From Food Crop to Fuel Crop: Discourse of Jatropha Crop Cultivation as Biofuel sources in Indonesia

Discussion Paper for the RCSD International Conference “Revisiting Agrarian Transformations in Southeast Asia: Empirical, Theoretical and Applied Perspectives”, Chiang Mai, Thailand, 13-15 May 2010


GUNAWAN

Abstract
Fossil fuel scarcity encourages alternative energy production based on renewable sources, especially biofuel. Jatropha is one of potential sources of biofuel, beside palm oil, sugar cane, and cassava. Production of biofuel based on jatropha is technically applicable in Indonesia since its land characteristic. But in reality, making this plant as a source for biofuel is not a simple thing, especially for social conditions in Indonesia. One critical social problem is on land utilization for jatropha plantation that will impact on land management and labor allocation.
Land management relates with process of switching land utilization from food crop to jatropha crop. This condition triggers labor allocation problem since the difference of production system between food and jatropha production. Being introduced as a highly potential source of alternative energy, jatropha is expected as a plant that provides a good profit for farmers. Farmers are planting and hoping high revenue from cultivating the Jatropha . This situation encourages the agricultural transition that leads socio-economic impact on society. After harvesting, farmers have to face the reality that jatropha seeds' price is lower than food commodity. This experience decreases farmers' motivation on jatropha plantation.
According to this trade-off problem between enthusiasms of finding new source of alternative energy and socio-economic agricultural transition problem, this research is conducted to indentify community readiness and explore social consequences of jatropha crop as a new commodity.

