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Agricultural land use alternatives in regional planning : a case study of West Pasaman area development… Pandjaitan, Sarda Vincentius 1982

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AGRICULTURAL LAND USE ALTERNATIVES IN REGIONAL PLANNING: A CASE STUDY OF WEST PASAMAN AREA DEVELOPMENT PLANNING WEST SUMATRA - INDONESIA by SARDA VINCENTIUS PANDJAITAN I r . , U n i v e r s i t y o f North Sumatra (USU), 1969 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE i n THE FACULTY OF GRADUATE STUDIES (School o f Community and Regional P lann ing) We accept t h i s t h e s i s as conforming to the requ i red s tandard THE UNIVERISTY OF BRITISH COLUMBIA A p r i l , 1982 @ Sarda V i n c e n t i u s P a n d j a i t a n , 1982 In p resen t i ng t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f the requirements f o r an advanced degree a t the U n i v e r s i t y o f B r i t i s h Columbia, I agree tha t the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r re fe rence and s tudy . I f u r t h e r agree tha t permiss ion f o r ex tens i ve copying o f t h i s t h e s i s f o r s c h o l a r l y purposes may be granted by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . I t i s understood tha t copy ing o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l gain s h a l l not be a l lowed w i thout my w r i t t e n p e r m i s s i o n . Department o f Community and Regional P lann ing The U n i v e r s i t y o f B r i t i s h Columbia 2075 Wesbrook P lace Vancouver, Canada V6T 1W5 Date A p r i l IS, 1982 i i ABSTRACT This thesis investigates the problems involved in determining the appropriate use of a g r i c u l t u r a l land i n i t s r e l a t i o n to regional planning. For the purpose of this i n v e s t i g a t i o n , the West Pasaman Development Plan has been chosen as a case study. The Development Plan for West Pasaman was drawn up by the I n s t i t u t e for Development Research--IDR, a consulting firm from West Germany, in 1975. The study team proposed f i v e c r u c i a l projects to be developed within a ten year period (1975-1985). Two of these f i v e p rojects, i . e . , a new main road and an o i l palm smallholder scheme were given p r i o r i t y . The p r i o r i t y for the o i l palm smallholder project was based upon conventional economic c r i t e r i a . Two important aspects were ignored. F i r s t , the physical c h a r a c t e r i s t i c s of the s i t e , i n c l u d i n g water resources, were not assessed, and secondly the needs of the e x i s t i n g population were not considered. In this t h e s i s , three f a c t o r s , the physical c h a r a c t e r i s t i c s o f the s i t e , the soc i a l aspects o f the population and economic f e a s i b i l i t y were chosen as the c r i t e r i a to determine the appropriate use of the a g r i c u l -tural land. The area of i n v e s t i g a t i o n i s made up of two parts. The f i r s t part of 13,000 hectares i s government land which, at present, i s under-u t i l i z e d . The second part, consisting of 11,000 hectares, i s private and communal land run by smallholders. The study team's report f a i l e d to account for the e x i s t i n g land use of t h i s 11,000 hectares and therefore i t i s on this area, of land that the i n v e s t i g a t i o n has concentrated. i i i I t i s found tha t the land be ing s t u d i e d i s p h y s i c a l l y s u i t a b l e f o r r i c e c u l t i v a t i o n . O i l palm c u l t i v a t i o n does not appeal to the farmers in the study area because they are u n w i l l i n g to move i n t o new c u l t i v a t i o n p r a c t i c e s as they fee l s a f e r growing r i c e and other crops w i th which they are f a m i l i a r . I t seems an i r r i g a t i o n p r o j e c t i s the most d e s i r a b l e government p r o j e c t f o r the s tudy a r e a . Th is would appear to con f i rm Indonesian na t i ona l g o a l s , which emphasize s e l f - s u f f i c i e n c y in food p r o d u c t i o n . I f the a v a i l a b l e water resources o f the study area (the Batang Tongar R i v e r ) cou ld be f u l l y u t i l i z e d , i t i s found by us ing economic data on re tu rns per hectare per y e a r , t ha t double c ropp ing r i c e w i th new high y i e l d i n g v a r i e t ies woul d y i e l d a h ighe r re tu rn to the farmers than o i l palm. Thus, i t i s concluded that wet r i c e a g r i c u l t u r e (double c ropp ing) would be a more e f f e c t i v e use o f the 11 ,000 hectare area than o i l palm. The t h e s i s emphasizes tha t the p h y s i c a l c h a r a c t e r i s t i c s o f the s i t e and the s o c i a l aspects must be cons ide red i n de termin ing the app rop r i a te use o f a g r i c u l t u r a l land i n a d d i t i o n to the economic c r i t e r i a . The t h e s i s concludes w i th the d i s c u s s i o n o f the methodologica l l i m i t a t i o n s o f the study and makes a p lea f o r reg iona l p lanners to u t i l i z e some o f the new ideas o f "development from below" and i n t e g r a t e d reg iona l development i v TABLE OF CONTENTS CHAPTER I: INTRODUCTION 1. Background In format ion 2 . Problem Statement 3. The Ob jec t i ve o f the Study 4. The S i g n i f i c a n c e o f the Study 5 . Methodology CHAPTER I I : THE THEORY OF DEVELOPMENT: A LITERATURE REVIEW 1. I n t roduc t i on 2 . Balanced Growth Theory 3. Unbalanced Growth Theory 4 . V i a b i l i t y o f Modern Economic Theory i n Developing Count r ies 5 . A l t e r n a t i v e o f Development S t r a t e g i e 6. Conc lud ing Remarks CHAPTER I I I : THE THIRD FIVE YEAR DEVELOPMENT PLAN (REPELITA I I I ) , 1979/80-1983/84 AND REGIONAL DEVELOPMENT PLANNING IN INDONESIA CHAPTER IV: WEST PASAMAN AND ITS CRUCIAL PROJECTS 1. S o c i o - c u l t u r a l Pa t te rns 2 . Economic Pa t te rns V Page CHAPTER IV 3. B a s i c Food Needs o f West Pasamanians 62 CONT. 4 . C r u c i a l P r o j e c t s 67 CHAPTER V: THE RESULTS OF THE STUDY 1. I n t roduc t i on 77 2 . P h y s i c a l C h a r a c t e r i s t i c s 78 3. S o c i o - c u l t u r a l Environments 85 4 . Economic Aspect 103 CHAPTER V I : DISCUSSION AND CONCLUSION 1. I n t r oduc t i on 114 2 . D i scuss ion 115 3. Conc lus ion 127 APPENDIX 1: FARMERS' QUESTIONNAIRE 132 APPENDIX 2 : WALINAGARIS' QUESTIONNAIRE 137 BIBLIOGRAPHY 140 vi LIST OF TABLES Page TABLE 1 Imports of Basic Food, 1968-1978 14 TABLE 2 Central Government Contribution to Development Budget (1973/74 to 1978/79) 48 TABLE 3 Population of West Pasaman by Nagari, 1979 65 TABLE 4 Area Harvested, Y i e l d Rate and Total Production i n Rice Paddies in West Pasaman (1979) 66 TABLE 5 Land Use o f the Study Area 79 TABLE 6 Kenagarian (sub-villages) and Population of 16 Desas Affected by the Proposed Batang Tongar Project 83 TABLE 7 Farmers 1 iOpinion on The Ophir O i l Palm Project 90 TABLE 8 Farmers Who Have Seen Oil Palm Trees 91 TABLE 9 Farmers Who Want to Grow O i l Palm on Their Farms 92 TABLE 10 Farmers' Response to the Ophir Oil Palm Project 93 -VII TABLE 11 Reasons fo r the Farmers Not Wanting to J o i n the Ophi r O i l Palm P r o j e c t TABLE 12 React ion o f Farmers to Devot ing T h e i r Land to O i l Palm C u l t i v a t i o n TABLE 13 Farmers' Pre ference towards P o t e n t i a l P r o j e c t s i n The i r Area TABLE 14 Farmers' W i l l i n g n e s s to Convert T h e i r Land to R ice Growing TABLE 15 Farmers' Response towards Re leas i ng Land fo r a P o t e n t i a l I r r i g a t i o n P r o j e c t TABLE 16 The Area of Land C u l t i v a t e d i n Paddy f o r Survey Group TABLE 17 The Acreage o f Land C u l t i v a t e d w i th Tree Crops , P a l a w i j a and Others f o r Survey Groups TABLE 18 Farmers' A b i l i t y to C u l t i v a t e Wetland Paddy TABLE 19 The Propor t i on o f Communal and P r i v a t e Land i n the Study Area TABLE 20 Income-Expenditure A n a l y s i s o f Per Ha O i l Palm Produc t ion With IPEDA Tax v i i i Page TABLE 21 Income-Expenditure A n a l y s i s o f Per Ha O i l Palm Produc t ion Without IPEDA Tax 109 TABLE 22 Bimas Program Loan Per Hectare 110 TABLE 23 Average R e t a i l Rice P r i c e at the Free Market i n Some Kecamatan C a p i t a l s i n Kabupaten ( D i s t r i c t ) Pasaman, 1977, 1978, 1979 and 1980 110 TABLE 24 Income-Expenditure A n a l y s i s o f Per Hectare Wetland Rice Produc t ion 111 i x LIST OF FIGURES Page FIGURE 1 Mechanism o f Nagari A d m i n i s t r a t i o n 56 FIGURE 2 O rgan i za t i ona l S t r u c t u r e o f the O i l Palm P ro jec t 73 X LIST OF MAPS Page MAP 1 Access Road to West Pasaman 7 MAP 2 Study Area and Ophir Es ta te 11 MAP 3 T a l u - P a n t i Road S e c t i o n 69 MAP 4 Batang Tongar and Batang Pasaman R ive rs 81 MAP 5 C ross ing Po in t at A i r Gadang 119 MAP 6 B i p o l a r In tegra ted Development 121 xi PREFACE During the l a s t three decades, the economic theory o f developed c a p i t a l i s t s t a t e s — t h e theory which suggests saving and investment as essential components in a healthy "development c y c l e " — h a s been the most widely accepted paradigm for development. The theory assumes that investment w i l l automatically take place provided savings and investment opportunities are both a v a i l a b l e . H i s t o r i c a l l y , the theory which i s usually c a l l e d the modern theory of economic development has s u c c e s s f u l l y been applied to the i n d u s t r i a l countries. As a r e s u l t of this success, most of the leaders o f develop-ing countries, including Indonesia ( p a r t i c u l a r l y a f t e r 1966), have highly praised t h i s development theory as the panacea for t h e i r economic problems. In t h e i r attempts to apply t h i s development paradigm, a large amount of capital investment i s needed. In the t h i r d world countries, the most promising source of c a p i t a l investment, in a d d i t i o n , to private foreign investment and international a i d , i s from the export of a g r i -c u l t u r a l products. In pursuing t h i s target, many farmers have s h i f t e d t h e i r labor and land away from food production to the growing of cash-crops. As a r e s u l t , most of the developing countries are now faced with the problem of food shortages. There i s a general view that the production of export commodities such as o i l palm or rubber i s more p r o f i t a b l e than growing r i c e or other x i i food crops. This implies that economic analysis i s the only c r i t e r i o n used to determine p r o f i t a b i l i t y . This thesis adds two other c r i t e r i a as a means of determining the appropriate use of the a g r i c u l t u r a l land. 1. The physical c h a r a c t e r i s t i c s of the s i t e should be properly analyzed for maximum u t i l i z a t i o n . 2. The s o c i a l environment should be properly understood so that the tot a l s o c i a l costs and benefits o f changes in economic a c t i v i t y can be r a t i o n a l l y appraised. It i s argued that only an evaluation of the t o t a l picture w i l l produce rational decision-making. x i i i ACKNOWLEDGEMENT I would l i k e , f i r s t o f a l l , to express my s i n c e r e thanks and a p p r e c i a t i o n f o r the va luab le c o n t r i b u t i o n s o f P r o f e s s o r Brahm Wiesman and Dr. Terence McGee. My a p p r e c i a t i o n i s a l s o addressed to the Canadian I n t e r n a t i o n a l Development Agency (CIDA) fo r i t s a s s i s t a n c e . I would a l s o l i k e to thank my b e a u t i f u l and deserv ing w i f e , J u l i a n a , and s o n s , Burhan, Tonny, Ford and Jimmy, and daughter , Mercy , f o r t h e i r p a t i e n c e , f i d e l i t y , unders tanding and encouragement. 1 CHAPTER I INTRODUCTION 1. Background Information Indonesia i s today struggling to produce greater equity and soc i a l j u s t i c e in development, alongside i t s e a r l i e r national goals of ensuring national unity while spurring economic growth. In the f i r s t f i v e year development plan (Repelita I ) , i n i t i a t e d i n A p r i l 1 969, emphasis was put on promoting national unity and economic r e h a b i l i t a t i o n , because these were the important p r i o r i t i e s immediately following the change of power. Towards the end of Repelita I a measure of unity had been achieved and the economy p a r t l y r e h a b i l i t a t e d . With the achievement of this p o l i t i c a l and economic s t a b i l i t y , a new range of issues emerged in Indonesia. These issues r e l a t e d l a r g e l y to matters of equity--of sharing the benefits of economic progress — and they produced a new concern for regional planning and development because of the problems a r i s i n g from the wide d i s p a r i t i e s in s o c i a l and economic conditions that existed in the various parts o f the country. There was also the r e a l i z a t i o n that sectoral planning alone may increase rather than decrease these problems. For t h i s reason the second five year development plan (Repelita II) included a new emphasis on regional planning, meaning some combination of the following: planning at the center for a hierarchy o f planning regions and for the provinces; integration of national and sectoral plans at the regional l e v e l , taking into account 2 reg iona l g o a l s ; s p a t i a l aspects o f s e c t o r a l p l a n n i n g ; and devo lu t i on o f p lann ing r e s p o n s i b i l i t y to the va r ious l e v e l s o f l o c a l government. In 1974, the p r i n c i p a l o b j e c t i v e s o f Indonesian reg iona l development were formulated i n a s e r i e s o f d i r e c t i v e s by the P e o p l e ' s Assembly. They were to achieve a balance between reg iona l and s e c t o r a l development; to reduce i n e q u a l i t i e s in the ra te o f development between p r o v i n c e s ; to help the p r o v i n c i a l governments so lve l a r g e - s c a l e p r o v i n c i a l p rob lems; to improve the p l a n n i n g , development and t a x i n g c a p a c i t i e s o f the p r o v i n c e s . These d i r e c t i v e s have been t r a n s l a t e d by the Nat iona l Development P lann ing Agency (Bappenas) i n t o four development g o a l s : 1) To e q u a l i z e development between reg ions and to prevent l a rge d i f f e r e n c e s i n l e v e l s o f development; 2) To reap the h ighes t p o s s i b l e b e n e f i t s from the p o t e n t i a l o f the d i f f e r e n t r e g i o n s , both from the n a t i o n a l development po in t o f view and from tha t o f the r e g i o n . Th is goal i nc l udes t r a n s m i g r a t i o n ; 3) To develop mutua l ly p r o f i t a b l e economic connect ions between prov inces i n the context o f a u n i f i e d n a t i o n a l economy. The c r e a t i o n o f reg iona l groups o f p rov inces w i th respec t to urban manufactur ing growth centers i s an a s s o c i a t e d o b j e c t i v e ; 4) To develop "backward" r e g i o n s , " c r i t i c a l " r e g i o n s , and "border " r e g i o n s . S u c c i n c t l y , i t can be s a i d tha t reg iona l development p lann ing in Indonesia has the dual o b j e c t i v e s : a) to improve e f f i c i e n c y in resource a l l o c a t i o n through i n t e g r a t i n g s e c t o r a l p r o j e c t s and programs i n each reg ion and ; b) to reduce i n t e r r e g i o n a l d i s p a r i t i e s i n development. During the l a s t decade, the government o f Indonesia has conducted 3 several regional planning studies. The " f e l t need" for these studies was strong among Indonesian exponents of regional planning and among foreign donors seeking a framework for t h e i r grant and loan programs, as well as among int e r n a t i o n a l consultants advising the donors. Towards the end of 1981, almost a l l provinces in Indonesia, except the province of West I r i a n , have been studied. Due to the lack o f funds and of experienced planning s t a f f , the government o f Indonesia through the Regional Development Division o f the National Development Planning Board (BAPPENAS) in consultation with an implementing agency, in most cases the Department of Public Works, and more: recently the Department o f Home A f f a i r s , requested foreign assistance. There are, in general, two e x p l i c i t objectives for a l l o f the studies stated in the terms of reference (TOR). The f i r s t objective i s to provide a systematic compilation o f information required for development planning in the concerned region. The second i s to recommend general development strategies for the subject regions. In addition to the two e x p l i c i t objectives mentioned above, the studies have also had several i m p l i c i t objectives. One of these objectives has been the t r a n s f e r of knowledge from experts to t h e i r Indonesian counterparts through "on the job t r a i n i n g " . A second i m p l i c i t objective of the studies has been the strengthening o f regional development planning i n s t i t u t i o n s and process. 4 2. Problem Statement Seen from the nature of the objectives stated above, the r e s u l t s of regional development studies can only be viewed as broad planning recommendations. They need to be elaborated before they are imple-mented. Stemming from the West Sumatra Regional Planning Study (WSRPS) conducted i n 1971, the West Pasaman Study was considered as an example of an "integrated area development plan" and i s expected to serve as a model for area-wide planning i n Indonesia. With five German experts ( I D R — I n s t i tute for Deyelopjnent Research, West Germany) and eight Indonesian counterparts, the Development Plan for West Pasaman was drawn up in 1975 and i t was submitted to the Chairman o f Steering Committee on A p r i l 7, 1975. From the outset, the team was concerned that the plan be implemented. Accordingly, the team did not analyze each and every sector of the economy and the diverse land use needs of the region. They aimed rather at a "short-cut" approach concerned with the implementation of some major proposals. Their e f f o r t s were concentrated on the sectors they f e l t most urgently required development i n West Pasaman which they c a l l e d " s t r a t e g i c sectors". However, d e f i n i t i o n of "needs" i s subject to value judgements of the team as opposed to what might be perceived as "basic needs" by society. The underlying idea of the short-cut approach i s that a regional development plan i s o f value only i f as many of i t s proposals are 5 r e a l i z e d within as short a time as possible. Clearly t h i s does not consider c l o s e l y which socioeconomic groups might benefit most from i t s r e a l i z a t i o n . Moreover, i n identi fying meaningful projects the team believed that, besides being i n accordance with the p o l i c y makers' o b j e c t i v e s ^ the project proposals must f i n d the approval o f prospective i n v e s t o r s , be they private or publ i c , domestic, foreign or multi-national . This practice creates the problem o f project s e l e c t i o n being disproportionately skewed i n favor of maximizing the p r o f i t s of the prospective entrepreneurs as opposed to s a t i s f y i n g the v i s i b l e needs of the people of the region. Having analyzed the e x i s t i n g conditions i n the study area, the team concluded that the lack of an e f f i c i e n t transportation network was the main cause o f West Pasaman's underdevelopment. At the end, team formulated the following objectives for West Pasaman: 1) improving external and inter n a l a c c e s s i b i l i t y o f West Pasaman; 2) reducing emigration from the area; 3) increasing the per capita income of the farmers; 4) creating additional employment within the a g r i c u l t u r a l sector; 5) di versi fying the labor market by crea t i n g new jobs outside the a g r i c u l t u r a l sector (WPDP, 1975 p. 165). 1) The team emphasized the policy-maker's objectives as those of the central government (p. 161). 2) SIPEF, a.foreign company which i s operating in North Sumatra pri m a r i l y i n o i l palm production was devised as a potential investor for o i l palm production i n Ophir. There was no e f f o r t made to i d e n t i f y local or domestic entrepreneurs to p a r t i c i p a t e in West Pasaman development. 6 Based upon the above g o a l s , the team suggested the c r u c i a l p r o j e c t s f o r West Pasaman between 1975-1985 i nc l ude the f o l l o w i n g : 1) The es tab l i shment o f a new main road from Simpang Empat to Mangapoh (see map 1}. 2) An o i l palm sma l l ho l de r p r o j e c t . 3) Feeder road programs 0 9 7 5 - 1 9 8 5 ) . 4) Making ope ra t i ona l the cen t ra l p lace concept by the improvement o f smal l towns. 5) A se t t lement scheme fo r the A i r Runding a r e a . (WPDP, 1975 p. 224) . Of these c r u c i a l p r o j e c t s , the f i r s t two were s t r o n g l y recommended and i n o rder to speed up the process o f t h e i r imp lementa t ion , a separate f e a s i b i l i t y study f o r the road p r o j e c t was commissioned and executed a longs ide the team's o ther a c t i v i t i e s , wh i l e the f e a s i b i Hi ty study f o r the o i l palm p r o j e c t was conducted by the WPDP team. Whether o r not the l ack o f an e f f i c i e n t t r a n s p o r t network i s the main cause o f West Pasaman 1s shor tcomings , i t can be taken fo r granted tha t a new road p a r a l l e l to the coast i s needed,connect ing Simpang Empat, Manggopoh, and Padang (see map 1 ) . I t shou ld s a t i s f y the r o l e o f t r a n s p o r t a t i o n i n 7 8 development as stated by Owen: Transportation has special s i g n i f i c a n c e because o f the pervasive role of mobility i n f a c i l i t a t i n g other objectives. Transport i s a necessary ingredient o f nearly every aspect of economic and s o c i a l development, i t plays a key role in getting land into production, in marketing a g r i c u l t u r a l commodities, and in making forest and mineral wealth a c c e s s i b l e . It i s a s i g n i f i c a n t factor in the development o f industry, i n the expansion of trade, in the conduct of health and education programs, and in the exchange of ideas. (Owen, 1964 p. 1). As stated previously, the team intended to concentrate i t s e f f o r t s on those sectors which were urgently needed for development in West Pasaman. However, the urgency o f development was seemingly directed at the i n t e r e s t s of people outside the region, even outside Indonesia. Before delineating project proposals the team had already i d e n t i f i e d the r e c i p i e n t groups which were interested i n , and affected by, the planning for West Pasaman, <as follows: Pasaman : Bupati's (Regent) O f f i c e Kabupaten ( D i s t r i c t ) A u t h o r i t i e s Kecamata.n (Sub-District) Authorities Bukittinggi : A g r i c u l t u r a l Development Project (ADP) German Technical Cooperation Padang : BAPPEDA (Regional Development Planning Board) Provincial Sectoral Departments 9 Jakarta : BAPPENAS (National Development Planning Board) IBRD Mission and Advisors UNICEF/FAO/ADB Germany : B.MZ (Ministry for Economic Cooperations) BFE, KFW, DSE, GTZ (Organizations administering Technical and Capital Aid Projects) Parliament (WPDP, 1975a, p. 101 The extent to which the two c r u c i a l projects mentioned above can meet the basic needs of the people i n West Pasaman i s questionable. As f a r as the o i l palm project i s concerned, components o f economic a n a l y s i s , i . e . Benefit Cost Ratio (BCR), Net Present Value (NPV), and Internal Rate of Return (IRR) were the only c r i t e r i a used to j u s t i f y i t . Social aspects were not considered i n the f e a s i b i l i t y study. The team stated that the o i l palm project would reduce regional income d i s p a r i t i e s (WPDP, 1975b, p. 4), but i t seems they were only concerned with gross regional income d i s p a r i t i e s , and did not take into account, the possible impact of the project on income d i s t r i b u t i o n or the potential use of water resources to mitigate food shortage problems in the study area and in Indonesia. Addressing these questions is the focus o f this research. 