Agricultural and Nonagricultural Bases of Inequality and Differentiation

G. Agricultural and Nonagricultural Bases of Inequality and Differentiation

The preceding sections have documented some of the va- riations between villages in the precise form and pace of agra- rian changes occurring during a decade of successful agricul- tural intensification. Despite these variations some broad gene- ralizations are possible. We have seen that increasing land- lessness now leaves about half of all households without sawah ownership rights and about 40 without cultivation rights. The decline in share tenancies has contributed to the relative dec- line of smaller farm households (although their absolute num- bers may not have decreased), allowing average farm size to increase despite the pressure of population growth; agriculture remains dominated by small groups of households owning more than 1.0 ha of sawah who (although comprising less than 9 of all households in the nine sample neighborhoods) own more than half the available sawah.

Some summary statistics on the levels and sources of in- come of the different landownership categories-departing from our usual practice and aggregating the nine sample neighbor- hoods are shown in Table 7.11. Space does not allow detailed discussion of the distribution of nonpaddy agricultural activi- ties and incomes (other seasonal crops, tree crops, livestock, poultry, and aquaculture) which together make up about one- third of the ‘own farm’ incomes shown in the table. (These are detailed for each sample neighborhood by landownership class in Abunawan Mintoro 1984: appendix 8.) Their overall distri- bution reflects that of paddy incomes, resulting in the highly unequal pattern of agricultural income distribution shown in

Agrarian and Nonagrarian Bases ... Table 7.11: 8.5 of households between them command 50 of

all farm incomes. In the sample villages a ‘poverty line’ income (if defined as many authors have done as per-capita incomes below 310 kg milled-rice equivalent per year) in 1981 amounted to approximately Rp. 61,000 per capita or Rp. 180,000 per household at prevailing local rice prices. As may be seen in Table 7.11, the larger landowning households with more than

1.0 ha of sawah are the only group whose agricultural incomes far surpass this level, providing a substantial surplus poten- tially available for further expansion in agriculture or other activities. On the other hand, while agriculture now provides average incomes (in own-farm and wage income) only slightly below ‘poverty line’ levels in the sample neighborhoods as a whole, the 65 of households without land or with holdings less than 0.25 ha command agricultural incomes so far below this level that involvement in nonfarm activities is necessary as a matter of survival.

With the decline of share tenancy and the growing ten- dency for land lease transactions to occur between landown- ing households, we can discern more clearly the emergence of an elite group of prosperous larger farmers or more accurately farm managers, sometimes supplementing their own holdings with land lease and mortgage, who control a large part of land and farm incomes and also provide the bulk of wage employ- ment in what is primarily a wage-labor-based production sys- tem. (As we have seen in Table 7.8, more than 80 of all prehar- vest labor inputs in paddy production are made by hired la- bor in most villages, and the proportion is of course still higher for the larger farms.) Although there is some ‘horizontal’ wage

Ranah Studi Agraria

Table 7.11 Summary : Distribution of Farm and Nonfarm Incomes Among Households by Sawah Ownership Class: 1981

Own farm income

Agricultural

Non farm income

Total income

wage income

% of all

Average

Average % of total Average % of total Average % of total

households

of total

Sawah ownership class

(8) (9) 1.0 ha and above

23 2143 31 0.5-0.99 ha

12 711 13 0.25-0.49 ha

17 598 16 Less than 0.25 ha

9 333 9 Non owners Engaging in agricultural

31 372 26 wage labor Not engaging in

9 405 5 agricultural wage labor All household

589 100 Source : Resurveys, 1981 (Abunawan Mintoro 1984: app 8),

Note : Aggregate for the nine sample neighborhoods,=1113 households: incomes in Rp thousands per year

Agrarian and Nonagrarian Bases ... circulation between smaller farm house-holds, the bulk of wage

transactions are ‘vertical’ with 68 of all agricultural wages earned by members of landless households (cf. Table 7.11). The changes we have described, which represent the accelera- tion and crystallization of trends already long in motion rather than any abrupt break with past patterns of agrarian relations, might then allow us to speak with greater confidence of the emergence of opposing ‘commercial farmer/employer’ and ‘landless agricultural laborer’ classes (with the exception of ‘backward,’ rain-fed Sentul where the transition from exchange to wage labor is only just beginning), at either end of a still large but relatively declining mass of petty commodity pro- ducing small-farm households still retaining some access to land and (particularly at the lower end of the scale) supplement- ing inadequate own-farm incomes with wage labor (cf. Table 7.11).

