BIBLIOGRAPHIC DATA SHEET 1.CONTROL NUMBER 3UBJECTCLASSIFICAT-ON (695) PN-AAJ-646 AF30-0000-0000 3. TITLE AND SUBTITLE (240) Landless peasants and rural poverty in Indonesia and the Phi lippines

4. PERSONAL AUTHIORS (100)

Rosenberg, J. G.; Ro,-en'erg, D. A.

5. CORPORATE AUI'llORS (101)

Cornoll Univ. C - for lit. Studies. Rural Development Committee

6.DOCUMENT DA-E (110) 7.N IA IBE OF P AGES (120) 1. ARC N UMBE R (f 1980 1 136p. 1338.1 .R813 9.REFERENCE ORGANIZATION (130) Cornell 10. SUPPLEMENTARY NOTES (500)

(Special a;eron li ile ; ;nw;i; and near-land I t ';';ness, no. 3)

11. ABSTRACT (950)

I I s(:.R71Ti)RS (90)01O. IS. PROJECT NIJM I! (I Phi ppI Iti w , AqrAfiiii ic.t (11v#1'?i l At 1,lIrAmt (14 n)

iff. IfIiIIIgPOC1IMV.NI fill(:

AllI 'V10 7 !10 M) ,hi)6 LL UNIVERSITY

RURAL DEVELOPMENT COMMITTEE

4 - 't " -,

Special Series on Landlessness and Near-Landlessness

LANDLESS PEASANTS AND RURAL POVERTY IN INDONESIA AND THE PHILIPPINES

Joan G. Rosenberg and David A. Rosenberg

LNL No. 3 LANDLE8:1 'l,"ASA'JTS AND RURAL POVERTY

IN INDONIESTA AND THE PHTLTPPINES

by

Jean C. Rosenberg and David A. Roomnberpg

Midd lebu'y Coll]ef-o Middlebury, Vermoit Published by the lural Development Commi.ttee, Center' for Internal;lonal Studels, 170 Un 1; Hall, Corinell University, Ithaca, New York 18'83. ,'ebruavy, 1900. Thi s vesearvch was, Fund (d In part by P/offc*! ()f;Ao r'a IDveloprieit ProJect # 0 11-]'7-998-00I-73. $0.00 Table of Contents

I. Introduction 1

Ii. Indonesia 10

A. The Basic Causes and Consequences of Rural Development on Java 10 B. Rural Development under the Dutch: Involution and Shared Poverty 15 C. The Creation of Wealth and Poverty: Explanation and Evidence 17 I. The Effects of Population Growth and Integration into the National Economy on Village Life 18 2. Changes in the Control of Land and Capital 24 3. Other Assets: Fish Ponds and Fishing Boats 35 4. Changes in Access to Farm Inputs 37

5. The Concentration of Income from Employment 40 6. Labor Use and New Technology 52 7. Institutional Changes Restricting the Sharing of Agricultural Work 55 8. Declining Returns to Agricultural Labor 60 9. Employment and Technological Change in Fishing 62 I0. Employment in Rural Industries 63

D. The Effects of Increasing Wealth and Poverty 64 I. Population Growth and the Land­ less 66 2. Conclusion: Political Partici­ pation and Government Policies for the Landless 68 III. The Philippines 72

A. Introduction 72 B. The Baslc Causes of Wealth and Poverty 711 ]. Changes in the Control of Land and the Organizatlon of Agrcultural Producton 75 2. ChtIr; a th, Distrlhlt ion of A -lcul ruval l ,wom, 79 3. The Dl ff,,rent 1sa] Conrsequences of Af rari't,' He forms 85 C. Factors of 11ur,il Chiangu 90 I. Plant;at ion:; 91 2. Owner-ope'at-ed, Commercial Varms 93

3. Expanis to by I,ashold Tpant,s 99 4 Ca)Iicul iat llof" Owrer"ht1p 102 .MargnIri] Teiiit; and Owners 103

.* LInd es, Libui'r:; 108 D. Conus 1on: A CapIlt,a Fronticr Is Requ . red 113 IV. Conclusion 115 A. Summary 115 B. Thcoretlcal Significance 116 C. PolIcy Implications 119

Footnotes 121

Bibliography 129 List of Tables Table 1: Landless and Near-Landless Rural Households

in Selected Asian Countires 4 Table 2: Rural Poverty in Java: 1970 and 1976 14 Table 3: Size Distribution of Farm Holdings, Indonesia: 1963 and 1973 28 Table 4: Proportion of Farms by Tenancy Status, Java: 1963 and 1973 30 Table 5: Percentage of Owner-operated Farms and Areas by Size, Indonesia: 1963 and 1973 34 Table 6: Fish Catch 36 Table 7: Employment of Men in the Main Rice Season of 180 Days, SriharJo: 1969-1970 14 Table 8: Percentage of Work in Agriculture and Non-agriculture, Main-rice Season, 180 days, SriharJo: 1969-1970 45 Table 9: Percentage of Household Time in Income Earning Activities and Household Work, by Strata, in a Javanese Village 149 Table 10: Underutilization of the Rural Labor Force, Java 50 Table 11: Rate of Tenancy by Crop, Philippines: 1971 83 Table 12: Percent Change in Number and Area of Farms by Tenure of Farm Operator, Philippines: 1960 to 1971 96 Table 13: Distribution of Number, Area, and Average Size of Farm by Tenure Status of Operator, Philippines: 1903-1971 98

Table 11: Sources of Credit by Size of Farm in a Laguna Village, 1976 106 I INTRODUCTION

Rural society in much of southern Asia is underolni! a profound and seemingly contradictory transformation. un the one hand, economic output is risng, Incomes are expanding,

tochnology Is changing, and wealth is accumulating. Un the

other hand, underemployment is pervasive, the distribution o,

income and wealth has become more unequal, real wages

have declined, and many small farmers have lost their land.

How is it possible to hRve both increasing wealth and increasing

poverty at the same time? This study attempts to answer this

question by examining two case studies of social change in

the rural Philippines and Indonesia. The study will attempt

to explain why some rural households in these two countries are prospering and accumulating now assets and skills, while other households are losing ownership of assets and becomInrg

poorer. in both cases, particular attention is given to a relatively new and highly disturbing phenomenon, the growth of a massive and enduring! class of landless peasants.

The phrase "landless peasants" is an intentional contra­ diction in terms. Peasants, according to most definitions, are farmers who own or rent land to produce crops, using traditional methods, primarily for their own consumption and subsistence, However, there are millions of poauant families who have loot their land and have not acquirod nny now skills or assets to provido a livolihood. To be sure, some peasants have become modern, commer­ cially-oriented, profit-maximizing agribusinessmen, but only a very few. A larger number may have become modestly prosperous, small-scale farmers. A very few have found industrial jobs to earn an adequate livin throurn wage labor. Increasingly, however, traditional peasant households are beinq reduccd to the slatus of landless peasants. They own few or no assets or to( is, in particular, very little or no land. They have no way to earn a ]ivinn except through their own manual labor efforts as wage laborers in anriculture, as plantation workers, as migrant workers, or as petty traders, yatierers, c aft workers, or any combination o the above. 'Yiney are almost always underemployed, but they cannot aiforC to be unemployed. However poverty may he defined -- in terms of income, or consumption, or basic human needs, or days of work -- landless peasants are the poorest of the poor. The approach employed in this inquiry, viewing land­ lessness as the key characteristic of rural poverty, was developed as part of a major comparative s tudy of .azdliessness and near-landlessneso in developing countries, under the auspices o the Rural Development Committee of the Cornell

University Conter for Adrternational Studies. The analytical. framework' and ,enera 1 I' i d i.nns of th isa research projec t are presentod in a Rural Deve.lopment Committe, mono,,rat, enI, tl]cd

land esneysot ynd fLeaIE-Land leanness in Deve lI ±IIJ. COtLIptriel Ly li11tori ,J.hsrman, Director of the eltor for 11ateriatotmalA Studies. Another monograph by the presont authors on Landlesb SPeasants and Rural Poverty in Selected Asian Countrie. tii.at ,on * the extent of landlesaness in hangladesh, 1ndia, Indonesia, the Philippines, and Sri Lanka. The conclusions of these monographs can be briefly sur.mnuizod, as followss In recent years, there has boon a major shirt in development objectives from maximizin economic growth and increasing GNP per capita to improving income distribution, reducing poverty, and meeting basic needs. "Growth with Equity" is now the guiding objective in many development agrencies. Many rural development programs, reflecting this shift in emphasis, have attempted to reduce rural poverty by improving the productivity and income o small farmers. However, while small farmers in southern Asia are generally poor, they are not the only poor, nor even the most poor. There are several other groups o rural workers who are even worse off than small farmers. Theso gro~ps arc best characterized as landless and near-landless workers bocause they do not have adequate farming land or other remunerative employment to provide subsistence. Those landless and near-landless workors comprise a majority of the rural labor force in many Asian countries. Further­ more, there in strong evidence that their numbers are incroasing rapidly. The basic categories and aggregate estimates of landlessnons are given in Table 1. Table 1

LANDLESS AND NEAR-LANDLESS RURAL HOUSEHOLDS IN SELECTED ASIAN COUNTRIES

-T Indonesia Bano2_dIesh(1977) india (i971) (Java, 1971) JPhilippines(1971) Sri Lanka(1973) I 1 % No.(000) % __o.(000) . N (u0)(o. K.(000) % o.(000): PI 501 11.3% 238 12.6%2 A. Agricultural Workers 623 5.3!' 23,000 27.0% F__-3,850 41.0/Z B. Non-A ricultural Workers 2,3; 19.9% s,(r 16.0, 75b 17.17_ - i -751 39.8% C. Tenant Farmers 7 5.0 3,000 I 3.0, i 24.4%° 480 10.8% rFae13 .0% 1,800 19.2% 1,312 29.6% 453

E. Others ... 381 8.6­

o !--ndlessand Near- I - dless 0 7a5 .e2 45,000 59.0% 7,950 84.7% 3,430 77.4% -1,443 76.4%% J i ra[ iI ICi

100.0%. Total Rural Households ! 1393 1 00.0i S 6 ,O, I1000%0i 9,390 I00.0 44,34 1!00.0Z i 1,888

Source: Rosenberg, David A. and Jean G. Rosenberg, Landless Peasants and Rural Poverty in Selected Asian Countries, Ithaca: Cornell University, Center for International Studies, Rural Development Monograph, 1978. includes agricultural and non-agricultural workers

estate labor households only

includes tenant farmers and home gardeners who also had agricultural or non-agricultural work These research efforts have been valuable In describing

the nature of the problem of landlessness and in ectimatinge

the incidence of landloesness and near-landlessness in

aggregate terms for several countries, it is now widely

accepted that the plight of the landless, or "the dispossussod

of the earth, " ' is a pervasive phenomenon and should be

considered in all rural development efforts.

To aid in these efforts, the present monogr,,i attempts

to explain what causes landiossness and rural poverty in

the villuos of Indonesia and the Philippines. It attempts

to explain the local and immediate processes and circuimstances

by which tenants and marginal farmers aro dispossessed o-, their land and are converted into low-wage laborers. The data employed are largely taken from village studies, sample surveys, nnd other diungpregitod sources from selected areas of Indonesia (primarily Java) and the Philippines (primarily

Luzon and the Visayao). Consequently, some areas and smo issues have not been given the consideration they deserve; for example, the impact of corporate farming in MIindanao on rural poverty, While the present approach reduces the generality of the study's conclusions, it nevertheless provides a good insight to understand how subsistence farmers become landless peasants and how they survive as landless peasants. A careful micro-analysis of the causes oi' landlessness is necessary because agg/(reg,,ate data, including official census data, may yield ambiguous if not rni.sleadIing, interlpretations.

A case in point is the Philippines 19,1 Census of Agriculture.

A summary analysis at the beginnint reports that, :rom

1960 to 1971, "full-owner operators increased by 41.1. percent while part-owners and tenants both declined by 13.0 and 21.2 percent, respectively." The writer then draws the conclusion that "this shows that a number of farm operators who have been previously operating their holdings as part-owners Ur tenants have acquired full-ownership of their farms. This situation is reflected in the decreased percentage in tenancy from

1960 to 1971.l"2 While it is true that Abe number of fill-owner operators has increased and the number (f p'irt-owners and tenants has decreased, it is inaccurate to conclude that any significant number of tenants or part-ovners became full-owner operators from 1960 to 1971. To the cortrary, numerous village studies and sample surveys reported in this mono­ graph show that part-owners and tenants are (enerally becumin, worse off and are much more likely to become landless laborers than full-owner operators. The observe( decline in the number of part-owners and tenants can best be cxplained as a declille in their economic status to the rank of landless laiborers due to distress sales, debt foreclosures, evict~uns, and thle fragmentation of already marrc nal holdings. Limilarlv. the 7

observed increase in the number of full-owner operatora can eto xplained,_.aa 'aro a l,-oL __h o aubdlv-iaion..of--- thei.. holdings among their heirs and the take-over of tenainted land by owners who want to operate the land themselves. Contrary to the conclusion given in the census, ntgnificant number of part-owners or tenants have acquired full-ownership of their farms The example indicated above not only shows the need for a micro-analytical view of the causes of landlosunosu. Tt also indicates tho complex pattern of processes both reinforcsng and mitigating landlossnoss in rural Philippine socloty. For example, the immediate causes of incroasine landloaui'J in the Philippines are, as suggested above, distress sales, debt foreclosures, ovictions, and the fragmentation of small holdings. lut not all tonants have become landless peasanta; some have acquirod rolativoly aecure leasoholds and may now be in bettor economic circumstances than many small full-owner operators. Another example of offsetting proceases concerns the pattern of land ownership. rho subdivision of land among hoers may increase the number of owner oporator, ond thoroby di fuse land ownership. At the same timo, however, the spread of commercial agriculture and the Incroaulng value of land as an investment serve to concentrate land ownorhilp. Those are a fow examples of how different processes Incronae or docronse landlesanoas In the rural Philippinos. Their not effects on rural poverty mre detailed In the followini- chapteru 8

Complementary to these relatively short-term and immediate causes of rural poverty, there are other more historical and analytical explanations available. In both countries, the amount of work available at or above a poverty level of remuneration is scarce. The number of good Jobs accessible to rural laborers is not increasing fast enough for the growing populations of the two countries. This can be seen as the result of the high growth rate of the labor force and the relatively low labor intensity of current investment. In both countries, more and more workers without land of their own and without any o-her significant assets, capital, or skills, are forced to take work which is not very productive and not very remunerative. Landlessness is one critical aspect of rural poverty; the lack of a good Job -- on the farm or off the farm -- is another one. The profound and seemingly contradictory transformation noted at the outset -- ()f simultaneously growing affluence and growing poverty -- can also be seen as the result of a rela­ tively new combination of circumstances in contemporary rural Philippine and Indonesian society. The growing population pressure on the land a:'d the steady increase in the cash market demand for agricultural products -- both longstanding trends -- have now combined with a distinctly new factor: the introduction of costly technological innovations in agriculture, such as high-yielding seed varieties, chemical fertilizers and pesticides, and farm machinery, all or which require significant cash outlays or credit. Tho introduction of these new input purchase requirements along with the long­ term factors of growinr population pressure and the

commercialization of anricu]ture are the historical trends whch are causing the basic structural chonres evident i

the organization of aricultural production and the control

of lnd in the rura] Philippines and Indonesia. The full details o1' these structural changes in the average size o,. holdings, in methods c,C producuion, in the patterns of land tenure status, and in the composition of the agricultural labor force, are documented in the monoraph. Ultimately, these structural chongos affect the distribution of rural income and wealth and create the remarkable qnd regrettable phenomenon of simultaneously growin{, afl'fLuence and growinr poverty. 10

II. INDONESIA

I. Introduction

Rural development in Java is a stor'y of inconsistencies,

of the simultaneous creation of both ne4 wealth and new poverty. Rural output, income and assets are growing; at

the same time, the poorest villagers axe experiencing declining

levels of living. Rural society in Java is bifurcating into

two groups, the property-owners and thE landless. Some of

the landless work with the capital and land of the property­

owners; the rest must work on their owr with only minute

quantities of capital and land.

A. The Basic Causes and Consequences of Rural Development

on Java

The basic causes of this pattern cf rural development

on Java appear to be the following: 1) A high population growth

rate of about two percent per year, on a base of a very dense

population. 2) Virtually all potential rural resources

have come into use, so that there is no frontier left.

Agricultural land, forests and fisherics are even overused,

and consequently their productivity haE declined in several

places. 3) A new integration of vill.ale society with the national

economy and power structure is changing- the orientation of

the village elites. 4) New methods of production and new

capital resources ha~e been introduced in agriculture, fisheries,

and manufacturing. :;ome of this technology is labor-replacin',,

some uses imported r sources, and some requires oxponl;ive capital and information. Sone of this product. on by new technolopy

has been moved 'to the citi es. 5) Iviark(t methodsl) for allocating 11

resources are extending into villages, replacing village customs. iarket methods depersonalize the decis ions and give an advanta.e to the wealthy in acquirin, more resources.

6) There are changes in some villaLe customs to restrict the traditional sharin7 of agr.:cultural work and income.

7) Government policies on rural development have been formulated with an urban bias, to meet the needs of the urban decision­ makers without much thouht about or concern for the trans- formations wrought on rural society. For example, agricultural development policy has concentrated on rice production with very

little attention givn to yield increases possible in other crops, which promise more to the incomes of farmers, especially land).3 the poorest farmers without sawah (wet rice

The creation of new wealth and new poverty is the result

of the above Pasic causes. A

of this capital, old and new, is beconing, concentrated in

the hands of a small percentage of the rural population. The

rest of the population has virtually no capi tal and no

prospects of acquirinr an,. Their numbers are incransin,

and the m.rKn' al productivi ty and avera,- producti vi ty' of their

labor, unsupported by infus ioni of capi tal] or skil1is, are

falI ng. ThO numbers or the :tndl1ess a re vi. TTb 1creai e

fish catch of' the artisan fishermen is declninv. Lome

cra'fts cannot compete wi mannufacturors and others have

pro''roaSSively l.owor NIs :t's more people take thom uap.

I'Tore is In !ac ve r I i L u Ii i'o rnai,i on , ';4h ,L is Ii;tp o.n'Ln

to rur'a] q;:r,i, u ,tK F Fere .'s isiidcAnd les the decline ol 12

some crafts which cannot compete with urban manufacturers, the springing up of some new workshops along roads outside towns, and the persistence in low incomes to workers in crafts which require very little capital to enter.

As operations endowed with capital expand in agriculture, fishing, and manufacturing, they create more days of employ­ ment. in addition, this new employment is at a higher rate of marginal labor productivity than the work of those without such capital. The days of employment have not increased as fast as the days available from the rural labor force, however, due to the high rate of growth of the labor force and to the labor-displacing nature of some of the new technology. The wage rate, furthermore, while apparently driven lower by the underemployment of the labor force, does not drop to the extremely low point where it might bring the demand for rind supply of labor into balance. Wage rates depend on numerous factors: skills, responsibility, risk, relationship tc the employer, and number of dependents, as well as community norms. in rural Java these c('mmunity norms contribute to keep wages above what a Free mairlket rate would ostensibly be, and thus contribute to the slow­ ness of the growth of employment in the prof it-oriented and capital-endoweO environment of Javanese ag(, riculture.

Some o' the landless or near-landless can find employ­ ment working, with the capitail of others. A large and growing number of the rura.1 populat*ion, however, owns no land or too little for ,;ubs.istence, and therefore must work very longl' hours wi W, Very Li Ltlv c;pil,a] ind consequently L.3

it very I w n aver'aq n nd mari na_l )'otu hivity of' labo'.

P'hey wor k In c enfPt.B, JI;Mt y ta, dinITrip, s : v 1oe , rood pi'(pepa r t loll arid hawki , huv'] 1, ; tridp4)oe's, IIvN. They e'arn a very poo' livOI I hood. T :i?(ie,.>'t o) j)oy't, cani [e de' , i I .d in sevc'ral way;; r' , ,x [ipk , accordi r' to I' Ce' t(lul.V& ]tIlL, as derived by Wlhit.e In Tab-le 2. Iin th: s monograph, Lajor emphasis is placcd ci the control of lond a; the ,apial! factor in e xp1al ri1 ru ral, weal. ,1 and iur; I poverLy. r'om this pei'vcc 'tive, 11 will be sh )wHi hulw that rural society

In ,aVaJu N t Is1 l . n iAItc, n,W(,t i' )Ii'F . i a';,1;l' those who

Own land and oilier c ipit. I, stc, as an]rm]an, rish ponS , tools, motori ze;d Louis ard nets., iioney, ve mills, neWiliw machines and -;o(on , in suffficient quna ntity to qene.- .V a sur'plus to urnhase nov'e capital , land, and educai on. land owne'ship has bW:en c'ucia l to rovid in,: the surplus fi st pond:;. to acqult'( other.r ass t:s, e.g.

The second r',u s Li cludes the,. land e s s or near'-landless who have no a',pUS Ld ro oppor tuon.ity to acynI r'e lan(d or cip ital1.

Home o' tic are erup[.Ia) to wo'I: wi tLh the assets (oi' other's.

These are the "tprlvi Iod'luo an(.Iic , a rid mrlny w el_ i'ec |Ve this vpivIs I leg't~c [tecatil;e of'K v'lr'c at iM ohl ns 1 I. IV. or' 'I end of' t1, owlel'r. 'l'hl! vo '', they r',. c yelvo, w! l1 be dette'llnulfJ(I by rniy c uns.Ide'vati, i oI pm'od cI. ,7iLy, 'eu.I a tl.onshiJ) , and need, but will ((l'tatlly bp' h wlce than whNLt they could(t

Ifl ol'11work (ill thi'ler o lr with out. capltl. rjl'I'.1 11 * ) C Fi 1 ;,If! 1aid 1./ 21W 1 r n'al(:1} '- I •d '~ ru t W~ The Punt of th l;anl.a] li tue ''Irf d]l'eos must work'. as rihey carn with~otl .na Itn] lIn lte "Inl[ pn)l"llI ' B}o(to.;O" Table 2 Rural Poverty in Javaa 1970 and 1976 (defined by annual per capita expenditures in rice equivalent)

Jan.-April12ZO Jan.-Aril 1 76 Number Zof total Number % of total (000,000) rural pop. (000,000) pop.

Poor (?20 kilos rice) 38.0 61.0 40.5 58.6 Very Poor (240 kilos) 24.6 39.5 27.5 39.8 Destitute (180 kilos) 13.0 20.9 17.2 25.0

Above poverty (320 kilos) 39.0% 41.4%

Source: Benjamin White, "Political Aspects of Poverty, Income Distribution, and their Measurement, Some Examples from Rural Java," p. 6 i I-

IvIuch of th s wo'L is ncn-ag ricultural. The returns are very low. it is possible that those who do have employ­ ment (even thourh it is likely te be part-time) on the farms and boats and in the shops of others will evolve into n labor

elite. They may be able to maintain their privileged access to jobs throuh their personal relationships to

the employer and the acquisition of skills. On the other hand, the intense competition for jobs rcm the desperately

poor may prevent thii restriction.

B. l'ra] Developmen 1;nd. r the Dutch: inv),lutuon :11( _ ha eCd

P overty lRura; ,Java has become widely known in the social science

literature tor its institutions of garicultural involution

and shared poverty, As the population 5rew, labor was

absorbed into wet rice culture without nny drastic fall in

the marginal productivity of labor. Every household was granted access to the land and its fruits through what were

often very complex customs for sharinLg employment ;in ncome.

