Guiding Principles:
Land Tenure in Development Cooperation

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Orientierungsrahmen:
Bodenrecht und Bodenordnung

Deutsche Gesellschaft
für Technische Zusammenarbeit
Abt. 45 / Div. 45

 

Ulrich Löffler, (1996):
Land Tenure Developments in Indonesia

3.4 Analysis of informal land tenure practices

In the previous section, the legal foundations which are in part very specific and formal have been presented. In practice, however, numerous examples of land tenure can be found which more or less strongly diverge from the formal rights in the BAL. "Behavior is oriented to what one sees as the law, not what is written down."[FN 104]

Exceeding the maximum permitted hectarage

Upper limits of landownership has been fixed in the BAL dependent upon population density so as to avoid landlords:

Table 3: Maximum Permitted Hectarage (see Law No. 56 of 1960, Art. 1 and Supplement)

Population Density

Sawah

(Wet Land)

Tanah Kering

(Dry land)

(per square km)

(ha)

(ha)

1 - 50 inhabitants

15

20

51 - 250 inhabitants

10

12

251 - 400 inhabitants

7.5

9

Over 400 inhabitants

5

6

Source: RAJAGUKGUK, 1988:80

 

If one relates the above figures to the real situation on Java, the population density in all the Kabupaten today is higher than 400 inhabitants per square kilometer. This means, according to the fixed ceilings, that land ownership on Java ought not to exceed the ceilings of 5 ha sawah or 6 ha tanah kering.

The minimum ceilings of 2 ha likewise fixed by law were seen early on as being unrealistic since there was not enough land available to be able to guarantee two hectares of land for every household.[FN 105] Therefore, de facto, the minimum ownership of two hectares has never been enforced.[FN 106]

The land ownership sizes presented in the table are regarded as the upper limit which can be under the control of one family (using a seven-member family as basis). If the size of the family diverges from this "family", 10 % can be added for every additional family member (however, only up to a limit of 50 %). At the same time, the total amount of property must not exceed 20 ha.[FN 107] There are exceptions for areas of land under hak guna usaha (concessions) and land under hak pakai (e.g. Tanah Bengkok (land in lieu of salaries for village officials)). Anyone who violates the provisions for maximum limitations can be sentenced to three months’ jail and / or fined up to Rp.10,000.[FN 108]

RAJAGUKGUK has established in his empirical studies that some owners control a lot of land through the renting-in of land. This is the case in particular in regions with sugar factories. E.g. in the Saradan District, one village head controls about 100 ha In the Pati Region, there are a least 4 people who control more than 100 ha, and one person controls more than 50 ha.[FN 109]

Informal rent arrangements

In many regions of Indonesia, rent arrangements exist which go against the regulations of the BAL and the Instruksi Presiden Indonesia No. 13 / 1980 (see the boxes 2 and 3).

Box 2: Selected Regulations from the Undang Undang No.2 / 1960 (Sharecropping) [FN 110]

The sharecropping contract must be drawn up in writing in the presence of the village head.

The length of the renting must be at least 3 years for sawah and 5 years for dry land.

Prepayment for the attainment of a rented parcel of land is not allowed.

Division of the harvest between landowner and sharecropper must be determined according to the ratios with regard to cultivated plants, soil quality, population density, socio-economic factors by the bupati for a kabupaten.

The regulations are not valid for permanent crops.

 

Box 3: Selected Regulations from the Instruksi Presiden Republic Indonesia No. 13 / 1980 [FN 111]

The ratio is 50-50 for sawah.

For other crops on sawah and for rice grown on dry land, the ratio is supposed to be 1 / 3 (landowner) and 2 / 3 (sharecropper).

The distribution ratio must be applied to the output after all the costs for seed, fertilizer, draught animals and labor have been subtracted. The input costs must be born 50-50.

If the sharecropper puts so much effort into his work that a considerably higher yield is achieved, it is usual in this region that it is divided up 1 / 5 (landowner) and 4 / 5 (sharecropper)

Thus in practice there are always divergences from the set distribution of harvest yields and input costs. In remote areas of Sumatra, for example, in the case of wet land rice farming along the northern coastal area, sometimes only 10 % of the harvest yield is passed on to the landowner. On the other hand, farmers in Toba area had to provide all the inputs although the harvest was then divided up 50-50.[FN 112] There are also reports of divergences from Java: "The share tenancy system in Indramayu and Cianjur / West Java is generally arranged on the 50-50 sharecropping basis. However, in Cianjur most of the costs of farm inputs are paid by the tenants (73 %), whereas in Indramayu in 97 % of the cases the costs of farm inputs are equally divided between the landowner and the tenant."[FN 113]

Avoiding "Absentee landlords"

The regulation[FN 114] that an owner may only own land in the subdistrict in which he has his residence, or in the subdistricts which borders this subdistrict is often neglected.[FN 115] It was originally intended that the problem of "absentee landlords" should be avoided. This regulation does not, however, apply to government officials and members of the armed forces while they are in service. But there is a restriction, that government officials and members of the armed forces as absentee landlords may not acquire more than 2 / 5 of the maximum amount of land allowed. This is evidently hard to control since "at present, the camat usually does not know about land which is owned in another kecamatan. This situation allows an individual to own land far beyond the maximum limit as long as it is located in various parts of the country."[FN 116]

Various village studies from Java have shown that economically better off urbanites in particular have bought land outside the kecamatan as an investment, for land speculation, or for weekend or retirement retreats, especially in recent years.[FN 117] The urban elite is in a better position because of a head start in information and knowledge about recognizing the future uses of the relevant parcels of land, and is also in the position of being able to have the complex process of registration more quickly carried out.

The regulations for absentee landlords can be got around in multiple ways:

  • An Indonesian can have a citizen card issued in several towns or districts and can then acquire land as a resident of the district.
  • For getting around the fixed upper limits, people take the opportunity of registering land under the names of various family members.
  • Further, it is possible to write the name in varying ways when registering land.
  • Empirical studies make it clear that both absentee landlords and exceeding certain upper limits are widespread problems, at least on Java:
  • In Rowosari / Kabupaten Kendal, 50 % of sawah is used by people from outside the village.
  • In Pendenarum / Kabupaten Demak, out of a total 160 ha in the village, more than 48 ha are given to the kepala desa as tanah bengkok.
  • In the village M / Kabupaten Subang, 27 ha of sawah from a total of around 59 are owned by two households.
  • "A distant landowner who has more than 10 ha of agricultural fields in Suka Galih (West Java) owns also some 5 ha of agricultural fields in Pancawati. Some farmers who have sold parts of their land to people from Jakarta bought cheaper agricultural land in other districts, others only still have the sites for their houses and become landless farmers."[FN 118]

Many city dwellers own land in rural areas, although the exact number is unavailable: "Because of large scale cases of land occupation by distant owners not only occurring in Java but also in Kalimantan, Bali and Sulawesi, Central Government has already committed itself to strengthening law enforcement in land ownership (KOMPAS, 3. Feb. 1995). However, the success of this law enforcement depends on the strong will of local government to overcome the present issues (KOMPAS, 7. Feb. 1995)."[FN 119]

Pawning land

Although the BAL from 1960 forbade pawned tenancy (gadai) where land is used as a deposit or as a pledge, gadai is still used. This demonstrates an example from Cianjur in West Java: "In Cianjur, the rice field can be pawned at the average value of 7 million rupiah par ha, whereas the price of land is 42 to 49 million rupiah per ha."[FN 120]