Such a view may be helpful in characterizing recent changes in production relations in agriculture, but it is ina- dequate and perhaps highly misleading as a characterization of rural classes or class relations or the ‘agrarian structure’ as

a whole. As we can see from the right-hand side of Table 7.11, nonfarm incomes provided almost two-thirds of all incomes in our nine sample neighborhoods taken together - in what was a relatively successful agricultural year for all villages except Wanarata-and more than half the incomes of each lan- downership group with the exception of those owning more than 1.0 ha of sawah (although the latter still command the highest absolute levels of nonfarm income). As we have seen already in Table 7.1, only Mariuk can still be considered a

Ranah Studi Agraria relatively ‘purely’ agricultural village, with two-thirds of all

income deriving from agriculture. To examine first the income sources of ‘landless agricul- tural laborer’ households we have eliminated a small number of landless households (15 of landless households, 7.5 of all households) whose members are not engaged in any kind of agricultural activity. These include, for example, ‘young’ house- holds who have not yet inherited land from relatively wealthy parents and in-migrant households with relatively good in- comes from trade or industrial or salaried employment, whose incomes are on the whole higher than those of small-farm and landless agricultural worker households (cf. Table 7.11). Thus, Table 7.11 covers only those landless households whose mem- bers obtained some agricultural wage income during the year. For these households, agricultural wages provide only a small proportion of total incomes in all cases, and nonfarm sources easily outweigh agricultural incomes with the single excep- tion of Mariuk. Petty trade and nonagricultural (casual) wage labor (columns 6 and 8 of Table 7.12) provide significant sources of income in all villages and in some cases secure sala- ried jobs (Kebanggan, Sukosari, Janti) such as school atten- dants or in local factories. Household industries are surpris- ingly unimportant, and the low figures provide some support for the impression that many traditional crafts are declining under the impact of competition with urban-produced substi- tutes. ‘Service’ sector incomes are prominent only in Wanarata, and in this case mainly derived from becak (pedicab) driving. In only a few cases (brick and rooftile industries in Sentul, kerupuk [shrimp-cracker] production in Janti, metal working

Agrarian and Nonagrarian Bases ... industries in Geneng) does wage employment in the nonfarm

sector involve relations with local employers who are also major employers of agricultural labor. Furthermore, as more detailed analyses have shown (Soentoro et al. i98i:ch. 5; Soen- toro 1984), large and probably increasing proportions of non- farm incomes are earned outside the village through seasonal or continuous (‘circulating’ and in some cases daily ‘commut- ing’) out-migration of household members to urban centers- in petty trade, casual labor in the (then) booming construc- tion sector, as becak drivers, domestic servants, etc.

Given the involvement of male and female members of ‘landless agricultural labor’ households in such a wide variety of activities and labor ‘statuses’ besides farm labor, in petty commodity production, small trade, service sector and wage work, both inside and outside the village, the landless cannot easily be categorized as a landless worker class; we could more usefully underline their semiproletarian status, with all the complex and ambiguous implications for class relations, class consciousness, and class action which that status involves. The same can also be said of the smaller farm households who supplement inadequate own-farm incomes both with agricul- tural wages and with a similar variety of nonfarm activities both inside and outside the village. We suppose this mobility and diversification of labor will further develop among such households as landlessness and land concentration increase, as the seasonality of agricultural wage-labor demand sharp- ens, and as agricultural mechanization proceeds, even if real agricultural wages remain at their new higher level for those with access to them. It is interesting to note that only among

Ranah Studi Agraria

Table 7.12 Income Sources of ‘Landless Agricultural Labor’ Households (Percentage of aTotal Annual Household Income): 1981

Agriculture

Non farm sources

Subtotal Average

non household % of all

Livestock,

Subtotal

farm income (Rp households crops

Household Wage

Salaries Services Other income 1000) Village

(12) (13) West Java Sentul

6 0 b 10 3 6 7 (32) 273 Jatisari

1 13 (60) 234 Central Java Rowosari

14 12 (59) 316 East Java Sukosari

32 1 9 35 5 7 (89) 771 Source : Resurveys, 1981 (Abunawan Mintoro 1984: app 8),

Note : totals may not add because of rounding. a 24% fishing

b 0 = less than 0.5%

Agrarian and Nonagrarian Bases ... the landless and very small landowning groups (with less than

0.15 ha of sawah) do we find a generally negative relationship between agricultural and nonfarm incomes at the household level (Abunawan Mintoro 1984:168-170), indicating that for these groups it is the inadequacy of agricultural-sector in- comes which propels their members into nonfarm activities as a survival strategy.

