1 DRAFT DO NOT QUOTE Three plausible futures of

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DRAFT DO NOT QUOTE Three plausible futures of the subak amid contemporary pressures of urbanisation and rural transformation.1 Dr Rachel P. Lorenzen, Visiting Fellow Resource Management in Asia-Pacific Program, College of Asia and the Pacific, Australian National University Email: [email protected])

Abstract Balinese have been very successful in growing rice with one of the highest yields across the Nation. Rice production is organised in units called subak, each rice terrace (sawah) and each farmer who grows rice is part of a subak. The subak has once been the mainstay of Balinese society and economy, but a growing population and a diversifying rural economy are threatening the future of the subak. The pressures placed on the subak’s resource base are many: land is being converted to residential and industrial settlements, new stakeholders have emerged demanding water, and attractive off-farm employment combined with better education lure the younger generation away from rice farming. The remaining farming community struggles with what is left to make a living. Moreover, with the imminent threats to the subak and its resources it is questionable whether rice production in Bali can be maintained. Yet, rice will remain the most important staple food. The importance of rice is also reflected in the government’s revitalisation program for the agricultural sector. This paper discusses three scenarios of possible futures depending on how current trends unfold. The structured narratives are not forecasts but may encourage discussion about the place and value of the subak and locally grown rice in Balinese society.

Keywords: Indonesia, irrigated rice, scenarios, Bali, subak, rural diversification, land fragmentation.

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This paper is based on the last chapter of my PhD thesis titled ‘Perseverance in the Face of Change - Resilience Assessment of Balinese Irrigated Rice Cultivation’ completed in 2012 at the Australian National University.

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Introduction Farmers in Bali achieve some of the highest rice yields in the Indonesian archipelago. They are organised in communities called subak, which includes all the rice terraces (sawah) that are irrigated by the same irrigation infrastructure. Subak membership is compulsory for sharecroppers and owners alike. The subak guarantees continued access to water, but its membership also includes obligations such as labour contributions to infrastructure maintenance and adherence to a cropping schedule. The subak rice production system has long been recognised for its efficient water use and high productivity. The fertile volcanic soil and an abundance of water are but one part of this achievement. Probably most important to its success are the subak institutional structures which provide an equitable and transparent system of proportional irrigation water distribution and sharing of labour to regularly maintain the irrigation system.2 The subak is firmly embedded in local Hindu culture with ceremonies performed to honour the gods, mark different rice maturity stages and ask for protection against pests and diseases. Until recently, the subak has been one of the four core social groups around which Balinese life is organised, including the hamlet (banjar), the temple congregation (pemaksan), and the kinship group (dadia) (Geertz, 1980: 47). With the arrival of tourists on the island of Bali and modernisation of agriculture in the early 1960s, a larger process of rural diversification began. As a consequence of these changes the subak lost its former significance in today’s Balinese economy and life. These days, the subak has to compete for its resources, namely land, water and labour, with other powerful non-agricultural industries. Since rice is and will remain the staple food of the Balinese in the near future, questions arise as to who will supply rice and what will happen to local rice production. Is the subak equipped to develop into a strong producer organisation that is able to negotiate land and water resources and compete in an increasingly global food market? Are direct payments and protective regulations required to continue the growing of rice and with it retain the cultural heritage? Or will this part of Balinese culture simply cease to exist and rice be produced in other parts of Indonesia and Southeast Asia? And if the rice terraces disappear, will tourists still come to the island? The list of questions as to what the future will bring could be endlessly continued. There are various factors that influence future trajectories and current trends do not necessarily point to an obvious outcome. One way of dealing with uncertainty and unpredictability of many aspects of the future is to develop scenarios. Scenarios are not a forecast but a structured and plausible narrative about possible pathways to the future using particular assumptions about how current trends unfold. The three scenarios presented here may stimulate discussion about the place and value of the subak and rice production in Bali. And if desired, they can pave the way for protective policies and supportive measures for farmers to continue producing rice, and preserving the cultural heritage and landscape. The paper begins with a review of rural diversification and present-day challenges the subak faces. An analysis of general regional trends follows in light of recent developments. The three scenarios discussed are based on particular assumptions on how these trends unfold and resources are impacted upon. The paper finishes with a discussion what specific current events in Bali could possibly lead to a trajectory similar to the suggested scenarios.

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Rice in Bali is irrigated by gravity-fed canal irrigation based on continuous flow and fixed weirs. For a more detailed discussion on Bali’s rice production system and the subak institutional structures, see for example Geertz (1972; 1980), Lansing (1991; 2006) and S. Lorenzen (2008).