Some ,uthors omphosize the values of a1pF)proximill :ImIoX t;/

in nccsr to I:,1n! and irnco)me within the vii 'a', while tLhrn,

assert I;iU tter'e w re dist inc}hir'rar'chies hoised an t.he

differenVtl ncc',nq ti) Iin(, ill villarie mnmbers orUi nally

had rip.hts W,' Ilti vation ( ' eplo(,ment (on land. Wi.th the

introduetion (' private ownfershIlip (f the Iland rop Iac&,

comrmunal. ownr;hip in lh( lato iinii teeith c ,ntury,IiridIos.ne.ss,

became cOliflOmo ; a 1905 .survc(y implies a andidloo rate f

L rty percniL.O 'liTe l rdiod.s wore ati.I. oh Iiaotd V, 16

provide access to land or employment fcr all the villagers. However, according to Temple, as the population grew, by 1900, some villages with very dense polulations had reached a point where those nee-ding work exceeded the number who could work for a subsistence wage. Furthermore, in the 1930s, many wage laborers returned home from the plantations to demand their traditionel rights to village employment.

Hence, in many villageE , some villagers were denied the right to work and receive patt of the harvest. They were the individuals and househcids with the weakest social ties to landowning families. By the 1930s, if not earlier, rural society was dividing irto three groups: those with land, those without it but with employment on others' land, and those without either land or employment on it. Duewel writes of ihe increased popilation pressure on the land leading to an end to a land frntier and increased landlessness before 1950, but he does not report any denial of the ripht to employment to any villagers. instead he asserts a decline in the ba.'ganing position of the land­ ..ess and near-landless, with declining real wages, share­ cropping rates, and harvesting shares. The response was not, he says, a continung concentration of land ownership aid denigration of the landless to the posltion of serfs, but rather a division of society into many cukupans (households with just enou;gh) and many kekurangf,..ns (households with not enough) . Everyone atil had the ri gi t to some em1d.Io:mornt and part of the harvest, perhaps niot enroutgh, but somne 17

The kekuranganis, those without enough land and without adequate social ties to Lain access to enough land, had to supplement whatever work they had on the land of their own or of others with work without capital or land.

It appears that rural society was steadily getting poorer from the time of the Dutch takeover to Indonesian independence. The populntion increased by seven times, but the area of land under cultivation by only somewhat more than three times. 8 bueh of that new land was of lower quality. The Dutch did not permit the Javanese to enter the international economy themselves, and thus tne village economy had to absorb all the additional population. While the poverty was not evenly shared, as some have implied, the

inequality of wealth and income between cukupans and kekuranans did not accelerate, it was in general limited by village social controls, by th( rights to employment of villa-e members, and by limitations on sales of land to outsiders.

C. The Creatlon of Wei iit and Poverty: Explana- ion and

Evidence

Averare rural income per person decl .'edover the century before independence from t'o Dutch , s the popula tion

incroasod Anister than the production for domestic use. The averar"'e income i.l. hut the inequa]lity of intcome in the viliries , whilie exi'stinry, wa; controllied . In the l.o st two

decades, however, th opposite trend hug; occurred; an iocrease

in per cai tal] lrura l AIwlice!e and P s imultanteous i ncrie;ie in 18

Technology is changing and capital is accumulating to raise rural output and incomes. Growing population, changing institutions and opportunities, and government policies provide the incentives to adopt new technology and accumulate capital. They also provide the setting, along with the new capital and technology, which induce the concentration of the newly generated rural income. Somf families gain and some families actually become poorer a,' they become land­ less and lose access to agricultural employment. Section 3 will attempt to explain how this process is working.

1. The Effects of Population Growth and Integration into the

National Economy on Village Life

Java has a rural population density of over 1200 people per square kilometer and a rural population growth rate of about two percent per year, implying a doubling of the rural population about every thirty-five years. While there is unused agricultural land, even of good quality, available on other islands of Indonesia, there is none left on Java. Migration to these other islands is encouraged by the frovernment, but

Javanese villagers are generally reluctant to teave their familiar village.; ard culture. The risks of the unknown seem jgreater than the )ossIble benefits, and very few people gro. IJnd Imrliovmnt.nt; o o ri wlth the rehab Illtation and extenson ol Ir'I gritlou systems, hut s;ome decline In quality ioo:, Oil a;t We I] WithI I,, rr('easod eros. o , ( stitl]ill h (10 t o deduo' tt. on . In a L1tiat lot of' nio land

F'ont l i11w' popI'o', l ,t, it I (A ail'ojun d tW) !.'I 19

year puts a heavy strain on the ability of the social institutions to integrate the increasing number of workers into the rural production and distribution systems. The traditionally crucial resource ratin, the man to land ratio, is rising. The social institutions governinfg production and distribution cannot perform with their traditional success and are under pressure to chang-e. The systems of production and distribution in rural Java are under pressure to change and have begun to do so. Agricultural involution, or the continual pgradual increase in labor applied to the land in order to increase output marginally, apears to have been replaced with an increase in purchased capital inputs and no or very little labor increase, at least In rice production. Shared poverty, or the ri, ht of every villag_-er to some work on the land and to a share

in the harvest, appears to be changcing toward customs wMiLch

restrict tie rig.ht to agr.cultural work and a share of' the harvest to only ieople witth close ties to the landowners. These sLi!ts An cuotom -,.rr! in the Intere'st of the landowners, not in the Ineret s 0 the land]e, or nevr-Landle;,)e rural. laborers. ri i ten iel.eentlli and early wenL.ietL ceuti (.I.0, increasin popul ition presSuWre may have strerigthened vii la{, hlierarchles and lowered the wares , sharecroppin, rate.' nnd harvest s,;,i,e.; el ti u ].aborer's, but ii; was a so met w.iLi, an increatse in !.ihor inrputs (ind a "iner sLiar tng ou of the

sl.owly 111cr.:,:;in., II')rV(e S L.The , .'o:hoo ttet .heirldI eso

,rind i('tr-] anI .55 wo' 'c,'rnod C] * 4,,', , i, l'',i ,(; 20

last two decades or so have village groups changed their economic interests and witY that, their village production and distribution systems?

Village officials have always been among the primary owners or controllers of land in .t;ie village, in a self­ perpetuating cycle. Their privileged access to land arises partially out of the grant of village-owned land to their use in lieu of salary, and their control over the assignment of village lind. The officials have always been powerful people within the villagoe. However, throughout the Dutch period and into the 1950s, a virtually unbridgeable gulf existed between the powerful villagers and the colonial bureaucracy. Village offif.ials were not very powerful outside of their village. They wer'e always dependent on village support for the performance of their duties and lived their lives in the village context. Duewel points out that the colonial irrigation and agricultural bureaucracies often worked to counteract the village leader; hip's concentration of power over water, a critical factor, by establishin,, procedures for control over water distribution by the users.

Thus, the water distribution system was not allowed to become 0 responsive to local poAer or wealth.'

The Dutch colonial policies prevented the Javanese from enterinp the internntional market economy and further prevented the spread of arirket methods into agricultural and social exchni'es, ouch ln: Lhe wnter d(s1tri Iystrri.th ion

Village cIis;orns remained strong, unweakenei by market cust(m) .Tiey wo rk(!d Lo .111f, tI ex ti,.trie.; of aff ] uenc e 21

and poverty; while elsewhere market customs permitted and

encouraged the concentration of ownership of wealth and income. Startin: in the 1950s, however, relations between the villages and the national rovernment Len:an tc ch nn, as did relations within the vil.age . The spread of many political parties and act ivitins into the countryside tKIlL links between villarers and naiona groups. it also introduced open conflict into the vf]ilage on the basis of economic

interests, religion, and culture. As schoolin" increased for the children o; the illage elite, tiey became amn itinu to move into the lower echelons of the natioral, bureaucracy.

Furthermore, political conflicts interfered Ai. the adminintration of several government proyrams, especially the maintenance of many irrigation systems. later became scarcer. in the increasing competition and conflict uver i 'ri;'atiol water, ]I0 requently the wealtiy or poli tically owwerful won.

In many villages, the scarcity of' rural resources became the subject of overt conf1i et, oncoura! ed by ouLside o11 tical allies and patrons on both the ri{,hL and 1,'! t,. A At:in point is the nonnsoin Communist Party which Mobtmpted t organize a mass Io'lowiV on0 the 1,8515 (1iso 0if, I II.'Oula:; consciousnesn amon{ the ]an1(] es and near- I ad]es,:;. party ch.aripioned laid reor.. Loc]. (sldro':; ove 1odortooP. to enforce 1land and sla"in', ]'o 'ornswitVZ L ox' L,(,4h, l , 'l sanction o'r sai icL oii * 'lb isT: p'o)vokeod V Ion cIl'': L;ion by landl.ords :il' devou t, u! lir , r'o2:i sLin' ot!, Lirte I. to the villg]. ' Soc a ,rdri' andiai'"rI i;'ous (Wiih I,I,ruit. 'i'Thon, 22

and continuing in 1967 with the military's enforcing loyalty

to its regime and destruction of all but two umbrella parties,

political life in the bureaucracy and the villages became

much more restricted. Social cohesion must have been damaged

in many villages by the overt conflict of thoae politicized

years, however. The social and political isolation of the

village had been breached, replaced by links with national

institutions and interest groups. The economic isolation

was beginning to break down, first with the "fertilizer

revolution," as Sajogyo calls it, and then with the rice

intensification program begun in the late 1960s, Patronage

ties outslde the village became important. New people from

the national Covornment, mostly military, entered some villages.

Village solidarity had been cracked in many places. Those

changes can help explain the shift In village behavior, the

retreat from customs of sharing employment and access to land, which appears to be part of Java's current response to

population preaure and changing technology.

The Nliw Order military government began programs for a "C~roon Rovolutlon" 1in indonouia In 1960l. The now coed, fortilizor, and pesticide packeae of inputo to be purchased 23

was organizod in con "junctionwith new agriculturalredit institution,;. Repair work was begun on the many irrigation

systems which had dete:.iorated. The risks associated with the new rico were soon perceived by the farmers. Due tc the

shorter growing season, each day in the life of the high-yield­

ing variety (HYV) is more critical, and thus the HYV's are more

responsive to the weather than longer season varieties. Since

they were imported from the Philippines rather than locally bred,

they were less resistant to local pest and disease problems than some local varieties. And when rice was continuously cropped, other problems arose, such as plant hoppers, rats, and other pests. Hence, a very strong incentive was needed to induce a farmer to spend money he did not have on purchasing inputs for a risky return.

The now village context, integrated into the national economy and society, makes the profit incentive increasingly powerful. New consumption patterns on the part of wealthy villagers are reported. Land is beccming a source of cash rather than a source of local social power through grants of employment and accoas to land within the village. Wealthy patrons do not need to maintaI.n the Icyalty of so many clientu, since much of tho villalfo political compotition has boon quashed wibh the Now Order. The competition now is for now inputs, which are available larsely on market criteriat resources to thue who can afford them, C~sh can be spent outside the village on luxury itoms, education, and obtlining salaried jobs for one's chIldron, heo rulf ttwoen teo villago and the 24

central economy and society is being bridged. Crucial both resources and rewards come to the villale from outside, and of these depend on accumulated wealth, not necessarily on power and prestige w.thin village society. Control over the village owned land awarded to officials still depends on village status, since the lurah, or village leader, is usually elected (usually for life) by the villagers. There are also too many villagers to be able to woo them all with village bits of land, so the basis for obtaining their support in

factions may be changing. Their support, also, is less

crucial than it used to be, and the useo of wealth are

preater.

if the village sources of power and rewards are changing,

so too are the customs and mechanisms for the distribution

of income and wealth. indeed, there is increasing evidence

of the deterioration of the old institutions of shared of wealth and poverty, and a trend toward the concentration assets. ownership and control over Land and other productive

2. Chanes Ln the Control of Land and Capital

Javanese r-r:i culture is chang!ing under tle impact of

new national. pressures ind o1portuni t1es, to a culture which

is oriented more toward the rewards outside of villag,e

society, in lpurticu].ar, toward th, '.o e-tary rewardo; of

prof itnh].e ar.'jculturnl. nterprioe. 'ohii is leadinrig to an

increas e in the ccricntrat ion of tto rr1,llrorn mlfrold aid cal[,ptal,

C asm;tJ' as soc1ai] ieostaizint,; o1 Lhe Coli(t!1It',VOi Ill (1 the I f ; , )o 1d , I (.;;" , 11 1 ' ,' , 1.. e I I I a I I(I () ( t -,! : -, j 1 1, ,) I' I ,'IrlI(lI , 1)1 ,:1 t, . , :tl~I' I 25

The increasen the--concentration of land,and capital in.a­ context of a ,,rowinC population and a growing amount of capital means that while the absolute numbers of property­ owners are probablynot declining, but rather growing, the percentage of people who own land and capital sufficient to provide for their own livelihood is stable or declining. TIhese fortunate propo)'ty-owners own more and more capital, since they are able to accumulate it. Is there evidence on pr:pert:/ ownership to support these assertions' Tho ovidonco mu3t be indirect, since there never has ben direct and explicit inforimation on the concentration o:f ownership of lrind or capital. .in the absence of counteracting customs, market forces tend to load to a concentration in the ownership of productive assets, as those with profits are able to build new ones or buy up old one, Concentrated ownership may also eventtually exert monopolistic power and drive out small rivals. There are myrind cuuntnrantlnu:- custormzi in rural I. I~vu l t ., 11.. 'ava of cour:uo , it- Fi I );noo; ;V ,tid vmirkot for(!s,(

Vs.Jl(IOV/s.:O'l , :1iI; Ti l os IOf 1 of'C 1 (1 tvI, , ( .O OX1J )O1 If .VO tocsc o "',1 VrI i1':, , Li.von , rd trade , rug/ l)e producnr{ thso predicted roe:ultra. Col.,:or quotes br. i;,uoyarto, one of Indonos.a',s loadir oono:t twin sources Of rural poverty aro the dimn..1hin- nizo of £artiw and the increaoin hinoqual-Ity of land hcidin/as."]2 Palmer assorts that the concentration oV control over land, hut not ownor­ chip of Tnd,i Is ,n , o ,mva.,o t throif'h Incroasod onicontrution 26

of tenanted 'Land and concentration of the grants of village owned land.1 On the other hand, USAID in Indonesia reports that, while some observers assert that the 1973 agricultural census in:Formation is misleading in not revealing concentration of landholdin ,,,the new census presents no evidence of a trend toward land consolidation, it points out that the area in farms of five hectares cr more actually declined from 1963 to 1973.14

It is likely that a number of different processes are going on with respect to control of land in Java, which may have the

effect of partially cancelling each oth}er out in the ag.gregate statistics on such data as averagfe farm si zes. It still would be interesting to know whnt the processes are, however. We can perhaps discern the outlines of t',ese processes through the use of t)otl> the agg egate data from the census and village studies.

First, the rural p(pulation has been increasing in iJava at somewhere around two percent per year, rnd therefore the populn-tion oressure on tie ].and has hocome ever more intense. ihIS is ii]lustr;)ted by the iricro:ise in the usc of agricultur;iI dry land area For h1ouse compounds, from 3.6 nercent. of the dry ],ind :iro in ]t 3 to ]0.2 percent In

1973, for ,] il'idones a * ural pupu l, ion th S11rov ti,,Id load tLu 1Lie "111),livI"Jon f firms. 1by inhoeri I ,nc(e, w1.Lii a con o(1l lenl. nl(r.as in ,hi irnbe]r ' Kr ; :()'(i i dccline in the'llI ;iVe';I, , : 'o.* do iii ,;tV' i ?, n rimihor (t' I ;ar'mn;

incro'rine d !,i l,'. orcenilt, F' ornrl 1'9h ) tou 11 J, a111d tue ;a-1,.',e s.,ZO ( ' 1';tirmr ]iC] ic ('d J'0'()tl () '! [il,' r t Lo 0 ()(,0 h I 41(,T'P, 27

This excludes farms below ).I hectare in sizc in order to make the 1973 data compirable to that of 1963. There was no land frontier in Java, :fnce the area estimated to he in farms declined by 3 percent from 1963 to 1973. The farms became smaller and more fragmented, with the average number of parcels per holding increasing from 2.4.6 in 1963 to 2.64 in 1973.

The sawah area on Jav actually expanded with improved irrigation by 3.6 percent, but the number of sawalh farms increased by 11.5 percent. The result vms smaller average sawah area per farmer, a drop from an averare of 0.4 6 hectare in 1)63 to 0.42 hectare in 1973. Kote that the amount of sawah necessary to make a tjavanese family cukupan is usually quoted at netween 0.5 and 0.7 hectare.

The poplla t: on pressure results not only in smal.ler farms and more area taken up by house compounds (which can be quite productive since they include ardens and small livestock rais inr) but in mony more ]andless laborers. The number of farms on ,ava iAcrea;ed by 4.2 pe'cent Crom 1963 to 1973 wh ie the apri culi ural labor force Jincreasesd by 10.4t percent from 1961 to 1971, accordin' W the populat ion censuses.

T'hes ).oce5';5 W' rI'NYTLI)di.VJsi 1oI dile Lu p)o1l) tio; pressure shoold lead us t( expect a dccl.ine in the nomler

[, t ' of lar; (.2a nd I sl5 . ,1 and n iaIC]1'O5Iso i. iii In he

of smail. farm1:s2 oVer' ti rio. ThisSSnpii rio.Iyr has I Spp)n d(1 F'olr 28

Indonesia as a whole,as indicated in Table 3. Booth arid Syndrum tell us that there was an absolute decline in the number of farms and farm area in farms over ten hectares for Indonesia. Table 3 Size Distribution of Farm 1oldings, Indonesia: 1903 and 1973, (excludinc,farms less than 0.3. hectare and estate a{,riculture)

Groups's Share of Total Area: Croup 1963 1973 Bottom 40, I0,1% i0.1% 4o to .0,. 10.5 11.1 60 to,/,, 19,0 21.4 80 to 900 15.3 14.7 90 to 95% 12.2 12.0 Tcp 5 32.9 30.7 (oncontrati on ratio: 0.546 0.532

Source: Anne Pooth and R.II. Sundrum, "'['he 1973 A?,rictltural. Censtc<,," hulletin of Indonesian Economic Studioe, 12, no. 2, 011y 1976, p. 96.

T[lip nlctlrei',) or us.V les, C].Ofl.. ie .1ro gjv, n only

the conoentra L1on 'a IJ.Lu< for Hip rorjioi.. ' cmiconlltrt1h itJ O1i

ratio for ,oava in l'.(Y3 wi.e; 0. , foru avaIV;. i J.()'/7 !. t

0.433, oir V tirl ] yri.rcI u -ied. (i ven Lfil't ti, im!:lwr o !' farms fl1 . 1 x~o .l~1I, it t.h ; o l (1.o Crc :t ion] 81 i Ii l .,,y ,. t a ,Ias- .l'IJ 10,;(;l 11;, ",ind 'L it

tfie aver ,,e 1ji.:; doclied, ii would 1mfilyi lh,t t e avera:c u,e o f,r ini, e(;m cI 1 erce!-inti-i ,'o u ) d c. i redi approx ilila'tl, hne fiI i . l that.L11,'c1:i W;e tht), t,:i')e oif 29

farm area in each percentile category would remain

approximately constant and thus the concentration ratio

stays constant. This implies that the average size of the larger ten percent of farms on Java has declined, and. so has

the averag-e size of the smallest ten percent of farms. tt is on Sumatra that land distribution is becoming sign-ificantly

more equal amon Carmers; the concentration ratio fell there from .561 to .502.

The data for Java are certainly consistent with an

assumption of subdivision of farms with population -rcwth,

but clearly the subdivision is proceeding' more slovly than

the population is ,rowinrr. it would be difficult to say

how much of this is due to resistance to subdivision and

how much is due to simultaneous ard Counteractin, concentration

of holding-s.

A secono process which has been -.oin,, on is ,n increase

in the nuinhe" and prop ort ion of f'arins on ,ava which are

operated by their owners ,nd a decline in the number operated b! Lorir L aiid ow-,ner- Lenants. Land owners are apparently Pv.cL.'n, tl( iiulits and ci] tivatill;' te and tein­ sclves, or ,Iv i , t1 L, Liei.r c hi.idren1 to (2,4.1Aiv;,Le. hon land is 51 1hdivi dod iII '1het'i LatIco, I hlleIiwr; CII1t vate 1t themso.ve': 'th r toI,,L;-1L}',t,y Wiii L W:1:1 eOMui ]lnd for one 'aun Ily I,,I v1iv:, , j'Oi, 1.t,Il *1lidm 8,l,.to '"r t'il) fainll i..0ovoi.VluI' i. 1i2 , i'.1111 ; I'I.i 11 L, I v: L.1t1,

Ltheilloo IVv ). iyo I)*I " i1o I ...ii' nti1, i I h I to

SiO LtI eh a 8 I C 8: 1l8 (d L, o' dIc I III( itr l'i,,,IIiiIIIboe , o , I elI ttl1,5 30

and the increase in the numbers of owner-operated farms. Table 4 summarizes these changes in tenancy status between 1963 and 1973. Table 4 of Far=3 Tenancy Status. Javas Proportion 3965 byand 1973

1963 1973

Owner-operated farms as a % of total farm 59.0% 73.2% Owner-operated farms as a % of total area 55.3% 70.3% Tenant operated farms as a % of total farms 6.0% 2.0% Part-owner operated farms as a % of total farms 34.0% 23.6%

Sourcot Anne Booth and R.M. Sundrump "The 1973 AgrIulural Census," Hu nonca Economic Studies, 12, no. 2, ,9 ioJuya togyo, "Modornization Without Devolopment in Rural Java, p. 51 USAID/Indonesia Annex to Fiscal Year 1979 Annual liudiot Submission, p. 33.

The number of owner operavora hao increased by 29.3 percent from 1963 to 1973 (from 59 percont of the total to 73.2 porcont of a alightly largor total), while tho agricultural labor force increaod at about 10.l4 percent (from 1961 to 1971) and the total rural population at around 20 percent (slightly los than 2 porcont per year). Tonants wore thoroforo boin; ovictod while owners took over cultivation of thoir lands The tonants wocunmly booame landless laborers. it 31 is possible that owners evicted tenants and consolidated holdings from one owner-operated-and several -small-tenanted ­ holdings to one larger owner-operated holding. This would result in larger size holdings and may help to explain why the average size of holdirng fell so slowly and why the number of holdings grew do slowly In a poriod of such population pressure. On the other hand, eviction of tenants would be resented nnd unlikely for a landlord to do unless the land was being given to his own heirs to cultivate, in oithor case, it is clear th:at many tenants joined the ranks of the land-loss laborers. Weo cannot toll from these data whether or to what degree the conceontration of ownership or control was occurriLn,;, There are apparently very fow land sales in Java, and there is certainly very little information on land sales, Small landowners are r(luctant to oll their land, Osnce they do not want to move to a distant island where thoy could buy more land, and they probably do not know how eloe to invest the financial capita3o. TtrdIng, Io ovororowdod alroadyp with low profit rator Even a tiny amount of land offora some socurity, oven if it to only the oecurity of a continuoua relationship with a croditor. Creditors may well bt, more intoronted In takinp the aharo of Income to the land throuthlntiroot rato rather thnn throuRh owning the land, ainco If the oeroditor took ownorsihp ho would have to pay if iu11l ti, I nu Iax t11.l the n4l s) 1Lrnilvnu Coutn ofi chanliilg tho doot. As croditor, lie o:ih oxtruct the tiriuU 32

... through interest, the cheap labor of his debtor, and a low *paddy-p~rchbase priceof1 O vr therez 6__ -idhi6Aa the new middle class has been buying land, encouraged by the high inflation rates. Military officers are apparently buying land as well, often in villages where they have been assigned authority.17 The Agro-Economic Survey has frequently found cases of outsiders owning land in the villages surveyed, 18 Absentee ownership requires tenants. The number of tenants and of part-owners on Java has declined, but not disappeared. Apparently, some part-owners have been expanding the amount of land they control through renting in more land. Farmers in two villages in the Agro-Economic survey said that land gets sold, sometimes to outsiders, when the fields become too small to distribute among the heirs. Instead of subdivision, tho field will be sold and the sale price dividod.1 9 Parmors are also forced to oll in cases of crop failure. Tho Agro-Economic Survey found two neighboring villages on tho north coast of Java with very dJfferont oxperiocos. One had a strongp, dominating and respected village loader who did not permit any of the villaao land to be sold to outsiders. The other village lacked such strong loadership, and from 1960 to 1975, 75 percent of the village sawah had been cold to outsdorc, mootly from towns. Farmers had been forced to sell by crop failures (i to pact infontaiormo. Yhn lniid now ownd by outaiders wos alao workod by tenants from outaido the village. 33

Both of these cases were regarded as typical in their districts.20 Sales to outsiders have increased significantly since 1960, when the land reform law shifted landho].din , legally from communal status to individual o'nership in al villages. This shift (which had already taken place in many villages) has permitted land sales to outsiders and greater subdivision of farms.21 Land sales, while perhaps not great in number in any one year, are certainly having an impact on the tenure situation in some villages, especially by the increase in the num er of absentee owners.

