The Biofuel Boom and Indonesia's Oil Palm Industry: The Twin Processes of Peasant Dispossession and Adverse Incorporation in West Kalimantan

The sharp rise in global demand for biofuels and food has prompted widespread land grabbing in the Global South. In the case of Indonesia, it has prompted an unprecedented expansion of oil palm plantations that are expected to triple in land area over the next decade. The province of West Kalimantan has recently been targeted as the site of greatest expansion across the archipelago, giving rise to new social vulnerabilities and intensified conflicts over land. In the wake of large-scale enclosures of 'national forests’ and ‘idle land’ by state actors allied with agribusiness and global capital, users of forest land under customary tenure are having to confront the pressures of neoliberal globalization and transnational circuits of accumulation and production linked to the oil palm sector. Field research conducted in Sanggau district has revealed highly uneven access to land and distinct labour regimes determined by on-going class differentiation within characteristic patterns of exclusion and various forms of inclusion, notably adverse incorporation. The oil palm expansion is enflaming outstanding and unresolved conflicts over land and labour which date back to earlier development schemes, and resistance is on the rise as the state, allied with domestic and transnational private interests, rely on deception, coercion, and violence to quell opposition and to allow for continued expansion at an unbridled pace. This thesis thus examines the political economy of Indonesia’s current oil palm industry in the upland district of Sanggau, West Kalimantan, and it identifies the mechanisms and processes of agrarian transformation as they relate to the changing social relations of production where land and labour are being reconfigured to serve the interests of capital. Biofuels and land grabbing / Oil palm and plantation expansion in West Kalimantan A critical theme in contemporary international development is the recent convergence of the food, energy, environmental, and financial crises which has placed land at the centre stage of development discourse. The term „global land grab,‟ first made popular by civil society groups and transnational movements, helped draw attention to the controversy surrounding land deals involving large tracts of agricultural land in the global South that were being leased out or sold in closed-door negotiations and which invited speculation as to the scope and nature of these transactions. The current wave of land grabbing, that is in part being driven by the biofuel boom that began in 2003, helped precipitate a global food crisis in 2008 which forced an additional 100 million people into chronic hunger and undernourishment in that year and brought the world total to over 1.03 billion (UN 2009, 9). As the „food-versusfuel battle‟ (Eide 2009, 12) 1 wages throughout rural and urban settings in developing countries, analyses vary regarding the effect exerted by the rise in demand for biofuels 2 with World Bank economist Donald Mitchell reporting that between 70 and 75 percent of the increase in food commodities prices was directly related to biofuels (Mitchell 2008, 16-17). The convergence of these forces has thus revived initiatives to purchase or secure long-term 1 This is in reference to the redirection of agricultural products away from food markets and towards the production of biofuels, and also refers to land use changes that are oriented toward biofuel feedstocks crops instead of food. 2 A 2008 publication by The International Food Policy Research Institute (IFPRI) estimated biofuels contributed to a 30 percent increase in food prices, while in the same year, the United States Department of Agriculture (USDA) determined that only a 3 percent rise in prices could be attributed to biofuels. (FAO, 2008, 101).