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Indonesia Estate Crops
Spice crops first attracted Europeans to the East
Indies, but
the tropical climate and rich volcanic soils offered a
fertile
laboratory for the introduction of new commercial crops
such as
sugar, coffee, and rubber. Large private plantations
controlled by
European and American interests became the backbone of the
colonial
economy in the late nineteenth century, when the Dutch
colonial
government began to limit the practice of tax collection
by forced
crop cultivation on village land
(see Colonial Economy and Society, 1870-1940
, ch. 1). Even at the height of the plantation
economy,
however, small-scale peasant cultivators were competitive
suppliers
of a variety of commercial crops. In 1929, just before the
world
market collapse in the Great Depression, agricultural
products were
75 percent of total Netherlands Indies exports, and about
one-third
of agricultural exports were from small-scale indigenous
producers.
Although sugar, then the single most important export
crop, was
entirely a plantation crop, a large share of rubber, next
in export
value to sugar, was supplied by smallholders; and coconut,
then the
third largest agricultural export, was produced almost
exclusively
by smallholders.
Although far less important in the overall economy, the
estate
crops were a significant share of exports and a vital
source of
income in the rural economy throughout the 1970s and
1980s.
Smallholders continued to cultivate many estate crops
grown on a
large scale on government and privately owned plantations.
Government-owned plantations were largely the legacy of
nationalization of foreign estates during the 1950s, and
restrictions on ownership still limited foreign
participation,
although joint ventures were not uncommon.
Rubber was generally the most valuable export crop,
followed by
coffee and oil palm (see
table 25, Appendix). Exports of
palm oil
and coconut were periodically restricted to ensure
adequate
domestic supplies. A variety of other estate crops,
including
tobacco, pepper, tea, and cocoa, were also exported.
Sugarcane was
still cultivated but never regained its prominence after
the
collapse of the sugar industry during the Great
Depression.
During the mid-1980s, the government initiated an
ambitious
plan to improve the technology and plant stock of
small-scale
producers. One of the Nucleus Estate Programs was a
smallholder
scheme that provided small plots of high-yielding tree
crops to
participating farmers in a determined location who shared
the
benefits of centralized technological and managerial
assistance. A
variety of difficulties were encountered with this
strategy, and
the planting area and productivity targets were rarely
achieved.
Outside observers criticized the nucleus-estate
smallholder
approach because only a small number of cultivators
participated,
leaving the majority of smallholders outside the nucleus
estates
without access to more productive hybrid tree stocks.
Rubber was cultivated on 3 million hectares of land in
1988,
and about 80 percent of that area was owned by
smallholders with
holdings of two hectares or less. Smallholder cultivation
was
concentrated in Sumatra, especially in the provinces of
Sumatera
Utara, Riau, Jambi, and Sumatera Selatan. Some smallholder
cultivation was found on Kalimantan, but less than 2
percent was
outside Sumatra and Kalimantan. Government and private
estates
cultivated roughly equal areas, although private estates
were
subject to a legal maximum size varying by province, and
so were
smaller and more numerous than government estates. About
12
government-owned and more than 800 private rubber estates
were
concentrated in Sumatera Utara, Jawa Barat, Jawa Timur,
and
Kalimantan Tengah provinces.
Oil palm (Elaeis guineensis, Arecaceae) was the
newest
and fastest growing tree crop in the 1980s. Ten government
estates-
-primarily in Sumatera Utara Province--were the major
producers,
although eighteen private estates accounted for about 25
percent of
the total 655,000 hectares devoted to oil palm in 1988.
Smallholder
cultivation of oil palm was insignificant. Exports of palm
oil also
expanded rapidly in the late 1980s, making Indonesia a
major
supplier, with 10 percent of the world market in 1988.
Coconuts were cultivated almost exclusively by
smallholders. In
1983 about 3 million hectares were devoted to coconut
production
throughout the archipelago, although a large share was on
Java. In
the early 1980s, the World Bank estimated that as much as
60
percent of coconut products were not sent to the market
but instead
consumed by the cultivators, in part because of low
producer prices
reflecting government administration of the domestic
coconut trade.
Indonesia was the second largest producer of coconuts in
the world
after the Philippines, but remained an insignificant
exporter
because of government restrictions and inadequate
processing
facilities.
Coffee also was cultivated almost entirely by
smallholders but,
in contrast, remained an important export crop throughout
the 1970s
and 1980s. Processing and marketing of coffee was
undertaken by the
private sector with little government intervention. Most
Indonesian
coffee trees were of the Robusta variety, which is more
hardy but
of lower quality than Arabica coffee. Cultivation was
concentrated
on Sumatra, especially Lampung Province, which accounted
for almost
25 percent of the estimated 500,000 hectares of
smallholder
cultivation in 1978.
Data as of November 1992
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