10 3. The Objectives of the Study In view o f the problems stated aboye, t h i s research attempts to investigate the implications o f using the designated land for o i l palm production and to search for i t s most appropriate use for other a g r i c u l t u r a l products. The gross area needed for the o i l palm project as proposed by the WPDP team amounted to 24,000 ha, of which 20,000 ha would be devoted to a smallholder system, and the remaining 4,000 ha would be used by the Nucleus Estates, which functions as a processing unit and for marketing the'finished product. Of these 24,000 ha more than h a l f O3,000 ha) belongs to the government and i s known as the former Ophir Oil Palm Estate which was established in 1930. However i t was abandoned a f t e r the Second World War. Thus the o i l palm project proposed by the WPDP team i s a r e h a b i l i t a t i o n of t h i s former project. The remainder belongs to indi v i d u a l s and communes (tanah ulayat). As there i s no.clear informa-tion about who would be the c u l t i v a t o r s o f the government land and where they would come from, f i e l d investigations for t h i s research concentrated on the non-government land. This land i s located i n the northern part o f Kecamatan Pasaman which consists of Kenagarian A i r Gadang, Lingkung 3) Aur, Aur Kuning, and Kapar . This study covers the appropriateness of land i n this area for a g r i c u l t u r a l , i n general, and wetland paddy and o i l palm production i n p a r t i c u l a r . Three f a c t o r s , the physical 3) The WPDP (West Pasaman Development Planning) team had proposed that o i l palm be c u l t i v a t e d on roughly 11,000 hectares of t h i s area, according to a small holder, a p r i n c i p l e s i m i l a r to the re - e s t a b l i s h -ment of the Ophir Estate, situated in the southern part of Kecamatan Pasaman (see map 2). RENCANA PEMBANGUNAN PASAMAN BARAT WEST PASAMAN DEVELOPMENT PLANNING Legend Kukou habupatan Cipiiii of Kabupatm toufcoU hKMtitwi Capd«l ol Kacamaian • Ibukota fcaneganan Nagan twadQuvtw O Tampat LaiMtyi Qitm ptaca . . . Bala* prcoam Pravncial bontor Bataa kotwpalan tobupatan bordef BaUt fcacamalan Kacamatan boroa' . Balai kanaqanan Nagan botdoi Baias cancana BorOvr of ir>a Planting pw-nbangunan Reg on C ± H,voo k«0 M A P Z 12 c h a r a c t e r i s t i c s o f the s i t e , the s o c i a l environment, and economic f e a s i -b i l i t y were chosen as the c r i t e r i a to determine land use appropriateness. B r i e f l y , the objectives o f the research are defined as follows: 1. To review the contemporary theories of development and t h e i r relevance to the proposed o i l palm project. 2. To evaluate the basic needs, p r i m a r i l y food production, o f the indigenous people of Kecamatan Pasaman^. 3. To examine the possible use of the land designated for o i l palm fo r food production, mainly f o r wet r i c e c u l t i v a t i o n . 4. To evaluate the appropriate use of the land under study. 5. To draw po l i c y conclusion for the area development planning process i n Indonesia. 4) Kecamatan Pasaman has been taken as a boundary of t h i s study. The main reason for this i s that the land in question i s located there. 13 4 . The S i g n i f i c a n c e o f the Study Indonesia i s f i f t h amongst the coun t r i es o f the World i n p o p u l a t i o n , exceeded on ly by C h i n a , I n d i a , the U . S . S . R . and the Un i ted S t a t e s . I t has a good c l ima te f o r farming and a l s o has a su rp lus o f l and s u i t a b l e f o r food p r o d u c t i o n . However, the people and government are con t i nuous l y faced w i th the food prob lem, as can be seen i n Table 1. The Table suggests that the bas i c food supply i s s t i l l a c r i t i c a l problem i n I ndones ia ' s economic development. Many at tempts have been d i r e c t e d to overcome t h i s p rob lem, such as the use o f High Y i e l d i n g V a r i e t i e s (HYVs), the use o f f e r t i l i z e r , pest and d isease c o n t r o l , the improvement o f i r r i g a t i o n networks , and the expansion o f c u l t i v a t e d a r e a s , e s p e c i a l l y i n the Outer I s lands . The Department o f A g r i c u l t u r e has given high p r i o r i t y to r i c e , the main f o o d s t u f f o f the Indonesian peop le , i n REPELITA I and REPELITA and i t s p roduc t ion has expanded r a p i d l y . However, i t s i nc reased produc t ion i s not keeping up w i th the demand o f the growing popu la t ion and i n c r e a s e d per c a p i t a consumption as average rea l income rose a t about 5 per cent per yea r dur ing R e p e l i t a I I . Cereal d e f i c i t s have cont inued to grow, as shown i n Table 1 , and m a l n u t r i t i o n has remained a major f a c t o f l i f e i n Indonesia (Mears, 1978). 5) Outer I s lands denote the Indonesian t e r r i t o r y e x c l u d i n g Java and Madura. Ex tens i f i c a t i o n i s no l onge r p o s s i b l e i n Java due to u n a v a i l a b i l i t y o f l a n d . 6) REPELITA II—The Second Five Year Plan (1974/75-1978/79) . 14 Table 1 Imports o f Basic Foods, 1968-1978 ('000 tons) Year M i l l e d Rice Soybeans Wheat and Flour 1968 628 0.2 367 1969 604 1 .2 294 1970 956 - 444 1971 490 0.3 155 1972 735 0.2 151 1973 1,660 0.1 690 1974 1 ,074 0.15 675 1975 672 17.8 717 1976 1 ,281 171.7 967 1977 1,950 89.1 763 1978 (est.) 1 .850 120.0 1 ,080 Source: Dick, H. "Survey o f Recent Development", B u l l e t i n  of Indonesian Economic Studies, Vol. XV No. 1 March 1979, p. 35. 15 As a r e s u l t , hopes for s e l f s u f f i c i e n c y previously concentrated on r i c e are now expressed in terms of food s e l f s u f f i c i e n c y . More attention has been given to palawija (secondary food) crops, such as maize, cassava, soybean, and groundnuts which were neglected during the past decade in the preoccupation with r i c e . Recently, there was increasing awareness and public acknowledge-ment, o f f i c i a l l y and u n o f f i c i a l l y , that to keep food production growing ahead o f population would be one o f Indonesia's c r i t i c a l problems for at l e a s t two decades. One d i r e c t i o n in which p o l i c y thinking i s once again turning i s . to expand food production on the Outer Islands. West Pasaman, as the focus of this research, with i t s considerable potential for a g r i c u l t u r a l production i s a part o f the Outer Islands located in Sumatra. Many of i t s r i v e r s can be used for i r r i g a t i o n . I f i t s potential food production land uses, are displaced., t h i s could exacerbate the e x i s t i n g endemic food shortages o f the region and the nation at large. Secondly, in view o f the low per capita income o f the mass of the population, imported food w i l l continue to remain beyond the reach of the majority of the people in t h i s region and the country. Further, over-reliance on the importation of food would create a greater gulf in the balance of payment d e f i c i t s o f the country--a probl that i s already posing a serious challenge to governments and planners in Indonesia. 16 5. Methodology This study evalutes the most appropriate use of the non-governmental land designated for o i l palm production. The physical c h a r a c t e r i s t i c s of the s i t e , the s o c i a l environment, and economic f e a s i b i l i t y were chosen as the c r i t e r i a for that purpose. This research i s the r e s u l t of the study o f the relevant l i t e r a t u r e , discussions, interviews, and f i e l d observation. Three le v e l s of government, the central government ( J a k a r t a ) , the p r o v i n c i a l government, (Padang), and the loc a l government (Lub.uk Sikaping) were consulted. In Jakarta, intensive discussions were h e l d with t h e o f f i c i a l s o f : Bappenas Cthe National Development Planning Agency), t he Directorate General o f Water Resources Development Cthe Directorate o f I r r i g a t i o n , t he Directorate of Planning and Programming), the Directorate General o f Food Crop Production, the Bureau of Planning and the Directorate General o f Estate Crops of the Mini s t r y of A g r i c u l t u r e , and the Directorate General of Agraria Cthe Directorate o f Land Use) o f the Ministry of Home A f f a i r s . At the prov i n c i a l level (.Padang) there were discussions with several sectoral agencies such as: the Public Works Service ( I r r i g a t i o n D i v i s i o n ) , the A g r i c u l t u r a l Extension Service, the Smallholder Plantation Service, and the Bappeda Cthe Provincial Development Planning Board). The German representatives to ADP (Area Development Program) West Pasaman were also contacted. 17 In Lubuk Sikaping, the loca l government o f f i c i a l s were v i s i t e d and the development o f West Pasaman was discussed. In West Pasaman an intensive discussion was conducted with the f i e l d .manager of PTP VI, a state-owned company which runs the Nucleus Estate i n the former Ophir Estate. The discussion was continued in Pabatu^ (North Sumatra), where complete data and information about the Ophir Oil palm project i s a v a i l a b l e . A l l data and information about the physical c h a r a c t e r i s t i c s o f the s i t e and economic factors which are needed for the evaluation of the use of land being studied were c o l l e c t e d from the agencies mentioned above. Data and information concerning the so c i a l environment was c o l l e c t e d from the farmers l i v i n g in the study area. Sixty farmers (.fifteen farmers from each Kenagarian—village unit) and four Wal i n a g a r i s ~ v i 11 age heads (one walinagari from each Kenagarian) were interviewed. The purpose of interviewing the farmers was to determine t h e i r opinion about the o i l palm project i n Ophir and i t s extension to the study area as well as to find out what kind of project or program the government should develop in the study area i n order to increase the farmers' income. The main purpose of interviewing the walinagaris was to c o l l e c t data and information on land tenure. In addition, the walinagaris were asked t h e i r opinion, as farmers, about the o i l 7) Pabatu i s the main o f f i c e of PTP VI. When I was in West Pasaman i n the summer, 1980, I was t o l d that PTP VI i s going to run the Nucleus Estate i n the Ophir area. In summer 1981, when I was in that area, the PTP VI ju s t started i t s a c t i v i t i e s i n Ophir to run the Nucleus Estate. 18 palm project and any other project or program which could d i r e c t l y increase the farmers' income in the study area. The questionnaire used for these interviews can be seen in Appendices 1 and 2, and the r e s u l t s are presented in Chapter V. 19 CHAPTER II THE THEORY OF DEVELOPMENT: A LITERATURE REVIEW 1. Introduction Until recently, the economic theory o f developed c a p i t a l i s t s t a t e s , which i s usually c a l l e d the modern theory o f economic development, has been the most widely accepted paradigm f o r development CAdelman, 1975). The theory suggests saving and investment are essential components of a healthy "development cycl e " . Thus a major feature of development economics i s centered on the generation of savings, the a v a i l a b i l i t y of investment opportunities and t h e i r p r o d u c t i v i t y . It i s assumed that investment w i l l automatically take place provided savings and investment opportunities are both a v a i l a b l e . Saving w i l l create a surplus for cap i t a l investment which w i l l create more output, which means GNP per capita w i l l increase. Once again, an increase i n income per capita w i l l generate savings. The p r i n c i p a l o r i g i n a t o r s o f this theory are Harrord and Domar who adopted Keynesian economics CHirschman, 1958 p. 30). 20 2 . Balanced Growth Theory H i s t o r i c a l l y , the modern theory o f development has s u c c e s s f u l l y been a p p l i e d in the i n d u s t r i a l c o u n t r i e s . Based on t h i s s u c c e s s , most o f the leaders o f deve lop ing c o u n t r i e s , i n c l u d i n g I ndones ia , p a r t i c u l a r l y a f t e r the New Order regime became p o w e r f u l , i n 1966, have h i g h l y acc la imed t h i s development theory as a panacea fo r t h e i r economic problems. Dur ing the 1950s many economic t h e o r i s t s centered t h e i r a n a l y s i s on the a p p l i c a t i o n o f modern economic theory in the deve lop ing c o u n t r i e s . They found tha t the theory d i d not worlc as we l l as i t d id i n the developed c o u n t r i e s . The economic s t r u c t u r e o f underdeveloped c o u n t r i e s , which i s p r i m a r i l y a g r i c u l t u r a l (Lew is , 19.55.p. 218; L e w i s , 1954 pp 448-449) , demonstrat ion e f f e c t (.Nurkse, 1953 p. 6 8 ) , imper fec t maintenance o f law and order and p o l i t i c a l s t a b i l i t y (.Bauer and Yamey, 1957) have been the main f ac to r s a s s o c i a t e d wi th the f a i l u r e o f t h i s theory i n the deve lop ing n a t i o n s . For example, i n a d d i t i o n to the problem o f c a p i t a l format ion i n underdeveloped c o u n t r i e s , the demonstrat ion e f f e c t has a negat ive e f f e c t , as s t a t e d by Nurkse: The modern communications and the spread o f knowledge are so r a p i d and e f f e c t i v e that the i n h a b i t a n t s o f poor coun t r i es know a l l about the high, s tandard o f consumption enjoyed by most people i n r i c h coun t r i es such as the U . S . , and tha t there i s a s t rong des i re and temptat ion to enjoy as much o f t h i s a t t r a c t i v e way o f l i v i n g as incomes pe rm i t . I t f o l l ows tha t a high income and consumption l e v e l i n an advanced country can do harm i n that i t tends f.o reduce the domestic means o f 21 c a p i t a l formation in the underdeveloped countries; i t puts extra pressure on countries with a r e l a t i v e l y low income to spend a high proportion o f i t . (.Nurkse, 1953 p. 68). There has been controversy about t h i s theory. The f i r s t school of thought, which i s known as the balanced growth advocates, proposed that investment should be d i v e r s i f i e d over a broad range of i n d u s t r i e s . It was argued that each industry would then generate a demand for the goods of the other industries s u f f i c i e n t to keep a l l o f them v i a b l e . In other words, when investment i s increased the people who are thus employed spend part of t h e i r incomes on buying consumer goods, and t h i s encourages producers o f consumer goods to produce more. This in turn gives more employment, and so the s p i r a l continues upward (Lewis, 1 9 5 5 ) . B r i e f l y , the main argument of the balanced growth th e o r i s t s is that investment projects that might be i n d i v i d u a l l y unprofitable would, when taken together, be p r o f i t a b l e (Rosenstein-Rodan, 1943; Nurkse, 1953). Several c r i t i c i s m s have been made of the balanced growth concepts (Fleming, 1955; Singer, 1949; Myrdal, 1957; Hirschman, 1958). 22 3. Unbalanced Growth Theory In 1958 Hirschman argued that the big push implied by the theory o f balanced growth f a i l s and he developed the theory of "unbalanced growth". He i n s i s t e d that development i s a gradual process, and i t i s u n r e a l i s t i c to think in terms of super-imposing a large modern sector on a t r a d i t i o n a l economy. Hirschman 1s unbalanced growth theory was i n s p i r e d by Perroux's concept of "growth poles". He strongly suggests that, in order to ensure the continuance of productive investment, the i n i t i a l a c t i v i t y chosen should be one that maximizes backward and forward linkages (p. 117). He believes that development might tend to polarize around certain i n i t i a l growth centers. However, the r e s u l t of t h i s development w i l l eventually t r i c k l e down to other areas. Thus, development strategy should be concentrated on r e l a t i v e l y , f e w sectors rather than on widely dispersed projects. Hirschman's argument is centered on how growth can be communicated from one region or one country to another. His basic argument i s as follows: ...we may take i t for granted that economic progress does not appear everywhere at the same time and that once i t has appeared powerful forces make for a s p a t i a l concentration o f economic growth around the i n i t i a l s t a r t i n g points. Why substantial gains may be reaped from overcoming the " f r i c t i o n of space" through aglomeration has been analyzed in detai l by the economic theory o f l o c a t i o n . In addition to the lo c a t i o n a l advantages offered by e x i s t i n g settlements others come from nearness to a growing center where an i n d u s t r i a l atmosphere has come into being with i t s special r e c e p t i v i t y to innovations and enterprise. Whatever the reason, there can be l i t t l e doubt that an economy, to l i f t i t s e l f to higher income l e v e l s , must and w i l l f i r s t develop within i t s e l f one or several regional centers of economic strength. This need for the emergence of "growing points" or "growth poles" in the course of the development 23 process means tha t i n t e r n a t i o n a l and i n t e r r e g i o n a l i n e q u a l i t y o f growth i s an i n e v i t a b l e concomitant and c o n d i t i o n o f growth i t s e l f. Thus, i n the geographica l sense , growth i s n e c e s s a r i l y unbalanced. However, wh i l e the reg iona l s e t t i n g r evea l s unbalanced growth at i t s most o b v i o u s ; i t perhaps does not show i t a t i t s b e s t . In a n a l y z i n g the process o f unbalanced growth, we cou ld always show tha t an advance at one po in t se ts up p r e s s u r e s , t e n s i o n s , and compulsions toward growth a t subsequent p o i n t s . But i f a l l o f t h e s e . p o i n t s f a l l w i t h i n the same p r i v i l e g e d growth space , the fo rces tha t make f o r t r ansm iss ion o f growth from one coun t r y , one reg ion or one group o f persons to another w i l l be s i n g u l a r l y weak. (Hirschman, 1958 p. 183-184) . Acco rd ing to Hi rschman, the advantage o f "unbalanced growth" over "ba lanced growth" which s t r e s s e s that every a c t i v i t y expands i n s tep w i th every o t h e r , i s tha t the former leaves cons ide rab le scope fo r induced investment d e c i s i o n s and t he re fo re economizes on a . s c a r c e r e s o u r c e , namely, genuine d e c i s i o n making (Hi rschman, 1958 p. 62 -63 ) . In p o s t u l a t i n g h i s unbalanced growth t h e o r y , Hirschman spoke o f " t r i c k l i n g down" and " p o l a r i z a t i o n " . e f f e c t s , the terms he uses to e x p l a i n the r e l a t i o n s h i p o f a growth po in t and i t s h i n t e r l a n d . The most important t r i c k l i n g down e f f e c t s are generated by purchases and investment made i n the h i n t e r l a n d by the growth p o i n t s . In a d d i t i o n , the growth po i n t may absorb some o f the d i s g u i s e d unemployment o f the h i n t e r l a n d , which means the marginal p r o d u c t i v i t y o f l a b o r and per c a p i t a consumption l e v e l s o f the h i n t e r l a n d w i l l i n c r e a s e . But p o l a r i z a t i o n e f f e c t s may a l s o take p l a c e . Compet i t ion from the more developed area may depress r e l a t i v e l y i n e f f i c i e n t manufactur ing and expor t a c t i v i t i e s in the l e s s developed a r e a , and the former may produce a " b r a i n d r a i n " from the l a t t e r , ra the r than c rea te o p p o r t u n i t i e s f o r t h e i r d i s g u i s e d unemployed. 24 Working independently in a different part of the world, Myrdal (1957) had already postulated the same thought as Hirschman. Myrdal stresses that "in the normal case circular causation is a more adequate hypothesis than stable equilibrium for the theoretical analysis of a spatial process" (p. 20-21). His main theme was that economic development would continue through a process of c ircular and cumulative causation. He found that whatever the reason for the i n i t i a l expansion of a growth center, thereafter cumulatively expanding economies would fort i fy its growth at the expense of other less developed areas. Geographically, growth would be transmitted through "spread" and "backwash" effects, which correspond closely to Hirschman's t r ick l ing down and polarization effects. Myrdal points out that development usually starts in certain regions of a nation because of their locational advantage or because of some historical accident. Once one region has achieved a development advantage over the rest of the nation, certain forces wil l immediately begin to operate. Myrdal amplified the effect of the force by writing: It is easy to see how expansion in one local i ty has 'backwash effects ' in other loca l i t ies . More speci f ica l ly the movement of labor, capita l , goods and services do not by themselves counteract the natural tendency to regional equality. By themselves, migration, capital movements and trade are rather the media through which the cumulative process evolves— upwards in the lucky regions and downwards in the unlucky ones. In general, i f they have positive results for the former, their effects on the latter are negative. Against the backwash effects there are, however, also certain centrifugal "spread effects" of the expansionary momentum from the centres of economic expansion to other regions. It is natural that the whole region around a nodal centre of 25 expansion shou ld gain from the i n c r e a s i n g o u t l e t s o f a g r i c u l t u r a l products and be s t imu la ted to t e c h n i c a l advance a l l a long the l i n e . There i s a l s o another l i n e o f c e n t r i f u g a l spread e f f e c t s to l o c a l i t i e s f u r t h e r away, where favourab le c o n d i t i o n s e x i s t f o r produc ing raw m a t e r i a l s f o r the growing i n d u s t r i e s in the c e n t r e s . (My rda l , 1957 p. 27-31) . In conc lud ing h i s argument Myrdal pos tu la tes tha t the h igher l e v e l o f economic development that a count ry has a l r eady a t t a i n e d , the s t ronge r the spread e f f e c t s w i l l u s u a l l y be (p. 34) . I t seems t h i s i s conf i rmed e m p i r i c a l l y by Wi l l i amson (1965) when he w r i t e s : . . . e x p e r i e n c e suggests tha t i n c r e a s i n g r e g i o n a l i n e q u a l i t y i s generated dur ing the e a r l y development s t a g e s , wh i l e mature growth has produced reg iona l convergence or a r educ t i on i n d i f f e r e n t i a l s , (p. 199) . Despi te the f a c t that Myrdal (1957) and Hirschman (1958) have s i m i l a r concepts o f a n a l y s i s i n t h e i r works , there are cons ide rab le d i f f e r e n c e s i n emphasis. Hirschman was more o p t i m i s t i c about the l ong -run fu tu re o f the l e s s - d e v e l o p e d c o u n t r i e s and a l s o r e l a t e d h i s theory e x p l i c i t l y to l e s s - d e v e l o p e d areas w i t h i n c o u n t r i e s . Whi le Myrdal was more cau t ious about the consequences o f induced growth, the cumula t ive advantages exper ienced i n growth po in t s would cause backwash e f f e c t s to p r e v a i l i n most o the r p l a c e s . Hirschman seemed to take f o r granted tha t s t rong fo rces e v e n t u a l l y w i l l c rea te a t u r n i n g po in t once p o l a r i z a -t i o n e f f e c t s have proceeded f o r some t ime . 26 4. V i a b i l i t y of Modern Economic Theory in Developing Countries Myrdal 1s and Hirschman's idea of unbalanced growth has dominated development strategies for the past three decades. The underlying idea o f th i s development strategy, also c a l l e d growth pole strategy, has been that i t would be i n e f f i c i e n t and i n e f f e c t i v e to spread developmental investment t h i n l y throughout the national t e r r i t o r y . Instead, i t i s better to s e l e c t key urban areas f o r concentrated invest-ment programs that would benefit from economies of scale and external economies o f a glome r a t i on. Experiences o f many developing countries have proved that t h i s growth pole strategy has been reasonably e f f e c t i v e in r a i s i n g GNP, but i t has f a i l e d to reach the l i v e s of ordinary people in terms of jobs, income d i s t r i b u t i o n , and the basic a l l e v i a t i o n o f c r i t i c a l poverty (Grant, 1 973; Adelman, 1975; Adelman and Morris 1973; A r i e f , 1977). And towards the end of the 1960's Dudley Seers raised some fundamental questions concerning the meaning of development which are addressed to poverty, unemployment and i n e q u a l i t y . The questions to ask about a country's development are therefore: What has been happening to poverty? What has been happening to unemployment? What has been happening to inequality? I f a l l three o f these have declined from high l e v e l s , then beyond doubt t h i s has been a-period o f development for the country concerned. I f one or two of these central problems have been growing worse, e s p e c i a l l y i f a l l three have, i t would be strange to c a l l the r e s u l t "development", even i f per capita income doubled. (Seers, 1969 p. 3). 