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Rural diversification in Bali and impact on the subak Rural diversification in Southeast Asia began concurrently with agricultural modernisation and commercialisation as a process of ongoing change away from agriculture.3 Other economic activities emerged, such as mining, manufacturing and construction, encouraged by a more thorough integration into the world market. In Bali, the main drive for rural diversification was the strategic marketing of the island as a tourist destination which started in the early 1970s.4 As a result, Bali became one of the prime tourist destinations in Indonesia for both, local and international travel. The increasing stream of tourists has created a wealth of new employment in tourism and tourism related industries. In particular the younger better educated generation of farmers seizes these new employment opportunities.5 Off-farm employment allows for an escape from the stigma of a ‘dirty, uneducated farmer’ to better working conditions such as regular working hours, fixed monthly wages and, most importantly, better pay. As a consequence agriculture’s importance in the economy has significantly declined.6 The diversification of the rural economy not only extracts labour from agriculture, but the emerging economic activities also compete for land and water. High land prices have created incentives for land-owning farmers to sell their land, especially at the south coast and along roads, where prices soar at incredible rates.7 In addition to the construction of tourist facilities, there is also a growing trend of housing estates (perumahan) built at the fringes of the capital city and the outskirts of tourist centres to accommodate the influx of immigrant workers. This ongoing land conversion has mainly been taking place on fertile sawah. Badung regency, for example, which is the most densely populated region with most of the tourist facilities, has lost nearly half of its sawah in the past 60 years (Daroesman, 1973: 33; BPS Bali 2012a). Water supplies have also diminished as non-agricultural industries, tourism and settlers have arrived in the arena. Particularly near urban and tourist centres, farmers struggle to get enough water for their rice crop (Strauß, 2011; R. P. Lorenzen, 2012: 222–3). The tighter water situation is exacerbated by deteriorating irrigation infrastructure and poor residential waste management.8 The pressure on land, labour and water in Bali will likely continue into the future as the rural economy continues to diversify. Across Southeast Asia, projections on rice farming are similar: rice 3

Agricultural modernisation aimed at increasing staple food production to feed rapidly growing populations. As part and parcel of modernisation, new agricultural technologies were introduced, such as faster growing high-yielding varieties, chemical fertilisers and pesticides, mechanisation of cultivation, as well as infrastructural improvements into irrigation and post-harvest processing. 4 Tourism developed rapidly, from 5,000 foreign visitors arriving at Bali’s international airport per year in 1968 to more than 5,000 per day forty years later in 2008 (Wall, 1996: 127; BPS Bali 2010). 5 The exodus of the young can also be seen in the average age of farmers which increased from 30 in the early 70s to 55 years old in 2005 (Birkelbach, 1973: 156; R. P. Lorenzen, 2012: 198). 6 Agriculture’s share in the economy decreased from 66 (in 1971) to 19 per cent (in 2009), while the workforce declined from 78 (in 1971) to 25 per cent (in 2011) (Bendesa and Sukarsa, 1980: 32–3; BPS Bali 2012b; BPS Bali 2012c). The trade, hotel and restaurant industry’s share, on the other hand, rose from 7 (in 1971) to 30 per cent (in 2011) and its workforce from 15 (in 1982) to 27 per cent (in 2011) (Bendesa and Sukarsa, 1980: 32–3; BPS Bali 2012b; BPS Bali 2012c). 7 Rieländer (1998: 62) observed a coastal land price rise in south Bali by a factor of more than 10 between 1990 and 1995. In 2005, in the research site, a new road was built connecting two neighbouring villages cutting through the middle of a subak. Here, prices for land along the road doubled in only a couple of months. 8 The poor quality of the irrigation infrastructure and problems with waste disposal into the canal system are a frequent news item across Bali; see for example: ‘2013, Digelontor Rp 33,81 Miliar * Saluran Irigasi Rusak di Badung Terpangkas’, 30/11/12, accessed at http://www.bisnisbali.com/2012/11/30/news/badung/ff.html on 13/2/13; ‘Sampah Plastik Meningkat, Desa Adat Bersiasat’, 20/4/11, accessed at http://www.balebengong.net/kabar-anyar/2011/04/20/sampah-plastik-meningkatdesa-adat-bersiasat.html on 13/2/13.

