Proposal for a Regressive HGU Extension Scheme under the Agrarian Reform Draft Bill

Institutional governance and public policy expert, Ahmad Alamsyah Saragih, has proposed a regressive extension scheme for Right-to-Cultivate (Hak Guna Usaha – “HGU”) under the Draft Bill on Agrarian Reform. Under the proposed scheme, the area of land granted to companies would be gradually reduced each time an HGU is extended.

Alamsyah stated that the scheme is necessary to reduce corporate concentration of land control amid continued population growth. According to him, the policy is also intended to reduce inequality in land control, which may contribute to structural conflicts.

“In Indonesia, we have HGUs that continue to be extended while the population keeps growing. The question, therefore, is how we address this issue institutionally,” said the former Ombudsman commissioner.

Under the proposed scheme, a portion of the land relinquished as part of the HGU extension process would be redistributed to local communities or farmers. Meanwhile, companies would be encouraged to collaborate with local communities and shift toward higher-value-added downstream industries, rather than relying solely on large-scale landholdings.

Land resulting from the redistribution could then be managed by local communities with support from the Government. “This reflects the principle of an economy based on collective endeavor, as contemplated under Article 33 of the Constitution. Therefore, what the Government refers to as downstream development can be pursued within the context of agrarian reform, particularly in the plantation sector,” he said.