Why West Kalimantan rubber farmers remain shackled by poverty

By Edi Patebang

SANGGAU, West Kalimantan (JP): Cockcrows in the small hours wake up Linjang (50 years old) from his deep slumber. Without washing his face, and while waiting for his spouse to serve him a glass of hot coffee, he prepares his knife -- specially designed for sapping latex -- along with his other equipment.

Around 5 a.m., the poultry descend from tree-branches, crowing and cackling to welcome the dawn. After gulping down his coffee, Linjang then starts to plod along to his rubber plantation some two kilometers away from his home.

This is his regular activity for six days a week. After a week's work of sapping latex, he dries it in the sun. After weighing the rubber he then sells it to his tauke (normally a Chinese boss who buys local strategic commodities) at the village for Rp 2,000 per kilogram.

He makes a relatively good income. Every day he can collect some six kilograms of dried latex, equivalent to 36 kilograms per week, which means he pulls in Rp 216,000. Apart from this, he also collects some 20 kilograms of second-rate latex per day. This lower grade latex is known as jinton in the Dayak Kanayatn dialect. He sells the jinton at Rp 1200 per kilogram, giving him further additional income of Rp 24,000 a week.

After debts have been paid, the monthly net income amounts to zero. To feed seven mouths (five children, a wife and himself), to pay for his children's school fees and medication, Linyang needs to borrow or get his daily needs from his boss -- a common sight in remote areas.

And, unsurprisingly, two of his children have dropped out of school. One had to quit school when he was in the second class of senior high school and another had to give up studying in the fifth grade."I could not afford to keep them in school," he said.

Linyang is one of the 242,194 rubber farmers that make up approximately 50.32 percent of the total workforce in West Kalimantan. Linyang and his colleagues, hundreds of thousands of other farmers, cultivate natural rubber (in contrast to the high- yielding rubber hybrid grown and developed by companies) and have lived in poverty for ages.

They are constantly strapped by debt, and sometimes debts remain unpaid until their death. They have no independence and their welfare is never an issue.

Most farmers seem unable to free themselves from prolonged hardship and have sunk even deeper into poverty. Despite hard work, they are unable to catch up with the ever-increasing price of daily necessities.

First came rises caused by the currency crisis in 1997, then Jakarta scrapped subsidies, hurtling the price of all basic commodities upward. In contrast, they see neither the price of their produce nor standard of living raised.

At the lowest level, farmers can only sell their rubber at Rp 1,800 - Rp 2000 per kilogram. They have become dependent on and vulnerable to price fluctuations or manipulation of the price for, more often than not, prices can go up and down in a matter of weeks.

At the local markets in subdistrict towns, however, dried latex is selling at Rp 2,300-Rp 2700 per kilogram. By the time it reaches the crumb rubber factory, it can fetch Rp 3000 - Rp 3500 per kilogram -- much less than the price of daily necessities. Most of the difference is pocketed by rapacious traders and middlemen.

In comparison, a kilogram of rice of poorest quality is Rp 2,500, sugar costs Rp 4,500, cooking oil is Rp 5,000, and a liter of kerosene is Rp 1,500.

The natural rubber farmers in West Kalimantan are generally Dayak and Malay tribesmen who cannot do much but leave their fate to the mercy of the taukes.

The tauke, along with the owners of crumb rubber factories, draw up the rules of the game and dictate prices.

"Ahe ja ma'an," Bukit or Kanayatn Dayak people say, meaning "whatever the boss says".

"With the pretext that the barn is full, transport is expensive, prices are down and a string of other excuses, they can easily dictate to the farmers" said Sartono, a rubber farmer.

When asked whether rubber traders are toying with prices, Leo Abam, the head of West Kalimantan Rubber Association, snapped, "That's not true".

The price, according to him, depends on the market mechanism and quality. Leo admitted that there are many brokers who have direct access to factories and there is no standard price set by factories, owing to the nature of contracts made with overseas buyers.

He further said that every factory has an appraiser to check on rubber quality. The appraiser normally has 15 years of experience working in a rubber factory. However, his appraisal is not always objective nor accurate, compared with that of a lab test. Adding to the farmers' predicament is the imposition of Rp 60 VAT on their product, pushing the price down at the farmer's level" Leo explained.

That's a double whammy for the farming families. West Kalimantan Apkindo (Association of Indonesian Wood Panel Producers) is trying to have the tax removed.

Yopi, a member of staff at crumb rubber company PT Dieng commented, "the quality of rubber in West Kalimantan is poor and it is quality that really matters in determining the price, both in the local and international markets".

He then added "the long chain and procedures in the rubber business also affect prices and we never buy it direct from farmers".

Yopi revealed that the rubber price has plummeted to a 30 year all-time low. He further explained "The rubber business involves a high risk as factories draw up contracts with overseas buyers on a quarterly basis, thus making the price fluctuate."

Head of West Kalimantan Rubber Plantation Unit, Andi Patiroy said that West Kalimantan has a rubber plantation area of 462,156 hectares, with an annual production of 213.691 tons. In 1996 total rubber exports from West Kalimantan reached US$173 million, representing the second most important contributor of revenue to the area after timber at $506 million.

Annually, Leo Abam said, 6 factories in West Kalimantan churn out about 100,000 tons of rubber (only eight percent of the gross national product) and the prospect of rubber is promising, as the quantity of timber is dwindling.

Threatened

Since international demand for palm oil is steadily increasing, the West Kalimantan administration has adopted a policy to appropriate an area of 3,200 hectares for oil palm plantations. Palm oil has become a reliable commodity to boost regional revenues.

As a result, the rapid expansion of oil palm plantations has drastically set rubber farmers aside, leaving them with a shrinking area for their rubber plantations. The presence of the oil palms is slowly killing rubber farmers, as they are now unable to expand their areas.

Natural rubber prospers here. "To the locals, rubber plantation are just like a supermarket -- the vast area can be interspersed with other potential plants such as durian, coffee, or jack fruit, appropriate to the soil types. And in between they can plant mushrooms, ferns and bamboo shoots. This cannot be done in monoculture plantations like oil palm" said Oktavianus Kamusi, head of the Supporting Agency for the Empowerment of Farmers.

For the last three years, this institution has been giving assistance or helping farmers establish and manage rubber cooperatives.

By the year of 2020, it is estimated that there will be a shortage of rubber supplies of around 800,000 tons of half-ready, or about 1000,000 tons of raw rubber. Farmers may be able to see that rubber prices will soar. Indonesian rubber will account for 35 percent of the world's total production, and it is hoped that the hike will help farmers live a prosperous life.

Historically, rubber has played a key role in raising the living standard of the locals. Some have even managed to send their children to universities outside the island.