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land is converted or cultivated with other crops, farmers turn to more individual irrigation options and rural-urban migration furthers an ageing farming community (see for example Bryant and Gray, 2005: 6–11, 30; ADB (Asian Development Bank), 2006: 22; Turral et al., 2010: 553). In addition, climate change and natural disasters are likely to impact on rice production (Case et al., 2007; Lassa, 2013). All in all, it appears that less land and water will be available to grow rice under less favourable conditions; there will be less people to engage in farming and a community less willing to cooperate in sharing water. However, as populations continue to grow, a greater demand will be put on the already scarce resource base to produce enough food. Rice will remain the main staple crop for the foreseeable future (Pingali, 2006). In Bali even today’s per capita rice production is not able to cover local demands (R. P. Lorenzen, 2012: 238–40). The Indonesian national as well as Bali provincial government are recognising the problem of a dwindling local rice supply and have developed policies, visions and strategies to protect the resource base and encourage an increase in production (see also Wardana; this special issue). For example, the national government set out a plan to revitalise agriculture in order to ensure food and rice security; and to protect natural resources by controlling urban and rural settlement growth (Republic of Indonesia, 2005: 1; 2010: I-63–4). Accordingly, Bali ought to remain one of the key national food suppliers. The government also issued a new national water law in 2004, which prioritises irrigation water for agriculture. In Bali, yearly funds are provided to all subak to support farmers in maintaining the cultural heritage, halt land conversion and develop a more sustainable agriculture (Erviani, 2009; Atmodjo, 2010). A ‘green belt’ has been established where, at least theoretically, land is to be used for agriculture only.9 In 2007, a large dam was finished in Tabanan regency to address subak water shortages. Last year, UNESCO enlisted five sites in Bali including 17 subak as World Cultural Heritage. However, it remains to be seen how this nominal listing can be put into liveable practice — one that creates enough incentives for those subak to continue into the future. And some are questioning the overall benefit of such reordering of the Balinese landscape (see Roth; this special issue). The government envisions an agricultural sector that will be more productive, commercialised, diversified, environmentally friendly and less vulnerable to agronomic and market risks (Republic of Indonesia, 2010: I-53). This vision requires an active farming community, which is interested, willing and financially capable to invest into their farms to increase productivity and diversify. At present, there are few incentives for farmers to invest into agriculture, take risks and be innovative. The main obstructions to innovation and risk-taking relate to farm size, sharecropping arrangements, availability of land for farming, higher labour requirements for non-rice crops, and lack of training and education (R. P. Lorenzen, 2012: 244–5).

A glimpse into the future - scenario building Given the continued resource pressure, uncertainty of effectiveness of polices and a farming community unwilling or unable to invest, the question of what the future bears for the subak becomes pressing. Scenarios are one way of dealing with the many uncertainties the future holds. In the corporate world, scenarios are being successfully used as a means to better anticipate future market developments and accordingly plan ahead more strategically (Shoemaker, 1995: 25–6; Shell International, 2008: 8, 76). In natural resource management scenarios have yet to be established as planning and decision making tool (Bohensky et al., 2006:1052–9). 9 In practice, unfortunately, reports in the news of violations of the green zone regulations (which prohibit the construction of any permanent buildings) are amassing (R. P. Lorenzen, 2012: 240–1).

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Although an infinite number of scenarios could be developed it is generally held that a small set with clear and striking differences is more useful (Shoemaker, 1995: 30; Carpenter et al., 2006). For the purpose of this exercise, I developed three scenarios which are set 25 years ahead in time when the current average farmer is too old to farm. The three scenarios are based on 18 months research in Bali (2004-2005) as well as follow-up visits over the past years. This research included a farming household survey with 300 farmers, participant observation, interviews, focus group and individual discussions with the farming community, heads of subak, irrigation officials and other key stakeholders in irrigation and cultivation of rice. The assumptions for the three different scenarios take into account the recent developments discussed in the previous section. The scenarios are presented as narratives, each in a separate box, followed by a discussion about why the subak could follow such a trajectory.

Scenario 1 – disintegrated water user associations This scenario represents the ‘business as usual’ option. It is based on my observation of the current situation in the research site which is located in a peri-urban setting where pressure on the resource base from non-agricultural entities is high. Peri-urban areas are characterised by rapid population growth, rising land values and a piecemeal development process of changing economic and employment structures from agriculture to other industries (Midmore and Jansen, 2003: 14; Hudalah et al., 2007: 505). In this fragmented agricultural landscape production is diversifying. In Vietnam, Thailand, the Philippines, China and Malaysia, for example, peri-urban agriculture has shifted from rice to predominantly intensive vegetable production (Midmore and Jansen, 2003: 15; Anh et al., 2004: 23–4). Vegetable production, however, especially for longer-term sustainability, requires secure land tenure, higher labour input compared to rice and larger investments into technology to maintain competitiveness. The proximity to urban retail markets, on the other hand, reduces transportation and storage costs and can also facilitate urban waste and waste water reuse as compost (Midmore and Jansen, 2003: 21; Anh et al., 2004: 51). Contract farming appears to emerge more often where agriculture diversifies. Contract farming provides for a purchase commitment by the agri-food enterprise. Transaction costs for both farmers and the contracting agribusiness can be reduced, such as lower production risks, improved access to markets, support in production technologies and quality control, as well as better economies of scale in processing, transport and marketing (Simmons et al., 2005: 514–5). However, land tenure can be an issue: where tenants mainly sharecrop land, longer-term contracts are less likely to succeed. Patrick also mentions a farmers’ group ability to organise and negotiate with the agri-business is important for a mutually beneficial relationship (Patrick, 2004: 68–9).