The concentration of and is oinr. on in Cava more through the method of the increased concentration of leased land, rather than inrcreased corcentration of ownership.

Landowners who own or own plus ront enough land to enable them to use successfully the rcdeorr technaloey av;,ilable to them find their incomes increasin,-. '11, is encourages them to acquire more land. ecZ use of the impedirments to l.and purchase, they rent more land and cnn pay the h igher rents because they nre hle to use tKe new techtology succea"sfuly.

The l:andlord ina pleasa ed to re t to a ten; nt wh o will Nic hieve highe' yields. a.]jo(yo says tihat ownr-L: tcos yvee increaa-,ed their ;Iueirc to a 1 rice fUr income y increasing their firmi uerationp nine over a few y' .r. 'hlie omAiie!l

e nr ' ice ta n i ,g22 farmers roes ve i d ec ' .ni p ;hare oI i co I'rtro

T Iis, I'fiL'ri (loIr:!,'I :Iare' i' ,p(] zeI.'11 ) :;m:i l I:i t'Iililo " wtho

CtIIIIC),t f o'rd , ke a i ,o Ij,ivi I i iivo O i rl' i n n ew tc.chno ' . tl(',:.'I lil-i e in'f:rler:,viho (,:Il (I.) :10 Niiid ;J', t,11cro­ foz'e (' t ' I,oyC' Z l' t nirwllp, (. per; ll i S I IlV v i1;O,i o.f' 34

the Agro-Economic Survey, three farmers through long-term renting arrangements have come to control 100 hectares of sawah each.23 Sajogyo cites a case where the owner-lessees in the sample at least dcubled the land they were working from wet season 1968/69 to wet season 1970/71. For the most

part, they were able to rent land for a fixed rent.24 Data from the 1973 agricultural census support this picture as well, as reported in Table 5. While the small farms (below five hectares) were becoming less tenanted arid more owner­ operated between 1963 and 1973, the large farms (over five hectares) were becoming less owner-operated. Uwner-operated large farms were being s~lit up, primarily due to subdivision, and becoming smaller farns, while at the same time new large farms were leing formed 1,y owner-lessees.

Table 5 Percentage of Owner-operated Farms and Areas by Size, Indonesia: 1963 and 1973

Size % owner-operated farms % owner-operated farm area (ha.) 196" 1973 1.963 197j

0.1-0.5 63.8 74.4 61.7 73.4 0.5-0.75 60.1 72.8 59.0 72.6 0.75-1.0 58.8 72.6 58.6 72.5 1.0-2.0 64.3 74.6 64.1 74.1 2.0-3.0 7.5 78.0 70.2 74.2 3.0-41.0 74.2 78.8 73.9 78.5 4.0-5.0 77.9 78.7 77.6 78.4 5.0-10.0 83.4 81.7 H3.4 81.6 10.0-15.0I3.5 87.-i7.6 88. 15.0 o.,ver 9.3)3.1 7.4

~Th ~ ) .' e ' ! t'hI) A i,ocutItur i :,Y iN " ,d ::,),o);N'ii i1' '.,Ic .! I 8 1y l IWO ) , , . '*' 35

We now have evidence indicating the existence of four different processes going, on in rural Java, all of which are changing the control over '.and. First, population pressure is causing the subdivision of farms and a decline in their average size. Second, landowners a"'- evictJng tenants end farming their land themselves, often in anticipation of dividing the land among their heirs. Trd, the urban middle class is acquiring some lend in villages, as absentee owners. Fourth, successful rice far ers have taken to expanding their farm.n operations by renting in more land. Hence, the control of land is becoming more widely diffused by the first process and more narrowly concentrated by the second, third, and fourth processes. Those diefusit and concentrating procesoos are counteracting each other, ns indicated by the stable concen­ tration ratio of farm slze for Java@ 3. Other Assets: Fish Ponjo and Fishin. Hoeats Other typos of assets than land are owned by the relatively few in rural Java. Brackish water fish ponds along the coasts are productive and have the potential for a largo Increase in yields. They are very expensive to build or to rent. Aocording to Gillian flart, "the pond ownorn tre by tar tho most economically powerful group In the villoao. Moot of them also own large arean of nawah." The ponds aro rarely cold, and only the rolativoly wealthy would have the capital to be able to build ouch a pond. 25 An Lncreaso in f(lh y1oldo would roquiro un inoroutiv ii(,luhi ottloy, and thnrouro ln tooallo only for thou., with walth, crdit, and divorulf'od nuueitu to reduoo the riks., 36

- _The-fishing-industry is-very important-in_rural, Java...... Eight percent of the population of Indonesia in 1971 was involved directly in the culture of fish or in capture fishing. Most of these were artisanal fishermen or pond workers. The structure of the sea fishing industry has been changing, however, in 1951, only 110 of 80,410 boats were motorized. In 1960, there were 1456 out of 167,975. By 1973, 9070 out of 294,770 boats were motorized. The total catch increased as the fleet did, but the catch per boat has declined steadily, as has the catch per fisherman,2 6 as indicated in Table 6. Table 6 Fis) Catch Catch per boat Catch per fisherman

(tons per year) (tone per year)

194o0 4.0 1.0 1955 3..9 1967 2.6 .8

Sourco William L. Collier, htarjadi )ladikoosworo, arid Suwardi Saroplo, incovm, m n d Food Ses in Javanose Coastal Villans pp, 17 l1e The decline in the catch per boat hns not boon evenly ahared. The motorized boats have increasod their catchos, while the traditional boats have docreasad theirs. This I illustrated by the caso of the fresh shrimp catoho from 1968 to 1973, the exports of valuable fresh shrimp inoroased from 2102 tons to 28,787 tons. It was the modern ships, many of them so markedly.2'1 foroign owned, which ino'aed the oatoh 37

The minimal investment requi.red for a small sailboat has mndo it possille for poor workers to acquire a boat, with the resultin, exptinsion in the numbers of these boats.

The cSntch in thie waters in which tiese boats can sail has been shnred amoIur the ,row nn number of boats. At the same time, the motorized bonts have been introduced. These can fis} further at sen, hIt also have invaded the i , areas of tLho traditionl.l boats. Kthey ,an c,tch mere fish by trawl inllv, and a lso often damage the nets of the traditional boats. 2K 'Ihy are cutt in into the c'tcli of the trad.iti.onal boats, tIherefore.

':'he ')tori' ed boats , Lien, are catch in' an increasinF proportion o th e total Cil Cri tc h . I se bou ts are usually from poz't c t e,, not Co; L< vi I .a , The vi ]la/r fisher­ recase u modern Lont.2) men cannot ~li y el; tL ' cr( dLt to The fishinbg iet s lroa , n, modernized end urbanized, leavin, the rural .hermen wtb i,de in1i n catch per boat aid catch per mnni "d a 'joel, iniii, ]livel ihood, Collier, lia jid- Lad i ';'sworo, and Suwni Ga'uple ive cal led this a bre;alId,,v " shared p; v('r .' inI f oi ,,,. 'ih, e'fec, Ls incre:12: ;crncentryt' M i o ,iie I ncome 'rum fisi r'., w ith r] sin,' iVne(!s ox' rmudl.n waLt owners, and fal in:, incomes for taiN tLi l i',t ,w ,r'i.

). (11it': I'.n . e(,,:;:a to V~rir m111,1to

~i)t 1I"., 1Stn,, ro'Wlt,r d ot1' 1,ind corlcentrated, but the

SCOti,i' i 11 i'll ' ,, It,- 1,1'" L' ' fin ti r:r'L* Vicd ' I ll olri I ' 38

hands of the "larger" farmers, that is those who control one hectare or more or sawah. Many of these are owner­ 30 lessees, who own some land and lease some more. The new rice technology requires a substantial increase in purchased inputs: seeds, fertilizer, often water and pesticides. The benefits of the increased yields have gone to farmers with working capital, credit, and enough good land to spread the increased risks. Penny and Singarimbun, among others, report that the relatively cheap government credit has been most easily obtained by those operating a minimum of 0.3 hectare of sawah and that large farmers consistently use 3 1 more fertilizer per hectare than others. Duewel reports that credit from government-organized village cooperative groups (known as IBUUD's), gets only to households with a demonstrable repayment capacity, a policy which clearly with favors the larger farmers.32 The marginal farmers, those under 0.5 hectare of sawah have been generally unable to use the new technology due to its higher expense and risk.

The Agro-Economic S3urvey found that larger paddy farmers did adopt the new hi,,h yieldirn, v -lities (Oknown as fiYVs ) more than smTi]ller paddy f'armers, and they also are most likely to -row several other varieties in order to spread their risks. 33 'Nie lYV; depend more on favorable w(.ither and water control th. n tLhe Iocal v .irieties, partly du (2 to

theIr shorter ;,roV I, Sa-on. Therefore, in jreas aind orn

farms weore cond it ojs ,ire ,;r;]eu] art * Jvorni)le,'/ the inYV:n

have -Shown a consistently hliher hen fit, wh ile in average ' •II.11I, , ,1'.) , kw+:+,I C I] w :. / ...... I ..1+,;. , .. 1' ....tl 1 t , ,,,', 39

greater. While yields may be somewhat higher in the average paddy, costs to the farmer are nso higher. hence benefits to -rowinar IiYVs po to those farers who can'uNv the inputs, '-icludi n, wnter, at tile ri-rht t.nme and in the right quanti t,es. These are the lar,,er' farmers in villa.'oes which have reli able irripation systems and reli.able all adequate delivery syst ns, fur the purchajsed .nputs. .n case the weatiaer dama,,es t~we crop, the lar~er farmer will also have had enowh land t) plant a silnrlficant amount of other wrieties and is protocted againt too Preat a loss. A very row. h estimate lased on the A,-fro-Econurnic Survey is that, in the densely popul a;ed areas (ares's w1.th the ibest irri{ration I'rcilitile ), on ',25 percent (if te vi ]la.,ers have suff ient naddy 1and ;o benefit from the iYVs. '

,'armcr. ''cotmi't(,five Iw, l'r 1,een SssLejiJ OJs of tI.e ILCW var ietier rind tLe n .wmeti ods urIrj ed on them*. 'Th e ].ar; or farmers haive Te soc11 ncco.... to the officiala necessary to spread or e c:,lpe ttre r.1a ls of indertu.hin, t.e ]ess 1o ln.ar experimen'. ;n time new crot, tch:no].o,-y. A ar ;e farmerw, for exa pile,, tyi' il['ill a oll i.,ati o to I,rtci lO! in m,,e new m.-ih, o wh}]hw !,muoo o"o . c . hi... t,' o the 1rind( 1w Zu rs;tem thar doIn ' It. on the lanC .r'mur f'amn hi mu LI'.

- amnile 'r :w,, al'pax'ently ri'eai ly I! IrrdtLed Iby their lack o I' 1(oi1 ,,tp I t~t all ch,"aL) O("I lIt. I;.Veti wI lh credit p.,r r ,t 'm''' I'l lt. , y'i':,'a'y ,v l':,lltl,I 1 ,w ;I1)] I. ',() I" ril tIYVB. '.l'iy mty ;.u' I l;'r'k'.,a' I'tmy'm(a':; I'I(1' tlE' 'I',.11. . thl 'y 4O

cannot get from formil sources, and become debt-laborers in

return. ']hey work off part or all of the debt with labor

for the creditor at a wage well below the going wage, which

implies an interest rate well above the government's interest

rates. The laborer will be on call twenty-four hours a day

to his creditor, and may nct be avail.able to work his own

land when it is essentil, lie must p].Ent crops, then, whiLch

can tolerate a measure of nelect, and thus he could not plant the ,IV, even if he couLd get the cash to,,ether. 3 6

Franke reports that the small, farmer debt-laborer is oft(n

reluctatt to pl :m U IYVsbecause tLhis would he perceived by

the crediLur as an attempt to get out of a dependent puosLion.

The credi tur would t en refuse any furtiher loans. Tie poor famili, cculd not risi: losinq its access to such loans, and therefore cannot attempt to IpL.nt hYVs. 3V

The beneits of the more productive rice tec1i1nol,,,,y will oh v1 ous.'I.. be c onecen tir Led in the li nds of thos e with more rice land, h LU in additi on the social factors of the av'i labilIty of workin,' capital :ind tw Inechtan i.m; 11mcavoid rl"I;k have further directod the heinOl, L'. dlle Lo I!V:; Lk w I ]lrer farmers.,

'j* ''I'll( Co ell nta.';a o O f iIlclue o1'm-JI' I'Jl iYII±l!rL

The 'o'It.( :11 0 ovei'ty ill 1.'J ll ;l tVI iiv(iVOSI Ill

-11-)l rIt, I ( rc I i VI iI ", : t,LII((:. r '(l' (11'I S ()IlI tII I 1 }oII o Id .

o ah1r ' Ihie hioll.0 lld(1:; Wh%. Iio0 i ' ()Wl Ii l' I'(eylt' ll1ch 1 1d or c iLj) , 1 il;m n who C.i 1110 , t'I i oiO('l 'l Iiiii]ip | it Wi lh t1,.o

]i(nd ;1 1 5 ) t 1"1'1,: 1 Wi' 0,U, ,'::.* 'I'i,,'VTiko, 1 lolliil It eY(I, 11CC

t .I'; I. ail'I ol i( t,. 1 ' thoy W ,'r Vo'r',y Ii;, 'd :Illi( 1 i ' 41

with the minimal capita] a their own disposal, at very low

productivity. The amount of this kind of work has been incrcasiny, as population g:rows faster than the employment in agrciculture and rur! ]industry, and as rural institutions change to restrict the sharin, of what a0rc]tural employ­ ment there is. With the increase in namber of those worhin" on their own without c n.i al, in a rurl., "I nformal" sector, the already low productivity falls even further. Thus, income from employment is a ctuall, becomKC, mcre concentrated; the number of those fortunat enourh to find employment with the accumulatin; rural wealth are not growin- as fast P'i the population. hLie productivity and income of those in the informa] sector, work.inr almost without capita], lls as more woonlr crowd in.

The (ioneral Lior i tii L*.on

Eim lo:,.,reit ,n a r cii.ture Uas not I ! en able to alsorb the iincr o:i;in 1. il( r force. Thile annual -rowth rTate of the lab r force in ,ior i , ,', incresed .ri'om V.5 lpercent in

1 197] L( P, ![o'in(' nt 1 O , isI, , L ( )'. r te lpa ,. 1 ]'I tI]) (ir 0if 1 pern:ois oVer tu ln' /'nvs :.{(im W;i: lnem''.cr ih.his is wol abovo the popuLv Kt.:unI'rowLIh Meto o2.forof!.0 (I l'Qell , Indonusia, or 1 *uvcpnL F'oira 1. Iidonieo&. LV. '(1),O0)U pepil)o ' ' join the ,:vp'ro 1O,l r force (nc ,,l, ',1,ii" t',' I i In:I Jr force in n'riculture is sIhrinkin,. 1'A ,0 ii )dl(li)rP,, ; I: ,, 'Jvy'o Ii . ptrecr 1tIL ,() of

Iibor i ,ri ,,o t r in1 1'I nn Q,.01.? p rc,,Il. in 1,7[q, it W P lt. i ,L , :0,I,/ ,(U. fl Pe 1,i(WIIt,-I l'/ q 1L, t ,1' i Ant, ti~''Cu] ni: wel l, V O1(L; nrP( oa:mv l(, hi: c 'lbu t nhiow 'tih 42

same trend: 69 percent in 1971 and 62 percent in 1977.

This latter involves an absolute fall from 30.5 million

workers to 28 million workers. The relatively slow growth in agricultural output can partially explain this. From

1965 to 1973, the share of acriculture, fishing, and forestry

in GHP decreased by 20 percent, with the rreatest decline

in traditional primary exports and non-rice food crops.

The labor-intensive sec ors expanded least, except for rice

production which declind in labor inte-isity as it expanded.39

it is h!7hl.y unlik]y that this decline in the a,ricoltural

labor force is due to I.,bor bein; attracted to hbetter paid

labor. g'ather, it Is mre likely that Iahor i ; bein,­ pushed out oK agriculture to less remunerative work else­ where. White states the various kinds of evidence which point

to the latter explanation. While the percent,,e of thu labor force iiAcreased in hoth services and manuufacutri a', it increased in the worse pa id service sector conosiderably more than in the better pa id manofac Luxn o sector. Yho case studies from th l]]Y0s show a ]5e that the ma .oritV o' non­ arr icul turn], roural 1am;ihv 'oPtoni Li s ;ivni lab]e W~ tar land­ loss offer lI e lVwr1 )or as than any L ind of" ;i,.ric ,oIlr.:Al work, 'Is(oIner, Itr'll t, )v am I, l'er. i,'(a 1 ;1"1" ] t"111rl walge levo I.; fiive Itonc Lrut Ledl wji thou L I s tron'' Lrend b'ver fij years QW;O to 19TV7. Thiis .a.'''st; tMOt t wqy level:; ixq, Iavi a .f'1oor m; L tAii ed by :;w inl cooLsto(, a ,idiov h:; I,4",1 1"0 upward forceo o a :we y r:roii demand f' :;tihor. 1ltw flioer­ more, every, vllne S to( i ed in the canu Mdtod Usha xpe' oncud 413 at least some technolog cal changos which reduced labor demand. Those changes %,ill be diucusasd below. When asked in a survey ot' six villtges, farmers oid it was easy to recruit labor, and more ].aborers reported increasing difficulty in finding work than increcsed ease in four out of 4 six villagos . 0 For those landless and near-landless soeking work in rural lava, work in rico ngriculture is most desirable but is also scarce. Table 7 demonstrates this situation in Sriharjo, a village near Yogyakarta, whore there is nt enough work per person In igriculture for anyone, and those who are employed most get most of their work outside of agriculture. Those who have the fewest days of labor Aot most of thelr work in agriculture, that is, they aro so unemployed because they cannot get extra non-agricultural work. The non-agricultural work Is tf tw) types, low status, poorly paid jobs such os duck-terding, tile making, bicycle repair, common labor, market off lcoial, portorint, and the bettor paid Jobs with highor atwtus, ouch as clerk, factory laborer, telephone operator, tonchor, official.l' The latter Jobs are obviously more dosirablo but nre n,)t usually available to the landless. 44

Table 7

Employment 2f enSrihar~iot in the tin1969-1970 Hice Season of 180 Days,

Rice Coconut Non-agricultural Quintlos* days sugar days days Median

1 20 30 95 14. 2 21 4.1 35 98 3 14. 50 13 77 4, 13 32 65 5 11 3 1 15 Wholo Sample 18 33 .26 78

*To establish the quintilesp the men were ranked by the total number of days worked. Sources D.li. Penny and M. Singarimbun, "Population and Poverty In Rural Java Some Economic Arithmetic from Sriharjo," p. 28.

Apparently, ownerohip of some lnnd givoo accooo to more labor both on rice land and off the farm. Penny and Singarimbun report the avorag.o amount of employment in rico that a landless man was able to pot was 14. days out of 180 in 1969-70.42 Tho avorago feor all men was 1 days. Obvlouoly, those who own moro land can get morn work on thoir own land. They also apparently Cot moro work off tho farm. As chown in Table 8, thoo men who oporatn more cawah and who aloo therefore havo more hours of labor in rico, also have a highor pnrcontago or days in non-angrioultural work, which implio that they hnvo mniy inoro work days overall than i;hoao oporating le or no owrnh. Thic is aloo indloatod In T'ablo 7 which ntiowu that thos n who tinvo toe orait work In rHco, 45

Table 8 Poroentso of Work In Agrioulturo nnd Non-azrioulture, Main Hio Soaaon, 180 Dayse Srf.har.1o, 1962-1270

Area of oauwah RiJco Coconut operated In % of loujr % of non-acriciilturo hectares all work all work %of tll work

0 16 40 44, 0.20 and loco 26 !0 24­ 0.21 and above 22 28 50 whole sample 22 42 36

Source. D.11. Penny ard It.Singarimbun, Population nnd Poverty In H,,rnl ,avni Soma Boonutic Arithmetic from Sriharjo," p. 26.

(i.o., thoon who operate mora oawah), also Cot s1pgnificuntly more days of work out of agricultra. Vho non-ea ricultural work horo Is p idl work, that iw vork with comoona oleo'a oapltal, not own-necount, non-agriculturnl2 work. Thioco men with vary few days of Inbots an reportod W TbloaI? nre Irobnbly workinr,on their own during tho rout of the season. Sajoe,,o alirooo that agrJoultural lnbor in vary important to a hoocohold buouno of Ito rnlotivoly htLh return. hn finds that It in coarce, Wit much loan so thnn In Brilmr,o. An Agro-EoonomIc Survey of aix villoon In 19V1 found that the aGrlcultural lnbororo hnd nn atornt-o of 131, deoa of work. In arricultUro In tho Contrn.a Javanouo villogoo, 142 dnyu of work In a-riculturo In the Eaot Jnvanoue villaon, nond 150 dayn of work In opricolturo In the Wout ,Invanono vil3n eo. Thin study found thut ktnhp won vary Imprtunt in getting the farm labor jobs; 50 to 85 percent of farm laborers were kin to their employer and usually had a long­ term labor relationship withhim. Work in nriculture and fisheries provides the major part of the livelihood and the beat returns to labor for most rural Javanese. The Ag:.o-Eoonomic Survey of 20 villages found that 90.5 percent of the West Javanese villagers, 78.5 percent of the Central tavaneae, and 84.6 percent of the East Javanese earned tho main part of their income from farming or farm labor.4 4 Howevert moat of these households must rely on non-farm incomo for an essential supplement, and many still earn an amount below the Indonesian "povirty level" of an equivalent of 240 kilos of rice per person per year. wany own no property to speak cf or else very little. In three no.'th coastal villages of Java, 42 percent, 60 percent sind 46 percent owned no asseto to work with at all In 1974.45 Activities which require no or little land or capital give lower returns than those which require some capital. Thus, a family without asnts and adequate wage lnbor will have to undertake such low-return activities as net-weaving, making coconut-sugar from sap, collocting wild food, fishing in public waters, gathorine wood, preparing food for gale, and onmll-soalo trading. The prevalence of this kind of work Lo very difficult to ostimato, in torms of the number of people who work In this way, or the percentage of their working time which they i47

spend on this kind of work. Tze BEKNAS survey of labor utilization bf 1977 lib ihformative a.bou~t "a great deail, but it does not categorize self-employed labor by how much

capital or land it has to work with or by its rate of return.