27 The pattern of development in Mexico is a typical example of Seers' questions. While this country has experienced an increased per capita income, unemployment, inequality and the poverty level of the mass of the population has remained unchanged or even increased. Empirical evidence for this failure has been shown by Grant: The experience of most developing countries over the past decade indicates.that a rising GNP growth rate alone is no guaranteee against worsening poverty. Mexico, for example, has been very successful by traditional standards; its GNP has risen by 6 or 7 per cent annually for the past 15 years. Yet, at the same time, unemployment in Mexico has been increasing'*, and the income disparity between the rich and the poor has clearly been widening. This is not only because of Mexico's very rapid population growth... It is also because government policies have bypassed the small, labor-intensive producers throughout Mexico and encouraged production primarily through large farms and urban-based factories... Half of Mexico's industrial production has been located in its capital city... the jobs, housing, education, and health facilities provided by government have generally favored higher income groups. In the early 1950's the total income of the top fifth of Mexican population was 10 times that of the lowest fifth; by 1 969, i t was 16 times as great. (Grant, 1973 p. 7). In line with Grant's findings, Arief (1977) observed that rapid growth in GNP per capita does not automatically result in a higher standard of living for the majority of people in Indonesia. He indicated that the development of the modern sector was financed at the expense of the traditional agricultural sector. Arief further writes: ... the implementation of the GNP growth oriented model tends to sacrifice the traditional sector... The industrialization strategy in Indonesia which is import-dependent import substitution for the purpose of catering . to the domestic market can be considered as a strategy which sacrifices the agricultural sector since i t does not depend on domestic agriculture for raw materials. 28 Indonesian economic p o l i c i e s and practices which were biased toward ;the modern and urban sectors were accompanied also by a pattern on behaviour of the r u l i n g e l i t e and the members of the bureaucracy which i s destructive to the attainment o f popular welfare as i t created d i s t o r t i o n s in the economic process. ( A r i e f , 1977 p. 21-59). In addition to the example given above, Adelman (1975) notes that not only i s there no automatic t r i c k l e down of development b e n e f i t s ; on the contrary, the development process leads t y p i c a l l y to a t r i c k l e -up in favor of the middle classes and the r i c h . Robert McNamara also r e a l i z e d that t h i s i n d u s t r i a l i z a t i o n strategy does not work properly in the t h i r d world. He recognized that the World Bank i t s e l f had paid very l i t t l e attention to subsistence a g r i c u l t u r e in i t s 25 years of operation (McNamara, 1973). The i n v a l i d i t y of basic assumptions o f growth centre theory i s not only found in the developing countries, but also in the developed countries. Moseley's empirical studies (Moseley, 1973) about the growth-transmission impacts of growth centres in East Anglia and Brittany have led him to conclude that i f the objective o f regional p o l i c y is to benefit small towns and rural areas, then i t would be advisable to invest d i r e c t l y i n these places. Pred's study on inter-urban transmission o f growth in advanced economies suggests that the disappointing record o f growth centre and growth pole p o l i c i e s in advanced economies i s in some measure a t t r i b u t a b l e to mistaken assumptions concerning inter-urban growth transmission. At the end Pred concluded that: 29 ... i t must be acknowledged that no regional planning p o l i c y i s l i k e l y to be e i t h e r goal consistent or as successful as a n t i c i p a t e d unless i t s formulation i s preceded by studies e s t a b l i s h i n g the p e c u l i a r underlying structure o f growth transmission interdependences within the concerned regional and national system o f c i t i e s . . . regional planners cannot continue to operate under the premise that income and employment opportunities w i l l automatically expand r a p i d l y in a growth centre and i t s surrounding region merely as a consequence of the implementation o f e x p l i c i t l o cational decisions, such as the growth centre assignment of a new manufacturing f a c i l i t y or government o f f i c e . Instead, ... i t i s necessary that, where possib l e , there be some minimal coordination o f the e x p l i c i t and i m p l i c i t l o c a t i o n a l decision-making o f both private corporations and government organiza-t i o n s . (Pred, 1976 p. 169). 30 5. Alternative Development Strategies Having r e a l i z e d that the t r i c k l e down approach did not work properly i n developing countries, i t has recently become fashionable to deplore the use o f the modern theory of economic development, which i s based on an urban-industrial o r i e n t a t i o n . Friedmann's work on 'A Spatial Framework for Rural Development in Poor Nations' stressed that "rural development in poor countries requires a major reordering o f national p r i o r i t i e s in the use o f investment funds and the adoption o f a s p a t i a l framework for the formulation and execution of the appropriate p o l i c i e s and program" (Friedmann, 1974 p.4). By "reordering national p r i o r i t i e s " he means that a process of economic growth should be "directed towards increasing prosperity and equality among the popula-t i o n ; economic development should .be directed towards s e l f generation which builds on e x i s t i n g knowledge and seeks to transform t r a d i t i o n a l structures from within; the strategy o f urban-industrial growth should be changed to another strategy in which improvement in a g r i c u l t u r a l production i s seen as a necessary precondition for further development in the urban-industrial sector" (Friedmann, 1974 p. 5). He suggested that "rural development must be viewed as a continuing process and i t i s f u t i l e to think of i t as ever reaching a Rostovian "take-off" stage" (Friedmann, 1974 p. 30). The rural development approach, as a means for promoting the economic well-being o f poor rural people, i s not a new approach in the t h i r d world countries. For example, B r i t i s h administrators during the 1920's and 1930 1s t r i e d to e s t a b l i s h certain organizations and i n s t i t u t i o n s in several v i l l a g e s in Pakistan as a means to overcome the v i l l a g e s ' 31 backwardness and poverty (Ahmed, 1980 p. 36). Despite the fact that there have been many scholars concentrating on rural development (Friedmann, 1974; Lele, 1975; Haque, e t . al 1977; Friedmann and Douglass,, 1975), only Friedmann's and Douglass 1 0975) study suggest an a l t e r n a t i v e strategy to replace the i n d u s t r i a l i z a t i o n , strategy i n the developing countries. In 1975, at a United Nations Conference in Nagoya, Japan, Friedmann and Douglass proposed "agropolitan development" as a promising strategy for developing countries. They argued that the t r i c k l e down strategy was untenable and proposed that a strategy of accelerated rural development should be oriented to basic human needs, a more equal d i s t r i b u t i o n o f economic ben e f i t s , the d i r e c t involvement o f local people in the process of development, and growth based on the a c t i v a t i o n o f rural people, a g r i c u l t u r e and resources. The "agropolitan development" strategy was based on t h e i r findings in assessing the r e s u l t s of the strategy o f accelerated i n d u s t r i a l i z a t i o n in s i x Asian countries, namely, India, Indonesia, West Malaysia, the P h i l i p p i n e s , Republic of Korea and Thailand. The following are t h e i r major f i n d i n g s : 1) urban growth i n every country was greater than the growth o f t o t a l population, r e f l e c t i n g large scale rural-urban migration; 2) "modern" development i s highly concentrated in only a few urban centres; 3) the urban economy was by no means ready to provide f u l l , productive, employment to everyone; 4) income i n e q u a l i t y i s increasing; 5) the t r a d i t i o n a l strategy has resulted in a substantial neglect of domestic food production and the emphasis on exports has led farmers to a l l o c a t e 32 t h e i r labor and land away from food to the production o f cash crops (Friedmann and Douglass, 1975 pp. 7-20). The main idea of the agropolitan development strategy was to integrate rural with urban development through the establishment o f the so c a l l e d "agropolitan d i s t r i c t " . An agropolitan d i s t r i c t supplies s e r v i c e s , off-farm jobs, and i s s e l f governing. Normally i t would have an average population density o f at l e a s t 200 persons per square k i l o -meter, contain a core town of 10 to 25 thousand inhabitants with a commuting radius of 5-10 kilometers (or approximately one hour's travel time by b i c y c l e ) and have a total population o f 50 to 150 thousand (Friedmann and Douglass, 1975 p. 43). The functions of the d i s t r i c t would be financed by r e t a i n i n g l o c a l savings, s u b s t i t u t i n g volunteer work for taxes, trans-f e r i n g c a p i t a l from the primate c i t y to rural areas, and changing the internal terms o f trade in favor of a g r i c u l t u r e . Friedmann and Douglass suggested that the agropolitan d i s t r i c t i s the appropriate unit for devising a p o l i c y of s p a t i a l development through decentralized planning and decision making (Friedmann and Douglass, 1975 p. 53). As a t o o l , at l e a s t , to slow down urbanization, agropolitan development can be viewed as a promising a l t e r n a t i v e to replace the i n d u s t r i a l i z a t i o n strategy. However, to what extent t h i s strategy can f i t into the developing countries' s i t u a t i o n s , in which authoritarian regimes are so endemic, i s questionable. It would require far reaching i n s t i t u t i o n a l and p o l i t i c a l reform to adopt t h i s strategy. Would the authoritarian regime allow s e l f government at l o c a l l e v e l ? Would the r i c h e l i t e v o l u n t a r i l y give up both p o l i t i c a l power and wealth 33 to permit the r e a l i z a t i o n of these goals? The a p p l i c a b i l i t y of t h i s promising a l t e r n a t i v e development strategy depends, to some extent, on the answer to these questions. The search for an a l t e r n a t i v e to the conventional development strategy has continued. One year a f t e r Friedmann's and Douglass 1 agropolitan development strategy had been formally presented in Nagoya, the International Labour O f f i c e (ILO) advocated the "basic needs" approach to development in the t h i r d world countries. This approach had been emerging from the ILO's World Employment Program launched in 1969. It was based on the recognition that instead of a l l o c a t i n g invest-ment funds to projects that y i e l d e d the highest return i r r e s p e c t i v e of employment and income d i s t r i b u t i o n implications., the choice should be those projects which created the l a r g e s t number of productive jobs. Several years l a t e r , however, ILO recognizes that this employment-oriented strategy, by i t s e l f , w i l l not s u f f i c e , and that there i s a need to intimately connect employment issues to poverty and i n e q u a l i t y (ILO, 1976). Based on t h i s recognition, the«IL0 at the 1976 World Employment Conference formally developed a new basic needs strategy as an approach to development i n the t h i r d world nations. Conceptually, basic needs have two elements. The f i r s t includes c e r t a i n minimum requirements of a family for private consumption: adequate food, shelter and c l o t h i n g are obviously included, as would be c e r t a i n household equipment and f u r n i t u r e . The second includes e s s e n t i a l services provided by and for the community at large, such as safe drinking 34 water, s a n i t a t i o n , public transport and health and educational f a c i l i t i e s (ILO, 1976 p. 32). Redistribution and growth are both required to achieve the s a t i s f a c -tion o f basic needs. The strategy focuses on the supply and the demand side; there must be adequate goods and services offered to poor people and, at the same time, there must be adequate purchasing power by the poor to buy these goods and services. In short, the basic needs strategy aims at increasing the access o f the world's poor to v i t a l goods and services in order to improve t h e i r well being. When the strategy o r i g i n a t e d , i t was c r i t i c i z e d on the grounds that the basic needs approach i s a welfare approach and i s inimical to growth. Indeed, i t i s not easy to secure agreement on what the basic needs strategy would imply in terms of s p e c i f i c economic p o l i c i e s . For example, there i s no c l e a r r e l a t i o n s h i p between the s a t i s f a c t i o n of basic needs and economic development (e.g. per capita income). Ensuring consistency between production plans and e f f e c t i v e demand i s another obstacle to implementing this strategy. Changes in p o l i t i c a l , economic and admini-s t r a t i v e structures would be required to make t h i s strategy operate. Lee (1981) concludes that the basic needs approach does not o f f e r a simple short cut for s o l v i n g the problem of mass poverty. He states: Apart from the rather obvious point that a r e d i s t r i b u t i o n o f wealth and income w i l l be r e s i s t e d by strongly entrenched i n t e r e s t s , i t i s also important to r e a l i z e that seemingly innocuous prescriptions such as 'greater d e c e n t r a l i z a t i o n ' and 'greater lo c a l s e l f - r e l i a n c e ' conceal potential c o n f l i c t s of i n t e r e s t . The o l d pattern of development based on 'top down' ce n t r a l i z e d planning has created vested i n t e r e s t s which would r e s i s t a s h i f t towards greater devolution o f power to regional 35 and l o c a l u n i t s . To leaders o f the t h i r d wor ld preoccup ied w i th modern iza t ion and the ex tens ion o f n a t i o n a l power, ' b a s i c needs' i s u n l i k e l y to prove a t t r a c t i v e as a r a l l y i n g c a l l to i n s p i r e n a t i o n a l m o b i l i z a t i o n (p. 121) . 36 6. Concluding Remarks The balanced and unbalanced growth theories became controversial issues in the 1950's. The balanced growth th e o r i s t s argued that invest-ment should be d i v e r s i f i e d over a broad range o f i n d u s t r i e s . On the other hand, the unbalanced growth theo r i s t s argued that i t would be i n e f f i c i e n t and i n e f f e c t i v e to spread developmental investments t h i n l y throughout the national t e r r i t o r y ; they argued that i t i s better to se l e c t key urban areas f o r concentrated investment programs that would benefit from economies of scale and external economies o f aglomeration. During the l a s t three decades, most governments have applied the "unbalanced growth" theory to t h e i r development e f f o r t s . This p o l i c y has been reasonably e f f e c t i v e in r a i s i n g GNP. However, i t has become incre a s i n g l y evident, p a r t i c u l a r l y from the experience of the developing countries, that rapid growth in GNP does not automatically reduce poverty and i n e q u a l i t y or provide s u f f i c i e n t productive employment. Empirical findings of most scholars tend to say that the unbalanced growth paradigm, based on the growth centers 1 notion (urban i n d u s t r i a l strategy) i s not able to solve the problem of poverty, income d i s t r i b u t i o n , and unemploy-ment in developing nations. They imply that the p r i n c i p l e o f p o l a r i z a t i o n i s wrong. Richardson and Richardson (1975), however, based on t h e i r experiences in Latin America, argued that: The disenchantment with growth center p o l i c i e s in many countries i s not evidence that the p r i n c i p l e of p o l a r i z a t i o n i s wrong. On the contrary, i t r e f l e c t s the over-optimum and short-run time horizon o f regional policy-makers, the 37 f a i l u r e of sustained p o l i t i c a l w i l l , the use o f d e f i c i e n t investment c r i t e r i a , bad locational choices and lack o f imagination in devising appropriate p o l i c y instrument (p. 169). The argument along the l i n e of development theories discussed above can be s i m p l i f i e d . The pro-group are the advocates o f a c e n t r a l i z a t i o n strategy. They argue that major investment must continue to.be c e n t r a l i z e d in metropolitan areas and that attempts to decentralize . urban development would be at the cost o f future economic growth. The con-group are the advocates o f decentralized investment and dispersed development, though they believe that expansion o f GNP should be the major goal of national p o l i c y and view economic c r i t e r i a as the primary standard o f strategy design, they argue that developmental investments should be decentralized and dispersed to the lower end of the spatial hierarchy, in small towns, v i l l a g e s , and rural hinterlands (Rondinelli and Ruddle, 1978 pp. 46-48). Rodwin (1963) has a c t u a l l y t r i e d to graft the views of these two extreme advocates by proposing a strategy o f "concentrated-decentraliza-t i o n " for lagging areas. However, what Rodwin suggested was consistent with the notion that induced urban growth centers should be the basis for regional development p o l i c y . Therefore, i t i s viewed as a growth center strategy. Having r e a l i z e d the negative e f f e c t of the growth center strategy, development t h e o r i s t s have t r i e d to search for a l t e r n a t i v e s . Friedman and Douglass (1975) proposed an "agropolitan development" strategy and the ILO (1976) proposed a "basic needs" approach. T h e o r e t i c a l l y , 38 agropolitan development and basic needs strategies can be viewed as promising s t r a t e g i e s . However, without r e s t r u c t u r i n g p o l i t i c a l , economic and i n s t i t u t i o n a l frameworks of the non s o c i a l i s t developing countries, i t i s hard to see the a p p l i c a b i l i t y o f these development strategies i n these countries. 39 CHAPTER III THE THIRD FIVE YEAR PLAN (REPELITA I I I ) , 1979/80-1983/84 AND REGIONAL DEVELOPMENT PLANNING IN INDONESIA In chapter I I , the theory of development has been discussed and reviewed. In t h i s chapter, Repelita III (.1979/80-1983/84) and regional development planning in Indonesia i s b r i e f l y reviewed i n an attempt to see how the theories discussed above relate to the idea and implementation o f regional development planning in Indonesia. Today, Indonesia i s implementing i t s t h i r d f i v e year plan. This Repelita III i s a continuation and enhancement of the previous plans, p a r t i c u l a r l y Repelita I I . Like the other two Repelitas, t h i s Repelita III i s an i n d i c a t i v e plan containing o b j e c t i v e s , t a r g e t s , p o l i c i e s , programs and projects. The main difference i s that Repelita III has been directed towards equity and j u s t i c e . For Repelita I and I I , p r i o r i t y had been given to a high rate of economic growth followed by equity ( e s p e c i a l l y for Repelita I I ) . For Repelita I I I , equity has been put as the f i r s t objective of development followed by e f f i c i e n c y and s t a b i l i t y as the second and t h i r d objectives. These objectives have been c l e a r l y stated i n the Main Outlines o f State P o l i c i e s (Garis-Garis Besar Haluan Negara-GHBN) known as the T r i l o g y o f Development (Ketetapan MPR No. IV tahun 1978). B r i e f l y , the following are the objectives of Repelita I I I : 40 1. Equitable d i s t r i b u t i o n o f development and i t s r e s u l t s towards achieving s o c i a l j u s t i c e for the people. 2. A hi gh rate o f economic development growth. 3. Healthy and dynamic national s t a b i l i t y . The f i r s t o b j e c t i v e , equity, addresses the dispersal o f development benefits to a l l s t r a t a o f the population and to a l l geographic areas. The second o b j e c t i v e , - e f f i c i e n c y , i s r e l a t e d to a s a t i s f a c t o r y rate of growth to increase society's resource base and output on an absolute and a per capita basis. The t h i r d o b j e c t i v e , s t a b i l i z a t i o n , i s concerned with stable p r i c e s , f u l l employment, and stable s o c i o - p o l i t i c a l conditions. Emphasising the importance of equity, the president has elabora-ted t h i s objective into "Eight-Avenues o f Equity" (Delapan J a l u r Pemerataan) as follows: 1. The dispersal of an adequate supply o f basic needs, p a r t i c u l a r l y o f food, c l o t h i n g and s h e l t e r . 2. The dispersal o f education and health f a c i l i t i e s . 3. The dispersal of increasing income. 4. The dispersal o f employment opportunities. 41 5. The d i s p e r s a l o f o p p o r t u n i t i e s to en te r bus iness a c t i v i t i e s . 6. The d i s p e r s a l o f o p p o r t u n i t i e s to p a r t i c i p a t e in development a c t i v i t y , p a r t i c u l a r l y f o r young people and women. 7. The d i s p e r s a l o f o p p o r t u n i t i e s to have j u s t i c e . 8. The d i s p e r s a l o f reg iona l development programs. As has been s t a t e d i n chapter I, equ i t y became an emerging i ssue a t the end o f R e p e l i t a I, a l though i t was not e x p l i c i t l y mentioned i n R e p e l i t a I I , i t has always been the aim o f the government to improve the c o n d i t i o n s o f the l e s s developed sec to r s o r g roups, and reg ions through s p e c i f i c programs, p r o j e c t s and p o l i c i e s . Government e f f o r t s to so lve the problem o f e q u i t y , which have developed s ince R e p e l i t a II and cont inue i n R e p e l i t a I I I , c o n s i s t o f : development grants and s p e c i f i e d development g ran t s . Development grants c o n s i s t o f p r o v i n c i a l development g r a n t , d i s t r i c t o r munic ipa l development g ran t , v i l l a g e grants and p r o v i n c i a l development program (PDP). The s p e c i f i e d development grants a r e : the pr imary school development g ran t , hea l th cen te r development grant and t r ansm ig ra t i on development. The d i f f e r e n c e between those two k inds o f grants i s tha t the l a t t e r i s very nar rowly s p e c i f i e d and they are s e c t o r a l g ran ts . How each o f these development grants c o n t r i b u t e s to reduc ing reg iona l i n e q u a l i t y , income d i s p a r i t i e s and unemployment i s b r i e f l y presented below. 42 Provincial Development Grant Before Repelita II the p r o v i n c i a l f i n a n c i a l system was based on ADO (Allokasi Devisa Otomatis)--an Automatic Foreign Exchange A l l o c a t i o n . This system automatically a l l o c a t e d to each region 10% o f i t s export earnings. It was found that the ADO system generated more imbalance as the more developed regions were in a position to export more and benefited more than the poor and backward regions. Since Repelita I I , the ADO system has been changed to "a minimum grant" for the l e a s t developed region. The p r o v i n c i a l development grant i s a kind o f unspecified grant. However, i t cannot be used for routine expenditures. It i s expected that, through t h i s system, the provision o f more development funds to the less developed areas than to the more developed ones w i l l gradually minimize regional d i s p a r i t i e s . The establishment of the Provincial Development Planning Board.