus t before World War II, when a tem porary halt was put to this migration.110 The present study will be restricted to the policies and achievements of thepostwa r period, and localtransmigratio n willno t be considered.111 7.1.2. Considerations onpostwa r transmigration The postwar problems of transmigration are considered by the government to differ from those of the prewar period. The present transmigration or land settlement program should not be considered as the logical continuation of the plans of the former Netherlands East Indies' Government. The considerations leading to the presenttransmigratio n projectsar eth e following: (a) It iscertainl ytru etha t thepopulatio n problem ofJav ai sye tt o besolved , among othermeans , bytransmigration . But atpresent ,ther ear e otherconsideration s (to be mentioned below) of the government that make transmigration desirable. These considerations are perhaps even more important than moving surplus population. If, however, in the process some of the population pressure on Java isalleviated , thisi sal lt o the good.Th e other sideo f the coini stha t solelytrans migrationi sno t sufficient to solveth eproble m ofJava' s overgrowing population. (b) The Indonesian economy is almost entirely agricultural and in world trade it could do more than supply raw materials. On the import side, Indonesia still requires food and at the same time it also strives to import capital goods. The 110 SieKwa t Soen, Land colonization inIndonesia, Ithaca, 1957.(Unpublishe d M.Sc. thesis, available at the Cornell University Library). 111Fo r readers interested in the pre-war achievements several excellent publications are available (see thebibliograph y at theen d ofthi sstudy) . 73 extentt o whichsuc ha n economy isdependen t onth evagarie so fth einternationa l market isalread yknow nan ddoe sno t need elaboration here. Planned diversifica tiono fth eeconomy ,als oleadin gt ofurthe r industrialization, isrequire dt o escape the nearly completedependenc e on external market and sources of supply. But to allintent s andpurposes , in theinitia l stagesindustrializatio n will requireimport s ofmachiner y and industrialequipmen to fal ltypes .Sinc eth egovernmen t is of the opiniontha tincreasin gagricultura l exports in the short run will be of doubtful value, it has attempted to raise the domestic production of basicfoodstuff s for internalconsumptio n in order to save foreign exchange. It is then to be hoped that a larger portion of imports could be devotedt ocapita lgoods . Asearlie r explained, the program for increasing domesticfoo d production can be accomplished by doing two things: by extending the land area and by inten sifying the use of existing farm lands. As the possibilities to expand agricultural lands on Java have reached their limit, the extension of agricultural land should beaccomplishe di nth eOute rProvinces . (c) After thewar ,defens e considerationsplaye d animportan t role. Thesettlemen t of large numbers of young men, if possible with military training in such strategic locationsa sBorne owa sconsidere dver yimportant . (d) Furthermore theunitar y state ofIndonesi a requiresincreasin gassimilatio n of the Javanese and other ethnic groups in order to minimize the centrifugal political forces inherent in Indonesian nationalism.I n other words,th e government wants 'Indonesianization', thecreatio n ofa homogenou snatio ni nwhic hth eproble m of regionalismwil lgraduall yvanish . 7.1.3. Quantityan dqualit yo flan davailabl ei nth eOute rIsland s Although there is still much empty land outside Java which can be reclaimed for transmigration needs, for the time being and because of various difficulties, the government is devoting its main attention to open areas which have been sufficiently investigated. Even here, the projects are limited to the sections which offer the best possibilities andth ereclamatio n ofwhic hca nb emos t easilyaccomplished . The areas which are intended for transmigration centers amount according to the Ministry of Agriculture,t o 2,542,000ha ,o fwhic h695,00 0h a offores t areaswoul db esuitabl e for agriculture and 1,947,000 ha is proposed for forestry projects (Tables 76 and 77). Actually,th efigure give nb yth eMinistr yo fAgricultur ei so nth elo wside . Asha s been said before, the Outer Islands haveconsiderabl e possibilities for agri cultural expansion, sincemuc h more land than necessary is covered by forest. There is a forest area of about 120,000,000 ha, including the forest reserve required for erosion control,distribute d overth e archipelago as can be seen in Table 78. But the situation isno t asfavourabl e as this table suggests.Th e forest area includes not only primaryforest ,bu tals o anextensiv eare acovere db yalang-alan g(iwperat a cylindricd) and second growth forest.112 Therefore, the author considers much more significant 74 Table76, Forestareas in Indonesia considered suitable for agriculturein 1963. Location Province Area(ha ) Remarks West Pisang Lampung (Sumatra) 20,000 Replacement of these WestRumbi a Lampung (Sumatra) 40,000 forest areasi n another WestTerusa n Lampung (Sumatra) 80,000 localityi sdesirabl e South Mesudji, West Tulangbawang Lampung (Sumatra) 100.0001 (Bedara nunggal) SouthMesudji , South Lumpur Palembang(Sumatra ) 80,000 (Sungai Gebang) Rantaubinuang Riau (Sumatra) 60,000 Langsa Atjeh (Sumatra) 30,000 Bulaksana (Singkil) Atjeh (Sumatra) 75,000 DeltaKapua s (Pontianak) West Borneo 80,000 Sikau (Kumai) Central Borneo 40,000 Mamudji South Celebes 90,000 Total 695,000 1 It is expected that the Sanggarbuana Ltd. and the Tokyo Wood Working Industry will con duct loggingoperation si nthes eareas . Source:Departmen t of Forestry, Ministryo f Agriculture, Contribution tothe realization ofthe transmigrationprojects, 1966,p .10 . the figure given for available 'unoccupied' land by the State Planning Bureau. This refers to land which has already beeninvestigate d and found suitablefo r agricultural purposes,bu t not yetutilized . Thisland , 4,312,000ha , scattered overth earchipelago , representsmor erealisticall yth e amount oflan d availablefo r transmigration purposes inth enex tte nt otwent yyears ;Tabl e7 9supplie ssom edetails" 3. The quality of the soil must be taken into account in considering the available quantity ofland .I t should bekep ti nmin dtha tth esoi lo fJav afo r thegreate rpar t is unusually fertile for tropical regions, largely owing to its origin from volcanic ash of about neutral chemical reaction. Large areas in Sumatra, Borneo and Celebes are devoid ofvolcanoe s and here someo f the soilsar e strikinglypoor . Butthi s infertility is not an insurmountable obstacle, as modern agricultural technology can improve soilfertilit y byusin gfertilizers ,growin gleguminou splants ,etc . The amount and distribution of rainfall also greatly affects the fertility of tropical soils and hence population density. Heavy rainfall throughout the year combined withhig htemperatur eleache sth esoil .Suc hrainfal l inmos tpart s ofSumatra , Borneo and some parts of Celebes, helps to account for the inferiority of their soils as com- 112 If, due to thepopulatio n pressure,fire repeatedl y attacks abandoned temporaryfields, finally onl y grasses and some herbs and shrubs survive. These persist because their roots, tubers or bulbs send out new shoots after thefire. Th emos t important grasstha tfinally triumph s over forest vegetation is Imperatacylindrica, calle d 'alang-alang'i nIndonesia . (PELZER,op. cit.,fii. 52,p .19.) . 113Se eals oTabl e8 0fo r theare a undercultivatio ni nth eOute rIslands . 75 Table 77. Proposedforestry projects. Name and kind of projects Area (ha) Annual ca Number of Required an L = logging, P = pulp pacity (m3) transmigrants nual funds (USS) Specialproject st oassis ttransmigration : PulauPin i(Nort hSumatra) ,L 17,000 60,000 500 100,000 Sasak/Kinali(Wes tSumatra) ,L 60,000 120,000 1,000 200,000 Tapan(Wes tSumatra) ,L 30,000 120,000 1,000 200,000 SunaiGaun g(Riau) ,L 50,000 120,000 1,000 200,000 SungaiBuaj a (Lampung),L 40,000 60,000 500 100,000 Meliau(Wes tBorneo) ,L 80,000 120,000 1,000 200,000 ArutKuma i(Centra lBorneo) ,L 100,000 120,000 1,000 200,000 Palangkaraja I (CentralBorneo) ,L 20,000 60,000 500 100,000 Mamudju (SouthCelebes) ,L 80,000 120,000 1,000 200,000 Otherproject s: SingkiKAtjehiSL 60,000 120,000 1,000 100,000 Simalur(Atjeh) 1, L 40,000 120,000 1,000 100,000 Penjengat(Riau) 1,L 50,000 120,000 1,000 100,000 WayHita m(Sout hSumatra) 1,L 30,000 60,000 500 50,000 Warsamson(Wes tIrian) , L 60,000 120,000 1,000 100,000 Manukwari(Wes tIrian) , L 120,000 120,000 1,000 100,000 Nabiro(Wes tIrian) ,L 80,000 120,000 1,000 100,000 Sarmi(Wes tIrian) ,L 120,000 120,000 1,000 100,000 Nunukan(Eas tBorneo) 2,L 18,000 80,000 200 150,000 Sesajap (EastBorneo) 2,L 18,000 80,000 200 150,000 Malinau(Eas tBorneo) 2,L 18,000 80,000 200 300,000 PulauLau t (SouthBorneo) ,L 20,000 80,000 200 150,000 Sampit(Centra lBorneo) 2,L 20,000 80,000 200 150,000 Takengon(Atjeh) 1, L 80,000 270,000 1,300 - Siondop(Nort hSumatra) 1,L 50,000 166,000 850 - 1 Torgamba(Nort hSumatra) ,L 50,000 100,000 500 - 1 Mursala(Nort hSumatra) ,L 6,000 30,000 150 - 1 Batahan(Nort hSumatra) ,L 14,000 30,000 150 - 1 Mentawai(Wes tSumatra) ,L 30,000 33,400 150 - 1 BukitGadan g(Wes tSumatra) ,L 60,000 100,000 500 - 1 Mandau(Riau) ,L 40,000 107,000 500 - 1 Rangau(Wes tSumatra) ,L 20,000 40,000 150 - 1 SengatiKahidupa n(Djambi) , L 30,000 70,000 400 _ 1 Semangus(Sout hSumatra) ,L 70,000 120,000 600 - 1 Rawos(Sout hSumatra) ,L 31,000 82,700 400 - 1 Sokosuban(Sout hSumatra) ,L 30,000 40,000 150 _ Sampit(Centra lBorneo) , P 40,000 5,000s 100 _ Samarinda(Eas tBorneo) , P 40,000 5.0003 100 _ Batulitjin (SouthBorneo) ,L 25,000 80,000 200 _ Palankaraja II(Centra lBorneo) ,L 60,000 100,000 500 _ Palangkaraja III(Centra lBorneo) ,L 60,000 100,000 500 _ Obi(Moluccas) , L 40,000 80,000 400 _ Buru(Moluccas) ,L 40,000 80,000 400 _ Total 1,947,000 24,000 3,200,000 ' TransSumatr aHighwa yforestr yprojects . »Projectsi noperation . ' Intons . Note:Th econtributio nca nb eincrease di fwoo dindustrie sca nb eintegrate di nth eloggin gpro jects. Source: Department of Forestry, Ministry of Agriculture, Contribution to therealization ofthe transmigrationprojects. 1966,pp .11-12 . 76 pared with those of Java, where especially in the middle and eastern provinces the rainfall isconcentrate di nth ewes tmonsoon .Obviousl ymuc hresearc hwor k stillmus t bedon et ofind jus tho wt omanag eth epoo rtropica lsoils . Still afurthe r consideration isth eaccessibilit y ofth earea st omarkets .Muc h ofth e area of the Outer Islandsi shidde n behind mountains orjungles .Th e cost of opening transportation facilities would betremendous . This is a limitation which can only be overcomeslowly . Table78. Forestarea in Indonesia, in1000 ha (1966). Cultivated or under Withoutfixed pur - Total regular supervision pose Javaan d Madura 2,990.8 - 2,990.8 Sumatra 7,793.2 20,626.8 28,420.0 Borneo 3,908.4 37,561.6 41,470.0 Celebes 1,689.2 8,220.8 9,910.0 Moluccasan dWes t Irian - 37,500.0 37,500.0 LesserSund a Islands 1,218.2 265.6 1,483.8 Indonesia 18,000 105,000 120,000 The difference of about 6,000,000 ha in the totals is caused by the fact that in Dr. MAHAN'S figuresi nTabl e7 4som eo fth efores tarea sar einclude di nth enon-classifie d land. Source: Ministry of Agriculture, Department of Forestry: Forestresources in Indonesia, 1966, p. 5. Table79. Availableunoccupied land in the Outer Islands, in hectares (1954). North Central South Borneo Celebes Moluccas Lesser Total Sumatra Sumatra Sumatra Sunda Is lands 607,000 1,030,000 776,000 799,000 687,000 150,000 263,000 4,312,000 Source:Stat ePlannin gBureau , Questionnairefor Indonesia, MI700IXW54-30,1954. Table80. Cultivatedarea of smallholders' agriculture in the Outer Islands, Indonesia, 1954(in ha). Lowland Dry fields Shifting cultivation Permanent Total perennial rice uplandric e perennial crops crops North Sumatra 254,500 249,100 130,400 17,400 288,300 939,700 Central Sumatra 241,800 222,600 142,000 28,100 783,800 1,418,300 South Sumatra 124,200 266,900 197,500 42,900 398,500 1,030,000 Borneo 196,600 - 244,000 - 393,500 833,300 Celebes _ 47,500 45,500 - 47,500 140,500 LesserSund a Islands 248,300 252,200 - 16,000 62,900 579,400 Total 1,493,400 1,673,800 855,800 107,200 2,368,300 6,498,500 Source:Se eTabl e79 . 77 7.1.4. Administrative organization of transmigration According to Government Regulation No. 2o f 1952,th e plans for resettlement shall be drawn up by the Director of the State Planning Bureau.114 In order to coordinate the migration program a Committee of Transmigration was established in 1955. Themember sconsis to frepresentative s ofvariou sMinistrie s (withth eVic ePremie ra s chairman), the National Reconstruction Bureau (Biro Rekonstruksi Nasional, BRN and the National Reserve Corps (Corps Tjadangan Nasional, CTN).U5 The author servedi nth ecapacit y ofsecretar yfro m 1953 to 1955. ThisCoordinatio n Committeei s responsiblefo rhandlin gth ewor ko fth e variousministrie san dagencies . Since 1959 this Committee has been reorganized several times. Sometimes it is called Board of Transmigration and, apart from changes in persons, its composition remainedmor eo rles sth esame . The government's organized program for internal migration, or transmigration, is underresponsibilit yo fthre eagencies .Tw oo fthe mdevot ethei rtim et oth e settlement ofveteran so fth erevolutio nan dth earmy ,whil eth ethir ddeal swit hth eothe r popula tiongroups . The CTNwa sestablishe d tohandl e ex-members of the regular Indonesian army. It was subsequently reorganized into the BPBAT (Biro Penampungan Bekas Anggauta Tentarao rResettlemen tBurea ufo r Ex-serviceMen) . TheBR Nwa sorganize d toresettl eforme r guerillafighters, peopl ewh o wereactiv e duringth erevolutio n as'irregulars' .Finally , theDepartmen t ofTransmigratio n dealt withth e resettlementi nth emor etraditiona lsense . TheBPBA Tan dth eBR Nar eprovisiona l organizationst o bedisbande d as soona s the rehabilitation of ex-fighters and reservists is completed. The Department of Transmigration is recognized as a permanent organization116; its responsibilities are asfollows : (a)I n the assembly area (Java):registratio n of the candidates for resettle ment, collection and transport, and subsidizing during collection and transport; (b) La the resettlement area: investigation, survey, opening and distribution of the land, together with reception, location and care of migrants, and provision for the welfare of the migrants, beginning with theformatio n and centralization of an econ omican dsocia lorganizatio nt ob echannele dint oa village-cit yfor m ofsociety . 7.1.5. Selectiono fsettler s The 'ten commandments of MAASSEN', the guiding rules for selecting settlers for the regular transmigration as described in the following pages are still applied by the Departmento fTransmigration. 117The yare : 111 BACHTMR AMTNUDDIN, Theory and practice in the problem of resettlement. Siasat 8, (January 1954),p . 1. 116 Jajasan PembukaanTana h Transmigrasi,Institut e for Opening of Settlement Lands.Th e chairman isalway schose n from the Ministry ofSocia l Affairs. 78 (1) Selectgenuin efarmers ; non-farmers area burden for a settlement and endanger itssuccess . (2) Selectphysicall y strongpeople ; onlythe yca n stand thehardship s ofpioneering . (3) Selectyoun gpeople ; by taking them, onereduce s future population increase on Java. (4) Selectfamilies ; families are thefoundatio n ofpeac ean d order in the settlement. (5) Don't select families with many young children; the working members of the family cannotcarr ytha tburde na tth estart . (6) Don't selectforme r plantation labourers; in 90% o f the cases they are cause of discontenti nth esettlement . (7) Don't allow so-called 'resettlement marriage'; they are a source of unrest in settlement.118 (8) Don't accept expectant mothers; the pioneer settler needs the full help of the wifedurin gth efirst years . (9) Don't accept bachelors; sooner or later they will become involved with some bodyelse' swife . (10) Allow dessas or kampongs to migrate as a whole; in such cases the first nine commandmentsma yb eignored . 7.1.6. Kindso ftransmigratio n Oneo fth e'faults 'i nth eresettlemen t schemea si toperate djus tbefor e thewar ,wa sth e preference given to families, thus ignoring the fact that the village, as well as the family, isa basi csocia luni tamon gth eJavanese . The Indonesian government has noticed theweaknes s offorme r resettlement plans andtrie dt ocorrec tthe mi nit sne wtransmigratio n scheme.Large-scal emigration sar e now contemplated, based on colonization by integrated village units, including, wherever possible, the head of the village and the religious elders. But such a group colonization will not facilitate the dispersion of migrants among the autochthonous population,thu sslowin gdow nth e'Indonesianizatio n process'. In 1956th egovernmen tplanne dt ocarr you ta ninterestin gprojec t whichwa scalle d Transmigrasi intellectueel' (the transmigration of intellectuals). 'Intellectual' is broadly defined to include not only persons with high school and more advanced education, but also those with skills, such as carpenters, blacksmiths, etc. Such mi grants are intended to form new, non-agricultural villages. But it is stressed that it isno t the purpose of thegovernmen t to create a special classi n these transmigration 119I t was successively put under several ministries since its establishment in 1950, first under the Ministry of Social Affairs, then under the Ministry of Transmigration, Cooperatives and Community Development. 117 PELZER, op. cit. (fn. 52), p. 210. us "Frequently bachelors marry hastely before emigrating in order to beacceptable . Their wives are knowna s'voyag ewives '(bin i djalan) or 'tow wives'(bin i gandingan)" (PELZER, op.cit.,fn. 52,p .210) . 79 areas.119Futur etransmigratio npolic yma y be significantly affected by comparing the achievements of transmigration of intellectuals with the transmigration of farmers. In 1955,ther ewa sals oa pla nt omov estudent swit h agricultural high-school train ing to Central Sumatra. Their allotment of land was to be 10 to 15h a and it was intendedtha tthe ywoul dappl ymechanizatio n toric ecultivatio n ondr yland. 120Bu ti t is doubtful whether thisfor m of agriculture will befeasibl e in Indonesia; experience in the past has not been encouraging. Further information on the execution of this projecti sno tavailable . The standard colonists' allotment consists of two hectares of land. Irrigation is provided for, thelan di scleare d and contoured, a housei sbuil t and roads areestab lished. Travelling expenses to the site are furnished and a subsistence allowance is granted until the first harvest. Seeds, tools and financial aid are given for rising the ricecrop .Beside sthes efacilities ,th emigratio narea sar eprovide dwit hmedica lclinics , schoolsan dothe rsocia loverhea dcapital . According to plans of the Department of Transmigration, two million people or 400,000familie s willb emove d to the following islands duringth e eight years' period beginningi n 1961121: Sumatra 640,000person s (32 %) Borneo 1,040,000 „ (52 %) Celebes 89,000 „ ( 4.5%) Moluccasan dWes tIria n 230,000 „ (11.5%) LesserSund aIsland s(excludin gLombok ) 1,000 „ ( 0 %) The policy of the Department of Transmigration is to direct its activities towards thefollowin g subjects122: (a) Placing settlers in already well-established areas, where there is still room for moresettlers . (b) Carrying forward projects which are notfinished, i.e . in regions now only partly occupiedb yresettlers . (c) Openingne wsettlement sadjacen tt oprogressiv eresettlers . The formation of a new isolated settlement requires previous detailed investiga tions as transmigration is justified only when all possibilities have been studied intensivelyenoug ht oguarante ea health ygrowt hlate ron. 123 Byconfinin g transmigration to already established areas, the seeds,etc. , which the settlersneed ,ca nb emor eeasil yprovided .If , attimes ,a shortage offoo d occurs from pests or diseases,th e settlers may expecthel pfro m neighbours. A shortage of labour alsoca nb eme ti nthi sway .Fo r example,seasona llabou r shortagema yappea r during the period when soil is prepared or during harvesting while irregular labour demand 118 Rentjanapenjelenggaraantransmigrasi 1956, p .6 . 180 Opinionexpresse dverball yb yJAHJA ,forme r head ofth eInstitut e ofSoi lResearch , Bogor. 181Departmen t of Forestry, Djakarta, Contribution to the realisation of the transmigrationprojects, 1966,p .2 . 122 KAMSAH,Transmigration , Madjalahberkalapertanian9, 1953 123Ibid., p .2 . 80 mayaris edurin gth econstructio n andrepai r ofroads ,dam san dwate rchannels . A new settlement isolated in the middle of the rain forest often suffers from plant pests. Settlements should belocate d asmuc h aspossibl enea r transport facilities, or there must,a tleast , bea possibilit y ofcreatin ga transportatio n networki nth e future. Thesiz eo fne wresettlement smus tb eadequat efo r efficient operation.124 Experience hasshow nclearl ytha ttin ycolonie sar edifficul t tokee palive . 7.1.7. Economicorganizatio n ofth esettlemen tare a Before World War II, 1.05h a of sawahi nne wsettlement swa sthough t toguarante e a proper subsistence for a family. The governement provided 2 ha to each family and 125 presented a proposal to enlargei t to 3ha. Accordin g to KEYFITZ and WIDJOJO, the settlers indeed got 1.4 ha, being 1.05 ha arable land and 0.35 ha for a house and 126 surroundinggardens. Thi sgive sa tota l of 1.4ha ,whil elate ro n TAMBUNANmention s in the Work Plan for 1951 an increase in the allotment of workable land to 2 ha per family.127 Landi sallocate di naccordanc ewit hth eDepartmen t ofTransmigratio n Regulation no. 3 of 1953, article 6, which provides that everymigran tfamilyi n the area shall be givenlan db yth egovernmen ta sfollows : (a) Forth enon-farme r aplo t oflan da tleas t0.2 5h ai nsiz efo r his house. (b) For the farmer, a plot of land 0.25 ha for a house and at least 1.75 ha for work land. (c) The farmer-migrant shallhav e cultivation rights on the afore said work land for threeyears . (d) If, according to an examination byth e Department of Transmigration the above mentioned workable land has been cultivated as well as possible, the rights of cultivationshal lb e changedt oa right o fownership . (e) Thenon-farme r wholate r wantst ofar m alsoca n begive nwor k land in the same manner as for thefarmers'. 128 Theproble m of determining the sizeo flan d holdingst o beallocate d to migrantsi s not only related to considerations of land and labour, but involves capital require ments, especially if expenditure for clearing the forest, building the roads, etc. are necessaryprio rt osettling . The determination of an optimum size of holding on this basis therefore resolves 124 Ibid., p.3 . 126Ibid., p.2 . 126 N. KEYFITZan d WIDJOJO, Soalpendudukdanpembangunan Indonesia, Djakarta 1955, p.127 . 127 TAMBUNAN, The resettlement problem work plan for 1951, PeneranganDaerah, April 1951, p. 14. In addition to this 2 ha, 0.50 ha is calculated for roads and public buildings (see: Department of Forestry, op.cit. (fn. 121),p .2 . 128 AMINUDDIN, op. cit. (fit. 114). 81 itself into the problem of estimating optimum production factor proportions. If land and capital are available in abundance, then there is no problem. But in Indonesia, with its shortage of capital, transmigration must compete with alternative uses such as agricultural techniques and mechanization. Moreover, with respect to size of holdings,economi cfactor s needno t dominate.Th egovernmen t alsoha st o facepolit ical difficulties, and it has to avoid givingth e impression of favouring the Javanese farmers at the expense of the autochthonous population. A solution might be found by stipulating that, wherever migrants from seriously overpopulated areas of Java arerecruite dfo r agriculturalcolonie si nth eOute rIslands ,ever yprovinc eo fIndonesi a hasth erigh tt ob erepresente di nth esettlemen tprojec t ofth e government. Thefirst method , movingpeopl efro m Java to the Outer Islands, isprobabl y more efficient in relieving pressure in locations where this relief is mostly needed. The second method sacrifices part of the efficiency for the broader objectives of giving citizens, from all parts of Indonesia, the right to share in a national undertaking. At the same time it achieves the goal of breaking down provincialism and promoting national solidarity by bringing together asman y divergent groups as possible. It is not practicable to leave the clearing of the forest entirely to the settlers129, because such work, on say two hectares, is far too heavy for one family, especially whenth evegetatio ni sentirel yjungl e(whic hi snormal) .I fth e clearingwor k hast ob e finished quickly, it should be carried out by machinery or, if this is not possible, the jobshoul db egive no ncontrac tt oloca linhabitant swh oreall yunderstan d suchwork . Thelan d whichha sbee ncleare d must beplante d as soon aspossible . If plantingi s not promptly done,th e already mentioned alang-alangwil l quickly cover the cleared area.Onc ethi sha shappened , thecos t ofreclamatio n isprohibitive . Such grass plains servesolel ya shuntin greserves . For this reason, the transport of prospective settlers should be timed to match exactly the progress in opening the forest land of the new colony. To secure efficient clearing of forest land, the government has formed the 'Jajasan Pembukaan Tanah Transmigrasi' (Japeta), the Institute for the Opening of Settlement Land, which closelycooperate swit hth eDepartmen t ofTransmigration . Moreover, the Japeta has a representative on the Coordination Committee of Transmigration. Except for the oneyear ,whe n it wasinclude d in the Department of Transmigration, this institution receiveda seperat ebudge t appropriation. The basic administrative area for transmigration isth eresettlemen t district.130 Such a district will have an area of at least 12,000h a and it will be supplied with whatever equipmenti sconsidere d necessary. Resettlement districtswil lb eorganize d byth eDe partment of Transmigration and Japeta with the aid of other agencies (Publicworks , Irrigation, Internal Aifairs, Finance, Economic Affairs, Labour, Agriculture, etc.). Among the regions which are proposed for settlements the Sukadana Complex 128 KAMSAH, op. cit. (fn. 122),p . 4. 130Ibid.,p.5. 82 (Lampung, Sumatra) is considered particularly suitable. Including roads etc. about 140,000h ao ffores t landan dol dsecondar y growthwil lgraduall yb etransforme d into tendistrics. 131 Eachdistric twil lb esupplie dwith : (a) A 'mother village' for the Pamong Pradja (Civil Service) and other authorities, smallscal eindustry ,trade ,etc .(10 0ha) . (b) Asee dfar mfo rpaddy ,secondar ycrops ,fruits , commercialplants ,etc .(5 0ha) . (c) Astoc kbreedin gcente r(10 0ha) . (d) Forestt oth eexten to f50 0ha . (e) Farmlan dfo rabou t400 0familie s(12,00 0ha). 132 The pattern of agriculture isdetermine d primarily bythre e purposes: food forth e family, fodder for thelivestoc k (chiefly draught animals) and products for sale.Th e smallsiz eo fth eproductiv euni tresult si nemphasi so nth efirst tw oneeds . The structure ofth e agricultural laboureconom y isbase d onth edominanc e ofth e peasantfamil y unit.Thi smean stha tth emajorit y ofproductiv eunit si nmos ttransmi gration regions do not offer employment to outside labour, except at times when pressureo fseasona loperation smake ssuc hemploymen tunavoidable. 133 Although 2h a of land are given to each settler, this does not necessarily improve his economic status as compared with that in Java (0.85h a in the early fifties)134, because asa rule thelan d inJav a ismor e fertile. Thus,th epolic y ofth e government does not raise the farmer in the settlement areas materially above the level of sub sistence. According to the Department of Transmigration135, the averageper catitaincom e in the colonization areas in 1954wa s between Rp2.7 0an d Rp 3.60a day. In Jogja karta (Central Java) theagricultura l labourer hada ttha t time aper capita incomeo f Rp 0.78a day, whilea farme r with land hadR p3.91; thelatte rfigure i sexplaine db y thefac t thatbette rirrigatio nfacilitie s madedoubl ecroppin gpossible .Bu ti fth esettle r comesfro m theclas s ofagricultura l labourers,hi seconomi c situation is substantially improved. Another aspect ofth e level oflivin g of the settler which must betouche d upon is food consumption. Theaverag edie t ofth esettle ri sfavourabl e ascompare d with that in Java, qualitatively aswel la squantitatively . Butth e levelo ffoo d consumptionan d nutrition inth e colonization areas can still beimproved , especially with food richi n protein(pulses ,meat fish,, etc.) . 181Ibid. 132 TheDepartmen t ofTransmigratio n isi nfavou r ofgivin ga colonizatio n family 3h ainstea d of2 h a as earlier mentioned. It isdivide d as follows: 2h a toproduc e padi andsecon d crops, 0.25fo r house and surrounding garden and0.7 5 ha for commercial crops likerubber , coffee, etc. Butthi s allotment of3 h aha dno tbee napprove db yth ecabinet . 133 SeeChapte r5 . 184Penjelenggaraan transmigrasi 1954, Djakarta , 1955,p . 6. 135Ibid. 83 7.1.8. Obstaclest o transmigration For the economicdevelopmen t of a resettlement area, a certain amount of accultura tion or assimilation of the new inhabitants is necessary. Therefore, no Javanese agricultural settlement could be founded without the collaboration of the basic populationuni to fth ecommunit yi nth eOute rIslands. 136 Till now, the local community officials have shown themselves anxious to support Javanese settlement, probably because of thefinancial advantage s connected with it. But it is doubtful if this attitude will persist indefinitely. The recent regional military revolts haveindicate d that thepeopl e of the Outer Islands seemt o be 'restless' under the Java-oriented national government in Djakarta. Therefore it is the task of the present governmentt ocreat ea n atmospherei nwhic htransmigratio n isconsidere db y all ethnic groups as a necessary national adventure, a national objective. All groups must understand that allIndonesian s must have a stakei n the success of transmigra tion. Education, extension work, and the press can contribute to make this agricul turalresettlemen t anintegra lpar t ofth eeconomi cdevelopmen t ofth ewhol e country. The national government has to be tactful in carrying out these resettlement pro grams. The impression must not be created that the Javansee farmer will benefit at theexpens eo fth eautochthonou spopulatio ni nth eOute rIslands . The social relationship between the autochthonous population and the settlers is another field where successful policies and techniques remain to be developed. As alreadymentione d earlier, the government'sintentio ni stha t assimilation between the newcomers andth e originalinhabitant s shall take place as soon as possible. In other words, the objective is Indonesianization, the creation of a homogenous nation and the reduction of regionalism to the point where it is no longer a threat to national existence.137 In the resettlement area, however, this problem of regionalism becomes compli cated. According to BACHTIAR AMINUDDIN, the reasons are the 'mistakes' sometimes madei nth enewl ybuil tvillage si nth eneighbourhoo d ofth epionee rvillage :eac hne w grouptend st obecom eisolate d init ssettlement . Evennow ,th erelatio n betweennew comersan doldtimer sleave smuc ht ob edesired . Other causes can be found in the mistakes made on both sides, especially in the Lampungarea. 138 First,i t canb esai dtha t theLampun g peopleloo k down onth enewcomers .Thi si s becausethe yar egenerall ywell-to-d oa scompare dwit hth enewcomers ,wh o represent the 'have nots'. Intermarriage is difiicult, because in addition to isolating themselves from oneanother : *»• For example 'ulajat land' in Minangkabau (Central Sumatra), 'patuan land' in Ambon (Moluccas), and 'marga land' inLampung . SeeAMINUDDIN ,op. cit. (/« .114) . 1S"B . AMINUDDIN, Resettlement is not the only way of solving problems of population density, Siasat8, Jan. 1954,p . 1. 188Ibid. 84 (a) Thebrid emone yrequire d byth e Lampungpeopl etend st o makei tto o expensive topropos et oa Lampun ggirl . (b) The Javanese are not allowed to visit the courting place (a place of rendez-vous for theLampun gyouth) . (c) The Lampung people seldom visit the market place of the Javanese or their cul tural performances. Onth eothe rhand , thenewcomer smak en oeffor t tostud yth eloca llanguag ewhic h isa nimportan t toolfo r mutualunderstanding .Th eJavanes elanguag ei squit e general in Lampung and quite a number of the localpeopl e can communicate inJavanese. 139 Moreover,th ename so fth evillage sestablishe db yth enewcomer sar etake nfro m their place of origin.Thu sw ese ethes ene wvillage swit h names likeWonosobo ,Wonogiri , Brebes,Purbolingg o and Watestake nfro m placesexistin gi n Java. BACHTIAR AMINUDDIN suggests that assimilation of the Javanese and the residents ofth eLampun gma yb e accelerated by thefollowing 140: (a) Theestablishmen t ofpolitica lpartie si nth earea . (b) The establishment of social clubs,labou r and farmers unions,women' sactivities , neighbourhood associations,religiou sgroup san d so forth. (c) Theorganizatio n ofsport ,yout hgroup san d so forth. (d) The establishment of schools with the Indonesian language as the medium of instruction. (e) Theestablishmen t ofbuilding sfo r publicmeetings . (f) Theorganizatio n ofa nassimilate dcivi lservice . (g) Themixin go fmigrant sfro m thesam evillag eamon g theloca linhabitant s instead ofkeepin gthe mseparate . (h) The entrance of the migrants into themarg a (local community) and, more or less asa consequence ,th eright st ojoi nlandownership . Up to 1960 there was no comprehensive law or regulation in Indonesia concerning land, and the problem of land tenure wasregionall y regulated. Adat (custom) played a predominating rolei nal ldecision si nthi sfield .Amon gothers ,variou sdistric tlands , controlled by the marga, could not be 'disturbed' by people from outside that mar ga.141 Thus an important factor in this transmigration scheme is the question of ownership of and control over the land and whether the owner is willing to accept Javanese settlers.Th e securing of suitable land offers a complex problem since much of the area of the Outer Islands hasbee n occupied permanently or temporarily by the indigenouspeople .Larg epart s ofthes earea sar eno tactuall yuse dfo r agriculture, but areneede d asgatherin gground s for suchfores t productsa srattan , resinsan d lumber, "' Ibid., p.2 . 