It also defines a person's occupation by the predominant working activity of the week. Thus, it is impossible to

determine how many people undertake low return, almost­

assetless work on their own accowLt or to determine what

percentage o their work this represents. The LEKNAS

information does tell us, howovcr, that the proportion of

women working in agriculture increases from the slack to the

peak agriculture season while the proportion of men in

agriculture decreases somewhat. both non and women engage in trade more during the peak season, perhaps because there

is more to trade and incomes are ligher. Women switch out

of jobs as employees in manufacturing and services during the

peak season. Probably much of this is low return, own-account work. Instead, they become unpaid family labor, both men

and women switch out of own-account work to t slight dogroe, 4 6 and men switch into employor and employee status.

Those findinpa trom the L M(AS survey suggest several conclusionsi

that agricultural omploymeit is preferred rnd will bo sought after whonover available; that own-account work gonorally hoe a low rnto of ruturn; and that laborers chango jobs frequently, evon seasonally, to maximize the roturnn

to thoir own labor. Gillian Hart's study of one villape in Central Java

shows, as seen in Table 9, that landless households qnder­

take considernbly more wage labor and low-return search activities than landed families, who wo "k more at the relatively high return, family agricu!tural labor. Te lrInd1ess families also spend a smallcr proportion of their work time

in househuld work, which suggests both that they %re poorer and need to follow more income-earninr activities and that they have a higher purti c.pation rate (for the some reason).

Ln this cnse, the of '-peak season wage li bur is Lrn',ely cn nearby snur pla.n ,at on, and mills. 'These dat upport the nssertion that the landless cannot find adequaote wa;,.e labor, and must supplement it by very low productivity work on their own i.n search activities, trade, and crafts. ThYbis work has lower returns than agricultural labor, since families with adequnte bind undertake a.mrnst none of it. The LlKiNAS survey was an attempt -to measire the under­ uti].ization on the . LMor force, in three cnu, ,,orles, un­ employment, low hours of work, and low productivi ty work, defined by low irceimtf rol'm'iilwo'k. In the r 'u' l ator force, uIompl.om'I nt wa; 'ire (W0, percent for wen, 1. 1 jw,'rC.,ut f'ur women) ,ind coro ied lxr; e.ly to f" Lir'ly well , duc;ited pm,l,e with other sup)or't. Sl /1,tly over Oii,- 'i 11L, of loth mbin nd women in the ri'I labor' Io'rce workcd 1.v,:;- l t, LJ i 'L,:/-I'ive hours ind winLed urye work. CleaIr'ly, orripI doyme1t1, ., :I luxury; it i s a I 50 op s ii, e t, ,.index-,em l1 ume I by/ lw hours of' wur' ";s 1 0n soPI Lofii ,, o l, ,iXV., 49

Table 9

.Percentaze of -.ousehold J'ImoIn 4ncomo Earnin Activities and flousehold Work bv Strata in a davanese Villago

Category As Strata I Stratait Strata III December 0.5+ ha. 0.15-0.5 ha. below 0.15 (peak) eawah sswah ha. cawah

1. Family ag. 4a.5% 17.5% 3,3% labor 2. Wage labor 11.2 42.4 65.7 3. Search 1.1 11.9 9.6 activities 4. Household 31.3 1.3 19.2 work 5. Total hours/ 510.7 586.1 537.03 month amm -l Im mm ml m -~lmm 1m Im

Category lit March (slack) 1. Family ag. 52.,4% 17.5% 5.3% labor 2. Waco labor 3.7 26.0 40.0 3. Search 304 21.3 31.0 activitieo 4. Hounohold 33.8 25.3 22.0 work 5. Total hours/ 493,1 4,)9.0 month

Sources John W. Duowol, "ooiu-hoonomio Analyala of the Provinioil Are Dovelopmont Proorum (Procrum IsomiAncunon Dnerah - PPL)) ror Contrnl .Iava, p. 8 0# 50

Underutilization of labor by low productivity is defined

in two ways by the LKNAS study. income adeeante to buy

240 kilos oV rice per person per year is taken as a minimum

poverty lne. As shown in Table 10, 29.V percent of the men

and 4P9.,7 pre cent, of the women earn an income helow the poverty

line for one prsonn. Ano ther 37 .5 percent o men And 26.14

percent oK woe'ner an ifncome indequate to support the

averare size household at tre poverty level. The : rst

group ire tOwn to be cle:rly underemployed due to low

productivity. II everyone in the second ,roup is also

Table 10

Underutilization of the Rural Labor Force, Java

Mer Women

A. Adeq, n,., , ( pl,Ky d 9.3 3.3

H. rn,;I, Ily(ned, seo k i nr, 2.2 1.1 wo1' ,

C. 35 hou:; o work, 21.3 20.5 wn"iLt 0' If, '-i(

D. low ,1:10M, or 29.7 48.7 }ndl iv i 'jlt ,

L Low i I l,rfl,. 37.5 26.4

i:'n ~()*J]rCi,e r , :,, .]"I V. . * I.oi r, Anid Dal i yo, Ltahor "orc, --?ind i PC,1'n 1iW8tion in l Ilec tod Arens,, .;:iv:1 I i)::.ill.:: : ' [ ' lf lt l .J'VP.'1 \'o I ., ). 105. counted as underemployed, then only 9.3 percent of the rural male labor force and 3.3 percent of the rural female labor force is adequately employed. This is more an illustration

of the general poverty of rural Java than an illustration of the class divisions being generated by the style of development going on there. People who are unemployed or underemployed by virtue of low hours are people who still have suffic.ent support to be able to afford not working. Those with incomes too low to support an overage household but above the poverty line for one person will be above the poverty line if they have an adequate number of workers in their household, each earning more than enough for cne person. Thus, the under­ employed by virtue of low productivity will include all of those with an income too low for one person, and some of them with an income too low for household support, thnt Is group D and part of group E in Table 10. This is between

29.7 and 67.4 percent of the rural male labor torce and between 48.y and 75.1 percent of the rural. female labor force. Undoubtedly much of the income those people earn is from their own-account work with very little capital and land. Two conclusions carn be readily drawn from tnso results, first, a very large proportion of the rural labor force earns nn income bolow the poverty linol second, they remain in poverty duo to lack of jobs or lack of cnpital.

These nra tho bicli.c chnrvnctorintico of tho lnndloss. 52

6. Labor Use and New Technology

While there is no question that wages for agricultural and processing work are low, they nevertheless seem to be higher than tie return from alternatives. For example, a woman used to be able to support herself by the work of hand­ pounding rice, since this work lasted year round and apparently paid adequately. Unfortunately, the employment in agriculture and processing on Java is growing only slowly if at all. The reasons fcr this are several: agricultural development efforts on Jiava have been devoted to new rice technolo,y, and while the dYVs have increased labor use in other countries, the labor effects on uava Lave been very slight. Other technical innovations are actually reducing labor use as they spread, such as rice mills, tractors, and rotary weeders.

The effect of the new rice technology on labor use in

Java has been studied. T]o Agro-Economic Survey of twenty villages with favorable conditions found that .n wet season

1969/70, the lncrease -in Treharvest labor use w th ilYVs was about f.i ti man days per hioctare, from about 233 to 2 4...<.

F'or all. variot. r the hired labor shi ,re had been incr.a;in, steadily !rom tie 1.90:;,/in 1 , however, the Aro-heonomic

Survey rotund no ,]. iff'o)iice at all between t L].orireliarvos per hectare ;'or locaJ ;:,d IihYVs overal.. An 'incroise ri .abhor use in Weotl ], va was; of 'SotL by declire i.n Central id Eu;t

Java . A ,)t h01' ;tu b(lyh/ I,,oU lt(,orery .iio wioi, :;siuoIwed I( (i l''eronce. j.ndoed, Co].i or Otato a, Lhre hau been a re iii Live ;id i b0,;o1uto 53

decline in the share of labor in rice production, since any slight increase in labor demand due to the increase in crops per year has been offset by new labor-replacing methods in plowing, weeding, harvesting and hulling rice.49 The new rice technology has created more jobs elsewhere in Asia due to the greater care required in nursing along the crop. In Java, however, the care of the crop was already so great that very little if any increase is required or worthwhile.50 The HYVs therefore have created very little net addition,6l employment in rice agriculture. Several technical innovations have been introduced over the last decade which hove in fact displaced labor. For the lost decade, at least, the larter rice farmers in certain areas of Java have been using power tillers, or padi tractors, instead of the plow and hoe. Large rice farmers also replace much of the labor used in land preparation. Estimates of labor displacement per tiller range from 128 days to 229 days of labor displaced if man and korbau are replaced, arid from 600 to 688 dayu of labor it only men aro replaced. A tiller In only profitable for a farmer with several hectares of sawah, but it is quite possible that contractors who undertnke soll preparation may adopt thom. 51 This probably dopends on the level of the direct and in­ diroot subsidies from the govornment on tillers. Rotary woodors are now uved in pluce of hand weeding in several p.acon. Eight man-dqyo of woodIna with n rotnry woodor rnplnoca 20 wefomn-danVs of handwood." USA1DMAID 54

estimates that the demnnd for labor for weeding has been reduced by over f'ifty percent. 5 3

Sickles have been widely introduced to replace the traditional srnmal knife, the an)-ant, in harvestin.. Sickles are not a new invention, hut are rather a technicni innovation permitted by institutional change, which will be discussed further below. Une estimnte ol the decline in labor demand at the harvest is from 200 days of work per

hectare with the ani-ani to 75 days per hectare with the sickle. Mechanical hullers or smnal rice mills have spread

throuphout Java very q"Ickly, and Collier estimated in about 1'( tha-t much m(,re than fifty percent of the total harvest was then m lie.] mechanically on ava. An

7, "matd,jO hand hlllers were dil,aced n

one sesu, thou hi the, were not full-time laborers,* AD

estima tes th. one sITall r1 ce mill elimin.0Les over 100,000

days of wor!k !o1r y,,e:ir, 5 k 6,1n reason for the speedy ado(ption of mechanical hillin is that small rice mills pive a hi,,,her return tu the ]andownier thani hatvIn, hi ; rice pounded 1b.v hand,

62 to 65 perc, it r th ier .,in 5(,6 reenL,, a ccuor'nra, to

Sajo.,yo . Thlier o h .i,'Iz' oIs085o l ,:i iof the h .d

1I011I il P1 W'''$', ' 11M niTm I 'lm 0tiTm 1,'m,.i:. Thu , ttle'eu hn Imen v t," ' I mi'ln, (ecl ine in em)l] ny/,onr I : (I andshr.t of incormc to tlhe hond, o' the :rnp owners 01(1 the cice m il. owners, 55

7. Institutional Chanees- Restricting 'i;he Sharing of Agricultural Work Employment in agriculture and processing has grown only slowly, or even declined in absolute terms, due to various technical innovations, Una response to the increasing scarcity of agricultural employment relative to the increase In the rural labor force has been institutional change to restrict the sharing of agricultural work, to keep the work in the hands of a restricted group of relatives and friends. This is just the opposite of the traditional custom oi insuring every village member access to labor and a share of the harvest. This turnabout in customs is apparently due to a partial breaking up of village solidarity from

the extremity of populatior pressure and the substitution of the profi.t-motive for village obligation and traditional prestige. The increasingly widoepread replacement of the bawon harvesting system by the tobasan oystern is one instance of the restriction of access to agricultural jobs. The bawon system allowed everyone who showed up (inthe harvest day to participate in cutting the hrvosc;, each with the ani-ani knife. Each harvester would bundlo tho rice stalks she 1ind cut In the Cield, and then carry -:hom to the landowner's house. Un the wHy she would solout the largest 1.undles. The

landowner's wife would then count the bundles, and award each harvoeter her share rtngrng :'rtn ono-junrtot, to al low as one-twolfth of what ohn hod ou', depandin, on her relation­ ship to thea ILndownr'a fardly, 'ho alonre nwnrdod to the 56

harvester would consist of the larger bundles which she had selected, so the share would actually be slightly hiP[iier tqian

the formal share. The harvest was usually done by women and

girls. After the harvest was finished, rleariers Could enter

the field -to find the panicles left, as .it was easy t- mi-ss

some when cuttiiy.- with the :oni-ani. Tin baw or sh:ares pr id to the harvcesters depend on the

amount of -.nwah the family of tlhe }-irvosLer owns rid vwetier

she cai offer harvestirV, crnploynent to nor "mpior.

Women Crom liousehAds with over one-half 1,ectare o,' sawa h

tended to harvest only on tile land of kinsmen ;ind nei;'hhors,

and received up to a one-cluarter share of their bundles.

in White and Stler's study in one Central -Java village, they

worked and averare of eloven days hnrvestin,, ind receved

12.2 kilos of i)addy per dny. Women from households wltl ]ess

than one-}inlf hect,ire .eceived one-sixth to one-ei g-t i shares on -he plots of househlds to whom they couMd offer iharvesting

opportunities, and lower shares from others. Women 'rom

households witil no sawali m rt ; ,;eL Cer-s xl;h to orle-i, li shares

from n]i,-hh )o-V,, one-tenti :;.Inres from vil]ope res,! denLs, and one-tw(cW'1;l siares from work in ollhor vi]lap,es. tun

OvcVO: , Th w whiw ,l ,;10i'l(,d (olly 2 kI ; f01'

paddy per day, a11uuAt ie-fifthL of the amount per

da,, the wen. Lliie r women o,'irned, arid worked at larvest:ini, , i ! 4.14 day, a

As populat.ion s increa.seodti on Jva, more -nd inore, people

have turned up 'to h rv!';t every farmer' a fild, Ii cludinf; 1arl, e 57

numbers of people from outside the village to whom the farmer does not feel obliration but whom lie cannot turn away. The large nnmbers increase the amount of grain trampled under­ foot. Those who cannot fit in the field will follow behind gleanin at the same time the laborers are harvesting. The harvesters tend to leave more behind for t.e leaners, who may he relatives.59 Tihe hawon system then has a]lowed increasin ' losses. in this context, the tebasan system has been spreading. Under the tebasan system, the farmer sells his crop in the field just before the harvest to a middleman or penebas, who is usiurl.y i landowner fron the same or a neigh hcr iag village. ALUG penebns will bring his own workers to harvest the field and prevent others from joinin V them. Since it is not his Ialad, ihe is ine' nc oh] iration to allow anyone to join the harvest. Since the workers are fewer, each one harvests more rice. The share paid hns been redn:cedi to one­ eleventh, or one-si xteentih, or even one-twenty-second, ut each

harvester nrrns more in iaL:]hsuta aniots*a 'mt'eT Who'[ costs

have boIoll reiduced "I." 1iltiCi ;: f i't;.y percent dule to the

smaller shares. * 1kiLt; ,te lOndowner, th ( peneiiaid the harvesters Pi 1,n, n wi i IeVose who ro prevented from

joinin, thoIiharvent lose.

ihe t ,'ri :;y. torl ha' also o|coLralr od the repliaceient f

tho [n i -an1i I., I" e ;;IcI;le. ToIhe ani-an'i rem:]l.,to l I n lower haqrves,, in a (] Inciil, )!aIi(ci] , thl.- ,;prcadini, thI. j oi anon,- for" worl:or:,; .ind I .o;1vin,', somelc1 f'or th ) 1'eanler , Tho 58 penebas is not under an obligation to allow everyone to join the harvest or to leave rice for the gleaners, so he can insist on the use of the sickle, which makes the work faster and leaves no uncut stalks behind. The revenn'e o, the Ace qoddess, who is reputed to be oFFended by the use of the sickle, is no Ousiness of the p onebas eitLer, since he des not own the land. The land owner can defend himself with the rico goddess by sayinr that he was not respons i le for the tvrvest me th'od. The introduction of the PYVs has also encoura ed the one of the sick]e, since the oni-nn causes shatter .n, o the shorter, thicker-stemmed iAYVs. The adv!sable use o the sickle to harvest hYVs has prok1ably acted as an incentive to plant VYVs since there in then a (i1 good excuse for al owl %tbasan harve t. 'i'hie nimtker of the decrease in hrtrvostin,'r jobs is unknown, but tWe tcLasan system usually uses; loon thin uHP hundr'ed Invosaters pox' haphapp, whIch in q1te a Lit less thn halt of the people who would Lve harvested nder the Wavion system.62 jThe effect then is to restrict the harvestin, .n(5ployrment to i .inal.r e umhet' "V workers. ''he.o f'or tuil te aorkers, are pro I,h re I ted to or noiphor.s f' the pene has or el se :from othe r ]loinOWnlOr's Aml]iie so I;Khe, con offer harvest jobs to the family o the penn 45.

Anot.,ho mo'thod of' vt:;t' .lA!t. the (1Ip)l oym.onLt In t,1 harvest

Is tht lruta'r -nmdiok syste. . It i'

"1lu)I. 1l I lot If' 1:I1u d 1,( t i :;s ' Wl ti;hv(' Wvi Ikko ()11 I f t r"I;l ­

l)"1±Iit, I i, :fInl W-(d I o(11)i 1ofio (1() t • h" itl'1 wiIha 8'1Ui ll 11 hoio i gsli.; 59 can use this as n way of restricting:, tho number of harvest workers without switching to the tebasan system. The workers will be paid from one-fifth to one-tenth of the harvest as payment for both their preharvesot and harvest work. eThoy are usually women and are rolatod to or neighbors oV' the landowner. 63 On a larger farm, tho field may be divided up into specific blocks, about thirteen to fifteen por hectare. A worker is ,,1ven the right to transplant, weed, and hrirvest a specific block in the f.!old, and will receive a ono-.Ai th share, according to Collier. The worker also applias terti­ lizers, sprays, and guardu the irriautlon water. This system is used by a rroup of farmers to keep the harvest on all their farms shared among the farmers and their relatives.

Farmers exchange gepuk labor rights with each other. 64 11huG, the access to employment and the harvest is restricted to those who have land and their close relatives and friends. Contract labor groups have been formed to do the work of lnnd proparation. unly tho better off laborers can Vorm such a group because they need access to a korbau. Tihoy prepare the ;1eld and p'ot paid in paddy at the harveut, four to fIva months later. Thus, only those who can at'ord to wait for their pay can join, but the wa;e Is h|1,hor than for non-contract labor and the job is assured i'or ono month. The farmer may off or the contract laborers the right to sharecrop his fioLd in the dry season (when thore is iroater risk of crop failuro if the Irriation facilltion are poor) ns an Incontive :'or thom to carry out the so0l 60

preparation work with delayed pay. This constitutes another institution which restricts work to a slightly privileLed 65 groups those who can afford to join the contract labor :roup. Previously, it was shown that those who own or control o.f land havo more days of employment both on rice land and the farm than the landless. This can be explained by the above examples of methods of restricting employment in agriculture. Ownership of land, even in small amounts, on gives the land owner the opportunity to confer favors others, by offerine jobs. The favors aro disproportionately favors. conferred on thoso who can reciprocate with important employ­ These may be similar farm jobs or even good off-farm ment.

8. Declinin- Returns to Arlcult.tral Lnbor Rostrictin'- the work on the land to those who alreidy rolative control land !a only onn response to the increasina the scarcity of land and abundance of labor. A decline in returns to hired or tenant labor seems to be joinb; on as well, Tenancy, for example, seems to be shiftinj prof,,ressivoly one­ over a lone period from mare, where the tenant receives whore half the crop ond pays for all the inputs, to mertolu for nIl the ten.nt receives one-third of the crop nnd pays the Inputs and to mrapat, whore the tonant takes ono-qunrtor r of the crop and puts in only his own lainir, Thnre aro vnn report of lower o, Sometimes an illeal romo 1 mnuch like a briA( pnymont to tho landlord is required, r . . 61

. Maro tenancy is.now rare (although the only legal form acco.Lding to the Land Roform Act of 1.960) and found only a-ong close relatives or with an absentee landlord. 1ixed rent arrangements, rs opposed to sharecropping, usually requires the po1iyment of the rent in advance, which increases the r.lsk to the cultivator. it is often undertaken ty farmers who own some land and wish to farm more, it has apparently expanded with the UYVs where conditions are favorable. 68 The bawon sharod hnve declined from one-quartor to one­ eighth and than to one-twelfth shares in -this century as sharecropping, shares have fallen and aromo payments to the landlord have boon introduced.69 The adoption of the woJlhing scale or volume measure has also reduced tho payment to bawon harvesters, since they are not able to seloct the laret rico bundles for their share. Instead, the amount each one has harvested is weighed and she is paid no more than her spocifiod shnro.' 0 A ponobso pays a lower rato por unit of work than the landowner under the bawon system, although each harvester has more work and thus earns ,oro. Sajoe,yo reports an ostimato of 1.8 kilou of milled rice equivnlont for aces than an hour of bawon work, nnd 1.3 kiloo of milled PicC time." 1 equivalant paid by the tobasan for an oquivalont Sinaga and Collior report that the actual, real wagoe

declinod oulbtantnlnly In terms of how much rico it could buy In the twenty sample vtln(,ou of tho Aj,,ro-BconioM.,. Survey * 62

between 1968 and 1974. As should be expected with a growing population, a fixed land supply, and new technology of purchased inputs, the share of labor in agricultural income appears to be talling while the share of land and capital is rising. Not only is there relatively less employment available in agriculture, the employment that is available receives a smaller return.

9. Employment and Technoqlorical Chare In Fishin, The fishing industry has been an important source of employment in rural Java, although future employment prospects are unclear. About two millior people were employed in 1971 in fishing at sea and in brackish and fresh water, capture fishing and aquaculturo. The brackish water ponds along the coastal strip and in mangrove swamps apparently have groat potential for expanded output and employment. This could be done by very careful management and the use oi fertilizers, pesticides and high quality fish fry. it would require extensive research and extension and credit facilItioe. These ponds are probably the only existing resource in Java 72 with much ,nusod potential, at least for the near future Employment in sea fishing, on the other hnnd, has been declining, due to the introduction of motorized boats. The nUmbera of smal1 soillboats havo increased tromondously, due to the minimal Jnvestmont required. lowovor, the catch per boat has doclinod due to competition with each other and with the motori.od onts. The number of asill)oats will probably be doo]lInn, us It has In one flshin/g v131aigo 63

whern t nmr treli. 1). 50 porcont, frri 1070 to 5h 31- r 1975 to 1977."(3 Tihe ioturizoci boritno wich havc boon increaning at tho rntest rato, cntch nn mut~h an 73 timnu

4the flanh nor £Iohormrin omplond an the trudilnoniotu Thua, ar3 mctork3zod bonts tnlte ovor from traditiunnIliota thoy Incronn thoenctch bo:L the:; rilav ao roducint, amploy­ mont. Yho numbor of' cn' f~ahermon In Wout i~nvn abrai i'rurm 90,97 6 In 196~8 to 56, 421i n 1971.75 Mn oddtlou the rotorinad * boatri aru tuiiady rvom ourt oitlou# not rtra aroua o UOoct * fluhln ; crnpoymcnt in uhiftln;w from conat'i'1 vi12.aeau to cities. Tii~u certainly loado to an oconoinSic docline ,or thouo vlllatgose The Income or' tho nrt1onnal Viahormun Win boon doe) inin..

sinco the critcl por heat Ih-iu boon droc3inin:! * The t ururn on -'Whouo 1):tn no Vtid with ni uhure of the cutch.Nl

Fuituro employmont. In tho ftiatVI, tndlistry In rttrrl . nv will. resuilt f'rom ,- continsiod doelino In u'ie fliang erploy­ mant ftO tho 1n(itlftr.y, contavon to nodorizo #And to ahlfit to port

c~tiou, nnd !in tncropaac Iii amlploy~lant In aquacultoro ' t'ho Potontial, tliorn cut i odevelopede -t otbould bo nL'tou Lioet it -01,o motorknod 1,ontu were ronotct from tho stroun whoro tho traditlonil itolu cart Cnh (conatil ohnflow, wmtor vroo), tho modorn lun'to viould -mv.) planty ut moo for ttole ne!tlvltty and viuitlt iioit d1oriqp Llh trtd itiunal ilulhI-utry*

tho Jndjur $roe, !to1: w,"n li. tite iti, ~ 0t~.tt1'F million people work in handicraft and villoge industries, 77 although usually this does not provide full-time employment. These crafts ha-ve very Jow productivity, low levels of capital, and many workers. Thus they pay very little. The crafts could probably be developed however, with technical research and development, credit, training, and marketing services, to bc more productive and simultaneously labor­ absorbing. Unfortunately, there is evidence that urban industrial development, which is not especially labor intensive, is replacing some rural industries. The most dramatic example probably is the textile industry. From 1966 to 1971, textile production rose from 250 to 600 million meters while employment dropped by more than one half. The cottage industry sector with its present methods cannot compete with the capit]-intensive factories. 7 8 The Agro-Economic Survey nlao has found that rural craft Jobs are disappearing as urban factories replace the production of tin buckets, 9 kitchen uonsils, agricultural tools, rope, and bricks. 7 Thus rural omploymont, and in fact total employment, in many crafts Is declining duo to the development of oapital-inLonsivo urban industries.