Background
Alternative fuel sources other than fossil fuels have been discussing intensively in Indonesia since 2005. It was triggered by the increasing in the total imports reaching 300,000 barrels per day or as much as USD 21 million per day on the price of USD 70 per barrel. This condition pressures the government to raise the domestic fuel price for transportation which reaches around 100% for diesel from 2,100 rupiahs to 4,300 rupiahs per liter on October 1, 2005.
Along with the rising of oil price in the world market in 2005, Jatropha Curcas Linn had initially been discussed by many people in the government, non-government organization and both national and international public. It was expected to be the latest energy source for biofuel.
In Indonesia, the effort to produce alternative energy of Jatropha oil is not only to decrease the dependency on fossil fuel, but also to overcome poverty. There was a declaration of national movement on poverty tackling and fuel crisis through Jatropha Curcas plantation on October 2005 as the National Strategy on Poverty Tackling. The declaration was signed by Coordinating Minister of People’s Welfare, State Minister of National Development Planning/Chairman of National Development Planning Agency, Minister of Social Affairs, Minister of Home Affairs, Minister of Agriculture, Minister of Public Works, State Minister for Cooperatives and Small and Medium Enterprises, State Minister for Research and Technology, etc. In the following year, Presidential Instruction (Inpres) No. 1/2006 was issued by the government for the provision and utilization of biofuel in Indonesia as an alternative energy source. The instruction is directed to 13 ministries , governors, regents/mayors to accelerate provision and utilization of biofuel as an alternative energy source. Another government effort to encourage the rising of biofuel production is by establishing a program of Energy Self-Sufficiency Village (Desa Mandiri Energi). This program was declared by the President of the Republic of Indonesia, Susilo Bambang Yudoyono, on February 2007 at Tanjungharjo Village, Ngaringan, Purwodadi, Central Java, along with officially announcement of the establishment of a biofuel factory, PT. ENHIL. Energy Self-Sufficiency Village is an intended program to enable villages in fulfilling their own need of energy to decrease the dependency on fossil fuel. Besides, it is also intended to provide job opportunity and overcome poverty in underdeveloping villages.
The government expects the plantation of Jatropha Curcas as an alternative of biofuel source provision after palm oil. It is not only in the production capacity, but also in its capability to absorb manpower massively. Ten million hectares of Jatropha Curcas plantation is targeted to absorb 100,000 skilled manpower and 10 million non-skilled manpower in 2009 . Based on the above expectation, thus, the production of Jatropha oil as the source of biofuel must be done in a big production scale. The government provides an opportunity for companies to invest in jatropha plantations as an alternative energy source. The company’s involvement in producing Jatropha oil starts on the initial planning of Jatropha Curcas cultivation program. Some of the companies are the partners of the government such as PT. Rajawali Putra Nusantara, Bahana Artha Ventura, PT. Rekayasa Industri, PT. Indosement Tunggal Prakarsa, Others are the partners of Bogor Agricultural University such as PT. Titan, and PT. AGB energy. There are also companies from Japan, Korea, and China.
In effort to produce biofuel, government and companies has been introducing jatropha crop to the farmer. The companies have been making an investment by planting jatropha in several areas such as Java, East Nusa Tenggara, and Papua in cooperation with local government and community. There are some models of cooperation between companies and the community. Initially, the companies asked to local governments to provide land to be used for seedling jatropha. The companies with local government organized the farmer to provided land for planting jatropha on private land or on government land. The jatropha seed was supplied by company but not for free, farmers had to buy and then received technical assistance in planting the jatropha. Companies promised to provided subsidies and credit to the farmer who want to plant the jatropha. In other side, the companies informed that jatropha crop is a simple plantation by low maintenance, low input, suitable for marginal land without fertilizer, and profitable because of the high price of its seed. Moreover, the companies promised to buy jatropha fruits in high price.
According to this information, farmers were very enthusiastic to participate on planting jatropha initially. They hoped to get credit or subsidies and economic benefit from cultivating jatropha crops. In some area, land that previously used for food crops was switching to jatropha crop because they hoped for reaching a high economic benefit. In some area, farmers were switching their land which is previously planted with corn and cassava. Farmers were not worried about where they will sell the jatropha kernel, because of the company’s promise.
After planting, the reality was not as they were expected. When jatropha produce fruits, farmers faced difficulties to sell the kernel. The company which previously were willing to storage and buy higher, unfortunately buy this production lower than its production cost. Moreover, the provided price was not stabil enough. In other case, the farmer could not sell the harvest because the company was closed. According to this condition, in some area, at Central Java jatropha crop cultivation was abandoned by the farmer. They were cutting down the crop and switching back the land for food crop cultivation (cassava and corn). Actually, cultivating the jatropha crop is not simple, because jatropha cultivation requires a lot of labor input in its management, starting from land clearing, planting, until harvesting. Jatropha seeds can not be harvested simultaneously. Farmers need more labor for harvesting and need additional manpower and labor costs.
Even though the government has formally established various policies to support biofuel production but the result is not yet seen. In current condition, the discoursement of biofuel production based on jatropha is beyond its fact. Media are often reporting about the establishment of biofuel companies or new locations for a big scale of jatropha plantations with the expectation of capacity production and manpower utilization. The news are optimistically impressed that the companies will run well to produce biofuel, but in fact do not match with the expectation. Often the company had close and leave the farmers when farmers began to produce jatropha seeds. Finally, the farmers do not know where to sell their product. Jatropha cultivation programmed by the companies show that they just sell the seeds to farmers while after growing, the companies run away.

This condition are experienced by the community at Ngaringan, Purwodadi, Central Java. Jatropha planting program in cooperation with government (the local government and the forest state company), community, and company is far from its expectation at the moment. The people who were formerly enthusiastic to plant Jatropha Curcas is apathetic now. The plants that has been planted are not well taken care of and just abandoned because of the imbalance in its seeds production cost and maintenance. The company which was previously expected to raise the people’s income is not running now. Finally, the plant is abandoned now; some farmers even cut it through and replace it with dry season crops.

Problems in Biofuel Production based on Jatropha Crop Cultivation
According to the condition that already been described, biofuel production based on jatropha crop is not well managed. Technically jatropha oil can be used for fuel as well as fossil fuel. But, in reality, producing jatropha oil in vast scale is not easy.
Currently, farmers still have orientation to plant food crops. The emergence of new types of commodity crops will cause social problems especially in its relation to knowledge production system and management of land and labor. Based on social-economic perspective, there are many problems in producing jatropha oil as biofuel; 1. How does the people’s readiness in producing biofuel; 2. How does manpower relationship between community and company in producing the biofuel?; 3. How does the social economy relationship built by community in the Jatropha oil production system?