(Bappeda) at the beginning of Repelita II (presidential decree No. 15, dated March 18, 1974) i s a c o r o l l a r y o f t h i s system. In addition, in order to integrate regional plans with the national plan, the s o - c a l l e d "regional consultation", to coordinate regional plans, and "national consultation" were established. D i s t r i c t or Municipal Development Grant This program began with Repelita I. The main purpose of this development grant i s to mitigate unemployment. The use o f the grant i s directed to: 1) labor intensive a c t i v i t i e s ; 2) small 43 projects which are t e c h n i c a l l y easy to handle by d i s t r i c t or municipal agencies; and 3.) projects which d i r e c t l y benefit the people and the development of the region. Since the basis o f the a l l o c a t i o n of these funds i s population, on the assumption that the more people, the bigger the problem of employment, there has been much c r i t i c i s m directed towards i t . As most o f the population l i v e in Java (approximately 64%), i t i s thought that this problem, though i t can reduce unemployment to some extent, may further create regional d i s p a r i t i e s . c) V i l l a g e Development Grant The main purpose of t h i s grant i s to induce development in the v i l l a g e s through the "gotong royong" (mutual help) system. The difference between t h i s grant and the f i r s t two grants mentioned above i s that the funds under this system may not be used for wage employment because labor i s the contribution of the people as a counterpart o f the grant. This grant i s a l l o c a t e d equally to almost a l l v i l l a g e s , disregarding t h e i r s i z e , population, and level of development. It has been shown that the grant i s very useful in encouraging people to p a r t i c i p a t e in providing f or t h e i r own immediate needs. In addition, the grant i s viewed by the v i l l a g e r s as a token of gratitude of the national government to them. 44 Provincial Area Development Program (PPP) This program was designed by the government of Indonesia, with USAID assistance. This program seeks to: 1) improve the c a p a b i l i -t i e s o f local government to undertake rural development a c t i v i t i e s which w i l l increase the productive capacity of the rural poor; 2) improve the c a p a b i l i t i e s o f key central government agencies to support lo c a l government a c t i v i t i e s which w i l l increase the income of the rural poor; and 3) most importantly, increase the income of the rural poor within the project areas. This program i s viewed as experimental and process-oriented, in that i t attempts an i n t r o -spective and evolutionary approach to improving l o c a l project manage-ment. So fa r , the budget for t h i s program i s derived mainly from foreign assistance loans and grants. The basic assumptions o f th i s program are: 1) i t i s generally more e f f e c t i v e to concentrate on a few p r i o r i t y problems than to disperse one's e f f o r t s in a l l d i r e c t i o n s ; 2) there i s more l i k e l i h o o d of v i s i b l e impact and more e f f e c t i v e administration by maintaining a geographical focus within targetted provinces; 3) outputs must be process-oriented; 4) there i s a need for f l e x i b l e implementation. Based on the assumptions mentioned above, the basic approach to the design of ind i v i d u a l PDP's has been to: 1) i d e n t i f y the socioeconomic-administrative conditions within p a r t i c i p a t i n g provinces; 2) s e l e c t a typic a l geographical region composed o f a lim i t e d number of contiguous d i s t r i c t s within the provinces; 45 3) study in more depth the socioeconomic-administrative conditions within the area, concentrating on the constraints to r a i s i n g the incomes o f the rural poor; 4) review systematically a l l l o c a l government programs, a c t i v i t i e s , functions which are, or could be targeted, on a s s i s t i n g the rural poor to improve t h e i r economic s i t u a t i o n ; 5) i d e n t i f y a l i m i t e d number of i n t e r r e l a t e d intervention points where outside assistance could r e s u l t i n s i g n i f i c a n t l o c a l government project management improvements and in the program goals being achieved; 6) describe and analyze these loc a l programs, a c t i v i t i e s , functions in s u f f i c i e n t d e t a i l to determine the types and magnitude of assistance which would r e s u l t in the sought a f t e r program improvements; and 7) design a broad and ne c e s s a r i l y preliminary implementation plan for each o f the provincial "thrusts" i d e n t i f i e d for improvement (USAID, 1 978). It i s hoped that the Provincial Area Development Program w i l l c o n s ist o f numerous multi-sectoral small projects which w i l l have a d i r e c t e f f e c t on the income o f the poor people. The nature o f the program requires a bottom up approach or "development from below" (Stflhr, 1981 ). The implementation of the PDP began in the province of Central Java and Aceh in 1978/1979 followed by Bengkulu, South Kalimantan, Nusa Tenggara Timur and East Java in 1979/1980 and West Java and Nusa Tenggara Barat in 1980/1981. 46 e) Pr imary School and Heal th Center Development Grants These two k inds o f development grants and t r ansm ig ra t i on are c l a s s i f i e d as a s p e c i f i e d development grant system. The main purpose o f t h i s grant system i s to speed up the s e c t o r a l develop-ment i n the r e g i o n s , and to ob ta in a b e t t e r s p a t i a l d i s t r i b u t i o n o f f a c i l i t i e s i n the r e g i o n s . The pr imary school and hea l th cen te r grant system i s i n l i n e w i th the bas i c needs approach. f ) Transmi g r a t i on S ince the e a r l y 1900's t r ansmig ra t i on has cont inued as an impor tant program w i th dual goals o f r e l i e v i n g the popu la t ion burden in Java and B a l i wh i l e s imu l taneous l y deve lop ing the o the r reg ions o f the coun t r y . In recen t years the t r ansm ig ra t i on p o l i c y has o f f i c i a l l y been d i r e c t e d a t r eg iona l development goals w i th the depopulat ion o f Java be ing de-emphasized i n o f f i c i a l p o l i c y s ta tements . During R e p e l i t a I I I , h a l f a m i l l i o n f a m i l i e s o f J a v a ' s popu la t i on w i l l be moved to the Outer I s l a n d s . From the view po in t o f the development grants d i scussed above, i t i s c l e a r t h a t there have been numerous programs which have been launched s ince R e p e l i t a I and R e p e l i t a I I . In R e p e l i t a I I I these e f f o r t s are be ing c o n t i n u e d . These e f f o r t s r e f l e c t na t i ona l p o l i c i e s e x p l i c i t l y and i m p l i c i t l y d i r e c t e d toward reg iona l development. These p o l i c i e s are in tended to ach ieve b e t t e r e q u i t y , p a r t i c u l a r l y from the s p a t i a l po i n t o f v iew, but not l e s s impor tan t , a l s o from the personal o r group po in t 47 of view. It has been r e a l i z e d by the government that development cannot be handled by the national government alone. Full p a r t i c i p a t i o n o f a l l l e v e l s o f government and o f the masses o f the people i s needed to achieve the objective o f development. Despite the fact that national government has paid more and more attention to the lower 1e v e l s o f government, the authority for development i s s t i l l strongly held by the central government. Conceptually, during the l a s t seven years, there has been a change in planning organization as a l o g i c a l consequence o f p r e s i d e n t i a l decree in 1974 concerning the i n s t i t u t i o n o f Provincial Development Planning Board (BAPPEDA). Under t h i s decree i t has been stated that BAPPEDA i s responsible for the coordination and integration of a l l planning a c t i v i t i e s at the pr o v i n c i a l l e v e l . This implies that there has been a devolution o f planning tasks from the center to the lower level of planning. However, this devolution seems to be only in an abstract sense. For example, the experience has shown that BAPPEDA has not been strong enough to coordinate and integrate regional or pr o v i n c i a l plans. This unsuccessful attempt i s not merely because of the BAPPEDA's i n c a p a b i l i t y , but mostly because o f the organiza-tional structure i t s e l t . The head of the pr o v i n c i a l department and the central government's representative for that department in the province concerned are one and the same person. As a central government's employee he i s apt to hear central's i n s t r u c t i o n s rather than p r o v i n c i a l ' s . Another example i s the f i n a n c i a l r e l a t i o n s h ips between the central and the lower level o f governments. The central government c e r t a i n l y intends to give the provinces, d i s t r i c t s or m u n i c i p a l i t i e s a larger 48 s l i c e of the national revenue. This i s evidenced by central government's contribution to the development in Sulawesi for the period of 1973/74 to 1978/79 as follows: TABLE 2: CENTRAL GOVERNMENT CONTRIBUTION TO DEVELOPMENT BUDGET tl973/74 to 1978/79) (PERCENTAGE) Province 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 South Sulawesi 90.6 83.9 85.7 88.4 90.7 90.9 Central Sulawesi 69.9 75.5 83.5 80.7 82.9 86.5 Southeast Sulawesi - 86.9. 88.5 86.9 84.1 88.8 North Sulawesi 67.7 77.5 66.4 84.3 83.1 87.2 Unweighted Average 78.8 80.9 81 .0 85.0 85.2 88.3 Source: Cummings, H. (1980 P.11) However, the use of this central government budget i s by and large determined by the BAPPENAS and central-sectoral departments rather than through the delegation of f i n a n c i a l authority to the provinces. At the central l e v e l (Jakarta), although central government depart-ments have t h e i r planning units, the overall r e s p o n s i b i l i t y f o r planning is entrusted to the National Development Planning Board (BAPPENAS). This board i s not only a planning organization, i t also has budgetary functions 49 i . e . the a l l o c a t i o n o f development expend i tu res . So f a r , almost a l l p ro j ec t s and programs f inanced by the c e n t r a l development budget are determined by the na t i ona l government i n J a k a r t a . I t seems tha t the c e n t r a l government s t i l l has a f e a r o f a l l o w i n g the devo lu t i on o f power and r e s p o n s i b i l i t y to go too f a r , g e t t i n g out o f hand and des t roy ing the un i t y o f Indonesia which has been so c a r e f u l l y nu r te red over the years s i nce the o l d order was deposed. B r i e f l y , based on the d i s c u s s i o n given above, a l though there has been devo lu t i on o f p lann ing tasks to BAPPEDA or the p r o v i n c i a l l e v e l , i t can be concluded tha t the nature o f r eg iona l development p lann ing i n Indonesia i s s t i l l f o l l o w i n g p r i m a r i l y the "development from above" or " top-down" approach. One c a n , however, argue t ha t by c o n s i d e r i n g the presence o f p lann ing i n s t i t u t i o n s a t p r o v i n c i a l and d i s t r i c t l e v e l s , reg iona l development p lann ing i n Indonesia a l s o i n c l u d e s a "bottom-up" e lement . 8). The Chairman o f the Na t iona l Development P lann ing Board (BAPPENAS) i s a l s o M i n i s t e r o f S ta te f o r Economy, Finance and Indust ry (EKUIN), a s u p r a - c o o r d i n a t i n g department o f s t a t e , and a Chairman o f the Committee f o r Economic S t a b i l i z a t i o n . 50 CHAPTER IV WEST PASAMAN AND ITS CRUCIAL PROJECTS It has been stated in Chapter I that the WPDP team proposed f i v e c r u c i a l projects for the ten year period 0975-1 985). The f i r s t two cr u c i a l projects, i . e . the road and o i l paljnri projects were strongly recommended. How do these two projects f i t into the socio-economic conditions o f the study area and what are the l i k e l y impacts o f these projects on the society? Have the people of West Pasaman already met t h e i r basic food needs? Searching out the answer to these questions i s the main purpose of t h i s chapter. 1. Soci o - c u l t u r a l Conditions of West Pasaman Most of the socio-economic conditions of the study area presented here are taken from the "Development Plan for West Pasaman/Sumatra" WPDP (1975a). West Pasaman i s part of the Kabupaten ( d i s t r i c t ) Pasaman in the northern corner o f the province of West Sumatra. It comprises the Kecamatan (.sub-district), Talamau, Pasaman, Lembah Melintang and Sungai Beremas with a population o f 200,494 inhabitants i n 1980 o f Manangkabau, Tapanuli, and Javanese o r i g i n (census Penduduk Pasaman, 1980). The presence of these three ethnic groups in West Pasaman distinguishes i t from East Pasaman in which the l a s t two groups are n e g l i g i b l e . Of the three ethnic groups r e s i d i n g in West Pasaman, the Minangkabau group was the f i r s t to occupy and use the area. As the f i r s t s e t t l e r s , 51 they possessed the r i g h t to "tanah ulayat" (communal land). The Batak Mandahiling group i s viewed as immigrants from the surrounding areas, i . e . the area to the north of West Pasaman known as Tapanuli. The existence o f Javanese in West Pasaman was started under the Dutch govern-ment by bringing in indentured labourers (buruh kontrak) for the newly . developed o i l palm estate in Ophir in 1930. Since 1953 the Indonesian government has been encouraging a transmigration project in West Pasaman, adding Javanese transmigrants to e x i s t i n g settlements and introducing new settlment schemes. Unlike the f i r s t Javanese in West Pasaman, who came as indentured labourers, the Javanese transmigrants were r e s e t t l e d in the tanah ulayat (communal lands) while the former occupied the government lands, i . e . the Ophir o i l palm concession. West Pasaman happens to contain the major constituents which make up the pattern of Indonesian culture as a whole. Here the three p r i n c i p a l cultures meet, namely,, the m a t r i l i n i a l (the Minangkabau group), the p a t r i l i n i a l (the Batak Mandahiling) and the b i l a t e r a l (the Javanese group). The differences in the area of o r i g i n and culture have resulted in ethnic groups maintaining t h e i r own c h a r a c t e r i s t i c s . As a r e s u l t , they cannot be e a s i l y assimilated. In addition to c u l t u r a l differences between the three ethnic groups, a d i f f e r e n t i n t e r p r e t a t i o n of the same r e l i g i o n s (Islam) has lessened the p o s s i b i l i t y of ass i m i l a t i o n between the Javanese and the Minangkabau groups. Land tenure problems haye also made th i s s i t u a t i o n become more 52 complicated e s p e c i a l l y f o r the Javanese s e t t l e r s who c u l t i v a t e tanah ulayat (communal land). Although the ninik mamak (.informal leaders) v o l u n t a r i l y released t h e i r tanah ulayat to be used by the Javanese transmigrants, they expected and even s t i p u l a t e d , that the Javanese s e t t l e r s should be completely 9 ) incorporated into the adat ' community, i . e . adat Minangkabau. This condition i s r e a l l y d i f f i c u l t to f u l f i l since adat Minangkabau, as a system of i d e n t i f i c a t i o n , i s strengthened by i t s r e l a t i o n to the Islamic r e l i g i o n . It i s true that the Javanese r e s e t t l e r s are Moslem, however, f o r the Javanese in West Pasaman, r e l i g i o n does not play a central role in t h e i r l i v e s and does not constitute a matter of l i f e and death as for the Minangkabau and Batak Mandahiling who l i v e i n West Pasaman. The differences in the r e l i g i o n i n t e r p r e t a t i o n i s evidenced by the Catholic missionaries' a c t i v i t i e s i n the transmigrant settlements (WPDP, 1975a pp. 91-92). Those a c t i v i t i e s were not met with h o s t i l i t y from the Javanese s e t t l e r s as they were by the Minangkabau and the Batak Mandahiling groups. For the Minangkabau soc i e t y , penetration o f any other r e l i g i o n i s considered as being perilous f or i t s own socio-c u l t u r a l l i f e . The readiness of ninik mamak (informal leaders) to bestow t h e i r communal land on the Javanese transmigrants was based on the expectation that the Javanese s e t t l e r s would be observant o f t h e i r 9) Adat i s a part o f culture which i s p a r t i c u l a r l y concerned with the arrangement o f the t r a i t s of a t r i b e . It can take e i t h e r a written or unwritten form, but i t i s mostly unwritten. 53 (Minangkabau) s o c i o - c u l t u r a l l i f e . This implies that any Javanese s e t t l e r s who would l i k e to convert his r e l i g i o n must also release the communal land a l l o t t e d to him. Thus, for the Javanese who c u l t i v a t e communal land there i s no freedom to choose to convert t h e i r r e l i g i o n . Keeping these facts in mind, one might expect that t h i s s o c i a l contradiction would be more obvious , i f the two ethnic groups (Minangkabau and Javanese) p a r t i c i p a t e d in the project which i s located on the government land l i k e the Ophir area, as adat Minangkabau i s no longer a precondition for Javanese r e s e t t l e r s , while the indigenous people do not wish the presence o f t h e i r adat intruders. The two ethnic groups, Minangkabau and Batak Mandahiling, are known as "perantau", or the people who l i k e to migrate. Despite the fact that both ethnic groups possess the same desire to migrate, there i s a s i g n i f i c a n t difference i n t h e i r motivation. A lack of good land for farming in Tapanuli, the o r i g i n area o f the Batak Mandahiling, can be viewed as a main reason for t h i s ethnic group to m i g r a t e ^ . The main reason for Minangkabau people to migrate can, to some extent, be attributed to t h e i r m a t r i l i n e a l system. Like many other mat r i l i n e a l 10) Deforestation of "cagar alam" ( w i l d l i f e forest) in Panti by land squatters i s the evidence of t h i s . In summer 1980, I was t o l d by Bupati (regent) of Pasaman that these land squatters are people from Tapanuli. I happened to meet some of these squatters before I reached West Pasaman, a l l of them stated that they were not squatters because they gave some money to the loc a l o f f i c i a l o f "Dinas Kehutanan" (forestry s e r v i c e ) . They also stated that they would l i k e to farm, but they did not have access to the land. 54 s o c i e t i e s i t i s l i k e l y that a "decisive role" in a Minangkabau house-hold i s held by the wife. Nairn 0976) pointed out that t h i s "decisive r o l e " has an influence on the divorce rates and polygamous a f f a i r s as well as on the migration rate. Reducing emmigration from the area of West Pasaman i s one of.the development objectives s p e c i f i e d by the WPDP team (see Chapter.I). This implies that the establishment o f the road project and o i l palm project w i l l prevent people from migrating. For the ethnic groups l i k e Minangkabau and Batak Mandahiling, i t might be wrong to assume that two c r u c i a l projects w i l l be able to keep them in West Pasaman. On the contrary, the road project w i l l probably speed up the rural-urban migration process as i t provides good a c c e s s i b i l i t y to urban areas l i k e ID Padang . It could be possible that the road project w i l l siphon o f f the natural resources as.well as human resources (entrepreneurs) of the study area ("backwash" or " p o l a r i z a t i o n " e f f e c t ) (Myrdal, 1957; Hirschman, 1958). Another p o s s i b i l i t y i s that the o i l palm project w i l l p r e c i p i t a t e the exodus o f the rural poor. For example, i f the o i l palm project i s implemented, there w i l l be a p o s s i b i l i t y that i t w i l l widen income d i s p a r i t i e s of the residents. The residents who do not p a r t i c i p a t e i n the project w i l l be less prosperous than project p a r t i c i p a n t s . As a r e s u l t the former w i l l probably t r y to seek other job opportunities in urban areas, e.g. Padang; the road project w i l l enable them to do so. Once they decide to move to an urban area, there w i l l be a very small p o s s i b i l i t y of t h e i r going back to West Pasaman 11) I f the road project was already in operation, the rural people o f West Pasaman can reach Padang within 3 hours or so, at present i t takes at l e a s t 10 hours. 55 as they w i l l be ashamed o f being, c a l l e d "coward" (pengecut). This i s p a r t i c u l a r l y true o f the Minangkabau and Batak groups. Administratively, the nagari ( v i l l a g e ) i s the.lowest l e v e l of the government system in Indonesia. The presence o f the v i l l a g e council o f representatives (Dewan Perwakilaa Rakyat Nagari or DPRN) and the t r a d i t i o n a l v i l l a g e council (Kerapatan Nagari) makes the mechanism of v i l l a g e administration i n the study area (and the rest o f West Sumatra) d i f f e r from the rest of Indonesia (see Figure 1). The DPRN was to consist of representatives from the various s o c i a l groups in the community. The t r a d i t i o n a l v i l l a g e council, composed o f ninik mamak (informal l e a d e r s ) , alim ulama (.religious d i g n i t a r i e s ) and cerdik pandai (pundits) functions as an advisory committee to the wali nagari ( v i l l a g e head). The wali nagari i s a sort o f mayor who i s nominated and elected by the voting inhabitants of the v i l l a g e f or a term o f f i v e years. He i s the o f f i c i a l head o f the v i l l a g e community, and as such, vested with the government's authority. Thus, special rights and duties o f the v i l l a g e head are sanctioned by the government, which provides him with p a r t i a l • compensation for the time and labor expended to perform his work. The ninik mamak which i s bound up with alim ulama and cerdik pandai to form kerapatan nagari, plays a decisive role in v i l l a g e administration. Without the consent of these t r a d i t i o n a l v i l l a g e f u n c tionaries, hardly any enterprise can be ca r r i e d out. Since, as adat experts, they are s t i l l responsible for many spheres o f da i l y v i l l a g e 56 BAGAN MEKANISME PEMERINTAHAN NAGARI MECHANISM of NAGARI ADMINISTRATION Kerapatan Nagari - Ninik Mamak - Alim Ulama - Cerdik Pandai Ccrdik Pandai Wali Nagari a — _ Sekretaris Nagari Ninik Mamak Kcpala Kaum Kcpala Waris D P R N (Legislative) Alim Ulama Anak Kemenakan R a k y a t Coordination Koordinasi Informal Connection Perhubungan Informil Command Komando Election Pemilihan 57 l i f e and due to t h e i r unchallenged high soc i a l standing, they can be considered as the backbone of Minangkabau v i l l a g e society. Recently, the wali nagari who stumbled over the opposition of the adat f u n c t i o n a r i e s , had to quit his o f f i c e before his f i v e year term elapsed (WPDP, 1975a). It i s not an easy task to govern a v i l l a g e with such a t r a d i t i o n a l l y powerful group behind the scenes. With regard to the nagari administration in West Pasaman, more serious problems might a r i s e where transmigration schemes have moved into the l i v i n g space of t r a d i t i o n a l groups. R e f l e c t i n g the deeply rooted c u l t u r a l differences between the Javanese and the Minangkabau, the r e s e t t l e r s 1 communities are incorporated iii the Minangkabau social system only in the administrative sense, and even th i s incorporation i s very incomplete. 