140Ibid. 1,1 In southern Sumatra, the highest indigenous political unit in each district is the marga, which comprises a number of villages (PELZER, op. cit., fit. 52, p. 207); for a discussion of themargas in southern Sumatra, PELZER mentions VAN DER ZWAAL, Inlandsch gemeentewezen in Zuid-Sumatra en Javanen-transmigratie, Wageningen,1936 . 85 and as hunting grounds. No person, unless belonging to the community that claims territorial sovereignityove rsuc hland ,ma yus ei twithou tth econsen to fth ecommuni ty. Suchpermissio n may usually be secured by the payment of a nominal fee. There fore anup-to-dat e agrarian lawfo r the Outer Island was needed to establish suitable tenureright sfo r thesettler san dt oensur eth ecollaboratio n of theindigenou s popula tioni nth etransmigratio n program. In 1960th e government enacted the Basic Agrarian Law no. 5whic h concerns the basic principles of agrarian regulations. It settles the various landrights, the tenancy and rent arrangements, the limits of landownership, etc. Furthermore it is stated in thisla wtha tland sno tbelongin gt oindividual so rpubli cbodies ,includin gth eso-calle d 'marga-land' in Sumatra and similar holdings in other parts of the Outer Provinces areowne db yth estate . The government can 'enforce' the establishment of agricultural land resettlement projects incertai n areaseve nagains tth e objection of theloca l community concerned. Formerly this was impossible, because it had no right to dictate plans to the marga. Of course, the government always tries to make the utmost efforts in coming to an agreementwit hth ecommunit ybefor e startingth eexecutin go fit splans . On the other hand, the government should administer the new legislation with much caution soa st oavoi d givingth eimpressio n toth eindigenou spopulatio n ofth e Outer Islands that their traditional rights are being pushed in order to favour the Javanesefarmers . Land whichi s not included in some marga is usually located in areas where there are no human beings, and there the establishment of new settlements is particularly difficult. The solution here will be to construct roads between such areas and the outside world. But the important point is how to select pioneers who are willing to facelonelines si nthes eextensiv ejungles . Generallyi ti saccepte d thatth esocia l tiesi n thetraditiona l villagecommunit y and the attachment to the soil are the main reasons which prevent the farmer from leavinghi svillage .Th eDepartmen to fTransmigratio nha smad eintensiv e propaganda efforts to reduce the reluctance of the Javanese to migrate. It was reported that in 1954 approximately 2,000,000 persons registered to be moved to the Outer Islands. But, due to lack of funds, only a small part of them could be actually transferred.142 New ways have to be found to reduce the government's cost. This point will be covered later in this study where spontaneous colonization after the war will be discussed. Until now, the government has held the belief that the possibilities of irrigation in thene warea sar eespeciall yimportant .Th e socialprestig e of theJavanes e isbase d on the ownership of sawahs (wet rice field) and it is less difficult to persuade him to migrate to a wet growing region than to a region where he could never expect to establishsawah . But irrigation has its limits. Sooner or later a shift to dry field agriculture will be 142Th egovernmen tha st opa yal lexpenses . 86 necessary.Althoug h themai nfeatur e ofth epostwa r periodi n Indonesia has been the slowrecover y of the prewar food consumption level,ther ei sevidenc e suggesting that with the growth of the towns, the increasing industrialization and the gradual rise in national income, there may bea marke d trend towards a more 'western' type of diet. Thisinvolve s an increase in demand for such articles as oils,fats , fruits, vegetables and livestock products.Thi sway ,ultimately , alsolead st o asurplu si n the production ofrice .Fo r thisreason ,th eAgricultura l ExtensionServic ei sencouragin gth eso-calle d 'compound cultivation', i.e. planting of vegetables, fruit trees, tuberous plants and othercrop so ndr y fields. Some efforts are also being made to integrate the development of crops with an expanded production of livestock.I n thiswa yanima l residues arereturne d to the soil and willincreas eit sfertility . Thismixe dcrop-livestoc k agriculturei sa promising line ofdevelopmen ti nIndonesia n agriculture. Another possibility in dryfield agricultur e is the cultivation of export crops. But such aprogram issubjec t to important reservations.I n particular, attractive priceso f agricultural export products as compared with other crops, are certainly needed to encourageth efarmer s toplan tthos ecrops . Transportation isanothe r limitingfacto r incarryin g out themigratio n program on a large scalea s shipping tonnagei s scarcei nIndonesi a and shipping isessentia l since thecountr yconsist so fman yislands . However, the government's program can be carried out only over a long period owing to the weak state of publicfinance. Bu t if the Department of Transmigration wants to speed up the rate of migration, it must find, among other things, a way to reduceth eshippin gshortag ee.g. ,b ycharterin gforeig nships . 7.1.9. Costo fresettlemen t Therear en oaccurat efigures availabl eo nth ecost so fmovin gon efamily . In 1966,th eDepartmen t ofForestr ygav eth efollowin g data.143 (a) Landand land clearing. Each family consisting of 5 persons needs on the average 2.5 ha of land: 1 ha for food crops, 0.75 ha for other crops, 0.25h a for housing and gardening and 0.50 ha for roads and buildings. Of this 2.5 ha only 1h a would be clearedb yth egovernment ,whil eth eres tca nb edon elate r on bytransmigrant s them selves.Thi s 1 ha isintende d for housing, gardening, roads and buildings, sotha t 0.25 ha remains for food crops.JThe clearing of land, which amounts to 400,000 ha annually, has to be done mechanically. The necessary surveys would cost Rp 50/ha, Rp25 0ha st o bepai dt ofre e onehectar efro m ownershiprights. Expense sfo r clearing are estimated on $ 60+Rp 350/ha. (b) Housingand otherbuildings. Each family is provided with a locally made pre- 143 Ministry of Agriculture, Department of Forestry, Contribution tothe realization of the transmigra- tionprojects, May 1966,pp . 2-3. 87 fabricated house of 36m 2an d4 m 2fo r other buildings (schools,mosques , etc.).Tota l expenses: $ 52+Rp607 2pe rfamily . (c) Agricultural seeds andtools. Eac h farmer needs some tools, 50 kg of fertilizers, 7k gpadd yan d7 k gmaize ,whic hwil lcos tR p25 0pe rfamily . (d) Provisionfor thefirst 8 months. Monthly eachfamil y needs 40.5k grice , 1 kg salt, 1 liter kerosene and 1 kg driedfish, togethe r Rp 2880fo r 8months . Cooking utensils willcos t Rp 75pe r family, clothing Rp 250pe r family. Total expenses per family for thefirst 8 months :R p3205 . (e) Social welfare. For thefirst 5 month s social care will cost Rp 1250pe r family. (f) Totalcost per person: Rp2375+ $ 22.50. A better estimate is thefigure base d on the author's study published in 1957. It startsfro m thethre ecos tfigures give nb yth eDepartmen t ofTransmigration , namely theexpenditure s ofth eDepartmen t ofTransmigration , thebudge t oftha t Department and the amounts received per family of average size of 4.5persons . The trend in the costo fmovin gpeopl eb yth eDepartmen t ofTransmigratio n isgive ni nTable s 81an d 82. The expenditures in 1954wer e about seventeen times as high as those in 1951,bu t the number of resettled persons rose only to its tenfold. Thus the rupiah cost per family increased. In examiningth ebudge tfigures o fth eDepartmen t ofTransmigratio n a continuous increase until 1953 is observed, then a drop occurs in 1954 and 1955 and they rise again in 1956.Th e increase of the total amount received per family from 1951-1954 also indicates the increase in the total cost of moving. To this figure still have to be added expendituresfo r irrigation, road building,healt h and educational purposes. Thecos to firrigatio nwil laccoun tfo r asubstantia lpart . S.K . DEY, UN Consultant on Community Development to the government of Indonesia, estimated it in 1955a t Rp300 0pe rhectare. 144 Table81. Budget amountsand expenditures of the Department of Transmigration, in millionrupiahs, 1950-1956. 1950 1951 1952 1953 1954 1955 1956 Budgetamount s 5 3.5 17.51 57.7 54.1 47.0 84.0 Actualexpenditure s - 3.0 1.3* 45.3 50.4 1 Exclusivepayrol lo fpersonnel . •Th egrea tdifferenc e betweenth efigures fo r 1952i scause db yth efac t that theexpenditure s for theJAPET A (Jajasan PembukaunTana hTransmigrasi .th eInstitut efo r theOpenin g of Settle mentLands )wer einclude di nth ebudge t ofth eDepartmen to fTransmigration . Sources:Departmen t ofTransmigration , Penlelenggaraan transmigrasi1954, p.4 (for theyear s 1955 to 1954, and: ibid. 1956.p .4 fo r theyear s 1955an d1956) . 141 StatePlannin gBurea u(S .K . DEY, Gotongroyong or alang-alang, Djakarta , 1955,p . 53). Table 82. Amounts receivedand costof movingper migrationfamily, 1951-1954. Number of migrants Amounts received Cost of moving one family per family in Rps actual cost in rupiah costs2 Rps1 in 1938 1951 2,541 4,304 8,600 230 1952 16,825 5,054 10,100 279 1953 35,432 5,191 10,400 326 1954 26,239 6,242 12,500 408 1 N. KEYFITZ and WIDIOJO, op. cit. (fn. 126),p . 127. Theactua l cost of movingi sroughl ytwic e theamoun tpe rfamily . Thisapproximatio n has generallybee naccepte da sa rul eo fthumb . ' Obtained by dividing eachfigure i n theprecedin g column by the corresponding index for the costo flivin g(se eTabl e 83). Source: Department of Transmigration, Penjelenggaraan transmigrasi 1954, pp.4-6 . Table83. Weighed index numbers of market prices of twelve foodstuffs in the countrysideof Java, 1950-1954(1938 = 100). 1950 1951 1952 1953 1954 1591 3188 3620 3166 3063 Source: CentralBurea uo fStatistics ,Statistical Abstracts 1956. p. 70. Table84. Specificationof the amount received per migrant family of4.5 persons 1951-1954. 1951 in Rps 1952 in Rps 1953 in Rps 1954 in Rps % oftotal amount 2 Household 89 90 40 70 1.1 Clothing 114 121 91 55* 0.9 2 Agricultural equipment 31 33 50 60 1.0 Seeds 70 40 60 107 1.8 Housingcost s 2100 2000 2000 2500 40.2 Livingexpense sfo r 10 months 950 1250 1450 1600 25.2 s Transportation 450 500 550 600 9.7 Clearing 1h a oflan d 500 750 750 1000 16.1 Cost oftemporar y quarters• 250 250 250 4.0 Total 4304 5054 5191 6242 100.0 1 Ifth emigrant shav et o waitfo r the distributiono fhouses . •Th eauantit yo fgood swa s lowertha ni n 1951 and1952 . »Thetransportatio n costsamounte d to Rp600 , whereasunde r 7.1.9.the ywer ementione d tob e Rp 492.Th e difference isprobabl y explained byth e inclusions in the firstfigure, o f board and lodgingdurin gtravel . Source: Department ofTransmigration .Penjelenggaraan transmigrasi 1954. Djakarta 1954, p. 4. 89 Table 85. Indebtednessof migrants to the government, 1950-1953(in rupiahs). Kind of migra Number of mi Amount of debt Installment re Balance of debt tion scheme grated families to berepai d in ceived in 1000 at the end of 1000rupiah s rupiahs 1954i n 1000 rupiahs 1950 Regular _ _ _ - Family 28 2.9 0.7 2.3 1951 Regular 102 442,6 - 442.4 Family 714 102.1 8.8 92.2 1952 Regular 1,823 6,417.4 - 6,417.4 Family 2,045 322.1 18.8 303.3 1953 Regular 8,939 18,341.7 - 18,341.7 Family 1,073 159.7 1.8 157.9 Total 14.7241 25,788.2 30.1 25,758.1 1 If theaverag esiz eo f thefamil y isconsidere d to be4. 5persons , thenumbe r of migrants does notcorrespon dwit hth eactua lnumbe rofmigrant sgive ni nTabl e 88.Thi s difference is explained byth efac t thatther ei sanothe rbreakdow no ffamilie si nth emigratio nare adu et omarriages ,etc . Source: Department ofTransmigration . Penjelenggaraan transmigrasi 1954, Djakarta, 1955, p. 34. Table 86. Numberof transmigrants by territory of origin, 1962. General Special Total transmigration transmigration1 no. of no. of no. of no. of no. of no. of families persons families persons families persons WestJav a 384 1835 274 1193 658 3028 CentralJav aexcl . Jogjakarta 1049 4505 1442 5468 2491 9973 Jogjakarta 249 1057 136 590 385 1647 EastJav aan dBal i 637 3532 436 1914 1073 5446 OtherLesse rSund a Islands 121 522 152 604 273 1126 South Sumatra 175 909 _ _ 175 909 Celebesan dothe r territories — - - - 1 Comprisingmember so fpreviousl ymisrate dfamilif c ir.^,i~-_ •• Source:Statisticalpocketbook of Indonesia 1963, p.23 . 90 Table 87. Numberof transmigrants by area of settlement, 1962. General Special Total transmigration transmigration no. of no. of no. of no.o f no. of no. of families persons families persons families persons North Sumatra 0 0 128 466 128 466 West Sumatra 100 481 0 0 100 481 South Sumatra 735 3,641 2,112 9,103 2,847 12,744 Riau Archipelago 58 275 0 0 58 275 WestBorne o 2 9 0 0 2 0 East Borneo 606 2,805 0 0 606 2,805 Central Borneo 281 1,225 0 0 281 1,225 South Borneo 743 3,504 0 0 743 3,504 Celebes 90 420 0 0 90 420 WesternLesse rSund aIsland s 0 0 200 200 200 200 Total 2,615 12,360 2,440 9,769 5,055 22,129 Source:Statistical pocketbook of Indonesia 1963, p .24 . Table 88. Numberof transmigrants 1938-1940 and 1953-1962. General Special Total transmigration transmigration no. of no.o f no. of no. of no. of no. of families persons families persons families persons 1938 _ _ - 33,399 1939 _ _ - - - 44,694 1940 - - - - - 52,208 1953 8,848 35,432 1,054 3,995 9,902 39,427 1954 7,470 26,239 1,112 3,953 8,582 30,192 1955 4,316 16,665 1,171 4,724 5,487 21,389 1956 4,281 18,232 1,484 6,118 5,765 24,350 1957 • 4,870 12,509 2,288 10,721 5,158 23,230 1958 2,385 10,610 3,870 15,809 6,255 26,419 1959 5,826 23,963 5,613 22,133 11,439 46,096 1960 2,500 10,295 3,122 11,780 5,622 22,075 1961 3,369 14,709 1,695 4,900 5,064 19,609 1962 2,615 12,360 2,440 9,769 5,055 22,129 Source:Statistical pocketbook of Indonesia 1963, p .24 . 91 KEYFITZ and WIDJOJO have indicated that the amount received by the settlers constituted about 50% ofth etota lexpenditure sfo r movingon efamily. 145 Since no indices for the cost of living are available, the rupiah expenditures for transmigration have been deflated by a price index for twelve articles of food at prevailing market prices in rural districts of Java and Madura.146 Such an index is assumedt oreflec tth epurchasin gpowe ro fth erupia h(se eTabl e83) . The 'deflated' cost of moving people to the Outer Islands has steadily increased during the postwar period. Total costfigures fo r 1955ar e not available, but a rise is indicated by the fact that the estimated transportation cost per family in 1954 was Rp492 ,wherea si n 1955i twa sR p 598,a nincreas eo f 18%. 147 Table 84provide s a specification of the amount received per average size family from 1951 till 1954. Thefigures fo r 1954,th e latest available when the investigations werecompleted ,sho wth eprocentua ldistributio n overth evariou sitem so fth eamoun t receivedpe rfamily . Housing, clearing 1.5 ha of land, initial living expenses and transportation areth e main items included in the amount spent on a family; they constitute 40.2, 16.1, and 25.7pe r cent,respectively . Table 85show sth eindebtednes so fth emigrant st oth egovernment .Th einabilit yo f migrantst orepa yth eloa ni sobvious .Practicall ynon eo fth edebt so fth epeopl emove d under the regular transmigration scheme have been repaid. The repayment of the loanst o themigrant s under thefamil y transmigration148 schemeha s been unsatisfac tory as well: only Rp 30,000 out of a total of nearly Rp 26,000,000 has been repaid here. 7.1.10. Resultso forganize dagricultura l resettlement Thenumbe ro fsettler san ddependent smove di sillustrate d byth eTable s86,8 7an d88 . Most ofth e migrants have settledi n South Sumatra, the remainder being spread out overth eothe rareas . 7.2 Survey of spontaneous agricultural resettlement during the postwar period Upt o 1957th egovernmen twa sno tconcerne dwit h 'spontaneous' transmigration, but this idea of additional transmigration practically without financial aid from the governmenti sreceivin gmor ean dmor esupport . Under this new plan,th erol eo f the "s KEYFITZ and WIDJOJO, op. tit. (fit. 126), p. 127. 1U These twelve articles of food are: rice, corn, cassave, peanuts, soybeans, buffalo meat, dried and salted smallfish , heneggs ,coconuts ,coconu t oilan d salt. "' Penjeleggaraantransmigrasi 1954, Djakarta , 1955. 148 Family transmigration refers to persons whojoi n relatives previously established in the colonies. 92 government would be restricted to clearing the forest and to make social overhead investments,wherea sal lothe rexpense sshoul db eme tb yth emigrant sthemselves . But Javanese farmers are reluctant to emigrate to the Outer Islands without government support, and the large-scale movement as in Burma, Thailand and the former Indo-China areunknow n inIndonesia. 149 Theexplanatio n istha t in the Indo- Chinesepeninsul a transport ismuc h easier. Moreover, peoplefro m thesethre e coun triesmove dt o areaswher eth equalit y ofth esoi li sa sgoo da so reve nbette rtha n that ofth elan d theyleft . In Indonesia iti sjus t thereverse :Javanes efarmer s havet omov e from fertile, volcanicJav a to theusuall yles sfertil eland s ofth eOute rIslands . But if agricultural resettlement is to be increased in Indonesia, some way must be found to encourage spontaneous transmigration. Then it may beexpecte d that more people can be transferred from overpopulated Java to the Outer Islands and the averagecos tt o thegovernmen t for movingth epeopl ecoul d besubstantiall y reduced. The statistical data on spontaneous migration are rather confusing or inaccurate. Buti t should bekep ti nmin d that estimates ofspontaneou smigrant s areb ynecessit y based on questionable assumptions. However, such estimates may be used for their broaddemonstrativ evalue .A nattemp twa smad eb yth eautho rt ostud yth evoluntar y movementsbetwee nJav aan dSumatr ai n1953. 150 An indication of the number of spontaneous migrants to Sumatra can be found from the number of persons transported by the State Railway ferry service from Merak (West Java)t oPandjan g (SouthSumatra )an dback . The figures show that in 1953, 97,998 persons were transported from Merak to Pandjang, and 82,209fro m Pandjang to Merak.151Th e difference suggeststha t inthi s yeara tleas t 15,800person sremaine di nSumatra . Ofcours ethi si sonl ya ver ycrud eestimate ,a sther ear eothe rtranspor tpossibilities . Transport by air is usually too expensive and can be neglected. But to move by shippingline sma yb efinancially possibl efo r somemigrants .Nevertheles sthi snumbe r cannot bever ylarge ,a sth e shipshav eonl ya limite dcapacit ywhic hals oappea r from the fact that the Department of Transmigration always has to charter special boats for its settlers. The conclusions seemsjustifie d that an additional 20% of migrants may be added to the total of 15,800 ,so that in 1953abou t 19,000 people may have migrated onthei row naccoun tfro m Javat oSumatr a(Tabl e89) . Moreover,th e Department ofTransmigratio n tookcar eo fa numbe ro fpeopl ewh o wantedt ojoi nrelative si nth ene wsettlements .Thi sconcerne d 1783persons ,nearl yal l withdestinatio n of Belitung (South Sumatra).152Th egovernmen t provided them with loans and land. The Ministry of Labour organized, in cooperation with someplanta - 148 Lectures on Asian Economic Development, given by Professor F. GOLAY, Cornell University, Ithaca, NY. 160 Here 1953i schose n becauseonl yi ntha t yearsufficien t datawer eavailable . 151Stat ePlannin gBureau , Questionnairefor Indonesia, M700/XII/54/30, Djakarta, 1954. 162Actuall y this is a totalfigure fo r 1950t o 1954.Sinc ether ei sn o specification for theyea r 1953(th e year in which the Department of Transmigration started to operateeffectively ) and the total number for the 4 years is relatively small, the author assumes the total amount as acceptable for the year 1953(se efootnot e 151). 93 Table 89. Numberof spontaneous migrants from Javato Sumatra in 1953. Way of migration Number of migrants Moved byferr y ofStat eRailwa y 19,000 Organizedb yDepartmen t of Transmigration 1,783 Organizedb yMinistr y of Labour 5,774 Total 26,557 Source:Compile dfro m severalpublications . Table 90. Number of workers and theirfamilies departingfrom Java and Madura to be employedin industriesor on estates in other islands. 1 Male Female Houshold members of the Total workers on contract female children 1938 _ _ _ _ 23,334 1939 - - - - 25,347 1940 - - - - 24,310 1951 6,596 3,961 1,572 6,286 18,415 1952 7,869 5,741 1,671 7,607 22,888 1953a 2,117 1,293 491 1,562 5,463 1954 1,528 1,330 99 1,347 4,304 1955 4,188 2,238 1,905 3,897 12,228 1956 3,098 1,929 1,146 3,376 9,549 1957 970 720 269 796 2,755 1958 1,400 951 449 1,101 3,901 1959 1,867 1,336 531 1,502 5,236 1960 5,901 5,018 883 5,868 17,670 1961 6,237 4,974 65 5,386 16,662 1962a 5,700 5,782 3 6,508 18,083 1 Data supplied by: Free Emigration of the Sumatra PlantersAssociatio n (FESPA), Zuid West Sumatra Syndicate(ZWSS) ,Pusa t PerkebunanNegar a(PPN )an d Standard Vacuum Petroleum Maatschappij(SVPM) . •Exclusiv eworker sfro m Javaan d Maduramigratin gthroug hth eintermediar yorganization so r thosementione d under footnote 1.Thei r number amounted in 1952, 1953an d 1962t o 311.34 2 and81 7persons ,respectively . Source:Statistical pocketbook of Indonesia 1963, p.279 . 94 tions, the transfer of groups of workers to be employed in Sumatra; in 1953 their numberwa s5774. 153 The various estimates of the number of spontaneous migrants to Sumatra are combinedi nTabl e89 ;th etota li s between26,00 0an d27,000 . Excluding these plantation workers (who actually are not real migrants because theyma yretur n toJava )th etota lnumbe r of spontaneousmigrant s amounted in 1953 to 19,000+1/5X 577 4o r veryroughl y 20,000people .I f it assumed that 50t o 70%o f them found their occupation in agriculture, the conclusion is that in 1953 between 10,000an d 14,000farmer s (includingthei r dependents) spontaneously wentfro m Java toSumatra . This type of migration becomes significant when compared with organized re settlement of the Department of Transmigration which, in 1953, moved a total of 40,000persons. 154O fcourse ,th eestimat eo f spontaneousmigratio n cannot bejudge d by the results of one particular year. But as earlier explained it can be used for their broad demonstrative value, namely to show that the spontaneous migration scheme deserves further exploration as a means of speeding up transmigration plans in the future. It is interesting to see the numbers of persons and their households from Java and Madura who are attracted by the estates and other enterprises in the Outer Islands (Table 90).Th e conclusion istha t these movements are of limited value to relieve the populationproble m onJav aa sa maximu m ofonl y23,00 0person scoul db eemploye d anuallyi nth epostwa rperiod . To persuade people to movefro m fertile Java to the lessfertil e Outer Islands, the government has to provide a minimum land holding sufficient to provide the settlers with a living. This concept has been defined by LEWIS155 as the ability "to earn as much onth elan d ash ecoul dear ni fh ewen tt otow nan d didth esor t ofwor kme no f his education and ability can get". Such a definition presupposes the existence of alternativelabou r opportunitiesi nth ecities . According to the Population Census 1961, the urban population of Djakarta, Surabaja, Bandung and the other 'Kota-kota Autonom' (municipalities) increased from 2.2 million in 1930 to 7.8 million in 1961.158 It has therefore much more than tripled,partl ydu et osurplu sbirths .Th esurplu sbirth sfo r the wholeo fJav a amounted in the same period to 51.2%.I f the large cities had followed the same pattern, their increase in population would have been 51.2% of 2.2 million or about 1.1 million. Actually it was 5.6million ,whic h means a move of roughly 4.5millio n people to the towns.157A stud ycarrie d out byth eInstitut e of Economican d Social Research of the 153 Statisticalpocketbook ofIndonesia 1963, p. 279. 164 SeeTable s 87an d88 . 155 A.W . LEWIS,Though t onlan d settlement, /. Agric.Econ. 6 (7) , 1950, p.8 . 166 TAN GOAN TIANG, Growth of Cities in Indonesia 1930-1961, Tijdschr. Econ.Soc. Geogr., mei-juni 1965. 157Ibid. 95 School of Economics in Djakarta has shown that indeed the migration to the city meansa ris eo nth esocia lladder. 168Bu ti fthi sflow i smaintaine d atth erat e mentioned above, it certainly will depress the wages there and increase unemployment, unless industrial expansionkeep sa tpac ewit hit .Thi sha sno tbee nth ecas ei nth eperio d after 1957.Th e consequences of this continuous urbanization are various social problems in housing, sanitation, prostitution, etc. They deter the sound development of the community, and the problems become more complex when the cities grow. Most of themigrants 'movemen tfro m therura l areasint o thetown s isno t caused somuc hb y a need of more inhabitants in the towns, but by population pressure and a general 'charm' of thecity. 159 On thewhol e it would be more beneficial if a part of the desire to move from overpopulated villages could be steered into a desire to move, spon taneouslyan dindependently ,t oth eOute rIslands . It isclea rthat , to promote alarge-scal e spontaneous moveo fJavanes efarmer s to the Outer Islands, a high degree of cooperation and participation by all elements of the Indonesian population is required. The task of the settlement program must not be theresponsibilit y ofth egovernmen t only,bu ti tmus tb econsidere d byth e Indonesian population asa nationa lgoal . KEYFITZ and WIDJOJOhav epropose d that, if each village on Java assumes theres ponsibilityt omov ea certai nnumbe r offamilie s (especiallyth eyounge r people)t oth e Outer Islands through its own effort (e.g. by providing loans to the settlers), more funds would be available to the government for building irrigation dams and roads, andclearin gth eforest . Morepeopl ecoul dthe n bemove dan dth ecapacit y ofth ene w areast oabsor bpeopl ewoul db eincrease d bythes elarg edevelopmen t projects.160 It is possible that some parts of the investment expected to materialize in the Community Development Program could be used not only to improve the living conditions in the villages, but also by providing funds for transporting people from theirvillage si nJav at oth eOute rIslands .I nth eIndonesia nfive-year pla n(1956-1960 ) it was expected that the village community sector would provide Rp 7500 million or 25% o fth etota linvestment so fthei rpurposes. 161 There might also be possibilities for implementing a community development at the other end, namely in the resettlement areas themselves. In this context it may be appropriate to conclude this subject with the remarks of Dr. D. K. DEY, Community Project Administrator inIndia ,wh oha sworke d severalmonth s atth e State Planning Bureau in Djakarta162: "Indonesia needs looking back at her own image in the mirror. Shewil ldiscove r howth edar k valleyswer ecleare d ofpestilenc e and parasites 158 The urbanization of Djakarta, Ekonomidan Keuangan 8,1955, p. 707. 159 StatePlannin g Bureau, Thepopulation of Indonesia, p .6 . moKEYFIT Z and WIDJOJO, op. cit. (fn. 126), p. 132. 191 State Planning Bureau, Some explanations on Indonesia Five-year Development Plan, 1956-1960, Ekonomi danKeuangan 9,1956 ,p .667 . 182 DEY, op. cit.(fn. 144), p.50 . 96 and how these were transformed into the greenland orchards of today through the labour of love done through community music over centuries. The Community DevelopmentProgra mi nIndonesi ai sol dwin ei na ne wbottl ean di sbu ta restatemen t of theol dchalleng e'Goton groyon go r alang-alang?' (mutual aid oralang-alan ggras s land). 7.3 Willresettlemen tremai ndesirable ? Willresettlemen ti ngenera lremai ndesirabl ei nth efuture ? Ifso ,i nwha tfor m and to whatextent ? The author tends to agree with VAN DER LEEDEN that the first question has to be answered most definitely in the affirmative. The efficient economic development of the large, sparsely populated territories outside Java is of great importance, and political considerations of a national and also an international nature even make it imperative.163 As to the second question, the government once designed a plan for moving 18.5 million Javanese within 30 years, starting in 1951.Agricultur e organized on a commercial basis in the Outer Islands was the basis of the plan. Increasing emphasis wasplace do nth edevelopmen to findustr yi nal lit sforms .Thi sindustria l development, whichwa st osupplemen tth eindustrializatio nprogra mo fJava ,wa sexpecte dt osuppl y the dynamicforce s necessaryfo r a satisfactory solution of thewelfar e problem of the Javanese people and of the exploitation problem of the vast Outer Islands. In short, settlers weret o form the core of a greater industrialization program for the whole of Indonesia. However, the government had to dropthi sambitiou s plan because offinancial an d technicalreasons .Th ebudge tfigures o fth eDepartmen t ofTransmigratio n show that in 1951-1955 a total of 180 million rupiahs has been spent for this purpose. In the five-year plan 1956-1960 a total cost of 383millio n rupiahs (3% of the total public investment)wa sallocate dan dabou t200,00 0person swer et ob emove dfro mJava ,base d on the achievements during the 1951-1955 period.164 But due to the inflation, there wasvirtuall yn oincreas ei nth erea lexpenditures . As indicated earlier in this study, the Indonesian National Development Plan 1961-1968 includes a more ambitious program, namely moving 2,000,000 persons from Java to the Outer Islands during 8 years. While in the five-year plan about 140,000 persons have migrated from Java, of the eight-year plan only a small part will probably be carried out as up till 1963onl y 55,000person s have been moved.165 163 C. R. VAN DER LEEDEN, Het aspect vanlandbouw-kolonisatie in het bevolkingsprobleem van Java, denHaag,1952,p.224. 164 See footnote 102, pp. 257-266. The cost of moving one person is estimated at about Rp 1800, exclusive irrigation and other overhead costs. See further: Statistical pocketbook of Indonesia 1963, pp. 23-24. 1,6 Compiled from several sources, among others from the Statistical pocketbook of Indonesia 1963. 97 If the government follows its present policy, in the long run it will be defeated in two ways by the rising costs. On the one hand, the cost of organized migration con tinued to rise along with inflation, on the other hand, as less suitable areas become involved, wet cultivation outlays for irrigation become increasingly costly and the point will be reached where irrigation is no longer economicallyjustified . It may be that these problems can be met by the government by encouraging both spon taneousmigratio nan ddr yfield cultivation . However,i t stillremain s obvioustha t therei sn opossibilit y of solvingth e Javanese problem bymean s of transmigration. It is to be expected that at best transmigration willprovid e employment opportunities for a significant number of Javanese farmers without solving the many problems for those left behind in Java. While it may be expected that transmigration willhaste n the economic growth of the other islands,i t is evident that transmigration alone can be of only limited value for the solution of Java's demographic and economicproblems . More about this subject will begive ni n Chapters 10an d 11. 98 8 Rehabilitation ofth esuga rfactorie s 8.1 The poor state of sugar production In thepas tth e sugarfactories , spreadove rth evas tplain so fJava , weremainl yowne d by foreigners who rented thefields fro m the farmers.166 Thus the influence of non- indigenous activities penetrated more deeply into the social and economic life of the villagetha n wasth e casewit hth euplan d estates.Thei r highlabou r requirements, and the rotation between estate and peasant agriculture left their mark on the whole economy of the area all around. Therefore, the economic crisis in the thirties had a very great impact on the economic situation. No accurate balance can be struck as to the effect on the local population of the resulting great fall in the wages formerly paid to the 60,000 permanent and about 700,000 temporary labour force. Although thelos swa slargel y offset, asth elan d formerly rented became available for food or other crops, the farmers were the main victims, especially the landless and very small ones. This was felt all the more because the inhabitants of the sugar producingarea shad ,t oa grea textent ,base dthei rlive so na cas heconom yfounde d on wagepayment. 167 Compared withprewa rtimes ,ther ei sa tpresen t a greatervariatio n inth ewa ycan e isproduced : (a) Thelan di shire dfo r about 18month sfro m thepeasants .Befor e thewar , factories negotiated the short-term contract with the individual farmers; nowadays the renti sregulate db yth egovernment . (b) Cane is bought from independent farmers. During the prewar period this was possible only for the factory on aver ysmal l scalewit ha specialpermi t from the government. After thewar , somefactorie s reliedt o a largeexten t onthi s method. (c) A crop-sharing arrangement is established between factories and farmers. The rate has become 60%o f the yield to the farmer and 40%t o the factory, but this has not proven to be very attractive to the farmer. There is now talk of 70% to 30% toencourag eth efarmer st ojoi nthi sarrangement . (d) Profit-sharing arrangements are established between factory and farmers. There isn oinformatio n available onthi smetho dan dit soperation , becausei ti sstil li na pilotstage. 168 las por jhgwa y factories obtained their land for sugar cultivation in the prewar period see Chapter 4. 167 PIM,op. cit. (fit. 9),pp .24-25 . 1,8 E. DE VRIES, Agro-economicsurvey of Indonesia, Report to the Ford Foundation, August 1966,pp . 19-20. 