AuthorHasudungan, Albert


Oil palm expansion in Kapuas Hulu is driven by political-economic fears within Indonesia over growing Malaysian economic hegemony in the border region of Kapuas Hulu. Malaysia has continued to expand oil palm plantations in the border region, even hiring workers from Kapuas Hulu. With growing economic and political rivalry with Malaysia--and partially as a response to fears of Malaysian economic intervention--Indonesian national elites have been actively promoting large-scale oil palm development in Kapuas Hulu since around 2000, with large-scale oil palm operations beginning in Silat Hilir in 2001. (1) To further secure national control over frontier border areas, some local elites began to provide land-use permits to large-scale oil palm developers in Badau, Kapuas Hulu. Badau was considered a strategic location due to its immediate proximity to Sarawak, and in 2012, large-scale oil palm corporations were granted permits to establish plantations in this border region. (2)

Land conversion due to oil palm has been heavily criticized by environmental activists as coming from top-down political decision making. In several media sources and reports, environmentalists associate oil palm development with negative livelihood outcomes for forest-dependent communities, where they provide a skeptical assessment of oil palm's contribution to sustainable development goals by improving the rural economy and the environment. (3) They point out that the expansion of oil palm--which consumes large amounts of forest--often reduces the livelihood resources of indigenous communities, such as forests for hunting and the harvesting of forest products, and water resources for fishing and accessing clean water. (4)

This study aims to evaluate the livelihood impacts of oil palm developments in three villages across Kapuas Hulu: Janting, Badau, and Miau Merah. It applies a sustainable livelihoods analytical framework to map local livelihood diversification concerning oil palm expansion among rich, middle, and poor households. Rather than viewing livelihoods as following one trajectory, this study understands that local livelihood trajectories are determined by specific livelihood strategies and the dynamics of agrarian transformation.

The vast literature on livelihoods and agrarian transformation portrays complex livelihood trajectories that are specific to their local geographical contexts. For instance, earlier literature on agrarian transformation and swidden farm systems in Southeast Asia suggested that small swidden farmers often faced land-tenure insecurity due to the expansion of large-scale plantations (e.g., in Sarawak). (5) Looking at the example of Sarawak, Rob A. Cramb observed that local people often participated in crop booms on their own terms. (6) He provides four reasons for why Iban Dayak groups actively participate in cash crop cultivation: cash crops offer new, flexible livelihood strategies; cash crops offer new land-tenure opportunities; the presence of new settlers places pressure on their lands that can be mitigated by growing cash crops; and cash cropping offers new opportunities to engage with the market and state. (7) These factors have led to a major agrarian transformation in Sarawak, which has reduced local dependency on natural resources and led to a shift to local livelihood diversification. (8)

Increasingly diverse and complex livelihood trajectories are also discussed by John F. McCarthy and Zahari Zen in their study of Jambi, Indonesia. (9) In the case of oil palm plantations, complex livelihood trajectories occur due to economic differentiation among different household classes. For instance, wealthy farmers can benefit from growing landholdings as they buy up the land of poorer farmers. Poor people were economically constrained due to land dispossession and smaller landholdings. McCarthy and Zen show how unequal land distribution affected the process of land conversion to oil palm plantations in Jambi. (10) In that case, rich households were able to accumulate more land at the expense of poor households. In West Kalimantan, Jean-Francois Bissonnette points out similar patterns of unequal land distribution due to the exclusion of the poor in negotiations over large-s cale land sales. (11) In a recent livelihood study of West Kalimantan, Lesley M. Potter asserts that declining dependency on swidden cultivation has led to a more diversified income. (12) However, in West Kalimantan, where oil palm development has occurred rapidly, a high population density has meant that land has increasingly come under the cultivation of immigrants. (13)

