Processes of inclusion and adverse incorporation: oil palm and agrarian change in Sumatra, Indonesia

Abstract

Changes in globalised agriculture raise critical questions as rapid agricultural development leads to widespread social and environmental transformation. With increased global demand for vegetable oils and biofuel, in Indonesia the area under oil palm has doubled over the last decade. This paper presents a case study of how micro-processes that are linked to wider dynamics shape oil palm related agrarian change in villages in Sumatra, Indonesia. It pursues related questions regarding the impact of agribusiness-driven agriculture, the fate of smallholders experiencing contemporary agrarian transition, and the impact of increased demand for vegetable oils and biofuels on agrarian structures in Sumatra. It argues that the paths of agrarian change are highly uneven and depend on how changing livelihood strategies are enabled or constrained by economic, social and political relations that vary over time and space. In contrast to simplifying narratives of inclusion/exclusion, it argues that outcomes depend on the terms under which smallholders engage with oil palm. Distinguishing between exogenous processes of agribusiness expansion and endogenous commodity market expansion, it finds each is associated with characteristic processes of change. It concludes that the way successive policy interventions have worked with the specific characteristics of oil palm have cumulatively shaped the space where agrarian change occurs in Sumatra.