Ara Simanjuntak : Betting the Farm

Palm oil contributes to up 4.5% to Indonesia’s GDP and unlike other commodities, the Indonesian government promotes palm oil as motor of rural development. This is because up to half of Indonesia’s palm oil production is generated by smallholders, farmers with 2-3 hectares of land, cultivating oil palm crops and selling the product for reliable market prices to corporate and state refineries. But this model of national development is in crisis. Small holder palm oil plants are aging, yields are decreasing and company profits are becoming leaner. At the same time, major markets are putting pressure on Indonesia’s palm oil industry for its environmental impact, including rampant deforestation and biodiversity loss. To address this crisis, the former Jokowi government embarked on an ambitious plan to help small holders replant their declining palm oil, this time in accordance with new standards of sustainability. But as my guest, Ara Simanjuntak, today reveals, the new government grants given to smallholders to help is creating new sources of precarity, anxiety and indebtedness that is fundamentally transforming the nature of rural development in Indonesia. To bet the farm, the title of this episode, is an expression in English. It means to risk everything on an uncertain outcome. And this, argues Ara is akin to what Indonesia’s palm oil smallholders are being asked to do. To talk about these issues, I’m here with Atmaezer Hariara Simanjuntak, or Ara, PhD candidate in Anthropology from Northwestern University.