99 Table 91. Numberof sugar factories by landrights, Java, 1963. Number of Acreage owned Acreage Number of Total factories by factories hired from peasants acreage peasants1 WestJav a 6 339 8,305 19,379 8,644 Jogjakarta 1 17 479 4,890 496 CentralJav a 16 968 23,358 83,167 24,326 EastJav a 33 13,607 41,502 104,846 55,109 Total 56 14,931 73,644 212,282 88,575 1 Excludingon efactor yi nEas tJav awhic honl yprocesse speasants 'cane . Source:Hasilsensus perkebunan 1963, tabl e3B . Table 92. Quantityof crushed cane by source, 1963(in 1000 tons). Total cane Cane from land Cane from land Cane bought ownedb y fac hired from peas from individual tories ants peasants Factories Quantity Factories Quantity Factories Quantity FactoriesQuantit y WestJav a 6 581 1 0 Jogjakarta 6 580 1 0 1 25 1 25 CentralJav a 16 1482 1 0 16 1467 5 14 EastJav a 33 4122 6 403 32 3089 22 630 TotalJav a 56 6210 8 403 55 5162 28 645 Source:Hasil sensus perkebunan 1963, Tabl ei aoj sugar from landscu titivatedby factories inJava. Planted area Production Averageyiel d in tons in 1000h a in 1000ton s per ha 1938 84.8 1,375.6 16.2 1962 82.5 588.7 7.1 1963 80.1 650.6 8.0 100 During the postwar period the sugar industry in Java has changed in several re spects; th ethre emai npoint sar eth efollowing : (1) Asearlie r explained in Chapter 4, theproductio n declined due to both a decrease inyiel dpe rhectar ean di ncan eare a (see Table93) . (2) Whereas before thewa r practically allcan euse dfo r centrifugal sugar production was cultivated on land hired by the sugar factories from the peasants, in 1963 thiswa sestimate do n 92 % (or73,64 4ha 169)o fth etota lproduction .Ther eappear s tob ea tren dfo rfurthe r declinei nth e future.170 (3) Theper capita consumption isa tpresen t highertha n in theprewa r period: about 8 kg as against about 5 kg.171Du e to the declining production and the higher consumption,ther e is lessavailabl efo r export. The development of total area planted, the production and the yield per hectare of sugar originating from land cultivated by the factories themselves can also be seen from Table 93. For a better understanding of the factors which caused the obvious decline after the war, it may be useful to study the high achievements accomplished inth eprewa rperiod . The impressive success of the sugar industry(befor e the warJav a had the highest yield per hectare) wast o a great extent duet o an efficient and low-cost production of canewit h a high sugarcontent . From 1886t o 1941, theresearc hwork , especially that of the experimental station at Pasuruan, steadily increased the yield both fromfield and factory.172 Much attention had to be paid to the economic use of the irrigation water asit s quantity waslimite d not only byth e capacity of theirrigatio n canals, but also by the requirements of peasant crops. A systematical rotation of crops was established. The different soil types were catalogued. On every large plantation the result of the soil analyses wasplotte d on large-scale maps. In thiswa yth e most suit ablemanur ewa sdetermine d byth eextensio n officer in chargeo f fertilization.173 Nevertheless the rise in yield was due more to selection of high producing strains than to improvement in cultivation methods. The most famous strain was the POJ 2878.B y 1929, it covered 90%o fth ecan eare ai nJava .Th eaverag eyiel dwa sthe n up to nearly 15,200k gsuga rpe r hectare.Thi scan eno t onlygav ea highyield , but it was also immune to 'sereh' and other diseases,an d it wasfa r lesssensitiv e than any other strain to differences in soil and climate.174Sinc eth ewar , the Sugar Research Institute at Pasuruan, has developed two other strains, POJ 3016 and POJ 3067, which are supposedt ob eeve nbette rtha nPO J2878. 175 1,9 SeeTabl e 91. 170 However, it ispossibl e that production could beincrease d considerably on the existing area if the causeso fth efal li noutpu twil lb eremoved . 171Internationa l Sugar Council, Theworld sugar company structureand policies, London, 1963, Vol.1 , p. 222. 172 ROBEQUAIN, op. cit. (fit. 9), p. 341. 173Ibid., p. 342. "'Ibid. 176 TJIOE SOEN BIE,Preliminar y variety traits in the cropyea r 1959, Berita-beritaperusahan gula 1965, pp. 1-82. 101 Yet the yield per hectare declined by about 50% (Table 93). This can partly be attributed to irrigation difficulties, lessefficien t methods of cutting and handling, late arrival offertilizers , insectplague s and thefts. Besidesthese ,thre e problems stand out in importance, namely: the problems relating to the soil, the labour resources (primarilyskille dlabour )an dth eba dstat eo fth eol dsuga r factories. Despite the present disconcerting position of the Java sugar industry, there are certainfactor s amidth egenera luncertaint ywhic hjustif y arevie wo fit sprospect san d possibilities, and sometentativ e practical proposals for its rehabilitation do not seem outo fplace . 8.2 Theproble m ofth esoi l Underth eAgricultura lLa wo f 1870,th esuga rfactorie sobtaine dth esoi lb ya comple x systemi nwhic hi twa srente d from thepeasan t for 3| or21 Jyears .Th ebes t soilswit h a good water supply could be selected, and sugar cane was grown alternatively with foodcrops .A typica lcroppin gcycl erun sa sfollows : First third of sawahs Second third of sawahs Third third of sawahs Year 1: dry season newly planted cane harvestable cane dry crops wet season growing cane wet rice wet rice Year 2: dry season harvestable cane dry crops newly planted cane wet season wet rice wet rice growing cane Year 3: dry season dry crops newly planted cane harvestable cane wet season wet rice growing cane wet rice Year 4: as year 1. In order to secure the supply of cane at present, vertical disintegration, bywhic h growingi sseparate dfro m processing,i sencourage db yth e government. In 1960,th e law of 1870wa srevoked ; instead, the Basic Agrarian Law no. 5wa s sanctioned by the Parliament. Based on the 'hak sewah',o r right of renting land, it stipulates,amon gothe rthings ,tha tsuga rfactorie s stillca nren tlan dfro m the farmers, buti neac h sub-districto fth esuga rarea sa maximu man da minimu m areassigne d for planting with sugar-cane, to be fixed by a decree of the Minister of Agriculture and Agrarian Affairs, on advice of the Governor and a special committee of the region concerned. In this1,decre e the procedure for settling the annual rent is alsoregulated . According to this law, the contracts are renewed for each cultivation period and usuallyeac htim edifferen t soilsar eallotted . The governmentfixes th e domestic prices for sugar.176 Before the war these prices were about twice that of rice, after the war they were often lower.177 This results in "• Actuallyth epric epolic yo fth egovernmen t isa complicated matter. Thesematter s willb ediscusse d whenexaminin gth egovernment' s sugarpolicy .Se eals oTabl e105 . 177 SeeTabl e105 . 102 low land rents, especially when compared with those in the free market: the farmers couldge tbette rprice si fthe ycultivate dric eo rothe rcrops .I nothe rwords ,th epeasant s did not like to cultivate cane at low prices and they tried to evoke the regulations by giving the poor soils to the sugar factories. In places with communal landholdings, theycooperate dfo r thispurpose . Later on the government increased the rent to a reasonable level, but still farmers are only willing to rent that part of their land which is onbly suitale for cultivating lessprofitabl e crops.178 Often the area allocatedfo r sugarindustrie s consists of scattered plots.Thi scause s delayi n deliveryan dhighe r costsfo r transport to thefactory , and sinceth ecan ehav e tob ecrushe dimmediatel y after cutting,thi sals omean sa lowe routpu t ofjuice . In 1963, 80,114 ha was planted with cane of which 73,644 ha or 92% was leased from thepeasants ,whil eth eremainin g 6470h a or 8% wasowne d by the factories.170 To restore the sugar industry toth eleve lo fbefor e 1933-1934,on e of the problems isho w to obtain large coherent areaswit hfertil e soilswher e sugarfactorie s can work on a long term basis. As the presently operating sugar factories have a much greater capacitytha nth eol dones ,the ynee dove r 1000 hafo reconomica loperation .I fsmalle r unitscoul db econstructed ,perhap sa fe whundre dhectare so flan dwoul db e sufficient, whichwoul db emuc heasie rt oobtai n(se e8.4) . Another systemwhic hmigh t be successful is, thatth efactorie s obtaina greate r part, ifno t all,o fthei r suppliesb ycontrac tfro m smallgrower sinstea dfro m their owncro p grown onlease d landswit h hired labour.180 Then the farmers havethei r own share in theresponsibilit yfo r theproductio nprocess . To maintain the quality of the cane and to avoid any fatal risk caused by the cultivation of inferior cane, cultivation should be put under scientific supervision of agricultural experts,eithe rfro m theMinistr yo fAgricultur e orfro m thefactories . It must also be kept in mind, that a large central factory represents a considerable investment.I f sugarfactorie shav et odepen do narea scultivate db yfarmers , incentives shouldb ecreate dfo r persuadingth epeasant st oplan tsugarcan ean dno tt ochang et o another crop. Possibly a fair price for their cane or a profit sharing arrangement betweenth efactor y and thefarmer s could solvethi sproblem . Sincethi s newfor m of cooperation is still in a 'pilot project' stage,i t seems advisable to wait for the results before moredetaile dwell-founde d recommendationsar esuggested . "• DE VRIES, op.cit. (fn. 168),p . 20.Probabl y theren t set byth e government isstil lrelativel y too low ascompare d withwha t thefarmer s could get ifthe yplan t their land with other crops.I n early August 1966, there was a proposal to increase the sugar price from Rp 3.38 per kg to Rp 5.58 wholesale off factories an increase of 65%, in order to give farmers more rent from their land. But eventhi s sub stantial increase might not be enough to persuade the farmers to rent their best land to the factories. Wewil lcom ebac ko nthes ematter slate ri nthi sstudy . 1,9 See Table 91. 1801. C. GREAVES,Modern production among backward peoples, London , 1935, p.104 . 103 8.3 Theproble m oflabou r Since 1958,practicall y all sugar factories (about 90%) have been run by the govern ment as state enterprises, as shown in Table 94. Although labour difficulties then decreased due to the improved relations between employers and employees, yet the shift from privateforeig n to state enterprises affected theindustr y in an unfavourable way,a sapparent fro m thefollowin gpages . Thetake-ove r of sugarfactorie s caused difficulties in management and administra tion. When the Dutch experts departed after 1957,the ywer e replaced by less trained and less experienced Indonesian personnel. The distribution of personnel according toeducatio nleve li sillustrate d inTabl e 95.I n 1963o fth e255 8staf f members running the5 6factories , only 17 (lesstha n 1% )wer eUniversit y graduatesan d 202o r8 % wer e from thesuga r academy.Thi slo wstandar d ofskil lnaturall ymilitate s against efficient production. Theproble mwa sthen ,ho wan dwher et o putth eavailabl etraine d people so that they work most productively and maximum use of their skill could be made. The fact that they had to work in more than one factory had to be considered tem poraryjustifie d only to overcome the short supply, but efforts were made to train a sufficient numbero fpeopl et ofill th evacancies . Of the 360,226 workers, 7% were permanent employees, comprising both staff membersan dlabourer s(Tabl e96) .Thei rsalarie swer ebase do ngovernmen t regulation andpai do na monthl ybasis . Government regulation no. 14, 1962, as amended by no. 21, 1963,provide d for a wage scale and a system of allowances varying according to marital status, size of family, etc. Apart from their money wage, the workers receive rice, sugar, textile and several other necessities at subsidized prices. In addition, all employees are supplied withtranspor t facilities (usually buses) or withtrave l allowances. A limited number even has free use of a car and free housing. Nevertheless the wages are inadequatet osuppl yth eworke rwit hth eminimu m comfort. It is not surprising, that under such circumstances it has not been easy to get the bestpeopl et ojoi n thesuga rfactories . Manyo fthe mleav eagai nunde rpressur e ofth e increasing prices for daily necessities to look elsewhere for a better income. If they stay, this means that either the wife must also work or that they must moonlight181, apractic ewhic hcut sint oa worker' sleisure ,affect s hishealt han ddeplete shi senergies . Ofcourse ,thi s has a bad effect on the efficiency of the worker which results in a low productivityan drob sth emanagemen t ofdiscipline . Though the government had to guarantee an annual income which undoubtedly created some sense of security, workers would probably have had more security if they had got a salary more in line with private enterprises or where earnings were commensurate with the living requirements, and were responsive to differentials in skill,industriousness ,ingenuit yan dothe rvariable sworth yo f reward. 181The yar eforce d towor koutsid ethei rmai njo bt oear na nadditiona lincom et o havea reasonabl e living. 104 Table 94. Numberof sugar factories in Java by type of enterprise, 1963. Number of factories State enterprises Private enterprises West Java 6 6 Jogjakarta 1 1 Central Java 16 15 1 East Java 33 31 2 Total 56 52 Source:Hasil sensus perkebunan 1963, Tabl e 1. Tabic 95. Educationlevel of staff members in sugar industry in Java, October1963. Univer- Acad- Agric. Techn. Other General Primary Total sity emy school school voca- second, school tional school schools WestJav a 1 25 40 66 81 122 3 338 Jogjakarta 1 4 6 12 3 12 - 38 CentralJav a 6 57 108 168 102 242 18 701 East Java 9 116 288 291 194 568 45 1511 Total 17 202 442 537 380 944 66 2588 Source:Hasil sensus perkebunan 1963, Tabl e 17. Table96. Size oflabour force ofsugar factories in Java, October1963. Staff members 2,588 Otherpermanen t employees 23,778 Labourerspai d ona daily basis 333,860 Total 360,226 Source:Hasil sensus perkebunan 1963, Tabl e 16. Table97. Minimum dailywages in some selected sugar factories 1(in Rps). 1958 1959 1960 1961 1962 For singleworkers : inmone y 4.50 4.75 5.00 6.00 6.25 inkind 2 2.65 3.14 3.99 4.86 4.86 totalvalu e 7.15 7.89 8.99 10.86 11.11 Formarrie d workerswit h2 children : inmone y 4.75 5.00 5.25 6.00 6.25 inkind 2 5.95 9.32 9.32 11.44 18.37 total value 10.70 14.32 14.57 17.44 24.62 ' Estatesworker sunite di nth eAssociatio no fSugarFactor yWorkers . •Converte di naccordanc ewit hofficia l (subsidized)prices . Source:Statistical pocketbook ofIndonesia 79«,P.281 . 105 Table 98. Numberof workers in sugar factories inJava, 1930 and 1963. Number of factories Total production in Permanent emplo- Casual labourers 1000k g yees 1930 180 3,000,000 54.0001 1,000,000 1963 56 650,000 26,000 334,000 1 The54,00 0peopl epermanentl yemploye dinclude d4,00 0Europeans . Source:fro m severalpublications . Table99. Yearof construction of sugar factories inJava. Number of factories1 Percentage of total number Before 1914 48 87 1914-1929 5 9 1942-1963 2 4 1 Onesuga restat ei nCentra lJav aha sn o mill;th ecan ei smille db ya factory inWest-Java . Source:Hasil sensus perkebtman 1963. Tabl e 18. Table100. Percentagessugar processed from caneby old and new factories. Year ofconstructio n of factory Number offactories 1 Average quantity of sugar (in kg)produce d from 100k g cane before 1929 53 10.1 1942-1963 2 11.0 Seefootnot e Table99 . 1 Source:Hasil sensus perkebunan 1963, Tabl e18 . Table101. Numberof factories 1 bynumber of days of maximaldaily milling, 1963. 0 1-5 6-10 11-20 21-30 31-45 46-60 >60 Un- Total days days days days days days days days known WestJav a - - - 2 1 _ 1 2 6 Jogjakarta - 1 - _ _ _ _ — 1 CentralJav a 1 - 1 4 4 3 __ 1 1 15 East Java - - - 24 1 - - 4 4 33 TotalJav a 1 1 1 30 6 3 - 6 7 55 1 Seefootnot eTabl e99 . Source:Hasil sensus perkebunan 1963, Tabl e23 . 106 Table 102. Numberof sugar factories by number of milling days, 1963. <45 46-60 61-7 5 76-90 91-105 >105 fact. total fact. total fact. total fact, total fact, total fact, total days days days days days days WestJav a - - _ _ 1 61 4 314 1 143 Jogjakarta 1 26 ------_ Central Java 3 117 1 46 2 136 5 413 3 285 1 356 East Java - - 1 60 8 555 5 426 8 789 11 3193 Total Java 4 143 2 106 11 752 14 1153 11 1074 13 3692 Source:Hasil sensus perkebunan 1963, Tabl e24 . Table103. Number of workingdays and lost labour hours insugar factories in Java, 1963. Number of Number of working Number of working factories1 days hours lost WestJav a 6 484 492 Jogjakarta 1 26 9 Central Java 15 1114 1931 East Java 33 3404 6838 Total 55 5028 9270 1 Seefootnot e table99 . Source:Hasil sensus perkebunan 1963, Tabl e24 . Table104. Additionalland needed by factories to extend their milling season (Java, 1963). Necessary extension Total number Total addi- of factories tional land >30days 31-60 days 61-90 days <90days needed(i nha ) fact. ha fact, ha fact, ha fact, ha West Java 2 300 _ _. 2 300 Jogjakarta - - - - 1 1,500 1 1,500 Central Java 2 460 2 500 1 200 5 1,160 East Java 7 1,925 1 110 1 1,200 9 3,235 TotalJav a 11 2,685 3 610 1 200 2 2,700 17 6,195 Source:Hasil sensus perkebunan 1963, Tabl e25 . 107 As for the casual labourer, the wages are determined by collective labour agree ments negotiated by the directors of the sugar factories and representatives of the labour union. They are valid only for a certain period. These wages are composed partlyo fmone yan dpartl y ofkind .Thei r development canb esee ni n Table97 . The existing labour law restricts enterprises, including those privately owned, to dismiss inefficient workers. Therefore, supervision cannot be carried out as it should bei na commercia lenterprise .Th eresul t is that thecos t of operating sugarfactorie si s higher than necessary. This isillustrate d in Table 98: to produce the 620,000ton so f sugar,mentione di nthi stable ,abou t 50% ofth e 1930 number ofpermanen temployee s and3 0% ofth ecasua lworker swer eneeded ,whil eth etota l production wasonl y2 0 %. It israthe r striking,tha tth elabou r productivity offield worker s has also decreased after WorldWa r II.Th e causeis ,tha t thefactorie s could only get older men to work on thefields. Th eyounger , somuc hneede d for the heavy work in preparing the land for cultivation,prefe rnowaday semploymen ti nth ebi gcities . 8.4 The problem of the factories The main problems of sugar factories are: their old age (Table 99) and their below capacityproduction . Ofth e 55 operating sugarfactories , 87 % areold-fashioned , havingbee nconstructe d before 1914.Onl y4 % werebuil t in thepostwa r period, while theremainin g 9 % were builtbetwee n1914-1929 . Virtually allmachiner ysuffer s from deficiencies.Spar epart s and accessories tokee p them operating efficiently and properly are often lacking. That the average daily processing capacity of the factories in the postwar period was 1627 tons, as against 1200 tons before the war182 can be explained by the fact that in the postwar period morefactorie swit ha hig hcapacit yar ei n operation. The percentage of sugar extracted from the canei n the postwar period was 10.2%, whereas before thewa r itwa s 14-17%. 183 But, as Table 100shows , the new factories established after 1942 are about 10% more efficient than the old ones. This means that nextt o theearlie r mentioned unfavourable location of the land, thelowe r labour productivity and higher transport costs, the age of the factories play an important rolei nthei r output. It isno t onlyth elac k offoreig n exchangetha t hascause d the shortage of imported spare parts; during the 1957-1962period , when the political relations between Indo nesia and the Netherlands were estranged, some vital parts could not be obtained as most of them were manufactured in the Netherlands. But the Indonesian workers havea recor d ofkeepin gthing sgoing .Eve nwit hth e existingol d machines, which cer- 18a Hasilsensus perkebunan 1963, Table 18,an d VAN HALL and VAN DE KOPPEL, op. cit.(fit. 56),dee l Ha, p. 368. 183 VAN HALL and VAN DE KOPPEL, op. cit. (fn. 56), Vol. Ila, p. 365. 108 tainly would have been disapproved by modern technologists, they were able to operatean d "aslon ga sproductio nwa sstil lpossibl efro m aplant ,th eag eo fa machi ne has been best measured not in terms of its date of manufacture, but rather by its prospectiveproductiv elife." 184 Assumingtha t theremainin gproductiv elif e ofth e sugarfactorie s iso n the average aboutte nyears ,th eproble mno wi sho wt oge ta maximu mretur n duringtha t period, before theywil lb ereplace db yne wmachines . But even if new machines should be introduced, the sugar factories still face another problem. Today, the specialized machines with automatic devices require different skillsfro m those existing at present in Java. The problem arises then where and how to get trained and experienced technicians with sufficient know-how to operatethes emachines . The second problem is the below capacity production of the present factories (see Table 101).I t seems that only 13factorie s work on full capacity, namely more than 105millin g days (Table 102). Besides that there is not enough cane to be processed, due to break down of field machines and labour difficulties, so that the 55 factories losta naverag eo fnearl y2 hour so feac h8 hou rworkin gda y(Tabl e103) . Out ofth e 55-13=42 factories workingbelo wthei r capacity, 17 (or40% )woul db e ablet o work on their maximum output if sufficient rawmateria l wasavailable . Table 104show sth earea sneede dfo r sucha nexpansion .I t isstrikin g to noticetha tth eothe r factories working below capacity are not eager to extend their area; perhaps the sugarpric ei sno tattractiv eenoug hfo rthe mt oincreas ethei rproduction . 8.5 The sugar policy of thegovernmen t After 1950ther e wasa timewhe n farmers couldplan t and sellsuga r canei n the free market. But later on, under the pressure of a severe cane shortage from the sugar factories' ownplantations ,fro m timet o timeth egovernmen tha d toissu eregulation s in which the farmers were compelled to plant and sellcan e to the factories. In other words:th esuga rproductio nbecam esubjec tt ogovernmen tcontrol . At present the wholesale prices for centrifugal sugar are fixed by the government (Table 105).Retai l prices arefro m timet o timecontrolled , especiallywhe n therei sa shortagei nth emarket . This is also the case with the price ofcane . Priceincrease sar eprimaril ycause db yth einflation . Furthermoreth etabl eindicate s that since 1959th e difference betweenwholesal e andretai lprice s becamegreate r and greater, sotha t in 1962th eretai l pricewa seve nabou tfou r timesth ewholesal eprice . Under suchcircumstance si tca nhardl y beexpecte dtha t traderswil lb emuc hinterest edi n export, as exports are paid in rupiah's at the official rate ofth edollar .Thi s can besee nfro m Table106 . 184 Development Project Consulting Service, Indonesian reporton industrialworking shops, Vol. I, Djakarta 1966,p .29 . 109 Incentives to supply the domestic market are equally insufficient for the factories to increase their production; asmentione d before, some of them are even notinter estedi nmillin ga tful l capacity. Fullproductio n iseconomicall yjustifie d onlywhe nth efactorie s canbu ycan e from farmers ata lo wprice .Bu twhe nprice sar ekep tlow ,farmer s tryt oevad e sellingthei r canean dinstea dproces sbrow nsuga ran d sellthi si nth efre e market. Table 107 shows the decrease in production of centrifugal sugar from farmers' plantations; Table 108demonstrate s theris ei nconsumptio n ofnon-centrifuga l sugar from anannua l averageo f57,00 0ton s overth eperio d 1934-1938,t o 97,000ton sove r 1951-1955 andt o 127,800 tons for theperio d 1956-1960. This table also shows that the lowprice s setb yth egovernmen t stimulateconsumptio nper capitao f centrifugal sugar,b yit sdistributio na ta pric efa rbelo wth efree-marke t price. Table105. Pricesfor cane, wholesaleand retail sugar, 1953-1962. Canepric epe r Wholesalepric et o Retail price perk g Ratio between retail 1000kg 1 retailersi nRp spe r inRp s and wholesale price 1000k g 1953 113 _ _ _ 1954 123 3,080 3.18 1.03 1955 119 3,060 3.29 1.08 1956 130 3,020 3.33 1.10 1957 139 3,500 3.94 1.13 1958 165 4,180 4.92 1.18 1959 171 4,400 5.88 1.34 1960 - 4,650 6.49 1.39 1961 - 5,900 10.75 1.74 1962 — 9,930 36.87 3.71 1 Theseprice srefe r tocan edelivere d atth efactorie s andar ereduce d incase swher eth ecan e is transportedb yth efactor yitself . Source: FAOproduction year book 1961, as cited by the International Sugar Council (see footnote 171),p .222 ;Statistical pocketbook ofIndonesia 1963,pp .257-261 . Table106. Export of centrifugalsugar, Indonesia, 1938-1940and 1958-1962 (in 1000 tons). 1938 1939 1940 1958 1959 1960 1961 1962 1,071.1 1,357.7 803.6 87.2 39.0 34.8 0 32.9 Source:Statistical pocketbook ofIndonesia 1963, p . 151. 110 Table107. Productionof centrifugal sugar in 1000 tons tel-quel ,1958-1962. From factory From farmers' Total Percent, of total produced plantations plantations from farmers' plantations 1958 588.0 183.2 771.2 24 1959 675.5 179.6 855.1 21 1960 564.6 113.1 677.7 17 1961 582.3 60.9 643.2 9 1961 552.2 36.5 588.7 6 Source:Statistical pocketbook of Indonesia 1963, p .84 . Table108. Sugarconsumption in Indonesia, 1934-1938and 1951-1960. Centrifugal sugar Non-centrifugal sugar1 total consump per capitacon total consump per capitacon tion in tons sumption in kg tion in tons sumption in kg Av. 1934/38 308,000 4.6 57,000 0.9 1951 338,843 4.4 36,000 0.5 1952 436,825 5.6 60,000 0.8 1953 483,080 6.1 141,000 1.8 1954 499,908 6.2 121,000 1.5 1955 642,746 7.9 130,000 1.6 Av.1951/55 480,280 6.0 97,600 1.2 1956 612,808 7.3 139,000 1.1 1957 665,870 7.8 126,000 1.9 1958 704,796 8.0 123,000 1.4 1959 723,906 8.0 126,000 1.4 1960 715,150 7.7 125,000* 1.3 Av.1956/60 684,506 7.8 127,800 1.5 1 Forcro pyears . * Estimate. Source: International sugar council statistics, FAO, Commodity reference series 1, The world sugar economy in figures 1880-1959, as cited by the International Sugar Council (seefootnot e 171).p .222 . 8.6 Productioncost s Table 109show stha ta larg epar t ofth eproductio n cost ofsuga rrepresent s payments for rent andwages .Th etabl egive scomparativ efigures fo r 1925,1936an d 1960. Despiteth erelativel ylo wlan dren tpai dt oth efarmers ,thi sren tform s 15t o 20% of theproductio n cost,a scompare dwit h7 t o 10% i nth eprewa rperiod. 185 Since wages are a substantial part of the production cost (estimated at 30-40%, 111 Table 109. Percentages of total costs of sugarproduction, spent on rent, wagesand othercosts items, 1925,1936,1960. 1925 1936 1960 Rents 7 10 15-20 Wages 44 % 38 30-40 Otheritem s 49 ' 52 40-55 Source:Variou spublications . Table 110. Wages1paid topermanent and temporary labourers* incane cultivation inJava, in 1000 Rps, 1957-1960. Wages paid to per Bonuses paid to permanent Total manent and tempo labourers rary labourers at Lebaran3 annually 1957 352,155 4,181 10,362 366,698 1958 398,464 3,810 12,312 414,586 1959 524,215 3,782 9,670 537,667 1960 501,978 2,450 1,993 506,421 1 Including the gross money wage, the difference between the market value and the pricepai d for goodssupplie db yth efactory , variousbonuse san dallowances ,an d absencepayment sdurin g leavean dsickness . »Includeslowe r rank labourers (upt o and including chief foremen) directly engaged incultiva tionwork . ' Lebaran:th een do fth eMosli mFast . Source: Statisticalpocketbook of Indonesia 1963, p. 87. 38-44% in the prewar period), the wage problem needs to be solved very soon.186 Themos timportan t point is nowt ous eth elabou r asefficientl y aspossible .A solutio n could be found in increasing labour productivity by inducing the labourers to work harder,o ri n thedismissa lo funnecessar ylabourers . The amount of wages paid to the lower rank labourers (including chief foremen) directly engaged in cane cultivation can be seen in Table 110. To these figures must be added the wages paid to other labourers and employees (lower and higher ranks) engaged in the factories, which amount to 30-40% ofthos epai dt olabourers i ncan e cultivation.187 165Tol d by Mr. SOSRO MOEUONO, an official working at the branch of the Indonesian Government Estates Office at The Hague. Mr. Moeljono has been involved in this matter for many years.Fo rth e prewarfigure s see H. J. BOEKE, Theevolution of theNetherlands Indies economy, Haarlem , 1947,p . 45. 186 Communicated byMr . SOSROMOEUONO .I nth eprewa r period, labour amounted to 38-44% ofth e productioncos t (BOEKE, op. cit.Jn. 185, p.45) . 1,7 Statisticalpocketbook ofIndonesia 1963, pp.7 an d 8. 112 8.7 The rehabilitation of sugarfactorie s in Java As seen earlier, till now the Indonesian government has built only two new factories because of the high costs: for one factory with an annual production capacity of 30,000ton s of sugar they amount to US $8,500,000. 188 Therefore the question arises, whether the rehabilitation of sugar factories in Java is desirable. And if so, in what form andt owha textent . Toanswe rthes equestion sth efollowin gpoint sshoul d be considered. Most problems concerningland , labour and the derelict state of the factories could be solved bypermittin g the factories to fix a remunerative sugar price.Then , in turn, they could pay higher land rents (and select good soils), higher wages (and attract better workers), and from the profits it would be possible to replace at least part of their equipment. But it may be questionable, whether the funds needed for such a rehabilitation couldno t be betteruse dfo r otherpurposes . The following macro- and micro-economic analyses attempt to assess this point. Though they are only crude, because in several respects no sufficient information is available, they may broadly demonstrate the general considerations that play a role inmakin ga decisio ni nsuc hcases . Theappraisa l ofa nagricultura lprojec t canb emad ea tdifferen t levels:whethe r the individual farmer benefits from the project, whether the agency which undertakes its financingreceive s a reasonable enumeration, or whether it is sufficiently attractive from a national standpoint. The present analysis concerns only the economic evalua tiono fth eprojec t ata nationa llevel . Various methods can be used to determine whether a project is economically justified invie wo fpossibl ealternative suse so fth einvolve dinputs .Thoug hth e author realizes thelimitation s and shortcomings of thecapital-output-method , heha d to use this technique because of lack of detailed information. Accordingt o thismethod , the incremental capital output ratio isdefine d asth e ratio ofincremen t of capital 'invest ment' toincremen ti n output. In 'capital' areinclude dth einvestment sfo r reconstruct ing the factories and for training personnel.T o measure theincremen t in output, use could be made of the expected increase of sugar production resulting from the rehabilitation ofth esuga rfactories . The foreign exchange costs for rehabilitating the 54suga r factories is estimated at about US $5 4 million.189 Rupiah expenditures would be required for unloading, transportan dinstallation ;thoug hthe yar erathe rsubstantia lthe yar elo w as compared with the above mentioned amount and can be estimated on 10%, or in dollars at 188 People's Consultative Congress, Ringkasan Ketetapan MPRS., I dan II, I960,p .203 , and ECAFE, Economicsurvey ofAsia and the FarEast 1964, p. 166.Thi sfigure o f $8,500,00 0i sals o supported by Professor JOOSTEN as,accordin g to him, the cost of constructing one factory with the annual capacity of30,00 0ton swil lamoun t toabou t 30 millionguilders . 188 The data on which these calculations werebase d are from a discussion with Mr. SOSRO MOEUONO (Seeals oECAFE , op. cit.,fn. 188, p.166) . 113 5.4million .S o thetota lcos tamount st o $ 59.4 million.190 To meet the shortage of skilled personnel a training program has to be set up.I t must beplace d on a rotational basis asi t isimpossibl e to send away a great number ofperson ssimultaneousl ywithou t disturbingth epresen tproduction .Al lrank sshoul d be involved, from specialized labourers to leading functionaries; as to the latter, it probably cannot be avoided to send some of them abroad. Assuming that over a period of ten years each year one tenth of the personnel is temporarily withdrawn from the factoriess this will cost (with the current staff of 2500) about $750.000. 191 Theremainin g staff willb etraine d in thecountr y for a period of six months; thiswil l cost the government $750,00 0 plus Rp 270,000,000, or, at the dollar rate in 1962 together about $2,000,000. 192 Thetota lrehabilitatio n costwil lthu sb e $61,400,000 . The benefits expected from this rehabilitation program, estimated at a 10% increase(se eTable s9 8an d 100)i n thecurren t production of 700,000ton s amount to about 7000 0 tons annually if the present delivery of cane can be maintained. This means at world market prices varying between $4 0 and $ 160 per ton, an output ratio between 5.5 and 21.9,dependin g on the price of the sugar at the world market (seeTable111) . From the above evidence we can conclude that economically the rehabilitation of sugarfactorie s doesno tsee ma sjustifie d asi s generally believed.193 Nexti tmigh tb eargue dtha ti twoul db emuc hbette ri fth eamoun t of $61. 4millio n needed for the rehabilitation of the factories were invested in, for examples the re planting of rubber trees. The Economic Survey Team of the U.S. estimated in 1962 that this cost totalled about $4 5millio n during a period of ten years. It involves an additional rubber export earning for Indonesia somewhere between $26 0an d $43 0 million ayear .I n addition, the export prospects are much better than for sugar and the government has to undertake a replanting program as otherwise other cheap natural or synthetic rubber producers will gradually squeeze out Indonesia's increas inglyinefficien t andcostl yproduction. 194 On the other hand it has to be realized, that the investment in rubber production willprimaril y be to the benefit of the Outer Islands,thu s leaving Java's problem still unsolved. Therefore, although rehabilitating sugar factories in Java will be only profitable withhig h sugar prices, the government cannot escape the need to rehabili tate some of thefactories , if she wishes to avoid asmuc h as possible importing sugar from abroad, as it is doubtful whether the Outer Provinces will ever become an im portant sugarproducin garea . 190 The estimate of the rupiah cost was based on the experience of the author when he was Project Director of the Development Project Consulting Servicei nIndonesi a between 1962an d 1964. 1,1 Based on the estimate of the Department of Higher Learning and Science, MPRS Report 1963, p. 9. 192Ibid. 193Actuall ya retur ni n5. 5year sdoe sno t appear too bad. 194 US GOVERNMENT,op. cit. (fit. 27), pp.39,69,213-22 0an d appendix44 . 