Box 1: Scenario 1 - disintegrated water user associations

This scenario assumes high fragmentation of rice land, high competition for water, and labour replacement by immigrating inter-regional labour unfamiliar with the Balinese way of collaborative water sharing and system maintenance, and a government unable to implement its visions and policies in an effective way. With uncontrolled piecemeal land conversion, sawah is getting compartmentalised which makes water delivery to the fields difficult and water sharing intransparent. Farmers rely on individual solutions such as pump irrigation where possible. There is no water allocation coordination, every farmer takes as he pleases what little water is available. Conflict over

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water is common. Better educated Balinese have turned their backs on rice farming due to plenty of off-farm work available. As a result, farmers on the fields are no longer exclusively of local origin. Most are tenants who sharecrop the fields of the more affluent Balinese. They are individual operators who pursue different strategies cultivating high-value cash crops on a short-term contract basis. Farmers’ choice of strategy depends on market demand, land and household labour availability and financial capacity. Contract farming is limited to short-term periods due to unreliable sharecropping arrangements and a highly volatile food market with varying demands of different cash crops. The subak institutional structure has disappeared as non-local farmers have little understanding of the working of a subak and only limited needs for a communal irrigation. The irrigation infrastructure has decayed after years of neglect, with leadership to organise maintenance having become non-functional. Only a few locals remain to grow rice as a subsistence crop with decreasing yields due to unfavourable conditions of limited water availability and a decaying irrigation infrastructure. In this scenario, rice production would be unable to keep up with local demand as harvested area and rice productivity decrease..

Current key reinforcing trends for scenario 1 in Bali There are several trends in Bali that reinforce a trajectory towards scenario one. Many younger Balinese mainly work off-farm, only helping out on-farm during peak labour periods their work arrangements permitting or they find a sharecropper.10 These days most sharecroppers are from the same or neighbouring village. However, in tourist centres such as Ubud, where the prospect for offfarm work is even better, most sharecroppers are non-local (MacRae, 2005: 213). Should this trend continue, the local-specific knowledge and skills base may possibly disappear. Harvesting which is the most labour-intense period of rice cultivation is typically outsourced in Bali. Balinese rice traders engage Javanese seasonal labourers as harvesters. Some of these stay on to lease sawah from the Balinese and grow cash crops during the rice fallow period (Sutawan et al., 1999: 14; R. P. Lorenzen, 2012: 249).11 In the future these Javanese could take over the entire rice cultivation if the Balinese agricultural workforce remains decreasing. The Javanese would be more inclined to diversify cropping as they have less off-farm working options. They also have a different approach to farming and appreciation of the land (R. P. Lorenzen, 2012: 249).12 Water pumping is still rarely seen in Balinese rice cultivation. However, where water availability is unsatisfactory and/or labour investments into maintenance too high, more individualistic means of water withdrawal may turn into viable options. Individual solutions would undermine one of the core subak principles that equal water sharing is based on collective responsibilities for each farmer. Increased water pressure combined with a subak membership that is multi-ethnic and does not share the culturally embedded principles of the subak institutional framework may eventually lead to the decay of solidarity amongst farmers and would negatively impact on system performance.13 10

For more details on present day labour arrangements in Balinese farming see R. P. Lorenzen and S. Lorenzen (2010). Farmers, in fact, are encouraged to cultivate a non-rice crop (palawija) after two rice harvests as a means to improve soil fertility. However, non-rice crops are usually more work-intensive cutting into time that can be spent working on a better paid job off-farm. Thus, many subak particularly in the lowlands have abandoned this rotation practice. 12 Balinese Hindu religion is strongly intertwined with every aspect of rice farming and rice fields are considered part of the sacred realm. Most Javanese harvesters on the other hand are Muslim for whom rice cultivation and land belong to the secular world. 13 Waste dumping and a farming community declining disproportionately to irrigation system maintenance requirements will further increase the likelihood. 11

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Across Indonesia, vegetable production and harvest area has increased and diversified from the more traditional growing areas in the highlands to the lowlands in recent years (Johnson et al., 2008: 12– 14). In Bali, the two major vegetable-producing areas are located in the highlands. Whether vegetable production in Bali's peri-urban regions can be established and act as an additional supply for a growing demand or as competitor to the highland producers remains to be seen. Diversification to vegetable production would require more security in terms of land tenure. Vegetable production to be profitable would require longer-term investments and research into technologies and a policy shift to less stringent focus on rice food security.14 Yet, regardless, of whether vegetable farming becomes a success, either contracted to agribusinesses or directly marketed, the subak with its strength in sharing water equitably, its high rice productivity and its cultural heritage value would in this scenario clearly be lost.

