Over recent decades a structural transformation has affected agriculture in frontier areas
of Malaysian Borneo and Outer Island Indonesia with the rapid conversion of agricultural
lands, fallows, and formerly forested areas into oil palm. These frontiers have similar
positions in the international political economy of oil palm and have complementary
resource endowments. Yet there are also significant differences in systems of
governance and policy frameworks regarding land. At the same time the capacity of state
actors to facilitate the transformation of these agrarian frontiers and to take up these
opportunities fluctuate over time and are subject to contestation nationally and
internationally. In seeking to transform these frontiers from “marginal” into “productive”
areas, policy makers face a common set of challenges that include attracting development
capital, finding the necessary disciplined labour force, delivering land for estate
development, maintaining local legitimacy, and dealing with local contestation. In
comparing the transition in both Malaysia and Indonesia this paper describes how the
“frontier” is created and transformed through particular policy narratives. These policy
narratives facilitate the transformation of whole landscapes into oil palm by rendering
obscure indigenous forms of agriculture and land tenure while creating reserves of
available “state” or “idle” customary land, and counterpoising smallholder “marginality”
and “backwardness” to the modernity of contemporary estate agriculture. The paper 3
describes the gradual shift in agendas as policy narratives have evolved over time.
During the era of state-led development in the 1970s and 1980s policy narratives allowed
for the deployment of government funds and development loans and the implementation
of integrated agricultural development projects involving parastatals in a state-subsidized
smallholder approach involving group smallholding schemes. Later the perception that
these schemes had failed took root at the same time global donors and states abandoned
the state-led agricultural development paradigm. In concert with neo-liberal principles,
state agencies were now to facilitate rather than to implement development schemes and
to provide incentives for private plantations that involved the privatization of customary
lands and the integration of smallholders into large blocks of land set aside for monocrop
development.