The Agrarian Conflict in East Sumatra

Abstract

ONE OF THE KEY REGIONS of Indonesia, and the country's most important producer of export commodities, is East Sumatra. Indonesia obtains more than half of her foreign exchange earnings from the Residency of East Sumatra, whereas Atjeh and Tapanuli, the other two subdivisions of the Province of North Sumatra, contribute very little. This is a result of the heavy concentration of plantation agriculture in East Sumatra, no other part of Indonesia having so extensive a plantation acreage.* Although the Indonesian Government has repeatedly expressed its awareness of the great economic importance of the plantation industry for the economy of Indonesia, the planters are very uneasy about the future of their holdings. The foreign ownership of the plantations makes them a readymade and convenient target for the propaganda of various political parties. Indonesians of all political factions favor changing the character of the Indonesian economy from a to a national one, and this feeling applies to plantation agriculture too. In contrast to other Asian countries which gained their political independence after 1945, Indonesia is in an exceptional and advantageous position in that all its foreign-owned plantation companies hold their land under 75-year agricultural concessions or leases, rather than as free-holds (as is the case with the plantations in Ceylon) or as grants conveying title in perpetuity (as in Malaya). This gives the Indonesian Government technically the right to refuse renewal of expired agricultural concessions and leases. Peasant organizations and other interest groups have repeatedly urged the Indonesian Government not to renew agricultural concessions and leases held by foreign companies, but to turn the land over to Indonesian peasants or entrepreneurs. Before the end of this century practically all of the plantation concessions and leases will have expired; in fact, a very large proportion will run out in the next fifteen to twenty years. Until now, the Indonesian Government has not been able to formulate new agrarian legislation to take the place of the colonial laws; as a matter of fact, because of the political agitation on the future of foreign agricultural holdings, the position of the Government has been ambivalent. It is, however, important that it should work out a new agrarian law in harmony with the