“Sometimes,” Baso said quietly, reminiscing about his untended oil palm plot now overtaken by weeds, “this grant feels no different than being forced into debt, especially if it’s your first time planting.” For four years, he has helped manage a seventy-two-hectare replanting scheme shared among members of his smallholder group. The grant, promised as renewal, arrived only after years of waiting and endlessly shifting requirements.
“Without [state] support, who would even start planting?” he said, half in jest. The group’s first harvest after a full 25-30 years planting cycle brought in barely Rp. 30 million (around US$1,800), split fourteen ways. To make up for shortfalls, they mixed certified seeds with cheaper, unlicensed ones or collected loose fruits with lower yields. “Ideally, we borrow from banks for good seeds,” Baso explained. “Credit unions are fine, but better for school fees or fixing motorbikes. That’s the only way to get good seeds and good results.”
Like many oil palm smallholders across Indonesia’s plantation zones, Baso is part of a group now enrolled in a state-backed program to green the entire supply chain – an effort that ties sustainability and climate governance to finance. Yet instead of renewal, what smallholders encounter is uncertainty. Many are caught in overlapping speculative regimes. While all navigate the demands of replanting finance, some experiment with emerging carbon markets or sell land to bauxite companies while working double shifts in nearby mines. Despite their different forms, these projects share the same rhetoric of sustainability, inclusion, and future prosperity. In practice, they bind rural communities to long timelines, unstable institutions, and the weight of mounting debt.
Beneath the language of green development that is so often invoked in global discourses of climate change and poverty alleviation lies a more profound transformation: the financialisation of rural life under climate capitalism. Here, land and labour are no longer valued for what they produce in the present, but for what they might secure in the future. Risk, meanwhile, flows relentlessly downward.
Green Development as Speculative Promise
Indonesia’s oil palm replanting program is one of the government’s flagship climate policies. Despite trillions of rupiah collected through a palm oil levy managed by the Plantation Funds Agency, only a small fraction reaches smallholders. Instead, the grant transforms how smallholders work. Planting is transformed into paperwork, regulatory compliance, and debt management.
For smallholders, the offer seems straightforward. Those seeking to replant their plasma plots—land tied to companies through coercive contract farming arrangements and opaque repayment systems—must maintain membership in their cooperatives, while independent plots require the creation of new or joint groups. Smallholders who own both must navigate both processes. With these groups administering the grant’s disbursement, aging trees are to be replaced with new, high-yielding varieties that promise higher productivity and reduce the pressure to clear new land. The state’s promise is simple yet powerful: their plots will double, even quadruple, in productivity. Yet the replanting’s insistence that higher yields will curb deforestation sidesteps the fact that earlier rounds of expansion, driven by similar promises, helped produce the degraded, flood-prone landscapes that smallholders now inhabit.
In practice, however, participation often deepens the very insecurities it claims to resolve. The replanting grant, set at Rp. 60 million per hectare per smallholder (around US$3,700) and delivered in the form of inputs (certified seedlings, fertilisers, herbicides), hired labour, and heavy machinery covers only part of the cost.[1] More critically, many smallholders are unable to bear the cost of replanting. Existing debts with banks, microfinance, and kin members prohibit them from pausing production despite declining yields. Replanting, which requires months without harvest income, becomes financially impossible for those already indebted.
To bridge the financing gap, the state has enlisted banks and plantation corporations as key sources of capital. State-owned banks are offered subsidised microcredit schemes to incentivise lending to smallholders, while new seedlings are reframed as leverage for banks to extend concessional credit, promising a steady repayment flow over 25 to 30 years to come. Corporations are being drawn back through new “partnership” contracts with former plasma smallholders. Framed as “multi-stakeholder collaborations,” these new partnerships effectively allow plasma land, once “returned” to smallholders after years of company control, to be re-bound under corporate management. The old system of indebted dependence, with roots dating back to the mid-1990s, finds a second life under the language of sustainability. In effect, the state is making smallholder finance more attractive to private investors by offering them new channels of access and control. While more financial sources are yet to be “unlocked,” the state encourages smallholders to utilise their own funds and cover the rest through more borrowing.