114 Atpresen t thecos tfo r rehabilitatingth emachinery ,usin ga smuc ha spossibl eloca l materials in replacing some ofth e worn-out equipment, ismuc hlowe rtha nwoul db e the cost of reconstruction of the whole factory. Of course, at the end of the period, there is a need for a large scale replacement of the worn-out machines, but in the meantime, the government should make a technical and economical surveyt ojustif y the construction of new factories. For example, in a place where there is a cluster of sugar factories but not enough cane is available, some of them must be closed or transformed into other kinds of factories. Personnel of the reconstructed factories should be trained how to handle the newtype s of machines.Ther e must becertaint y about the availability of fertile soils and other complementary factors to make an investmenti nne wfactorie s attractive. In recent years, annual sugar production has fluctuated between 600,000 and 800,000tons .Domesti cconsumptio n at 'fair' pricelevel smigh twel lb e 1,000,000ton s for the whole of Indonesia, but at the moment this goal seems to be beyond reality because of transport difficulties and high production costs. In addition it could be argued that, even if it were economically justified to induce aper capita sugar con sumptionleve ltwic etha to fth eprewa rperiod , sugarha sstil lt ob econsidere d aluxur y underth epresen teconomi csituatio ni nIndonesia . Thus,whethe rth egovernmen tprefer st ohav ea large rexpor t ort oris eth edomesti c consumption (to increase the number of calories available for the population), it is evident that in both cases sugarproductio n should beincreased . However, as regards therehabilitatio n ofth efactorie s it should beclea rfro m theprecedin gdiscussio n that therei sn odecisiv etes ta st owhethe rth ebenefit so fth eprojec t aresufficien t towarran t itsimplementation. 195 It may betha t the agro-economic surveywhic hi sbein gcarrie d out in Indonesia will further analyse this important subject and can give a better founded recommendation. Table111. Estimation of capital output ratiofor the rehabilitation of the sugarfactories at various sugarprices. Increase of pro Price levelsi n Increase of revenues Estimated Estimatedcapita l out duction in tons US $ per ton in US $ investments, inclu- put ratio = (4):(3 ) dingtrainin gprogra mi n USS (1) (2) (3) (4) (5) 70,000 40 2,800,000 61,400,000 21.9 70,000 80 5,600,000 61,400,000 10.9 70,000 160 11,200,000 61,400,000 5.5 195 Theautho r ismor eincline dt oconclud etha t iti sno t profitable torehabilitat e thesuga rfactorie s in Javaexcep t withhig h worldsuga rprices . 115 8.8 Potential of peasant cane growing Viewedfro m the micro-economic standpoint there are three possibilities for thecan e growert ous ehi sagricultura lresources ,namely : (a) tocultivat ecrop sothe rtha ncane ,fo r instanceric ean d dryseaso ncrops ; (b) to cultivate canean d either selli t to thefactor y or process brown sugar himself; (c) to renthi slan dt o thefactor y andt o work there atth e sametim e or to seekothe r employmentelsewhere . Due to lack of detailed economic data it is difficult to state exactly which of these abovepossibilitie s willb emos t beneficial to thepeasant . However, something canb e said about the possible decisions and choices of the peasants, based on the rough calculationsummarize di nTabl e112 . Fromthes efigures i tcoul db econclude d that canegrowin gwil lb eth eleas t profita ble.I nth ecas eo fworkin ga tth efactor y therei sth eadvantag e that thepeasant' swif e mightcontribut et o thefamily' sincom eb ybein ghersel f employedthere ,whil e in the other two alternatives shewil l help her husband in his farm business. Assuming that shewil lwor k half of thetim e and thewag epai d by the sugar factory is2/ 3 of thato f her husband, there willb e an additional income of Rp 2400. But it must be kept in mind that in the year 1960th e wagespai d to the workers were relatively high due to themonetar y reform oflat e 1959.As , sincethen , inflation proceeded, this alternative will be less favourable, especially as the peasant has to buy additional food for his family, thefoo d hereceive sfro m thefactor y beinginsufficient. 196 Nevertheless,unde r thepresen tcircumstance sth enon-can epeasan tseem st ob eth ebes t off. Nowth equestio narises ,unde rwha tcircumstance swil lth egrowin go fsugarcan eb e favourable for the peasant? To answer this question it has to be remembered that a farm's grossincom e depends on the yield and the price of the crop. Usually the total yield of a particular crop will not change much in a short time, so that the farmer's incomechiefl y depends on prices.Pric e changes serve as a mechanism whereby con sumers indicate a certain preference and this causes shifts in production and useo f resources, unless measures are taken to direct the production pattern and the useo f theresources .I n thiscas eth eregulation s must bemad e effective. Given afre e choice, thefarme rwil lcultivat eth ecro ptha tseem sth emos tprofitabl e tohim .Assumin gthat : (a) thenon-can e peasant earnsdurin g the 18 months with rice and other cropstwic e thevalu eo fa suga rcrop ; (b) theaverag erice yiel di s2 0quintals/h awit ha pric eric eo fx Rp; (c) theyiel d of peasant canei s 600quintals/h a or 60quintal s of sugar/ha with sugar priceso fy Rpan da can epric e4 % o fth esuga rprice ; (d) themai ndifferenc e betweenproductio n cost ofth etw oalternatives ,excludin gth e processing ofth eproducts ,i sth efertilizatio n costwhic hi n 1960wa s estimated at Rp200 0pe rha . "' Payment inkin dha sno t increased after 1961. 116 Thenw ecom et o thefollowin g equation whererice productio n isa sprofitabl e ascan e growing: (2.20x)-500=600(0.04y)-20 0 j=(1.6x+62.50) Rppe r 100k gsugar . Thismean s that cane growingi sa sprofitabl e asric egrowin gi f the sugar price per kg isfixed a t 1.6 timestha t ofric eplu sth efertilizatio n costs.I n 1960however , the sugar price was Rp 4.65,whil e the rice price was Rp 7.75. Therefore it is evident why the peasantshifte d from canet oric egrowing. 197 So much for cane and rice growing. Some of the sugar fields are also suited for tobacco and, in the Cheribon area, also for the cultivation of onions. The question arises then which crops are more profitable to cultivate. Since there are no farm management data on which to base his recommendation, the author could only sug gesttha tth edecisio nshoul db ebase do nthre ecriteria : (a) whichcro pwil lgiv eth ebigges tne tadde dvalu et onationa lincom e? (b) whichcro pwil lprovid eth emos temploymen t opportunities? (c) whichcro pwil lgiv eth epeasant sth ehighes tincom e? More detailed farm management studies should help the farmers, and the govern ment to make a choice for the efficient utilization of the available but limited farm resources. From the rough micro-economic analysis as given in the foregoing pages, the conclusion is that sugarcane growing is not so profitable for the peasants as it is generally believed, or to put it in a more general way:i t iseconomicall y not justified to allocate, in advance, a certain percentage of agricultural land for acertai n crop as doneu pt ono wi nth ecas ewit hsuga rcultivatio ni nJava. 198 Table112. Estimatedannual income of landowners per ha by type of occupation, Java, 1960. Income in Rps Non-canepeasan t 15,500 Cane-peasant 6,000-8,000 Non-peasant 11,000 1,7 Ofcours ea ne wexchang erat emigh tchang eth esituation . 198 See also D. H. PENNY, The economics of peasants agriculture: The Indonesian case, Bull. Indon. Econ. Stud.5, Canberra , October 1966,pp .26-31 . 117 9 Improvement ofpeasant' s agriculture, especially rice growing As mentioned before, peasant agriculture isth ebackbon e of Java's economy. The foregoing chapters havereviewe dit smai n aspectsi nth epast ; thischapte ri sintende d to deal more elaborately with the various factors affecting its present production. The range offactor s influencing the progress ofagricultur e isver y wide.The yca n be arranged in different ways,bu ther e theclassificatio n given byth e Conference on Productivity and Innovation in Agriculture in the Underdeveloped Countries, held at Cambridge, USA,i n January 1965, will befollowed 199. It distinguishes between: (1) thephysica linpu t (2) theeconomi cenvironmen t (3) researchan d education (4) organizingagricultura l development. Some factors which affect peasants' agriculture willb ediscusse d more elaborately than theothers , as they arealmos t intermediatei nthei r effects. Attention will prima rily begive nt orice ,bein gth emai ncro pi nJava . 9.1 Thephysica l input To raise thevolum e of peasants' agricultural production inJava , thephysica l input shouldb eincreased .Th emajo r requirementsare : (1) Todevelo pa nefficien t fertilizer program. (2) Toconstruc t new irrigation works, to improve theexistin g irrigation systeman d toregulat ewate r supply. (3) To select high-producing varieties suitable for different soil, climate and water conditions,an dt oincreas eth eus eo fsuc hvarieties . (4) Tocontro lpest san ddiseases . 199 Another classification isgive n by BARTER (basedo nth e FAO/ECAFE Report onSelectiv easpect s of agricultural planning for theFa r East; seeals o FAO, Agricultural planning studies No.3,1963 , p. 173)wh o separates thevariou s meansb ywhic h thegovernment sca n influence therat e andpatter n ofagricultura l development as follows: (1) Provisiono fmateria l impuls,e.g .fertilizers ,improve dseeds ,an d irrigation. (2) Measurest oimprov eefficiency , e.g.researc h and extension. (3) Provision ofeconomi cincentives ,e.g .pric esuppor t andcro pinsurance . (4) Institutional reforms, e.g. land reforms, provision of institutional credit, reform of marketing system,cooperativ eservice san d farming. 119 (5) Toimprov ecultivatio nmethod sb yth eus eo fmor eefficien t implementsan dbette r croppingpatterns ,includin gth e useo fgree nmanur ecrops . Ascompare d with other means of increasing production, the more extensiveappli cation of fertilizers seems to be most promising as can be seen from the following section. 9.1.1 Theus eo f fertilizers Theaverag equantit y offertilizer s used(primaril y in Java) duringth eyear s 1936-1941 was 122,700 tons. During the period 1947-1952 it decreased to 53,000 tons (Table 113)200. The import in later years varied considerably, but between 1958 and 1963 there was a distinct trend for higher figures201. As Indonesia itself did not produce large quantities, this means that fertilizers were used only on a very small scale as compared withothe rcountrie s ofth e ECAFE region.Whil ei n Java duringth eperio d 1962-1963th e applied quantity was only 8.5 kgpe r hectare, in Japan it amounted to 270 kg, inTaiwa nt o 190 kg, inKore at o 175kg 202. In the past, the estates were the principal buyers; among them the sugar estates ranked first. The peasants used only small amounts, mainly for cash crops such as sugarcane, tobacco, onions, red pepper and cabbage, sometimes on irrigated rice fields. Although good results can also be expected for padi gogo, maize and other foodcrops by fertilizing with N, P2Os and possibly KaO (especially on soils in good physicalcondition) ,the ywer epracticall yneve r applied. Table 114 gives the amounts of fertilizers recommended by the Extension Service in1953. 203 Since the Rice Selfsupporting Campaign (SSB.) was launched in 1959, the use of fertilizers by the peasants hasincrease d considerably, as can be seen from Table 115. More than 60% of the fertilizers was intended for use by the peasants. Provision for the foodcrop ssurpasse s the requirementsfo r estatecrops ,whic hformerl y consum ed mosto f the fertilizers. In 1962,abou t 300,000ton s offertilizer s wereimporte d to increase riceproduction . That year a rise of 10% was noticed as compared with the average over 1953 to 100 SreKWA T SOEN,Th eUs eo f Fertilizersi nIndonesia ,Ekonomidan Keuangan 7,1954,p .614 . sn Imports areconsidere d to beinterchangeabl e with consumptionfigures unti l 1963.Befor e thewa r therewa s anaverag edomesti cproductio n of40,00 0ton so froc k phosphate.Afte r thewa r production was in operation again the middle of 1953, but sincethe n dropped till 9,000ton s annually. Starting from 1964, theure aplan t inPalemban g(Sout h Sumatra)starte d itsproductio n at a potential capacity of 100,000ton sannually . SM Thisi sth eaverag efigure fo r thewhol eo f Indonesia.Fo r Javai ti s somewhat higher,sinc e fertilizers are primary used onthi s island (seeUN , EconomicBulletin for Asia andthe FarEast 16,No . 1, June 1965, p. 22). 203 SIE KWAT SOEN, op. cit. (fn. 200), p. 604. 120 1962.204Bu ti n theyea r 1962,th eweathe rcondition swer ever yfavourabl e and many agricultural experts attributed the increase primarily to the good weather. Factors sucha sclimate ,soi l fertility, nature of the cropsan d educationo ffarmer s areimpor - tants aspects in the use of fertilizers. Besides, economic considerations such as the costo ffertilizer san dth eextr alabou rneede dt o applythe mpla ya role . Despite the research results of MAHAN and others, many farmers hesitate to use fertilizers. Their reluctance could be explained by the fact that MAHAN'Sfigures ar e averages based on field studies of the Agricultural Experimental Station in Bogor. Whether the same results could be obtained on a large scale is still debatable, and it ispossibl e that an individual farmer has no results.I n viewo f his weak economic position he hesitatest otak e any risks.205 Table113. Importsof fertilizers (in 1000 kg) in Indonesia, 1936-1941,1947-1952,1958-1964. 1936-1941,averag e 122,700 1960 228,300 1947-1952,average 53,000 1961 346,400 1962 446,800 1958 157,000 1963 375,400 1959 254,600 1964 169,400 Forth eperio d 1953-1957n oreliabl estatistic sar e available. Source: Statistical pocketbookof Indonesia 1963,p . 135, and WartaBiro Pusat Statistik (Bulletinso fCentra lBurea uo fStatistics) ,Decembe r 1966, pp. 18-20. Table114. Necessary quantitiesof ammonnium sulphatefor peasantagriculture inJava, calculatedon 200 kg/ha. Area in ha Quantity in 1000k g tobacco 60,000 12,000 pepper 2,000 400 sugarcane 35,000 7,000 potatoes 8,000 1,600 onions 5,000 1,000 vegetables 10,000 2,000 maize 5,0002 500 chillies 10,000 2,000 total 26,500 other crops 3,500 1 allcrop s 30.000 1 30,000ton so fammoniu msulphat emake s6,30 0ton so f N. '100kg/ha . Source: SieKwa t Soen, The useo ffertilizer s in Indonesia, Ekonomi dan Keuangan 7(9), 1954, p. 604. 204 Statisticalpocketbook of Indonesia 1963, p. 135.Th e total import of fertilizers in 1961 and 1962 was 350,000an d 450,000 tons, respectively or about 400,000ton s a year, of which 70% was used for rice (MAHAN, see footnote Table 74, pp. 68-70). See further, Central Bureau of Statistics(CBS) , Produksi-Bahan Makanan Utamadi Indonesia 1963, Djakarta 1965, p. 1. 205 Professor JOOSTEN is of the opinion that unless there is an expanding market for the farmers' produce there is little sense to expand production, especially if the fertilizers are imported. 121 Table115. Fertilizers:import plans for 1962-1963,and destination(in metric tons of plant nutrient), Indonesia. K 0 N P2O5 2 Agricultural Extension Service: paddy 7,294 8,754 maize 15 fruits andvegetable s 12,489 7,685 589 smallfarmers ' commercial crops 6,282 826 AgriculturalStat eEnterprise s (BPUPertani) : paddy centers 88,261 56,391 uplandric e 196 505 600 Government estates (PPN) 22,871 10,069 4,366 Privateestate s(Swasta ) 492 3,898 679 Total 137,885 88,143 6,252 equivalent to 306,400 232,000 10,420 urea superphos potasiium phate chloride Source:MAHAN ,op.cit. (fn.Tabl e 74), p.70 . Table116. Irrigationprojects includedin the Indonesian Overall DevelopmentPlan, 1961-1969. ha ha 1961 Rehabilitation of tertiary irrigation system in Java and South Sumatra 63,700 1962 Ibid,i nJav a 17,500 SectionI Djatiluhu r project inJav a 80,000 97,500 1963 Section II Djatiluhur project inJav a 80,000 Rehabilitation secondary and tertiary systemi nJav a 12,600 Rehabilitationoutsid eJav a 40,000 132,600 1964 Waterreservoi r inJav a 5,000 SectionII I Djatiluhur project inJav a 80,000 85,000 1965 Newproject s inWes t Sumatraan d South Celebes 401,000 401,000 1966 - 1967 Newproject s inSout h Sumatra 85,100 85,100 1968 Rehabilitation inJav a 90,932 Newproject si nNort h Sumatra 297,000 387,932 Total 1,252,832 Source:Nationa lPlannin gCounci l(Depernas )a scite db y MAHAN, P. 62(se eTabl e 115). 122 Convincing farmers of the advantages of fertilizers is a slow process. Especially whereth egovernmen t madesom emistake ,a swa sth ecas ewhen ,afte r World War II, the KOGAM (the Kommando Operasi Gerakan Makmur, the Welfare Operation Command) distrubuted urea in certain parts of south-eastern West Java without the support of adequate soil and field research data. The results was: no increase in pro duction,an dfo r thetim ebein gth efarme r intha t areahesitate st ous e fertilizer. There were times when a part of the fertilizers, whichwer e supposed to be applied to rice,wa s usedfo r sugarcane, tobacco, etc.Perhap s thiswa seconomicall y justified, as the result was indeed a higher return, but the aim to increase rice production was not reached.206 Despiteth eman yproblem swhic hstil lhav et ob esolved ,th eautho ri so fth eopinio n that properly applied fertilizers are economicallyjustifie d if their application iscom bined with fighting diseases, proper irrigation and the use of improved seed. Then Javawoul db eabl et orais eenoug hfoo d tofee dit speople . 9.1.2 Irrigation Java, Bali and some parts of the other Indonesian islands are of old renown for their irrigation system. Its advantages have so often beenbrough t to thefor e that further elaboration seems superfluous. Java and Madura account for about 63% ofth eirrigate dland , asca nb e seen from table3 6unde r 3. Thisha sresulte di n ahig hoccupatio nvalu eo fth esoil ,reachin g11 8 in 1941. Butafte r thisyea ri thardl yincrease danymore ,a sth eestablishmen t ofsmalle r irrigationwork swa seconomicall yjustified , onlyafte r largeone sha dbee nconstructed . The National Overall Development Plan 1961-1969 gives a program for repair andimprovemen t ofth eexistin gsystem san dth econstructio n ofa numbe r ofmediu m sized and a few large projects for the whole of Indonesia. Its execution will add a total of 1,252,800ha , as can be seen from Table 116. Only part of it refers to Java: the Djatiluhur Project, the Tjimanuk Development Scheme,an d theBranta s Project. The Djatiluhur Project will add 180,000ha ; its costs will amount to 5,000millio n rupiahs. Spending this amount seems hardly justified from an agricultural stand point, but actually the generation of power is the main aim of this project. Its com pletion willcos tth e government atota l of Rp2,500,000,00 0fo r power generation, of which 50% or about $ 110 million will be in foreign exchange, and another Rp 2,500,000,000 for irrigation purposes of which no foreign exchange component is given.207I ti sexpecte d to produce about 216,000ton s ofric eannually ,jus t enough to feed theincreas e ofJava' s population intw oyears .I ttoo kte nyear st obuil d andwa s completedi n1967. 208 206Suga rwa si nthi sexampl emor eprofitabl etha nric ebecaus ei twa ssol da tth efre emarke tpric ei n contradictiont oth eexampl egive ni nChapte r8 . so' MPRS,op. cit. (fn. 191) ,pp .19 2an d199 . Conversionrat eof : 1$=R p11.40 . 208Averag eyiel do f1 hai sestimate da t1. 2to nrice . 123 Alsoi nth e BrantasProjec t power generation andflood contro lar eth emai npurpo ses. TheTjimanu k DevelopmentSchem ei s stilli nth eplannin gstage . Irrigationagricultur ei sconsidere dt o beth emos tproductiv e kind offarmin gdevis ed by man, but in the short run it is also the most expensive.209 The cost of building irrigationwork s aspar t of the multipurpose project iscalculate d at Rp 11,500pe rha , equivalent to US $ 115.210I n thisfigure i s not included the cost of building themai n and secondary canals.T o maintain the high yield required by the high cost of irriga tion, again all other physical inputs like fertilizers, improved seeds, pest and disease control,an d otherimprove d farm practicesmus t beuse dt o full advantage.311 9.1.3 Improvedseeds 212 Asindicate dearlier ,befor eWorl dWa rI Ith egovernmen tha d alreadydevelope dsom e superiorvarietie so fric ecrops. 213I twa s estimatedtha talread yabou t 1,000,000hectare s wereplante dwit hthes e seeds.Th emos t widelyuse dvarietie s were 'Tjina' and 'Bega- wan'. During the Japanese occupation (1942-1945), the area with improved seeds declined substantially.214 This may be explained by the fact that these varieties re quire a somewhat different treatment and that they are more difficult to handle than theplant sfro m commonseed . After World War II, the Ministry of Agriculture launched a number of projects to restore the use of improved seeds.Wit h the help of the Institute of Rice Research at Bogor,th e prewar varieties of high yielding seeds were reproduced and new ones were developed. These seeds were sent to the regional experimental farms of the Institute of Rice Research where they formed the initial stocks for multiplication. Thereafter, under the guidance of the Agricultural Extension Service, the seed was transferred to selectedgoo d farmers for further multiplication. Finally the new seeds weredistribute d amongstth e individualfarmers . In addition to the 'Begawan' varieties,ne wimprove d seedslik e 'Gadis', 'Remadja', and 'Djelita' have been introduced. The area planted with improved seeds amounted in 1962 toabou t2,000,00 0ha. 215 202 PELZER has stated that the construction of technical irrigation systems required an average invest ment of 190 guilderso r about $ 100 perh a before World War II. PELZER, op.cit. (fit. 52),p .55 . 210 Since a substantial part of building the dam is imposed on the cost of the power generation, the irrigation cost is less than it should be. For instance, according to GROENVELD, the average cost of irrigation projects, using a high dam, but in which only the main canals are included in the public costs, is between S750 and S1000 per ha (D.GROENVELD ,Investment for food, Amsterdam, 1961, p. 85. 211Befor e the war the government had already introduced the use of improved seeds on irrigated field, toincreas erice production . 212 Actually the right term is improved quality of superior seeds. For convenience the term improved seedsi s usedhere ,a susuall y donei nothe r publications. 215 Improved varieties are usually superior in selected characteristics and their ecological adaption tendst ob erelativel ylimited . 124 In 1960 a Japanese research team which came to Indonesia noticedtha tth eIndo nesian ricevarietie s are quickly 'saturized' withnitrogen . Theplant s tend to liedow n ifto omuc hfertilize r ofthi skin di sused ,whic hresult si nlos so fkernels .Th eJapanes e expertsthu srecommende d to look for newvarietie s whichca n stand a heavier nitro gen fertilization (e.g. the Japonica rice type) for further breeding purposes. In addi tion,varietie sar eproduce d suitablefo r drycultivatio n('Gadjali-lampung' )an dfo rth e tidalswamp s('Bajar-kuning'). 216 Theus eo f improved seedswil l also bever yimportan t for theproductio n ofmaize , especially in combination with fertilizers. It has been proved that the application of 100 kg of urea per hectare may increase the production from about 1000 kg/ha to 3000 kg. In the long run, hybrid maize will give considerable possibilities: a yield of800 0t o 9000kg/h a isconsidere d possible.217Bu tth eimplementatio n ofa program which aims at such improvements requires some education of the farmers, a goal whichcanno tb eaccomplishe d overnight. 9.1.4 Pestan ddiseas econtro l In the prewar period, the government already issued regulations against pests and diseases.Wit h the establishment ofcentra l and local agricultural experiment stations, the systematic study of diseases and pests could start, and measures could be taken tocomba t thedamage .A sth eoccurrenc e ofplague si sclosel yconnecte dwit hclimati c conditions, a theoretical study of data from the past made a fairly precise forecast possible. Since World War II, the prewar regulations for pest and disease prevention have been in many respects neglected. Some of them were considered politically unaccep table,thoug h technicallybeneficial . For example,t o diminishth eris k oflosse scause d byrat s it isrequire d to keep to certain rules sucha sth e simultaneous planting of rice at a prescribed time so that during a sufficiently long period no food is available for the animals. But as the farmers were unwilling to follow these measures, and thego vernment (because of political reasons) couldno t force them to doso ,th eresul twa s an explosion of rats.Ther ear e ofcours eothe rmeasures ,suc ha sth eus eo fpesticides , but for the time being, planting time regulations seem to be the most effective and cheapestwa yout . A study of the use of pesticides may be moreimportan t in the future because they 811Th e exact figures are not available, but it is estimated that it dropped to a very low number of 100,000ha . 816 MPRS, op. cit. (fn. 191),p . 5, and MPRS, IchtisarTahunan 1961 dan1962, Djakarta 1963, p. 57. "' The use of improved seeds is a very important means of increasing production. For instance, the research institutions before World War II won golden opinion by theimprovement s madei n agricul tural export.Th e yield per hectareo f rubber,sugarcan ean d other crops was the highest in the world *" MPRS, Ichtisar Tahunan 1961 dan 1962, Djakarta, 1963, p. 57. Dr. MAHAN even mentions - a production of300 0k gb ya napplicatio n of 1 qt urea(persona l communication). 125 Table117. Useof some pesticides in Indonesia (in tons), 1950,1961. Arsenicals Benzene Sulphur DDT Copper hexachloride compounds compounds 1950 550 10 250 85 350 1961 2001 295 3002 168 1273 1 For1960 . ' Dusts. Source:ECAFE ,Economi csurve yo fAsi aan dth eFa rEas t 1964, p. 111. willinterac t stronglywit h other inputsi nth elate r stages of agricultural development. The need for pesticides rises as development proceeds, because other inputs often createcondition stha t favour the spread of diseases andpests. 218 At the present time, a pest-control program must still be carried out under close supervision of the officials of the Ministry of Agriculture because many of them are poisonous andmos t ofth efarmer s cannot properly readth ewarning s attached to the packages. For a succesfull execution of thepes t and diseasecontro l program allfarmer s must becoerce dt ojoi nit .The ymus treceiv einstruction si nplan tprotectio n measures,suc h as changes in sowing dates, cultural practices, seed treatment and appropriate crop rotations219, breeding crop varieties of rice, maize, etc. with the highest resistance to diseases,an dth eprope rus eo ffungicide s andpesticides . 9.1.5 Otherimprove dagricultura lpractice s Productivity oflan di sno t onlya functio n ofsoi lan dclimate ,bu t alsoo fth etechnica l leveli n agriculture.Wit h the adoption ofimprove d cultural practices such as a wider use of green manure crops, better soil conservation measures, the introduction of new crops, a better crop rotation and mechanization and other practices mentioned earlier, therei stechnicall y still scopefo r considerable improvements in Java. The use of green manure crops introduced to the farmers before World War II, proved tob emos tpromisin gt oincreas eth eproduction . Itwa sestimate d that 300,000 ha of the peasant agriculture area were covered with them.220 MostlyCrotalaria 218 Data on the use of these chemicals are inadequate, but available information is summarized in table117 . 219 Thesear esom eo fth eoperation s ofwhic hth efarme r hast ob emindfu l ofth erigh t timet o counter actth eadvers eeffec t ofsom emajo r diseasesan dpests . 220 Sm KWATSOEN, op.cit. (fn. 200),p . 606et sqq. Green manuring isals o important for estate crops liketea ,coffee , etc.Ther ear en o data availableabou t thetota l acreageuse di nthes eplantations . 126 juncea is used; under certain conditions 100 qt/ha may replace 1qt/h a ammonium sulphate.221 Though no exact data are available, it is certain that during and immediately after World War II the use of green manuring has dropped. Among others, this is due to thefinancial difficultie s the peasants met. In addition they were eager to have a con tinuous production of their land to have more cash and they lost sight of the fact thati nth elon gru nthi swoul db edetrimenta lt oth eyield . Green manure crops can also be used for soil conservation purposes, e.g. along terraces. Sometimes the slopes of agricultural land are covered by leguminous and other soilprotectin g crops,thoug hmountai n areas should bekep tunde r forest. These are all measures necessary for soil conservation, because once erosion occurs, as e.g. in the Gunung Kidul area in Jogjakarta, it will take hundreds of years to regain the topsoi lb y reforestation. With the introduction of new crops, with the growth of the towns, the increasing industrialization and the gradual rise in national income, there may be a marked trend towards a more 'western' type of diet.Ther ewil l bea higher demand for foods sucha sfats ,fruits , vegetablesan dlivestoc k products.Fo rthi sreason ,th eAgricultura l Extension Service is encouraging the so-called 'compound cultivation', i.e. planting vegetables, fruit trees, tuberous plants and other products around the houses in the villages. Some efforts are also being made to integrate the development of crops with an expanded production of livestock. By this means animal residues can be returned to the soil and consequently increase the production. Thisjoin t food and fodder crop agriculturei sa promisin glin efo r bettercro protation . After the war mechanization of agriculture was introduced by the government to increase production. But the introduction of motor-powered machinery might create problems: in Java, with its surplus of labour in agriculture, mechanization might aggravate the problem of unemployment or underemployment.222 9.2 Theeconomi cenvironmen t Iti sgenerall ybelieve dtha t thephysica linpu tfactor s areth estrategi cone st o promote agriculturalproduction . Neverheless,i tappear stha ti nman ycase swher eth eavailabl e supplies of irrigation water and other requirements have not been considered, or where fertilizers have not been properly used by the farmers, the impact of govern mentmeasure s onproductio n ismuc hles stha nha d been expected. Lack of economic 281ibid. m por ti,e reciamation ofne wagricultura l land inth eOute r Islands,wher ether ei sa mor e favourable land/labor ratio, there are possibilities in the use of farm machinery. Perhaps in the long run agri cultural mechanization could play a strategic role in agricultural development in the Outer Islands, especially if combined with agricultural resettlement in the scope of regional economic development. Seeals o Chapter7 . 127 incentivesi s one ofth emai n factors whyfarmer s are not eager to use more improved requisites.Therefore , thegovernmen t shouldpa ymor eattentio n tocreat ea favourable economic environment. The following pages will describe some aspects of economic incentives: the price policy, the marketing incentives, the credit policy, and the in centives to be expected from land reform and changesi n the sizeo f holding. 9.2.1 Pricepolic y The prices received by farmers for their products determine the use of fertilizers and other improved requisites. Instability or fluctuation in prices cause the expected in creasei nth evalu eo fth eharveste d cropno t tocove rth ecos t of fertilizers. It is difficult to estimate the extent to which price policy affects agricultural pro duction in Java. Inflation has been more or less continuous since 1952, and it is hardly possible to choose a proper deflator in order to isolate the price influence on agricultural production. But something can be said about the effect of the applied pricepolicie so nproductio ni ngeneral . Maximum prices for basic agricultural commodities arefixed b y the government; they are usually relatively low. A special administrative machinery is set up to con trol them; buti t isinadequat ean dhardl yworks .I f apric eleve l has become unrealist- ically low this may become fatal to maintain it.223Whil ether ei sa shortage ofgood s and serious inflation occurs,fixed price s will not have any reasonable chance ofsuc cess. Thusi t isclea r that therelativel y low pricepai d to the peasants byth e government before 1964fo r their rice did not increase their output. Both the area devoted to rice and theyiel d per hectare tended to fall, as illustrated by Tables 57an d 58i n Chapter 4224 To induce the farmers to sell their rice, the government resorted to a so-called non-pricemeasure spolicy ,whic hmean ssubsidizin gfertilize r distribution, equipment, etc. It should be realized, however, that even if the non-price measures succeed in encouraging the farmers to increase their production, the amount of rice which they arewillin gt o sellt o the governmentwil lb ebelo w expectation. Aslon g asth e govern ment has difficulty in obtaining adomesti cmarke t surplusfo r subsidized distribution, it will be forced to import rice from abroad, or to persuade the people to shift to othercarbohydrat eresources . In August 1964, in order to encourage domestic production, the government commencedt obu yric ea tth efre e marketpric ean dabandone dit slo wpric epurchasin g policy.Bu to nth eothe rhand , thegovernmen tha dt osel lth eric ea ta subsidize dprice , for example to its officials, thus increasing subsidy costs. Indeed, the government faces a difficult task infinding a reasonable price for both producers and consumers. 223 P. G. H. BARTER, Agricultural price policies and economic incentives, in FAO, Agricultural PlanningStudies, no .3 ,FAO ,Rom e 1963,p . 210. 224 Statisticalpocketbook of Indonesia 1963, pp. 68-70. 128 Regarding the farmers' export crops, we face another serious problem. The dis crepancy between the free market and the legal pricesgive sris et osmuggling , under- invoicing of exports. It is difficult for the state trading enterprises to procure goods from private producers because they have to purchase the goods against fixed, usually low, government prices. Moreover, these manipulations cause a substantial volumeo fforeig n exchanget o go intonon-officia l hands. 9.2.2 Marketingincentive s The author fully agrees with the conclusion of the Conference on Productivity and Innovation in Agriculture in the Underdeveloped Countries, which has stated: "Marketrefor mough tt o be anintegra lpar to fan ypolic yfo ragricultura l development. Normal economic incentives to induce farmers to increase productivity can operate only to the extent that the marketing system enlarges the market for their produce and bringsthe ma reasonabl e pricefo r it. Their desiret oear nlarge r cashincome sca n be stimulated by a marketing system that brings them cheap consumer goods, and their effort to increase productivity can succeed only to the extent that the marketing system delivers the needed inputs. Marketing is as critical to better performance in agriculture asfarmin g itself and should be regarded and developed as such".225 JOOSTEN has also stressed that agricultural development is primarily a structural problem, that establishing a market for the farmer's produce is equally important as, e.g.,capita linvestment. 