D. The Elf net o' Inoroaelir', Weulth nnd Poverty The growth of the rJNP In indonoia during the 1960's and 1970'a hao avoraeod botweon alx and oight peraont pir yoar, wafl abovo tho population crowth rato, THo ha. boon dLatr.lA0ted vor; unmwvin~y, w1it' n innrnanlng paop bntworl 65

the average levels of JakarLa and othe', urban areas of Java, and a widening ap between the rich -,.nd poor in urban nreas, 8 0

According to the fational Sample Sitrve;j dnta for 1967,

1971, and 1976, rural icome distribution on uava has not significantly chanu,od and may have sli,,htly improved from

1971 to 1.976. White points out that this is contrary to the available research frca sanple villages which point to an incrensed concentratior of rural invomo., I The Nationan Sample Survey dnta also indicate v.real per cnpita declino of o:pcn(Jiturc on rood of 9.3 percent by the [poorest 60 porcornt of rtra.] hounoh )lds and n real por cnpltv incrense of 11.O percent L:lthe top '10 porcout of roral housoholdu, between 196'7 and 197 0.82 Thor was a decline 3n real arricultural wa;es between 1968 and 19 '.,4.83 The decll.ne in real wages o1 rico e.old labcrors from 191/ to 1972/73 ran ed from 20 percent to 44i piercent for different ub,".1i two different north coast villages.8 4 There have also been doclininrg onlplo,,fnnt opportunitias in .,r.culture and procousine for the landlon, nu dlscussod irevlously.

The doolninU ]evo]n r' ].fvin11 of tlho poor are rflected in thoir docliuin.. nhltr.Ltdunnl. levels. Nhtrition in, nv:1 ho boon detoraiort.ng, sino the turn of the contury. (no etudy found N ;rdunl ,-onorottonn. declino In body we i onda

I oI1 Y d cl.no".i lhar contnu d for Uhn urd rrry prson.. at loact, denpi te tt;o ,nuroaue In per crpltria nrinuol li:rvonts.

1'ho poorest poopl(e ae ohifti , -t r o(! m ttttO OUCI, 11 oasaova tird m-mot peo ntoou, which ro loss nutrliiOIS thtml , *. .16: .. 66

1. Population Growth and the Landless One effect of Increasing landlessness and near-landlessness may be on the birthrate. Women from poorer households spend less time in housohold work and more time in wage labor and searching activities than their better off neighbors. They can do this if they have enough children to take over the necessary household labor. A household with a larger labor pool can take better advantage of work opportunities when they are available. Ct ildren are economically useful first at doint: household work to free the adults for outside 87 work and then at income producing work themselves. The Implications for a high birthrate of the economic usefulness of children to poor families are confused by findings on the family size of the poorest families. Cateeoritin, familios an cukupan (having enough to eat by local standards) or not cukupan (too little to eat), Penny and Sin rarimbun found that the number of children born to and presently alive In cukupan families was higher than for non-cukupan families. (They studies only those households with completed familios.) The cukupan fomilios had 4.0 living children and 5.6 children born to them, while the poorer families had 3.0 children and 4,8 children born to them. The ideal number of ohildren was lnrger for the oukupan families as well, 5.8 as opposed to k.6. The number o' children born in limitod by abstinonce after the birth or each childi poorer familioo have a longor period of abstontion ond thou Xavir chIlcrnn..ihe.. Implicrition here tfut,. Whilo oh Ildren rnt nlty iionmofutt tholl trooont a 67 cost at first that the poorest families cannot afford. ne poorest families then mny have n lower birthrnte than the next to poorest, who can a'ford to support t;he children trouJhI the baby yoar~i unt 1 they cnn be economically useful. III order to sl.ow the blrthr;te, famil.i.es rnny need to be lifted from verb' low J.ve3s (,f irncMO to much hiuher ones (in relativo terms) rnthor swiftly, in order to :-vojcl a IA._ swell no farail ies mrove irom loss tlinn cuklCIan to cuku:)pn. Alternatively, the bone!i ;s of childron could bo ]owered, by requirin[,g their attendrince at school, for oxampl.. The impoverishnment of m:iry rural families may in fact reduce the birth ratc, hut it ccrtainly does not thereby improve the welfare prospects for the poor or for Indonesia. Another implication of this pattern of development is the chan.vIng status of women's work. Tlhe partic pation rate of rural women in the lnbor force has been !.rowl3ng steadily, buL the naturo of their work Is chan(li|;:. As noted before, womon have i.ar ely boon replaced ali hulling rico by rico mills. ,arvvrutin- with the ani-miJ was customarily (Jonr by women, u whenl tho n.ckle i & used mcn are more 3il4oly to be tho Iarvcstora. I-any of tim crafts replaced by uruan industry worn made by womLan. Thus th rural womana' work. may be chan{,linv In nature, aI, womon aro replaced by naclilnory and mon cit some of theIr most productivo Jons. Thio hift coincidno with (rowin; ruro. femalo pirti. pniJCon In the labor force, wh i oh probably furtor v.odiicon t oprodul.,ivity of. the rtiral womn'a vork. 68

2. Conclusion: Political Participation and Government Policies for the Landless There are obviously many other implications of the current pattern of Javanese rural development for the lives of the impoverished and the prospering. With further village study, the changes will become clearer. One particular chanae which will have important consequences will be thte changing political power base in the countryside. Sajogyo says village administration has become more monolithic and concerned with law and order functions. As the population grows, villago-wide deliberations become unworkable and the wealthier patrons make the decisions.90 Faith asserts that rising inequality within the village has increased the reluctance of the poor villagers to seek redress for their grievances. They recall the mnssacres and arrests of leftist villagers in 1965 tind 1966. Party politics have been prohibited in the vlllages since l'l7, so overt organization of the poor may appear infeasible. There has been a general tendency for the "prosperous" villagers to grow more cohesive and to ally with the representatives of the central government.91 The results of this tendency for decreased political weight of the impoverished will have to be watched fore Their doclining participation in villago politics does not bode well for their future, however. Rural devolopmont in -ava has Involvod incroases in output of rico, CJoh, industrial gcods, but thu increased returns have rono to u limited L#roup of producers. in the 69 cases of fish and indu,,tria*. goods, the rural producers have suffered declining output while urban producers have produced the increases. Th. increased rice returns have ,,one to those who own rice :and of ndequate size and appropriate conditions to use the n w iYVs and to spread their risks.

There have been no imp:ovomonts for the owners or tenr'nts oil land growing other cro)s or land too smsl], or inappropri:nto for the HYVs. There huve been dcc].ini.r,, i.ncomes for the artisannl fishermen and uncompettivc crafts workers. The landless arricu.turai torkors have lost employment as the agricultural work becomes r,3served for the landed families and their close contacts. Governrent rural development programs concentrate on rice production, despite the very li'm.ted potontiul for paddy dovelopment to riso the incomes or the food supplios of the poorest half of the society. Intensifled rice cutueo on Java will not absorb the underemployed rural 10bor force, lar/gely sice riLce culture was alrooJdy so Iabor Intensive before the recent Innovntlonn. The fnrr1ors wo own no awnwr, or too little to be Pffocted oy thie proirna do not bonofilt. The farmers wOth land suitib]o only for dry crops, tree crops, or hose :ardans do not bonofit. The people who doponnd aitnificntly on loss 2:,pennive staplos, nuch an corn, tubers, rago, or on dried fish nnd leoumau do not bonofit. Thcse affected by tho erosion of hillLIdo ind ,.nd thu ocarcity o.... firowood rind timbor do not; honofl.t. The viorkern not ompluyed 70

on the large expensive mechanized government rice estates on Sumatrn do not benefit. in short, the government's concentration on rice program is of little assistance to the Lknderermployed and poor, who cannot afford to boy much rice any vay. hcre are other programs which could be of greater assistance to the 1 idless and nonr-landless by ralsin'; product.vity and employment on dry land, fish ponds, and deforested hillsides. The *,overnmccnt's policy on industrial development has generated few jobs at hibh cost. 92 The net effect on ,iobs may eveni h.ve been negative, in view of' the decline of rural crafts, such ns textiles. The industrial policy since 1967 has relied basically on inviting foreiln investment and providing speci2l opportunities to the Chincese and top military and civilian officials to monopolize new industrial development. The result7in- industry is capital-intensive. This policy a pparenULgL anroso out of alarm at the state o­ the economy in 196i7 a iid ,ie feelinr of the need to promote industry quickly. h'ihereore privi.leres were ,,ranted to "ex]perieniced0" induistr i!alsts, i .e., fre i;n compaInies and

the CuinIese, ond',I to .ivored officials t;o lpr'omote "Lridustry. lndigenoi:s nsmi :,IIaus uI:dersta)ndh;I) o.O',0n I .* in vi

ln(d OVcio Ii , , rr',' i ' t,(, Lu; i I. oil / t) Y h :'l' , l: I,'i *l~,- ,l , [T 71 still open, rilthou,h more restricted thutn in the past. The six bi lli.on do:llars worth of Pertamllna debts wihc the

ndonesian :ovcrnment took over, wh ich End been used to finance h,!Qly capIt::1-Intens xve projects, could prouribl.y have had an impact on Lmde'-Cmlo',mcnt and poverty in indonesia. .insum, the current pattern of rural developmenl; on Java is P't1least partially the result of nol.ic' ehoices made by te ndonen inn uvnr-nment. 'Yhi e re.sul ts wore n, 1: a :s foresccn, oi ceorso , and very freq.ently no douit thoso p ic es ye boon .ed anlonite I,;others. !oowevo if the 1nrVitienv I ,ridi.OlS, undcrerileymn t;, aund rurnl povrt I, I.,1o en to ti;e liimary ! ( lic/ objoct irv , then new; choices csn ic mde. 72

III. THE PHILIPPINES

A. Introduction Philippine rural society is currently undergoing a profound structural transformation which is creating,new relationships between people and-tho land and among people within different socio-economic groups. Who transformation is marked by three major characteristics: 1. An increase in size and number of very large farms, 2. the divergence between a class of prosperinE small to medium-size farm owners and secure tonants, on the one hand, aid a class of insecure tenants and very small iarm owners on the other, and 3. the growth of a very larvae and very poor group of landless laborers. The stratification of social groups in the rural Philippines has existed in all historical periods. What is distinct aboot these current trends is that they indicate a widespread shift to commercial agriculture under conditions of high population pressure and rapid technological change. During the pre-colonlal period, rural society was organized around the braneay, with it3 chief, freemen, and bondsmen. Stratification was slight, indicating a labor­ scarce and land-plontilful environment. iJn the Spanish colonial ora, land control by a few (the Spanish and their descendonts, the Churchl, and prosporir local leaders and morchanto) was intonsifiod. T aior dominance was maintained

An a land-plorthful society by tylrng, the labor force down by dobt bondanoe Ina traditional, oubslstonoo-orlontod aerioult ral system of 3ow productivity, the lnnded class 73 served the function of accumulating a surplus which could be dispensed in personnl or lo(:al emergencies. They provided a measure of economic and social security.

In the American colonitl period, the land frontier still existed but was gettin,,, more remote from the most populous areas. New land eithe:" required more capital investment (for example in drainage), or was less productive, or was farther away. The net benefits of migration were falling; it was harder to move. Thus, the labor scarcity turned into a plentiful labor supply; tenancy increnied and became less favorable to the tennn';. Landowners stiLll served the function of providing economic and social, security. The continued monopoly of power and force by the landowners was exemplified In landgrabbing by force and in the courts. Production for new export markets ;.rev rapidly, especially in sugar, tobacco, and abaca. This promp*;ed the creation of some plantations and some large farina, ioth of which worez worked by hired labor and produced primarily for the mn-ket. The now conditions ot, pleantful inoor nnd erowine, markets nt home and tibroad which wore first noticeable in the Amcrlur-in colonial period now dominate Philippine agriculture. in addition, new tochnolopiy Isn vlvblo for rice production and for come othor crops as woll. New oppurtunities In agriculture have gonoratod a new function for the land, nct as a uource of status and power to the ownor-cum-ptron, but rather no n oirce of c,,.:h inuonin ;tid lit-oif| it1lo |Ivu timUlit to, Lh own r-cUmn-untroprnnur, 74

B. The Basic Causes of Wealth and Poverty Economic output, income and land productivity are all rising in the rural Philippines. New wealth is being cresitod; however, side by side with it, and simultaneously, new poverty is being created a3 well. The new assets and income are accumulating in the hands of some rural 8roups. They are not few in number, but they are only a small portion of all rural households. At the same time, some groups are gaining income only slowlyl others are apparently losing income. Evidence for the increasing poverty and wealth in the rural Philippines has been produced by the BCS (bureau of Census nnd Statistics), which found an increasing concentration of income from 1956/57 to 1971, as the share of rurnl income of the poorest 20 pe'cent of rural households fell from 7 percent to 4.4 percent (a fall of 2.6 percentage points) and the share of the poorest 60 percent from 32.8 percent to 27.6 percent (a fall o.t' 5.2 percentage points). The share of the richest 20 porcent :f rural households Increased from 46 percent to 51 percent (5 percentage points). For the period 1961 to 1971, the average real income of the poorest 20 percent of rural households fell in iLbooluto terms, while the avernge rural. real inacme as a wholi Increused fnlrly rapidl. I In order to underatnnc thin phenomnnon of inoreeuing; wealthand increacing povrty in the 1hilippinos, It Itn necuaonry to examine Mint Is happenint: %:nOcoos to the Dind and !to frito and what lo happenine to the oranization of productllon. Thono, 4n tovii, arp ahnn~irl; in responue to three important trends: 75

fir s, ncreaninc, popui. ion pressures 'Iiecond, 7JroW L11" markets; and third, te increasinp productivity of lxind due to tcchno­ logical chan and investment. The social cltanges which .rc logice3 whanch rire induced by ill these new conditions ire certainly infunnced by customIS, social tics, and by government policies such ns tenancy reform ond credit availability, however, it is the changing control over :nnd and the organization of production which has ch:nged tho distribution of rurnl income. Th is in tlie immediate cause of the phenomenon of increasing wealth and incren i,ri , poverty n rural Philippirne 3oc lety.

1. Chnes . n the Con ,rol of Land and the uranizatIuon (i

Apricul turn] Prodiietc;n Two trends, one o thL diffusion of land control and the decrease in farm s ze, nnd the other of concentration ov land control and the increase In farm size, are proceodint­ simultaneously In the 1hilippines. The first of these is due to the subdivision of pluto of land by owners and tonnta, as they are pnaosed on to heirs. It repronent; now farma; formod primarily by subdvilsion and secondarily by settlement.

Although the end of the Innd frontier has been declared by many, the total area in farma Incroased by 9,3 percent from

1960 to 1971. However, the land added is of relatively lower productivity and must bo used In largo amounts to support a houcohold. rhu numbor of fnrrnu increased from 1961 to 1971 by 8.7 po'oent, probnbly larl~oly due to Innd ubd vt.ton itnd only olli.tItly to tho tidditiou Of aNrmn 1a-id 76 at the frontier. The average size of farms stayed approximately the same at 3.61 hectares (up from 3.59 hectares in 1961, a 0.6 percent increase). The 8.7 percent increase in the number of farms over eleven years is remarkably low, however. if we assume that rural cultivator households are being formed at the same rate as the rural population is growing (2 percent annually), we would then expect a 24.3 percent increase in cultivator households, a much higher figure than 8.7 percent. There may well be resistance to dividing farms among all the rural heirs, but it is more likely that some­ thing is acting simultaneously to reduce the number of farms; that is, to concent'ate land in farms. Some agricultural land is being concentrated into larger farm sizes. The reasons vor this are associated with the changing function o. land as technology changes and the market demand for agricultural output increases. Land then becomes desirable as a aource o1' profit and cash Income rather than as a source of prestigo, of command over people, or of security. Those who control the land begin to make careful claculations of how to maximize profit by reaulptin costa to Increase output, labor becomes a coat to be minimized to the landowner, ratler than a tenaint, client, or n relative neodine nupport. land becomos a carofully mniied and valunblo input rather than 9 resource to be uuod to 'uild political support or t) haro with relative., Credit becomos a coat to bo used to maximizo pro."Ito for the buuiness enterprJoo rather than a monian.am to bond tunonts rocuraly to the ,M't:n. 77

The now profit opportunitleu are hiighly tenptirW, to lnnd­ owners nnd cultivaters, and they are respondina by ndoptin new tochnolse.y by mnirketine, crops, -nd by inkin. tkhe carefll ca]culrtcq-1s. Tniy rlso rive roup!)ndilng by tnookin,; to inercmic the nmo Ir L 2 2,ind tLPoy cni contro] n rinother wny of Incrensinp trn prof it.. Whore now ] .rd iC of inuich lower productivIty nnd penernlly imsultuble for the new t.cLnrlI . nnyway (duo to its hb Iricun) eX:r~nlot ly niot cultivntr means contrnctlon or losu o f land by anothur. Prufit-acI:inL landowners rind cult.voturs will ondoavor 1u increaoo tho amount of profitable 1!ind they control, but nut bccatl3e large form "jizo is more officiont, Severnl studios indicate that smnll farms Tire more officlonL than lar~e frrmu li maklnLr the bout use of scarce Inputs. Lnri et' farmn, howuv-r, permit a ltirger volume oil tc.:,1 profit. The new rice t.ochnolo:.y requires careful attention to the crop in order to onsure q profit. The clautumury nrrano­ ments of :lire tonmimy, howeveir, do not oncourn.u thin carofal attention by tho teniant nul LvnLor. 'Labor ]s supplied ointirely by tfim uhrocroppor, but the output it crentou will be shared wtt) the landlord (inlf and half to the usual 3hurina formnla 10 tho Phillppinoo). in tho post, Takahnehi outCutu,9 5 shnro tonancy hoe boon roaponnlblo fur low rice yioldu, usnoo tho tenant putn In au llttto of tilo ftmly'a work is they canti Vt by with, In order to work no much a .poulbio in othor nioumu-oatrnln,, ttiuko. Them lindlord will tsiko hilf tho crop . hiO alsrn, *ind tUnn wilJ take moot ol' Uhe roet of It iii paymotiL of dobtu, naovrne 4f rltiod 78

by the tenant in other activities cannot be claimed by the landlord to repay debts. The purpose of remaining a tenant

is that the landlord is under a social obligation to provide

subsistence loans to the tenant. The tenant then gains a

guarantee of subsistence and probably some portion of the

1,arvest in exchange for his family's labor on the farm (as

little as possible to raise a crop). The landlord gets most

of the rice crop (at low yield), an immobile labor source,

and the traditional benefits of landlord (loyalty and prestige)

in exchange for assuring a subsistence income to his tenant.

This is clearly not a very profitable method of organizing

production, since the incentives 'ard for low labor inputs

in a labor plentiful economy.

In view of the now profit opportunities in agriculture,

both tenants and landlords will try to devise new methods o'

organization to replace share tenancy. They have differont

Interests, of course. Une method used by landlords is tile

eviction of tenants and operation of the land by the owner himself or by a manager. Another method used by share­

croppine tenants is to switch to leasehold tenancy. Landlords will want to be able to raise rents as yields increase and as population pressure increases the economic rent of land and decreases the wages of labor. Tenants, on the other

hand, will want to have rents controlled, au in a leasehold arrangement, 79

An incrotse in tho ctmceitrotion, of Tihndowners.3hii should. be expected as land values increase. Laod As aIgood invest­ ment under these circumstances and the wenltl:y will be able to buy it as it comes on the mnrkot. Smill owners will. be unable to buy any more land, and when they are eventually forced to sol it due Lo subdivision or Cri1s, it i more likely to be boutiht Ly n weivithy person than by arncthtr poor person.

Hence, populntion prossurc, increased demand for agricultural 4oods, and new tochnoloy in nigrlculture are promoting two contr-.i(Octory trends in ].ind control, one tow'rd smaller farms arid th- diffusjon of ownership, and the other toward larger .r's and the concentrtion of owner­ ship. Both of those tr(nda create more landless households And nn increuaso in the jiroportlon of the landleos. Subdivi1cion of fnrmj evantuoaly nrontea plots too sm,1.] to farm, :,nd tho heirs inisi. soil tho nnd and become I.idlein. Uri the othcr hnnd, cunn4 I dttion oui rnt IfrIi1rpe r iitou tirfnts ji vd 1)y the pvlctlan of' tortrtt, t',o purchase of torvinoy vi('hto, or tho purchur.n of land froin rnll owners. Tlosc displaced tonrnts nnd small (wner, :iln, jo.I the ranks of thn lindlouu.