Scenario 2 – Japanese model with paid ecosystem services The ideas for this scenario were gathered from the Japanese rice farming sector and payments for ecosystem services, a market-based approach that compensates those who maintain the services. Japan has an equally long history of irrigated rice production, but it is at the other side of the spectrum in terms of agricultural mechanisation, wealth and economic development. In Japan, contrary to Western scholars’ expectations, rice farming units became smaller rather than larger with modernisation (Bray, 1994: 210, 213). A small-scale rural industry developed complementary to technological change allowing rural households to diversify without having to abandon farming (Francks, 2005: 451–475). Thus, along with rapid economic growth and extensive urbanisation, Japanese famers became part-time cultivators narrowing their on-farm focus to rice only. With improved access to education and extension services and investing in mechanised cultivation they continuously increased land and labour productivity (Bray, 1994: 165–6). High demand by urban consumers, cultural traditions around land inheritance, governmental subsidies and domestic market protection help to keep Japanese rice prices high and rice farmers growing rice (Bray, 1994: 217; Francks, 2005: 460–4). These days, however, Japanese rice cultivation is increasingly in trouble as the farming community continues to age and rice consumption declines, which puts a question mark to the costly protectionist policies (Fujiki, 1999; Sato, 2001).15 Payment for ecosystem services is a recently developed concept with the aim to create incentives for land stewards to sustainably manage natural resources.16 Recognising and protecting ecosystem services allows for a more integrative approach and long-term perspective to mitigating human development impacts on nature. Recognised ecosystem services of irrigated rice cultivation in Indonesia are flood mitigation, prevention of soil erosion, water preservation, preservation of rural amenities for recreation and preservation of aesthetic, cultural and religious values (Agus et al., 2006). Payments for ecosystem services, either by the public or private sector, can benefit poor people while ensuring long-term viability of the resource base (Milder et al., 2010) Box 2: Scenario 2 - Japanese model with paid ecosystem services

This scenario assumes that Bali has transformed into a prospering high-income economy. The affluent society can afford and is willing to keep traditional rice production intact. Agricultural resources have become scarcer but are available thanks to protective policies that are 14

Such as for example off-season vegetable production for continued supply (Midmore and Jansen, 2003: 22). Across Southeast Asia, rice consumption declines as meat and ready meals are becoming more important parts of the diet (See for example: Pingali, 2006). 16 For a history of payments of ecosystem services see Gómez- Baggethun et al. (2010). 15

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effectively implemented. In this scenario, farmers and subak leaders have become public servants. They are organised in loose organisations that resemble the original subak but which have been formalised and made uniform. The government has developed a payment system that pays farmers and subak leaders to maintain the subak cultural heritage and to grow local rice varieties for a premium market, while the public works department maintains the physical irrigation infrastructure. Most Balinese have moved on to work in non-agricultural industries and services. Land conversion near urban areas has been high, yet controlled and consequently less fragmented. The residual rice areas have remained contiguous and thus irrigation system performance remains intact. With less land under rice cultivation, water pressure has also eased and water availability is sufficient. Local rice production enjoys a high demand by the local population and is protected by supported rice prices and import restrictions. Rice farming has become an attractive additional income. Due to rising incomes farmers have been able to invest into machinery to replace a shrinking labour force. Farmers continue to combine part-time farming with off-farm work. The farming community is exclusively Balinese to ensure the cultural heritage is preserved and rice production levels are maintained. Though, it is questionable how sustainable such a management system is and whether it could still be called a subak.

