The conversion of farmland, both from one commodity to another and from one sector to another, is a normal phenomenon that occurs as development progresses. Although Law No. 12/1992 on plant cultivation systems gives farmers the freedom to choose the crops to be grown, the conversion of major food lands, such as large paddy fields, could threaten the national rice production.
The extensive development of oil palm plantations in Indonesia, which is almost entirely outside of Java, has not reduced the area of rice fields. Based on 2015 data from the Agriculture Ministry, rice farming areas outside Java are likely to increase (Figure).
On the contrary, rice land on Java Island is declining because of conversion to non-agricultural sectors, such as industry, infrastructure and housing. However, the overall national rice area is still relatively stable at about 13 million hectares and it is increasing.
These data show that the expansion of oil palm plantations outside of Java as a whole did not reduce the area of rice crops. The area of rice farms outside Java is on the increase. In addition, rice land on Java Island is not part of the development area of oil palm plantations, but is declining because of conversion to the non-agricultural sector, which may be more productive.
Of course, at the regional and local level, rice farming areas are being converted into non-rice areas, including as oil palm plantations as farmers feel it is more profitable to develop non-rice businesses. The right of farmers to choose commodities and businesses that are profitable for them is protected by Law No. 12/1992. However, the overall expansion of oil palm plantations entirely outside of Java Island is also followed by expansion of rice plantation areas.