226 Farmingi nJav ausuall ymean smor eo rles sself-sufficienc y infoo d and is nothighl y commercial as in more developed countries. The quantity of marketable surpluses dependslargel y on thesiz eo f the consumption of thefarmer s themselves. For exam ple, the proportion of the marketed surplus is estimated at about 30 % of the rice production. The government has tried to increase theflow o f supplies of agricultural products to the urban markets to meet the increasing demand there, but not always with success. Indeed the lack of incentive to higher production can be attributed for a considerable part to poor marketing facilities,227 and an expanding market for the peasant's produce will solvemos t of theproblem s for increasing production.228 Therura lmarke t systemi nJav aha sbee nprofoundl y influenced byth eopenin go fth e country to the world market. Yet it has retained an identity which separates it from 226 Conference Report, p.80 . 228 J. H. L. JOOSTEN, Landbouwontwikkeling en macro-economische orde. Landbouwk. Tijdschr. 76, 1964,pp . 122-124. 22' Other impeding factors for increasing production are, for example, transport facilities, credit policy ofth eprivat e moneylenders. 228 Professor JOOSTEN has always stressed that lack of markets is one of the impeding factors for increasing peasants' agriculture. An expanding market will occur if the non-agricultural sectors will also expand (seeth esectio n on fertilizers under 9.1.1.). 129 many of the features of the complex world of international business.229 MEARS230mad ea good start in thestud yo fthi s subject withhi spublication s onric e marketing in Indonesia. But in general, data regarding the marketing of peasants' agricultural produce and the channels which are followed in this process are very scanty. Therefore it is impossible to say anything precise about this subject and the discussionha st ob erestricte dt oa fe wremarks . Thefarme r may dispose of his product bysellin gi t to theloca lmerchan t or dealer- processor-shipper or directly to the consumer, or hema y selli t to the marketingcoo peratives society if it exists in his village, From these three marketing systems, the firsti s the most important. It isi n this sphere of assembling and distribution of farm products in Java that a number of middlemen have emerged. The accompanying diagram depictsi n a general picture thepositio n of thesemiddlemen , their mutualre lations, and their connections with the farmers. It also shows that agricultural mar kets in Java can be classified into three categories: village or primary markets, as sembling or secondary markets, and distribution or terminal markets. Itma yb emor e advantageous for thefarme r tosel lhi sproduct st oth econsumer sa t the village market, whether he does, or does not, depends largely upon the distance from his home to the village, the means of transport and the volume of the products tob esold . Diagram for domesticmarketin g channels of agricultural products in Indonesia. ~>middleme n >•wholesaler s >retailer s - -•local village markets- peasants/producers yconsumer s ->cooperative s- *•processor s The process of assembling agricultural products from numerous small-scale pro ducers and distributing them to Java's sixty-three million inhabitants isver y intricate and expensive.231Befor e the products reach the consumer they pass various markets, *" Since this chapter is concerned with farmers' agriculture, the marketing of estate agriculture products willno t bediscusse d here. 230 SeeLEO N A. MEARS, Ricemarketing in Indonesia,plu ssupplement, Djakarta , 1961. 231Lac k of adequate transport facilities also contributes to the high marketing cost of the products. 130 either before or after processing, and they enter through different channels. The middlemen are mostly Chinese, but (especially in the last years) also Indonesian traders.The yperfor m acombinatio n ofservices :the yac ta sbrokers ,warehous emen , processors and also as 'bankers' who finance the local crop production. This all addsu pt oa comple xan dexpensiv esystem. 232 Obviously the existence of soman y types of middlemen is detrimental to the price the farmer receives for his product. But as long as no sufficiently regulated markets are established and cooperative efforts on the part of the farmers themselves remain inadequate, the presence of so many middlemen is necessary. The government con siders no other approach as effective in eliminating the role of middlemen as promo ting the cooperative marketing system, where a combination with credit supplies is essential. But the establishment of an efficiently operating cooperative is not an easy task. 9.2.3 Creditpolic y According to the government, permanent indebtedness causes the farmer to lose his self-reliance and the will to take his fate into his own hands or to raise his low level ofprosperity .Therefore , thegovernmen t hasestablishe dman yinstitution s to provide 'cheap' credit to the peasants as will be shown in the section dealing with credit-in stitutions.Althoug h the government has established manycredi t agencies and coope ratives (the so-called institutional credit agencies),ye t they still are relatively weak in comparison with the private moneylenders or the non-institutional agencies. These moneylenders are estimated to provide about 80% o f the farmers' need and usually charge muchhighe r interest rates than thosefixed b yth egovernment. 233 For thetim e being they still are indispensable, because private loans are easier to get, even for consumption, and usually are 'unlimited'. Often those agencies give credit without anysecurit yt opeopl ethe yknow . Onth e other hand, governmental funds are limited: not more than 20% of the total credit required by the farmers is available from this source. Besides, loans are given only for specific purposes, and on condition that the farmer provides for colla teral security to back his application. Administrative practices discourage the simple farmer from borrowing.234 The government argues that it is necessary to find a way to solve the peasant's needfo r credit. It must gain thepeasant' s confidence, act asa protector and promote the farmer's welfare in regard to his product. With a more efficient organizational setupan demphasi s onth etechnica limprovemen t associatedwit hcredit ,i tmus trous e 232 C.S .BELLSHAW , Traditionalexchange and modern markets, Ne wYork , 1965,pp .67-68 . 233 This was the situation before the SBBcampaig n in 1959,whe n the government provided to every farmer a basis of Rp 1000pe r ha, partly in kind (like fertilizers). After 1959 the government's share has increased. 234 Seefootnot e 233. 131 the peasant's spirit and give back his creativeness, which is the basis for agricultural development. What organizational setupwil lb eth ebes tt o carry out isillustrate d under 9.4. 9.2.4 Landrefor m andsiz eo fholdin g Asindicate d in the discussion of the distribution offarm s by size,i n 1963abou t85 % ofth efarm s inJav awer eunde r onehectare . Of this number, about 70%ha d an area belowhal fa hectare. 235 A heavy population pressure on scarce land brings about keen competition for the rightt o cultivatea plo t ofland .Therefore , highrent sar e common. Rents are ofeithe r fixed on a certain amount, regardless of the harvest, or they are of the crop sharing type. Share-cropping is the prevalent tenancy in many areas in Java (for further particularsse eunde r5) . In 1960th e Indonesian government enacted the Land Reform Law, better known under the name Basic Agrarian Law no. 5, which contains the basic regulations of various landrights, the tenancy and rent arrangement, the limit of landownership, etc.236 Rent regulation, as stipulated in the law, shifts the emphasis from crop-sharing to fixed rents, thereby providing the tenants with greater incentives. The Crop-Sharing Law of 1960regulate s more elaborately the crop-sharing tenancy237; it requires that alltenanc ycontract smus tb ewritte nan d registered.238 According to the Basic Agrarian Law, the land in excesso f themaximu mholdin g will be expropriated and redistributed among small farmers and landless peasants.239 Anuppe r limit of 5t o 20h a has been setu p for the size of ownership, depending on the population density of the area, the fertility of the soil, the location of the farm, etc. For Java this limit is 5h a for sawahs and 6h a for dry land. But as most of the farmers in Java ownles stha n 5 ha, thisla wi smor e important for some of the Outer Islands, where landlordism prevails, or where there is still land belonging to local communities, the so-called 'marga land'. The question whether the sizes mentioned above are sufficient, or too small for efficient farming, cannot be answered precisely 485 CentralBurea u ofStatistics ,Agricultural census 1963, p .1 . 838 For the complete law see: Ministry of Agrarian Affairs, Peraturan dasarpokok-pokok agraria. Djakarta, 1962. 23' TheCrop-sharin gTenanc yLa wwa senacte d beforeth eBasi cAgraria n Law. 238 At theen d of 1963,ther ewer ealread y 25,345 contracts in 182o f the 259regencie s in the wholeo f Indonesia (see MPRS-Report, Ringkasan Ichtisar Tahunan tentang Pelaksanaan Ketetapan MPRS No. II/MPRSI1960 jang berkenaan denganTahunan PelaksanaanPembangunan 1963, mimeographed Report, Djakarta, 1964,p . 20). 23»Ibid. The expropiated land was first estimated at 178,000 ha in Java, Madura, Bali, Lombok and Sumbawa, but after a more careful investigation, it amounted only about 74,000 ha of which about 40,700 ha was already redistributed at the end of 1963. See also O. SCHILLER, Agrarstruktur und Agrarreformin den Landern Sud- und Sudostasiens, Hamburg and Berlin, 1964,p . 125. 132 withoutcarefu l investigations.240 In other densely settled areas in theworld , likee.g . Japan the enlargement of farm sizei s not an absolute condition for increased agricultural production per hectare.241 But the general feeling is that the average size of the Javanese farm as compared withth eexistin ginpu tfactors , especiallylabou r input, isto o small. With respect to the existing small farm situation, where individual holdings are fragmented, a strong case isals o made in the BasicLa wfo rre-allotment ,th eredistri bution of land to reach larger units. But even if the redistribution of land is carried out in Java, every rural family cannot possibly be given a piece of land. Therefore, the landless are bound to take, and the larger landowners are bound to offer land under tenancy arrangement as stipulated by the government. This means that, in the short run, the only realistic policy is to recognize the inevitability of some form of tenancy and to legalize and promote the most efficient form of tenancy rather than toabando nit . 9.3 Education and research 9.3.1 Education Education has alwaysreceive d special attention from the Indonesian Parliament, and the government givesi t high priority as can be seenfro m Tables 118 and 119. Their sustained efforts caused an unprecedented increase of pupil and student enrollments. Theeducatio n inth efiel d ofagricultur ekep tabreas twit hthi sgenera l development. This isindispensabl e to meet the needs of the expanding population and at the same time provide some improvement in theper capita food consumption. The necessary 4t o 5% annualincreas ei nagricultura l productivityca n bereache d onlywit himprov edtechnology , developed byeducatio n andresearc han dapplie d bya larg enumbe r of farmers. Agricultural education is supplied in vocational agricultural schools, agricultural high schools and agricultural colleges and universities.242 The latter are considered 240 Actually not one measure is adequate to satisfy all purposes. A more useful approach is to deter mine what combination of resources would be required under anticipated natural and economic conditionst o providea reasonableincom efo r thefarmers . Unfortunately, datao n the optimum farm sizei n the various districts inJav a are scanty. Besides,accordin g to Professor JOOSTEN,i t is question able whether there might be an optimum size of holding, since the prices of inputs and outputs are alwayschanging . SeeG . R. SITTON, HOWt o measure the sizeo f farm business,i n Farm managements. Documentspresented at the fifth FAO development centeron farm managementfor Asia and theFar East.Manilla and Los Banos, thePhilippines, 3-21 October 1960, Manilla, 1961, pp.28-29 . 241I n Japan and Taiwan, productivity per hectare has been raised manyfold without any significant enlargement offar m size. 242 In 1966,th e university level of agricultural education is still under the Ministry of Education. In addition this ministry has administrative authority over all other agricultural education, which also hasshow na substantia ldevelopmen t sinceWorl dWa rI I (see Tables 120-122). 133 byth e government to beth emos timportant , asthe y supply thehighl ytraine dpeopl e for leading functions in agriculture as well as the scientists for research and the stafffo r educationo nth etw olowe rlevels. 243 In 1964th e number of university graduates in agriculture in Java amounted to 800. Someo fthe mha d theireducatio n outsideIndonesia , but most of them camefro m the State University Faculties in Bogor and Jogjakarta.244 The author has estimated that the minimum needed would be about 5000 persons245, which certainly is attainable withina reasonabl eperiod . Ast oth ecurriculu m ofth eagricultura l faculties, theyshoul d not beconten tmerel y with educating graduates who seek 'white collar jobs', but also with young people who are willing to get involved with the more practical aspects of agriculture, as encountered in agricultural enterprises and in the Extension Service. Further it should be noticed that, especially in the field of agriculture economics, teaching depends too heavily on textbooks. Students will not gain a clear pictureo f their own agriculture by theory alone; this will tend to remain unrealistic and irrele vant to them, as textbooks are illustrated largelywit h data from foreign regionsan d sometimes areno tmodifie d to suitth e specific situation athome . Perhaps the government should also establish a specific department in one or more ofth efacultie s to train theteachin g staff of agricultural universities and highschools , bringingthe mi nclos econtac twit hresearc hfindings, a s at present the knowledge and skillo fa grea tnumbe r ofthe mi si sno tquit eadequate . Someword s could besai dregardin gth e agriculturalcolleg ei nTjiaw i (nearBogor) . It has a four years' training after high school and it was established by the Ministry of Agriculture to satisfy the need of adequately trained people in a relatively short time.Thi s collegewil l beabandone d as soon as there are enough graduates from the universitiest ofill th evacancie so fth eministry . In 1958 there were 10agricultura l high schools in Indonesia, 3 of which were in Java. In 1960Indonesi a had about 2000farme r training courses(chiefl y in Java) meeting for two hours a week for a period of 6 to 12months . Also there were 8months ' to 2years ' duration vocational schoolsi n agriculture for rural youth.246 Despite the relatively rapid development of these schools and courses, the author feels that the training program for prospective farmers has only been partly met. "» C. W. CHANG,Present status of agriculturalextension development inAsia and the FarEast, FAO, Rome, 1961,pp . 28-29. 244 In 1964, the Agricultural Faculty in Bogor was included in the Institut Pertanian Bogor (the Institute of Agricultural Sciences), which is an autonomous university level educational institution directly under the Ministry of Higher Learning and Sciences. There are three other State Faculties. 845 The author's estimation of the need of 5000universit y agricultural graduates is confirmed by the Report ofth eNationa l PlanningCounci l(se eMPRS ,Ichtisar Tahunan tentang Pelaksanaan Ketetapan MPRSNo. II, 1960,Djakarta , 1963,p .10 . S4« CHANG, op. cit. {fn. 243). 134 Table118. Numberof schools and pupils inIndonesia, school year 1960/61. Number of schools Number of pupils in 1000 Primary schools1 41,280 9,167 Loweran duppe r generalsecondar y schools 4,241 542 Vocational schools: teachertrainin g schools 282 35 technical andhom eeconomi cschool s 748 98 commercial schools 260 51 other schools 20 2.5 Total vocational schools 1,310 186 Faculties 59 29 1 Including1,82 6pre-primar yschool swit h 107,000pupils . Source:Statisticalpocketbook of Indonesia 1963, p .29-31 . Table119. Total number of schools andpupils (in thousands) inIndonesia for theyears 1937-1938to 1939-1940and 1955-1956 to 1960-1961. 1937- 1938- 1939- 1955- 1956- 1957- 1958- 1959- 1960- 1938 1939 1940 1956 1957 1958 1959 1960 1961 Schools 21.0 21.4 22.3 31.2 33.5 32.3 41.7 44.1 46.9 Pupils 2,192 2,324 2,415 6,361 6,620 6,404 7,948 8,991 9,925 Source:Statistical pocketbook of Indonesia 1963, p.29-31 . Table120. Coursesand colleges integrated in the Collegeof Agricultural Science, Bogor(Tjiawi) , 1958. Established Number of j Collegeo f Forestry 1949 80 Seafisher y course 1951 12 Seafisher y extension course 1952 29 Collegeo fagricultura l extension 1952 54 Collegeo fbiologica lscience s 1955 - Source:Stat ePlannin gBureau ,Laporan pelaksaanan rentjana pembanguan lima tahun 1956-1960, Table 106. Table121. State College of Sugar IndustryScience (established in Jogjakarta, 1950). Numbero fgraduate su ptil l 1955 44 Number ofgraduate si n 1956 45 Total 89 Source:Se eTabl e120 . 135 Table122. Maindata on agricultural education, Indonesia, 1956-1958. Number of schools Number of pupils 1956 1957 1958 1956 1957 1958 Agric.junio r highschool 1 2 1 1 82 35 16 Agric,senio rhig hschool 2 10 10 10 1,914 2,192 2,508 Schoolfo r peasant agriculture 19 23 27 521 648 800 Coursefo r peasants 4098 3314 1753 113,542 82,011 48,635 Coursefo r peasants' organization 3558 4871 5000 368,114 386,799 400,000 Educational centrefo r villagelif e 328 335 336 _ Forestry 'police' school 3 3 3 103 139 116 1 Suspendedi n1959 . 1Cumulativ enumbe ro fgraduates . Source: State Planning Bureau, Laporan pelaksaanan rentjana pembangunan limatahun 1959-1960, Table 107. Thereaso ni stha tman yteacher s ofthes eschools ,wh oar egraduate sfro m theagricul tural high schools, are neither sufficiently trained in practical agriculture, nor well- equipped in general agricultural science subjects. Moreover, the salaries are low, and most of the alumni of the high schools prefer to work in private enterprises where theyca near nmore . The development of a rational agricultural school system requires a certain ratio between the number of pupils in the three educational levels mentioned above. This means that, ultimately, the number of people with a vocational training has to be considerably larger than that with a high school education, and that the agricultural high schools have to supply considerably more trainees than the universities. At pre sent Java hasfive universitie s in which agriculture isteache d as against three agricul tural high schools. Is this not an indication that the development in these two levels isno tproperl y adjusted? CanIndonesi a afford to support soman y agricultural universities? Could the same achievements not be got at less cost? For instance in just locating the agricultural universitiesi ntw oplace slik eBogo r and Jogjakarta, withthei r adequate facilities and teaching staffs? Is there any sense in building new universities which will not be run efficiently interm so fth eexpecte dcost ?Thi sseem st ob ea poin tworth-.whil ecosidera - tionb yth egovernment . 9.3.2 Research The development of the agricultural research institutes at Bogor started in the past century.247 Later on several stations were added, mainly private ones working in the 847 The private research institutions dealing with research of non-farm agriculture will not be dis cussedi nthi ssection .The yar ealread y treated inChapte r 3. 136 field of commercial crops. After 1950, the Indonesian government continued to strenghtenthem . In 1964, agricultural research was carried out by the Ministry of Agriculture (and Agrarian Affairs), the Ministry of Higher Learning and Science, the Ministry of National Researchan dth eMinistr yo fHealth. 248 Most research institutes are organized by the Ministry of Agriculture, either on subject matter basis (e.g. plant pathology and entomology) or on a commodity base (e.g. rice).249 In view of the many institutes and the various ministries involved, the necessity of coordination became evident. Within the Ministry of Agriculture this has been realized in the Bureau of Research Coordination. The coordination of research ac tivitiesbetwee nth eMinistr y ofAgricultur ean dth eAgricultura l andVeterinar yScien ce Faculties iscarrie d out byth e 'Dewan Kerdja Samaantar a Lembaga-lembaga dan Fakultas-fakultas' (the Coordinating Council of Agricultural Research between In stitutes and Faculties.250 The Ministry of National Research, through its various research councils, has attempted to coordinate agricultural research where coopera tion ofmor etha ntw oministrie si srequired . As to the responsibilities of the other Ministries mentioned above, the dividing linei sno talway sclear .Fo rinstance ,i tha sbee nspecifie d thatth eMinistr yo fNationa l Research will be primarily concerned with those branches of agriculture where in dustrial application has already progressed (food canning, and wood preservation), whereasth einstitute so fth eMinistr y ofAgricultur e should carryou t themor e specific agriculturalresearch .Th econsistenc yo fthi sdivisio nseem squestionable . Further, it isgraduall y realized that agricultural research costsmone y and requires skilledmanpower , twothing swhic hth egovernmen t at present hasi n short supply.251 The research organizations have to be rationalized. Acentra l body, placed under the 248 TheInstitut eo fNutritio n isunde rthi sMinistry . 219 The agricultural research institutes in Indonesia are: the CentralAgricultural Research Institute (Bogor) with 5 divisions (rice, soil, agricultural, botanical and plant pathology and entomology research institutes);th ePeople's Rubber Research Institute (Bogor) ;th e CentralRubber Fund (Bogor); the HorticulturalResearch (Bogor) ; the CentralAnimal HusbandryResearch Institute (Bogor) with 7 divisions (animal industry research, chemical investigation in animal husbandry, animal nutrition research, livestock breeding, mixed farm research, animal husbandry research and poultry breeding, institutes); the Central VeterinaryInstitute (Bogor) with 7 divisions (acutely contagious diseases, serology and chronically contagious diseases, sera and vaccine, virus, bacteriological, pathology and parasitology and micrological institutes); the Institutefor Foodand Mouth DiseaseResearch (Sura - baja); the CentralForestry Research Institute (Bogor) with4 divisions (forest research, forest product research, chemical technology of forests and forest working techniques institutes); Aerial Survey Section (Bogor); Officefor Land Utilization (Bogor); the Institutefor InlandFishery (Bogor) and the Research Institute for Food Technology (Pasar Minggu). In addition, there are related research institutes such asthos efo r estatecrops .(C .W .CHANG ,Present status of agriculturalresearch develop mentin Asia and the Far East, FAO1964,pp .27-48) . 250 The Head of the Bureau of Research Coordination is usually not the leader of the team of the officials ofth e Ministryo fAgricultur ei nthi sCoordinatin g Council. 137 Ministry of Agriculture, should be created to coordinate the work of all agricultural research organization. Priorities should be given to research in agricultural economics. Many Indonesian agricultural officials feel that, even with the existing technical knowledge available at the agricultural experiment stations, a substantial increase in agricultural production canb ereache d only on the base of economicdata . This absence hampers the drafting ofaccurat ean ddetaile dagricultura ldevelopmen tplans. 252 A good start in this direction was the establishment of the Agro Economic Survey of Indonesia (AEI), a project which started in early 1965. The objectives of survey are to increase efficiency in the execution of the first National Overall Development Planning (1961-1969) in the field of agriculture and agrarian affairs, and to establish the foundations for the following stages of the National Development Planning (1969-1977).253 Perhaps the Faculties of Agriculture, which are now under the Ministry of Higher Learningan d Sciences,shoul db epu tunde rth econtro l ofth e Ministry ofAgriculture , so that teaching, research and extension are united. Only along such lines it can be expected that the research institutes and the agencies in charge of agricultural devel opment can tackle the massive problem of stagnation and low productivity in Java's agriculture.254 9.4 Organizing agricultural development The development of physical, economic and educational factors as explained above are not sufficient to get agriculture moving: the package of knowledge has to be brought from the ministry and the research stations to the fanners. Or, as stated on the Conference on Productivity and Innovation in the Underdeveloped Countries: "Without this factor our package is incomplete and the other factors will remain barren.Th efacto r oforganizatio n is perhapsth eleas ttangibl ean dleas tclearl yunder stood of all the factors which go into the 'system problem' of agricultural develop ment".255 251Fo r instance, most of the agricultural research institutes do not work efficiently due to shortage of qualified people, who are discouraged to join these agencies because of the low salary and low prestigeamon g theofficial s inth epubli cservice .Ther ei sals o a shortage oflaborator y equipment. 452 MINISTRY OF AGRICULTURE, Agro-economicsurvey in Indonesiaproject, (mimeographed), Dja karta, 1965.Th eautho r willno t suggest that non-agricultural economicresearc hshoul d be neglected, but duet o lacko f funds andskill ,prioritie sshoul db egive nt o agricultural economics. 253Ibid. 2Sa WHARTON has given some research priorities in agricultural economics in South East Asia, some of which isapplicabl e for Java. (Economic and non-economic factors inth e agricultural development ofSouth-Eas t Asia,som eresearc hpriorities ,ADC paper, August 1962, revisedJune 1963). 254 In 1966, the Faculties of Agriculture and Animal Husbandry, and the Institute of Agricultural Science were not yet included in the Ministry of Agriculture. But there are plans to accomplish this. 865 Conference Report, p. 111.Se eals op . 119o f this study. 138 For instance inJava , despiteth eweaknes si nth eresearc h structure,fa r more in the field of technology is known than isused . The problems now are how to make these techniques viable to the farmers in a form they can use and how to create an envi ronment which makes it possible to adopt innovations. This means that the aid of the extension services,th e credit institutions, the cooperatives, the public administra tion and especially the village administration have to be called in.I nadditio ntrans port facilities have to be developed. These subjects will be treated in the following sections. 9.4.1 Agriculturalextensio nservice s Agricultural extension in Indonesia started as early as 1911. Its central agency is the Agricultural Extension Serviceo fth eMinistr yo fAgriculture ,locate da tPasa r Minggu nearDjakarta . Atpresen ti ti sorganize da tnational ,regiona lan dloca llevels . The agency carrying out theextensio n work isth e provincial government. In 1960, the total extension force in the country was about 6000 people, most of them with only sixyear s of primary schooltraining. 256 One of theimportan t tasks of the Exten sion Servicei sth e close observation of thefoo d situation and the production of food crops,s otha tmeasure sca nb etake ni ntim ei fth esituatio n threatenst obecom ecritical . Another task is to supply the farmers with implements, seeds of high yielding rice strains,plantin gmaterial ,fertilizers , and chemicalsfo r combatting pestsan ddiseases . Itals ooperate sa larg enumbe ro ffarm swher eseed ,supplie db yth eCentra l Agricultur al Research Station at Bogor, ismultiplie d and distributed among the farmers. Fur thermore,th eextensio n servicegive sinformatio n onirrigatio n and irrigation schemes and stimulates the growing of rice and export crops. It also sets up training centers and supplies agricultural education through village education centers and farmers' trainingcourses. 257 In 1960, about 250 village educational centers were established, each under the charge of an extension worker. They have at their disposal 0.8 to 2 ha of land for demonstration purposes and a building for meetings and exhibitions, and for storing seeds, tools and insecticides. Even a small library ispresent . Besides these centers are meeting grounds for the village community and they are used for social and educa tional purposes.258 In 1959 part of the work was transferred to so-called paddy cen tres,specialize di nric egrowing . It isamazin g to notetha t before World War II Indonesia was one ofth e few coun- 256 Seefootnot e 243. 2" In 1960,ther ewer ethre e in-servicetrainin gcenter s inJava : one in Lawang, East Java, for training in horticular crops, another in Pasar Minggu, near Djakarta, for farm mechanization and seed improvement, and onei nBandun gi ncharg ewit hvillag eeducationa lcenters .Candidate s withsuccess ful recordsafte r a minimum offive year s of extension service,ar e selected and sent to training centers for oneyea ro fpractica leducatio n ongovernmen t expenses.Se eCHANG ,op. cit. (fn. 243) . 258 CHANG, op. cit. (fn. 243). 139 tries where an effective extension service was established. It can be said that it was quite well organized. After the war, however, it had to face many problems, suchas : (1) Shortage of trained personnel, notwithstanding the establishment of in-service training centres. There are now about 6,000worker s for the whole of Indonesia (about 4,000-5,000i nJava )t o servete nmillio nfarmers , or 20,000-25,000 farmers for everyextensio n worker! (2) Inadequate payment and travel allowances for the workers. (3) Lack of adequate funds: the budget for the extension servicei susuall y below 5 % oftha to fth eMinistr yo fAgriculture . (4) Lack ofclea runderstandin g ofextensio nconcept so nth epar t ofman y agricultural administrators and policy makers. In many cases extension services are used as agencies to undertake whatever the Ministry ofAgricultur e wants to have enforc eda t village level, sotha t the extension workers cannot confine themselves to the tasko fteachin gan dadvising . (5) Finally there is the problem of organization. If the various agencies engaged in extension work could be combined under one administration with agricultural research and other training this would lead to a more efficient use of staff mem bers, and anumbe r of them could servea s specialists or asfar m advisers.259 Experience in other countries has shown that the expansion of extension work would not involve high costs as compared with other agricultural development pro jects. Soi n Kenya the improvement of the extension service has resulted in an consi derableincreas e of agricultural production as shown in Table123 . Table123. Capitalacquisition of smallholdersproduction in Kenya (percentages). Return to Return toth < invested capital government Smallholders'te a growing 60 21 Agricultural Extension 36 2 Irrigation 25 10 Low density resettlement 2-6 5 Source:H . RUTHENBERG,Smallholder production development policy in Kenya. Berlin,1966 . 9.4.2 Creditinstitution s The agencies which help farmers meet their credit needs can be classified as non- institutional and institutional. As earlier explained, the non-institutional credit agen ciesar e primarily private moneylenders and the institutional ones chiefly government owned. '"See 9.3. 140 The principal agricultural credit institutions in Java and Madura are the Bank Koperasi Tani dan Nelajan (BKTN, Farmers' and Fishermen's Cooperative Banks), the Bank Desa (Village Bank), the Lumbung Desa (Village Paddy Banks), and the PegadeanNeger i(Government' spawnshops) . There are other agricultural credit agencies established primarily for specific crops; among them are the Jajasan Tebu Rakjat (JATRA, Peasants' Sugarcane Foundation), the Jajasan Perkebunan Rakjat Indonesia (PERRIN, the Smallholders' Export Crop Foundation), primarily for tobacco, and the Jajasan Karet Rakjat (Smallholders' Rubber Foundation). TheFarmers' and Fishermen's Cooperative Bank (BKTN )i sa merge ro f the BankTan i dan Nelajan (BTN, the Farmers' and Fishermen's Bank) and the Bank Rakjat Indonesia(BRI) .I twa sfounde d in I960.260 The BKTN lends somewhat larger amounts to landowners than the Village and Village Paddy Banks for periods up to twelve months.281 Its offices are usually located in the capitals of the regencies. The total loans supplied by it are given in Table 124,a substantial part was extended to the rural sphere, primarily for agri culturalneeds ,a sillustrate di nTabl e 125. It is very difficult to judge how much real profit the BKTN has gained from its operations, sincei t is not easy to select an appropriate deflator for the ever declining purchasing power of the rupiah. In money terms the BKTN did make a good profit, asi t borrowsmone yfro m theCentra l Bank(th eBan kIndonesia )agains t therelativel y lowrat eo f4 % perannu m and lendsi t out against 12%( aver ymoderat e ratei ntime s of heavy inflation) to the farmers.262 Since for the application of a loan from the BKTN collateral is required, the risk in extending loans is not great. Although the interestrat eo f 12% i srelativel ylo wa scompare dwit htha to fth eprivat e moneylender (some people say they charged 60 to 72% in 1958), there is still some criticism by the Indonesian politicians on the BKTN operations for charging too much interest. The considerable increase in both the number of depositors and the amount of the deposits of the BKTN after 1958 (which is shown in Table 126) is no proof of increasedsavings . "" The Algemene Volkscrediet Bank (AVB, General People's Credit Bank), established in 1934,wa s an offspring of theeconomi c crisis in the thirties. It wasa n amalgation of old-established institutions for people's credit (BOEKE,op. cit. (fn. 185),p . 