58 2. Economic Patterns Agriculture i s the most important sector o f West Pasaman1s economy. It accounts for an estimated 66% o f the regional product and about 80% of the population draw the majority o f t h e i r income from this sector. Rice c u l t i v a t i o n , i n terms o f the acreage c u l t i v a t e d , i s the dominant a g r i c u l t u r a l sector i n West Pasaman. Wet r i c e c u l t i v a t i o n correlates very c l o s e l y with the d i s t r i b u t i o n of the population. The larger agglomerations o f Minangkabau and Bakak Mandahiling groups are r e f l e c t e d by r e l a t i v e l y large areas o f sawah; e i t h e r normal sawah (as in the case o f Talu, Cubadak) or more extensively used swamp r i c e f i e l d s (south o f Ujung Gading). A l l the other sawah areas coincide with the large transmigration schemes (Desa Baru, K i n a l i , Kota Baru) thus indica-t i n g the higher i n t e n s i t y of agriculture in these settlments. Irrespective of market access, Javanese small hoi ders s t i l l focus on wet r i c e c u l t i v a t i o n which serves as both the main food and cash crop. Besides r i c e c u l t i v a t i o n , perennial crops, such as rubber, cloves and other spices, coconut and coffee are c u l t i v a t e d . Rubber is grown in Paraman Ampalu, Silapang, P a r i t and Simpang Dingin, while cloves and other spices are concentrated in the core area around Simpang Empat and along the. road to Ujung Gading and in the Batak Mandahiling areas near Paraman Ampalu. Dry land c u l t i v a t i o n of annual crops occur in two systems of d i f f e r e n t i n t e n s i t y , permanent (tegalan) or s h i f t i n g c u l t i v a t i o n (ladang berpindah-pindah). Most o f the permanent dry land c u l t i v a t i o n of the annual crops 59 is concentrated in the core area around Simpang Empat. S h i f t i n g c u l t i v a -t i o n i s s t i l l widely practised in West Pasaman. Roughly, 43% o f the West Pasaman area covered by secondary vegetation can be considered as a latent reserve for t h i s most extensive form of agricul ture. It i s estimated that 4% of the t o t a l area under secondary vegetation Cor roughly 8,000 ha) are a g r i c u l t u r a l l y used each year. The average rotation periods o f s h i f t i n g c u l t i v a t i o n i s about 7 to 8 years CWPDP, 1975a). A g r i c u l t u r a l land use data for West Pasaman in 1974 shows that r i c e i s the main crop c u l t i v a t e d (.10,863 ha) followed by rubber (6,537 ha), cloves (.2,185 ha), coconut (2,077 ha), coffee (1 ,384 ha) cassia vera or cinnamon C665 ha) (.WPDP, 1 975a). Agriculture in West Pasaman today i s exc l u s i v e l y run by smallholders. The d a i l y working time r a r e l y exceeds s i x hours with an average o f two persons per family spending most o f t h e i r time on farm work. The marketing o f a g r i c u l t u r a l produces i n West Pasaman takes place in v i l l a g e markets and through dealers and agents. In the market (pasar) d a i l y goods are traded by the farmers' wives. The variations in volume and price of a g r i c u l t u r a l products are related to the harvest times. The dealers have a strong influence on a g r i c u l t u r a l product p r i c e s . Scattered supply and seasonal fluctuations are two reasons which make the position o f dealers in r e l a t i o n to the smallholders so strong. A marketing system by a chain of middlemen operates i n West Pasaman. Most detrimental for the smallholder i s the frequent combination of marketing and c r e d i t s Csystem i j o n ) . Credits are mostly given during seasons of shortage e i t h e r in kind--calculated at the high prices then v a l i d — or 60 in cash which does not buy very much at that time. When these c r e d i t s are repaid by the smallholder a f t e r harvest, a much lower price p r e v a i l s . Thus, the i n t e r e s t can reach as much as a hundred percent annually. The main reason for the condition of the marketing system is not the lack of the farmers' response to market in c e n t i v e s , but l i e s in the i n s t i t u t i o n a l set up. Various observations (.WPDP, 1975a) reveal that the producer's reactions to price fluctuations are very quick. For example, the sharp decline i n rubber prices observed during 1974/75 resulted in an almost complete production stop. The minimum price f o r rubber i s calculated by the smallholders at a le v e l which ensures the purchase of a minimum quantity of r i c e . I f prices f a l l below t h i s point they change t h e i r a c t i v i t i e s towards food crop production such as dry r i c e , maize, cassava and sweet potatoes on quickly opened up dry land (ladang). Forestry and f i s h i n g are also economic a c t i v i t i e s in West Pasaman. Almost one h a l f of the area i s covered by primary forest and about 25% of West Sumatra 1s coast l i n e (excluding the Mentawai Islands) belongs to West Pasaman. About two-thirds of the e x i s t i n g primary forests are administered by the forestry service (Dinas Kehutanan). as government fo r e s t s . A small quantity o f wood for loc a l use in construction and furniture making and for f i r e wood i s cut a l l over the area, providing an additional income for loc a l farmers and fisherman. Roughly 10% of West Pasaman's population depend wholly, or p a r t i a l l y , on f i s h i n g . From WPDP f i e l d surveys, i t was gathered that nearly a l l fishermen in West Pasaman are engaged in agr i c u l t u r e during the non-fishing 61 season . Fur thermore, o l d peop le , women and c h i l d r e n , who do not p a r t i c i -pate in f i s h i n g f i n d pa r t t ime occupat ions apar t from a g r i c u l t u r e , i n the p roduc t ion of s t raw f o r c i g a r e t t e s Cfrom n ipa palm l e a v e s ) , i n t r a d e , boat b u i l d i n g and o the r h a n d i c r a f t s . Simple p rocess i ng f o r the produc t ion o f food s t u f f s , b u i l d i n g m a t e r i a l s , f u r n i t u r e and o ther everyday, u t e n s i l s can be found throughout the r e g i o n . Th is household i ndus t r y i s done by very smal l e n t e r p r i s e s us ing the s i m p l e s t of equipment and produc ing predominant ly f o r the l o c a l market . Very o f ten the p rocess i ng un i t s are run by pa r t t ime farmers and f o r e s t r y l a b o r e r s . In view of the o r g a n i z a t i o n of these a c t i v i t i e s , i t i s ha rd ly j u s t i f i e d to speak o f a c l e a r l y d i s c e r n i b l e secondary s e c t o r o f the economy. On the who le , p r o c e s s i n g , both o f a g r i c u l t u r a l and f o r e s t r y products are home-market i n d u s t r i e s , f o l l o w i n g a very l o c a l and s l ow l y expanding demand. P r o c e s s i n g p lan t s work ing f o r expor t are few in number and employees. Rubber sheets are the on ly ones to be e x c l u s i v e l y expo r ted , wh i l e on ly smal l q u a n t i t i e s o f o ther products such as c o f f e e , cassava ch ips (kerupuk) and s p i c e s are s o l d ou t s i de the r e g i o n . Among the wood manufactur ing e n t e r p r i s e s , boat b u i l d i n g i n A i r Bangis and Sasak i s notab le f o r i t s e x p o r t - o r i e n t a t i o n . I t ca te rs not on l y to the demand o f l o c a l f i she rmen , but a l s o f o r sh ips up to 100 DWT ordered by c l i e n t s from Padang. Earn ings o f the ent repreneurs in the study area are s m a l l , not above the fa rmers ' average, and r i s k i s minimal s ince the n o n - a g r i c u l t u r a l a c t i v i t i e s are o f ten on l y a source o f a d d i t i o n a l income f o r the f a m i l i e s . Household i n d u s t r y i n West Pasaman does not seem to r equ i r e s p e c i a l s k i l l s o r a l a rge amount o f c a p i t a l . 62 3. Basic Food Needs o f the West Pasamanian Indonesia i s well known as an agrarian country. Nevertheless, i t has not been s e l f - s u f f i c i e n t in food. During the period of 1921-1940 an average of 460 thousand tons of r i c e had to be imported annually and these f i g u r e s , a f t e r independence, were even greater, r i s i n g to 763 thousand tons in 1956, and accounting for 13% of the to t a l cost of imports (Hadiwidjaja, 1970 p.. 19). By 1977 t h i s figure had r i s e n to 1,950 thousand tons o f r i c e , 89.1 thousand tons o f soybeans and 763 thousand tons of wheat and f l o u r (Dick, 1979 p. 35). In 1960, with i t s Eight-Year Overall Development Plan, the govern-ment of Indonesia paid special attention to the food problem. It was expected that the country would be self-supporting in r i c e by 1962. However, th i s target was not reached and during the period o f 1961-1964 more than one m i l l i o n tons o f r i c e were imported annually. Since Repelita I 0969/70-1973/74) food production, p a r t i c u l a r l y r i c e , has received very high p r i o r i t y . However, r i c e imports and other basic food imports, such as soybeans and wheat and f l o u r continue to grow (Dick, 1979). Repelita III states that s e l f - s u f f i c i e n c y in food i s one o f i t s objectives. The increase i n r i c e production i s to be accomplished both by i n t e n s i f i c a t i o n of farming practices and expansion o f c u l t i v a t e d areas. A v a i l a b i l i t y of i r r i g a t i o n networks i s c r i t i c a l for these e f f o r t s , p a r t i c u l a r l y intensi f i c a t i o n . The expansion of c u l t i v a t e d areas for r i c e c u l t i v a t i o n i n Java 63 through i n t e n s i f i c a t i o n has almost reached i t s peak. Hence, the promising areas for food production are in the Outer Islands. In l i n e with the p r i n c i p l e of the equitable d i s t r i b u t i o n of development and soci a l j u s t i c e , as the f i r s t objective of Repelita I I I , the government of the province of West Sumatra has decided on the basic human needs approach to meet the objective of development in that province. Based on the r e s u l t of the study conducted by the Directorate of Land Use (Direktorat Tata Guna Tanah, 1976), using nine essential commodities (sembilan bahan pokok) as a means o f determining the poverty l i n e , the pr o v i n c i a l govern-ment has i d e n t i f i e d the lagging areas which are c a l l e d "kecamatan miskin". In the meantime, West Sumatra has been divided into fi v e Development Regions (A, B., C, D and E). Development Region A, with i t s center Lubuksikaping, comprises a l l Kabupaten Pasaman. It i s divided into Development Sub-Region I and II. West Pasaman belongs to Development Sub-Region I and three out of i t s four Kecamatan (sub d i s t r i c t ) , namely Kecamatan Sungai Beremas, Kecamatan Talamau and Kecamatan Lembah Melintang are c l a s s i f i e d as "Kecamatan miskin" (Repelita I I I , Sumatera Barat, p. 175). Thus, Kecamatan Pasaman as the focus o f t h i s study, according to t h i s c l a s s i f i c a t i o n i s economically aboye those three kecamatans. The average c a l o r i e consumption in West Sumatra of 2,161 c a l o r i e s i s above the minimum requirement o f 1,900 c a l o r i e s . However, i t i s estimated that 42% o f the prov i n c i a l population are below the minimum, requirements and most o f them l i v e in Development Region A. It i s also estimated that the people in Development Region A are the smallest consumers of protein, far below 40 grams per capita per day (Repelita I I I , 64 Sumatera Barat). By using 1979 s t a t i s t i c a l data for population and r i c e production Csee Tables 2 and 3), i t i s found that the average r i c e production per capita of West Pasaman i s about 127.9 kg. This figure i s f a r below the average r i c e consumption figure used by the Directorate of Land Use, 140 kg of r i c e per capita per year (Direktorat Tata Guna Tanah, 1976 p. 12). I f the c a l c u l a t i o n i s based on the kecamatan level (non-aggregated f i g u r e ) , the r i c e production figures per capita are as follows: 103.7 kg for Kecamatan Pasaman., 103.4 kg for Kecamatan Lembah Melintang and 187.7 kg and 134.2 kg f o r Kecamatan Talamau and Kecamatan Sungai. Beremas res p e c t i v e l y . It i s true that the people of West Pasaman grow other a g r i c u l t u r a l foods, such as maize, cassava and sweet potatoes, however, i t i s not used as a main diet in the study area and i s sold as a source of cash income. I t i s for that reason that those three food crops have been excluded from this c a l c u l a t i o n . It i s quite c l e a r that, even assuming that there i s no r i c e production flow out of West Pasaman, the basic food needs of the people in West Pasaman have not yet been met. I f there are no i.additional c u l t i v a t e d areas for r i c e production, this shortage w i l l automatically become la r g e r in the years to come. I f the local government does not want to be faced with a more serious problem about t h i s food shortage, the suitable land for food production should be reserved. 65 TABLE.3: POPULATION OF WEST PASAMAN BY NAGARI, 1979 TOTAL POPULATION Kecamatan Talamau 42,593 1. Kenagarian Tal u 6,571 2. - " - Sinurut 7,133 3. - " - Kajai 7,976 4. - " - Cubadak 11,297 5. - " - Simpang Tonang 9,616 Kecamatan Pasaman 66,960 1. Kenagarian Aur Kuning 9,117 2. - " - Lingkung Aur 8,695 3. - " - A i r Gadang 5,500 4. - " - Kapar 5,232 5. - 11 - Sasak 7,112 6. - " - Katiagan 3,263 7. - " - K i n a l i 19,487 8. - " - Koto Baru 8,554 Kecamatan Lembah Melintang 45,271 1. Kenagarian Ujung Gading 19,100 2. - " - Sungai Aur 13,930 3. - " - Rabi Jonggor 8,625 4. - " - Muara Kiawai • 3,616 Kecamatan Sungai Beremas 29,639 1. Kenagarian A i r Bangis 7,540 2. - " - P a r i t 9,325 3. - " - Batahan 8,933 4. - " - Desa Baru 3,841 TOTAL (WEST PASAMAN) 184,463 urce: Pasaman Dalam Angka, 1979 (pp. 152-155) 66 TABLE 4: AREA HARVESTED, YIELD RATE AND TOTAL PRODUCTION IN RICE PADDIES IN WEST PASAMAN (1979) Area Harvested Y i e l d Rate Total Production Kecamatan wetl and upland wetl and upland wetland upland (ha) (ton/ha) (ton) 1) Talamau 4,137 272 3.40 1 .85 14,031 502 Pasaman 3,602 152 3.44 1.37 12,408 208 Lembah Mel intang 3,211 632 2.32 1.66 7,458 1,052 Sungai Beremas 2,130 1 ,796 2.65 0.89 5,638 1 ,593 TOTAL 13,080 2,852 3.02 1.18 39,535 3,355 1) dry unhusked r i c e Source: Calculated from "Pasaman Dal am Angka, 1979" (p. 205) 67 4. Crucial Projects As stated previously, for a ten year period (1975-1985) the WPDP team proposed five c r u c i a l projects as a means for achieving the development objectives for West Pasaman. The economic goals of these c r u c i a l projects are: 1. To increase regional income. 2. To increase employment. 3. To improve the balance of payments. 4. To improve family income. 5. To reduce regional income d i s p a r i t i e s . (WPDP, 1975b p.4) Since t h i s study i s primarily related to the second c r u c i a l project, i . e . an o i l palm smallholder project, the l a s t three c r u c i a l projects w i l l hot be discussed here. A new main road project (Simpang Empat -Manggopoh) w i l l b r i e f l y be discussed because i t i s l i k e l y to be a precondition for the o i l palm undertaking. 4.1 The Main Road Project This main road project consists of two sections: Section A, 68 Simpang Em-pat - Manggopoh, 72 km and Section B, Manggopoh - Lubuk Alung, 69 km. The former i s a completely new construction and the l a t t e r i s an improvement in order to achieve the same standard as the preceding section (.see .Map 1). The WPDP team concluded that the lack of an e f f i c i e n t transport network i s the main cause of West Pasaman's backward-ness. The lack o f an e f f i c i e n t transport network i s a t t r i b u t e d to the very poor condition of the road and i t s alignment, e s p e c i a l l y from Talu to Panti, where i t meets the trans Sumatra highway. According to the WPDP team, i t seems the improvement o f the Talu - Panti section i s very d i f f i c u l t due to landslide and curve problems. The underlying idea of proposing a new road from Simpang Empat to Maggopoh was based on t h i s technical problem. Without arguing whether i t i s s u f f i c i e n t for the establishment o f a new road, undoubtedly the o i l palm project had a greater influence on the proposal. For example, i f the a g r i c u l t u r a l products of West Pasaman were destined for the people i n West Sumatra and i t s surrounding provinces, the road alignment would probably be d i f f e r e n t (see Map 3). In other words, technical problems would probably not be viewed as the main obstacle. Therefore the road and o i l palm projects are mutually supportive; without an o i l palm project, there would be no new road proposal (.probably the Talu - Panti section improvement would be more de s i r a b l e ) . Or, without the establishment of a new road there would be no o i l palm project as stated in WPDP's Operational Programmes: The s t a r t i n g point of the whole project depends l a r g e l y on the decision to bu i l d the road connection from Manggopoh to Simpang Empat. As soon as a d e f i n i t e , p o s i t i v e decision i s taken to go ahead with t h i s road, the Nucleus Estate w i l l begin with c l e a r i n g the land, while the factory w i l l be b u i l t in year 2 and 3 i n order to be ready for the f i r s t harvest i n year 4. (WPDP, 1975a p. 1/12). RENCANA PEMBANGUNAN PASAMAN BARAT WEST PASAMAN DEVELOPMENT PLANNING Legend fi) isufcota luitxjttatift Capital of Kabupaia*. Q ttiukflU kacamalan Capital ot Kocamatan • Ibukota k*n*u*n»n NagaM hoadquanar 0 Tampal Lamnya Othtv ptaca . Bala* propmaf Pfowtc*/bonlaf — B«<U k»Oup4t«XI K«bup«l*«l tKMQW _ _ _ _ Baiai kacamatan Kacamalan ewdM Bataa fctnoQanan Nagan OorOW Scale 1: 500000 Ta lu . P3n*<* StcU CD HAP 3 70 Another concern with respect to t h i s road project i s the road standard. It i s proposed to be class l i e o f Bina Marga's road c l a s s i -f i c a t i o n CDirectorate General o f Highway Construction). As this standard i s quite high, i t means that the cost per kilometer i s also high, and the WPDP team was therefore forced to enlarge the size of the o i l palm project into the priva t e , clan and communal lands, an additional 11,000 ha, in order to j u s t i f y the road project. This was done without further i n v e s t i -gation of the physical c h a r a c t e r i s t i c s and the s o c i a l environment of the extended area. As stated e a r l i e r , the consent of the t r a d i t i o n a l nagari function-ar ies Ckerapatan nagari) i s absolutely necessary for the implementation of the project to be ca r r i e d out in t h e i r area. When designing the o i l palm project, p a r t i c u l a r l y the extended area on non-government land, there was no contact with e i t h e r the Walinagaris, as formal leaders, or Kerapatan Nagari, as informal leaders. I t seems the team neglected t h i s , though i t says, When the project i s extended onto v i l l a g e or clan land agree-ments with the formal and informal leaders must be reached. An absolute precondition i s that the contracts between farmers on this land and the PM are countersigned by the Walinagari. His signature should then be regarded as a guarantee of long term land tenure. CWPDP, 1975a p. 1/13) In order to put this problem into the context of t h i s study, the proposed o i l palm project w i l l f i r s t be summarized as follows. 71 4.2 THE OIL PALM PROJECT The WPDP team viewed the o i l palm smallholder project as the central focus for West Pasaman's economic development. The major objectives of thi s project are: (1) to introduce smallholder o i l palm production to West Pasaman; (2) to increase family income, (3) to create employment opportunities and (4) to earn foreign echange. The project area i s located i n the Kecamatan ( s u b d i s t r i c t ) Pasaman. The gross area necessary for the project amounts to 24,000 ha, o f which 20,000 ha i s to be devoted to a smallholder system with the remaining 4,000 ha to be used by the Nucleus Estate. The Nucleus Estate i s to be established on government land, the former Ophir Estate entrusted to the m i l i t a r y . The WPDP proposal s p e c i f i e s that "the Nucleus Estate w i l l be run by SIPEF, a commercial plantation company already operating in North Sumatra" (WPDP, 1975b p. 1/8). One of the basic functions o f the Nucleus Estate i s to provide the surrounding smallholders with a variety o f services. These w i l l include: information, advice and recommendations about o i l palm produc-t i o n , techniques, the provision of planting material, the processing of t h e i r o i l palm f r u i t production by a processing unit to be b u i l t and 12) Most of the information presented in this section i s taken from the "Operational Program for West Pasaman/Sumatra", a volume produced by the WPDP team in 1975. A detailed f e a s i b i l i t y study o f the o i l palm project was presented i n that volume. 72 managed by the Nucleus Estate, and the external marketing and export of the f i n i s h e d product. The WPDP proposal a l l o t s each smallholder 5 ha, 4 ha of which i s to be devoted to o i l palm c u l t i v a t i o n . The remaining hectare i s to be used by the smallholder to meet his family's food needs. In the i n i t i a l year (year 0), the farmer i s to be giyen c r e d i t subsidies to carry him through the f i r s t eight months. During the non productive four year immature phase of the o i l palm, the smallholder i s to make his l i v i n g p r i m a r i l y from the production of food crops. As f a r as o i l palm production i s concerned, the smallholder's role appears to be e s s e n t i a l l y mechanical, producing the o i l palm f r u i t for the Nucleus Estate according to i t s i n s t r u c t i o n s through the Project Management. The WPDP proposal does not provide for a d i r e c t r e l a t i o n s h i p between the Nucleus Estate and the Smallholders. Instead, the WPDP plan provides for a Project Management (PM) body to f a c i l i t a t e the day-to-day a c t i v i t i e s of the smallholder area and to co-ordinate arrangements between the Smallholders and the Nucleus Estate. The proposal does not specify whether the PM's personnel would be public o f f i c i a l s or provincial government representatives. The main task o f the PM i s to organize, co-ordinate, supervise, and implement a l l Smallholder a c t i v i t i e s . This function includes: (.1) the co-ordination and control of Smal 1 hoi der operations; (.2) the 73 provision of planting material and seeds for int e r c r o p s ; (3) the marketing o f the o i l palm f r u i t , i ncluding weight and q u a l i t y c o n t r o l ; (4) the provision o f c r e d i t f a c i l i t i e s ; (5) the provision o f f r u i t transportation from the smallholders' plots to the factory (processing u n i t ) ; (6) the construction o f farm roads (within the project area) and (7) the development of extension services and nurseries. In add i t i o n , there i s the need for (1) land negotiations with the v i l l a g e authori-t i e s ; (2) land surveys; (3) land c l e a r i n g and (4) planting. The Project Management body i s to provide'the only l i n k between the Smallholders and the Nucleus Estate and to represent the Smallholder i n t e r e s t s in dealings with the Nucleus Estate. Thus, a l l information and material from the Nucleus Estate i s disseminated by the PM to the Smallholders. And, a l l o i l palm f r u i t i s marketed and transported by the PM, under contract, as the only buyer of the farmer's production and as the sole supplier to the Nucleus Estate factory. Monetary Receipts > Oil Export f PROJECT MANAGEMENT Organization Transport NUCLEUS ESTATE , Fr u i t SMALL-HOLDERS Processings Marketings Cul t i vation ( FIGURE 2: ORGANIZATIONAL STRUCTURE OF THE OIL PALM PROJECT 74 Even before the project gets o f f the paper, however, there are some gla r i n g l i m i t a t i o n s both in tbe proposal's formulation and in the actual project. The team seems to have forgotten i t s impartial role as planner, with the r e s p o n s i b i l i t y and function to proyide the decision-makers with information on, and evaluation of, the project's f e a s i b i l i t y and desira-b i l i t y . Instead, the team appears to function, based on f a c t s , figures and formulations which are not presented to be weighed as a l t e r n a t i v e s , but to be accepted as the sole d i r e c t i o n the programme i s to follow. Thus, i t states that SIPEF w i l l run the Nucleus Estate without regard to other possible operators or organizational a l t e r n a t i v e s . The proposal tends to concentrate on the technical aspects at the expense of s o c i a l and economic factors that should be considered. The f e a s i b i l i t y study r e s t r i c t s -much of i t s examination o f the Smallholders to an explanation of c u l t i v a t i o n techniques. For example, l i t t l e concern seems to be expressed for the way the Smallholders w i l l deal with the r e s t r i c t i v e a g r i c u l t u r a l and economic control by which decision making and i n i t i a t i v e w i l l be in hands of the PM and the Nucleus Estate. As a procurement body between the Smallholders and the Nucleus Estate the PM w i l l get a-commission of 15% o f the farmers' gross y i e l d a f t e r a deduction o f 15% for the Nucleus Estate, based on the world market p r i c e . This implies that the Smallholders w i l l only get 72.25% o f t h e i r gross y i e l d . And the economic a c t i v i t i e s o f the Smallholders depend on the world,market p r i c e . In addition, the Smallholder i s also a dependent of the PM as well 75 as o f the Nucleus Estate. Moreover, the WPDP team did not mention the reason why the PM should get 15% of the farmers' gross y i e l d ( a f t e r the deduction o f 15% for the Nucleus Estate) as i t s commission. I d e a l l y , the PM, which deals with, or takes care of, both the Nucleus Estate and the Smallholders, should get a commission from the Nucleus Estate. A deduction o f 15% of the farmers' gross y i e l d for the Nucleus Estate 1 3) i s reserved to cover the export ta-xes o f 10% and CESS levy o f Rp 2.6 per kg which i s to be borne by the Nucleus Estate. Again, t h i s deduction i s not c l e a r l y stated. The Smallholders w i l l s e l l t h e i r f r u i t to the PM as the only buyer and the sole o i l palm f r u i t s u p p l i e r to.the Nucleus Estate, but, they Smallholders have to be charged for export taxes. This apparent unfairness i s not explained. At the end o f the f e a s i b i l i t y study, the WPDP team concludes that: By using a ~\2% i n t e r e s t rate and the price per kg of US <£44 f.o.b. for palm o i l , the overall project has an Internal Rate of Return (IRR of 19.4% and a Benefit Cost Ratio (BCR) of 2.35. Since the IRR i s above the Indonesian bank rate of 12%, and the •BCR i s greater than 1, the project i s f e a s i b l e . The projected farm incomes were estimated to exceed Rp 160.000 per 13) Cess levy i s a special contribution paid by the grower. This fund i s addressed for research purposes. 