Eligibility remains selective. Smallholders must hold formal land titles, maintain participation in groups, and have their plots digitally mapped by GPS. While the government has made adjustments to these requirements over time to boost uptake, the structure remains largely unchanged, excluding many from the outset and pushing others to withdraw mid-process. Even for those who qualify, the process is slow and uncertain. Funds can take years to arrive. While waiting, smallholders are not allowed to cycle their plot for other crops or subsistence purposes, forfeiting crucial secondary sources of income. For Baso, this meant months of dwindling harvests sold at depressed prices (just above Rp. 2000/Kilogram on average or US$0.12 throughout 2023), and loans he couldn’t repay. At the same time, districts dominated by oil palm are now experiencing increasingly unpredictable and destructive flooding. This is the direct outcome of long-term ecological disruption that further exposes the gap between the state’s sustainability rhetoric and the on-the-ground vulnerabilities smallholders endure.
This is what makes the so-called green program speculative: it turns the future into a financial instrument, asking smallholders to shoulder the risk of large-scale transformation that may or may not arrive in a predictable timeline. Renewal is financed not by grants but by debt, old and new, layered upon each other in ways that turn sustainability into a revolving obligation.
The Dull Labour of Waiting
The effects of this state speculation are felt most acutely in the temporalities of labour. Waiting structures the rhythm of everyday life.
For people like Mat, another smallholder in the area, inclusion in the replanting program meant much more than planting. It meant staying within a debt-burdened cooperative to replant his plasma plot while simultaneously forming a new group to manage their independent plot. It also meant nightly meetings, field surveys, and filling out grant forms no one could fully explain after hours of plantation work. The group was envisioned as a space for collective support and local production control. In practice, it became a site of fatigue and endless administrative labour that slowly eroded fragile trust among members.
Evenings on Mat’s porch turned into informal offices. Laptops, printers, and stacks of documents spread across wooden benches. Some smallholders came to pay dues or submit data; others came just to vent. Mat tried to hold the group together through long speeches on discipline, fairness, and thrift, drawing on his long experience with NGO sustainability trainings. His wife had to bear the cost of such ambition. Stirred from sleep again and again to make jugs of sweet coffee and prepare snacks, she rises the next morning to work through the fatigue and dull throb of a headache. The atmosphere was tense and full of suspicion. Smallholders accused the leadership of mismanagement or favoritism; the leadership, in turn, blamed members for delaying paperwork or missing requirements. Everyone was waiting—for seeds, for signatures, for funds that arrived late or in incomplete amounts.
When seedlings were finally delivered, confusion often followed. The state allocated resources based on land size, prompting smallholders with smaller plots to accuse the group of shortchanging them, while those with larger ones refused to plant the surplus. District officials soon intervened, demanding letters of compliance and threatening expulsion from future state grants. They could not afford to report back to the Ministry of Agriculture or the Plantation Funds Management Agency that replanting had slowed, or that seeds were not planted on registered land. Each round of intervention brought new evening meetings and jugs of sweet coffee on Mat’s porch. What was meant to embody solidarity began to feel like surveillance and punishment.
Behind every signed replanting contract lies months, sometimes years, of unpaid bureaucratic labour. Attending meetings, chasing officials, remaining visible and legible in the eyes of the state all fall on smallholders already stretched thin. And yet, official metrics of success reduce these struggles to the numbers of hectares replanted and contracts signed. The exhaustion, improvisation, and quiet endurance that keep the program running remain invisible.
The labour of waiting remakes the plantation’s moral and temporal structure. Labour no longer ends at harvest but extends into bureaucratic management and digital traceability. Where productivity was once defined by worth, now maintaining compliance and endurance replaces it.
Enter “Green” Bauxite
When replanting feels too slow or uncertain, some smallholders turn to another option: bauxite mining. In districts like Mel, about forty-five miles south of Baso and Mat’s village, mining companies have reopened vast concessions (over 13,000 hectares in some cases), driven in part by aluminum supply chain demands of the global green economy. They come offering what the replanting program cannot: immediacy. Quick cash. Work today, not promises tomorrow. For smallholders weary of waiting, weighed down by debt and bureaucratic fatigue, mining looks less like exploitation and more like relief.