160). ByEmergenc y Law, afterwards established as a law by Act no. 77(Government Gazette1958, No. 36),th e BTN (Farmers' and Fishermen's Cooper ative Bank) wasse t up with a capital of Rp 100million , provided byth e government.Share s arc to be spread regionally, and finally to be transferred to cooperatives and comparable institutions. Priority shares remain in hands of the Autonomous Regional Government (Bank of IndonesiaReport 19581 1959, p. 120). m It is difficult to state the maximum amount which can be borrowed by one landowner because it changed severaltime sdu et o inflation. "' Usuallyth eBKT N investspar t ofit sprofi t inrea lestat elik elan dan d buildings.I nth emeantim e the interest rateha sbee nincrease d severaltimes .I n 1960i twas 15%. 141 Table124. Loanssupplied by the Bank KoperasiTani dan Nelajan (Farmers' andFishermen Coopera tiveBank), inJava and Madura, 1938-1940 and 1953-1962 (in million rupiahs). Advances Repayments Outstanding Arrears Numbero f loans1 agencies 1938 21.6 18.8 20.8 1.7 68 1939 24.2 22.0 22.7 1.4 68 1940 22.5 23.4 21.6 1.2 68 1953 689.8 519.8 376.3 42.3 69 1954 656.7 638.6 391.1 62.2 ' 69 1955 836.2 735.8 488.3 69.3 69 1956 1,265.8 1,135.8 622.6 96.1 69 1957 1,266.9 1,306.5 598.8 94.6 70 1958 1,831.- 1,716.2 714.6 93.2 70 1959 2,338.8 2,136.9 907.7 91.6 70 1960 4,813.2 3.952.4 894.3 867.1 70 1961 2,940.3 2,531.0 1,241.1 118.6 70 1962 10,199.3 8,150.7 6,588.9 1,391.2 70 1A ten do fyear . Source: Statisticalpocketbook of Indonesia 1963, p .232 . Table125. Loans in the ruralsphere supplied by the Bank Koperasi Tanidan Nelajan (Farmers' and Fishermen CooperativeBank), inmillion rupiahs (1938-1940,1953-1962), for Javaand Madura. Advances Repayments Outstanding loans1 Arrears 1938 9.6 8.1 8.5 1.2 1939 12.5 10.7 10.1 1.0 1940 12.0 12.2 9.7 0.9 1953 149.3 139.0 85.1 12.0 1954 146.0 150.3 80.8 13.0 1955 150.3 139.1 93.0 13.9 1956 133.0 143.3 82.9 17.0 1957 116.7 128.0 72.0 12.4 1958 229.8 284.5 162.7 19.2 1959 411.2 " 397.4 215.7 19.1 1960 483.5 440.3 258.7 17.6 1961 650.4 520.3 387.4 29.5 1962 4,690.1 2,392.2 4,663.7 1,174.1 1 Aten do fyear . Source:Statistical pocketbook of Indonesia 1963, p .235 . 142 Table126. Number of depositorsand amount of deposits in the Bank Rakjat Indonesia (People's Bankof Indonesia), 1956-1957. 1956 1957 Depositsa tth een do fth eyea r Rp. 735,326,000 Rp. 1,252,736,000 Number of depositors 167,943 206,467 Source: JACOBY,p .7 7(seefootnot e66) . Table127. Money loans inmillion rupiahssupplied by Village Banks and VillagePaddy Banks in Java andMadura, 1938-1940 and 1953-1962. Numbero f Outstan Advances Repay Outstan Arrearsa t Numbero f banks dinga tbe ments dinga ten d end ofyea r loans grant ginning of ofyear ed(i n year thousands) VillageBanks : 1938 5,619 3.1 19.2 18.9 3.4 0.0 1,017.6 1939 6,753 3.4 21.1 21.0 3.5 0.0 1,057.4 1940 6,925 3,5 21.7 21.6 3.6 0.0 1,069.4 1953 4,373 14.7 153.2 120.9 49.2 0.7 1,801.8 1954 4,604 49.2 200.2 191.9 57.4 3.8 1,942.2 1955 4,660 57.4 223.9 216.2 65.1 5.7 1,859.1 1956 4,633 65.1 232.9 230.4 67.6 8.4 1,778.0 1957 4,589 67.6 232.6 231.9 68.2 8.3 1,658.6 1958 4,587 69.0 241.7 239.6 70.1 7.1 1,591.4 1959 4,515 70.1 269.7 265.1 74.4 5.7 1,512.1 1960 4,456 74.4 328.9 312.4 90.9 4.9 1,553.7 1961 4,464 90.9 458.7 427.9 121.7 5.1 1,556.3 1962 4,321 121.7 631.3 597.8 158.2 3.7 12,580.1' VillagePadd y Banks: 1938 5,561 0.0 0.0 0.0 0.0 - - 1939 5,512 0.0 0.0 0.0 0.0 - - 1940 5,451 0.0 0.0 0.0 0.0 - - 1954 3,635 3,0 3.5 4.2 2.4 - - 1955 3,635 2.4 2.3 3.0 1.7 - - 1956 3,604 1.7 2.8 2.8 1.7 - - 1957 3,603 1.7 3.0 3.1 1.6 - - 1958 3,602 1.6 3.0 2.8 1.7 - - 1959 3,582 1.7 2.2 2.5 1.3 - - 1960 3,325 1.3 1.8 2.2 0.9 - - 1961 3,160 0.9 2.9 2.5 1.3 - - — 1962 2,993 1.3 2.3 2.7 0.9 — 1 Includingth enumbe ro ffarmer sparticipatin gi nth eSS Bcampaign . Source:Statisticalpocketbook of Indonesia 1963. PP .237-238 . 143 Table128. Paddyloans inmillion kg suppliedby VillagePaddy Banks inJava and Madura, 1938-1940 and1954-1962. Loans outstan Advances Repayments Remitted Loans outstan dinga t begin ding at end ning of year of year 1938 4.7 108.8 108.5 0.0 5.0 1939 5.0 110.7 109.4 0.0 6.2 1940 6.2 110.0 112.1 0.1 4.0 1954 71.8 63.6 58.2 0.9 76.4 1955 76.4 60.7 55.4 1.7 80.0 1956 80.0 48.2 50.7 0.1 77.5 1957 77.5 47.8 47.0 0.1 78.2 1958 78.2 45.1 45.9 0.8 76.4 1959 76.4 41.6 45.0 2.4 70.5 1960 70.6 45.6 44.5 3.9 67.6 1961 67.6 43.4 39.8 1.6 69.5 1962 69.5 38.7 40.0 0.8 67.4 Source:Statistical pocketbook of Indonesia 1963, p .238 . Table129. Agriculturalbank credits, 1957. umber of debtors Total value (Rp) People'sBan k of Indonesia 353,181 328,014,370 VillageBank s 1,658,473 232,563,000 VillagePadd y Banks 582,200 47,805,O001 Total 2,593,854 608,382,370 Bankfo r Farmers and Fishermen 33,058,140 Total 641,440,510 1Th eloa n isi nth efor m ofpadd y totalling 47,805ton sa t Rp. 1000pe r ton. Source: JACOBYp . 78 (seefootnote66) . 144 Table 130. Pawnshops in Indonesia, 1938-1940 and 1953-1962. Year Number of Loans in million Rp Number of pawnshops pledges in issued redeemed outstanding millions 1938 460 85 78 33 43.5 1939 462 87 83 33 46.0 1940 468 88 85 33 49.6 1953 397 1,087 952 384 36.2 1954 410 1,217 1,225 377 37.6 1955 414 1,606 1,388 595 42.0 1956 422 1,967 1,890 •752 46.4 1957 430 2,042 2,082 711 46.3 1958 435 2,398 2,320 789 45.4 1959 440 3,928 3,239 1,482 39.9 1960 443 8,953 6,043 4,393 45.2 1961 443 12,156 10,971 5,578 48.6 1962 443 24,670 20,234 10,015 47.0 Source: Statisticalpocketbook of Indonesia1963, p .239 . Table 131. Credit requested by Perrin (for peasants' tobacco) in 1000 rupiahs, 1955-1959. Crop year 1955/1956 1956/1957 1957/1958 1958/1959 Credits 49,250 52,350 58,050 63.750 Source: State PlanningBureau ,Laporan pelaksanaan rentianapembangunan lima tahun 1956-1960, Djakarta, 1960,p . 177. Table 132. Credit extended by Jatra (for peasant's sugarcane), 1955-1959. Crop year Extended credit Planted area of Production of Total area of (in 1000 Rp.) 'Jatra' cane (in ha) 'Jatra' cane (in peasant's cane (in tons of sugar) ha) 1955/56 38,534 16,120 103,492 26,225 1956/57 33,339 9,381 90,062 21,680 1957/58 28,215 7,991 55,937 20,000 1958/59 18,600 5,000 n.a n.a. Source:Se eTabl e131 . 145 Table133. Data onthe various types of cooperatives inIndonesia (1940, 1958-1962). Nr. of so Nr. of Deposits Reserves Creditors Debitors cieties members (in million rupiahs) in100 0 Central cooperatives 1940 15 0.4 0.2 0.0 0.0 0.1 1958 216 9.5 343.5 104.5 471.1 393.1 1959 246 11.7 406.9 33.6 503.3 - 1960 350 19.7 159.0 27.1 - - 1961 289 21.7 283.0 38.6 - - 1962 1,279 32.4 550.8 79.1 - - Villagecooperative s 1940 53 2.1 0.0 0.0 0.0 0.0 1958 4,750 1,108.9 80.4 10.7 24.1 78.7 1959 5,390 1,329.4 102.1 13.2 23.1 - 1960 - 2,767.1 210.2 18.9 0.0 - 1961 14,843 3,489.3 476.6 21.3 0.0 - 19621 18,818 4,854.5 587.9 54.2 0.0 - Credit cooperatives 1940 478 41.3 0.3 0.0 0.0 1.2 1958 5,526 689.2 171.8 14.0 36.5 155.9 1959 6,095 756.6 223.0 19.0 46.5 - 1960 6,347 871.5 317.1 27.2 0.0 - 1961 8,573 1,023.3 439.1 28.5 - - 1962 10,986 1,276.2 765.0 57.5 - - Paddy storage cooperatives 1940 19 1.3 0.0 0.0 0.0 0.0 1958 531 56.3 2.5 0.5 1.4 2.4 1959 1,450 153.5 28.9 7.1 19.8 - 1960 1,993 199.7 69.9 12.5 - - 1961 2,712 254.7 196.7 23.6 _ - 1962 3,927 374.1 246.9 62.0 - - 8 Production cooperatives 1940 43 2.0 0.0 0.0 0.0 0.0 1958 2,048 168.3 280.2 44.0 165.1 98.6 1959 1,216 139.1 388.6 55.2 120.8 - 1960 1,144 122.3 570.2 63.7 _ - 1961 1,702 177.1 799.6 76.2 _ - 1962 2.747 263.6 1,395.3 153.0 - - Consumer cooperatives 1940 23 0.6 0.0 0.0 0.0 0.0 1958 805 113.1 19.4 2.1 8.0 11.8 1959 1,935 244.1 47.4 3.3 8.5 - 1960 6,461 1,259.4 118.3 4.2 _ - 1961 9,736 1,859.4 323.3 30.0 _ _ 1962 13,419 2,961.1 690.3 44.3 - - Other cooperatives 1940 8 0.1 0.0 0.0 0.0 0.0 1958 270 53.2 10.6 1.3 4.4 7.1 1959 272 43.5 9.7 0.7 4.6 _ 1960 329 36.6 17.6 1.1 _ _ 1961 947 83.0 113.8 2.8 _ _ 1962 1,540 161.6 138.8 4.1 _ - 146 Table 133. (vervolg). Nr.o fso Nr.of Deposits Reserves Creditors Debitors cieties members (inmillio n rupiahs) in100 0 Total 1940 639 47.8 0.4 0.0 0.1 1.3 1958 14,146 2,198.5 908.4 177.1 710.6 747.6 1959 16,604 2,678.0 206.5 132.0 726.6 - 1960 27,652 5,276.3 1,462.3 154.9 - 1961 38,802 6,908.5 2,632.1 221.1 - 1962 52,716 9,923.5 4,374.3 404.22 - 1 Multipurposecooperatives . ' Also covering cattle breedingfishery, an dindustry . Amounts in Straits J inth e Riau Islands havebee nconverted . Source:Statistical pocketbook of Indonesia 1963, p.241 . JACOBY263 explains that theforce d closing of many foreign banks, mostly Dutch, in December 1957an d thereafter, caused depositors to transfer their savings toth e BKTN and likewise induced commercial companies to transfer a considerable part of their funds to this bank. Butth e primary objective of the banks is to assist the farmers, and this is not fully accomplished. On the other hand, the Village Banks and theVillag ePadd y Banks,whic har eadministere db yth eBKT Nar emor eappro priatet oth eneed s ofth e farmers. Thegovernmen tprovide da ninitia lcapita l ofR p 150 million.264 Unfortunately their number is not adequate to furnish the farmers' need. The Village Banksar e small money banks setu p byth eloca l authorities to furnish small loans to thefarmers , redeemable in weekly installments.265Thei r numberha s decreased since 1955,a s can be seen from Table 127. Before thewar ,thes e Village Banks played an important role; after the war, some of them were abolished and somewer etake nove rb yth eBKTN . The Village PaddyBanks, rice barns, also supervised by local authorities, have been establishedt o grant crediti npaddy .Th enumbe r ofthe m inoperatio n hasals o decreasedsinc e195 4a si sillustrate db yTabl e 128. Thesebank sar eimportan ti nassistin gth efarmer s toovercom eth edifficul t 'patjek- lik', the period between planting and harvest. They arever y old institutions inth e Javanesesociety .Th evalu eo f thepadd y isfixed a t a certain price; thedeb t canb e repaid either with paddy ori nmoney ,wit hinterest .Certainly ,thes evillag ebank sar e great helpfo rth efarmer s andi ti st ob eregrette dtha tthei rnumbe rha sdeclined. 266 283 JACOBY,op. cit. (fn. 66), p. 77. 294 Inwha tyea ri sno tmentioned . 285 JACOBY,op. cit. (fn. 66), p. 77. 288Ibid. 147 In 1958,th e BRI charged an interest of 12% per annum, the Village Banks 1% per week. Rice loans were supplied at 40% per six months. These were the official rates and they certainly were very high, but due to the shortage of capital and inflation, theycoul d not be reduced.267 But as compared with private moneylenders and shop keepers who asked for 5t o 6% per month for money loans and 100%pe r 6month s for rice loans, the official rates were moderate.268 On the other hand, as said before, moneylenders' crediti seasie r and much more convenient to get. To givea n idea about the credit granted by the principal credit institutions, some datafo r theyea r 1957hav ebee nmentione di nTabl e129 . In addition to the three kinds of banks discussed above, the pawnshops are an im portant source of agricultural credit, although not all loans are extended for thispur pose.The yar e organized asa government monopoly. Table 130give s an idea ofthei r importance. There are other government credit institutions supporting special agricultural ac tivities, as,fo r example, for the cultivation of sugarcane, tabacco, copra and kapok. The results, up to 1958,ca n be seen in Tables 131 and 132. The agricultural credit cooperatives willb etreate d in the section regarding cooperatives. 9.4.3 Cooperatives AfterWorl dWa rlith ecooperativ esyste mwa srehabilitate dan denergeticall yextended , asillustrate db yth edat ai nTabl e 133.Credi tan dconsumptio n cooperativesdominate . Thisrapi d growthi sprimaril y duet oth eful l assistance and guidance ofth egovern ment which is well aware of their importance and has accepted cooperatives as the ultimate goal for the distributive system in the economic process. But its success cannot be judged by numbers only. Shortcomings in organization, unfamiliarity with cooperative working methods, lack of business knowledge on the part of the directors,insufficien t control, etc.,cause d that not allattempt sme t the government's expectations. Up to now there are only 6174productio n cooperatives, including the lumbung (paddy storage) cooperatives, or only 12% of the total number of coopera tives(se eTabl e133). 269 The Ministry of Cooperatives, in collaboration with the Ministry of Agriculture, has made many efforts to get the idea of cooperatives accepted by the farmers. To accomplish this,i t isnecessar y to make the farmers understand better the underlying ideas. But their mental adjustment, necessary to distinguish between expenses for consumptivean dthos efo r farm business,i sfa rfro m easy. Perhaps,i fth ecredi t cooperatives want to succeedi n assistinglow-incom e farmers, they must be organized in the same way as the producers' cooperatives. The author s" Ibid.Th erate scharge db yth eBKT Nwer eincrease d to1 5% i n196 0a searlie rexplained . 2«8 Ibid. *" StatisticalPocketbook ofIndonesia 1963, pp.240-241 .Th efigures give n for the cooperatives are actually for thewhol eo fIndonesia .Th eJav afigure is estimate d to beabou t 80% ofth eIndonesian . 148 wouldlik e to add that one of the meanst o reach this goali st o adopt the supervised credit approach.270 However, before thisapproac h canb ecarrie d out ona larg escale , firstth e educational level of the farmer should be raised and the operations of the Agricultural Extension Service should be improved and extended. But, as explained under9.4.1 ,thi sServic eha sa sever eshortag eo ftraine dpersonnel . 9.4.4 Public administration program In the present situation in Java public leadership and coordination of effort must playa larg epar ti n agricultural development.Therefore , thegovernmen tha sattempt ed to design local organizations to bring the various elements of the public admini stration program into direct contact with the farmers. These elements include credit dissemination or information, marketing, input supply, additional irrigation and local government. The operating unitshav et o complement oneanothe r at thevillag e levelan d preferably also throughout the administrative organization. Butu p tillno w theresult shav eno tbee nu pt oexpectations . A sufficient knowledge of the principal types of socialstructur e in the villagesi s a prerequisite for designing an effective development program, and to identify the best point in the village community on which to build such a program. Should it be the cooperatives, the community development organizations, or some new form of or ganizations?271 At the national level, the interdependence of the different elements in a program to increase agricultural output is so great that an organization must be designed to ensure that each element is to becarrie d out on net output. Atpresent , most ofthes e elementsar eineffectiv e (creditinstitutions ,cooperatives ,extension ,etc.) .Th eagricul tural bureaucracy does not have the capacity to execute such a complex program at thefar mlevel . Input interactions or measures of the spectrum of factors must be accounted for indesignin gfar m planning andlan dreform , etc.Thes efactor s requireefficien t organi zation, careful selection of personnel, in-service training and, above all, the capacity tolead ,t ocommunicat ean dt oimprovise . Finallyi ti snecessar yt ofind way st omak ei tmor eattractiv efo r governmentworker s to serveagricultura l development. This relates to the general administration asmuc h as it does to the technical departments which are more directly concerned with agri culture. For, becoming a professional agricultural research or extension worker, 2,0 This supervised credit was developed by the Farm Security Administration (FSA) before World War II in the United States.I t consists primarily in farm and home planning, the provision of credit to meet the essential family and farm expenses by the timely release of loan funds on the basis of operational needs and the extension of technical assistance to the farmers and the housewives. This supervised credit approach has been adoptedi nth erehabilitatio n of low-incomefar m groups all over theUnite d Stateswit hencouragin gresults ,particularl yi nth esouther nstates . 271Community development willb ediscusse d lateri nthi sstudy . 149 it is rather unsatisfactory to stand near the bottom in prestige among officials in the public service.I t ispossibl e that, to accomplish these ends, the government's admini strative structure should bechanged . But at present, efforts should be directed prima rilya t drafting aprogram topromot e agricultural development in thepresen t admini strative organization. 9.4.5 Community development The government of Indonesia is aware of the importance of community development as a policy for economic progress in general and agricultural progress in particular. Community development has many definitions, but the author tends to agree with OTHMANwh oha s given the following: "Community development means the creation in villages of favourable attitudes towards general improvement, the coordination of the various services from the government reaching the villages and uniting all the efforts ofth epeopl et ohel pthemselve si n development."272 HIGGINS273remarke d that there isa closerelatio n between community development as an approach to economic development and the "upb yth ebootstraps " approach. Heexplain stha tth egovernment so fsevera lunderdevelope d countries,discourage db y the magnitudes of the capital requirements suggested by calculations, have seized uponcommunit ydevelopmen t asa neasie rpath . One of the considerations for community development projects is that the rural districts of Java contain immense reserves of potential human energy and initiatives. These resources are largely dormant and willno t develop at their own accord.There fore,the y must be actively stimulated by arousing hope of a better future and thede siret o workan dcooperat eenergeticall yfo rloca lan dultimatel ynationa l improvement. A second consideration istha t rural problems in Java are somultipl e and complex in nature, that providing the many services required by each village is beyond the means of the government. Community development aims at overcoming these diffi culties by helping the rural people to utilize effectively the available outside help. In Java community development movements have been able to build on traditional forms of communal cooperation sucha sth ecusto m of'tolon gmenolong 'an d 'gotong rojong'.274 The establishment of a Ministry of Community Development in 1963 initially raised high hopes. Although considerable difficulties are involved in attempting to measure the achievements of community development programs, it seems generally true that they have contributed something to the future growth of productivity "* A. D. OTHMAN, Community Development, Agriculturalplanning studies no. 3, Lecture onagri culturalplanning, FAO-publication,Rom e 1963, p.219 . ™ B.HIGGINS ,Economic development. Problems, principles and policies, London , 1959,p .679 . 271 'Tolong menolong' means to help each other in time of needs and 'gotong rojong' means to accomplish something by mutual efforts, whereby each member of the community contributes his shareaccordin g tohi s capability. 150 through their emphasiso n human development, especially through improved health and education. But there is also some feeling that community development has not lived up to these high hopes. This may be partly due to the fact that too much was expectedto o soonfro m programs that areo fquit erecen t origin.275 9.4.6 Transportan dcommunicatio n facilities Althoughi t can be said that Java has good transportation and communication facili ties as compared with the Outer Islands, yet they are far from adequate. Overaged railroad equipment must be rehabilitated.Hig h priorityshoul db egive n to the opera tiono fth eharbour st ospee du pexpor tan dfacilitat e deliveries. Thesyste mo fcombin edrailroa d andferrie s betweenJav a and someo fth eOute rIsland smus tb eexpanded . Themaintenanc e ofth eexistin groad san dth econstructio n ofne wone sar eurgent . Inefficiency oftranspor tfacilitie sar efactor shamperin gth emarketin gservices .It sde lays and serious damages and losses of products, add to their cost (as, for example, the fluctuation of the food prices in Djakarta indicates). This will also create social unrest. Statistics for 1962sho w that the railroads in Java suffered from shortage of spare- partsan dmaintenanc e ofexistin gmaterial .Casua lobservatio nals osuggest stha t road transport equipment is used in an inefficient way. The organization of trucking and public transportation is usually poor. Besides,ther e appears to be an excessive im port of passenger cars ascompare d with that of trucks and buses. Also maldistribu tion oftruck s between different regions on Java addst o theinadequanc y of transport facilities. Thusimprovemen t of transport systemsi son eo fth emos timportan t requirements to agricultural development in general and agricultural marketing in particular. As shown above,a substantial part ofth edifference s inprice si sdu et oth echroni c defect intranspor t facilities. 9.5 Concludingremark s Inconclusio n itca n bestate dtha t thegovernmen t hasseriousl yattempte d to increase productivity in peasant agriculture. But it is obvious that the cooperation of the far mersi sessential .Th ebes twa yt oaccomplis hthi si st ogiv eth epeasant sth eremunera tionthe yar eentitle dt ofo r theirshar ei nth eproductio nprocess .Bu tth egovernmen ts policy could be motivated by other considerations, without properly assessing the economic loss involved. The Three Years Rice Program 1959-1962, could illustrate thispoint . '' Theprogra mstarte di n1955 . 151 9.5.1 Thesetu po fth eThre eYears 'Progra m Ricei sb yfa r themos timportan t cropan di ti sals oth eeconomi cfoundatio n ofpeas ant'sagricultur ei nJava . In 1959,th e government launched a three year program to be self-sufficient in rice, as seen in Chapter 4. In cooperation with the Ministry of Public Works, existing irrigation works were repaired and new ones built to irrigate more land. Silos were constructed and paddy-centres established. Also the use of chemical fertilizers, better farm implements and technical assistance by servicesan d agencies of the Department ofAgricultur ewer eimproved .A specia lorganizatio nlik eth eBada nPimpina n Umum (BPU) Pertani (the Board of Directors of the Agricultural State Enterprises) is en trusted with themajo r sharei n carrying out of the program. The Ministry ofAgricul ture established 500padd y centres for the distribution of high yield rice seed, fertili zers,insecticides , farm tools and information about making the best use of the com modities.Cas hloan swer eavailabl efo r thefarmer s for buyingimplement st o increase production. At that year the paddy centres controlled 3,000,000 ha sawah and, including the second crop ricei n the dry season, 4,010,500ha 276. In areas not served bypadd y cen tres, or where the BPU Pertani did not have organized units, the Agricultural Exten sionServic ewa sresponsibl efo r carryingou tth eprogram . 9.5.2 Evaluationo fth eThre eYears 'Progra m For anumbe r ofreason s(organization , administration) theprogram to raisedomesti c rice production was only partly successful. An increase of 25% wa s expected in too short aperio d (3years) ,wherea spas t experiencesshowe dtha t thisincreas ecoul donl y beachieve d in9 years.The nth egovernmen t thought that resultswoul d come quicker by creating an organization on a military base, the KOGM (Welfare Operation Command). The farmers were instructed to usefertilizers , improved seeds, etc.Bu t this rigid measure only tended to foster a passive resistance from the side of the far mers. Obviouslyth erapi dpac efo r theseinnovation spu tto ogrea ta strai n onth e farmers. The time available to master new skills (for example, the application of fertilizers), to learn the proper use of credit and sometimes even to accept unsettling changes in their traditional environment (for examplei n the operations of the KOGM) was too short. But all these shortcomings cannot be attributed to the fanners alone. The govern ment too had its shortcomings. For instance, as mentioned before, the distribution and storage facilities for thenecessar y inputs wereno t adequate, and the government did not provide enough to supply sufficient improved seed.Thes e circumstances also "« See4. 3an d6.2.3 . 152 preventedmovin gth eprogra mo na large rscale . Theprimar y andth e secondary canalsfo r irrigation areattende d to byth e govern ment, but the farmers are responsible for the tertiary canals. Yet the government should also have a look after the latter, for fertilizers will be partly wasted if this kindo fcanal sdoe sno toperat ewell . A program to combatpest s andplan t diseasesi snecessar yt o matchth e other tech nological improvements, but it isreporte d that the results of the researches at Bogor dono treac ho na sufficien t scaleth eworke ri nth efield, primaril ydu et olac ko f funds andpersonnel . Credit must be extended to the farmer in proportion to his needs and not to his status.Uneconomi cloan sar eselfdefeating , poorrepaymen tan dheav yoverdue shav e occurred. In the SSBcampaign , repaymentwa sexpecte dt ob ei n kind. Sincethi s proved to be difficult, cash was required instead, but heavy inflationary pressuredi dno tsolv eth eproblem . The government cannot always get the needed persons in accordance with its pro gram. For example, in the case of thepaddy-centers' ,th eprogra m did not work well because,amon gothers ,o flac ko fsuitabl eperson sfo r thatkin do fwork . Government officials involved with the program must actually be an agent of change:i n the form of extension officer, cooperative organizer or local official he must bring innovation to the farmers and winthei r confidence. The encounter between farmers and bureau crat isa crucia lpoin ti nth eproces s ofagricultura l development. Thus we have seen that the farmer and the government are the key factors in cat alyzingagricultura ldevelopment . Governmental price policy is very important to increase agricultural production. For example, the government distributes rice at prices well below market prices. Thusi tmake sconsumptio n andhenc eproductio ntarget shighe rtha nwoul db edictat ed by normal criteria. On the other hand, as it pays a low rice price to the farmers, it discourages them to increase their production. With the result that rice still has to be imported from abroad, subsidy costs increase and inflation accelerates. Then the government decidedt o direct itssubsidie st opurchase dinputs ,lik eferilizers , improv ed seeds,pesticides ,etc. ,rathe r than raisingth eric eprices .I tha sals oconsidere d that the cost of the subsidy program is directly related to the utilization of practices, which will increase the productivity. Another thing is that, by inducing this kind of policy, the government thought it could avoid the political consequences of raising foodprices . In contrast withth eabove ,th e government thought that higherric eprice sadde dt o the income of both non-innovators and innovators.277 It considered also that this windfall income, generated by the higher prices, may to some extent decrease the incentives of somefanner s to raisethei r production, asthe y could permit themselves tohav emor eleisure .However ,a sshow nearlier ,a lo wric epric edoe sno tgiv eenoug h stimulust oth efarmer st orais ethei rproductivity . 2" Innovatorsar efarmer swh olik et ous efertilizer san dothe rimprove dagricultura linputs . 153 Judging these arguments, theautho r iso fth e opinion that a higher rice pricewil l givemor e incentive toth efarmer s inincreasin g theproduction . Buta tth e sametim e it is desirable that price fixing, or the provision of subsidies, should be applied to important inputs, about thevalu e ofwhic hth e farmer mayb e sceptical, like fertilizer andimprove dseeds . Ofcourse ,thi ssubsid yprogra mwil lcos tth egovernmen t muchmoney ,bu t perhaps it canb epartl y recovered byhighe r taxrevenue s resulting from a reorganization of thepresen tlandta xsystem. 278 Whileth egovernmen t intervenes directly inth efixatio n of prices,i tma y also take stepst oimprov e pricesi nothe r ways,e.g . withmor e ample credit facilities toremov e the need forhast y sales,i nstrengthenin g the bargaining power ofth efarme r by the establishmento fcooperatives . More of this increasing productivity of peasant agriculture, especially in theric e program,wil lb ediscusse di n Chapters 10an d 11.279 278 Withinth erura lsector ,som earea so ftaxabl ecapacit yar e now practically free from taxations.Th e present tax system doesno tfull y tap theresource s availablei nth erura l sector. Forinstance , the land tax is levied at lownomina l rates and valuations existing in the period when there wasn o heavy inflation but isno t adjusted toth ene wsituation . 4">Th e government has launched a new program toincreas e food production known asth e 'Bimas' (Bimbingan Massal, Guidance on Mass Scale) extension program. It originated from the Bogor Institute of Agriculture inth e 1962/1963ric eseaso ni nJav a andwa sexpande d ona nationa l scale in 1964/1965. Most of the Bima's extension workers are students. Theprogra m tries to achieve self- sufficiency infoo d production ina longe r time span than the SSBcampaign . The first results seemt o provetha t Indonesian farmers willrespon d wellt oagricultura lextensio ni fther ear eadequat e supplies of fertilizer, insecticides and agricultural implements. (See D. H. PENNY and DAHLAN, THALIB, Survey ofRecen tDevelopments ,Bull. Indon.Econ. Stud.6, Februar y 1967, p. 26. 154 10 Appraisalo fth eresult so fpas tplan san dpolicie s 10.1 Why has agricultural development not been successful? Thefirst thin g to doi n theappraisa l of theresult s ofpas t plans,policie s and actions, ist o review thecriteri a to beapplie d in theevaluatio n ofth egovernment' s attempted measures to alleviate the deteriorating economic situation in Java. These criteria depend onth e objectives ofth esuccessiv eagricultura l plans(se eChapte r6) . Special problems confronting the Indonesian government, as already explained earlier,are :(1 )insufficien t food production (Chapter9) ,(2 )th enee d toexpan d export (Chapter 8)an d(3 )th epopulatio npressur eo nlan di nJav a(Chapte r7) .Thu sa progra m has been setu p tofind a solution to thoseproblems . Buti t appeared that the govern ment failed in fulfilling its objectives, and the question remains why the agricultural developmenti nJav aha sno tbee naccelerated . The causes of the failure of the agrarian policy as regards overall agricultural de velopmentma yno wb eliste da sfollows :(1 )th elac ko fpolitica lstabilit yan dcontinui ty, (2) the multitude and inconsistency of the government's objectives in pursuing agricultural development, and (3) the absence of any clear-cut doctrinal concept of the government's agrarian policy as to the political attitude towards the peasants. A successful developmentprogra m requiresa tleas t somedegre eo fpolitica l stabili tyan dcontinuity .I nIndonesi ath erapi dchangin go fcabinet si nth efifties, th evariou s uprisings, the dispute about West-Irian, the confrontation with Malaysia and the attempted coup in 1965, reflect the political instability of the country. They all in volved high costs, particularly in the economic sphere, as too many resources had to becommitte d for non-economicpurposes .I n addition, theinefficienc y ofmanage ment and corruption have brought the country into a very difficult situation. This economic deterioration again results infurthe r political instability. Although it is understandable that the government's efforts have been devoted mainlyt o building a sense of nationhood and unityi n search of a workable structure and governmental administration, the political ends should not interfere with good management of the economy. Economic development and political stability are, in fact, two sides of the same coin. No government canle t economic development wait too long while it manoeuvres to keep in power, especially where the realization of agricultural development programs require the active participation of a very large number of peasants, and the modernization of a traditional agriculture requires time horizonso fsom edecades . 155 10.2 Multitude and inconsistency of government's objectives Formulating the objectives of the agricultural development program is the responsi bility of the government. But the government wants to have the majority support of the political leaders in providing directives. Therefore it has the tendency to start a multitudeo fobjective s simultaneously,whic hal lto o often appeared inconsistent. For instance,i n the caseo f the resettlement program,ther e may be a difference in medium and longer term objectives. On the short run, the resttlement projects should alleviatea smuc h aspossibl eth epopulatio n pressure on landi nJav a bytransferrin g a largenumbe r ofpeasant st oth eles spopulate d areaso fth eOute rProvinces ,especiall y Sumatra.B ydoin gthis ,th egovernmen twoul dlik et oachiev e also longer term politi calobjectives ,e.i.i ncreatin g amor ehomogenou s Indonesian nation and in themean time to enable the settlers to improve their standard of living as compared with the past.Bu tthi spla ncoul dgiv eth eimpressio ntha t thegovernmen t favours theresettle d Javanese above the autochthonous population. On the other hand, if the resettled peasants are not helped effectively, the government could be blamed for transplant ing poverty from one part of Indonesia to another and the resettlement project will missit smai n objective. Another example is the case of settlement in Borneo. The government wanted to havea larg enumbe ro fyoun gmen ,i fpossibl ewit hmilitar ytraining ,i nsuc ha strategi c location. From thepoin t ofvie wo f defense, this settlement mayb econsidere d impor tant, but from the economic point of viewi t is far from efficient, as it will cost more thanmovin gpeopl et osout h Sumatra. The question arises, what is the primary objective of the resttlement program? As made clear in Chapter 7, it is the alleviation of the population pressure in Java. To achieve that, one of the methods is placing a large number of active persons in the Outer Provinces, with ample land resources. Economically speaking, this should be achieved at the lowest possible cost, as capital resources are very scarce. Thus the mixing of wider objectives with the settlersma y beinconsisten t with economic consi derations. However, to make resettlement attractive, the settlers should be given the opportunity to better their economic position, but not to sucha n extent that thepro gram would absorb too much personnel and money. This means that much effort of the settlers themselves should be incorporated in the planning of the settlements. Inconsistency ofobjective sca nals ob edemonstrate di nth ecas eo fth erehabilitatio n ofth e sugar factories in Java. The main objective ofrehabilitatio n ist o earn more fo reignexchang ean dsimultaneousl y raiseth eagricultura lincom eo fth esuga rpeasants . But as the government likest o secure a cheap supply of sugar, it intervenes with the prices. Hence these peasants are more or less discouraged in their efforts to increase production.Th eresul ti stha tth eincrease dproductivit y ofsuga rcoul dno tb erealized ; production evendeclined . The same conflict arisesi n the attempt to increase riceproduction . To save foreign exchange and to raise the economic situation (especially for the poor peasants) the governmentwant ssuc ha nincrease .Bu tt oavoi dpolitica lrepercussion sthroug hhighe r 156 food prices, an upper limit has been setfo r the price of rice, so that the peasants get a low price for their product. Thus the farmer will not expand production by costly inputs,an ddomesti cproductio n didno timprove . With such a multitude of cross-purposes, the government cannot implement any effective program. The result would have been different, if it could single out one objective; but asthi s could not beachieve d politically, theproble m isho wt o harmo nizeth evariou sobjective san dt ocombin ethe mi n anacceptabl eway . The economists and other experts charged with planning agricultural development must guide the government by assessing the problems facing the economy, the re sourceslikel y to beavailabl e in different eventualities, and to stipulate the ways open for development. It is up to the politicians to chose between these alternatives on a rationalbasis . 