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How local elites earn money from burning land in Indonesia

A carbon-rich peatland planted with oil palm burns in Indonesia's Sumatra in 2015. The giant island's vast peat zones have been widely drained so as be planted with oil palm and pulpwood trees, but the dried peat is especially prone to catching fire, especially when planters use slash-and-burn to clear it cheaply. The practice is illegal in Indonesia for all except the smallest farmers, though companies routinely employ it, often with the tacit consent of corrupt officials. Photo by Rhett A. Butler/Mongabay

  • Members of political parties and local figures are organizing farmers to burn land for sale to a variety of large and small buyers, a new study shows.
  • These elites pocket most of the profits from this destructive and illegal activity. Village officials who administer land documents and the workers who carry out the burning also receive a cut.
  • For the fires to stop, the study says, these actors must be disempowered through law and policy.

A “fire economy” has emerged in Indonesia in which the blazes tearing through the country’s land and forests, driven largely by the global demand for palm oil, are lining the pockets of local elites and their patronage networks, according to a new study.

Fire economy and actor network of forest and land fires in Indonesia,” published in the journal Forest Policy and Economics, details the ways in which a variety of people “benefit directly and indirectly from the business of fire, enjoying profits and economic rents at the expense of environmental quality.”

The study — carried out by scientists from the Center for International Forestry Research (CIFOR), the University of Riau and Bogor Agricultural University — focuses on four districts in Riau province, on Indonesia’s main western island of Sumatra.

The province reportedly experiences the most frequent fires in Indonesia, due largely to the massive conversion of forests and peatlands to oil palm estates, where slash-and-burn methods are employed to clear land for planting. The practice is illegal in almost all cases.

The fires do not only impact the local environment, with blazes in Indonesia regularly resulting in haze that affects the whole region, particularly Malaysia and Singapore, and that has been linked to a slew of premature deaths.

At the heart of the issue are the “enormous benefits” reaped by those involved in the fires, said one of the study’s authors, Herry Purnomo.

According to the report, land cleared by fire carries a higher price tag than that cleared through cut-and-slash techniques, as it is ready for immediate planting, saving the buyer from any land preparation.

The trade of burned land is known locally as terima abu, or receiving the ashes, which fertilize the soil. 

The trading value of such land is $856 per hectare, compared to $665 per hectare for cut-and-slashed land, the report notes. Land already burned and planted with oil palm is even more lucrative, with a reported value of $3,800 per hectare.

“Buyers came from various levels: colleagues and family members, resident immigrants, company staff, village officials, business people and residents from nearby district towns,” the study says. “Networks also involved buyers from other islands, for example, medium-scale investors from Jakarta, Bogor or Surabaya.”

Illegal forest clearance for oil palm in Indonesia’s Riau province. Photo by Rhett A Butler

Based on data collected from 10 research sites and interviews with 131 respondents, including farmers, local officials, and plantation company employees, the study found that a number of actors benefited from the fires, but none more so than local elites, such as members of political parties and public figures.

Most of the locations studied had previously been linked to illegal logging. As a result, loggers had identified so-called “open access areas” that were not subject to land claims or were former concessions that had been abandoned.

Subsequent successful land claims in these areas were followed by fires, caused by slash-and-burn practices, and the establishment of oil palm and pulpwood plantations.

District-level elites, referred to as “farmer group organizers,” play a key role in managing such land transactions, and organizing farmers and other community members who engage in burning, according to the report.

“They have their own capital and [are] supported by connected investors at a local, national or even regional level to organize people to illegally claim, burn and grow oil palm, for instance,” said Purnomo.

The study found that these farmer group organizers received the majority of revenue from burned land.

Individuals organized to slash and burn the land and village elites who administer land documents were among those also found to receive a cut of the revenue.

An oil palm plantation in Riau. Photo by Rhett A. Butler

According to the study, efforts to stop fires are hindered by “complex social networks” formed by those profiting from the destruction, which can influence national and regional decisionmaking processes.

“The networks provide power, support, protection and access to various resources,” the study notes.

The large profits and increasing demand for palm oil — an ingredient estimated to be found in some 50 percent of packaged products sold in supermarkets worldwide — incentivize the use of fire, while the patronage networks protect those involved.  

For the fires to stop, the study says, farmer group organizers need to be disempowered through law and policy.

Methods of achieving this disempowerment include stronger law enforcement on illegal land claims and transactions, cutting the flow of money coming from investors, and allocating land to small-scale farmers so they are not as dependent on the local elites, Purnomo said.

Ultimately, “to reduce fires we have to provide economic incentive and disincentive” for those involved to stop, he told Mongabay.

According to the report, government efforts to tackle the fires have to date largely failed to address the underlying causes of the issue, with actions focusing on things like canal blocking and an early warning system rather than measures such as providing financial incentives for land preparation without burning.

An oil palm plantation burns in Riau. Photo by Rhett A. Butler

The UN’s REDD+ program, which focuses on reducing emissions from deforestation and forest degradation, has included efforts to incentivize communities to protect land from fires.

Among its other activities in Riau, REDD+ has “supported livelihood programs, community fire brigades, social forestry, as well as strengthening…law enforcement and training citizen journalists to cover forest issues,” Christophe Bahuet, Indonesia country director of the UN Development Programme (UNDP), told Mongabay.

However, Bahuet acknowledged that “challenges remain in ensuring corporate compliance and law enforcement,” with efforts being made by the body to promote justice sector reforms.

The study claims that as long as fires create more economic value than initiatives like REDD+, “actors will not feel incentivized to overcome or tackle fires.”

But, Purnomo said, policymakers in Indonesia are moving towards addressing such issues with the “Grand Design for Fire Prevention 2017-2019” agenda currently being coordinated by various ministries and agencies.

The new agenda includes strategies on providing economic incentives and disincentives for those currently profiting from the fires and on strengthening law enforcement, he explained.

Key to reducing the fires, he said, is an awareness at policy level that fires are ignited predominantly not because of climatic conditions but because of people seeking economic benefits.

“Transparency, civil society engagement, anti-corruption measures and an efficient government bureaucracy will reduce the effectiveness of patronage networks” established by those behind the fires, the study says.

Amid warnings of more fires in Riau, with an increasing number of hotspots detected across the province earlier this month, the report notes that without the effective implementation of such policies, the issue will only persist.