P. Changes in the Distribution of Agrioultural Income 'l". p.ttornu ot lInni, f ttr%,1 and )n3 o' fnew tuchnoluy. 'ro. Uo ':orL.. t I .- ... .ubetantially dl rout the dIatributlo, of the g'nhs in rt'rlo, I tav . A now rurul atratification tu b)000115' ;IF 0n ,r bn1. nk o : 1,111d Coli,1 intd teio I~ t~ vel, 80 and reflected in the growth or stagnation in income of the participants. Those who have been paining the growing income are the large landowners and cultivators (including corporations), middle class landlords, some small owners and strong tenants. There are many other small landowners and weak tenants who have not been able to claim a share of the rising income. This is either because their land is unsuited for new technology or because they cannot get adequate credit on time. Their continued access to land Is in jeopardy due to the scarcity of credit and to subdivision by inheritance. Many of them will be Joining the landless laborers, who are the poorest rural group with the falling real incomes. The largeo landowners are a diverse group, including agribusiness corporatlons, commercial farmers, ranch owners, and owners of haciendas (large amount3 of land which are worked by tenants). Thio group is prospering from ajricultural growth. The largo owners of tenantod rice nnd corn lands may have hnd their lind redistribute to their tenunts, but compensation io In ull, and they nro given priority accos to frontier piblic lands. Thero ic a larae Crou-i of middle olaor landownero who own between 7 and 24 heot:'so of land, Thoy lurgely earn an

Lncome outsido of agrioJlt'iro, moutly In buolnesu nnd the profosions, Aftor the Prooldontial land roform dooroe In 1972, the Department or Arraririn Reform and President IWorcos woro curprised to dlooovor that as much no 13.6 percent 81

of alf & & rfadwirs owned becw on 7 a nd 24' hcctnres of' land. This anruunud -to 26.5 pe-rcent of' all rice and corn Tandti. Thoy leased their Ithud to 32.4 percent of nil tho rlicc land corn tennnts.' 6 Accordin.g -to n leSAID siurv.,y, 1-.6 porconiL of the, ownnra ol' 24 lioc-1.,rrn or lon (ziorno o' wahichi

is tennmLcdrl & o or corii Iind ) it ill, tll] pvrt c1 their 1sridg f ty-,ovoi porneint hnqd pe~rion Ily +,11iied siomn of theio p l1and at; on(, ti ThuePey vI rLun1Ly Fil VI'y w.Ithinz f~vo k~lom-etoro 01' their land. Alw'o it hallf t~f thon ht~d (.htli ,1)0(

tho land 1, I'gurol~ r.-itlir thua-i Inrhori t4trcu.97 :nv~nrir Invoutcc1 In Iand 1h,_vo hen woil prutoctid from i-nflttt.rm~ and at low rlcl.. Thla triddlo claua ;,,oup his uhared in the Iflcoto f'rom~

afrvcul Lo. 3O!,rowtl; * rhoy luive froqurnntly i nvonte it cipit-ii.oip.n which thoi rant 'to Winir tonnnto twid otthorn, nuch au tractors, pump Jrr:gators, Iand threaheras 9 i Doupito theO Lonanoy ro'orrn which c~onvortud mout, rou und corn tuoncien toi lnunoihuld t i lowioz' roliit whura toi'rstn ha~vo aiUcc(dUuuii1y ,vownl kLfo I1I-y1ildh\ke vivIaLIOU or' vice (HYVa), the absolute amount paid to the landlord hu noon wih.*UaoDl~ Uluro I~ijz; doollnuci.O. Lindownorn wfiu0 land ito pleunLo'd to OLI&V Uor..pu, U14011 nOict~P pinoupDloo or coconuts az'o not throateneod by land rororm or tenancy rotcorm. ioidtior slru Jluoidomiura of uny aIzo who oultivat theoir lunut wlltIuu tonuw~itu, idiroutty ur by u mnazore

Cunuoquontlyp &lretu jr~OG Otit orn Lindliurdu iiuvo ritLuinjptud to oviot tholtt tonnnto or iwItul, tit( crolin W10y ,JUWs T1 0~ 82

is probably accpleratirC a trend toward medium-sized conmercial farms run by owners or managers. Many small landowners and strond tenants have been able to generate and claim a share of the rising rural incomes. Lowland rice farming has become more productive. The prices of other crops, such as sugur and coconuts, have been supported by the high demand of the 1970s. What makos a tenant "strong," or able to raise his family'u income, is a combination of several factors, including the size of his plot, tha availability and intorest rate of credit, marketing services, and his relationship with tho landlord. A few tenants lease large amounts ca land, such as In "barrio S" in Laduna, studied by Kikpuchi, Fortuna, Bambo, and hayami, where two tenant farms ware oL 80 hectaros and 41 hectares. 10 0 Iany smaller tenants would qualify as stron tenants, since many have boon able to raise their incomes significantly. Takahashi says of rice tenants converted to leasehold, that probably the level of income of many at least tripled from 1965 to 1970l due to the lower rent paid by leaseholders and the Increoasod productivity on lowland rice land. 10 1 Other writers agro that policy loasoholdors have eained on the whole, althouh few vould claim as high an increame. There ere other weak tonunts and very small landowners who have not been able to uhare In the raIns in agriculture due to the small sazel their land, their inability to raise productivlty, to Get adequate credit, or to lower their rents pnid. Upland rico growero, both tenants and 83

Table 11 Rate of Tenancy by Crop. Philippines, 1971

' A".t, I,:t 1'nif % t 'of Tenants % of Tenants by cenants and Partowners

Palay 36.8 30.6 52.7 Corn 30.4 21.1 37.7 Coconut 18.2 16.1 24.6 Sugarcane 53.5 16.0 65.4

Tobacco 34.2 - -

Vegetables 29.8 - -

Bananas 23.2 - -

Pineapples 48.0 - -

Sources Republic of the Philippines, National Census and Statistics Office, Philippines, 1971 Census of Apriculture, Vol. 11, p. 9. 84

owners, have faced fal.ling prices for rice without being able to increase their yields appreciably, M~any tenanto arid small owners have been unable to find credit from institutional sources either in adequate amounts or on time. Consequently they are rorced to borrow at very hieh rates from private sources. They may find It Impossible to repay such debts, and thus their continued access to the land !s in Jeopardy. The haher interest rates claim any increased output which they might have produced, There are many tenants growino all kinds of crops In the Philippines. Tenants on land planted to crops other than rice and corn, unfortunately, have not benefited from any tenancy reform. Tonaicy overwholmingly moans share tenancy for crops other than rice and corn, accordin to the 1971 Cenoun of Aericulturo. Table 11 Indicates this phenomenon.

Takahashi and IRRI economists aproe 'that the income gap in widonin between tenants and landless workers. WHRI ,".eports that the lar:e tonanto have captuirod the major

benofits of Incroasod rice productivity I '*' lowland rico' villnge and have become pwtrona to 1nnd. - iborors und oubtenante 114RI predicts a continued deollne In the Income of tho laborers as the proportion of the landleos countinues to rise.102

Thu lendinss. then, are the poorest rural i6roup. Their numbers inoruane with population growth cad as some faumorn -re foroed out of farmin' throtuih Indobtodnono, oubdivinion of thoir land, or eviction. They depend on fnrm employment supplementedby-iow.. productivity work-onthoir own in cranfts-. serviceo, and PAtherin,. uhoamount of employment hs been

increasin due to .incroced farmi.ni, intensity and infrastructuro construction. At the name time, farineru in some place.; tutvc been rodctICnU t;hOer doponden on hired workers, 1Hoal wajten have boon fallin,.. Those with some land to cultivate, rocnrdleus of tonurlal utatiu, are bottor Gff thtir tho Rind­ les. Wlckham, Torres, and Cnatillo, found that Lneunr , farmers who also worked an loborers earned about throe timen what a purely hired l9borer earned,. 0 3 Landleon lnboror

hcuneholdo respond wth mIrration to opportunitlea for work they hear of nnd can ni ocd; in one barrio in Laz~naw which had recently boon a trontler area In the municipallty, the population &rowth from 1.966 to '9V6 wau 5..1 porcont per year, wtth aubntential am.rat'in of joung, lundl:u3 mon find wwur , 1O14

3. Yho Dl'f,#)rontin1 Co-rjggjo.sonu uf A&gPzrign Refor-mg The troiicla oretlttiq thioun formu of lThd centrul tinvo boon procoodin, for oome tLmo in tho Phllipplnuol fur oximnplo, the nutdtviuion of lond and the crontion of plantation., Othor n.pooto of thoo trends, howover, ore quite rooorl for example, the divorrnnoo betweoon trong and weok t(nanto which in ds o t o the tonnnoy reform and tovornmont rise programs. Part of tho Inontivo to ovioL rr buy out tonnitta In rico and orrn lu nine du. to the rant routrlitconu con'.'Inod In tlio tenvney rn ormn. Aho trodn vro dlrnetWd byO ntleoitrLm otin,Ld ta#tii o01' [tlsi t|inJrowth Na 1'w'l1. nnoit, t t 'Inr: s taw .,en ,i', hlI 86

and growing markets. These trends are modified in different places by local customs, social ties, different initial land control patterns, and varying government policies. For example, more recently settled villages with concentratod ownership seem to have weaker social obligations of sharin than the villages settled over a longer period and with more diffuse ownership. This Ia stg raeted by the pattern of Inbor 16e a phenomenon which will he qxamined later.

The tennncy reform on rice and corn farms has utrorq;ly affected the pattern of land control and the process of land consolidation. The A~riciltural Land h:eform Code, the buoic tenancy reform legislation, wan paused in 1963, with its main joal to transform ohnre tenants on rico and corn farms to lease tenants by flat with the declaration of an area as a lend reform area. In Its second phase, the loaueholders wore to become amortizin! owners, and eventually full owners.

The loaseholdor'n rent wnu to be ,fixed so ns not to exceed one quarter of the nvorajto harvest of throe normnl yearn proceeding,tio transuorrantion. The doclaratlon of areas as land reform areas proceeded very olowlyl by 1972# only 9 percent of all share tonants had achieved losoo status. Concerted efforts howevor had boon made in portions of Contral Luzon, whioh was an nrea of h~ih tonancy and ortanized diouatlafaotion. In Nueva Ho ja, 85 percent of the chare tenants hod boon converted to leasehold by 1972. 105

In Septombor, 1972, when martial law woo doolnrod, President Marcos dne'ood thnt the whole country wou a land 87

ref orm. area. .All .-tonats onr lands primarily doevoLed to r.1ce and corn wore to become leasehulders, and eventually were to become uwauru of five hectareu of nojI-irrj~ated ltld or 11hroe hectares of irrieWted laund. Tiie lindownors were to be roim­ burued for t ti, land wiLh .uverrmiwt bondu, atocks in enter­ prlseu with :,uveruatm, interotu, unsd/or cuoth, in ono down paymont and fifteon :iarly Inatullmontu. The tonants were to autro un Lhu value oi' thie land witti Lho landlords, wtilch wa toI be two and one-hal' tlmeu Lhe averuw~e harvest 0 throe normal crop years. Tho tonants wore to pay for the land witi, uix percent inLoreat over fifteon years. The landlordu were to bo allowed to koup seven i octurou of their land. Tho reform would otnrt by rodlutributliw titlos to the tonants un Lhe land of ownura of ovor IOU hocturou of rico or corn land, then proceed to Wiee load of owners of over $0 hoctarua, und then by Novelobor, 1973, to the land or ownors of 2 to 50 ),octurou, Thae UCOpI of the laind rufUril wsiu ruu L:'ictod Lu Wa1 lr d of lndownuru with ovor uovot ioctaro uf lend, who woro aloe priurrly gtruwlrnr rziu or corn, and whloli wn alot; cultivatod by tonantu. Thli by no moaan covered a mtuJurlty of tho tonnttu In thre uouiary. und wuiild not give acooo Lu land to non-tonantu, In 19'/2, 14UaTVc tlhuupht tthlu would covor wot of the tunvnu in rico and corn oultivatiun. After the docroo, however, we bopartnont of Ajlrarlan Hfurm atudled the landholdlnr j tLornii in rice and corn lndo In u natJonwido survey, und i'ounid it tho eataten of tho nin­ 88

....--- toenth century-have been-replaccd-largely iby medium-sized-­ landholdings of 7 to 24. hectares. Most of these landowners have another occupation in business, civil service, teaching, and so on. They are opposed to tho, land tranofer. 1.rcos decided he needed the jupport of 1hese many small landlords, 6 and therefore the agrarian reform program lantuiuhes. 10 It appears that the land tr'anafers will not extend to land of landowners with less then 24 hectares, which leaves out 70 percent of the tenants cn rice and corn land In 1973.107 It Is not oven certain +hat tenants on estates of over "4 hectares will become landowners, at the very slow pace of Implementation. The agrarian reform, tnen, Is basically a tenancy reform on rice and corn land. it does not affect other types of crop land, and it does not transfer ownership to a majority of tenants, .,ot alone small owners or latndloss laborers. The tenancy reform has been effective in raiuing incomes for many tonants and raising,risks for almost all. Leasehold rents have boon difficult to ralse, once uot, despite increasing population and productivity of the land. They usually are a lower share of output, on rice land, than the 50 percent share of th, not harvest would be in one barrio In L*.unn, In the 1976 wet soason, the avorwe share of total output paid to the landlord by le0sees was 18 percent. The comparable f~guro for share toeants was 24.8 percent (of a considerably lowar viold),l 0 8 Takahashi estimates that the level of income o'loauoholdorn in a bulacon v1llaja@ at 89 least t ripdfrom the late 1960s to ti ourly 197Os when the teiancy refrm and the introduc tion of technological Innovation occurred simultaneously.109 on Nuova Ecija rice farms after the reform, lessees had an income from the farm over twice the level of that of share tenants (partly due to the lower rent and partly to the higher yield they achieved as they put in more labor). 11 J concludes that the share of output to the cultivator has increased in the i l l 1970s with the shift o many tenants to leasehold status. Not overy tenant hau ,.,Lined 'nder the reform, because there have boon uoveral ser ouo problems fur tenants. The shift to leasehold, which usually occurs by t1he requeut of the tenants, often brIrq-,us an end to the Uenevolent relations between landlords and tenants. The written contract is likoly to replaco the oral agreomont, symbolizin the new nature of tho relationship. Landlords no lonaeor givo loans for either production or subsiutence, wheroas +hoy formerly wert a major credit sourco 1 2 The ltindlord is no lonklor paying any of tho coutri of produc on, which Incroacous the louoce's need for oiulh at the sato t .lno as his credit from the land- Lord disappoars. in tho arou whoru tonancy refourm han hLd I)oultlvo offeout wn Vyl, 11 hnu fioun acoumlaniud by nubstantial /uvorumnit orouit Z:} tu ropieoo tho LAtiBlrd'u loot crodit., i(t iall sihuve tuoizinto hntvu ruqtitotod to boowun Louooo, priu'rily lIonttiuo ui Ioud routiona botwon tliu tonant rnd laiolord, 1 0l ed fear (ft louu of the oruoit from tho landliord tujit lona ot tho lanrdljrdln Wrlijonuo i ai 1 for IrrIpgton water and other buranuorato problms.1i 90

After the 1972 land reform decree, many landlords began evicting tenants. Many also attempted to convert rice and 116 corn land to other crops. If successful, they would prevent tenancy reform or land reform on their land. The tenant of course, would be worse off, either as a landless laborer or as an unreformed tenant on ron-rice or corn land. Many tenants have been able to prevent the evictions, but others have not.

Tenancy reform, in all, has been a mixed blessing. Those who could defend their rights legally and obtain credit have gained; those who could not defend their rights or find alternative reasonable credit sources hive lost. The former number is probably greater than the litter, but one effect of the tenancy reform has been to enlarge the gulf between strong tenants and weak tenants In the above fashion.

C. Factors or Rural Change

The evidence on changej in landownership patterns and the organization of farming comes largely from village studies.

Broader surveys often produce data which are too aggregated and therefore ambiguous. It is from the village studies that the story of how the changes are taking place comes out. The nature of the process varies sllehtly In different regions or under different conditions. Aggregated data, such as on the increases In family labor as opposed to hired labor, tend to con­ fuse the picture. Village studies can clarify the changes and their relationship to particular conditions. There are several villae ntudles whichl have done In rocent years, mostly on 91 rice villages, and most~y in Lajuna and Central Luzon, These are very useful, 11ut the concentration of research on these areas leaves unanowered several major questions about what is happening in other areas and on other croplando. I. Plantations Plantation agriculture, that in, very largo farms which used hirod labor to produce Lor mnrkots, seoms to be oxpnndJng. Since 1972, with the rlue in world food prices, a subntsntlul amount of land han becn converted from runinl domotlicnlly consumed crops to ralnn' export crops coconuts, bananas, pineapplos, sugar, and otheru. The Atltarln Reforn Law has also encouraged the uwitch from rico and corn production to other crops. 1,17 Wost~ ot thinti chnpohn' losntI not In plantation ~nsi~ production, but plantations havo prospered nnd oxpanded.

For oxumplo, the lPhilippino Packing Gorpo.!atJnn In doublingt its orlpInol 17,000 leased acres of pirnopplo plantationu In Bukldnon, The land comon lutrr.oly froin settlers in the ares who loace tho lnnd or ero i'orcd off. (Local farmern tontiflad In hciruinoz an tictlvu tid by I'iI1flik to Lorcu 1 1 8 thorm off the land.) The 1 rowin,, ,J*lincou murflet for banan, s pruvideu athar case. 10t rood copot:.co autii as Doe isonto, Dole, nnatOhCiqutn, have contri.ctud with l-cul lnrl:,, 1.ndowitorn to owitch tW banana production. Tho corporntior auppllos crodit, puckini, houou, toluial ond wmauorlul advise, .nd murkutln,. The landownor provido ,ou,.:,oront, )ind, and labor. The cerporz'ltonn only1r1vi lisrot cuntr.oLu, ou louil .,itdownutri hand t-) inoquiri) tmurtiiiPUa me~ot Wons otiatco, afleo di,1~v 92

thoy havo ovictod tonaints and bouC,11t and lovsod nnd by intlrrid~ati ng thn umall ownorri. (mGnotc011AWod to do th! to ofIfor to rent the mornl1 owners' land, Un AV.0tIQC1F and Tntor claim it w=; -i Ioonn ad dolivind rocpriyrnOnt;. T arna.L2. ovnor, UnaLble to pay, loon h~ Irind. Jiwho1 Y 22 playvtntlwn : had $F ('00 :icroo aaiuw 01h~lbo

converted from coconut, corn, abatca and rice productltort.tl 9

Other .rintions tir o' fl creut*d IL overrnmnt 11Aril I IExpropriatocI rico -,nd corn 1--ndowneo are IC bQ _Ivtill~w t~ in tho nilocationl of' vrl1, jtI yi culioun Th rit c~rd rn,_ t-A blarcr)o, uo n8l ill compo i- fl.i III -701 n n rq.t Lnt tc' Incrn#t. r1z' c rind corn pto~~~inthe rci c-ovortmfnent oroo~red all. f~zrmn.; %%ith500 or miurp c1:pl~wr!(:. to 'rvldoonc crnvri her wwfl- no~r wnplt-yn I ~cc or comi.

Th1,1 coui I eo Irii r tocdIA ticIy v rm ~r irtr c d (iJc io ti,cri 11y oi. formrl , idle or im,rlrijod lknd. ('1C opt*-i oa 1Ai;

]Fu.o o~r '1tI!S l~ncIdl ', (.w' midoemoaL~d I ,::Id .'r prodn1tio:1.

f rmr ,;' i ItF i:)'2rIm o ',T)iwl,o n L~,,Il. -1 Yiutntl vo ri!Liuil *i

Thu r'~y 25ira,.hrbbillt. t Ir toIro'J"tCO donriu; Li~ Ily by 1,1616 VWO d,)1zit.;,- upon. jlaii o luuuL voih,i Ltm:/ mitwQd ' find 1ollomi ±'z'oIi Lo'opnmvsi !wn~1iQf Ljo tVL'ht, I' 10t

Ulizo oi tLh J Ik,:I e '111U1. L,4n11ed kit 1101ULUi.'e to ,.m 122 Li~njofi piublla an~jr; i iutn Jub';OI~rpjtI4 ,

tiavn ali 1it)d0(1 C 4J&tlj* 1.,x CIILilu,, t .4til' ', jitt W1Q !f o, wovou"Lmo k~1 otiiny vt'm L4~icix)6uitt. 11J MI e1 YiIOI'f S. 93

private armed guards, to ensure that too land was "unoccupied.'' The settlers or others min-,t then bo invited back as workers 1 2 or tenants.

2. uwnor-oporated, Ccmmrcal Farms The noentiven are stron, for landowners to evict their tenants and farm thot.r land with hired libor. Acy can usually expect higher land yields, duo to more intensive cultivation and hired labor, than the yield from their land being worked by share Lenants, as is the case with virtually all tenanted land in crops other than rice or uorn. Under leasehold, contractual rents have a tendency to rse move slowly than the economic rent (i.e., the share of total agricultural .ncomo which would accrue to the landowner in a perfectly competitive mnrket olLuation). This is due primarily to inflation in crop prices and the reduced barCaining power of landlords to change rents under tenancy reform. This means that tle lessee lo capturing part of the returns to landownership. The owner could receive all the economic rent by evictin, his tcnant and farmin tho lnd himself or by a manager. Tenancy is clearly no longer necessary in order to tiO the worker to the land, since there is no labor uhiurvaa. Landlords are apparently responding to these incontivos and converting land from tenancy to personal cultivation by the owner. T"kahauhi uaya this wau Loing on in Oentral Luon in the 1950O ond 1960s, Erld it han boon uccolorutod by the U~roon Reolutionm und tho throat of JTund ref orm.1i Revolution, omun Ibrndownicro hiave turned lrvt.() Cerlmorclal. rice) farmers itntoro-.;ted In increasiluj., yioldio And roetird io' Lu

*1c ci.tes hhe oxample of~ oI ihuova]CIfEiiiija wlr-c ;I o

landowmner In the late l96U(.) cultliitcu ,i hir- Lr;jct il' land by mechunizad me Lhodo with hired labor, UitLho nhelw Another examplu comeo~ £ruml jl~t~ iiQ wherc, a 1: r, o landowner pttcha.,oc tho Lunancy rij ~fromf hiuL tei Ants3 cojveriir1, 'f3.11 lhoctlre frori 97 to l)7 ~ .,irted farming theL lanea hi rnlf ith I1r d labor

Tcn,-xntta 1h;ivc been movedi o.Ci' the Ilnd 1b-, e'Vctio01 or: by pLurCha'ie Ci fheir tenWncy riTrt.*ho'%C.ar be evicted 1lv-ally Zor flofljlpaymunL cort the:LL' rent (v.,ich can caull.y happen i.: a tenant is otni>lciotly indebted to bio bldlord, sa thjat ra hanrvost duen noil covur tho rent I-, addition to Uhe vepaypiont and inee~)or for criminal activity, T,10 riejiht to conit.nue a luenancy !ppevrcd and boomo common In the l9(Ocq and 1197(0o, in La uma at luttt. 1 1114-, r(.;1~t apparontly troin out Cf Lile tcnaucy rci'orm (if .1963. it I~ vaUtiablo L~o the tonun L, iin Limrile) of' incruvaoin,- pup~ia~. Lu, cuverni ton to loaiahiold, and riui rodLCutivity. 1; 'L'3 tiarisfonrahI, ind IL routoiN v'jl dofonloc to koc, I.t, of10c tive.

Thooe oxaffplon como £Crom land undox' vico cultivat ion. 'i0Conrtly, aulCRv tillnI ht'1ve oe:,m 1.otO ctoixulo or ruq'th,'u moru intonN~Ivo ui Livnt,!onr (1 tH'1 bir*lind'"' ill 6'njr dJ'. Wri ',cL!, wlith raoru .1mvootmnrt anid nowa tochniquani PiTi -L lao rount'o UrttdpidcVvt pr or, tr ud oer 95 lab'oror. Th-jee chlangeo may ,we1111ho idu-c In tno a')me kind- of 1 28 tenure chatVes on sugar lands. Indirect evidonce on the conversion of tenanciu. Lo ownership cutiios from tho 1960 and 1971. Cellousos Of Agriulture. This is summarized in Table 1.2. The area of land cultivaLted by tenants decreased by 12.7 percent from 1.960 to 1971; the area in part-owner farms decreased by 18.3 percent; and the area in owner-operated farms increased by 29.3 porcent. Tenanted land was being shifted to owner-cultivated land. 253,746 hectares went from tenanted to owner-operated status, and 209,116 hoctares went ,roi parL-owner to Jwner-oporated status. An unknown amount oI the l:,tter f.LiL,re had been tenantod and became owner-operated. The intr'duct'iuti to Volume

II of the census odays, on pai;o xxi~i and xxiv, thWt thl'.

