Analysis of Implementation of Profit Sharing Agreement in Rice

Fields Cultivation: Case Study at Gampong Blang Krueng

Baitussalam, Aceh Besar

Syamsul Bahri, Ishak, Asrafil Rizal, Lia Sautunnida

Law Faculty, Syiah Kuala University

Keywords: Profit Sharing Agreement, Rice Fields, Cultivaton.

Abstract: Article 3 Act Number 2 Year 1960 concerning the Profit Sharing Agreement stated that an agreement with

any name must be in writing in front of head of the village and presented by two witnesses from both parties

and legalized by the authorized officials. The profit sharing in rice fields’ cultivation at Blang Krueng was

carried out verbally. This essay has three aims, firstly to explain why the community made the profit sharing

agreement orally. Secondly to explain the agreement system for the profit sharing at Blang Krueng and third

is to explain the obstacles in implementing the profit sharing system at Blang Krueng. This is an empiric

juridical research by collecting data through observation and interview then analyse them to draw

conclusion. The results showed that the community made profit sharing agreement verbally because it had

been done for generations and most of the community didn’t know Law No. 2 Year 1960. The distribution

system uses 2 variations, namely 1:3, one for the owner and three for the cultivator. 1:4, one for the owner

and four for the cultivator. The impediment for the community in implementing this profit sharing is

dissenting opinion among them regarding the profit sharing distribution. Therefore, it is suggested that the

community at Blang Krueng to make the profit sharing agreement in the form of writing with the presence

of an authorized person in the village and presented by two witnesses from both parties so that when the

dispute arise the evidence will be vigorous.

1 INTRODUCTION

Indonesia is an agrarian country which means that

most of its citizens live in the agriculture sector

(Harsono, 1997). Agriculture is the activities of

humans which encompass farming, livestock

breeding, fish cultivation, and forestry activities

(Saleh, 1987). Agriculture might contain two

meanings i.e. narrow and broad meaning. In a

narrow meaning, agriculture is defined as farming

activities (Sudiyat, 1981). The regulation concerning

the profit-sharing agreement of agricultural land is

stipulated in Law No.2 Year 1960 relating to Profit-

Sharing Agreement.

Considering the structure of rural agricultural

society (hereinafter referred to as Gampong) which

still need the utilization of non-personal land

especially in the area of Gampong Blang Krueng,

thus, the utilization of that type of land is still

needed or possible to be done temporarily through

profit-sharing method. The land management

through profit-sharing is when the land owners make

an agreement with other people to work on their

lands, manage them, plant the land with crops, and

with a deal of which the profits of those lands are

shared toward both parties.

Profit-Sharing Agreement of agricultural land is

a legal act in which the land owners cannot work

their own land due to a certain cause but they still

want to obtain the profits over their lands. Profit-

sharing agreement of agricultural land is an act of

legal relation which stipulated in Customary Law.

Profit-sharing agreement is a form of agreement

between someone who has the right over a plot of

agricultural land of others referred to as cultivators.

According to the agreement of which the cultivators

are allowed to manage the related land with the

sharing of profit between the cultivator and the

owner that based on the mutually-agreed portion

(Harsono, 1997). The profit-sharing agreement of

agriculture in Indonesia is originated from and

stipulated based on the provision of Customary Law

which usually referred to as the cultivation right as

230

Bahri, S., Ishak, ., Rizal, A. and Sautunnida, L.

Analysis of Implementation of Proﬁt Sharing Agreement in Rice Fields Cultivation: Case Study at Gampong Blang Krueng Baitussalam, Aceh Besar.

DOI: 10.5220/0009444302300236

In Proceedings of the 1st International Conference on Psychology (ICPsy 2019), pages 230-236

ISBN: 978-989-758-448-0

the right of an individual to conduct farming on the

land owned by others with an agreement that the

profit will be shared between both parties by

considering that the distribution of profit is provided

based on a fair basis and guaranteed with proper

legal standing for the cultivators in underlining the

rights and responsibilities of both cultivators and

owners (Saleh, 1987).

The implementation of the profit-sharing

agreement of agricultural land in Gampong Blang

Krueng is performed by the community through

verbal agreement (unwritten) which based on the

deal of both parties. There are two implementation

systems of this agreement, the first is through the 1:4

allocation and the second is through 1:3 allocation.

With this 1:4 allocation system, the cultivator

receives 4 (four) portions and the land owner gets 1

(one portion) while in the 1:3 allocation system, the

cultivator receives 3 (three) portions and the land

owner gets (1) portion. Those portions or the

allocations use two systems namely the “Bled

system” (paint bucket weighted 25 kg) and “Tem

system” (cake cans in which the volume is 12 kg).