76 month, which i s roughly 16 times the average 1974 farm income in West Pasaman. However, even the most casual evaluation of these r e s u l t s leads to ce r t a i n c r i t i c i s m o f t h e i r economic an a l y s i s . The figures f o r the IRR and BCR, mentioned above, t o t a l l y depend on the assumptions made by the team. I f the assumptions were changed, d i f f e r e n t figures would be obtained for the IRR and BCR. The figure of a projected farm income, 16 times as great as the t r a d i t i o n a l farm income, i s also deceptive as the team compared farm incomes from farms o f quite a d i f f e r e n t s i z e . The income from a 5 ha farm would, of course, be higher than the income from a 1.18 ha farm*^. Moreover, the.team was not able to show what impact the o i l palm project would have on the region. For example, the team concluded that: Given the loca l consumption and savings pattern, savings are often spent on jewelry, an increase in the gold trade i s to be expected. CWPDP, 1975b p. 1/48). This conclusion would imply that savings would not be available for development financing because they would be converted instead to jewelry. Thus, there would be no additional ca p i t a l formation expected from the project. This would mean that the o i l palm project would have no impact on regional growth. 14) 1.18 ha i s the average farm siz e i n the study area based on interviews with farmers and walinagari conducted during the summer of 1981. 77 CHAPTER V THE RESULTS OF THE STUDY 1. Introduction In Chapter IV we have seen that West Pasaman i s s t i l l f a r from s e l f -supporting in r i c e . The figures on a kecamatan basis show that only Kecamatan Talamau i s able to meet i t s food needs in terms o f r i c e produc-tio n per capita 0 8 7 . 7 kg). Kecamatan Pasaman i s the second lowest (103.7 kg) a f t e r Kecamatan Lembah Melingtang O03.4 kg). By extending the Ophir o i l palm estate project as proposed by the WPDP team to the northern part of Kecamatan Pasaman, i . e . Kenagarian Kapar, Aur Kuning, Lingkung Aur and A i r Gadang, in which a part o f the present r i c e production comes from, the basic food supply of Kecamatan Pasaman, as well as West Pasaman as a whole, would be placed in an even more severe p o s i t i o n . Almost one thousand hectares o f the land proposed for o i l palm i s c u l t i v a t e d with paddy. Whether the area under study should be devoted to o i l palm c u l t i v a t i o n or to other a g r i c u l t u r a l food production and tree crops which the farmers have been f a m i l i a r with, i s the main concern o f t h i s chapter. As stated e a r l i e r , three f a c t o r s , i . e . the physical c h a r a c t e r i s t i c s of the land, the s o c i a l environment and economic aspects were chosen as the c r i t e r i a for that purpose. \ 78 2., Physical C h a r a c t e r i s t i c s The discussion o f physical c h a r a c t e r i s t i c s in t h i s section covers land and water resources, and addresses the possible use of the non-government 15) land for food production and other non-oil palm tree crops . The boundary o f the land in question can be seen on Map 2 (.approximately 11,000 ha). Andosols formed on young an d e s i t i c t u f f are predominant in the area, and accounts f o r 64.8% (6»934'.ha), L a t o s o l i c s o i l s derived from igneous rocks prevail over the r o l l i n g h i l l s o f the western part and occupy 23.7% C2.530 ha) of the area. About 2.6% i s occupied by Low Humic-Glei and bout 1.5% by Humic-Glei. Andosols and l a t o s o l i c s o i l s i n the area are both well to moderately drained, strongly a c i d i c i n reaction, and low in phosphorus for c u l t i v a t e d crops (Sinotech, 1979).. Andosols generally have a moderate to high content of organic matter and are high in exchange capacity and water-holding capacity, but l a t o s o l i c s o i l s tend to be permeable and low in nitrogen content. Generally, andosols and l a t o s o l i c s o i l s are suitable f o r r i c e crop c u l t i v a t i o n . However, for the l a t t e r a dditional nitrogen f e r t i l i z e r i s necessary 15) Since the f e a s i b i l i t y study for using the area for o i l palm production had been conducted in 1975, i t can be taken for granted that i t i s p h y s i c a l l y s u i t a b l e for that purpose. 79 The results of Sinotech's (1979) study, based on land c l a s s i f i -cation c r i t e r i a for i r r i g a t i o n purposes, shows that over four-f i f t h s o f the land i n the area may be considered as a r a b l e - i r r i g a b l e . Thus the area has a moderately high potential for food, and in p a r t i c u l a r , r i c e production. Land use o f the study area i s dominated by brushwood and shrubbery followed by alang-alang (imperata c y l i n d r i c a ) , upland s h i f t i n g c u l t i v a -t i o n and tree crops, and paddy land. TABLE 5: LAND USE OF THE STUDY AREA Land-use type Acreage (ha) Percentage Paddy land 988.75 9.25 Upland f or shifting-farming and tree crops 2,564.94 23.99 Brushwood and Shrubbery 3,553.94 33.25 Alang-alang 2,841.25 26.58 Ponded/swampy lands 376.26 3.52 Settlements 265.00 3.41 TOTAL 10,690.14 100.00 Source: Sinotech (1979) p. III.2 Of the land used for paddy c u l t i v a t i o n , only about 545 ha are well 80 drained and the rest (443.75 ha) i s mostly water-logged during the wet season. Hence i t i s only used for one crop of r i c e in the dry season. It i s estimated that more than one thousand hectares o f upland are c u l t i v a t e d with coconut, rubber, cloves, coffee and f r u i t trees, and less than 400 hectares are used for secondary crops (palawija) by the s h i f t i n g c u l t i v a t i o n method. A considerable amount of alang-alang lands in the study area i s the r e s u l t of s h i f t i n g c u l t i v a t i o n . Many r i v e r s i n West Pasaman can probably be used for i r r i g a t i o n in order to increase food production. One of them i s Batang Tongar r i v e r which flows along the eastern border of the study area (see Map 4). In 1954, 293 families of Suriname repatriates were r e s e t t l e d in Tongar, the one v i l l a g e in the study area within Kenagarian A i r Gadang. They were promised wetland r i c e c u l t i v a t i o n (sawah) through the construction o f the Batang Tongar i r r i g a t i o n project. Unfortunately, there i s s t i l l no r e a l i z a t i o n of t h i s promise. Because of the disappointment, most o f these people moved to other places l i k e Padang, Pekanbaru, Medan and even to Jakarta and only 60 families now l i v e i n the v i l l a g e . The leader of the group has stated that none of them would have l e f t Suriname had they known that Batang Tongar would not proceed (Interview, July 1981). To be s e l f - s u f f i c i e n t in food production as one of the objectives of Repelita I I I , the development of i r r i g a t i o n i s e s s e n t i a l . The Sinotech's (1979) study reveals that a total of 4,079 ha of brush and RENCANA PEMBANGUNAN PASAMAN BARAT WEST PASAMAN DEVELOPMENT PLANNING 'No, Legend. ® CbufcoU kafiupatan Capita* ol Kabupaian Q ibufcota kacamatan Capital of Kacamatan • kanag^nan MaQarl haadquarta* D Tampat Lainnya Oth* ptac* Bataa propinai Prownctal borda* Balai kaCupalan KaOvpatan Oontat _ _ _ Baiu kacamatan Kacamatan boroar Baui kanaganan Nagan boftfer Scale 1 : 500 000 givers - — — MAP Zi 82 grass lands in the study area can be reclaimed into paddy lands and 6,664 ha or about 62% of the study area can be planted with r i c e twice a year, i f the Batang Tongar project was b u i l t . By growing r i c e twice a year, i t i s estimated that one family should be able to make a reasonably good l i v i n g on one hectare (see c a l c u l a t i o n under Economic Aspects). Therefore, the Batang Tongar project can accommodate 6,664 fam i l i e s . In addition to the 3,500 e x i s t i n g farm families in the study area (see Table 61, the project can f a c i l i t a t e 3,164 farm fa m i l i e s of l o c a l or national transmigrants. . The Sinotech study also pointed out that there i s some p o s s i b i l i t y o f extending the i d e n t i f i e d acreage in order to more f u l l y u t i l i z e the water resource of Batang Tongar. It suggested that further i n v e s t i g a t i o n of the area to the west on the l e f t bank of Batang Pasaman (see Map 4) was desirable. A f t e r the completion of the Batang Tongar project, the supply o f water w i l l no longer be a constraint to r i c e production. Through land develop-ment, r i c e variety and c u l t u r a l improvement, better f e r t i l i z a t i o n , pest and disease c o n t r o l , and water management i t i s expected that for the land being studied, the output of paddy r i c e w i l l be 47,034 tons a year (Sinotech, 1979 p. x v i ) . Thus, from the view point o f optimum use o f the land and water resources, and i n order to increase r i c e production to meet the food needs 83 TABLE 6: KENAGARIAN, DESA AND POPULATION OF 16 DESAS AFFECTED BY THE PROPOSED BATANG TONGAR PROJECT Kenagarian/Desa ; Population 0 980) I. AUR KUNING 4,788 1. Padang Tujuh 2. Sukamenanti 3. Lembah Binuang 1 ,965 2,127 696 II. LINGKUNG AUR 6,929 1. Koto Dal am 2. Koto Sibiluan 3. Sibadagung 4. Koto Tinggi 5. Batang Bi u 6. Bandarjo 7. Rimbo Candung 1,304 962 1,134 845 998 1,054 632 I I I . AIR GADANG 5,141 1. Batang Lingkin 2. Tongar 3. Batang Umpai 4. Durian Hutan 5. Pasir Bintungan 1,352 583 947 657 1 ,602 IV. KAPAR 1. Kapar Utara 661 TOTAL 17,519 1 6 ) Source: 1) Sinotech 09791 2) Sensus Penduduk Kabupaten Pasaman 0980) 16) It i s assumed that the average family s i z e i n the study area i s 5. 84 of the people i n the study area, as well as West Pasaman, there are strong arguments in favour o f the implementation of the Batang Tongar project. 85 3. Socio-Cultural Environment By looking at the major objectives o f the o i l palm project (under IV 4.2), i t i s apparent that the WPDP team attempted to modernize the t r a d i t i o n a l economy o f West Pasaman by l i n k i n g i t to inte r n a t i o n a l markets through o i l palm production. This i s in l i n e with the p r i n c i p l e of conventional development theory, that i s , to give the subsistence sector a big push into the modern world and into the international market economy (Lappe, et. a l , 1977). In analyzing the e x i s t i n g conditions of West Pasaman in order to f i n d the potential bottlenecks for further development, the WPDP team concen-trated i t s e f f o r t s on the i d e n t i f i c a t i o n of the lagging sector and concluded that "the lack of an e f f i c i e n t road network turned out to.be -the main cause of many of West Pasaman's shortcomings" (WPDP, 1975a p. 24). As a r e s u l t , they strongly recommended the construction o f a new road from Simpang Empat to Manggopoh. In choosing the other c r u c i a l projects (see Page 6), the team did not take into account the s o c i a l aspects which might i n h i b i t the implementation of i t s project proposal. There are many circumstances where s o c i o - c u l t u r a l conditions can i n h i b i t development e f f o r t s . Sojneti.mes c e r t a i n peasant groups r e s i s t change and are conservative in t h e i r attitudes towards economic development. For example, Foster (1967). found strong evidence that in Tzintsuntzan 1 s a v i l l a g e i n northern Mexico, peasants espoused a conservatism and lacked i n t e r e s t i n e x p l o i t i n g new soc i a l and economic opportunities. According to Foster, the-reason they do not take advantage o f ava i l a b l e 86 opportunities i s that they believed i n d i v i d u a l improvement can only be at the cost of others. The use o f available opportunities according to Foster's i n t e r p r e t a t i o n , would be perceived as leading to increasing socio-economic i n e q u a l i t i e s and to internal c o n f l i c t . While the Tzintzuntzan's peasants do not take advantage o f new s o c i a l and economic opportunities because they perceive that one's gain i s always at the expense o f someone e l s e , the Indonesian farms in general, and Javanese peasant farmers, in p a r t i c u l a r , tend to dismiss these opportuni-t i e s because "they place e-xtremely high discounts to r i s k and uncertainty, p a r t i c u l a r l y the l a t t e r " (Penny, 1 966). The Indonesian peasants.^ as subsistence-minded farmers, according to Penny, believe that the returns they would get from the use o f new technology, from growing of new crops, and other kinds o f investment are much lower than they would in fact get i f they did not adopt such innovations. This type of peasant farmer, with a narrow r i s k base, values s e c u r i t y highly. Gains and losses are not equally weighted. This i s necess a r i l y so because the p o s s i b i l i t y of a . small l o s s — w h i c h means someone must go h u n g r y — i s more important than the equal p o s s i b i l i t y of a larger gain. The f i r s t objective of the o i l palm project i s to introduce an innovative smallholder o i l palju production in West Pasaman. Again, the team overlooked the fact that innovation i s a process wMch takes time. . Many a g r i c u l t u r a l innovations have s o c i a l , econo-mic and c u l t u r a l consequences that make them less desirable than the practice that they su b s t i t u t e . The farmers' decisions are usually made in terms of what has been done in previous generations. Economic necessity and s o c i a l pressures can be 87 viewed as basic considerations in the farmers' decision to adopt an innovation. Will the farmers of West Pasaman automatically accept this o i l palm project? It i s true that o i l palm was grown in West Pasaman during the colonial period. However, none o f the farmers in West Pasaman were involved in i t s c u l t i v a t i o n . Therefore, i t i s not reasonable to assume that these farmers w i l l e a s i l y accept o i l palm as a replacement o f t h e i r e x i s t i n g crops which have been i n h e r i t e d by t h e i r ancestors. On the contrary, as has been shown by the r e s u l t s of f i e l d observation, there i s no i n d i c a t i o n that the farmers i n the study area w i l l adjust themselves to t h i s innovation. The Indonesian farmer's perception of innovation was observed by Penny (.1966 p. 27). He pointed out that although income could be increased merely by a change in the pattern o f resource use, or by a small transfer of labor from crop production to repair work on the i r r i g a t i o n system, or by spending a l i t t l e money on f e r t i l i z e r , the farmers tend to ignore these opportunities. Penny further says that in most of Indonesia, farmers do not attempt to maximize t h e i r incomes, nor do they respond strongly to economic incentives. For example, the growing of papaya and other f r u i t in the Depok area for the Jakarta market i s much more p r o f i t a b l e than growing food crops for sale, but only a few farmers take advantage of t h i s opportuni ty. For t r a d i t i o n a l s o c i e t y , the process of innovation can, for a certain period of time, be prevented by i t s deeply-rooted soci a l value system. 88 For example, the Javanese v i l l a g e economy, a wet r i c e economy, according to Geertz (.1963), provides a place for surplus labor though i t i s known that the p r o d u c t i v i t y of the additional workers i s less than the claims they w i l l make on the t o t a l product. Geertz c a l l s t h i s uneconomical decision the e t h i c of "shared poverty". Some Javanese farmers know that the use of the s i c k l e for harvesting i s more p r o f i t a b l e than the c u t t i n g knife (.ani-ani). However, they do not use the s i c k l e because of the., soci a l pressure against t h i s new system, as i t reduces work opportunities. More recently, however, the change in the t r a d i t i o n a l harvest arrangement from "bawon" or open harvest system Cthe f i e l d i s open to a l l , who t r a d i t i o n a l l y work with a n i - a n i ) , to "tebasan" or contract harvesting . Cunder t h i s system, the more e f f i c i e n t s i c k l e i s used rather than the ani-ani) has gained i n popularity. This process o f change i s purposely designed by farmers and landlords as " t a c t i c s to l i m i t the number of harvesters crowding t h e i r f i e l d s i n search o f a wage" (White, 1979 p. 99). As a r e s u l t , the social and i n s t i t u t i o n a l arrangement at the v i l l a g e level that provided mechanisms f o r sharing of employment and earning opportunities are beginning to break down, for example, the share of the harvest laborers i s reduced. There i s an assumption that technological innovation w i l l lead to changes in the economy and s o c i a l organization. It was probably the expectation o f the WPDP team that the smallholder o i l palm innovation would automatically lead to a better economy and society. For example, Salisbury C1962) observed that d i s p l a c i n g of stone axes by steel ones among a New Guinea Highland people s u b s t a n t i a l l y reduced the time spent on subsistence production and led to an expansion o f ceremonial and p o l i t i c a l a c t i v i t i e s . 89 It did not, however, produce much change in the economy and social organization. In order to obtain the people's perception o f the smallholder o i l palm innovation i n West Pasaman, interviews were conducted during the summer of 1981. Sixty farmers were interviewed to determine t h e i r opinion as to what project or program would be s o c i a l l y desirable. Each farmer answered the same questionnaire consisting o f fourteen questions Csee Appendix 1). Of these fourteen questions, only eleven were tabulated because Question No. 2 _CQQ2) ;was only answered by one person, Question No. 4 CQQ4) resulted in a t o t a l l y negative response and Question No. 5 CQ05) was not v a l i d . In response to Q01, only 1.7% o f the farmers were of the opinion that the re-establishment o f the Ophir Estate was a good idea and 98.3% have no opinion Csee Table 7). 90 TABLE 7 : FARMERS' OPINION OF THE OPHIR OIL PALM PROJECT Kenagarian Farmers' Opinion Good Idea Don 't Know Bad idea No. % No. % No. % 1. A i r Gadang 1 5.7 14 93.3 0 0 2. Lingkung Aur 0 0 15 100.0 0 0 3. Aur Kunung 0 0 15 100.0 0 0 4. Kapar 0 0 15 100.0 0 0 TOTAL/AVERAGE 1 1 .7 59 98.3 0 0 Almost a l l of the respondents (96.7%) had seen o i l palm trees. The 3.3% who had never seen them were from A i r Gadang (see Table 8). 91 TABLE 8: FARMERS WHO HAVE SEEN OIL PALM TREES Kenagarian Number and Percentage of Respondent Have Seen Have Never Seen No. % No. % 1. Ai r Gadang 13 86.7 2 13.2 2. Lingkung Aur 15 100.0 0 0 3. Aur Kuning 15 100.0 0 0 4. Kapur 15 100.0 0 0 TOTAL 58 96.7 2 3.3 In response to Question No. 6 aTT of the respondents (1001) were of. the opinion that they did not want to grow o i l palms on t h e i r farms for commercial purposes (see Table 9). 92 TABLE 9: FARMERS WHO WANT TO GROW OIL PALM ON THEIR FARMS Want to Grow Don' t Want t o Grow i\enagari an No. % No. ? 0 1. A i r Gadang 0 0 15 100 0 2. L ingkung Aur 0 0 15 100 0 3. Aur Kuning 0 0 15 100 0 4. Kapar 0 0 15 100 0 TOTAL 0 0 60 100 0 I t was found tha t none o f the respondents would l i k e to j o i n the Ophi r O i l Palm P r o j e c t (see Table 10)-. T h e i r main reasons f o r not want ing to j o i n i t are shown i n Table 1.1. A l l respondents s t a t e d t ha t they f i r s t needed evidence o f some economic advantage and tha t they don ' t want to be d i c t a t e d to by the Nucleus E s t a t e . They f e l t t ha t i t was s a f e r to grow r i c e and o the r crops tha t they are f a m i l i a r w i th r a t h e r than o i l palm. S u r p r i s i n g l y , 70% o f the respondents based t h e i r d e c i s i o n on the p leasure time f a c t o r s . They are o f the op in i on t ha t o i l palm c u l t i v a t i o n i s too t ime consuming. More than h a l f (61.7%) do not want to leave t h e i r v i l l a g e s . The farmers in the study area (Minangkabau p e o p l e ) , who have been we l l known as "peran tau" (ou tm ig ran ts ) , would f ee l ashamed to migrate such a sho r t d i s tance from t h e i r v i l l a g e to the Ophir s i t e . U n f a m i l i a r i t y w i th o i l palm c u l t i v a t i o n i s the l e a s t important reason fo r t h e i r not want ing to j o i n the o i l palm p r o j e c t (51.6%). 93 TABLE 10:: FARMERS' RESPONSE TO THE OPHIR OIL PALM PROJECT Kenagarian Like to Join No. Don't Like to Join No. % 1. A i r Gadang 2. Lingkung Aur 3. Aur Kuning 4. Kapar TOTAL/AVER. 0 0 0 0 0 0 0 0 15 15 15 15 60 100.0 100.0 100.0 100.0 100.0 The respondents opposition to o i l palm c u l t i v a t i o n was confirmed in t h e i r response to question no. 9.' None of them agreed to devote t h e i r land to o i l palm production should the Ophir Palm Project be extended to t h e i r areas (see Table .12). Nor did a rubber plantation project i n t e r e s t the farmers. More than twenty percent were interested in the p o s s i b i l i t y of a coconut project. However, the f i r s t preference of a l l the respondents was for the creation of an i r r i g a t i o n project i n t h e i r areas (see Table 13). I f the i r r i g a t i o n project was b u i l t 96.7% o f the respondents said they would convert t h e i r upland to r i c e growing while 3.3% s a i d "don't know" (see Table 14).. The main reason for the l a t t e r was that t h e i r coconut trees are s t i l l young. TOTAL 1. Air Gadung 2. Lingkung Aur 3. Aur Kuning 4. Kapur CO - f i - j c n . c n zz. o Not F a m i l i a r With O i l Palm C u l t i v a t i o n cn cr, 100.0 33.3 46.7 26.7 a* cn o cn cn cn cn zz o Need Evidence 100.0 100.0 100.0 100.0 100.0 CTl o — J • • _ _ l cn cn cn cn o Don't Want To Be Dicta t e d To By The Nucleus Estate 100.0 100.0 100.0 100.0 100.0 cn o cn cn cn cn zz. o Safer To Grow Rice And Other Crops Which Have Been F a m i l i a r With 100.0 100.0 100.0 100.0 100.0 ro —1 o ro <o zz. o Need Time For Pleasure 70.0 60.0 p,n o 66.7 73.3 CO ro o co zz, o Don't Want Tn Mnvp cn 53.3 66.7 46.7 80.0 \J \J \ \ \r 11 U II l> I \J I lyj v A Short Distance o m o -o TO a - a 3=" - a TO O 3» 00 TO m CO o o TO ZJZ m 3= TO m TO CO CD —I O 95 TABLE 12: REACTION OF FARMERS TO DEVOTING THEIR LAND TO OIL PALM CULTIVATION Kenagarian Agree No Idea Disagree No. % No. % No. % 1. Ai r Gadang 0 0 0 0 15 100.0 2. Lingkung Aur 0 0 0 0 15 100.0 3. Aur Kuning 0 0 0 0 15 100.0 4. Kapur 0 0 0 0 15 100.0 TOTAL/AVER. 0 0 0 0 60 100.0 TABLE 13: FARMERS' PREFERENCE TOWARDS POTENTIAL PROJECTS IN THEIR AREA I r r i g. Rubber Coconut Coffee Kenagarian No. % No. % No. % No. % 1. A i r Gadang 15 100.0 0 0.0 0 0.0 1 6.7 2. Lingkung Aur 15 100.0 0 0.0 5 33.3 2 13.3 3. Aur Kuning 15 100.0 1 6.7 2 13.3 2 13.3 4. Kapar 15 100.0 0 0.0 6 40.0 0 0.0 TOTAL/AVER. 60 100.0 1 1 .7 13 21.7 5 8.3 96 TABLE 14: FARMERS' WILLINGNESS TO CONVERT THEIR LAND TO RICE GROWING Kenagarian Wi 11 Convert Don't . Know Not Convert No. % No. % No. % 1. A i r Gadang 15 100.0 0 0.0 0 0.0 2. Lingkung Aur 15 100.0 0. 0.0 0 0.0 3. Aur Kuning 15 100.0 0 0.0 0 0.0 4. Kapar 13 86.7 2 13.3 0 0.0 TOTAL/AVER. 58 96.7 2 3.3 0 0.0 The respondents preferance f or an i r r i g a t i o n project was confirmed by t h e i r response to Question No. 12. A l l o f them stated that they would release any of t h e i r land needed for i r r i g a t i o n canals (see Table 1-5) and would not ask for compensation. TABLE 15: FARMERS' RESPONSE TOWARDS RELEASING LAND FOR A POTENTIAL IRRIGATION PROJECT Kenagarian Release the Land Ask Compensation No. % No. % 1. A i r Gadang 15 100.0 0 0 2. Lingkung Aur 15 100.0 0 0 3. Aur Kuning 15 100.0 0 0 4. Kapar 15 100.0 . 0 0 TOTAL/AVER. 60 100.0 0 0 TABLE 16: THE AREA OF LAND CULTIVATED IN PADDY FOR SURVEY GROUP Wetland Rain fed Upland • Total (ha) Aver. Size Aver. Size Aver. Si ze Aver. Per HH (ha) (ha) (ha/HH) (ha) Cha/HH) (ha) (ha/HH) 1. A i r Gadang 0 0.00 8.50 0.57 4.25 0.28 12.75 0.85 2. Lingkung Aur 4.30 0.29 3.20 0.21 1 .80 0.12 9.30 0.62 3. Aur Kuning 6.00 0.40 2.40 0.16 0.50 0.03 8.90 0.59 4. Kapar 7.40 0.49 5.30 0.35 0 0.00 12.70 0.85 TOTAL 17.7 0.30 19.40 0.32 6.55 0.11 43.65 0.73 TABLE 17: THE ACREAGE OF LAND CULTIVATED WITH TREE CROPS, PALAWIJA AND OTHERS FOR SURVEY GROUP Rubber Coconut Coffee Clove Pal aweja & Others TOTAL (ha) aver, per HH (ha) Kenagarian si ze (ha) aver. (ha/HH) si ze (ha) aver. (ha/HH) size (ha) aver. (ha/HH) size (ha) aver. (ha/HH) size (ha) aver. (ha/HH) 1. A i r Gadang 1.75 0.12 1 .20 0.08 1.20 0.08 0.00 0.00 1 .40 0.09 5.55 0.37 2. Lingkung Aur 0.90 0.06 2.75 0.18 1 .80 0.12 0.50 0.03 1.10 0.07 7.05 0.47 3. Aur Kuning 2.80 0.19 1 .95 0.13 2.60 0.17 0.85 0.06 0.90 0.06 9.10 0.61 4. Kapar 0,00 0.00 . 