Rubber smallholders' flexibility No windfall, no crisis

A few decades ago rubber was one of the first tree crops to be characterized by a spectacular breakthrough, the production of new, highly productive clonal material. With regard to rubber, the adoption of clonal planting materials led to a spectacular improvement in labour-productivity and revenues. It requires also different cropping patterns during immature period. An increase in return to labour costs is usually the first priority of smallholders. As this adoption of clones by smallholders only started in the 1970s in Indonesia, this is an extremely important strategy which must be stressed before we begin to analyze the impact of the krismon (a contraction of "Krisis Monetar" in Indonesian or "monetary crisis"). With regard to rubber, there is clearly a dualism of seedlings and clonal material. This dualism is more important than with other tree crops. Rubber seedlings are often grown under a complex agroforestry system and nicknamed locally ‘jungle rubber'. Clonal rubber is generally grown in monoculture sometimes with intercrops during the first three years."Even when computing the cost of the investment and the credit that has to be repaid, the net income per hectare and per labour day from a clonal plantation is at least 50% higher (sometimes 100%) than the income from a jungle rubber plantation" (Gouyon 1999, 31). What was the situation before krismon? Due to capital and information constraints, only 15% of the smallholders already had access to highly productive clonal material rubber in 1996. This percentage was achieved, first and foremost, through official projects. Then in the late 1990s, the "copying effect" started playing its role, however rather limited. More and more farmers were able to observe the advantages of clonal material. This led to a booming network of private nurseries that helped to accelerate the adoption of this material. This means that a relatively strong dynamism was observed before krismon. It also means that most clonal plantations are still young, which is important in terms of potential response to price changes (Chapter 1). However, when krismon arrived, around 85% of traditionnal rubber farmers still relied on ageing jungle rubber with limited productivity. How may krismon influence these ‘jungle rubber' and ‘clonal' farming systems? Is it going to accelerate or reduce the investment in rubber plantings? Is it going to help to accelerate the adoption of clones? In 1998, rubber farmers did not benefit from the spectacular windfall, which affected cocoa and coffee (Chapters 5-7). Can this be explained by the different performances of farming systems or by variations of the International market? Is there a direct relationship between the decline of global prices and the interference of the Asian crisis in Indonesian rubber supply and exports (Chapter 2)? Page 2 How did the monetary crisis affect the other dramatic changes faced by Indonesian rubber smallholders? In addition to the economic crisis, as in other regions of the country, the ecological crisis also struck Sumatra and Kalimantan in 1997-98. Huge fires destroyed millions of hectares of forests, fallows and crops, including rubber. Will both crisis reduce investment in clonal plantings? Eventually, regions such as West-Kalimantan were the theatre for grave social troubles related to conflicts between autochtons and some immigrants, especially spontaneous immigrants1. A lack of confidence in the country's regime was evident well before the crisis. Last but not least, oil palm development looms in traditional rubber regions. Might it hamper the development of clonal rubber technology in Indonesia? Does the crisis encourage the adoption of oil palm at the expense of rubber? Does the crisis deepen the social imbalance between smallholders who already have access to clones and those who do not? To try to answer these questions , the paper is structured in 4 sections: 1 A brief overview of the rubber sector : the situation before krismon 2 Krismon and its impact on rubber smallholdings 3 The rubber crisis on the international market 4 A conclusion including the future for the rubber smallholder sector