This study will extend previous livelihood studies by observing both land and non-land factors. To broaden the sustainable livelihoods analysis (SLA) framework, livelihood trajectories were mapped through a variety of livelihood assets to include natural capital (such as land access), physical capital (infrastructure), financial capital (monetary wealth), human capital (labor quality and availability), and social capital (social supports). (14)

This study contributes to the literature on SLA by explaining how different local agrarian transformations drive economic inequalities in Kapuas Hulu. The customary institutions of indigenous people in the area have traditionally governed the distribution of resources and labor among indigenous communities. These institutions are now under intense pressure from the now dominant market economy, which has expanded with the arrival of the oil palm economy. In Janting, Badau, and Miau Merah, varied economic interests within indigenous communities have broken social bonds that customary institutions are based on. Due to increased migration and the rising importance of the cash economy in Kapuas Hulu, local villagers have increasingly turned to the market to meet livelihood needs. In this context of agrarian transformation, richer households have been able to accumulate various economic assets at the expense of poor households.

A recent study of Indonesian oil palm examined access to different livelihood assets and related livelihood outcomes in oil palm and non-oil-palm villages. (15) By analyzing secondary data of PODES (village potentials), their study concluded that communities in the villages that rejected oil palm development can maintain social cohesion. Social cohesion here relates to social bonding among communities to support each other. Meanwhile, few economic benefits go to other villages that have oil palm plantations within their village. The study revealed that social capital is a critical factor to improve local livelihoods in a non-oil-palm village. Amid weaker social capital in oil palm villages, the study found that variegated access to economic assets can lead to better livelihood income among rich, middle, and poor households facing oil palm expansion within their village territory.


By exploring oil palm scholarship in Southeast Asia, this section provides a number of important conclusions about the complex livelihood pathways of oil palm adoption in Malaysia and Indonesia. First, in Sarawak the introduction of oil palm into rural areas has resulted in an important transformation where there had been a significant influx of capital and labor into the local landscape. (16) This transformation has important implications for rural livelihoods in all their different settings. Other research has observed that successive booms of cash crops brought differentiated impacts to swidden farmers. (17) In Sarawak some swidden farmers are worse off due to large-scale land dispossession and land-use zoning. (18) On the other hand, some others reaped economic benefits from the changing infrastructure in the form of roads, education, and health care.

Before oil palm development was introduced, some Dayaks in Sarawak relied on subsistence farming and rubber for their livelihoods. (19) In his study of swidden farming in Sarawak, Cramb asserted that customary institutions within Dayak communities tended to favor asset transfer from asset-rich to asset-poor households. (20) He asserted that agrarian change brings some local livelihood patterns which made people less dependent on subsistence farming. (21) This occurred as livelihoods became diversified within the community. As livelihoods became increasingly oriented toward the cash economy, there was increasing inequality of landholdings among smallholders. (22) Hence, there is a tendency for local people to diversify their livelihoods depending on the available assets that they possess. (23)

McCarthy and Zen suggest that in the case of oil palm development in Jambi, Indonesia, the livelihoods of more prosperous farmers (often local elites) improve as they can reap the advantages of oil palm booms. (24) Such farmers have the advantage of surplus capital that can be invested into labor and fertilizers, which means they are better able to acquire further rural land for oil palm cultivation. (25) However, many poor farmers in Jambi struggled to hold on to their land as the cash economy became more and more prominent, especially in times of household crises. (26) Hence, smallholder oil palm plots are at risk of being sold to outsiders, while the poorer smallholder farmers are forced into low-skill labor. Hence, in the context of oil palm development, livelihood trajectories are differentiated as to the degree that local farmers can engage in oil palm development. (27) This inequality in livelihood trajectories has been confirmed by Jonida Bou Dib, Zulkifli Alamsyah, and Matin Qaim in their 2018 case study in the province of Jambi in Sumatra Island. (28) They showed that while local people engaged in oil palm cultivation, which brought new streams of income, the poorest farmers still tended to experience land dispossession, as they had few assets apart from land that would assist them in the transition to a cash economy.

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