3.30 0.22 0.90 0.06 0.00 0.00 1 .20 0.08 5.40 0.36 TOTAL/AVER. 5.45 0.09 9.20 0.15 6.50 0.11 1.35 0.02 4.60 0.08 27.10 0.45 99 With regard to the size o f land hoidings, i t was found that, on average, each respondent has 1.18 hectares, of which 0.73 hectares i s c u l t i v a t e d with paddy (0.30 ha wetland paddy, 0.32 rainfed paddy and 0.11 ha upland paddy) and 0.45 hectare with tree crops and secondary crops (see Tables 16 and 17). It seems draft animals are quite important for farming in the study area. In response to Question No. 14 one farmer w i l l , with a d r a f t animal on average, be able to farm 2.27 hectares wetland paddy, whereas without a draf t animal a farmer w i l l only be able to farm 1.55 hectares (Table 18). TABLE 18: FARMERS' ABILITY TO CULTIVATE WETLAND PADDY (HA) With Draft Animal Without Draft Animal Kenagarian Total Average Total Average 1. A i r Gadang 35 2.33 25 1.67 2. Lingkung Aur 33 2.20 23 1.53 3. Aur Kuning 36 2.40 24 1.60 4. Kapar 32 2.13 21 1.40 TOTAL/AVER. 136 2.27 93 1.55 100 Four Walinagaris i n the study area were interviewed. Nine out of twelve questions were designed to determine the general c h a r a c t e r i s t i c s o f land ownership i n the study area. The other three questions dealt with the Walinagaris 1 opinions about the o i l palm project and other potential projects which might increase the farmers' incomes in the study area. The responses of the four Walinagaris to a l l questions, except Question No. 1, are s i m i l a r . In the study area 61.25% of the land i s communal land (tanah ulayat) and 38.75% i s private land (tanah. m i l i k l (see Table 19). In order to obtain some communal land for a g r i c u l t u r a l purposes, the ninik mamak's approval i s required. It can be e i t h e r oral or written and there i s no o b l i g a t i o n i n terms of money or in kind to the ninik mamak or the community. However, the law obliges him to take care o f that land (UUPA^, 1960 a r t i c l e 15). The maximum amount of communal land which can be a l l o t t e d to a family o f the society i s about two hectares. I f the grantee does not c u l t i v a t e this land for a three year period, he w i l l lose his r i g h t to the use of the land and i t w i l l become available for someone who i s w i l l i n g to c u l t i v a t e i t . It seems there i s an opportunity f o r an immigrant to reside i n , or c u l t i v a t e , communal land. However, he has to obey t h e i l o c a l adat law of the kenagarian and to be adopted as the ninik mamak's nephew. I f he 17) UUPA stands f o r Undang-Undang Pokok Agraria. Statute number f i v e of the year 1960 concerning Basic Regulations on Agrarian Pri n c i p l e . 101 does not obey the local adat law, he w i l l be expelled and the land w i l l be returned to the ninik mamak. In theory, any immigrant ethnic group has potential access to the communal land. Howeyer, since the local adat law cannot be separated from the residents' r e l i g i o n , each walinagari expects the immigrants to be moslejn. Communal land can be converted to private land with the ninik mamak's approval. This type of conversion can only occur during a mass land d i s t r i b u t i o n , i n which each family obtains a land c e r t i f i c a t e . This converted land can be transferred or sold to other persons. TABLE 19.: THE PROPORTION OF COMMUNAL AND. PRIVATE LAND IN THE STUDY AREA Kenagarian Communal Land (Percent) Private Land (Percent) 1. A i r Gadang 85. QO 15.00 2. Lingkung Aur 45.00 55.00 3. Aur Kuning 55.00 45.00 4. Kapar 60.00 40.00 AVERAGE 61 .25 38.00 102 Without giving an explanation, a l l walinagaris stated that the Ophir Palm Project was a good project. However, when asked whether the walinagaris would join the project should i t be extended to their kenagarians, a l l walinagaris had no idea. In addition, the four walinagaris concur with the s i*ty interviewed farmers, that an irr igat ion project was the preferred project that should be implemented by the government in order to increase the farmers' income. All walinagaris would be wi l l ing to release communal land and their private land without compensation, i f needed for i rr igat ion networks. They would also welcome local or national transmigration and would not require compensation for lost land provided the newcomers obeyed, or at least respected, their local adat law. 103 4. ECONOMIC ASPECTS Thus f a r , the i n v e s t i g a t i o n of the physical c h a r a c t e r i s t i c s and the s o c i a l aspects of the study area reveals that: p h y s i c a l l y the land being studied i s most suitable for food, mainly r i c e production, and s o c i a l l y , r i c e c u l t i v a t i o n i s both desirable and urgently needed. To determine the best use of the land, the results of a t r a d i t i o n a l economic assess-ment w i l l be employed. The popular economic view has been that developing countries should do everything possible to improve t h e i r balance of trade. Thus, i t has been assumed that i t was in the nation's i n t e r e s t s and i n the farmers' i n t e r e s t s to produce as great a quantity of export commodities as p o s s i b l e , even i f i t means s a c r i f i c i n g the production of staple food crops. However, "we have to erase from our minds the automatic connection between a poor country's r i s i n g export income and improvement i n the welfare of the majority of the people" (Xappe, et. a l , 1977 p. 199). It may well be that the production of export commodities at the expense of the production of basic foodstuffs simply serves short term p o l i t i c a l or special i n t e r e s t o bjectives, rather than a s s i s t i n g the welfare of the nation and of the i n d i v i d u a l . In Indonesia's case, i t i s worthwhile considering the cost^benefits of producing rubber, as an export commodity, rather than the food crop, r i c e . Penny and G i t t i n g e r 0970} noted that, i n December 1966, the world price ratio.ibetween r i c e and rubber was about 1:3.3 per kilogram. That should mean (input operation costs being assumed, for our purposes to 104 be i d e n t i c a l ) , that world-wide, i t would be over three times as p r o f i t -able to produce a kilogram of rubber than a kilogram of r i c e . Thus, whenever po s s i b l e , rubber should be grown and the rubber farmer would make more than s u f f i c i e n t p r o f i t s , by s e l l i n g his rubber, to buy three times as much ri c e as he could have produced himself. In Indonesia, however, the 1966 price r a t i o between r i c e and rubber was, i n f a c t , quite d i f f e r e n t from the general world p i c t u r e . The price r a t i o was only 1:1.2 per kilogram. This i s even more s t r i k i n g when i t i s discovered that the rumpiah price of r i c e was 25% below the world price (Penny and G i t t i n g e r , 19.70). Thus, without the government subsidization of Rp 25 for every kilogram of imported r i c e , the domestic prices o f r i c e and rubber would have been about the same, notwithstanding the fa c t that rubber was being encouraged as a cash crop and that the i n s u f f i c i e n t production of domestic r i c e incurred the cost o f subsidy payments. Thus, i f the world price of r i c e was Rp 100, and the Indonesian government subsidizes i t by Rp 25 for every kilogram imported, the Indonesian subsidized price would be 25% below the world p r i c e , or only Rp 7.5. Under these circumstances the farmer would be able to buy r i c e at less than the cost to produce i t p r o f i t a b l y , and the government would.be forced to spend some of i t s funds for the purchase of an imported product which could have been produced domestically, while the farmer i s encouraged to grow an export commodity such as rubber. Perhaps this would be s a t i s f a c t o r y i f the rubber farmer could expect the world p r i c e s , or 3 times the price of r i c e , f o r his rubber. This would 105 make the production of rubber a sound and j u s t i f i a b l e economic undertaking. However, the peasant farmer a c t u a l l y received a domestic price of only Rp 90 per kilogram of rubber. That i s 10% lower than the unsubsidized world price of r i c e . Thus, i f Indonesia's r i c e price were allowed to reach the world price of 100 Rp, the farmer would f i n d i t more p r o f i t a b l e to grow r i c e than rubber and the government would not have to use i t s l i m i t e d funds on an a r t i f i c i a l subsidy designed to encourage the farmer to produce an unnecessary and unprofitable cash crop. This i s an example of government assistance for a t h e o r e t i c a l l y p r o f i t a b l e program t h a t , leads to unnecessary interference and an unfortunate market-place. For the purpose of using an economic assessment as the t h i r d c r i t e r i a in t his study, the economic advantage of r i c e as opposed to o i l palm production w i l l be compared in the area under study. In order to make possible this comparison, i t has f i r s t o f . a l l , to be assumed that o i l palm production i s p h y s i c a l l y suitable and s o c i a l l y desireable for the study area. And because of the l i m i t a t i o n of available data and information for both commodities, some necessary assumptions and l i m i t a t i o n s have to be made: 1. The basic figures used for o i l palm analysis are taken from "Indonesia NES - Project Ophir 19.80, Final Preparation Report, Frankfurt 1980" (mimeo). 2. IPEDA - Iuran Pembangunun Daerah (Regional Development levy) tax o f 5% of the net value of production, i s included i n the o i l palm a n a l y s i s . In r i c e a n a l y s i s , however this tax i s not 106 included. The main reason for this i s that the IPEDA tax on r i c e growers i s not continually c o l l e c t e d and i s r e l a t i v e l y smal1. 3. The duration for o i l palm c u l t i v a t i o n i s 19 years. It does not necessarily r e f l e c t the l i f e - s p a n of the o i l palm project, but t h i s i s done because the available data in (1) i s only projected for t h i s time. 4. The f i r s t harvest of o i l palm i s in the fourth year. However, the net income per hectare i s derived from the average income over 19 years of c u l t i v a t i o n , s t a r t i n g with the f i r s t year. 5. A r i c e farmer's c r e d i t or loan for new land preparation (pence-takan'sawah baru) i s calculated as an input cost. The amount of this c r e d i t i s Rp 221,1Q1 1 8^ per hectare. For the purpose of this comparison, however, the land preparation c r e d i t i s equally divided into 19 years. Thus, the input cost per ha per year i s Rp 11 ,637 (RP 221,101 : 19). 6. It i s assumed that as water w i l l no longer be a constraining f a c t o r , there w i l l be two r i c e crops per year, as has been practised by many farmers i n Indonesia. Thus, the input cost for one hectare of r i c e c u l t i v a t i o n from the land preparation c r e d i t i s one h a l f of Rp 1 1 ,637 or Rp 5,818.5. 18) Source: t h i s writer's interview with Walinagari, July 1981 107 7. Another input cost for r i c e c u l t i v a t i o n i s Bimas (Mass Guidance) program loan, which consists of: seeds, f e r t i l i z e r s , p e s ticide and a l i v i n g allowance (see Table 22). 8. By using these production inputs (7), the r i c e y i e l d per harvest i s estimated at 4 tons of unhusked r i c e per ha. It i s assumed that the per hectare r i c e y i e l d i s constant for each harvest. 9. The conversion rate of paddy (unhusked) r i c e to market (hulled) r i c e i s 60%. For example, 100 kg of unhusked r i c e r e s u l t s in 60 kg of hulled r i c e , (Note; hulled r i c e i s usually sold in Indonesia). 10. The r i c e price i s based on the average price of hulled r i c e i n Simpang Empat, the centre of Development Sub-Region I (Pasaman Dalam Augka, 1979). This price,.Rp 186 per kg, i s based on 1 978 figures (see Table 23). 11. So f a r , water users are free from water tax, e s p e c i a l l y i n the Outer Islands. Thus, the i r r i g a t i o n project cost i s not included i n this comparison. By taking a l l of these assumptions into account i n preparing the income and expenditure analysis of the two communities, the following conclusions can be drawn: 108 TABLE 20: INCOME-EXPENDITURE ANALYSIS OF PER HA OIL PALM PRODUCTION WITH IPEDA TAX ('000 Rp) Year Gross Value of Production Cost of Produc-t i ' o n 1 9 ' Net Value of Production Net Value of Production a f t e r on A IPEDA t a x ^ u ; Debt Repayment Net Income 0 1 •2 3 2 1> 115 0 115 ' 109.25 109.25 4 364 95 269 255.55 - 255.55 5 612 95 517 491 .15 114.0 377.15 6 722 95 627 595.65 105.0 490.65 7 882 95 787 747.65 98.5 649.15 8 924 95 829 787.55 92.0 695.55 9 924 95 829 787.55 86.0 701.55 10 924 95 829 787.55 80.5 707.05 11 924 95 829 787.55 75.0 712.55 12 882 95 787 747.65 70.0 677.65 13 882 95 787 747.65 65.5 682.15 14 882 95 787 747.65 65.5 682.15 15 882 95 787 747.65 65.5 682.15 16 882 95 787 747.65 65.5 682.15 17 882 95 787 747.65 65.5 ' 682.15 18 840 95 745 707.75 46.5 661.25 TOTAL 9,448.10 Source: Calculated from "Indonesia NES - Project Ophir 1980, Final Preparation Report, Frankfurt 1980" (mimeo). 19) Consists o f: f e r t i l i z e r , p e s t i c i d e , cover crops, f r u i t transportation cost and other costs during the f i r s t three years, such as o i l palm planting material . 20) IPEDA tax = 5% net value of production. 21) The year of o i l palm production. 109 TABLE 21: INCOME-EXPENDITURE ANALYSIS OF PER HA OIL PALM PRODUCTION WITHOUT IPEDA TAX ('000 Rp) Year Gross Value of Production Cost of Production Net Value of Production Debt Repayment Net Income 0 1 2 3 115 0 115 - 115.0 4 364 95 269 - 269.0 5 612 95 517 114.0 403.0 6 722 95 627 105.0 522.0 7 882 95 787 98.5 688.5 8 924 95 829 92.0 737.0 9 924 95 829 86.0 743.0 10 924 95 829 80.5 748.5 11 924 95 829 75.0 754.0 12 882 95 787 70.0 717.0 13 882 95 787 65.5 721 .5 14 882 95 787 65.5 721 .5 15 882 95 787 65.5 721 .5 16 882 95 787 65.5 721 .5 17 882 95 787 65.5 721 .5 18 840 95 745 46.5 698.5 TOTAL 10,003.0 Source: Calculated from "Indonesia NES - Project Ophir 1980, Final Preparation Report, Frankfurt 1980" (mimeo). no TABLE 22: BIMAS PROGRAM LOAN PER HECTARE Item Quantity Amount of Loan (Rp/ha) Seeds 25 kg 3,750 Urea 150 kg 10,500 TSP 100 kg 7,010 Pesticide . 2 I t 2,460 Rodenticide 0.1 kg 230 Spraying Cost cash 2,000 Liv i n g Allowance cash 10,000 TOTAL 35,940 Source: BRI - Bank Rakyat Indonesia (Indonesia's A g r i c u l t u r a l Bank O f f i c e , Simpang Empat. TABLE 23: AVERAGE RETAIL HULLED RICE PRICE AT THE FREE MARKET IN SOME KECAMATAN CAPITALS IN KABUPATEN (DISTRICT) PASAMAN, 1977, 1978, 1979 AND 1980 (Rp/Kg) PLACE YEAR 1 1977 1978 1979 1980'" J 1. Bonjol 2. Rao 3. Simpang Empat 137.50 133.30 131.60 144.50 146.30 135.80 195.80 166.70 169.40 215.38 183.37 186.34 Source: For the year 1977, 1978 and 1979 the average price i s calculated from "Pasaman Dalam Angka, 1979". 22) For the year 1980, the estimated price i s calculated by adding a price increase of 10% (the price increase from 1978 to 1979 was 35%, 13% and 25% for Bonjal, Rao and Simpang Empat r e s p e c t i v e l y ) . Ill TABLE 24: INCOME-EXPENDITURE ANALYSIS OF PER HA WETLAND RICE PRODUCTION23^ Expenditure Income Net Income a. Bimas loan 71,880 (2 x Rp 35,940 for two harvests) b. Loan for new land preparation (penceta-kan sawah) Rp 11,637 (2 x Rp 5,818.5) a. Total r i c e production for two harvests = 8 tons ( 2 x 4 tons f o r each harvest Conversion rate = 60% Total hulled r i c e = 4.8 tons. b. Total income = Rp 892,800 (4,800 x Rp 186) Total input = Rp 83,517 Total output = Rp 892,800 Rp 809,283 23) Calculation i s based on two harvests per year 112 1. The annual net income per hectare from growing o i l palm (with the IPEDA tax) i s Rp 497,268 2 4* (equal to US $795.63). 2. The annual net income per hectare from growing r i c e (with two harvests a year) i s Rp 809,283 (equal to US $1,294.85). 3. By assuming that only one r i c e crop i s grown each year, the 25) net income would be Rp 404,641.5, 19% 1 lower than the net income of growing o i l palm with the IPEDA tax, or 23% lower than o i l palm grown without the IPEDA tax. 4. Without the IPEDA tax the net income from growing o i l palm per hectare i s Rp 526 ,473.6 2 6^ (equal to US $842.36). This is 130% of the net income for single-crop r i c e , but 35% lower than the net income for double-crop r i c e production. 5. However, by assuming that r i c e i s double-cropped (as i s usual in Indonesia i f the water provision i s not a c o n s t r a i n t ) , the net income from r i c e growing i s 163% that of o i l palm growing 24} Rp 9,448,100 = R p ^ ^ u $ $ ] = R p g 2 5 25) One r i c e crop a year s Rp 404,641.5 s m Thus, the net income of Oil palm with IPEDA Rp 497,268 ' one r i c e crop.is 19% lower than o i l palm with the IPEDA tax. The same applies to calculate other percentage figu r e s . 26) Rp 10,003,000 R p 5 2 6 j 4 7 3 . 6 113 with the IPEDA tax or 154% that o f o i l palm production without the IPEDA tax. 6. Thus with or without IPEDA taa, growing o i l palm i s not more p r o f i t a b l e than growing r i c e . On the contrary, growing r i c e i s more p r o f i t a b l e than growing o i l palm. 114 CHAPTER VI DISCUSSION AND CONCLUSION 1. Introduction The development objectives for West Pasaman and the necessary means to achieve them haye been b r i e f l y explained in Chapter I. In Chapter I I , the contemporary development theories have been discussed and reviewed. How these theories r e l a t e to the idea and implementation o f regional development planning i n Indonesia i s the main concern o f Chapter I I I . A general description o f West Pasaman's socio-economic patterns, the basic idea of proposing the c r u c i a l p r o j e c t s , i , e . the road and o i l palm projects, and the analysis of basic food needs o f the West Pasamanians have been presented in Chapter IV. Chapter V covered an analysis o f the physical c h a r a c t e r i s t i c s o f the s i t e , the socio-economic environment, and an economic assessment of palm o i l and wetland r i c e production. The necessary discussion o f the problems i d e n t i f i e d i n these f i v e chapters, in an attempt to draw a conclusion, i s the main concern of t h i s chapter. 115 2. Discussion The "short-cut approach" used by the WPDP team i s based on the . p r i n c i p l e stated i n Chapter I, i n which a regional development plan i s not an end i n i t s e l f ; i t i s of value only i f as many of i t s proposals are r e a l i z e d as soon as p o s s i b l e . The team argued that the prospective input into West Pasaman and the lack o f information by those agencies and potential investors who might invest in the region, must f i r s t l y be i d e n t i f i e d . And i n i d e n t i f y i n g the project proposals the team believe that, besides being in accordance with the p o l i c y makers' o b j e c t i v e s , the project proposals must find the approyal of the prospective i n v e s t o r s , be they private or p u b l i c , domestic, foreign or multinational . In i t s attempts to i d e n t i f y a project proposal for West Pasaman which would meet these c r i t e r i a , the team took the following steps: 1. A systematic search for available development funds (e.g. Public Works development for the feeder road programmes; UNICEF for the health programme and the n u t r i t i o n a l sector, ADP for a g r i c u l t u r a l development); 2. Adaption of planning proposals and ongoing development a c t i v i t i e s / p r o j e c t s (e.g. ADP's t r a c t o r unit stationed at Sukamenanti, Kecamatan Pasaman); 3. Talks with prospective investors i n order to find out t h e i r preconditions f o r project implementation (e.g. SIPEF, a company showing keen i n t e r e s t in running the Nucleus Estate for the smallholders' o i l palm p r o j e c t ) ; 4. Checking these preconditions against the objective o f the o f f i c i a l planning bodies and the f e l t needs of the population; 5. Working out operational programmes for these projects and programmes which haye proved consistent with the aim of evaluating t h e i r (regional) development e f f e c t s and f i n d i n g out about the investment risks involved. (WPDP, 1975a p. 14). 116 It seems that the f i r s t two steps are appropriate. It i s obvious that the f i r s t step i s necessary to avoid overlapping budgets. And the second step i s meant to harmonize the ongoing projects with the new project proposals. In f a c t , however, once the team had worked out the t h i r d step, the team's value judgements and bias should have been t a c i t l y incorporated into the decision making process. For example, without regard to other possible operators, the WPDP team had selected SIPEF to run the Nucleus Estate i n the Ophir area. This would be s a t i s f a c t o r y i f SIPEF was the only company which was able to run such an estate. However, there are some state-owned companies CPTP - Perusahaan Terbatas Perkebunan) which are capable o f running the Nucleus Estate. Therefore, i t i s necessary to ask the following question. What was the main reason for the WPDP team to choose SIPEF as an implementor of the Nucleus Estate i n Ophir? The .most promising answer to t h i s question i s that i t was because the WPDP team had good rel a t i o n s with the SIPEF Company, at l e a s t with i t s General Manager, who i s also a Consul of the. Federal Republic of Germany in Medan (_North Sumatra). Thus, i t i s quite c l e a r that i f SIPEF had been accepted as an implementor o f the Nucleus Estate in Ophir area, the team's value judgement and bias would have been incorporated into the decision making process. SIPEF has however l o s t the opportunity as the PTP VI was chosen to run such an estate. The practice of step three obyiously showed that economic analysis was the only c r i t e r i a used by the team i n i t s e f f o r t s to d e l i n i a t e the project proposal. Other factors (physical and s o c i a l ) tended to be minimized; while a l t e r n a t i v e p o s s i b i l i t i e s were not pursued. 117 As has been mentioned i n Chapter IV, the high standard of the proposed road project necessitates the enlargement of the area for o i l palm c u l t i -vation; thus the road project and o i l palm project are mutually supportive. In this chapter the effectiveness o f the short-cut approach on the imple-mentation process of the two c r u c i a l projects, i . e . the road and-oil palm projects w i l l be discussed. This chapter w i l l also discuss the r e l a t i o n s -hip between the proposed o i l palm project and the contemporary development theories. The purpose of these discussions i s to provide support for the overall conclusion of this t h e s i s . 2.1 Short-Cut Approach and the Crucial Projects As stated e a r l i e r , the most urgently required investment for West Pasaman was assumed to be a major road. The econcomic f e a s i b i l i t y study for the road project was conducted i n 1975. In 1976, DIWI (Dr. Ing Walter I n t e r n a t i o n a l ) , an engineering consulting firm from West Germany, conducted a technical (engineering) f e a s i b i l i t y study for the same road and submitted i t s report to the government of Indonesia and to the government of the Federal Republic of Germany in September 1977. S u r p r i s i n g l y , in July 1978 DIWI came back to West Pasaman to do additional f i e l d work and submitted a further report in April 1979. The additional f i e l d work concentrated on the study o f the Pasaman r i v e r crossing at A i r Gadang (see Map 5). At present a cable-controlled pontoon-type ferry i s used to carry a l l vehicles across the r i v e r . The WPDP team had not recommended the construction of a bridge in t h i s place on the grounds that i t would be too c o s t l y . However, DIWI's f i n a l report 118 concluded that the construction of a bridge at A i r Gadang would be more economical than the continued use o f the ferry (DIWI, 1979). In fact, the construction of a bridge at A i r Gadang was included i n the project's contract for Section A (Simpang Empat - Manggopoh). This decision to construct the bridge at A i r Gadang has had a s i g n i f i c a n t influence on the region's overall planning strategy. The r e s u l t has been a s h i f t from a single-polar strategy to a bi-polar strategy. The WPDP's report which had rejected the bridge, had proposed a s i n g l e - p o l a r strategy: ....Simpang Empat i s to become the f u n c t i o n a l — a n d i n a l a t e r stage also the a d m i n i s t r a t i v e — c e n t e r of West Pasaman. It i s the only place on the top level o f the hierarchy of central places. Above a l l , t h i s i s due to i t s s t r a t e g i c l o c a t i o n at the area's main crossroads. Besides, Simpang Empat i s sit u a t e d i n the most i n t e n s i v e l y used part of West Pasaman which in the future w i l l see the most rapid increase of a g r i -c u l t u r a l production. (WPDP, 1975a p. 183). In March 1979, however, the German Appraisal Mission (headed by the previous team leader of WPDP in 1975) came to West Pasaman to evaluate the progress o f German Technical Cooperation i n the area. In i t s report o f May 1979, the team proposed a "bipolar integrated development" by putting two centres i n West Pasaman with the same rank, i . e . , Simpang Empat and Ujung Gadang (see Map 6 ) . I t i s stated in the Appraisal Mission's report that: Each of the two centres--Simpang Empat and Ujung Gadang--stands on the top of a three level hierarchy of central places or service centres. The southern sub-unit around Simpang Empat includes three sub-centres (Talu, K i n a l i , Sasak) and one sub-5wb. RENCANA PEMBANGUNAN PASAMAN BARAT WEST PASAMAN DEVELOPMENT PLANNING Legend. 