Current key reinforcing trends for scenario 2 in Bali The narrow focus on rice growing, often combined with off-farm work is a characteristic feature of many subak in south central Bali. Labour replacement with farm machinery will be influenced by onfarm labour availability. Presently, Balinese farmers continue to mainly rely on hired day labourers because of the low cost. Assuming a growing demand for off-farm labour as the economy continues to prosper will eventually lead to a shortage of the on-farm labour force. By that time however, Balinese may be able to afford investing in machinery to replace or reduce physically demanding labour. A much improved education system will also allow young Balinese to take a more sophisticated approach to farming. There is a trend to more formalisation and push for uniformity of subak organisational and institutional structures. The government's official recognition of the subak in 1972 as a customary law society has initiated this trend.17 Many of the larger ceremonies are these days organised by a government institution instead of by the subak themselves. Contests among subak aimed at preserving the cultural heritage are held, which strive to catalogue and record the subak —an act, which may eventually reduce the flexible management approach so characteristic of the subak. Moreover, subak heads are nowadays paid an honorary salary to do their job, which buttresses the impression that they have become public servants. In Bali rice has been and is still an important aspect of Balinese culture and ritual. The aesthetics of rice terraces and the cultural aspects of rice cultivation as part of Bali's touristic image will need to be weighed against the costs it would require for its continuation. Private ecosystem service payments to farmers are already practice around tourist centres where hotel owners pay famers to keep cultivating rice in the fields surrounding the hotel. The recent listing as UNESCO world cultural heritage may further encourage such payments to farmers. With the continuing trends of households engaged in part-time farming, more formalisation of subak structures and a common willingness to preserve the subak cultural heritage, Balinese rice production 17

Peraturan Daerah Propinsi Bali No 02/PD/DPRD/1972 (Pasal 4–7, 14–6) tentang Irigasi Daerah Propinsi Bali (Bali Provincial Regulation on Irrigation, articles 4–7 and 14–6)

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may potentially move towards a system similar to the Japanese model. Yet there might be pitfalls with a further formalisation of subak structure directed toward an agency-managed irrigation system. Rules defined by an agency and formalised over large regions may be unsuitable for local management issues. For farmers need freedom to adapt rules to changing circumstances (S. Lorenzen, 2008: 16). In the past, irrigation systems that were exclusively or partially managed by an agency rather than by farmers themselves, generally struggled to perform since a sense of responsibility and ownership towards the irrigation system is missing (Horst, 1998: 78; Sutawan et al., 1999: 15). Furthermore, it may be questionable, whether a subak turned into an agency-managed system —in which the authority is held by the government and where allocators, maintainers and users of irrigation water are not exclusively farmers— is still a subak.18 The willingness of Balinese to pay a premium for locally grown rice will possibly increase in the near future. Urban consumers prefer Balinese rice, especially traditional varieties. Combined with the current national rice policy, the two trends support a trajectory towards the Japanese model of protected rice farming. Ultimately, it will be a balancing act for the government between consumer demands for affordable rice and the economic viability of farmers' rice production.

Scenario 3 – combined agribusiness and ecotourism19 This scenario is based on a case study of a farming group in uphill Bali which has turned to more sustainable farming practices. Included are considerations on worldwide increasing demands for more environmentally friendly produce and services over human, animal and environmental health and food safety concerns. For instance, there is a growing niche market for certified organic and fairtrade produce at premium prices. Indonesia’s agricultural area dedicated to organic cultivation —albeit a tiny share of total area— has been fast expanding in recent years with the government actively promoting more sustainable farming practices (Willer et al., 2008: 18–19; MacRae, 2011). Organic farmers abstain from applying chemical fertilisers and pesticides, relying instead on natural processes to increase fertility and combat pests. Fairtrade certification aims at bettering working and trading conditions for producers groups and farm workers in the South. Products that are labelled fairtrade and/or organic undergo regular certification controls to ensure adherence to specific production standards. Nevertheless, plausibility and substantiality of the claim and the ability to verify the labelling process are contentious issues (Watts et al., 2005: 29). Ecotourism, which provides responsible travel to conservation areas and improves the welfare of local people, is another type of indirect payments for ecosystem services. There are several initiatives that have developed criteria for best practices or certification schemes.20 Ecotourism has been growing fast with many travellers now considering active protection of the environment and support of local communities to be part of a hotel's responsibility (TIES 2006). Agroecotourism is an extension focusing exclusively on a tourist's experience of agricultural life. The farming group turned sustainable began with a few farmers in an upland subak in 2005 with an organic 'waste problem'. Supported by a local agricultural scientist and a local farmer-entrepreneur they started producing compost which soon turned into an enterprise. They began to notice the benefits such as an increase in biodiversity in the fields, lower production costs and the creation of 18

For a more detailed discussion on agency and farmer managed irrigation systems see Dayton-Johnson (2003: 317) and S. Lorenzen (2008). 19 Dr. Arthawiguna from BPTP Bali has first brought this idea to my attention as he developed the notion of 'agroecotourism'. 20 Such as for example Green Globe (http://www.greenglobe.com) or Global Sustainable Tourism Criteria (http://www.sustainabletourismcriteria.org).

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new employment opportunities in the production and sale of surplus compost (MacRae, 2009: 6). This success encouraged farmers to invest in more cattle, compost cattle manure and progressively substitute chemical fertiliser with compost. The group has since expanded to nearly all subak members growing certified organic rice.

