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The Perusahaan Inti Rakyat (PIR) scheme, a smallholder support scheme in collaboration with plantation companies, was developed in the late 1970s in Indonesia. The idea of the PIR scheme is to improve the socioeconomic condition of smallholders. One of the ways of doing so is by providing technical and economic support and capacity building to help them develop as modern self-owned farmers. The PIR scheme also aims to change the relationship between companies’ large-scale modern plantations and smallholders’ traditional estates from an antagonistic one to a mutually interdependent one, while recognizing the existence of a dualism between the two, as indicated by Boeke (1884–1956) in his theory on dual societies.
This article shows the transition of the PIR scheme within the historical context of socioeconomic and political changes in Indonesia. The development of PIR-Bun, PIR-Trans, and PIR-KKPA during the authoritarian Suharto era (1966–98), the stagnation of the PIR scheme during the Reformation era (1999–2003), and the development of PIR-Revitalisasi in the democratic era (2004–) are reported and analyzed. Over time, the main companies participating in the programs of the PIR scheme changed from state-owned companies to private ones. The gap in productivity between companies’ large-scale plantations and smallholders’ estates was not resolved during the Reformation era. As a result, PIR-Revitalisasi has applied a
united management system in which a company manages the whole process of smallholders’ estates, including planting, growing, harvesting, and marketing in order to enhance the latter’s productivity, effectiveness, and profitability. Smallholders are excluded from the management of their estates, while they receive benefits shared by the contracted company.
It seems that the PIR scheme has given up the idea of developing smallholders as modern self-owned farmers. However, we may evaluate the result of the PIR scheme before the adoption of the united management system more positively as the scheme contributed to a generation of independent smallholders who regard oil palm as one of their diverse livelihood strategy options. It is also important to carefully evaluate the scheme’s impact on the harmonious existence of humans and the environment, as well as on the culture and customs of smallholders.