For the middle and larger landowning groups, on the other hand, agricultural and nonfarm incomes are positively asso- ciated (ibid.)—suggesting that in this case we are dealing with

a more dynamic strategy of accumulation, in which surpluses derived from one activity are used to gain access to (and higher incomes in) the other. In Table 7.13 we provide some details for each village on the agricultural and nonfarm income sources of the small numbers of households owning more than

1.0 ha of sawah, who (as already seen in Table 7.11) have been the major beneficiaries of state-subsidized agricultural pro- ductivity growth by virtue of their control of more than half the land. Any reader who has tried to gather information on the incomes of rural elites through surveys will understand that many income sources are likely to be underestimated, and the small sample sizes (between 6 and 10 in each sample neighborhood) may introduce further distortion; neverthe- less this table provides a rough idea of the relative importance of different income sources for members of these prosperous ‘commercial farmer’ households. Land rent is of importance in only a few villages (Rowosari, Mariuk, and Wanarata). In Geneng and Janti, reorganization of sugarcane cultivation, while intended to replace land rental (to the sugar factories)

Ranah Studi Agraria with ‘smallholder cultivation’ (by the landowners), has in prac-

tice resulted in a new form of rent; land assigned to sugarcane is made over to landowner groups whose leaders organize its cultivation using wage labor, and the net income from sales is divided among the landowners who may have had no direct role in its cultivation. Only in three villages are large amounts of income derived from rural small industries employing wage labor: brick and rooftile enterprises in Sentul, kerupuk manu- facture in Janti, and commercial rice mills in Rowosari, with a smaller contribution from blacksmithing industries in Geneng which produce small agricultural tools, knives, and vehicle springs. Trade figures prominently only in Jatisari (mainly vegetables and paddy) and Rowosari (paddy and fish); paddy traders in these villages in 1981 specialized in low-price pur- chasing from farmers unable to reach the minimum moisture content stipulated for guaranteed-price purchase by the co- operatives, to be resold to the cooperatives without further processing through close relations with cooperative officials willing to ignore the regulations.

In Kebanggan, Wanarata, and Janti many members of the large landowning households have secure salaried positions as school teachers. In Wanarata, a large proportion of their nonfarm incomes derive from the hire of vehicles. We should also mention—although the limitations of questionnaire in- terviews mean that it does not figure in our quantitative data on incomes—that many large landowners also derive income from usury, a major source of loans for the large proportions of households in all villages (especially in the small-farm and landless groups) who reported informal-sector debts; about

Table 7.13 Income Sources of Households Owning More Than 1.0 Hectare of Sawah, (Percentage of Total Annual Household Income): 1981

Agriculture

Non farm sources

Average Subtotal

Village Own Livestock, Land Sugar

household crops

Salaries Wage Services Other non income fisheries

labor agricultural Trade

Small

farm income (Rp100.000 West Java Sentul

0 a 3 2 (49) 611 Mariuk

5 18 (49) 1544 Central Java

Agrarian and Nonagrarian Bases ...

11 5 40 c 7 (49) 983 East Java Sukosari

3 0 a (49) 4134 Geneng

7 (49) 2438 Source : Resurveys, 1981

17 4 4 34 b 2 (60)

Note : totals may not add because of rounding. 337 a 0 = less than 0.5%

b Profit on sugarcame (TRI) land (see text) c Vehicle hire 3.5%

Ranah Studi Agraria three-quarters of informal-sector debts were used for income

generation (to finance trade or agricultural or nonfarm pro- duction) rather than consumption (cf. Colter 1984). In sum- mary, the commercial surpluses deriving from large landhold- ings and intensified production seem to be invested in a vari- ety of nonfarm activities, few of which are new (vehicles and rice mills are the main exceptions), although many of the ‘tra- ditional’ ones are modernizing and expanding (for example, through investment in machine-pressing of rooftiles in Sentul).

A similar impression emerges from examining the new assets recently acquired by large landowners; in 1981 only in three villages was any new land acquired by this group, the main other form of asset acquisition being vehicles. The large land- owners, besides their substantial farm surpluses, also have the greatest access to subsidized bank credits; comprising only

3 of all households and 10 of all formal-sector borrowers, they receive more than three-quarters of all subsidized credits (cf. Colter 1984). We may suppose, therefore, that they will con- tinue to be the dominant rural investors and follow a diversi- fied pattern of investment in small industry, trade, agropro- cessing, land acquisition, and usury, balancing these against the demands of children’s education and conspicuous consump- tion (televisions and videos, house improvement, etc.), which are the most visible sign of growing differences in wealth and life-style between rich and poor-even if the incidence of abso- lute poverty is itself decreasing-in a time of relatively rapid agricultural and nonagricultural income growth.

These patterns help us to understand why land concen- tration is not proceeding faster, even though the surpluses

Agrarian and Nonagrarian Bases ... available to finance further concentration of landed property

are increasing. On the one hand wealthy households have many other avenues for profitable investment’ and many demands for nonproductive expenditure, which compete with the al- ternative of land acquisition. On the other hand, the many smaller owners whose agricultural incomes do not provide reproduction at minimal levels (cf. Table 7.11) are able by participating in a variety of low-return nonfarm activities both inside and outside the village to achieve subsistence incomes without the distress sale of their sublivelihood’ plots. These patterns, which are certainly not unique to Java, call for inter- pretations of agrarian differentiation processes under condi- tions of commoditization and productivity growth which place the phenomenon of ‘part-time’ farming and farm labor at all levels of the agrarian structure in more central focus.