MIFEE has never been a single clear plan for development. There are different versions of what that development may entail, and these differences reflect the vested interests and manipulations of the corporate and government actors involved. The process of decision-making is not transparent and there are no authoritative sources of data by which to accurately determine the project’s status. Understanding MIFEE means building up a complete picture from a patchwork of all the different available sources.

For example, MIFEE’s official propaganda tells of the planned large-scale cultivation of rice-fields, integrated with other basic foodstuffs, to provide for Indonesia’s food security needs into the future. Yet if we look for news of what is happening on the ground we hear of villages evicted and huge swathes of forest cleared by one of the main MIFEE companies as it exports wood chips to be made into paper. Given such divergence we can be forgiven for asking what this mega-project is really about. What form is it likely to have if it goes ahead? Is MIFEE in practice different from MIFEE in theory?

One way to comprehend what is going on is to cast an eye over the history of the last few years, and see how MIFEE has developed.(30) Two of the main protagonists for MIFEE have been Indonesia’s largest privately owned oil and gas firm, Medco, and Merauke’s former Bupati, Johannes Gluba Gebze. Medco had already got involved in Merauke, developing plans for a wood pulp plant. This has now been scaled down slightly to be a wood chip plant, which processes the wood produced by a subsidiary of Medco, PT Seleras Inti Semesta. Meanwhile, another Medco subsidiary started to experiment with growing food crops in the area, on 200 hectares of land near Serapu village which had been abandoned by a previous investor, Texmaco.(31) Amongst other crops, Medco was developing the SRI system for rice cultivation, a form of intensive organic growing which it had also introduced in other parts of Indonesia.(32)

Johannes Gluba Gebze has been actively promoting agricultural investment during his second term as Bupati, or head of the regency government. He was instrumental in pursuing the idea that Merauke could be a suitable location for large-scale industrial agriculture at the national level. There are rumours that he has personal political motivations behind this move: he is apparently hoping that a new province of South Papua will be created, allowing him to stand for election as Governor.(33)

The scheme was proposed to the central government who responded with the necessary land-use zoning modifications to reserve an area of 1.9 million hectares to be known as the Merauke Integrated Rice Estate (MIRE). The idea was taken up by the Indonesian President Susilo Bambang Yudhoyono in April 2006 when he travelled all the way to Merauke for a celebration of the rice harvest there, and mentioned for the first time the idea of a ‘rice estate’.(34) In August 2008, investors from the Saudi Bin Laden Group expressed interest in investing in the area to guarantee a continued availability of basic food supplies to the Gulf region, and indicated that they were prepared to invest $4 billion to develop 500,000 hectares of land in Merauke.(35)

The Saudi investment had fallen through by March 2009, with the global financial downturn given as a reason(36), but the seed was well and truly sown. MIRE was repackaged as MIFEE, and several Indonesian investors expressed interest. Most of these companies were the businesses of the Indonesian elite, who often have ties to the military or political parties.

A set of new national and local laws were created to facilitate agro-industrial investment in MIFEE. Government Regulation 26 of 2008, about land use planning, designated six key zones, which were to be growth areas for particular industries. Merauke Regency was singled out as a focus for farming and plantations. This was to be bolstered by Presidential Instruction 5 of 2008 requesting a speedy implementation of these key zones and instructing local Merauke and national land use bodies to facilitate agricultural investment in Merauke. This was to be followed in early 2010 by Government Regulation 18 of 2010 concerning food cultivation, which describes a food estate and the tax and customs benefits which investors could obtain.(37)

At the level of Merauke regency four policies have been developed to support MIFEE. One is the General Land Use plan for the district. Another was a local policy that deals exclusively with MIFEE (Perda Merauke 23 of 2010). Another two are connected with increasing MIFEE’s positive effects for local people. One is concerned with the management of Ulayat (indigenous land rights) and the other is focussed on social development.(38)

MIFEE’s proponents had hoped that it would be launched at the start of 2010 in the presence of President Susilo Bambang Yudhoyono, but that plan fell through. In the end the program was formally inaugurated in a ceremony on the 8th August 2010 at Medco’s pilot project in Serapu. However the people of the village had not even been informed that such an event was going to take place until it happened – an inauspicious start for how MIFEE companies would relate to local people as the project progressed. The suspicious death of critical local journalist Ardiansyah Matra’is a few days before cast another shadow over the event.