"slows thaT a number of 4 arm operaiturs who fi-ve been previous.y operating their holdinj;s either as part-ovinerS ur tenants have acquired full ownership of their farms." This assertion is extremely doubtful, as the evidence prosented above suggests. it is far more likely that owners ovicted tenants or bought their tenancy rights in orior to farm the land thensulvos. Further corroboration is presented in Tablo 13. The actual size of the avnrago tienant farm rose from .960 to 1971, doupite ubdivi"Ion, Lrom 2.31 huctiros 'to 2.56 hectarus, an :Lncrotise of ILO . percenti. This indicatos thalo I, w, Lho smallest who boro Ikot I.nilaslikely LO1)0o Ovi td or bauqi1t Wn 01L1)L 1 OU ho,11'* out . 12he avorag0 "Jim" u1(, I owner-operated Farm Voll Vom 11.2'/ hoclareu .In1()6U to hoc ttrou in 1%,l, a duo,,J tf. Lercent Cliange litNumbwr anid Area of Farms By Tenure of Farm _jiprator_, PI.IIIpImc.: 1900 to 1971

Number ol l'arnis Area of Farms Tenure of Farm Perc.n. 1971 190t Operator 1971 1960 Cluange Change

Total 2,354,469 2,166,216 8.7 8,493,735.0 7,772,484.6 9.3

Full-owncr 1,364,990 967,725 41.1 5,345,429.3 4,133,276.4 29.3 Patt-owner 268,665 310,944 (13.6) 930,840.4 1,139,956.5 (18.3) Tenants, All types 681,658 864,53H (21.2) 1,74 6,4 54.9 2,000,201.1 (12.7) Cash 5,680 13,506 (57.9) 33,688 1 47,007.7 (28.3) Share of (17.5) produce 569,277 745,426 (23.6) 1,384,731 8 1,677,857.1 Fixed aimount 44.3 of poduLe 49,864 34,145 46.0 128,301.6 88,911.1 Rent frce 39,310 29,816 31.8 133,172.7 55,918.4 138.2 (49.0) Others 17,527 41,645 (57.9) 66,560.6 130,506.8 (5.2) Manager 2,458 2,487 (1.2) 346,242.1 365,309.0 Other foi ins of (6.7) tenure 36,698 20,522 78.8 124,768.3 133,741.6

Sou,_ce I..I tl)Pir i I 17 ol' _ t il'i, V ,Ir I ,I p xx 1 11 97

8d,2 p erc cnt. .... i s is a result o f tl,,, s -ub,6d iv ~s e 1 -el vom r ­ operited farms by inheritance, counteracted by the addi.tion of new farms on the frontier of a larger thain average size, and by the conool'idation of tenanL farm; into ownet'-operatot] farms. The conversion of Won;iicies into owner-operated farms in the Philippines Ij conutr-i led, undoobtedly, by several factors, one i that So mu1ih of the land Is ovwneu by middle class people who work at otier uccupatiun. Farmi.±ng t;bcir land themselves Is no- an option in view of this, mut they wish to retain owneruhip of the land au a uurco u. ari ul cash income and as a form of saVinl,3 well-protacted ajiairnJt inflation. Also, eviction of tentints hti become more difficul; now dule to the tenuncy roforms on rice and corn lund. Conveuion from toenancy to owner cultIVt"Wn will, probably continue Al view of the incentives, o',t the cont~arianto on th.1'iuP'oceus crea';o stron,_ ncentiveu Cr the ontatits theornolvou to Luka ovor land ,re other terunwts and farm lar, or ar,-as. Table 131

Distribution of Numibtr - Arc.;i, aand Avergc.a_ Size of Farm by Foiurc St attus f Ope rator, PhI 1HpI ! tnes:o 1.903-II~' 71

% Distribit ion of Farm Area fly Tenure, 1903-1971

1903 1918 1939 1948 1958 1960 1911 owner farms 75.6 73.6 55.1 61.5 55.5 53.2 62.9 part-owner farms -- -- 12.1 8.6 9.8 14.7 11.0 tenanted farms 24.4 26.4 25.1 27.1 26.5 25.7 20.6

% Distribution of Farm Operators b6 Tenure, 1903-1971

1903 1918 1939 1948 1958 1960 1971 owners 80.7 77.7 49.2 52.6 49.S 44.7 58.0 14.3 11.4 part-owners -- -- 15.6 10.0 10.2

tenants 19.3 22.3 35.1 37.3 39.8 39.9 28.9

Average Size of Farm in IecLares, 1960 and 1971

1960 1971 % Cliange Change in hectares

35 owner farms 4.27 3.92 -8.2 -. 21 part-owner farms 3.67 3.46 -5.7 -. tenanted farms 2.31 2.56 10.8 .25 .02 all farns 3.59 3.61 0.6

p. 47, and Source: Ingrid Palmer, Thie New Hice In the I!lI PLFnes.,I tnticti Office, Republic of the Phillpineu , National Censuts and Stat Pi!l ippl i , I C_- ,--,so;,, )l A ri. n.l;ito e, Vol. II. 99

3. -Expansionby-.Leasehold. Tenants Some tenants have been able to expand the amount of land they cultivate. The incentives to do this were substantially raised with the transformation of rice and corn share tenants to lessees. The leasehold rent tends to rise more slowly than economic rent, or the competitive share of income to land, as previously mentioned. The lessee then captures part of the return to land instead of the landlord. This is especially attractive since the economic rent on land has been rising steadily due to growing markets for output, increasing yields, and declining unit labor costs. Tenants require several favorable conditions to be able to expand their land. They need entrepreneurial ability. They need a trustworthy source of adequate credit. If the tenants are lessees, this usually must be from an institutional credit source. Reliable, adequate, and prompt credit from Institutions has been scarce for tenants. The accessibility of institutional credit appears to be improving for leasehold tenants, but in such a way as to reinforcu the advantages of the strong tenants. That is, large lessees tend to get better credit service than small or heavly indebted lessees.

Another requirement for a tenant's expansion is either the favor of the landlord or enough wealth (or credit) to buy up the tenancy rights from other tenants or to make loans to get tenants Indebted. The favor of the landlord might provide credit or the grant of a lease to land when the landlord regrants it. Vor example, in one Laguna barrio, 100 two tenants controlled _land of 80Ohectares and 411 hectale., or 60 percent of the total vice area in the barrio. They both began as very small tenants and expanded their land control in the 1960s and 1970s through purchase of tenancy titles and direct renting of land from the landlord. The landlords granted tenancy rights to these strong tenants when other tenants were evicted because of their failure to pay the rent as a result of debt accumulation to the landlord. Some of the tenants sold their tenancy rights In order to buy land elsewhere where it would be cheaper. Others sold them to pay off their accumulated debts and became landless workers. i29 The value of the leasehold tenancy right In Laguna is as high as 30 percent of the land value. 1 3 0 In a Neuva Ecija villagc with one landlord, a small number of tenants (all share tenants in the mid-1960s) attempted to become strong tenants. They e.perimented wit.h and adopted new technology and new sources of income quickly (mushroom growing, for example). They made loans and advances of rice, with interest, to fellow tenants. Many of these strong tenants did not take advantage of leasehold and the rent reductions of tenancy reform when the other tenants demanded them. The strong tenants remained loyal to the landlord, and thereby kept their shareholding arrangement and their source of credit, which the new lessees lost. They were rewarded with irrigation water at favorable rates, the use of landlord's tractor, and priority with the threshing machine at harvest. The strong tenants were able to become important credit sources for the lessees, whose debts. to .them accumulated._ Eventualy maly~lQtee's WOer

forced to sell their tenancy rights ch(aply to their creditors, the strong tenants. In this way the strong tenants exlinded the'r cultivation. 1 3 1

The strong tonants in Laguna had other advantages over their small tenant neighbors. They paid lower land rents than the smaller tenants, and they also paid lower wages than the other tenants. They could pay lower wages because they were the major employers of hired labor in that market.

Their operator's surplus turned out to be equivalent per hectare to that of the small tenants, because they had a higher labor input per hectare (since they needed considerably more management labor) and also more capital inputs. In short, the large tenants were less efficient, if anything, than the small, but their greater bargaining power with the landlord and labor enabled them to earn the same surplus per hectare.132 Subtenancy is another method of increasing the extent of the land from which the lessee Is extracting part ofr the economic rent. If the lessee lenses more land than he himself can cultivate and does not wish to farm t.t with hired labor, then he might sublet It at a higher rent than he has to pay to his landlord. The subtenant will, do the work, pay the higher rent, and the lessee keepn the difforence between the rent he charged and the official rent. Subtenancy appeatred In Liaguna w! Ai the tenancy rofom. TI, It, qu ito

I Imited , howe(ver, bec u e .. I , .1 1 1e 1 , I ' the subtenant 102

notifies the authorities, he will be granted the tenancy right. Subtenancy is restricted therefore, to close relatives and indebted people who can be trusted not to report It.13 3 Consolidation of tenanted land and cultivatlon by hired laborers is the more likely method of expansion by tenants.

4. Concentration of Ownership

There is little accessible evidence on current concentration of ownership, other than what has already been said about assertions of shady practices in frontler areas and in areas where plantations are being set up. Census information is collected on the size of farms, not on the extent of ownership. The ignorance on the concentration of ownership is exemplified by the surprise with which it was discovered that so much rice land is owned in amounts between

7 and 24 hectares. The Department of Agrarian Reform has not released any other information on the pattern of land owner­ ship. There have been no other national (or provincial) studies of ownership, either in other crops or at other times, so no comparison can be made. At the begInning of the

American period, however, it was assumed that land ownershlp in the long settled areas was very concentrated, in estates belonging to the Church and to local haclonderos. Most of the Church lands were broken up and distributed early in the American period. The big haciendas were probably much reduced by division at Inheritance. At, the same time, lowland frontier areas were being opened up by landowners with the help 103

of settlers; the settlers eventually became tenants on tho land. This process is recorded for Nueva Ecija, Tarlnc, and frontier areas of Laguna in the twentleth centurty.

There were widespread stories of landgrabbing from small owners in Central Luzon in the 1920s and 1930s. In short, there is very little public documentation on ownership patterns. It is clear that land sales are not uncommon by small owners. It is also clear that middle class Filipinos like to buy land in their home locale, as they acquire some savings. There is little evidence available to say more than this at present.

15. Marginal Tenants and Owners

Some tenants and landowners are prospering and expanding their farms. Others are improving their standards of living, but are not able or interested in using their surplus to expand their farms. And there are other tenants and land­ owners who are not experiencing gains in agricultural income, or who have very little savings or assets for survival in a crisis. Bad weather or mis-management or family crisis or bureaucratic mis-management can make the negative side of the risks come true. These farmers may have to sell theIr omral] plots, sell their tenancy rights, or be evicted. They can be called marginal tenants and owners, because their hold on their land or their tenancy right is precarlous; Jt I eally threatened by the many risks of farming.

The ranks of these marginal tenants and owners are growing. Farmers with Inferlor land where new technology cannot be usud may ouffer from a fall in the price of the crop 1011

but no Wcrvwa2 e In y1elds. This Is often the case with

upland vice farmv.A;. Thu subd Ivis Ion of I:wnd by ihri rltance

meais 3 inorme for ho s l erI' mov. T]r"io r t in,'v(o I I.on

teohnrol() y makes el'(,::; m'ore vinie i i Jl to wn1l, c(ort , I urid

r weather, ind requir(es more work I rki .U I al] In a credI t-s:rv'i e

situation. These factors Increase the r:ks ini pddy F'irming.

Small farners arnd espeeIiall]y terniant;s have t1he least rol]lob] e

access to Ilnstitut onal credit, aid thus, the -nol .ibi]]ty , "

to survive the risks or oven to take thrm )n in the f'I rst,

place.

Farms are beinq subdivided. Aver' o Iarm s;o' In a

barrio in h,,ur~n toel]lroi 2. hectaresh to .? .0 e,,ares rrom

1966 to 1976. "he barrio was composed of many sm;ill tenant,

farms, gettir smaller. In 1966, there wo' III lirid]ol'ds lnd

46 farmers ; In 197t , thovr Were th didi ord'st ' id n4 f'r ers . 1

In another ba rrio In Laguna, while the ]arr~e tenant farms

got ]arger, the small tenant farms rot smnall]]r , with a decline

in the nurmber, of" farms with orie to th'n', heclares, and an

Increase Ini thos" h) lnw on' hwctanu.'

C lii l r-,vrImeIla 1 :;u I tabl I I ty, tIio nival ]ab 111 ty

of credit In UP mst: vov loui 2 co; lrS nL:i' l, u ch i vl ri, 11l:sIrig

yil ds through :;uccuss;;l unpisor' t;he new tochriologlo Thes

nva.IlabI1lty and cost o' credit varl], r'enit1y bowafl n and withL in Nac, . , do pond 1rin on Lti admiIn1 Ls.riL1. 1i(, of' tIhi jg v,'rni­

rneut, cr-c I Lpr'orp'Is, th i 2' 1] ho"Nm l hiI,i i' I N I (" P');"M' I 1 or t he existn,"OI r i lh i lk, 'ITh rrll;I ba ilw

.trtLe d Inr .952 with Ann,,-ican creodi1ts. TheIy are iril ly 10 5

under the control of local important families who r|i them

credit worthiness. They are not attuned to the needoi of

the small farmers. A 1967 program of ,ovevnrment gutzintoont

of rural banLk loans to lessees and small owners falled to

increase slignificantly the loans by rural banks to them. At present, the rural banks handle some loans grantled by

the government credit program, once the loans are approvod by

the Masagana 99 (rice progrim) workers. Perhaps, with grenttr

familiarity with the small l;enants and owners, the bank w111

be more willing to lend to them, At present, however,

institutional credit for small-holding tenants and ownevr

comes primarily from government credit programs.

With the shift to leasehold tenancy, tenants lont. credit

from the landlord who had supplied the ma,lorIty of production

and consumption loans. They must now rely on government

credit, commercial credit, private moneylenders, or on

friends and relatives. (Loans from friends and relatves may carry the highest rates of interest; or none at all.)

aoernment credit is more available In some pl]ceti thrn In others. Tie Agricultural (!redlt AdministratIon In v'iuIttant 137 to provide funds to strug tng or defunct co-opa. Ored1t depends on the approval by the extenslon workers or the farmins plans of each farmer. In areas where extension workern are spread too thin, loans may not gtet approved In tLime or In the right amounts. A study from ilollo reports that 106

institutional credit for, tenant farmerr: Is hard to get.

Furthermore, delays In granting loans by the rutral banks or governiment. pograms have caused many ton:vmtL to vedlu(, thelr requests ,nd hift to t-chri hius which I'-(due th,,I1 11,,,,d f',,r cash. Sma 1 1 i.ams and tenants are aI'r-,ild to bolvuow f>'oriI rural banks because of fears of default ini or even of detontion if they default. 135

Apparenitly even the government loan agencies, as well as the ruco I banks, favor the better-of'f tenants and larger landown s,-"1 T(9n a I,,aIuI'l b II () f'many LM.I:i]1 tn, antsIII the -lar orof thos, te rumt.,L wwuis it .1)1h t, 1.u'n ) tai Ita oire of theI r credit fvom Itst tu t-oalno so..c..., and th.re for'e at lower- rates of Intercst, than t e small tenant's, as Indicated in 40 Table 14.1

Sources of Crdit, by 21 so of Fiarn in A L nlt Vi i r( ]07b

Tns, I tut l a I l"II l.'r& 1.1:I, I v,*-:; lnanId 1ord:; lazrge tena ts7 17 )/a ,).. s maI]I l~n-:mt,;t JK. B U' 1 *1'"

Source: ,i:.;u KtkuchI , LIi iso M. Hlomba , :aiid Yrl I11'( 1:Iy,1t,, "'I:v) lult ~n a( , nd Tenornd 2yter InI a !,:tro vnI V 1.llw.',I

...... 107

_Other aspects of the government _rice programs. work-bett r,

for large farms than small as well as the credit programs.

Extension workers do not reach small tenants much since they

c~ncentrate their limited time on the larger farms.

The price support program for rice is supposed to buy rice

from the small farmers first when rice is to be purchased.

However, there have been difficulties, such as getting authorization to sell rice and to transport it to the proper place to sell it. The large farmers have been more able

to take advantage of the support prices than the small ones.

They are able to be first in line for support purchases when not enough funds are available to buy all the rice necessary 142 to maintain the price supports.

The new rice technology and the government programs have been more easily and thoroughly used by the larger farmers and the owner farmers. Tenants, especially small tenants, and small owners have been at a disadvantage and have been less able to apply as much of the cash-using inputs as those who could take better advantage of the programs.

They also suffer greater risks in borrowing at higher interest rates and not using as much of the protective inputs such as pesticides. The tenancy reform then has probably made the continued access to land of many tenants more precarious, by removing their one sure source of credit. At the same time their need for credit increased with the now technology. Some tenants have become weaker than before.

The amall owners arc at greater risk as well because oP their 108

greater need for credit. These problems might be alleviated

by reliable government credit programs, but these are difficult

to provide.

6. Landless Laborers

The number and proportion of rural workers without land

has been increasing in the last three decades, as a result

of population growth and of the consolidation of farms by

landowners and by tenants. The rural population has been

growing at 2 to 2.5 percent annually, with the labor force

growing even faster. The increase in the proportion of the

landless Is illustrated by the information from several

village studies. In one small tenants' barrio in loruna,

the percent of landless households increased from 30 percent

to 50 percent of all households from 1974 to 197K, due to

the immigration of landless families. The number of land­ less workers increased by 170 percent from 1966 to 1976.143

In another barrio, population growth was 3.6 percent per

year, and landless households were 56 percent of all

households in 1977, primarily working as hired labor In

agriculture. 14 In another Laguna barri o, andless riosoholds

increased from 30 percent to 43 percent ofr al] households

from 1967 to 19711. 1 5 Another Laguna v1llage xpep lencd a

growth in landless worker households from 30.3 percent in

1966 to 49.5 percent lIi 1976.1 W In a Zamba les vi ll i o, the

landless workers Increased from 8.6 percent or :1 I hus.holds

to 15 porcenl. from 1967 1.o 1977. 1 1 7 Th" numbers "r iondies households In these flgures do not .Include tenants of any sort. 109

The landless workers depend mostly on agricultural hired

labor for a livelihood, but they cannot rely on that source

of income lof,., AgricuIturni wages supp1 i.ed 60 C r r o

the incoe( oF the landless workers' househohlds in Kikuchi's

Laguna barrio wilh Lwo large tenart-irriaged f:i,. ARTh

iverage days of work per month for hired labor .in fore Iaguna

villages were 13.8. Wher'e they were very seasonally carocentrated,

as in rice agriculture, laborers had more trouble fi nding

other work than where the agricultural work was sp read over

the year, as on c cout 'a 1ms The wage rates pall n

the stead.ieor employment ir su.ar anrd enconut, were lower than

in rice, bub the total yearl y income of coconut workers was higher than that of rice workers because oir the greater

amount of work. Thi1 s is not so for .ugar workers, whn are

the poorest pai.d of al l. ;]urngv lAr'ms are nost dependent.

on hired labur (86 prcn t orf the total wo'k force), Nhaca

farms are next most deprdent (63 percent), with rice and corn farms usirng hired labor ror about one-halF of their labor

force.

[Llano 1(S hohslro: )]5 'rlu 5t Il|d ot.h1' work. They ho] d a wide di versi.ty or odd jobs: for' examp) e,, ish in, carpenry, vegetatle 'ais i ng, pouli r'y and 1v,,Vt"l, 1015.1 1in, cop)Wa­ making, a;erv ices, factory work, tuba Mi' rig,g trade, pedicab 1', CII'iv Ingj, Fi're~wood r~htin t cogortan011(Iij a litei' . 01

F,'ood g w1 n: is3 M an; vo y i r'l, , v,, th ' V, / p v,, Qnpeci~~~~~~~~~ly~iiqnN owWvvPo~ W ths iieeM 110

Landless laborers depend heavily on income from a wide variety of sources besides agricultural labor, but have trouble finding enough work of any kind to provide a liveli hood.

Total employment In rice agriculture has (1efinitely increased in the Philippines with the introduction of HYVs.

The increase in labor Is used in the care of the crop, largely weeding, aii( in harvesting the larger yields. However, there has been an actual decline in labor used to prepare the land and for threshing, due to widespread mechanization of these activities. In Laguna and Central Lu:on , the Increase in labor inputs amounted to about 20 days per hectare 1In 1977.

The use of labor for weeding doubled in Laguna, and more than doubled in Central Luzon. 1 5 3 Tractors have been introduced primarily for the purpose of preparinr the land quickly in order to get another crop planted promptly.

Thus, while they reduce labor use in land preparatLon, they allow more labor use in crop care by increasing cropp inr.1511

Subsidized interest rates for machinery pur'chas es have probably encouraged mechanizsation somewhat.

Tra.0 ditiornal ly, ii much of the lowland Phi 1.ippi .nes, transplant in g,, harvest i ng, and thresh I nq were dtone by hi red family. labor, and the care of the crop was done by the

With the Green Revolution, however, there Is much mope work to be doifw on th( care of the crop, most.ly In wndi nr onol srnyInr. In zome ar':n this Incr'ease( wordk in due by hi" ed

labor and InLother :r(as It Is don"e prIm: rlly by fliril],y lab0)or.

Even the pIlactIce of hirring labor to, harvest l s.been IIi

weakened in some places, with family labor taking it over.

These decisions seem to be based on profit cons idera ionsin

view of local constraints. Care ofr the crop has iWcrpeasi gly

been ass Lqned to hi red labor where new customs havi. dvaoped

whereby the weeders do not get paid. Insatoad, they acqu lru

the right .o )erform the harvest ing and 1;hr, shI.ng wt l~pon

the area which they weed. The ha1rwarestin, ny is not _increased

above the traditional share, so this a mounts to a considerable

drop In wa ges, since much imore work is doei for the same

pay (usual ly a one-sixth i ' orI' Who, ha v,;t). The

laborer gains the security or iar ntuwd har'ves;t work, but

must work at weedinig w itht pay a ctepk rnsplanting unil l

the harvest. The farm,..r gets the labor dI e wthout a cash

outlay (which would couir" scarce and expensive credit) and

a auarantee of harvest I boTa' when he wants ii. Tlis system

is call Eci ama in La gin u, and sagod in NloW." (A ,,omparable development in Pampanuga is the atorga system, where an labor group contracts to trpaina nt, harvest, an d ha ul the crop in exchange for the 11.66 pr'co t o r the crop wlic.hsed Qt be pad Fro hivyir.. and inn iua nto. ) 10 l ing the 1970s, these p)(,t iLLO' Itv, ,uen introduced ald spread very qu~ckly to vi rtuA Ily all an]mll] farmprsr in these a rns.

In Ki:unichi's Ra r'i'oIa ,, withltw) very Iiv'gr', 'tims o;)or'a ted b:y tenarint s Iri r hi red lI[l() , lh(t fhllrt y;t il :i oalt ti;' ot over as in clh . ,t , ( ' t 1 ] I ir l ' ;a 1.1I I , In,1 7'Y, onl y hIi ,dci II'' a' 10u0(ii.' tV a ,l. tAnd l t ir(', a li g. i' la tfi'

Lno it p:t- l;_fir, " r,tow ei , hit In11 9Y5t'/ 5!'t.5lcuiP1 t'e Ciihti'Vllt, s;hare? p,:ld r' nm o n,-;.la hi O ri L;hi, di'y sqa.s.:on anfd unw-inlIlh 112

for the wet, to one-eighth and one-seventh. 1 5 8 They paid wages for hired labor to weed, but still achieved a reduced

overall wage rate by reducing harvesting wages. AecunlpIin,

credit in order to pay cash wages For weed.in woul( be

considerably less of a problem for these large farmers, of

course, than For small farmers. The smaA1 tenants in the

village most ly followed suit and reduced the harvest wage

but did not hire labor Cor weeding. Some oF them did use the

gama system, however (13 percent of the rce area was 14 harvested by gama In the 1977 dry season.)

In Central ,Luzon, the Increase In employment in rice

production has been taken up largely by Fainmi ly labor, not; 160 hired labor. The gama system has not yet extended to

there, and cash would be required to pay hirnd labor to

weed. Unpaid family labor usually does it instead.

In the new atmosphere of profit-oriented agriculture,

customs can change quickly. Gama spread In just a Few years

to include virtually every farmer in the villages where it Is

found (unless t;hey ad',pted a A] ferent system, as Ini b ailo

S). The strong tenanlts I n a Nueva Eeljn hairrlo, extendilgj

their farms through buying up tenancy vI ght:;'u Im Iidt,,Ked

fellow tenant:;, hav, begun to shake off the trd 11.1,rnal1

"sharnr" customs. Ahny tunile(] pop]l away from the hlNvest

work(, I r itA Ily II holto 01]1Ia.i, OP CO ""t Pr t F th.

work at, n gll,I when t1 w e p"; werelc,i il,. llhe e 'rilm e rlr.,

Family mfml)rP: to haet ,, ti'dtora 1011 v not, (1e( , O' fil!)loyed

indebt!d rC] at Ionis; at, ,I l)wei wage. 0 'llihy wel"4 F 111(i11nr

ways t;o keep the prfl,table haovestini 1abor In the famrily]. 113

This kind of' reduction of wages and restriction of the opportunity to work will probably in-crease& with~ theInc&reasing

numbers of landless laborers and near-landless farmers who

seek farm labor.