The land deals usually start small. Company representatives arrive in front of people’s doors, offering Rp. 75,000 (about US$4.60) per soil test pit, with one pit dug per hectare. If the land is deemed viable, companies offer to lease it at Rp. 80 million (US$4,900) per hectare, or a full sale for Rp. 125 million (US$7,600), according to smallholder testimonies in 2023 and 2024. These figures are far higher than what old, unproductive oil palm plots might fetch, especially those located farther upriver. Within weeks, test pits dot the hillsides. Bulldozers and excavators follow suit. Permits for these concessions are issued through the Ministry of Energy and Mineral Resources, providing formal cover for operations that overlap with existing, ambiguously titled oil palm concessions. Some large landowners are recruited as brokers, persuading neighbors and community leaders to lease or sell by invoking a “ten-year profit window,” a tactic that creates both urgency and the rush for a limited opportunity.
The mine operates around the clock. All their services, from excavation to transport to refining, are subcontracted to a dense network of contractors. Younger men compete for jobs driving ten-wheeler trucks, transporting thirty tonnes of soil daily to the company’s downstream processing laboratory for testing. Older smallholders also wanted to join, but the backbreaking work of pit digging and breaking laterite after long hours in the plantation is too much to bear.
The cost, however, is immediate. Topsoil is stripped, rivers turn milky brown from runoff, and floods that once came seasonally now arrive without warning. While companies promise to restore soil and replant oil palm after mining ends, few villagers believe it. Still, with debts rising, replanting funds stalled, and harvest prices consistently low, many see no alternative.
Similar transitions are unfolding across oil palm-saturated districts, forming a new pattern of land conversion for mineral mining under the green economy. What matters is not that mining replaces plantation work, but that it extends its speculative logic. Like oil palm, bauxite extraction transforms land into a financial instrument valued for what it can be exchanged for instead of its yields. The difference lies in tempo. Replanting demands patience, paperwork, and faith in deferred promises; mining rewards liquidation, immediacy, and irreversible loss. One trades in future hope, the other in the present’s exhaustion. Both, however, deepen dependency on volatile markets and distant institutions that turn local livelihoods into collateral. In this way, mining is not an escape from the plantation’s decline, but its mutation.
Carbon Credits and Unseen Futures
In recent years, carbon trading has been promoted as the next frontier of sustainability for smallholders caught in a faltering plantation economy. The premise sounds simple: protect forest patches, plant new trees, and earn carbon credits that companies or governments can buy to offset their emissions. Large-scale plantations are framed as carbon sinks and smallholders as potential climate stewards. Across Kalimantan, multinational NGOs and government agencies host workshops and pilot projects, introducing PowerPoint slides filled with graphs, maps, and satellite imagery of lands categorised as “high carbon value” and “high carbon stock.” But the details rarely land.
Yon, a smallholder and longtime sustainability NGO volunteer, attended one such training. He learned that hardwood and Durian trees on his land could, in theory, generate income if properly documented, certified, and traded as carbon credits. Yet the questions that mattered most remained unanswered. Which trees count more? Who sets the price and how will the profit flow? How long would it take? The facilitators spoke of opportunity, not procedure. Of potential, not process.
What Yon found is echoed across the plantation district: carbon markets, like replanting, are built on the anticipation of future profit. Inclusion depends on certification, mapping, and proof of ownership, all of which demand time, money, and technical savviness often monopolised by development institutions. Yet for most smallholders, these markets exist only as talk and training, not as tangible income. Projects rarely materialise beyond pilot phases, and payments, if any, remain speculative. The promise of future compensation sustains a slow, uneven enrolment process in which value is calculated not on what trees do but on what they are expected to absorb. More fundamentally, carbon is not really about trees at all. Carbon accounting frameworks posted on the walls of local NGOs’ training rooms translate living forests into mapped categories that assign value to land rather than to the labour or ecologies that sustain it. Here, forest stewardship becomes legible only through satellite imagery, digital zoning, and an audit process that privileges titled, contiguous plots over mixed or fragmented holdings.
Thus, carbon offers another bureaucratic horizon, another distant solution to present-day uncertainty. For now, it provides short-term employment for smallholders contracted by NGOs to collect data, map plots, and carry out administrative labour. Yet the actual profit from carbon trading remains a promise, deferred to a future that may never arrive. Like replanting, it requires smallholders to work not for immediate return, but for the possibility that one day, their compliance will pay off.