10.3 Absence of clear-cut doctrinal concept Themos timportan t objection against thegovernment' s agrarian policyi sth e absence of any clear-cut doctrinal concept as regards the political attitude towards the peasants.Thi sca nb eexplaine da sfollows . As earlierstated ,th esucces s of any agricultural development plan depends on the cooperation of the peasants. Although it is true that the Indonesian government undertakes some farm production directly, either by establishing state farms or by taking over the management of farms and estates formerly privately owned, in most casesagricultura ldevelopmen ti sstil lbasicall yth eoutcom eo f productiondecision sb y the great number of farmers.Nevertheless ,th egovernment' s action will be a decisive point in promoting and facilitating production and productivity increases by the farmers onthei rfarms . The range of measures available to the government to influence the progress of agriculture could haveit sroot si n twoalternativ e doctrinal concepts: (1) Thegovernment' sagraria n policyi sdirecte dtoward sth eachievemen t of specified objectives. In that case instruction, sometimes even with harsh and distasteful methods, have to beuse d to compel thefarmer s to do the things the government wants.Thi sdoe sno t meantha t anydevelopmen ti n agriculturewil lb e counteract ed: suchmeasures ,especiall ywhe n applied with skill,whereb y different elements ofth erura l societyar euse dt odestro yth eol dstructur ean dt odevelo pqualitie so f leadership and ane wattitud e of mind, can substantiallyincreas eth eproduction . Butit sachievement sca nonl yb eaccomplishe d through political authoritarianism. In this concept, the government willdecid eho wt o combine land, labour, capital and technical knowledge. The status of the peasant in this case isjus t that of a labourer simplytakin gorder sfro m thegovernment . (2) The other concepti sbase do nth eindividua lfreedo m ofchoic ei n economicactiv ity and of personal decisions. "People make the choice they do in farming as they do in all other things, on the basis ofth e satisfaction they derivefro m them. 157 This satisfaction includes approval by their families, by their friend and by their society. It includes economic gain, it includes a personal achievement, it includes the feeling of being of service to their fellow men and to their country.280 By this concept the government tries to induce the peasants to employ improved methods not byusin gforc e but by using educational methods (extension). This meanstha tth egovernmen t placesful l faithi nth eindividua lfanne r asth eproduce r andmanage r ofhi sow nfar m and its services rendered are only for helping the farmer toimprov ehi sfar m management. The author would not like to give his comment on the question which concept is economically thebetter , because according to him thechoic ei sa political rather than an economic one. But for the success of any agricultural development, one or the otherconcep tshoul db eapplie d consistently. If weexamin e the government's measures in the past, they reflect rather a mixture ofbot h concepts.281A fe wcase swil lbriefl y illustrateth e point. As to the agrarian policy in the use of improved physical inputs, the government enforces thefarmer s to usemor efertilizers , seeds,an d pesticidest o meet its objectives to selfsufficienc y in rice production. This frustrates the efforts of the Ministry of Agriculture to mobilize the autoactivity of the farmers by convincing them through the Extension Servicetha tth eus eo ffertilizer s andimprove d seedsi s profitable. In the case of plant protection, the government hesitates to apply planting time regulations, as it is afraid that this might create the impression of limiting the peas ant's freedom. But on the other hand, it enforces the peasants to use more chemicals throughth eWelfar e Operation Commend(KOGAM) . In order to induce the farmers to increase their rice production, the government, disregarding its low price policy for foodstuffs, from time to time attempted to en courage the peasants to increase their production by creating an economic environ ment which was more in line with the 'liberal' concept: by paying the peasants a pricewhic hwa smean t to givethe m incentives to produce more. In doing soth egov ernment action did not contribute to a clear understanding of its policy. Asregard s the credit policy, on the one hand the government provided credit faci litieswhic haime d toeducat eth epeasant s in the efficient use of credit to get them to adopt sound farming practices, but on the other hand, they were forced to accept credit regardless of their need, only so that they would join the Self Sufficiency in 280 A.T . MOSHER,Agricultural development, NewYork , 1963,pp . 10-11. 281Thi s mixture of two doctrinal concepts in the political attitude of the government towards the peasants should not be confused with the mixed system of economic organization, where the govern ment aims for the cooperation of private initiative in certain sectors of the economy. This mixed system of economic organization is based on the philosophy that, wherever private initiative can do thejob , the government should sponsor it, and that when private initiative islacking ,th e government should do thejo b itself.I t ishighl y unlikely that in most developing countries private initiative alone willb eabl et o developth e country. Such development demands a favourable industrial climate which isusuall y lacking inthos e countries. Therefore, the author's critisism isno t against a mixed systemo f economic organization, but against the ambiguity and inconsistency of the government's measures whichfind it sroot si nth eapplicatio n ofa mixtur eo ftw o doctrinal concepts. 158 Rice Production (SSB) Campaign. Again a mixture of two concepts: the first is to strengthen the development of the individual peasant as a producer and manager on his farm, and the second more to consider the peasant as a labourer only to have the government accomplishit sobjectives , e.g.t oreac hselfsufficienc y inric eproductio n at allcosts . Considering land policy, we have seen that the government adopted the Basic Agrarian Law of 1960,whic h put a ceiling on the size of peasant holdings. More or lessi n contradiction to that, the government, asstate di nth esam elaw ,bega na polic y of recognizing individual ownership of the land in order to strengthen the economic position of individual private peasants. It may be that in this concept the ceiling is puta tto olo wa leve l(a si nJapan) :"Lik eth esui tonc efitted t oa rapidl ygrowin gchil d becoming too tight, the land tenure system aimed at the establishment of owner farmers has become unsuitable to thepresen t agricultural situation.282 It is evident that agricultural instruction is designed to achieve the objectives for which the educational and training institutions are established. If one examines the curricula of the government agricultural educational institutions, one sees again a mixture of two concepts: the stepping-up of education is combined with political education, especially since 1959. Thiswil lhel pth egovernmen t tocarr y out its politi caleducation ,e.g .t ostrengthe nth econcep t of 'guided democracy and economy'.Thi s soundslik ea nenforcemen t policyt o beapplie d onth epeasant s('printa h alus'). But on the other hand, thegovernmen t isno t to teachth e 'what and how', but also the'why ' ofit smeasures .Thi sseem st oindicat eit sopinio n thatth eultimat e effective nesso fan yagricultura l developmentprogra mdepend so nth eabilit yo fth eindividua l peasant. He has to make sound decisions, based on an understanding of the alterna tivesope nt ohi man di n appraisingthei rconsequences . As in the case of education, and in the operation of the research institutes, too, if one tried to introduce the policy of guided economy, this would mean, that the capable and promising young agriculturists would beforce d tojoi n the agricultural research institutes. However, the government gave freedom to this people to choose their ownjo b within the various government organizations (banks, agricultural en terprises and the like). Only a few went into the research institutes, the mean reason waslo wpayment . Asregard s theinstitutiona l programs taken byth e government thefollowin g could be said. In developing a strong agricultural extension service the conclusion could be drawn that the government is inclined to consider the individual peasant as pro ducer and manager of his own farm. But in this case, too, it contradicts itself by ac cepting the other concept, namely byformin g the KOGAM which enforces thepeas antsint odoin gcertai nthing st omee tit sobjectives . In thecas eo festablishin gcredi tinstitution , thegovernment' s activities are direct edtoward ssettin gu pagencie swhic hencourag e theus eo fagricultura l credit associat ed with the widespread adoption of sound, improved farm management practices. 882 Japan, FAOAssociation ,A strategyfor newagriculture, Tokio ,1962 . 159 Buti tmingle sthi scas ewit hth esecon dconcept .Th ecreate dpadd ycenters ,ar eamon g others (as explained earlier), designed to provide each farm with a credit regardless itsneed . Thegovernmen tha stake ngrea teffort s toencourag eth eestablishmen t ofagricultur alproducers ' cooperatives.Thi scoul d beexplaine d as a first stept o collectivizepeas ant agriculture through partial collective ownership of means of production. Buti n the Basic Agrarian Law of 1960,privat e ownership of the land is guaranteed, which seemst o indicatetha t thegovernmen t also encourages theconcep t ofindividua lpeas antsownership .Agai na mixtur eo ftw oconcepts . The non-existence of a clear-cut concept of the government's agrarian policies as regards its political attitude towards the peasants is not limited to the rice growers just mentioned. It also includes government measures to increase sugar production, and theorganizatio n of agricultural settlement inth e Outer Provinces aswell . There weretime swhe n peasants wereno t subjected to governmental regulationsi n plantingan d sellingo fsugarcan ean d sugar. Buta sth esuga rfactorie s didno t produce canethemselves ,th egovernmen t intervened in this matter. Thepeasant s are compell ed to plant or sell canet o sugar factories for a relatively low price to insure the gov ernment ofa chea psuppl yo f sugarfo r domestica swel la sfo r exportpurposes .Agai n anexampl eo fa mixtur eo ftw oconcepts . The government has great hopes for agricultural resettlement-projects to relieve the population pressure on Java. But as it has no clear-cut concept as regards the political attitude towards the resettled peasants, the execution of these projects has beenon eo ftria lan derror .Consequently ,n oconsistenc ycoul db esee ni nth eorganiza tion ofth eagricultura lresettlemen tprojects ,th eacreag epe r settleran d the conditions of tenure in the government's agricultural resettlement schemes. 10.4 Concludingremark s The lessons to belearne d from these examples of non-existence of any clear-cut con ceptsi stha tth egovernmen tha sfaile dt oimbu eth epeasant swit ha sens eo f confidence and purposefulness in the execution of agriculturalprograms .A slon ga s the govern ment's agrarian policy does not succeed in fulfilling cherished objectives ofth epeas ants,an yagricultura ldevelopmen twil lb ea failure .Thu si ti snecessar ytha tther eha st o bea nidentit yo fpurpos ean da commo nresponsibilit yfo rth egovernmen tan dth epeas ants to reach with greater security than up till now ajoin t achievement of purposes. Onlythe n willth epotentia l energy ofth epeasant s beactuall y released. This kind of problem is a basic one not only faced by the Indonesian government but also byman y developing countries in theworl d today. Although iti s understand able that the Indonesian government hestitates to make a choice between the two concepts, due to circumstances explained in the section on political instability, yet therei sn o other way out than to accept oneclear-cu tconcep t for the execution ofit s program. 160 In summarizing we can conclude that there are still many obstacles to overcome before Java can launch rapid agricultural development on a large scale. But, it has to berealize d that eveni fJav a canachiev erapi d agricultural development, it stillwil l not solve its ultimate problems. Java must be industrialized. But industrialization in Java alone will be more difficult if it is not integrated in the economic development for the whole of Indonesia. Java and the Outer Islands have historically developed in such a way that both are vital and necessary components of one symbioticecono mic system. How this system could be thebes t developed will be briefly discussed in Chapter 11. 161 11 Prospectsfo rth efutur e 11.1 Theinabilit y ofpeasan tagricultur ei nJav at oabsor bth e populationincreas e Planning agricultural development is more or less a matter of speculation. But one thingi squit e clear: in Java thisdevelopmen t isdominate d byth eproble m of popula tiongrowth . As already stated, since about 1840 until 1930 the agricultural sector was able to absorb 1% of the total population growth or 1,5% of the growth of the agricultural population. That agricultural expansion kept up with this 1.5% has been possible by theincreas ei n arable land, theintensifie d use of the land through double cropping (irrigation), the introduction of new crops, and theestablishmen t of large- scale agricultural enterprises.Althoug h thepeasants ' economicpositio n during that period did not deteriorate (even a slight improvement between 1900 and 1930 has been reported) yet the resources for further expansion became more and more ex hausted. Nexti tmus t bepointe d outtha t duringtha tperio d agricultural and non-agricultur al employment developed along parallel lines,bot h showing an annual employment increaseo f 1.5%. In the period between 1930an d 1953,th e percentage of agricultural population in Java decreasedfro m 68.1t o60. 5% . Thiswa spartl ydu et ofactor s likewar ,revolutio n and agricultural resettlement in the Outer Provinces, but mainly to the expansion of petty trading, government jobs and manufacturing industries: in absolute figures 1.7, 1.3 and 1.8 millions, respectively (see Table 134). This favourable structural change did not continue and the percentage of agricultural population has increased againt o71. 9%i n 1961.Thi sdemonstrate stha tsinc e195 3non-agricultura lemploymen t didno texpan di nproportio n withth epopulatio n growthan d thatagricultura l resttle- ment in the Outer Provinces had not been able to cause a substantial relief in the populationpressur ei nJava . Politicalinstabilit yan d thedeclinin geconomi csituatio ndurin gth elas tdecad ehav e reversed the favourable trend of the previous period. This induced a process of re- ruralization, the 'trek' to the rural area, as people hoped to find a living by falling back on the traditional village and family ties.I f the level of living of the peasantsi n Javaa tleas tshoul d bekep tconstant ,the nth enatura l agricultural populationincreas e of 2.3% (or about 1millio n people annually) as indicated by the last figure of the CentralBurea uo fStatistics ,require sth ecreatio no fadditiona lemploymen tfo r235,00 0 163 familiespe ryear . All these calculations are based on the assumption that in the short run, counting on results of direct demographic policies as birth control (which the government has not yet found necessary to pursue in an all out and effective manner, anyhow) is unrealistic. But is must be realized that the absorptive capacity of the agricultural sector with thepresen tcombinatio n offactor s ofproductio n hasalread y surpassed itslimit .Eve n different proportions in the allocation of the agricultural resources will have no im mediate significant effect. To show this,variou s measureshav et o be considered;the y mayb eliste da sfollows : (1) Toincreas eth eare ao farabl elan di nJava . (2) Torais e theproductivit y of the arable land byincreasin g the rate of doublecrop pingi nconstructin gne wirrigatio nworks . (3) Toimprov eth eexistin girrigatio nworks . (4) Tointensif y thecultivatio no fexistin gfarm sb ymean so finput sothe rtha nimprov edirrigation . (5) Tochang eth ecroppin gpatter n from lesslabou rintensiv et omor e intensive crops, e.g.conversio n of lowland large-scale enterprises to peasant agriculture. (6) Todecreas eth eaverag elandholding . (7) Torehabilitat eth eestates . Ast oth eexpansion of arable land inJava ,a stud yo fth eStat ePlannin gBurea u estimat edtha tth eislan d can stillsuppl yabou t 200,000h a ofne warabl eland ,a tmos tenoug h to absorb the agricultural population increase of one year. But it will be technically Table134. Employmentstructure by industries in 1930 and 1953. Millions of %o f total Increase (+) or employed employed decrease (-) persons persons in%of in% o fsec 1930 1953 1930 1953 total em toralem - ployment ployment Agriculture 14.3 19.1 68.6 60.5 -8.1 + 33.6 Non-agriculture: mining 0.1 0.1 0.3 0.2 -0.1 0.0 manufacturing 2.2 4.0 10.5 13.3 +2.8 + 81.8 communications and transport 0.3 0.8 1.5 2.7 +1.2 +166.7 trade 1.3 3.0 6.2 10.0 +3.8 +130.7 free professions 0.2 0.2 1.0 0.7 -0.3 0.0 government 0.5 1.8 2.4 6.0 +3.6 +260.0 other employment 2.0 2.0 9.5 6.6 -2.9 0.0 total non-agriculture 6.6 11.9 31.9 39.5 +7.6 + 80.3 Total 20.9 31.0 100.0 100.0 Source:Stat ePlannin gBurea u(se eTabl e 120), p.69 . 164 very difficult to realize this expansion and the costs will be extremely high, so that iti sdoubtfu l ifthi smeasur ei seconomicall yadvisable . The possibilities of extending thearea of irrigatedfields by newirrigation works are practically exhausteda s the economically morefavourabl e areasar ealread yoccupie d bysawahs .Bu t it couldstil l be possiblet obuil dmor elarg eirrigatio nworks ,eventual lya smultipurpos e projects. It hasbee nestimate d that bythi smeasur e about 500,000 ha of peasant agricultural land can be brought under irrigation, which would make possibleth egrowin go fmor etha n onecro ppe ryear . However, with regard to its practical implementation, the following reservations have to bemade . The realization of theirrigatio n of these 500,000h a depends for an important part on the speedingu p of the execution ofth emultipurpos e projects, and it isth e power generation part whichma yeconomicall yjustif y the execution of these expensiveprojects , sotha t irrigationpurpose splay sa les simportan t role.I n addition theimprovemen t ofth eirrigatio nwil lb esprea dove r arathe r longperiod . Itshoul d further beunderstood ,tha tthes emultipurpos eproject spresen ta numbe ro f difficulties whichhav et ob esolved .The ywil lb eencountere d inth emutua l adjustment of agricultural and non-agricultural interests, such as the use of the water for irriga tion,th e demand for a regularwate r streamfo r powergeneration , the supplyt o cities and industries and the need of flood control. Further, as much foreign exchange is needed for these projects, it will be difficult for the government tofinance them , un lessforeig n assistanceca nb efound . It ist o be expected that only about 180,000h a can be brought under irrigation by thecompletio n ofth eDjatiluhu r project in 1967.Th eothe rtw omultipurpos e projects arestil li n thesurveyin gstag ea sshow nunde r 9.1.2an di twil ltak eman yyear s before theywil lb efinished, eve ni fsufficien t funds canb efound . Itshoul db ekep ti nmind ,tha tthi smeasur ewil lno tad dan ysignifican t employment opportunity to the men on this land. But the farmer who tills this land now will benefit andth eagricultura lproductio nwil lincrease . The improvement of existingirrigation works will enable the peasants to make fuller useo f their land and their labour. However, thisimprovemen t will not provide addi tional agricultural employment as the farms in Java are already overcrowded. Given thisrestriction ,thes emeasure swil lsolel yimprov eth eeconomi cpositio n ofth epeopl e already on farms and increase their buying capacity for industrial products and services. The possibility of increasing yieldsby theintroduction of other improvedagricultural techniques, like seed selection, fertilization, combat of plant diseases and pests, still presentsimportan t opportunities.Bu tneithe rthi sdevelopmen twil lprovid e additional agricultural employment on the farms. Nevertheless all possible efforts should be made to improve the economic position of the present peasants,a s this will add also toth eimprovemen to fth enationa leconomy . 165 It is obvious that the success of transformation of peasant agriculture needs the understanding and the cooperation of the farmers. Whatever the government plans to do in a short period, it is likely that thethoroug h transformation of peasant agri culture required to produce radically improved performances, will take much time. Yeti nvie wo fth epressur e ofpopulatio n growth and thedevelopin g industrialization, it is obvious that peasant agriculture should be improved as soon as possible within thepresen teconomi c organization. Thus, on the one hand the desperate urgency to increase agricultural production asquickl ya spossibl eand , onth eothe rhand ,th enee dfo rfurthe r studyan d experience (of the physical, economic, educational and organizational factors involved) before launching big agricultural projects, present a dilemma to the government. It hardly needst o be repeated that the accelerated expansion of food production is oneo f themos t complex problems which Java has to face. It isno t merely a question of greater investment in agriculture or of enlarging the supply of current inputs, such asfertilizer s andimprove d seeds,bu t creatingsocia lan dinstitutiona l conditionsunde r which the peasant can develop adequate incentives to raise the productivity of his landi sequall y important. Under the present conditions, agriculture can largely be developed by activitating the peasants. For this purpose a well-organized extension service is essential, so that a betterus eo fth eexistin gresource swil lb erealize dwithou tmajo r capitalinvestments . The cost of such a service can be estimated at only $2 per ha per year. As in this program about 8,000,000 ha of peasant land is involved, $ 16 million investment is needed annually. Because no figures are available it is not known exactly, what the benefits resulting from this investment will be in the short run. But in the long run, presenteffort s toincreas eproductivit y ofpeasan t agriculture may prove to havebee n the right approach and may lead to an economic progress as experienced by other countrieslik eJapan . The conversion of lowland estates intopeasants agricultural land will be of limited value because it will create additional employment for only about 200,000 families. Thisi sbase d onth efollowin g facts: (1) Theacreag eo flowlan destate so nJav ai sonl y200,00 0ha . (2) The average worker per ha lowland estate is 0.7 and that of peasant agricultural landi s2.5 . (3) Thenumbe r ofworker spe rpeasan tfamil y is 1.8. (4) On theseconverte d lowland estateslan d the same average worker per ha (namely 2.5persons )ca n beemploye d as on thepeasan t agricultural land. Thismean stha t thisconversio n isperhap s just sufficient to absorb the agricultural population increase of one year. But it should be realized that the loss of the money income and foreign exchangeearning s derived from those estateswil lprobabl y be far moreseriou stha nth erelie fi s helpful. Another possibility ofcours ei sa further reduction inthe average size of landholdingb y redistributingth eexistin gland .I ti seviden ttha t thiswoul dresul ti na furthe r decrease 166 in the standard of living in the rural areas which would cause a serious political and sociologicalimpac to na nalread yprecariou ssituation . In the author's opinion the reverse is needed, i.e. the increase of the average size of the farms, as with the present size the Javanese farmer is actually a peasant with extremelylimite d opportunities. The prospects for the rehabilitation of estates are not favourable, as shown earlier in thisstudy . Only rubber production showeda nincreas eafte r WorldWa rII ,bu t inth e lastyear sthi sproduc tha sdecline dtoo . Mainly political factors prevent the estates from making their full potential con tribution to economic development. Although most of them are nationalized, which eliminated theconflic t betweenindigeneou slabou ran dforeig n capital,stil lsom epoli tical partieswan t to divideth e estatelan d amongst thefarmers , especially inth elow lands. At the moment there are too many workers on the estates. To increase labour productivity, part of these workers should be dismissed, but this is forbidden by the presentlaw .Moreover , alsounde rpressur eo flabou runions ,highe rwage san dwelfar e benefits are paid to the labourers than in the past, which substantially increased production costs. Unless all these political problems are solved, the rehabilitation of theestate swil lb ever y difficult. Summarizing it can be said, that the future economic position of the population of Java looksrathe r darki f it continues to increase at the present rate, and it is under standable that the government considers the solution of this problem to be of the utmosturgency . Iti spossibl etha t increasing theproductivit y ofth elan dcoul dprovid ea livin gwith in the sphere of the peasant community, for instance by means of workshanngfo r a certain number of persons and in the meantime could stabilize the standard oflivin g inrura l areas at theexistin glevel .However , thiswoul d onlyabsor b arelativel ysmal l number of people. While the process of increasing the productivity is a rather slow one,i ti smor erealisti ct obas eplan so nth efollowin g figures. A solution of Java's population problem requires that the 1,600,000 persons or 360,000 families added each year to the population should be absorbed elsewhere in the economy (the non-agricultural sector in Java and the Outer Provinces, and the agricultural resettlement projects and agricultural enterprises in the Outer Provinces) to avoid a further decline in the level of living. Finally, it should be important to explore if a direct demographic policy could be applied to slow down population growth. • r SomeIndonesia n development economistsexpec tmuc hfro m theexpansio n ofnon - agriculturalemploymen ti nJav awhil eother shav egrea thope so fa nincrease dresettle mento fJavanes ei nth eOute rProvinces .Th eautho ri so fth eopinio ntha tbot hmeasu res should be simultaneously applied, because it will be technically impossible to absorbth egrea tnumbe ro fperson sb yonl yon emethod . 167 11.2 Expansion of non-agricultural employment Assumed that non-agricultural expansion, except in government jobs, could follow the same path as indicated by the development in the years 1930-1953, being about 4% per year, with anultimat e number of 7.8millio n workers, then their employment sources could absorb about 320,000 workers (about 205,000 families) per year assu mingtha t thenumbe r ofworker spe rfamil y isdistribute d as follows: Industrial enterprises 1.25 Cottage industry 1.50 Other non-agricultural employment 1.70 The State Planning Bureau's employment survey indicated that 40% of the expan sion of non-agriculturalemploymen tca nb eattribute dt oth e manufacturing industry, theremainin g6 0% t oothe rnon-agricultura lemployment .The nindustrializatio n could absorb about 95,000families .Assume dtha t theproportio n ofcottag eindustr yi s 60% of the total industrial employment (as indicated by the Bureau of Statistics), then 57,000 families could find employment in cottage industry each year, and the other manufacturing industries could provide each year new employment for 38,000 families. Thus distribution of possible employment in the non-agricultural sector couldb ea sfollows : Cottage industrial sector 57,000 families Other industrial sector 38,000 families Remaining non-agricultural sector 110,000 families Total 205,000 families This means that each year from 360,000familie s added to the total number, about 155,000familie smus tb eemploye doutsid eJava . 11.3 Resettlementi nth eOute rProvince s Assumed that indeed the resettlement in the OuterProvince s absorbs about 155,000 families (650,000persons )eac h year, theni n the nearfutur e thepopulatio n growth in Java would be limited to about 1,000,000person s annually, thoughthi snumbe rwil l substantiallyincreas eagai nlate r on. If younger couples, for instance families consisting of parents with one child, or even better young childless couples, could be transferred, the effect on the future growth of populationi n Javawoul db e much greater,an d it may then be realistic to assume that the annual population increase of 1,000,000peopl e will be maintained during a much longer period, say up till 1980. This would give the government a breathing spell to reconstruct the national economy in such a way that it would 168 create the necessary conditions for a rapid increase in farmers' income afterwards andals ofavourabl y affect future economicgrowt ho fth ecountry . In 1966, according to DE VRIES, due to the deteriorating economic situation, the number of spontaneous migrants to the Outer Provinces increased considerably and reached a total number of about 250,000person s in that year. This number, though encouraging, is stillinsufficien t to solveJava' s population problem andi t is doubtful ifi tcoul db econtinue d atth esam erate .Way smus tb efoun d toresettl ea tleas tabou t 650,000person s annually to the OuterIslands ,a sindicate dabove . Thusi t isobviou sthat , acceptingthes ecol dfacts ,resettlemen t inth eOute r Provin ces cannot become a means to improve simultaneously the economicpositio n of the Javanese settlers as compared with their present position. This has always been an addition goal of theresttlemen t policyu pt onow ,bu tfo r thetim ebein gi tca nhardl y beexpected . Resettlement projects should bedirecte dfirst o f allt oprovid eth emaxi mumemploymen tfo r thesurplu spopulatio ni nJava . Assuming that 25,000 families could be absorbed by the non-agricultural sector of the Outer Provinces, then agricultural resttlement should absorb 130,000 families of average size. If agricultural resettlement is to be increased to such an number, spontaneous transmigration in particular should be encouraged to lower the cost, (whichamounte dt o $20 0fo r movingon efamil yi n1953) . In the author's opinion, this spontaneous transmigration should be the ultimate aim for all migration. However, it will be necessary to set up first of all nuclei in settlement areas to which thespontaneou s transmigration shouldb edirected . The task of the government wouldthe n bet o demarcateth erigh tareas ,t o develop the nuclei settlement areas with selected settlers, and to construct around these nuclei the necessary infrastructural works and to provide the required personnel and services to make the whole organization work effectively at lowest possible cost. Forth edemarcation of the areas for spontaneoustransmigration i tshoul db eremember ed that, according to the State Planning Bureau (see Chapter 7), there are about 4,500,000h a of land available suitablefo r agricultural resettlement projects,scattere d over the various islands of the Outer Provinces.I f the government allocates 2h a for each family, this is thus sufficient for 2,250,000families ,enoug ht ocove rth eneed sfo r about2 0year s(calculate d on8 0% ofth esettler st ob efarmers) . Theseland s should be openedfirst t o settlement.Prioritie sshoul db egive nt o areas whichca n beintegrate d into theoveral ldevelopmen t planso f the country, likethos e closet oth eAsaha nDevelopmen tProjec ti nnorther nSumatr a andth eSumatr a High way.J nth emeantim eth egovernmen t couldloo kfo r othersuitabl eareas . Thedevelopment of thenuclei settlement areas hast o bebase d on unitso f 100,000ha , ofwhic h 10%o r 10,000h a could becleare d at the expenseo f thegovernment , while theres t could becleare d by thesettler s themselves.Thi s 10,000h a willb eth e nucleus ofth eresettlemen t project whileth eremainin g90,00 0h awil lb egive nt o spontaneous 169 settlers, where the government could provide the necessary services to make farming asuccess . Within these 10,000 ha, about 3,000 ha may be cleared simultaneously with the opening up of the area with roads (which has to be done mechanically), while the remaining7,00 0h aca nb ecarrie d outb yth esettler so fth enucleu sare ai npai d labour. Sincether e are 4,500,000h a land available, the government has to open 45nucle i assoo na spossible . Some resettlement areas are less suitable for food crops because of the edaphic or climatologic circumstances. Here the cultivation of perennial crops like oilpalms is suggested, and thepossibilit y to establish agricultural enterprises in combination with resettlementshoul db eexplored . Ast oth eselectio no fth esettlers ,especiall yfo r thenuclei ,i ti sadvisabl e to choose(a s inmos t parts ofth eworl d wherene w soilshav ebee n brought into cultivation) people who possess the right pioneer spirit and are prepared to accept the hardships which go with the clearing of virgin land. The settlers of the nuclei should, if possible, be alsoexperience ddry-lan d farmers. In the construction of the necessary infrastructural works the government agencies involved with the resettlement projects have the task to assist the spontaneous settler inth efollowin g subjects: (a) To make available land for agricultural settlement. The clearing of the land and building of houses should be done by the settlers themselves, with assistance of thegovernmen tfo r somenecessities . (b) To help with the transport of the settlers, especially by providing sufficient ship pingfacilities . . . (c) To construct the infrastructure necessary for a smooth spontaneous settlement. As regards schools,hospitals , rural roads and the like, experience shows that the government can make a go with rudimentary facilities for a start which can be improved later when thereturn s offarmin g begin to comein . (d) Toassis tth esettler si nthei rfarmin gpractic e(b yefficien t extension services)an dt o ensureth enecessar yclimat et omak eproductio nattractiv ean dsuccesfu l by provid ingseeds ,tools ,livestoc k and readymarket sfo r theirproducts . The cost of a 10,000h a agricultural resettlement with the above mentioned setup in mindma yb eestimate da sfollows : Mechanical clearing 3000h a oflan d including construction of theinfrastructur e $2,000,000 Clearing7,00 0h ao flan db yth esettler sthemselve s $ 210,000 Transportan d othercost sfo rth esettler so fth enucleu sare a $ 500,000 Total $2,710,000 Ifi ti spossibl e to openu pi n 3year s4 5nucle iarea s totalling 450,000 ha, the cost up to 1970wil l amount to about $ 120million . Thiswil l create employment for 225,000 families. But,base d onth e calculations given earlier in this chapter, it is necessary to 170 resettle 465,000 families in these three years. Soway smus t befoun d to expand non- agricultural employment in Java, inadditio n totha trequire d for the615,00 0families , for the balance of the 240,000 families. Afterwards, as soon as the nuclei areas are open, an influx of spontaneous settlers may be expected. If the cost of settling one family of spontaneous settlers is $ 120, then the cost of bringing the remaining 4,050,000 ha of the 45 agricultural settlement areas into cultivation will amount to $ 243million .S o the total cost to open4,500,000h afo ragricultura lresettlemen t pro jectswil lb e $ 360millio n inth ecomin g2 0years . 