Box 3: Scenario 3 – combined agribusiness and ecotourism

The main argument for this scenario is that the tourism industry develops towards ecotourism and sustainable tourism with a greater demand for certified environmentally friendly products and services. Assuming that a more affluent middle class has likewise a growing demand for eco-products, sustainable land practices and preservation would further encourage this trend. This in turn, combined with a growing number of young well-educated Balinese who would be interested in working in a more attractive and economically viable rice production system, would help to initiate projects all over Bali that combine tourism, marketing of products and services, and cultivation and irrigation of rice in a number of different ways. For instance, some subak would be directly attached to hotels, delivering environmentally friendly produced rice and, at the same time, maintaining the landscape for tourists staying in these hotels. Other subak acquire a business manager who takes over the marketing of rice as well as other high-value cash or niche market crops. These would be delivered to specialised markets in and around tourist areas, in expatriate communities and in the capital city. This scenario would entail that the subak community —so far mainly united in the irrigation and cultivation of rice— would jointly embrace marketing. Land fragmentation would be put on hold with the formation of strong producer groups able to create incentives for farmers to keep their land. The newly developed businesses would be able to find alternative and innovative ways to save and negotiate water successfully with competitors. The government would play its role in that its policy for a more diversified and competitive agriculture would be implemented and continuously monitored, decreasing the pressures on land and water. This scenario requires young Balinese to return to the fields of their ancestors. They have benefited from a good education system and acquired knowledge about sustainable agricultural practices and business management. They have managed to secure long-term land tenure for increasing cultivation area and have been able to make significant investments to the subak and its business side. Accordingly the subak cultural heritage can be maintained and rice productivity remains high.

Current key reinforcing trends for scenario 3 in Bali There are several trends that could potentially lead to scenario 3. Bali, too, experiences a growing demand for specialty products and services spurred by tourism, a large expatriate community and a growing local middle class (MacRae, 2005: 217–8; MacRae and Artha Wiguna, 2011). Moreover, numerous supermarkets have appeared along arterial roads. These shops have a different procurement system and a greater demand for specialty produce which could be supplied by market-oriented subak. The ability of the subak to develop into more market-oriented organisations would be paramount for this scenario to become reality in one form or the other. Yet there seems to be a certain conservatism inherent in the subak. The main weakness of the subak is its lack of a business side for marketing the produce.21 The subak offers solely an institutional framework to support cultivation and irrigation of 21 Geertz (1972: 29) stressed that subak are by no means collective farms because they never engage in the actual cultivation process or marketing.

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rice and to ensure appropriately performed rituals. Marketing has always been organised separately. As a consequence, farmers have little knowledge about the market situation and how to access more exclusive niche markets. In the case study farming group, the combined marketing of the organic rice experienced several setbacks. Initially, the majority of their rice was sold on the local market with only a small margin above the ordinary rice price (MacRae, 2011). In order to access the specialised premium price markets, a company was founded led by business managers. Farmers were, however, very sceptical towards the business model; and the trust building turned out to be difficult. In the end, the anticipated transformation of the subak into a commercial agribusiness failed due to the company’s lack of understanding of the farmers’ world and its purely economic interests (MacRae and Artha Wiguna, 2011). In subak where sharecropper percentage is high, this scenario will not offer a viable future. Sharecropping agreements are volatile and temporary, unless sharecroppers are able to establish longer-term relationships with landowners or enter more formal written contracts. A further hindrance to this scenario becoming reality is the fact that many households in Bali practice part-time farming on small-sized holdings, in particular in the lowlands. These farmers invest their time and energy in finding better-paid off-farm work rather than committing to new ideas and investments on-farm (MacRae, 2011). Full-time farmers with larger land holdings and secured sharecropping arrangements will be more likely to follow this scenario and organise the marketing of their produce cooperatively. For a business model to succeed, it will have to be adapted to local circumstances, with those involved on the business side clearly needing a strong trust base with the farming community. Once the marketing side is organised, there will be little obstacles in the way as current demand for alternatively produced rice is higher than supply.22 Further research and hands-on experience will be required for a better linking with the tourism industry in order to become a viable part of this scenario. If this scenario became reality, subak would turn into entrepreneurs marketing their premium produce to the growing niche market. While some subak would deliver the produce to shopping centres, hotels and restaurants, others would offer tourism activities on-farm. Agricultural production would be diversified with the main focus remaining on rice production. The cultural heritage of the subak would be preserved with this scenario, yet it might also be varied to include the marketing side.