0 Ibukota kabupatan Capital of Kabupatan • Ibukota kacamatan Capital of Kacamatan • Ibukota *m.*t*n*n Ma^an toaoquartat C Tampat Lamnya Oinar placa Batas propinai Provatcial boitof Batai kabupatan Kabupatan border , _ _ _ Bataa kacamatan Kacamatan bordar Batai kanaganan Naoan boidar Scale 1 : 500.000 a t i a ' i i • ' » » C r o r x i n ^ point ai A»V £ a d 0 * 3 MAP S. 120 centre (Cubadak). In the north-western part around Ujung Gading two sub-centres (Paraman Ampalu and A i r Bangis) and onejub. sub-centre (Desa Baru) have been i d e n t i f i e d . (Appraisal Mission Report, 1979 p. 10). The WPDP team's decision not to recommend the bridge at A i r Gadang was, to a great extent, influenced by i t s short-cut approach. Two possible reasons underlie this d e c i s i o n . The f i r s t i s that the team was unable to fin d potential investors who would invest t h e i r money i n the northern part of the study area (settlement scheme for A i r Runding area as the f i f t h : cr u c i a l project, see Page 6). The second possible reason i s that the development o f resources around Simpang Empat to the south, mainly o i l palm, was s u f f i c i e n t to j u s t i f y the construction of the road: Simpang Empat - Manggopoh - Lubuk Alung. It i s true that planning is a recurring process; i t i s not an end i n i t s e l f , as stated i n WPDP's report. However, i t i s d i f f i c u l t to understand why the strategy should change without any change i n planning issues. With regard to the o i l palm p r o j e c t , the team began by i d e n t i f y i n g SIPEF, a foreign company operating i n North Sumatra primarily on o i l palm c u l t i v a t i o n , as a potential investor for an o i l palm Nucleus Estate in Ophir. This company had already completed a f e a s i b i l i t y study for o i l palm development on 4,000 ha o f the former Ophir Estate i n 1975 and an agreement between SIPEF and the M i l i t a r y (represented by the M i l i t a r y Command of K0DAM 111/17 Augustus to whom the former Ophir Estate i s entrusted) had been reached and sanctioned on July 25, 1975. In ad d i t i o n , the Foreign Investment Application Form A had been submitted to the Investment Coordinating Board (Badan Koordinati Penanaman Modal - BKPM) RENCANA PEMBANGUNAN PASAMAN BARAT WEST PASAMAN DEVELOPMENT PLANNING Legend. '*} ttmfcota kafiuoatan Capita* of Kaoupttan O ttwhoU kec*m«l»n . Capital of Kacamatan • IDukoU kanaoanan Nagan taadquartw O Tarppat Lannya Olhar placa _ _ _ _ _ _ Balaa propmi Promnciai bortaf Bataa kabvpafan Kabwpaian Utvfla* « » _ Batai kacamalan Kacamaian borda*' Balai kanaganan Nagan txxOai Scale 1: 500 000 i i i * i i • centre Jub-centre Q ) SAAb-Sub- Cent re "bi-polar strategy' MAP 6 . To H a n ^ o p o K 122 through the Director General o f Plantations, Department o f Ag r i c u l t u r e , Jakarta. However, the PTP VI, a state-owned plantation company which had had experience in o i l palm production, was chosen to run the Nucleus Estate i n Ophir. The expulsion o f SIPEF from West Pasaman i s , to some extent, rel a t e d to the planning approach used by the WPDP team and can be explained by the questions raised by the unnatural advantages SIPEF gained by this approach. Based on the team's short cut approach, the team was in favor o f determining and catering to the potential investor's preconditions. The team committed i t s e l f to SIPEF's precondition, i . e . the construction o f a new road from Simpang Empat to Mangappoh (69 km) and an improvement of the e x i s t i n g road from Manggapoh to Lubuk Alung (72 km). It i s unclear why the team did not do the same thing for the domestic company, PTP VI, or other state-owned plantation companies as i t did for SIPEF. Another question i s whether SIPEF had permission to conduct i t s f e a s i b i l i t y study f o r the Nucleus Estate from any le v e l o f government ( c e n t r a l , provincial or l o c a l ) or ju s t from the WPDP? The WPDP team, as a planning team, did not have the r i g h t to grant such a request. I t seems that the team's short-cut approach blurred the d i v i s i o n of r e s p o n s i b i l i t i e s between planners and decision makers. It i s the r e s p o n s i b i l i t y of the planner to convince potential investors through preparing sound proposals, which are not opposed to policy makers' objectives and which are s o c i a l l y acceptable to the concerned s o c i e t y , rather than to r e s t r i c t p o l i c y formulation to l i m i t s set by an investor's 123 i n t e r e s t s or preconditions. This i s p a r t i c u l a r l y c r u c i a l i n the public sector because the r e s t r i c t i o n s placed on project s e l e c t i o n by private i n t e r e s t preconditions i n e v i t a b l y lead to the subordination of the i n t e r e s t s of the majority o f the rural population and r e s t r i c t the oppor-tunity to examine a l l possible proposals or t h e i r merits. 2.2 Oil Palm Project and Regional Development Theory As has been widely discussed i n Chapter I I , the contemporary regional development theories can generally be grouped i n t o : balanced growth versus unbalanced growth theories; urban-based i n d u s t r i a l strategy versus rural development strategy; and development from above versus development from below. Although d i f f e r e n t writers give d i f f e r e n t connotations to the strategy o f development, the proposed strategies are more or less s i m i l a r i n aim and d i r e c t i o n . For example, Lele (1975) defined rural development, as improving l i v i n g standards o f the mass of the low-income population r e s i d i n g i n rural areas and making the process o f t h e i r development sel f-sustaining. (p. 20). Dantwala (1977) argues that, i f the idea i s to stimulate s e l f - s u s t a i n i n g growth in the rural area, the project must have a growth r a m i f i c a t i o n e f f e c t on l o c a l , natural and man power resources, (p. 4). 124 and Stohr and Taylor (1981) write, Development 'from below' considers development to be based primarily on maximum mobilization of each area's na t u r a l , human, and i n s t i t u t i o n a l resources with the primary objective being the s a t i s f a c t i o n of the basic needs o f the inhabitants o f that area. (p. 3). The main purpose o f t h i s section i s to discuss the o i l palm project o f West Pasaman i n i t s r e l a t i o n to the contemporary regional development theories. L i t t l e attempt i s made in the o i l palm project proposal to determine the overall e f f e c t s o f such a project. The project does not create e i t h e r forward linkages or backward linkages. The project was planned to reduce income d i s p a r i t i e s between d i f f e r e n t Kabupatens ( d i s t r i c t s ) i n West Sumatra. However, achievement o f th i s objective w i l l create a very s e n s i t i v e income imbalance between the o i l palm smallholders and the other farmers of the region. The projected farm income o f the o i l palm small-27) holder w i l l be roughly 16 ' times the e x i s t i n g average farm income. By a l l o t t i n g 5 ha o f land to each project p a r t i c i p a n t (while the re s t o f the society s t i l l lacks arable land), the project w i l l benefit only a small group o f people. This contradicts the idea of development from below. In proposing this o i l palm project, the main consideration has been 27) The e x i s t i n g (1974) annual gross farm income was about Rp 124,384 or equal to US $299.72 (US $1 = Rp 415). 125 based on the central government's development objectives as stated in the WPDP's report (p. 5). The o i l palm project w i l l be acceptable to the central government as long as the project can appear to meet these objec-t i v e s . From the provi n c i a l and lo c a l (Kabupaten) governments' viewpoint, i t i s believed that the more investment that i s made ii i t h e i r areas, the more prospects and the happier they w i l l be. They are p a r t i c u l a r l y i n t e r -ested in benefiting from investments made by the central government. I f the development budget for these two projects (the road and o i l palm) had to be found from within the pro v i n c i a l and l o c a l governments' budgets, i t would be quite possible that these governments would forsake these two projects as not being p r i o r i t i e s . Since the o i l palm project does not create e i t h e r backward or forward linkages, i t could be possible that the improvement o f the transportation network from the study area to Padang w i l l speed up the process o f draining West Pasaman resources; a ty p i c a l example of "development from above". As stated previously, before delineating project proposals the team had already i d e n t i f i e d the r e c i p i e n t groups which were interested i n , and affected by, the planning f o r West Pasaman. Germany with i t s BMZ (Ministry for Economic Corporations) and other organizations administering Technical and Capital Aid Projects, and Parliament (see page 9) was i d e n t i f i e d as a rec i p i e n t group for the West Pasaman development plan. This implies that the in t e r e s t s of these organizations had been taken into the WPDP's consideration in delineating the o i l palm project; a t y p i c a l example of "development from above". 126 Bearing this information i n mind, though the o i l palm project in Ophir i s located i n a rural area, i t can be said that this project does not follow the p r i n c i p l e of "development from below". On the contrary, i t t y p i f i e s an example o f "development from above". 127 3. Conclusion A b r i e f evaluation of the basic food needs of the indigenous people of West Pasaman as a whole, as well as of Kecamatan Pasaman i t s e l f , reveals that adequate production of r i c e , which i s the basic food, i s s t i l l the main problem to be solved in that area. The average r i c e production per capita of West Pasaman i s 127.9 kg, about 8.6% below Indonesia's average r i c e consumption. For Kecamatan Pasaman i t s e l f , t h is gap i s even wider; the average r i c e production per capita o f Kecamatan Pasaman (the area where the land being studied i s located) i s 103.4 kg, about 25.9% below the Indonesian consumption figure. Viewed in terms o f the main objectives o f Repelita III (see p.4-C>) and from the r i c e production-consumption imbalance in West Pasaman, ri c e production should be the most urgent project to be developed in the study area. The analysis o f physical c h a r a c t e r i s t i c s shows that the land being studied i s suitable for r i c e c u l t i v a t i o n . I f the available water resources of the study area were brought into use (Batang Tongar r i v e r ) , about 4,079 ha of brush and grassland could be reclaimed into paddy lands and 6,664 ha or about 62% of the study area could be p l a n t e d w i t h r i c e twice a year. This means that 3,164 additional families could be accommodated in the study area. I f the land being studied was used for the o i l palm project, not only would there be no additional families which could be 128 s e t t l e d there; on the contrary, at l e a s t one-third of the e x i s t i n g 28) families would be replaced 1 . The results of the soc i a l aspects analysis reveals that the average size of land for one family i n the study area i s about 1.18 ha and the maximum amount o f communal land which can be a l l o t t e d to a family i s only 2 ha based on Walinagaris 1 questionnaires. Therefore, i t seems that the WPDP's proposal, with one family c u l t i v a t i n g 4 ha of o i l palm with 1 ha for food crops and a housing l o t , has ignored the r e a l i t i e s of the r e l a t i o n s h i p o f the a g r i c u l t u r a l population to the arable land. O i l palm c u l t i v a t i o n does not appeal to the farmers in the study area because such a d r a s t i c change i s not within t h e i r a b i l i t y to imagine. Before the farmers would be able to lose t h e i r fear of such a change they would have to have very real evidence o f the success and advantages o f such a project. This i s i n l i n e with the farmers' way o f thinking as expressed in t h e i r proverb: "Mengambil Tuah Kepada Yang Menang, Mengambil Contoh Kepada Yang Sudah". This means that the farmers would j o i n a project or program only a f t e r they have seen the p o s i t i v e results of such a project or program. The farmers feel safer growing r i c e and other crops with which they are familar. This i s expressed in t h e i r preference for government projects 28) With an o i l palm project the land being studied can f a c i l i t a t e only about 2,138 families (the size of the land i s 10,690; each family w i l l acquire 5 ha). 129 which would be less disruptive and more l i k e l y to improve the e x i s t i n g a g r i c u l t u r a l system. It seems an i r r i g a t i o n project i s the most desired government project for the study area. Considering the points mentioned above, i t can be concluded that the land under study i s s o c i a l l y inappropriate for o i l palm growing. It i s s o c i a l l y more appropriate for an extension of the e x i s t i n g a g r i c u l t u r a l system. Government e f f o r t s should be directed to improving the e x i s t i n g system, rather than attempting to create a new system that i s s o c i a l l y unsuitable. A proper analysis o f the economic aspect shows that growing o i l palm is not more p r o f i t a b l e than growing r i c e . It i s true that o i l palm is more p r o f i t a b l e than r i c e per hectare i f the l a t t e r i s grown only once a year. By assuming that only one r i c e crop i s grown each year, the net income of growing o i l palm i s 123.0%, with IPEDA tax, and 130%, without IPEDA tax, of that for r i c e growing. However, by assuming double cropped r i c e as usually practised by farmers in Indonesia, i f the water provision i s not a constraint, the net income of r i c e growing i s 163.0%, with IPEDA tax, and 154.0%, without IPEDA tax, of that for o i l palm growing. The r e s u l t s o f t h i s study show that the most promising use of the land and water resources of the area under study would be r i c e production rather than o i l palm production. C e r t a i n l y , i f one i s to meet the food needs o f the people i n the study area i n p a r t i c u l a r , and in West Pasaman in general, and to provide a better l i v i n g and accommodate more farmers i n the study area, i t i s deemed necessary to consider the alternate use 130 of the land under study for r i c e production. In conclusion some attention must be given to the methodological l i m i t a t i o n s o f the study. I d e a l l y , i t would have been desirable to include a discussion of the prospective benefits deriving from o i l palm c u l t i v a t i o n for the overall Indonesian economy. It i s possible to argue that the export earnings accruing from o i l palm c u l t i v a t i o n might be u t i l i z e d for the purchase o f " o f f shore" technical inputs which could benefit other aspects o f the economy. But, i n view o f the fac t that the plan, as i t was o r i g i n a l l y proposed, was designed to maximize foreign investment and earning opportunities i t appeared u n l i k e l y that these types o f benefits would be s u f f i c i e n t to produce the res u l t s outlined in the previous sentence. As a consequence t h i s aspect was not considered in any d e t a i l . S i m i l a r l y , the question of the minimum s i z e necessary for the e f f e c t i v e operation of the o i l palm project was not investigated as a v a i l a b l e evidence suggests that the 13,000 hectares o f government-owned land would be s u f f i c i e n t for a viable operation. C l e a r l y , i n any evaluative study of this nature, i t i s d i f f i c u l t to provide comprehensive data on a l l aspects. In f a c t , the thesis attempts a much broader evaluation than the e a r l i e r planning proposal. In r e l a t i n g the thesis conclusions to the e a r l i e r chapter on develop-ment theory, three important conclusions emerge. F i r s t , "planning from above", which involves heavy capi t a l investment at the cost o f the so c i a l needs o f an e x i s t i n g regional population, poses real problems for regional development. Secondly, large projects such as th i s need to be related to a much wider range of information which would allow a more comprehensive 131 and integrated regional plan to be developed. F i n a l l y , planners must be made more aware o f the importance o f the s i t e , and the s o c i a l and economic needs o f the e x i s t i n g population in evaluating data and presenting proposals. In the ten years since the proposals were f i r s t made, the important changes in the "development paradigm" have meant that the planning a u t h o r i t i e s o f developing countries have become in c r e a s i n g l y aware of the need for integrated regional development and "planning from below". In a sense, t h i s study i s an evaluation o f a planning approach which i s now la r g e l y outmoded. As such, i t i s a contribution to the growing body o f studies which support the new development paradigm. 132 APPENDIX 1 FARMERS' QUESTIONNAIRE Questionnaire No. Date of Interview 1. Interviewee Code Number Address 1) 2. Interviewer ;Name Q01 . Recently, the government has decided that the former Ophir O il Palm Estate w i l l be reopened for o i l palm c u l t i v a t i o n . It i s designed for a Nucleus Estate and Smallholder System (NES) which means that the Nucleus Estate provides a processing unit in order to f a c i l i t a t e the surrounding farmers to process t h e i r o i l palm f r u i t s . What i s your opinion about the government decision? a. I t i s a good idea. b. Don't know. c. I t i s a bad idea. ( I f the answer i s "Don't know", skip Q02) 2^ 1) In order to get more accurate responses, the name o f the farmer was asked. Instead, a code number was used. For example, AG-| i s the f i r s t interviewee in Kanagarian A i r Gadang. 2) Words in parenthesis are not to be t o l d to the interviewee, they are intended merely for the interviewer's guidance. 133 Q02. Would you please give me the reason(s) why i t i s a good idea or why i t i s a bad idea? Q03. Have you ever seen an o i l palm tree? a. Yes. b. No. (I f the answer i s "No", skip Q04). Q04. Have you ever grown the o i l palm or worked on an o i l palm plantation? a. Yes. b. No. (I f the answer i s "No", skip Q05). Q05. Where did you grow the o i l palm or work on an o i l palm plantation? Q06 Do you want to t r y to grow the o i l palm on your farm for commercial purposes? a. Yes. b. No. 134 Q07. I f you were given the opportunity to p a r t i c i p a t e in the Ophir Oil Palm Project, would you j o i n that project? a. Yes. b. No. ( I f the answer i s "Yes", skip Q08). Q08. Why don't you want to j o i n that project? a. b. c. d. e. f. g. h. Q09. In making the plan for West Pasaman Development, the WPDP (German experts) team recommended that t h i s area be c u l t i v a t e d with o i l palm. I f such a recommendation were implemented, a l l the land, except the wetland you c u l t i v a t e would be devoted to o i l palm growing. Would you agree to devote your land to o i l palm c u l t i v a t i o n ? a. T o t a l l y agree. b. Have no idea. c. T o t a l l y disagree. ( I f the answer i s " T o t a l l y agree", skip Q010). 135 Q10. It i s the government's intention to increase the farmers' incomes in this kenagarian. I f so, what kind of project or program do you think that the government should develop here to increase the farmers' incomes? a. b. c. d. e. f. Q l l . I f an i r r i g a t i o n project were developed in t h i s area and a l l the land you c u l t i v a t e became i r r i g a b l e , would you be w i l l i n g to devote or convert your land to wetland r i c e growing? a. I wi11. b. I don't know. c. I w i l l not. Q12. I f an i r r i g a t i o n project were constructed here and a part o f your land had to be passed by or used for any kind o f canals (main, secondary or t e r t i a r y canals), would you release i t or would you ask for compensation? a. I w i l l release i t without asking for compensation. b. I w i l l ask for compensation. 136 Q13. Would you please t e l l me the acreage o f land you c u l t i v a t e f o r : a. paddy 1. wetland paddy ha 2. rainfed paddy ha 3. upland paddy ha b. tree crops 1 . rubber ha 2. coconut ha 3. coffee ha 4. clove ha 5. ha c. palawija (secondary crops) and others ha Q14. I f you were able to have access to more land (wetland) as a res u l t o f an i r r i g a t i o n project without using hired farm laborers, how many hectares would you be able to c u l t i v a t e ? a. with draft animal ha b. without draft animal ha THANK YOU VERY MUCH FOR YOUR INFORMATION'. 137 APPENDIX 2 WALINAGARIS' QUESTIONNAIRE Questionnaire No. : Date of Interview : 1. Interviewee Name : Address : 2. Interviewer Name : Q01. Would you please t e l l me the proportion of tanah ulayat (communal land) to tanah milik (private land) in this kenagarian? Q02. Is there any special procedure to obtain a piece o f communal land to be c u l t i v a t e d by a member o f the society in this kenagarian? Q03. What i s the maximum amount of communal land that can be a l l o t t e d to one family and how long can such land be cultivated? Q04. Is there any ob l i g a t i o n (such as tr i b u t e ) of the c u l t i v a t o r to the ninik mamak or the community? I f there i s , how much, on a per hectare basis i s i t ? Q05. Is there any p o s s i b i l i t y o f converting communal land into private land (tanah m i l i k ) ? I f there i s , what kind o f procedure would the c u l t i v a t o r follow? 138 Q06. Is there any opportunity for an outsider or immigrant who i s not a resident of t h i s kenagarian, to reside in and c u l t i v a t e the communal land? ( I f the anser i s "No", skip Q07). Q07. Is any special d i s t i n c t i o n made between immigrants t r y i n g to gain access to communal land (based on t h e i r ethnic grouping such as Minangkabau, Batak or Javanese)? I f there i s , would you explain please? Q08. Recently, the government has decided to r e - e s t a b l i s h the former Ophir estate. It has been designed for the Nucleus Estate and Smallholder System (NES) which means that the company who runs the Nucleus Estate and the Smallholders who run the o i l palm c u l t i v a -tion w i l l work side by side. What i s your opinion about t h i s government decision? Q09. I f such a project were extended in t h i s kenagarian, would you and other residents w i l l i n g l y j o i n that project? Q10. As a walinagari what kind o f project or program do you think that the government should develop here in order to increase the farmers' incomes? ( I f the answer i s not r e l a t e d to an i r r i g a t i o n project, skip Q l l ) . 139 Q11. I f an i r r i g a t i o n project were established here and a part of the communal land were required for the d i f f e r e n t i r r i g a t i o n canals (main, secondary or t e r t i a r y c anals), would you release that land for that purpose and would you ask compensation for i t ? Q12. I f the i r r i g a t i o n project were constructed here and a l l your communal lands became i r r i g a b l e and at the same time your residents were not capable of c u l t i v a t i n g a l l the i r r i g a b l e land, would you welcome l o c a l or national transmigration without asking compensation for the land? 140 BIBLIOGRAPHY Adelman, Irma. 1975. "Development Economics: A Reassessment of Goals" The American Economic Review, XLV Adelman, I., and C T . Morris. 1973. Economic Growth and Social Equity in Developing Countries. Stanford, C a l i f : Stanford University Press. Ahmed, V. 1980. 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