Extracting labour from the neighbour: class dynamics of agrarian change in Sumatran oil palm

ABSTRACT

Recent global ‘land grabbing’ has evoked concerns about the dispossession of agricultural smallholders. This concern often assumes that the current smallholders are the continuation of the undifferentiated ‘middle peasantry’ (‘peasant family’), only with a new crop. Drawing from Sumatran oil palm farming in Indonesia, this paper shows that the majority of smallholders are petty landowners who must sell their labour to survive and are thus part of the labouring classes. On the other hand, a few smallholders are among the capitalist farmers, those who extract their neighbour’s labour for accumulation. Exposing capital-labour relations between smallholders implies that any resistance to dispossession can no longer take for granted that all smallholders are opponents of corporations and states.

KEYWORDS:

• Oil palm Sumatra
• smallholders
• class dynamics
• class location
• class relation

Acknowledgment

Thanks to Linda Sudiono for her intellectual support, warm courage and caring. I am grateful to four anonymous reviewers who have provided valuable inputs and suggestions to improve the draft of this article. This research is funded by Indonesia Endowment Fund for Education (Lembaga Pengelola Dana Pendidikan/LPDP).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The problem with the term ‘smallholders’ has been identified (Cousins 2010). For the sake of familiarity, this paper maintains the term ‘smallholders’ only for descriptive category: non-corporate agricultural producers.

2 This indicates their ‘choice’ in selling their labour, instead of out of compulsion. Our study finds that the PCPs (with their modest land ownership) generally manage to meet their subsistence from their land. In contrast, petty landowners, who are members of the classes of labour, have no such economic capacity and, thus, they must sell their labour out of compulsion to meet their subsistence.

3 For example, for harvesting, the most intensive agricultural task in oil palm, the companies generally offer the workers Rp. 87,000 per day plus a bonus ‘premi’ after harvesting 25 bunches of oil palm. The ‘premi’ is around Rp. 150 per kg of bunch of oil palm they have harvested and each worker may get ‘premi’ for 0.5–1 tonnes per day. This is similar to what individual capitalist farmers offer, though they employ only the ‘premi’ mechanism (which, on average, is about Rp. 150/kg of oil palm bunch) instead of offering a daily wage. Per day, a worker could harvest between 1 and 1.5 tonnes of bunches of oil palm. Working for either a company or capitalist farmer, the harvesters could earn between Rp. 150 and Rp. 225,000 per day.

4 Workers with ‘permanent employment’ status (mostly for the harvesting task) often complain that they have to attend the office at 6 am for briefing before start working at 7 or 8 am. The working hours for the day technically end when the worker has collected the minimum harvest requirement (25 bunches of oil palm), and yet they normally work longer, up to late afternoon, to receive a bonus ‘premi’ from the company. Workers also complain that they may be fined for mistakenly harvesting un-ripe bunches of oil palm (Rp.30,000 per bunch). For workers with daily wage employment status (normally covering non-harvesting tasks, such as applying pesticides and fertilisers, weeding and other unspecified tasks), they have more flexible working hours. They work for about four hours per day (from 7.30 to 11.30 am) and earn about half of what the harvester earns. For the PCPs who own a modest piece of land, working as a ‘daily wage worker’ for the company is desirable as it offers additional income and time to take care of their own land. For the landless workers, however, the income from working as a ‘daily wage worker’ is inadequate and, thus, becoming a ‘permanent worker’ for the company is a desirable goal. This is also the case for petty landowners (semi-proletariat farmers) who cannot find a job as a harvester with an individual capitalist farmer. Apart from the push factors, workers are keen to be ‘permanent workers’ with the companies because of the social insurances and pension rights promised to them.

5 With our focus on villagers who are part of the ruling class in the village, we consider the companies operating in Timpang and the neighbouring villages as part of an urban capitalist class that controls and exploits workers in rural areas.

6 The minimum requirement to receive a recommendation letter from a factory (a local processing plant) is control of over 20 hectares of palm oil. The local agents (palm oil traders) who own land less than 20 hectares might still receive a recommendation letter if they manage to secure loyal farmers (equivalent to 20 hectares of palm oil) who regularly supply them with bunches of palm oil.

7 In the village, the system of ancak has been practised since the beginning of oil palm farming in the late 1980s. For the employers, ancak effectively secures labour to perform a routine harvesting task, while for the workers, ancak guarantees them a regular job with income.

Additional information

Funding

This work was supported by Indonesia Endowment Fund for Education (LPDP).

Notes on contributors

Muchtar Habibi

Muchtar Habibi is a lecturer at the department of Management and Public Policy, Universitas Gadjah Mada, Indonesia. He receives his PhD in Development Studies from SOAS, University of London. His research interest covers political economy of agrarian change and capital-labour relation, in which his publication can be found among others at Journal of Contemporary Asia and Journal of Agrarian Change. His upcoming book will be published by Routledge (2022).