Indonesian NGOs want biofuels policy to side with farmers

Indonesia is set to become one of the leading biofuel producers, with a variety of crops being promoted - from sugarcane and cassava, to jatropha and palm oil. Biofuels and bioenergy offer the country the opportunity to substantially reduce reliance on extremely expensive oil and to bring millions of jobs to the poor. Technically this may be possible, but success will depend on carefully crafted policies and legislation (previous post). Local NGOs support the transition towards the green fuels, but call on the government to do more to ensure that the poverty alleviating potential for smallholders - who are feedstock producers - fully materialises.

The Indonesian government has so far invested US$1.42 billion in the sector, with more than 67 projects for the production of liquid biofuels signed so far, and with 114 biomass power plants under construction across the archipelago (earlier post). The country plans to inject a total of US$ 12.4 billion over the coming 3 years (more here). The program is presented by the government as a way to alleviate poverty and to generate employment, as it expects some 2.5 million jobs to be generated in the sector (earlier post).

Istowo Setyandito, head of a group of small jathropa farmers said yesterday during a discussion on biofuel policy that a law and presidential decree on biofuels do exist, but there is yet to be a real and comprehensive implementation of the regulations:

"We have reliable and skillful farmers, but the government's policies are not siding with them, despite the fact that the agricultural sector is an important pillar of our country's economic development."

Deputy director Abet Nego Tarigan of NGO Sawit Watch shared the same view, saying that even though the agricultural sector had created new jobs for villagers, the government did not pay attention to their welfare:

"Indeed, the sector has reduced unemployment, but in fact more than 50 percent of plantation labors only get their daily wages without any insurance or social security scheme."

Darmawan Triwibowo from the Indonesian Biodiversity Foundation Kehati said the group doubted that the current policies to promote biofuel use would have a direct impact on unemployment and poverty.

"The government assumes it's the perfect situation in every area. But in fact, it won't be that easy to employ workers, increase their welfare and solve their poverty problems. It really depends on the development scheme of the plantation industry. The situation will be worse if a land dispute occurs. [...] Farmers should have the right to cultivate their land without losing their ownership. On the other hand, they should also benefit from the biofuel business."

Many smallholders in Indonesia are leasing their land to biofuel and plantation enterprises and feel they are benefiting. An example of the often-quoted indirect effects of the arrival of plantations comes from Mangat Nuan, a small farmer in central Kalimantan:

"This used to be my land. But I rented it to a plantation company a little while ago. It was a good price - all the landowners round here did the same. Life before was difficult. [...] I couldn't even feed my family, not to mention send my kids to school. After the plantation took over, more people came and suddenly we had roads and schools. We've also opened a small shop, so it's improved our income significantly."

But not all Indonesians may be as lucky as Mangat Nuan, and after all he merely refers to his direct benefits, not to potentially negative indirect impacts on the environment. Moreover, Kehati's Darmawan Triwibowo said disputes over land ownership, either between farmers and the government or farmers and plantation companies, remain common:
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However, Evita H. Legowo, the first secretary of the National Biofuel Development Committee at the Energy and Mineral Resources Ministry said that the policy on national energy development, which includes the promotion of biofuel, has drawn a clear target for providing more job opportunities and reducing poverty.

"By 2010, we expect that biofuel industry will have provided 3.5 million job opportunities for villagers and increased their wage at least up to the regional minimum wage by developing 5.25 million hectares of plants, which are sources of biofuel," she said.

"But the target should also be followed by a proper pricing policy that will benefit farmers."

Currently, the ministry, together with the Coordinating Ministry for the Economy and the Coordinating Ministry for People's Welfare, is working on a regulation that would make the use of biofuel mandatory in the hope that it would encourage the use of the environmentally friendly fuel.

The first areas to test the regulation will be Java and Sumatra, where there are several biofuel projects.

Indonesia mainly produces biodiesel, with more than 11 government-supported biodiesel plants under construction (earlier post), but the country wants to replace gasoline with ethanol as well. Its ethanol program is based on sugarcane and cassava.

To achieve its goals, Indonesia will be planting 2.25 million hectares to grow the crops, out of a total of 6 million that have been allotted for energy crops (see here).

Picture: workers load oil palm fruit bunches into a truck. Credit: Reuters.