171 12 Conclusions The present study reviews the main aspects of the agricultural development in Java. Themai nconclusion semergin gfro m itar eth efollowing . 1. Increasingproductivit y ofpeasan t agriculturei so fcrucia limportanc ei nth einitia l periodo feconomi cgrowt ho fa country . 2. Therefore, the central problem ofagricultura l development inIndonesi a isho w to get peasant agriculture moving in Java, where wefac e the problem of an already excessive yet still increasing agricultural population. The government has taken several measures toreliev ethi s unfavourable situation, suchas : (a) Totransfe r Javanesefarmer s toth esparsel ypopulate d OuterIslands . (b) Topa y special attention to the rehabilitation of the sugarfactorie s which are mostlyunde rstat emanagement . (c) Toincreas eth eproductivit y ofpeasan tagricultur eb yapplyin gmor efertilizers , better seeds and other improved agricultural techniques. But the results have not been up to expectations due to various factors, as will be explainedi nth efollowin gpoint . 3. In Chapter 10i t is shown that agricultural development inJav a has been retarded byth efollowin g threemai ncauses : (a) Thepolitica linstabilit yo fth ecountry . (b) Themultitud ean dinconsistenc yo fgovernment' sobjective si npursuin gagricul tural development. (c) Thenon-existenc e of anyclea r doctrinal concept in thegovernment' s agrarian policya sregard sth epolitica lattitud etoward sth epeasants . Other constraints on recent agricultural growth are: (a) Themor erapi dpopulatio n growthafte r WorldWa rII . (b) The diversion of some economic resources for non-economic development purposes. (c) The weakness of the first attempts in comprehensive agricultural planning. 4. Iti seviden tfro m thestud ytha tincreasin gproductivit y ofth epeasant' s agriculture on a revolutionary scale requires technical, economical, attitudinal and political transformation of the rural society that cannot be brought about quickly. The transformation ofpeasan t agriculturerequire sa series of interlocking changes in so many different aspects of rural life that a perspectivefo r a period considerably longer thanth eeigh t years anticipated in the Overall National Development Plan 1961-1969 is required. 173 5. Next, an identity of purpose and common responsibility between the government and thepeasant s isnecessar y to accelerate agricultural development. 6. Another important conclusion of the study, which is also stressed by JOOSTEN and others,i s that expansion of themarket s for theagricultura l products isneces saryfo r agricultural development. Such an increase would certainly alleviate the situation of Javanese farmers for atime ,bu tultimatel yi twoul dno t solvethei rproblem .Onl yi fmos t oftha tincreas e can be siphoned off into industrial investment does it seem that the application of more and better agricultural inputs will really contribute something dynamic to the general economic situation. If it cannot be drawn off, it will merely further the process of 'involution', not just in agriculture now, but throughout the whole ofth eJavanes esociety . 7. It is also shown that Java's rural economy is simply unable to absorb population growth without falling standards of living. In Chapter 11 it is illustrated that a solution of Java's problem requires that the 1,600,000person s or 360,000 families added each year to its population should be absorbed elsewhere in the economy, intoindustrie si nJav a orth eOute rIslands ,o rint o agriculturei nth e OuterIslands . Only an effective policy of agricultural resettlement to the Outer Provinces and industrialization could enable Java to provide employment for its annual popula tion increase. Such a policy, vigorously applied and accompanied by an adequate educational program, will give the government a breathing space to reconstruct the national economy. Then it might be obligatory for the government, in order toachiev erapi deconomi cdevelopment , topersuad eth epopulatio n tosto plookin g onth emaximu mo fbabie sa sa 'bliss' . 8. Looking at Indonesia from these perspectives, the final conclusion is that it is unwarranted to expect that economic (including agricultural) development occurs easily andquickly .Accordingly ,economi c developmenti sa long-ter m goalan dth e programt ocarr yi tou tmus tb eequall ylon gi nterm . However,natura l andhuma nresources ,climat ean dlocatio nar esuc hthat ,whe n the government does succeed to prepare the basis for the 'plane to take off' (to use the familiar metaphor of economic growth as introduced by ROSTOV), it hasth epotentia l't ofligh hig han d fast'. 174 Samenvatting Na detweed e wereldoorlog hebben zichi n Indonesie groteveranderinge n voltrokken in de export en import van landbouwproducten. In dit verband dienen genoemd te worden de sterke toename van de rijstimport en de dalende betekenis van de uitvoer van andere landbouwproducten. Dit betreft in het bijzonder Java, dat met ongeveer 65% vand eIndonesisch ebevolkin gslecht s 15% va nd edevieze nopbreng t maar daar- van 65% consumeert . Uiteraard heeft deze situatie allerlei politieke consequenties. Inmiddels blijft de bevolking op het reeds zeer dicht bevolkte Java gestaag toene- men. Deze toename wordt op dit agrarische eiland voornamelijk opgevangen door de landbouw(of beter gezegd: op het platteland), wat een ernstige bedreiging vormt van het sociaal-economisch bestel en grote gevaren voor een verslechtering van de economieme tzic hme ebrengt . Deze omstandigheden hebben de regering genoodzaakt tot het treffen van allerlei maatregelen. Ermoe techte rworde ngeconstateerd , dat dei nd edivers eplanne n voor- ziene ontwikkeling van de landbouw bij de gestelde doeleinden is achtergebleven en zelfs, dat devoortbrengin gi nverschillend e sectorenva n delandbou w stagneert. De onderhavige studie heeft tot doel, een analyse te geven van deoverheidsmaat - regelen omi n deze situatie verbetering te brengen, en de oorzaken op te sporen voor hetfale n daarvan. Gehoopt wordtda tz ebi jza ldrage nto t deopstellin ge nuitvoerin g van nieuwe plannen voor de ontwikkeling van delandbou w in Indonesie, enspeciaa l opJava . Het betoog is verdeeld in 12 hoofdstukken, waarvan de beide eerste een inleidend karakter dragen. Hoofstuk 1 geeft een overzicht van de achtergronden, dedoeleinde n en deindelin g vand estudie .I nHoofdstu k 2word ti nee nkort etheoretisch ebeschouwin gaangegeve n waarom de landbouw tot verdere ontwikkeling dient te worden gebracht en hoe dit speciaalgeld tvoo rd esituati ei nIndonesie . De volgende drie hoofdstukken (3, 4 en 5) geven een schets van de ontwikkeling van de landbouw in Indonesie vanaf 1815.Hoofdstu k 3 behandelt de ontwikkeling inIndonesi ei nhe talgemee ne ndi eva nd eBuitengeweste ni nhe tbijzonder . Hoofdstuk 4 belicht voornamelijk de ontwikkeling op Java en Hoofdstuk 5d e gevolgen van de bevolkingsdruk opd elandbou wva ndi teiland . De hoofdstukken 6to t en met 9illustrere n de methode van aanpak, het beleid en de maatregelen van de regering om het hoofd te bieden aan de moeilijkheden die na detweed ewereldoorlo g zijn gerezen. Hoofdstuk 6behandel t in het kort de opeenvol- gendeplanne n diedoo rd eregerin gzij n gelanceerd voor deontwikkelin gva n deland - 175 bouw. Hoofdstuk 7 bespreekt de maatregelen om de bevolkingsdruk op Java te ver- lichtendoo rprojecte nvoo rnieuw elandbouwvestiginge ni nd eBuitengewesten . Hoofd stuk 8beschrijf t depoginge n van de regering om de export van agrarische produkten opt evoeren ,waarbi j derehabilitati eva n desuikerfabrieke n opJav a alsee nvoorbeel d wordt gegeven.Hoofdstu k 9behandel t demaatregele n van deregerin g on de produk- tiviteit van de bevolkingslandbouw op tevoren ,waarbi j de nadruk valt om de rijst- produktie. Hoofdstuk 10analiseer t het falen van het agrarisch beleid bij de landbouwontwik- kelingo pJava , terwijl Hoofdstuk 11 het oogrich t opd e toekomst. Devoornaamst e conclusies kunnen alsvolg tworde n samengevat(Hoofdstu k 12). 1. Het is van vitaal belang, dat in de huidige fase van de economische ontwikkeling van Indonesie de produktiviteit van de bevolkingslandbouw wordt opgevoerd. 2. Het centrale probleem daarbij is, op welke wijze men de landbouw op Java tot nieuwe initiatieven, en, hoe men daarin meer dynamiek kan brengen. De regering heeft verschillende maatregelen getroffen om dit te bereiken, zoals: (a) transmigratie van Javaanse boeren naar dun bevolkte streken van de Buiten gewesten om de bevolkingsdruk op Java te verlichten; (b) rehabilitatie van suikerfabrieken, die nu voornamelijk staatsbedrijven zijn; (c) verhoging van de produktiviteit van de bevolkingslandbouw door het gebruik van meer kunstmest, beter zaaizaad en andereverbeterd e landbouwmethoden. De resultaten van deze maatregelen zijn echter beneden de verwachting gebleven doorverschillend ehiern at enoeme n factoren. 3. Voornamelijk drie factoren hebben de landbouwontwikkeling op Java geremd: (a) depolitiek elabiliteit ; (b) de verscheidenheid en tegenstrijdigheid van de doeleinden van de regering in hetstreve nnaa rlandbouwontwikkeling ; (c) deafwezighei d van eenduidelijk e politieke houdingtegenove r deboere n in het agrarischregeringsbeleid . Andereremmend efactore n zijngeweest : (a) deonverwach t snellegroe iva n debevolkin gn a detweed e wereldoorlog; (b) het gebruik van sommige economische bronnen voor niet-economische ont- wikkelingsdoeleinden; (c) tekortkomingen van de regering in haar eerste pogingen om een alomvattend en efficient plan voor de ontwikkeling van delandbou w op te stellen. 4. De studie toont aan, dat de verhoging van de produktiviteit van de bevolkings landbouw op revolutionaire wijze een technische, economische, geestelijke en po litieke transformatie van de maatschappij op het platteland vereist. Zulke veran- deringen, diei n elkaar grijpen bij deverschillend e aspecten van het levenspatroon, eisenee nvee llanger eperiod e dan deach tjaa r voorzien in het achtjarenplan 1961- 1969. 5. Het is noodzakelijk te komen tot een identiteit van doeleinden en een gemeen- schappelijke verantwoordelijkheid bij regering en boeren om de landbouwont- 176 wikkelingt eversnellen . 6. Voor de ontwikkeling van de landbouw is een groeiende markt voor landbouw- produkten noodzakelijk, waarop door JOOSTEN en anderen reeds met klem werd gewezen. Een verhoging van de produktie van de landbouw alleen zal zeker het probleem van de Javaanse boer voor korte tijd verlichten, maar niet op lange ter- mijn. Slechts alshe t resultaat van dezeverhogin g gebruikt wordt voor industriele investeringen mag men een bijdrage van de landbouw verwachten tot een dyna- mischeontwikkelin gva nd ealgemen eeconomisch e situatie;z o niet,da n kan alleen een verdere teruggang worden verwacht, niet alleen in de landbouw, maar in de geheleJavaans emaatschappij . 7. Tenslotteword t aangetoond, dat de Javaanse boereneconomie eenvoudigweg niet in staat iso mee nverder eaanwa sva n debevolkin g opt evange n zonder een voort- schrijdende daling van de levensstandaard. Een oplossing van het Javaanse be- bevolkingsvraagstuk vereist, datde ongeveer 1.600.000persone n (360.000 families) dieel kjaa r worden toegevoegd aan detegenwoordig e bevolking, ergens anders in deeconomi eemploo ivinden :i nd eindustriee n opJav a ofi n deBuitengewesten , of in de landbouw in de Buitengewesten. Een daarop gericht, krachtig beleid, aan- gevuld met een passend opvoedingsprogramma, zal de regering een adempauze moeten verschaffen om de nationale economie te reconstrueren. Daarbij zal het wellicht mettertijd noodzakelijk zijn, geboortebeperking bij de bevolking ingang tedoe nvinden . 8. De eindconclusie is, dat het irreeel is te verwachten, dat in Indonesie' de economi sche (en dus ook de landbouwkundige) ontwikkeling gemakkelijk en vlug te ver- wezenlijken is.Ee nessentiel everbeterin g kan slechts op lange termijn worden ver wacht, en om dit doel te bereiken moet dan ook ieder ontwikkelingsplan worden opgezetvoo rlang eperioden .Daa r staattegenover ,da td enatuurlijk e en menselijke hulpbronnen in Indonesie zo rijk zijn dat, als de regering er in slaagt een basis te bouwen voor het "vliegtuig om op te stijgen" (ROSTOV), het land inderdaad de mogelijkheid heeft om"hoo ge nsne lt evliegen" . 177 Selected bibliography1 First national congress on agricultural economics. Bogor (mimeographed). BAUER, P. T. 1961 Economic analysis and policy in underdeveloped countries. London. BERBANGSO, A. D. 1955 Masalah transmigrasidan beberapasoal-soalnja jang meminta perflationsepenuhnja. Djakarta. BOEKE, J. H. 1953 Economicsand economic policy of dualsocieties. Haarlem. BORTON, R. E. (Ed.) 1966 Selected readings to accompany getting agriculture moving: essentialsfor development and modernization.Tw o Vols. New York. BUCHANAN, N. S. 1955 Approachesto economic development. New York. and HOWARD, S. E. Central Bureau 1966 Survey sosialekonomi nasional tahappertama (Dec. 1963-Jan. of Statistics 1964); pengeluaran untuk konsumipenduduk Djawa-Madura. CHANG PEI KANG 1949 Agriculture and industrialization: the adjustments that take place as an agricultural country is industrialized.Cambridge , Mass. CLARK, C 1964 Theeconomics of subsistence agriculture. London . and HASWELL, M. R. DJOJOHADKUSOMO, S. 1955 Ekonomipembangunan:pengantar ilmu ekonomi. Djakarta. DJOKO LELONO 1953 Membuka tanah baru, masalah pemuda dan pembangunan. Djakarta. ElCHER, C. 1964 Agriculturein economic development. New York. and Wrrr, L. ENKE, S. 1963 Economicfor development.Englewoo d Cliffs, N.Y. FURTADO, C. 1964 Development andunderdevelopment. Berkeley and LosAngeles . GrmNGER, J. P. 1966 Theliterature of agriculturalplanning. Washington . GrrnNGER, J. P. 1965 Planningfor agricultural development: the Iranian experience. Washington. HAGEN, E. (Ed.) 1963 Planningeconomic development. Homewood, 111. HlGGINS, B. 1959 Economic development:principles, problems and policies. New York. HOSELITZ, B. F. 1963 Industrializationand society. Mouton ,France . and MOORE, W. E. (Ed.) HUIZENGA, L. H. 1958 Het koeliebudgetonderzoek opJava in 1939-1940. Wageningen. JOOSTEN, J. H. L. 1961 Enige aspecten van de problematiek van de landbouwontwik- keling in economisch achtergebleven gebieden. Tijdschr. Econ. Soc. Geogr., febr.: pp.41-46 . JOOSTEN, J. H. L. 1964 Problemen rond de micro-economische aspecten van de ver- hoging van de productiviteit van de landbouw in de ontwik- kelingslanden.Economie 28 (10) : pp.485-496 . 1 Otherreference s aremad ei nth e footnotes. 179 KAHIN, G. MCTURNAN 1952 Nationalismand revolution in Indonesia. Ithaca. KlNDLEBERGER, C. P. 1958 Economicdevelopment. New York. LEWIS, W. A. 1955 Thetheory of economic growth. Illinois . Ministry 1962 Peraturandasar pokok-pokok agraria.Djakart a of Agrarian Affairs Ministry of Agriculture 1960 Rentjana3 tahun produksi beras.Djakart a MOSHER, A. T. 1966 Getting agriculture moving: essentials for development and modernization.Ne w York. MOSHER, A. T. 1966 Training manualfor group study of getting agriculture moving. New York. MYINT, H. 1964 Theeconomic of developing countries. London. NEUMAN, A. M. DE 1954 Progress of industries and the development plans in Indonesia. Ekonomidan Keuangan 7:pp . 247-255;332-336 ; 476-479. NURKSE, R. 1955 Problems of capital formation in underdeveloped countries. Oxford. PAAUW, D. S. 1960 Financingeconomic development: the Indonesiancase. Glencoe, III. PENNY, D. H. 1964 The transitionfrom subsistenceto commercialfamily farming in North Sumatra. Unpublished Ph.D. dissertation, Cornell University, Ithaca, N.Y. ROSTOV, W. W. 1965 The stages of economic growth: a non-communist manifesto. Cambridge. SCHULTZ, T. W. 1964 Transformingtraditional agriculture. New Haven, Conn. SELO SOEMARDJAN 1962 Socialchange in Jogjakarta. Ithaca , N.Y. SIE KWAT SOEN 1961 Aspek ekonomi dan pembangunan sosialisme dilihat dari sudut ekonomi pertanian. Ekonomi 3 (1-2): pp. 137-164 (Djakarta). SIE KWAT SOEN 1962 Pementjaranpenduduk di Indonesia: tindjauan dari sudut ekonomi pertanian. Kongres ilmu pengetahuan nasional II. Djakarta (mimeographed). SIE KWAT SOEN 1963 Indonesia's agriculture: with a special attention to tenure and settlement condition. Land reform and land settlement sym posium, Tjiawi, Bogor, April 1 - May 4, 1963. Djakarta (mimeographed). SUJUDI, A. 1956 Djajaloka.Semarang . TlNBERGEN,J . 1958 Thedesign of development. Baltimore . UN (ECAFE) 1955-9Economic bulletin for Asiaand the Far East, Vol. 6-11. Bangkok. UN(FAO) 1962 Agricultural commodities. Projectionfor 1970: specialsupple mentto theFAO commodityreview 1962. Rome . UN(FAO) 1963-6Agricultural planning studies series. No. 1-7. Rome. UN 1964-5World economic survey 1964. Part I—II. New York. USA (Department 1965 Changes in agriculture in 26 developing nations, 1948 to 1963 of Agriculture) (Foreign Agriculture Economic Report no. 27). New York. WHARTON, C. R. jr. 1965 Research on agricultural development in Southeast Asia. New York. v WHARTON, C. R. jr. 1965 Selected bibliographyfor conferenceon subsistenceand peasant economics.Ne w York (mimeographed). WIDJOJONrnsASTR O 1964 Migration, population growth and economic development in Indonesia: a study of the economic consequences of alternative pattern ofinter-islands migration. Ithaca, N.Y. ZIMMERMAN, L. J. 1964 Arme enrijke landen: eeneconomische analyse. The Hague. 180 Listo ftable s Table 1. Exchangerate so fth eU S dollar 4 Table 2. Estimatedincom eo fIndonesians , bysourc e(1939 ) 6 Table 3. National incomeb ysource ,Indonesia , 1952 8 Table 4. Valueo fagricultura lexport so fIndonesia , 1894-1940 8 Table 5. Estimates of national income of Indonesia, 1958-1962, by source, at 1960price s (in 1000millio nrupiah ) 9 Table 6. Percentagedistributio n ofnationa l product bysourc e 1958-1962,a t 1960price s . . 10 Table 7. Number of professional workers in Indonesia, classified according to groups of activity(i nthousands) , 1930 11 Table 8. Number of employed persons (10 years and over) in various sectors in different regions,Indonesia , 1961(i nthousands ,bot h sexes) 12 Table 9. Percentages of persons (10year s and over) employed in various sectors in different regions,Indonesia , 1961 13 Table 10. Export by economic groups, Indonesia, 1938-1940 and 1958-1962 (million rupiahs) 14 Table 11. Agricultural export as a percentage of total exports for Indonesia, 1938-1940 and 1958-1962 14 Table 12. Area occupied by estates under various landrights in Java and the Outer Provinces, 1875-1937,i n 1000h a 21 Table 13. Numbero festate san dplante darea si nIndonesi a(1938 ) 21 Table 14. Percentage of estates' and smallholders' production in the total agricultural export ofIndonesia , 1894-1939 22 Table 15. Production of main estate crops in Indonesia, in 1000 metric tons, 1938-1940, 1958-1966 22 Table 16. Planted areas of principal estate crops in Indonesia, in 1000 ha (1938-1940 and 1958-1963) 23 Table 17. Total and planted area of estates in exploitation, Indonesia, 1938-1940 and 1957-1961 22 Table 18. Totalan dplante dare a ofestate si nexploitatio ni ndifferen t regions,1961( x 1000ha ) 24 Table 19. Number ofestate si nexploitatio ni nIndonesia ,b ycrops , 1938-1940 and 1958-1962 24 Table 20. Export from Indonesia by main economic groups in million kilograms, 1938-1940 and 1958-1962 • 24 Table21 . Export by main economic groups of products in million rupiahs, Indonesia, and 1958-1962 25 Table 22. Planted area of principal commercial farm crops, exclusive rubber, Indonesia, 1957-1961 (x 1,000 ha) 29 Table 23. Production of principal commercial farm crops, exclusive rubber, Indonesia (1000 tonsofdr y product)(1957-1961 ) 29 Table 24. Mainpeasants *non-foo d production inIndonesi a in 1000metri ctons ,1960-196 6 . 30 Table 25. Exporto fsmallholders 'rubbe rfro m Indonesia, 1953-1959 • . • 30 Table 26. Export of smallholders' rubber from the main production areas in Indonesia (in metricton sofdr y rubber), 1938an d 1955-1959 30 181 Table 27. Production index numbers of principal export products, Indonesia, 1958-1961 (1938=100) 31 Table 28. Shares of the principal products in the export of Indonesia, 1928, 1938 and 1950- 1958 • • 32 Table 29. Export ofcopr afro m Indonesia, 1938an d 1954-1965 32 Table 30. Copra purchased by the Copra Foundation in Indonesia (in 1000 tons net), 1953- 1961 32 Table 31. Export ofpeppe rfro m Indonesia, 1938an d 1954-1962 33 Table 32. Harvested areas of most important food crops in Indonesia in 1000ha , average for 1953/1962,an dyear s 1960-1963 . 33 Table 33. Harvested areaso f most important food crops in Indonesia, 1953-1962(i n 1000ha ) 33 Table 34. Production of most important food crops in Indonesia in 1000 tons; average for 1953/1962,an dth eperio d 1960-1966 34 Table 35. Production ofmos t important food cropsi nIndonesia , 1953-1962(i n 1000tons ) . . 34 Table 36. Averageyiel d of most important food crops in Indonesia, in 1000k g per ha, for the period 1953/1962(average )an d theyear s 1960-1963 35 Table 37. Harvested areas (in 1000ha ) of principal farm food crops in different regions, 1962 35 Table 38. Production ofprincipa lfar m food cropsi ndifferen t regions, 1962(i nmillio nkg ) . . 35 Table 39. Principalfoodstuff s availablei nk gpe rcapita ,Indonesia , 1958-1962 36 Table 40. Importso fric ei nIndonesia , 1938-1940an d 1958-1964 37 Table 41. Areao festate si nJav aan d Madura,i n 1000ha , 1875-1937 40 Table 42. Plantedare ao festat eagricultur eb ycrop si nJav aan d Madura, 1937 40 Table 43. Export of agricultural products from estates and peasant farms in Java, in million guilders(1931-1940 ) 40 Table 44. Arablelan d for peasants' agriculture inJav a and Madura, in 1000h a (1900t o 1940) 43 Table45. Total arablean dharveste d areao f farm cropsi nJav aan d Madura, 1931-1940 . . . 43 Table 46. Harvestedarea so ffar m cropsi nJav aan d Madura, (1930-1940)i n 1000h a .... 43 Table 47. Production of principal food crops in Java and Madura, (1931-1940) in 1000 tons 44 Table 48. Production and consumption per head of the principal food crops in Java (1929- 1940) 44 Table 49. Riceimport so fth eOute rProvince sb yorigi n(1931-1938) ,i nton s 44 Table 50. Percapit aric econsumptio ni nk gi nJava ,fo r theperio d 1850-1940 45 Table 51. Exportoftapioc a products,excludin gwast e(1932-1940 ) 45 Table 52. Number ofestate si nexploitatio n byprincipa lcrop si nJav a and Madura, 1938,1962 and 1963 48 Table 53. Planted areai nh ao fprincipa lestate scrop si nJav aan d Madura, 1938,1962andl963 49 Table 54. Production of principal estate crops in tons in Java and Madura, 1938, 1962 and 1963 49 Table 55. Productiono festat etobacc oi nJav a(193 8an d 1953-1956),i nton s 49 Table 56. Harvestedarea so ffar m cropsi nJav aan d Madura duringth eperiod s 1939-1941 and 1953-1962,i n 1000h a 51 Table 57. Harvested areas of principal food crops in Java and Madura, 1938-1941 and 1953- 1962 (in 1000ha ) 51 Table 58. Productiono fprincipa lfoo d cropsi n 1000ton sfo rJav aan d Madura (1938-1941an d 1953-1962) 52 Table 59. Planted area and production of principal farm grown (non-estate) commercial crops inJava , 1961 52 Table 60. Production and consumption (in kg), and consumption as a percentage of produc tion ofth eprincipa l food percapit ai nJava , 1936-1940and 1958-1962 53 Table 61. Production and consumption (in kg), and consumption as a percentage of produc tion of the principal foodstuffs, per capita, in Java and Madura, 1936-1940 and 1958-1962 53 182 Table 62. Export oftapioc a products excluding waste,fro m Java, (1938-1940an d 1958-1962), inlOOOtons 54 Table 63. Averageyiel do fpeasants 'suga rpe rh ai nJava , 1957-1961 54 Table 64. Averageyiel do fpeasants 'te ape rh ai nJava , 1957-1961 54 Table65. Export ofkapok from Java, 1938-1940an d 1958-1962 ; . . . 54 Table 66. Distributiono flan dus ei nJav aan d Madura(194 0an d 1962) 58 Table 67. Growth ofpopulatio nfo rJav aan d Madurafo rth eperio d 1918-1962 58 Table 68. Variousdat a onpupolatio n and sizeo fpeasan t agricultural areai nJav aan d Madura 58 Table 69. Numberso ffarm s (over0. 1 ha)b ysiz eo farea ,Java , 1963 59 Table 70. Per capita area of arable land (in ha) of peasant agriculture in Java and Madura, 1939-1941an d 1953-1962 59 Table 71. 'A-projects' inEigh t Year Development Plan 1961-1969;mone yfigures i n thousand millionrupiah s 69 Table 72. Gross and net receipts on 'B Projects' and costs of 'A Projects' in Eight Year Development Plan 1961-1969 70 Table 73. Expected receiptsfrom' B Projects'in Eight YearDevelopmen t Plan 1961-1969 . . 70 Table 74. Landus ei nIndonesi a in 1962(area si nmillio nhectares ) 72 Table 75. Population densityi nIndonesia , 1961 73 Table 76. Forest areasi nIndonesi a considered suitablefo r agriculture in 1963 75 Table 77. Proposed forestry projects 76 Table 78. Forest areai nIndonesia ,i n 1000h a(1966 ) 77 Table 79. Availableunoccupie d landi nth eOute r Island,i nhectare s(1954 ) 77 Table 80. Cultivated area of smallholders' agriculture in the Outer Islands, Indonseia, 1954 (inha) 77 Table 81. Budget amounts and expenditures of the Department of Transmigration, in million rupiahs, 1950-1956 88 Table 82. Amountsreceive dan dcos to fmovin gpe rmigratio nfamily , 1951-1954 89 Table 83. Weighed index numbers of market prices of twelve foodstuffs in the countryside of Java, 1950-1954(193 8= 100) 89 Table 84. Specificationo fth eamoun t receivedpe rmigran tfamil y of4. 5person s 1951-1954. . 89 Table 85. Indebtednesso fmigrant s toth egovernment , 1950-1953(i nrupiahs ) 90 Table 86. Numbero ftransmigrant sb yterritor yo forigin , 1962 90 Table 87. Numbero ftransmigrant sb yare ao fsettlement , 1962 91 Table 88. Numbero ftransmigrant s 1938-1940an d 1953-1962 91 Table 89. Numbero fspontaneou smigrant sfro m Javat o Sumatrai n 1953 94 Table 90. Number of workers and their families departing from Java and Madura to be employedi nindustrie s onestate si nothe r islands 94 Table 91. Numbero fsuga rfactorie s bylandrights ,Java , 1963 100 Table 92. Quantityo fcrushe dcan eb ysource , 1963(i n 1000tons) . 100 Table 93. Planted area, production and average yield of sugar from lands cultivated by fac toriesi nJav a 100 Table 94. Number ofsuga rfactorie s inJav a bytyp eo fenterprise , 1963 105 Table 95. Educationleve lo fstaf f membersi nsuga rindustr y inJava , October 1963 105 Table96. Sizeo flabou r force ofsuga rfactorie s inJava , October 1963 105 Table 97. Minimum dailywage si nsom eselecte dsuga rfactorie s (inRps ) 105 Table 98. Number ofworker si nsuga rfactorie s inJava , 1930an d 1963 106 Table 99. Yearo fconstructio no fsuga rfactorie s inJav a 106 Table 100. Percentagesuga rprocesse dfro m caneb yol dan d newfactorie s 106 Table 101.Numbe r offactorie s bynumbe r ofday so fmaxima l dailymilling , 1963 106 Table 102. Number ofsuga rfactorie sb ynumbe ro fmillin gdays , 1963 107 Table 103. Number ofworkin gday san dlos tlabou rhour si nsuga rfactorie s inJava , 1963 . . . 107 Table 104. Additional landneede db yfactorie s toexten dthei rmillin gseaso n(Java , 1963) . . . 107 183 Table 105. Pricesfo r cane,wholesal ean dretai lsugar , 1953-1962 110 Table 106. Export ofcentrifuga l sugar,Indonesia , 1938-1940an d 1958-1962(i n 1000tons ) . . 110 Table 107. Productiono fcentrifuga l sugari n 1000ton stel-quel, 1958-1962 Ill Table 108. Sugarconsumptio ni nIndonesia , 1934-1938an d 1951-1960 Ill Table 109. Percentages of total costs of sugar production, spent on rent, wages andothe r costs items, 1925,1936,1960 112 Table 110. Wages paid to permanent and temporary labourers in cane cultivation in Java, in 1000Rps , 1957-1960 112 Table 111. Estimation of capital output ratio for the rehabilitation of the sugar factories at varioussuga rprice s 115 Table 112. Estimated annualincom eo flandowner s perh ab ytyp eo foccupation ,Java , 1960 . . 117 Table 113. Imports offertilizer s (in 1000kg )i nIndonesia , 1936-1941,1947-1952,1958-1964. . 121 Table 114. Necessary quantities of ammonium sulphate for peasant agriculture in Java, cal culated on20 0kg/h a 121 Table 115. Fertilizers: import plans for 1962-1963, and destination (in metric tons of plant nutrient),Indonesi a 122 Table 116. Irrigation projects included inth eIndonesia n OverallDevelopmen t Plan, 1961-1969 122 Table 117. Useo fsom epesticide si nIndonesi a(i ntons) , 1950,1961 126 Table 118. Number ofschool san dpupil si nIndonesia ,schoo lyea r 1960/61 135 Table 119. Total number of schools and pupils (in thousands) in Indonesia for the year 1937- 1938 to 1939-1940and 1955-1956t o 1960-1961 135 Table 120. Courses and colleges integrated in the College of Agricultural Science, Bogor (Tjiawi), 1958 135 Table 121. State Collegeo fSuga rIndustr y Science(establishe d inJogjakarta , 1950) 135 Table 122. Maindat a onagricultura leducation ,Indonesia , 1956-1958 136 Table 123. Loans supplied by the Bank Koperasi Tani dan Nelajan (Farmers' and Fishermen Cooperative Bank), in Java and Madura, 1938-1940 and 1953-1962 (in million rupiahs) 140 Table 124. Loans supplied by the Bank Koperasi Tani dan Nelajan (Farmers' and Fishermen Cooperative Bank), in Java and Madura, 1938-1940 and 1953-1962 (in million rupiahs) 142 Table 125. Loansi nth erura lspher esupplie d byth eBan k KoperasiTan i danNelaja n (Farmers' and Fishermen Cooperative Bank), in million rupiahs (1938-1940,1953-1962), for Java and Madura 142 Table 126. Number of depositors and amount of deposits in the Bank Rakjat Indonesia (People'sBan ko fIndonesia) ,1956-195 7 143 Table 127. Money loansi n millionrupiah s supplied by VillageBank s and VillagePadd y Banks inJav aan d Madura, 1938-1940an d 1953-1962 143 Table 128. Paddy loans in million kg supplied by Village Paddy Banks in Java and Madura, 1938-1940an d 1954-1962 144 Table 129. Agricultural bankscredits ,195 7 144 Table 130. Pawnshopsi nIndonesia , 1938-1940an d 1953-1962 145 Table 131.Credi trequeste db yPerri n(fo r peasants'tobacco)i n 1000rupiahs , 1955-1959 ... 145 Table 132. Creditextende d byJatr a(fo r peasant'ssugarcane) , 1955-1959 145 Table 133. Data onth evariou stype so fcooperative si nIndonesi a(1940,1958-1962 ) 146 Table 134. Employment structureb yindustrie si n 1930an d 1953 164 184 Author'sinde x BACHTTAR AMINUDDIN, 78, 81, 84, 85 NAPITUPULU, B., 32 BARTER, P. G. H., 119, 128,129 NEUMARK, D. 7, 10, 39 BELLSHAW, C. S., 131 OTHMAN, A. D., 150 BOEKE, H. J., 17, 18, 44, 46, 112, 141 PAAUW, D. S., 6, 7 BOSCH, A. VAN DEN, 17 PELZER, K. J., 42, 58, 61, 62, 75, 78, 79, 85, CHANG, C. W., 134,139 124 DEY, S. K., 88, 96 PENNY, D.H., 1,117,154 GEERTZ, C, 14, 39, 41, 42, 45 PIM, A.,8,17,18 , 20,9 9 GELDEREN, J. VAN, 45 POLAK, J. J., 6, 7, 10 GITTINGER, J., 5 RAFFLES, S., 17 GOLAY, F., 93 ROBEQUAIN, C, 17, 18, 19, 39, 41, 42, 45, 46, GREAVES, I. C, 103 101 GROENVELD, D., 124 ROSTOV, W. W., 177 GONGGRDP, G., 17,18, 19 RUTHENBERG, H., 140 HALL, C. J. J. VAN, 21, 42,44,46,54,100,106, SCHELTEMA, A. M. P. A., 45 108 SCHILLER, O., 132 HIGGINS, B., 150 SIE KWAT SOEN, 73,120,126 JACOBY, E., 46, 143, 144, 147,148 SITTON, G. R., 133 JONKERS, A., 18, 22, 43, 58, 60 SOENARIO, 62 JOOSTEN, J. H. L., 5, 41, 113, 121, 129 TALBOT, P., 19 KAMSAH, 80, 82 TAMBUNAN, A. H. O., 81 KEYFITZ, N., 81, 89, 92, 96 TAN GOAN TIANO, 95 KOPPEL, C. VAN DE, 21, 42, 44, 46, 54, 100, TERRA, G. J. A., 42 106, 108 THALIB, D., 1,154 KROEF, J. M. VAN DER, 19 TJIOE SOEN BIE, 101 LEEDEN, C. R. VAN DER, 97 VRTES, E. DE, 99,103,169 LEWIS, A. W., 95 WERTHEM, W. F., 17 MAHAN, J. N. A., 72, 121, 122, 125 WHARTON, C.R. jr., 138 MEARS, L. A., 130 WICKIZER, V. D., 26, 27, 48, 55 MELLOR, J. W., 5 WIDJOJO NrnsASTRO, 81, 89, 92, 96 METCALF, J. E., 41,42 ZINKIN, N., 41, 61 ' MOSHER, A. T., 5, 65, 158 ZWAAL,J . VAN DER, 85 185 00 OS s = pi 2 g ci o •3- N. •*. "!, f". - ft* I 8! P fs" rf os" oo" r» •s ni 9 B9 « Os H CSJ >n 00 CM "J *•* 6 1 OS 00* r-^ o CM os