Land for the People: The State and Agrarian Conflict in Indonesia

Ch 2: Land Concentration and Land Reform in Indonesia: Interpreting Agricultural Census Data, 1963–2003

Chapter 2 L and C oncentration and L and R eform in I ndonesia Interpreting Agricultural Census Data, 1963–2003 Dianto Bachriadi and Gunawan Wiradi Fifteen years after Indonesian independence, on 24 September 1960, the Basic Agrarian Law (BAL) was promulgated,1 placing agrarian justice at the center of the nation’s economic life2 and reflecting a particular concern for the rights of marginal people.3 Indonesia’s first president, Sukarno, in his famous speech on “The Progress of Our Revolution” in 1960, declared that “the Indonesian revolution without Land Reform is like a building without foundation, like a tree without a trunk, like big talk which is empty. The implementation of Land Reform means the implementation of an absolutely essential part of the Indonesian Revolution. . . . Land is not for those who sit around and become fat and corpulent through exploiting the sweat of the people whom they order to till that soil” (Soekarno 1960, 34). The spirit of the law was to free the Indonesian people, the majority of whom were dependent for their livelihoods on land and other agrarian resources, from precolonial “feudal” bonds and from colonial exploitation. For this reason land reform, which was aimed at protecting the interests Land Concentration and Land Reform in Indonesia 41 of peasants (whether small farmers, tenants, or agricultural laborers), became the key policy focus of newly independent Indonesia. BAL principles can be summarized as follows: Land must be treated as a means of production to create social welfare, not for individual interests that can lead to concentration of ownership and exploitation “of the weak by the strong.” Accordingly, although individual ownership (hak milik) is paradoxically privileged, the land should not be commoditized. The owners of the land and agrarian resources within the territory of the unitary State of Indonesia are the people of Indonesia. Foreigners are not allowed to own land in Indonesia but can be granted limited rights to utilize agrarian resources. As a manifestation of “collective ownership,” the state holds a mandate to manage resources for the social welfare of the Indonesian population as a whole.4 For this reason, the BAL prohibits the monopoly of agrarian resources, except by the state in its role as the representative of the people’s interest.5 Implementation of the BAL 1960 through regulations establishing ceilings on agricultural land holdings (UU56/1960), land redistribution and compensation procedures (PP 224/1961), Land Reform Committees (KepPres 131/1961) and Land Reform Courts (UU 21/1964), underpinned the land reform program that aimed to limit private land holdings,6 abolish private absentee holdings, and redistribute land. The lands targeted for redistribution were state land (tanah negara), privately owned land in excess of the maximum ceiling, absentee land, and lands belonging to former autonomous swapraja principalities. Meanwhile, the Share Cropping Act (UU 2/1960) aimed to reform the tenancy systems in rural areas that were considered unfair by the state authority and legislators. Land reform legislation also aimed to protect tenants in a weak position vis-à-vis landowners and to encourage economic development in the agricultural sector (Soemardjan 1984, 110–11). The state-led land reform program, originally formulated as the foundation for Indonesian development and based on the principle of “land for the tillers,” faced strong obstacles when Suharto came to power after the 1965 countercoup. In fact, similar land reform programs were being implemented as the basis of postwar development 42 Dianto Bachriadi and Gunawan Wiradi in Japan, South Korea, Taiwan, India, and Iran (see, for instance, Inayatullah 1980 and Ghose 1983). In Indonesia, however, critics had argued that the amount of available land to redistribute to the large population of the landless and land-poor was insufficient. This position was put strongly by scholars such as Ladejinsky (1964, in Walinsky 1977, 342–43) and Morad (1970, 36), and repeated subsequently by scholars including Booth (1988, 137), Billah, Widjajanto, and Kristyanto (1984, 278). At issue was the question of whether demographic and economic impediments to the land redistribution program in the densely populated parts of “inner Indonesia” would inevitably undermine the social justice objectives of the program. Based on data from the first official agricultural census carried out in Indonesia (table 2.1), the pattern of agricultural landholdings and control in 1963 was certainly unequal. Of 12,883,868 hectares of agricultural land held by 12,236,470 households, the Gini ratio of land control in this year was 0.55, which means that the degree of land concentration in this year was...