Conclusion The three scenarios presented here show different trajectories that the subak may follow (see table 1 for a summary). Depending on the government’s ability to implement its policies and monitor land conversion any of the scenarios can become likely. The trajectories also depend on the future generation of farmers: will they have gained a better education that allows them to be better positioned with respect to risk taking and investment into their farms? A further key point in defining the scenarios is how the situation develops with land conversion, water availability and sharecropping arrangements. At present, the sharecropping arrangements appear to be a major obstacle for subak to follow scenario three. What is important to keep in mind in discussing the scenarios is that subak and rice cultivation in different regions face different challenges. Upland farmers tend to own larger sawah and sharecrop less allowing for a better starting position to risk taking and innovation. On the other hand, there may be more options in peri-urban areas in finding new markets for there is a greater demand. Clearly, the pressure on land resources is highest near urban and tourist centres and piecemeal land conversion is 22

I W. A. Arthawiguna, personal communication.

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evident. Especially those fields close to roads are prone to be sold quicker with many farmers seeing more benefits in selling their land rather than cultivating it. High land fragmentation and urban sprawl—an issue on top of the agenda in many densely populated regions in Europe—will impact not only on subak performance but also on the natural environment and quality of life of all people in Bali.23 The scenarios presented here are a mere beginning of a future discussion that will be needed to define the value of the subak and rice cultivation in Balinese society. Ultimately, it lies in the hands of society, government and farming community alike whether the subak can survive. Subak and rice cultivation as a cultural heritage will need to be weighed against the costs it would require for its continuation. A future exercise could be to redefine the suggested scenarios using them as a planning tool to develop desirable futures of the subak. Most importantly, this process of designing will need to be a participatory process integrating multiple stakeholders: members of the subak and civil society, government institutions, and academics. Improved education, the opening of new marketing opportunities for speciality produce, increased viability of payments for ecosystem services options combined with the inherent characteristics of Balinese social organisation may open up new pathways for farmers to continue the subak in ways that are unimaginable as yet. It is the intent of this paper to put the subak back on the agenda and encourage discussion to begin imagining these new futures of the subak and rice cultivation in Bali.

23 Ensuing impacts of high land fragmentation lead to loss of biodiversity, decreasing mobility of flora and fauna, reduction or loss of habitats, as well as increased conflicts over type of land use (Jaeger, 2001).

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Table 1 - Overview of 3 Scenarios of the Subak Scenario 1 -

Scenario 2 -

Scenario 3 -

Disintegrated WUA

Japanese PES

Agribusiness Ecotourism

Features

Subak have disintegrated with a loose framework to share water, a few grow rice but water situation is critical, land leasers grow high-value cash crops on short-term basis, using pumps for irrigation

Government/society pays for ecosystem services so that rice terraces remain intact and that rice is produced on remaining cultivation areas with strong policies to protect national rice market

Subak enter business relationship with tourist businesses with support for processing and marketing, specialising in combined eco-agriculture and ecotourism

Water

High scarcity of water, non-negotiated with other stakeholders, high competition for diminishing water resources

Medium scarcity, government implemented negotiations with other stakeholders

Medium scarcity, dealt with different cultivation methods, negotiated with other stakeholders

Labour

High shortage and replacement of local labour, younger Balinese do not return to farming, tenants mainly and a few remaining old age owners

Medium shortage, mechanised, some younger generations return, mixed tenants and owners, paid by government

Medium shortage, younger generation returns with better skills, owner-tenants mainly, able to accrue additional land

Land

Farm sizes become smaller, high land fragmentation

Farm sizes varying, fragmentation put on hold by payments for ecosystem services

Farm sizes slightly bigger, fragmentation, put on hold by strong producer group contracts

Irrigation facilities

Needing repair or broken, replaced by pumps for river or groundwater

Intact, maintained by government officials

Intact, maintained by producer groups

Financing

No financing

Government-paid ecosystem services

Producer groups or cooperatives, plus business manager, tourism industry invests

Subak head

No head or no means of power nor influence

Becomes full government official

Leader of producer group (cultivation and irrigation)

Production

Rice for subsistence (water insecurity leads to lower yields) and highvalue cash crops

Rice for national market only

Niche market or high value crop production, with possibility of export of specialty rice

Processing, Marketing

Short-term contract farming with sharecroppers/leasers

National government controls price and sale

Organised by agri-business entity

Institutional framework

Non-existent or ineffective

Formalised and uniform rules for all subak

Strong independent institutions, redefined to adapt to business side

Cultural heritage

Disintegrating

More or less maintained

Maintained, adapted

Household income

Part-time farming, poor

Combined part-time farming and off-farm work, income derived from higher off-farm

Tendency to full-time farming, moderate to good income from farming

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