Real wages of agricultural laborers have been falling,

as exemplified by the introduction of the gama and atorga

systems and the decline in the harvest share paid by the

large farmers. The decline in real wages is a long-term

phenomenon. They have declined 30 percent since the early 162 1950s. With the increasing number of agricultural workers,

this process can only continue, especially as commercial values become more powerful and erode village customs.

Falling wages will be accompanied by Increasing underemploy­ ment. The proportion of all rural workers wanting additional work was 10.3 percent in 1975, but it is much higher for poor workers. In the Bicol River Basin, it was 63 percent among the poorest workers.1 6 3

D. Conclusion: A Capital Frontier is Required

Rural development in the Philippines raises the incomes of some and lowers the incomes of others. Rapid population growth is partially responsible for this duo to subdivision of farms and the creation of'more landless workers. Consolidation of farms Is also responsible, which pushes weak tenants and owners into the landless group. This could probably be considerably reduced with effective programs of credit and , Om'I1Ittice Vol'snj iim n 114

.The falling incomes of the landless and near-landless laborers will not be improved adequately by such a prorram, however. What they need are more assets or more pr'cduti"e work. The World Development Rep)ort, 1979 says thI stronj agricultural growth over time is required to genernte the 1614 additional waqe employment. While this is undoubtedly true, the emphasis on agricultural growth to solve rural poverty problems seems inadequate to us, especially with regard to the poorest of the poor, the landless laborer. Since the land frontier is closed, In order to raise the incomes of the poorest wnrkers who own no assets, a capital frontier is required. The very poorest workers will probably not be able to take advantare of this, but they will benefit from jobs in rural industry, If they can be sufficiently developed.

Labor-intensive rural industry requires the avallability of credit to the small entrepreneur, not' at subsidi:ed rates but at rates no hLgher than to the large entrepreneur. The small entrepreneur needs equal access to corelit, just as the small farmer does. He may also need equal access to govern­ mentally-ass.sled technical and marketi p rograms. ural developmenti needs a stronq, labor-ontensIve Indust rial component on a small scale, In order to Increase productIve rural employment and incomes for the poorest. 115

IV. CONCLUSION

A. Summary

Why is poverty increasing in rural Indonesia and the

Philippines? Why are larger numbers of people experiencing

lower standards of living? The complex answers to these questions will vary somewhat according to the particular circumstances

of each place. However, the two regions have enough in

common for a general answer to )e given. Rural development

in both countries is proceeding in an economic framework which

is characterized by unequal ownership of the important assets: primarily land, but also fishing boats, fish ponds, craft

tools, and other cultivation equipment. In tdiis situation, three

important processes are going on which determine the pattern

of rural development. First, markets for products, inputs, and consumption goods are growing and extending to new areas. Second, the productivity of land is rising as new technology is being introduced. This technology requires

increased cash outlays to increase the productivity of rice

land, fishing, or craft production. Third, population density on the land is already great and Is growing.

These first two proce.3ses in Indonesia and the Ph~lippiner are leading to increased c ncentration of the control over land and capital. Population growth counteracts the Increasing concentration of control over land somewhat, by subdivision of assets at inheritance. All three processes are loading to Increasing landlessneos and near-landlessness, or loss of other nssets by poor, ritral households. 116

B. Theoretical Significance

In Economic Theory arid Underdeveloped Regions, Gunnar,

Myrdal stated a very general theory of how the free piay of' the market leads to 'egi ona I economic Inequal]ities, :a; one region grows and others decline. 16n Capital and Iabor flow to the expanding region, attracted by the hihep et turn; available there. The stagnating region loses pvroduciitv e re so nrcu, oass ilte Wo()rk e rs emi grate, as sa vn [rfiow out, and as industry there declines, unable to compete with the low-cost, new indu stries. The increa sino regigonal ini eq u ality is due to a reglonal shift in product lve resources ir a market economy.

The growing inequality among rural households dae to increasing lOndAessness can also be traced In Iar,. pai, to

.he free pInoy of the market. It can be observed Ini bot tihe rural Phil ippl es and Indonesia that a shi rt In ownrpshIp of prOdocLvw re 00sources Is gon.ng on among hious eho]ds; pruductive resources are becomilri Inove cn et, atLed. The households wi th an adequate lnl, ootor i in( car N[ord to aci(tl.r. l'tmove ( assetw; o; ill:] ltlsian, arid ('sik contI rii to prosper. They can sa V, borrow, arid .Invest . Poop houmliho (s cal lose the inadequat. :ooeLt;; Lhey have.

The technologIcal changes that are nnw golng on may make cort i nued owlerhip or -lX, 1trig assets , sueh1 s Iand, Kdo1 en'I nt on thfe use o) oh er- coumeiiry ri''w Nso t,. Nor' "Xlu the hlth-yki l,1g r(ice varieties Pr(elpI le purchae or n('W Inputs.

Many rvWc fa:rmers will be unable to afford tiUh new technology 117

package; soon they will not be able to compete with the more productive farmers who can afford it. In time, those who cannot afford to purchase the new technology inputs may have to sell their land. In another example, many rural craft workers cannot compete with mod rn producers without heavy outlays on new equipment. Hence, the expense of technological change can make it impossible for poor households to keep the few assets they do own. Consequently, the initial unequal distribution of assets becomes more unequal, especially as costly technological change increases the opportunities to those with adequate assets to afford it and decreases the opportunities to those with too little. Population growth also contributes to landlessness since inheritance splits up land ownership. These three processes: 1. the extension of cash markets,

2. ca6,.-requiring technological innovation, and 3. population growth--all act to reduce the wage income to landless and near-landless households. These three processes together are the primary influences on the reorganization of rural production.

As the control of land, fishing boats, and other productive resources changes hands and becomes more concentrated, the pattern of labor use changes. Much of the new investment by the prospering asset owners is capital-Intensive, not labor­ intensive (rice hullers, motorized boats, tractors, urban industry). The market crileria for production erode the traditional commitments to provide as much employment to the poor as possible. Tncreailrigly, the desirable employment 118

is offered only to family members and friends who can offer reciprocal benefits instead of being open to all who need work. At the same time, the labor force is growing faster than the number of jobs paying a wage at or above the poverty line. In this situation, the real wage to the rural landless worker is declining.

Market processes under conditions of unequal ownership of assets can partially explain the inadequate employment created by the present type of relatively capital-intensive investment. For example, those individuals and firms with the most assets can typically borrow at considerably lower rates of interest than those with few assets. This is because wealthy firms and individuals are lower risks to creditors. Governments also provide subsidized interest rates to wealthy firms and larger farmers. As a result, those who seek to maximize their profits will respond to lower interest rates by replacing labor with the cheaper capital. In both

Indonesia and the Philippines, a tremendous amount of invest­ ment undertaken is of this sort. The perverse consequence of this situation is that there are many investors facing high interest rates who are ready to use lots of labor per unit of capital, but who find very little capital available to them. Thus while the capital supply is growing, it is concentrated in uses where it is available to relatively fewer workers. The majority of workers have less capital per worker than before.

Consequently, their productivity falls and so does their earning power. 119

C. Policy Implications

In conclusion, the growth of poverty in the rural

Philippines and Indonesia can be explained by 1. the loss of

control of land and other assets by poor households, and,

2. the inadequate creation of Jobs due to the current style of investment. Families are dispossessed of their traditional

livelihood but are not provided with another. The creation

of poverty is occurring, not despite economic growth, but

because of it. A higher economic growth rate of the same

style could create more poverty rather than alleviate It.

This style of economic growth is not Inevitable; nor

is it natural. It can be affected at many points. In fact,

past government policies have acted to enhance this style,

but this could be reversed. The Inequallty of ownership of

assets could be reduced; cooperatives cr collectives could

be formed. The structure of Interest rateu could be shifted

so that small borrowers could obtain affordable credit, and

capital-lntensity would not be encouraged. Research and

development could be concentrated on low-cost and labor-using

agricultural and craft technology. Ansoeto In the form of useful training could be provided to poor familles. Th (?vv are a few of the various poleaon that governments In JTkarta and Manila might consider to reduce the plight or the landlovs and rural poverty. It to Incroasingly clear that central govornmonto cantiot afford to ignore the pr(cblemn of the landlean itnd neir-hand|i.u.

The displacoment and pauportzatiton of' larKu numbers oj' 120

traditional subsistence farmers Is not only a critical devlop­ ment problem of achieving quitable econlomic rowt,h; ii Is also a major polltical ehal lune to the let-itimyLcy :and stability "rf' ial rvoevtrnmlnt. (;atina A ,nthbGiet h trwiuin ic

power "nd%Q peIl ca] powe ;Nrr b ,eomirg moe and mope (',,econt rated in Indornesl :i nd the PhilippIies, the r:angu or" woikble solutions is; cast d i I eI r . At Isn I mperativ e that; effective pollelv; W Imp Iimentud as3 soon as possible, while the oppor'nunItV.en ,'ltn. 121

Footnotes

1. The phrase is from a recent Worldwatch Paper (#30), Erik Eckholm, The Dispossessed of the Earth: Land Reform and Sustainable Development, Washington, D.C.: Worldwatch Institute, June, 1979.

2. Republic of the Philippines, National Economic and Development Authority, National Census and Statistics Office, Philippines, 1,971 Census of Agriculture, Vol. II, Manila, 1975. pp. xxiii-xxiv. 3. Willard A. Hanna, Food in Indonesia, Part I: Rice, pp. 7-8. 11. William L. Collier, Harjadi Hadikoesworo, and Suwardi Saropie, Income, Employment, and Food Systems in Javanese Coastal V=ilages, pp. 39-40. 5. G. P. Temple, "The Decline of Agricultural Involution: Analysis of Migration, Employment, and Income Distribution in Rural Java," pp. 14-7.

6. Ibid., pp. 8-9.

7. John W. Duewel, "Socio-Economic Analysis of the Provincial Area Development Program (Program Pembangunan Daerah--PPD) for Central Java," pp. 6-8. 8. Ibid., p. 6. 9. Duewel, 2E. cit., pp. 9-11. 10. Ibid., pp. 16-17. 11. Ibid., p. 21. 12. William L. Collier, Harjadi Hadikoesworo, and Suwardi saropie, op. ci., p. 11.

13. Ingrid Palmer, The New Rice in Indonesia, pp. 137-138. 14. USAID/Indonesia,. Annex to Fiscal Year 1979 Annual Budget Submission, pp. 31-33. 15. All the information from the 1963 and 1973 censusen here is from Anne Booth and R. M. Sundrum, "The 1973 Agricultural Censu,," Bulletin of' Indonesian Economic Studies, 12, no. d, July 1976,7pp. 90-105. This excludon estate agriculture. 16. Palme', o. a-It., pp. 136-7.

17. Ibid. , pp. 131, 9111. 122

18. William L. Colli,_r, "Agricultural Evolution in Java: The Decline of Shared Poverty and Involution," p. 32.

19. William L. Collier, Harjadi Hadikoesworo, and Suwardi Saropie, op. cit., p. 96.

20. Ibid., F ). 25-27.

21. Ibid. , pp. 139-140.

22. Palmer, op. cit., pp. 137, 143.

23. Rudolf Sinaga and William L. Collier, "Social and Regional Implications of Agricultural Development Policy," Prisma, I, no. 2, Decenber 1975, P. 33.

24. Sajogyo, "Modernizatton Wi'hout Development In Rural Java," pp. 23-)4. 25. William L. Collier, fharjadl Hadikoesworo, and Suwardi Saropie, op. cit., pp. 39-40.

26. Ibid., pp. 17-18.

27. Ibid. , pp. 15-19.

28. Ibid., pp. 71-75, 121.

29. Ibid., pp. 88-89.

30. Sajog:,ri, oL. cit., pp. 30-35.

31. ID. 11. niiny arid ,4.Singarlmbun, "Population and Poverty in Rural Java: Some Economic ArithmetIc from Sriharjo," p. 32.

32. Du wl , o]. cIt. , I,!. ] 9-20.

33. S j o and%y W-llI am l. o(l,' 1 l , "Adopi. 10n11 of ll gh, YIOlding Rice Va, t. 1 1; h/ ,Ja' , Fa mI ';;, ). J

311. Rli I I', Iri; i ,arI WI I lain L. Collier, of. cit., p. 32.

35. Pa Im r', 2Lj . cit., p. 143.

36. Pal mr,, . c.., pp. 83-85.

37 .. Ptt1 1, i I(, lo,, 1 overnmnrlit arild A rlc ll tlwri l D Vl 1o11i 1 . . I,.:Jv, i l ri It. - An,1' I, 38. ;n It M,I 2, 2,,;l,.;m l tia,:;, ,Jok at , 1"ll(l iuio ,Iga, AnIaIt ] ],;lo a~ jj ,j_ri-, Ii ,7,( p,. ,_J. inP l n"~'~"r. .. ',' "> ,7 123

110-.BenJamin White ,- "Political - Aspects of Poverty, Inco m e. Distribution, and Their Measurement: Some Examples from Rural Java," pp. 9-14. 41. D. If.Penny and Singarimbun, op. cit., p. 28. 42. Ibid., p. 23.

43. Sajogyo, op. cit., pp. 46-47.

411. Palmer, op. cit., p. 162. 45. William L. Collier, Harjadi Hadikoesworo, and Suwardi Saropie, op. cit., p. 30. 46. Han R. Redmana, Hazel V. J. Moir, and Daliyo, Labor Force and Labor Utilization in Selected Areas in Java: Results of an Experimental Survey, Vol. 1, pp. d5-89. 47. William L. Collier and Sajogyo, "Employment Opportunities Created by the High Yielding Rice Varieties in Several Areas on Java," pp. 4-5. 48. William L. Collier, op. cit., pp. 11-13. 49. William L. Collier, "Food Problems, Unemployment, and the Green Revolution in Rural Java," PrIsma, pp. 8-9. 50. William L. Collier, llarjadi Hadikoesworo, and Suwardi Sarople, op. clt., p. 96.

51. Sinaga and Collier, 2E. cit., pp. 30-31. 52. William L. Collier, "Agricultural Evolution In Java: The Decline of Shared Poverty and Involution," p. 22.

53. I1SATD/Indonesia, OP , cit., p. 26. 51. Ibid. 55. William L. Collier, "Agricultural Evolution in Java," op. cit., p. 24. 56. USAID/Indonesia, Loc. cit. 57., L,11,1o gYo, a], . t, p. 411., 7, Duewel, 0]. cit., p. 78. 59. William L. Collier, Hariadi ladikoesworo, and Suwardi Sarople, a. cit., pp. 91-96. 60. Will11am L. Collier, "Ari~rcultural Evolution in Javai," 21 211 sPP. 124

61. . Palmer, OP. cit., pp. 150-151. 62. Sajogyo, op. cit., p. 43. 63. Palmer, op. cit., p. 151. 64. William L. Collier, "Agricultural Evolution in Java," Op. cit., pp. 30-32. 65. Ibid., pp. 28-29.

66. D. H. Penny and Singarimbun, 2p. cit., p. 34.

67. Palmer, op. cit., p. 129. 68. Ibid., p. 130.

69. Duewel, op. cit., pp. 15-16. 70. William L. Collier, Harjadi Hadikoesworo, and Suwardi Saropie, a. cit., pp. 91-96. 71. SaJogyo, ap. cit., p. 43. 72. William L. Collier, HarJadi Hadikoesworo, and Suwardi Saropie, op. cit., p. 127. 73. Duewel, op. cit., p.58.

74. William L. Collier, Harjadi Hadikoesworo, and Suwardi Saropie, op. cit., p. 80. 75. Ibid., p. 87. 76. Ibid., p. 76. 77. United States Embassy, Jakarta, Indonesia, Annual Labor Report, 1977, P. 9. 78. Palmer, a. cit., p. 26. 79. William L. Collier, "Food Problems," op. cit., p. 19. 80. United States Embassy, Jakarta, Indonesia, 9R. cit., p. 12. 81. Benjamin White, "Notes on Agricultural Employment and Rural Labor Utilization in Java," pp. 4-5. 82. Dwight Y. King and Peter D. Weldon, "Income Distribution and Levels of Living in Java, 1963-1970," p. 18. 83. William L. Collier, "Food Problems," 2. cit.) p. 9. 84. William L. Collier, HarJadi Hadikoesworo, and Suwardl Saropie, o. c., p. 115. 125

G-5.Cary -E.Hansen -,-~cit; , P. 8 86. Willard A. Hanna, "Food in Indonesia, Part I: Rice," pp. 1, 7. 87. Benjamin White, "The Economic Importance of Children in a Javanese Village," pp. 78-79. 88. D. H. Penny and M. Singarimbun, p. cit., p. 59. 89. USAID/Indonesia, op. cit., p. 46. 90. Sajogyo, op. cit., p. 71. 91. Herbert Feith, "Political Control, Class Legitimacy Formation and in Suharto's Indonesia," Kabar Seberang Sulating Maphilindo, no. 2, June, 1977, pp. i-ii. 92. United States Embassy, Jakarta, Indonesia, op. cit., p. 9. 93. Brewster Grace, "The Politics of Income Distribution in Indonesia," pp. 4-7.

94. Lorna P. Makil and Patria N. Fermin, Landless Workers in Rural the Philippines: A D~cumentary Survey, p. 44V; also, Zubeda M. Ahmad, ed., "LandI Particular Reform in Asia, with Reference to Pakistan, the Philippines, and Thailand," p. 12.

95. Ahmad, op. cit., p. 61. 96. Ahmad, op. 2t., p. 711. 97. Duncan A. Harkin, "Small Landlords in the Philippine Land Reform," pp. 22, 23, 28. 98. Ingrld Palmer, The New Rice in p. 12J1. the Philippines,

99. H. W. Herdt and C. 0. RInacde, "The Technology Impact of New RlIco on thc S3hares of' Fiarm Earndngs, Laguna and Centrtil Luzon, PhtiJpplne," p. 12. 100. Masao Kikuchi, Nellie Fortuna, Luisa N. Bambo, and Yuji.ro Hayaml., "Polarization of' a Laguna Vlllage," p. 5. 101. Ahmad, 2a. cit., pp. 60-61. 102. IRRI , r-m'Ibid., and IRRI Research HIighlights- , p . 85). : ...... for. . 1977, Los Banoi:

103. 0. Wickham, E. B. Tortres, and G. T. Castillo, "The 1'tume' s Laborerl, p. 57, 126

104,..... Masao_, Kikuchi., _Luisa M..Bamb o.and ...YuJiro,_Hayami, ...... "Evolution of Land Tenure System in a Laguna Village," p. 5.

105. Palmer, op. cit., pp. 51-54. 106. Gerald C. Hickey and John L. Wilkinson, "Agrarian Reform in the Philippines," pp. 11-12.

107. Ahmad, op. cit., p. 74.

108. Kikuchi, Bambo and Hayami, op. cit., p. 10.

109. Ahmad, op. cit., p. 61.

110. Makil and Fermin, op. cit., p. 42. 111. Randolph Barker, "Farm and Village Level Research in Agricultural Economics at IRRI," p. 7. 112. Kikuchi, Bambo and Hayami, op. cit., p. 8. 113. Palmer, op. cit., p. 39. 114. Kikuchi, Bambo and Hayami, op. cit., p. 9. 115. Palmer, op. cit., pp. 54-55. 116. Ibid., p. 57. 117. Gerald Hickey and Robert Flammang, "The Rural Poor Majority in the Philippines, Their Present and Future Status as Beneficiaries of AID Programs," p. 30. 118. Frances Moore Lappe and Eleanor McCallie, "Agribusiness in Mindanao--Multinationals in Control," Ang Katipunan, Nov. 15-30, 1977, p. 5. 119. Frances Moore Lappe and Eleanor McCallie, "Agribusiness in Mindanao," Ang Katipunan, Dec. 1-15, 1977, p. 5. 120. Ahmad, a. cit., p. 6. 121. Cabanilla and R. W. Herdt, "An Economic Analysis of Large Scale Rice Farms Under General Order No. 47," pp. 1-5. 122. lbd., Appendix, Table 1, p. 32. 123. Gerrit Hulzer, "Agrarian Unrest and Peasant Organizations in the Philippines," p. 25. 124. Ahmad, a. pit., p. 8. 125. Otto van den Muijzenberg, "Involution or Evolution in Central Luzon," in Peter Kloos and Henri J. R. Olaesson, eds., Cultural Anthropology in the Netherlands, pp. 145-148. 127

126. Kikuchi, Fortuna, Bambo, and Hayami,op cit.P. 10.

127. Kikuchi, Bambo, and Hayami, op. cit., p. 11.

128. van den MuiJzenberg, op. cit., p. 147.

129. Kikuchi, Fortuna, Bambo and Hayami, op. cit., pp. 9-10.

130. Kikuchi, Bambo and Hayami, op. cit., p. 1.

131. van den Muijzenberg, pp. 148-149.

132. Kikuchi, Fortuna, Bambo, and Hayami, op. cit., pp. 9, 12-13.

133. Kikuchi, Bambo, and Hayami, op. cit., p. 35.

134. Ibid., pp. 5-6 and 26.

135. Kikuchi, Fortuna, Bambo, and Hayani, op. cit., p. 5.

136. Palmer, op. cit., p. 45. 137. Ibid., p. 41. 138. Antonio J. Ledesma, "The Sumagaysay Family: A Case Study of Landless Rural Workers," Land Tenure Center Newsletter, No. 55 (Jan.-March, 1977), pp. 22-2"4. 139. Ahmad, op. cit., p. 7.

140. Kikuchi, Bambo, and Hayami, op. cit., p. 42. 141. Makil and Fermin, op. cit., p. 103. 142. Palmer, op. cit., pp. 427-429.

143. Kikuchi, Bambo, and Hayami, op. cit., p. 4.

144. Kikuchi, Fortuna, Bambo, and Hayaml, o. cit., p. 4. 145. Violeta Cordow and Randolph Barker, "The Effect of Modern Technology on Labor Utilization in Rice Production," pp. 17-18. 146. IRRI Researcq Highlightsfor_1977, op. cit., p. 85. 1117. Barker, op. cit., p. 16. 148. Kikuchi, Fortuna, Bambo, and Hayami, 16c. cit. 149. Wickham, Torres and Castillo, o. ct., p. 57. 150. Makil and Fermin, op,. cit., pp. 99-101, 21. 128

151. Ibid., pp. 32-36.

152. Hickey and Flammang, op. cit., pp. 29, 47.

153. Cordova and Barker, op. cit., pp. 11-15.

154. Palmer, op. cit., pp. 170-171.

155. Cordova and Barker, op. cit., p. 16.

156. Ibid., p. 17; Kikuchi, Bambo, and Hayami, op. cit., pp. 12-14, Ledesma, op. cit., pp. 17-19.

157. Barker, p. 11. 6-8. 158. Kikuchi, Fortuna, Bambo, and Hayami, op. cit., pp.

159. Ibid., p. 7.

160. Cordova and Barker, loc. cit.

161. van den Muijzenberg, op. cit., p. 149.

162. Hickey and Wilkinson, op. cit., p. 13.

163. Makil and Fermin, opj. cit., pp. 31, 110.

164. World Development Report, 1978, Washington: World Bank, August,1978.

165. Gunnar Myrdal, Economic Theory and Underdeveloped Regions, New York: Harper and Row, 1957. 129

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