Indonesia's Prabowo Subianto Expands State Control Over Land Resources

In March 2026, Indonesia's Defense Minister Prabowo Subianto initiated a significant campaign to seize land, claiming over 4 million hectares (approximately 10 million acres) of plantations, mining concessions, and processing facilities. This effort, which has been described as a move to enhance governance, has drawn attention for its scale and implications for both domestic and international markets. The campaign is characterized by the establishment of the Forest Area Enforcement Task Force, led by Prabowo's ally, Sjafrie Sjamsoeddin, which has been instrumental in transferring land to the state-owned firm Agrinas Palma Nusantara, now the largest palm oil player globally by area.

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The campaign gained momentum with the confiscation of 221,000 hectares from the Duta Palma Group, a palm oil company linked to corruption allegations against its owner, Surya Darmadi. The Indonesian government has also targeted various mining operations, including tin smelters and nickel mines, as part of its broader strategy to reclaim what it deems illegal gains from resource exploitation. This initiative is framed within Prabowo's vision of protecting ordinary citizens from the excesses of business elites, which he refers to as "greedy-nomics."

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Local farmers, such as Rubahan Hasibuan from northern Sumatra, have reported that land they have cultivated for generations is now under government control. Many farmers have been offered joint ventures with Agrinas, allowing them to remain on their land in exchange for a share of profits. However, these terms are often seen as unfavorable, leading to resistance among growers who wish to maintain their independence. The campaign has raised concerns among industry players, with companies like Wilmar International and IOI Corporation expressing apprehension about the impact on their operations and future investments in Indonesia.

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Critics argue that the land seizures are politically motivated and could undermine investor confidence in Indonesia's resource governance. Eve Warburton from the Australian National University highlighted the risks of politicization within the task force, which has broad discretion in its operations. Additionally, there are concerns about the long-term viability of the seized lands, as less than half of Agrinas's holdings are currently productive, necessitating significant investment in land restoration.

Bloomberg

While the government claims that the land seizures are necessary for better management and governance, some farmers and industry experts question the legality of these actions, citing historical approvals from local governments. The overlapping land allocations in the palm oil sector complicate the situation, as many areas classified as forest land have been cultivated for years. The lack of clarity surrounding permits and land ownership continues to create tension between the government and local stakeholders.

Bloomberg

As the campaign progresses, the Indonesian government is imposing hefty fines on companies for alleged illegal land use, with penalties that could exceed the value of the land itself. The future of this initiative remains uncertain, as enforcement and management of the seized lands pose significant challenges. Industry analysts warn that the potential for production disruptions is high, which could have broader implications for global commodity markets, particularly in palm oil and nickel.

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• “This is just the beginning,” — Prabowo Subianto, Defense Minister

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• “We will not give up,” — Rubahan Hasibuan, Local Farmer

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• “The risk of politicization is high,” — Eve Warburton, Australian National University

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• “The risk that production will suffer more than we dare to say now is probably bigger than vice versa,” — Thomas Mielke, Executive Director of Oil World

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