Model of Land and Labor Management in Plantation
In Indonesia, the Jatropha oil for fuel source has been known in a long time period, especially during the Japanese occupation. As a new commodity crop, jatropha became a big discourse in 2005 but in current condition so far jatropha production has not produced any significant result. Before introducing jatropha, biofuel sources can be produced from sugar cane and Crude Palm Oil (CPO). Sugar cane produced ethanol, as byproduct of sugar.Palm oil was converted for biodiesel.. But both crops were cultivated as food crops rather than fuel crop. Recently, converting CPO to biodisel do not give economic benefit to companies because its price is higher than fossil fuel.
Meanwhile, jatropha, as an expected source of biofuel, is not strongly managed yet. The crop production system has not accommodated labor mobilization and land tenure system. Regarding this condition, the system is expected to adopt a sugar cane and palm oil as an established management. Several working patterns have been applied in the production system in sugar cane and palm oil to manage the relation between the labor, manufacturing company, and the land owner.
Sugar cane plantation systems in the Indonesia’s new order were known as Tebu Rakyat Intensifikasi-TRI (People's Sugar Cane Intensification) and Tebu Rakyar Bebas-TRB (People's Free Sugar Cane) . In the TRI system, the sugar cane company cooperated with the government to set up plantation pattern for the working fields belonged to the people and special village lands. Working fields belonged to the people were taking turn obliged to plant sugar cane with certain pattern. Sugar Cane Company provided incentive in the form of loan to farmers for the field processing, started from storaging into harvesting. The farmers were categorized into several groups based on the planting location block. The sugar cane produced was bought by the company. The loan taken by the farmers would be calculated on the harvesting time. Farmers could not refuse to plant the sugar cane in this system due to the authoritarian of a new Order regime. As the reformation of this order, this model was not longer applied in Indonesia. Facts show that there were a lot of funds corruptions in this system which was used to fund the production itself. Farmers lost out during harvesting due to the imbalance result compared with other plants which was caused by the factory in transparency in counting harvested sugar cane and its results after processing.
In TRB system, the farmers were independently planting sugar cane in their field and depositing the products to the factory to be processed. In this system, the factory was not interfering the process of planting conducted by the farmers. The farmers were free to plant sugar cane in their field and sell the products to the factory. Even so in the TRB system, since the company had full power to determine the price, farmers were often losing out due to low sugar cane price during harvesting so they could not cover up the production cost.
There are several working relation models for the manpower and company in palm oil plantation. First, the plantation is fully under the company. The company has several areas to plant and involves the manpower in the production system starting from field cleaning, planting, maintaining, harvesting, and processing. With this system, the manpower will get fees according to the status which is classified as full time, part time, and daily. Manpower does not assure any risks of losing that may happen.
Second, it is with the system of Nucleus Estate Smallholder or known as Perkebunan Inti Rakyat. In this system, there is contract farming which forms close relation between the company as the nucleus and manpower as the plasma. The nucleus obliges to provide the field, plant, input and production tools, technical guidance, and credit access, obliges to build physical facilities and accommodate the products. The plasma which is consisted of manpower/common people has certain requirements. The plasma obliges to process and maintain the plantation as well as deposit the products to the nucleus/factory. In several cases, the company can not maintain stable price so that it is the farmers who lose out.
Third, the manpower processes and maintains their fields independently and then sells the products to the company/factory with free plantation system. They assure all production costs and losing risks that may happen, especially due to the unstable market price.
Based on the relation patterns of production system to the available commodity, thus, the Jatropha Curcas commodity as the source of biofuel will lead to various social consequences. Therefore, it is necessary to identify alternative manpower relations in the Jatropha biofuel production system.