A System Built on Devolving Risk
What links today’s green development schemes is not just their language of sustainability, but a shared architecture of converting declining corporate concessions into tradable assets. Each is framed as support: a promise to boost local productivity, align with climate goals, and ensure smallholder inclusion. But in practice, they displace risk onto smallholders while allowing corporations, financial institutions, and the state to reorganise responsibility, delay, and debt.
Meanwhile, the institutions of development are being quietly reconfigured. Ministries and independent bodies once tasked with overseeing rural development trajectories now operate through consortia of banks, holding companies, and asset managers. Capital is not disbursed on the basis of need or agronomic potential but on metrics of “creditworthiness,” “traceability,” and “compliance.” These trends have deepened since the 2008/09 financial crisis, when development finance began to adopt the logics of risk management and asset valuation. Under the banner of climate governance, this transformation has only accelerated, embedding “financial rationalities” even more firmly within the state’s development apparatus.
Plantation corporations, too, are readjusting themselves. They are no longer approached as producers in the conventional sense but as assets in a portfolio. As mills break down, yields decline, and debts accumulate, corporations respond not through repair or reinvestment but through revaluation. Private companies occupying Baso, Yon, and Mat’s lands now operate far below capacity after years of neglect, while another, once known for overproduction, has been reclassified as a “non-core” subsidiary slated for sale. Parent firms describe these declines as restructuring: mills may close, but their concessions are entered into balance sheets as appreciating assets.
This logic extends across the sector. State-owned plantations have been folded into new holding structures to unlock refinancing and syndicated loans despite chronic losses. In each case, plantations are repackaged as investment instruments whose value lies not in what they produce, but in what they can collateralise. The plantation, once grounded in the rhythms of labour and yield, now persists as a speculative architecture where land and debt themselves are the primary sources of accumulation.
For smallholders, these corporate maneuvers unfold at a distance but with immediate consequences. When mills slow or suspend purchases, harvests rot and local credit dries up. Yet in corporate reports, what smallholders experience as uncertainty and loss are recast as “portfolio optimisation” or “debt restructuring.” A group leader recalled how, under the previous company management, village heads were regularly consulted about harvest quality and road repairs; after the company was restructured and a new management took over, “nothing—the plasma manager never visits.”
At another site, a company’s appointment of an Indigenous Batak manager triggered protests among Indigenous Dayak smallholders who read it as another round of external control and racialised exclusion justified in the language of efficient management. Such shifts are lived as a withdrawal of recognition and reciprocity. The uneven social relations that once sustained plantation work are quietly dismantled, leaving smallholders to absorb the volatility alone.
Living Through the Crisis of Promise
Green development in Indonesia’s plantation zones is no longer about redistributing resources (if it ever was). It has become a way to manage risk through finance. Smallholders are expected to absorb the risks of long-term loans, institutional delay, and shifting state priorities, all while remaining “compliant,” “bankable,” and accountable to programs shaping their future without their participation. Increasingly described as “farms without farmers,” these landscapes reflect a broader global trend: the financial restructuring of farmland, where land is treated not as a source of livelihood or autonomy, but as a speculative asset to be leveraged and traded.
And yet, smallholders do not simply give up. They respond with quiet adaptations, albeit unevenly. Women organise informal groups to share labour and lead in establishing vegetable gardens, which are harvested collectively and sold below market prices. Others return to older systems of kin-based mutual aid, pooling collective funds to be distributed to those who most need it each month. A few, primarily men, try to master digital bookkeeping or alternative farming methods, hoping to manage paperwork better and keep their groups afloat.
Some withdraw. They slow their planting, take no new loans, rely on remittances, or turn to their vegetable gardens. These are not acts of outright protest against uncertainty, but of exhaustion and survival. In these moments, smallholders are not refusing development. They are enduring it.
What becomes increasingly clear is that Indonesia’s green plantation future depends on these invisible labours of endurance. The sustainability targets, certification audits, and credit flows that animate global finance rest on the unpaid and uneven work that keeps the plantation economy from collapsing. Recognising this is not moral accounting. It is to see green development for what it is: as a regime that extracts not only value from future plots, but perseverance from those who are still holding it together.