Oil Crops and Social Conflict: Evidence From Indonesia

• Author: Donald Grasse
• DOI: http://doi.org/10.1177/00220027221084826
• Published date: 01 August 2022
• Date: 01 August 2022
• Subject Matter: Articles

Article

Journal of Conflict Resolution

2022, Vol. 66(7-8) 1422–1448

© The Author(s) 2022

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DOI: 10.1177/00220027221084826

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Oil Crops and Social Conflict:

Evidence From Indonesia

Donald Grasse

1

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Abstract

When do agricultural transformations impact social stability? Cash crops are typically

associated with economic prosperity and social peace. I argue agricultural booms may

spur violent conflict over resource allocation by pitting would-be producers against

incumbent landowners when the gains from production are concentrated and the

negative externalities are diffuse. I study the rapid expansion of oil palm in Indonesia, a

growingly important crop in the global economy. I find when oil palm grows more

valuable and expands within producing districts, violent resource conflicts increase.

The positive relationship does not exist for other cash crops, nor other types of

conflict, and is moderated by the presence of sustainability certified processing mills.

The results connect commodity shocks to non-state violence over resources, and

suggest land use change is an important mechanism connecting agricultural booms to

social conflict.

Keywords

political economy, resource curse, commercial agriculture, social conflict

Introduction

Commercial agriculture is increasingly considered a tool for poverty alleviation and

peace building in developing states (Cal`

ı, 2014;Dudwick and Srinivasan, 2013;

Grossmann, 2009).

1

Despite the economic promise of cash crop industries, new ag-

ricultural markets have also been linked to a host of negative environmental

1

Emory University, Atlanta, GA, USA

Corresponding Author:

Donald Grasse, Emory University, 201 Dowman Drive, Atlanta, GA 30322-1007, USA.

Email: donald.grasse@emory.edu

externalities, including deforestation and biodiversity loss, and have been linked to

violent competition for land ownership (Tellez, 2021).

2

When does commercial agriculture intensify social conflicts? Labor intensive

agricultural growth tends to be negatively associated with armed conflict (Blair,

Christensen and Rudkin, 2020;Dube and Vargas, 2013), however, the relationship

between crops and social conflict between non-state actors outside of ongoin g civil

conflict is less well-known. To the extent scholars and policymakers conceive of

cash crops as a means of providing opportunity to the rural poor,unpacking the link

between cash crops and social violence is critical to understanding low-level vi-

olence between neighbors and forging effective development policies in post-

conflict or fragile states.

I argue emerging commercial agricultural markets can disrupt social stability,

producing social conflict over the distribution of resources. The growth of commercial

crops can crowd out sustenance farmers, damage forests resources which support

forest-based communities, and may only slowly bring economic benefits to a locality.

Since sectoral growth creates tensions over the distributional consequences of the

industry in the short-term, and only brings profits that may offset grievances in the long-

term, the incentive for contention wins out over incentives for peaceful production.

I study the case of oil palm in Indonesia. Indonesia is at the center of the recent oil

crop boom, the largest agricultural transformation since the green revolution (Byerlee,

Falcon and Naylor, 2017, 1). Given the expectation that palm production will continue

to expand across Latin America, Southeast Asia, and Sub-Saharan Africa, under-

standing the link between oil palm and stability is critical to fostering inclusive

development.

I argue the palm oil boom generates incentives for violent resource conflict between

producers and non-producers more quickly than the opportunity cost of conflict in-

creases. Profits from oil palm production do not immediately bring prosperity to

surrounding communities: low-skilled and forest-dependent communities lose out from

palm oil plantations (Obidzinski et al., 2012;Santika et al., 2019), and the poverty-

reducing benefits of oil palm are both slow-moving and come at the expense of the local

environment (Edwards, 2019). Since transitory oil palm shocks generate up-front social

costs along with delayed income gains, I expect higher prices of oil palm to correspond

with increased levels of distributional conflict.

Ifind the palm oil boom is positively associated with resource conflicts between

non-state actors in Indonesia. Resource conflicts involve violent disputes over land,

access to markets, and environmental or economic grievances emerging from pro-

duction, and occur between citizens, communities, and firms. Resource conflicts

between non-state actors are multifaceted. Individuals who claim exclusive rights to

produce may attack one another to seize and destroy property, producers hire private

security outfits who may forcibly remove tenure insecure landholders, or communities

collectively protest, rob, or sabotage plantations to disrupt the production process. I do

not find a relationship between the boom and other types of political violence unrelated

to resources, such as popular justice, election, governance, law enforcement, and

Grasse 1423