A ‘grand design’ for MIFEE was published, outlining how the project was envisioned to run. As its name suggests, the vision was of an integrated program involving animal husbandry and fisheries, as well as food crops such as rice, corn, soya and fruits. The intention was to split the land use 50% for food crops with 30% for sugar cane and 20% for oil palm. A total land area of 1.23 million hectares was envisioned for the scheme, distributed into clusters and developed in stages over 20 years. Projections of expected yields were even supplied: rice 1.95 million tons, maize 2.02 million ton, soya bean 167,000 ton, beef from 64,000 cows, sugar 2.5 million ton, and crude palm oil 937,000 ton per year.(39)

Many companies have expressed an interest in MIFEE, but have also been cautious both with their commitment and the amount of information that is publicly announced. In May 2010, before MIFEE was officially inaugurated but at least a year after the idea was first floated, Merauke Promotion and Investment Agency (Badan Promosi dan Investasi Daerah -BAPINDA) released a list of 36 investors which had already obtained an location permit, the first step needed in order to open a business there. As no subsequent complete list has been issued it is this list, with slight variations, is often used as an indication of what MIFEE will look like. The thirty-six planned plantations cover an area of just over two million hectares, significantly larger than the area allocated for MIFEE. Ten are for oil palm, covering around 20% of the area. Another seven are for sugar cane, covering 21% of the area. A huge 50% of the area would be covered by ten industrial wood plantations and food crops would be a relatively insignificant 8% of the area, with six planned investments.(40)

Table of potential investors in MIFEE. Data from Bapinda Merauke May 2010.

From these figures we can see permits given out by this local government agency give a vastly different picture of MIFEE from that described in the ‘Grand Design’. Instead of the promised structured and centrally-planned intensive production of food crops, what the companies that have got involved have been proposing is a typical mix of large monoculture plantations, such as is common elsewhere in Indonesia: oil palm, sugar and industrial tree plantations.

There are some reasons why this discrepancy may have developed. Several of the plantation projects pre-date MIFEE. They are based on permissions from 2007 and 2008, or previous interest in the Merauke Integrated Rice Estate. Yet there are others from 2010, such as PT Anugrah Rejeki Nusantara (a subsidiary of Singapore-based multinational Wilmar)’s plan for a 200,000 hectare sugar cane plantation. This land, located in Taboniji district substantially overlaps with MIFEE’s cluster number 8, which is designated to be developed in the medium term for rice and beef production.(41)

It must also be noted that the effect of the new laws which have been created around MIFEE, and the orientation of local and national government to promote investment, have acted as incentives for companies to invest, taking advantage of streamlined processes of getting permission and tax breaks. Whilst the status of MIFEE as an integrated process remains unclear, the doors to investment have well and truly been opened. If things progress as they seem to have started, then it is totally possible to imagine that Merauke, amidst all the promises of becoming the granary which will guarantee Indonesia’s basic food needs, will just end up as another sprawling maze of oil palm and industrial tree farms.

For that reason, for the purposes of this briefing, we treat MIFEE as any of the possible scenarios that may arise from the agricultural development of Merauke. There may yet be a few twists and turns before agricultural development succeeds but these need to be seen essentially as overcoming barriers to the enclosure of a vast new area in the service of Capital.(42) Merauke, together with other parts of Southern West Papua have been designated as having large potential for agricultural development, yet currently they yield very little for Indonesia’s economy. Therefore they hold a tantalising potential for economic growth. Although there are existing peasant farmers in Merauke and a state-owned company is developing plans for peasant-run businesses within MIFEE, it is clear that the main thrust of any business there will be corporate-led.

next: Reports from Villages