Transformation bumn sugar : a study of paradigm and ecosystem changes towards self-sufficiency | [International Journal of Communication Networks and Information Security • 2024]

Author(s):

1. Arif Afandi: Faculty of Social and Political Sciences Postgraduate Program, Brawijaya University, Malang

2. Darsono Wisadirana.: Faculty of Social and Political Sciences Postgraduate Program, Brawijaya University, Malang

3. Muhammad Faishal Aminuddin.: Faculty of Social and Political Sciences Postgraduate Program, Brawijaya University, Malang

4. Muhammad Lukman Hakim: Faculty of Social and Political Sciences Postgraduate Program, Brawijaya University, Malang

Abstract:

The rapid decline in domestic sugarcane productivity has for decades thrown Indonesia into relatively absolute dependence on sugar imports as it continuously weakens productive capacity of both the sugarcane farmers on-farm and sugar mills off farm. The issuance of Presidential Decree 40/2023 on national sugar selfsufficiency then provides policy framework and governance guideline upon which Ministry of Badan Usaha Milik Negara- BUMN (State Owned Enterprise-SOE) is authorised to execute the policy. Central to this initiative is the transformation of both BUMN ministry and sugar SOEs into PTPN III Holding and its subsidiary PT SGN. Againts the backdrop, this study addresses three key questions: (1) How is the transformation of sugar SOEs advancing toward the national sugar self-sufficiency targets set for 2028-2030? (2) What are the normative prerequisites and institutional actions that affect the success of this transformation in driving national sugarcane-sugar production?, and (3) in what ways has such transformation deeply impacted the socioeconomic relationships between PT Sinergi Sugar Nusantara’s (PT SGN) sugar mills and their partner farmer groups as the primary suppliers of raw sugarcane? By deploying Karl Polanyi’s Institutional Sociology approach (1957, 1944, 1968) this study dissects the transformation in PTPN III Holding and its subsidiary PT SGN within an intricate context of nationwide sugar industry led by oligarchic force and institutional restructuring on the part of the SOE. Key concepts are embedding, dis-embedding, and re-embedding used to analyze how far and deeply ingrained the three pillars of economic reintegration (redistribution, reciprocity, and householding) have been applied in the whole process of institutional, managerial and operational transformation. Specific attention given to the governance of sugarcane production upstream in two practical breakthroughs namely regionalization of sugar mills and the implementation of a profit-sharing system (SBH). Drawn upon qualitative case study at Gempolkrep Sugar Factory in Mojokerto, Pesantren Baru Sugar Factory in Kediri, and Meritjan Sugar Factory in Kediri, this eight months inquiry (August 2023-April 2024) results in three core findings relating to paradigm, ecosystem and partnership. First, there has been normscompatibility between productivity paradigm applied in PTPN III Holding since 2021 and eternity paradigm as working norms for and off farm, has gradually been reinvigorated with the sole mechanism of SBH which proves effective in disentangling them from rent-seeking ecosystem called Pok-Pokan benefiting only the local big capitalists and private sugar mills. This study offers both theoritical and practical policy significances. It sheds more light on the strenghts of Polanyi’s institutional approach in addressing root causes of social- economic disintegration between BUMN and the farmer community in current economic neoliberalization. While in terms of policy significance, this study endorses the collaborative role of BUMN realigning with the farmer community for national sugar self-sufficiency 2028-2030.

Page(s): 1355-1369

DOI: DOI not available

Published: Journal: International Journal of Communication Networks and Information Security, Volume: 16, Issue: 4, Year: 2024

Keywords:

ecosystem , transformation , Paradigm , Sugar SOEs , Sugar SelfSufficiency

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