This verbal agreement has been implemented for

generations, this action is the result of high level of

trust between the community members of Gampong

Blang Krueng in the past (previous generations),

however, the possibility of dispute is widely open in

this present era.

2 LITERATURE REVIEW

Before explaining the meaning of profit sharing

agreement, it is necessary to know the terms of

profit sharing agreement in each different areas like:

 Memperduoi (Minang kabau);

 Toyo (Minahasa);

 Tesang (Sulawesi);

 Maro (1:1), Mertelu (1:2), (Central Java);

 Nengah (1:1), Jejuron (1:2), (Priangan).

Apart from the above terms, there are still other

terms in some other areas (Sudiyat, 1981):

1. For Sumatra region

a. Aceh uses the term "mawaih" or "Madua

earnings" (1:1) "for peuet "or" muwne

peuet , for lhee ", for limeng" where

successively the owner obtains parts 1 / 4.2

/ 3.1 /5.

b. Gayo uses the term "mawah" (1:1), the base

land has the terms "Blah duo" or "Bulung

Duo" (1:1).

c. South Tapanuli uses the term "marbolam",

"mayaduai".

d. South Sumatra for Jambi uses the term "for

two", "for three ", Palembang uses the

term" half ".

2. For Kalimantan:

a. Banjar uses the term "baharun".

b. Lawang uses the term "sabahandi".

c. Nganjuk uses the term "bahandi".

3. Bali Region: The general term used is

"nyakap", but another variation by using the

term "nondo" or "nanding" which means

"Maro", "nylon", or means mertelu (1:2),

"muncuin" or "accelerate" means mapatapat

"(1:3) and so on, where it is the smallest part

for cultivators.

4. Java Region: Use the term "nengah" for

"maro", "mertelu".

5. Mandura: Use the term "paron" or "paroa" for

half production of agricultural land as a wage

for cultivators.

According to Customary Law experts, the profit

sharing agreement has various types, as follows:

1. Definition of profit sharing agreement

(Deelbouw Overeenkomst) according to Djaren

Saragih stated (Saragih, 1984):

"A profit sharing agreement is a legal

relationship between a people who owns

the land with another (second) party,

where these two parties may process the

land concerned with the provisions, the

profits of processing land are divided

between the owner of the land and those

who cultivate the land."

The function of this profit sharing

agreement according to Djaren Saragih is for

maintaining productivity of the land for land

owner, while for the deelbouwer the function

of the agreement is to work on the land without

having the land.

2. Definition of the profit sharing agreement

according to Hilman Hadikusuma (1990):

"As a general principle in Customary

Law. If someone planted someone else's

land with consent or without approval,

is obliged to surrender a portion of the

proceeds to the land owner. This

principle applies not only to vacant

land, land fields, garden land, or paddy

fields, but also for aquatic land, fisheries

and livestock ".

From the opinion of Hilman Hadikusuma,

explained in general everyone who planted

someone else's land is good because of

Analysis of Implementation of Proﬁt Sharing Agreement in Rice Fields Cultivation: Case Study at Gampong Blang Krueng Baitussalam,

Aceh Besar

231

agreement of both parties or without consent,

the party who plan must give a portion of the

proceeds to the land owner. This is what a

general principle that applies in Customary

Law

3. Definition of agreement for profit sharing

according to Boedi Harsono namely (1997):

"A form of agreement between a

person entitled to a plot of agricultural

land and other people called cultivators,

based on agreements where the

cultivator is allowed to cultivate the

land with distribution of profit between

cultivators and who owns the land

according to a mutually agreed balance,

for example each gets a single (maro) or

the cultivator gets a third part

(mertelu)".

4. The meaning of profit sharing agreement

according to Bushar Muhammad is (2000):

"If the land owner gives permission

to others to work on the land with an

agreement, that gets the permit must

give part (half if two called maro and

one third called mertelu or jejuron) to

the owner of the land".

Based on above definition from scholars,

conclusions can be drawn regarding

understanding of the profit sharing agreement,

namely:

a. There is a legal relationship between

landowners and parties land tenants, so that

the rights and obligations of the parties

arise.

b. The landowner in the profit sharing

agreement gives permission to other people

as cultivators to cultivate land and the

profits are divided in accordance with the

agreement that has been agreed upon

together.

c. Cultivators are also obliged to work or

proceed the land as good as possible.

The Profit Sharing Agreement according to

Customary Law is basically an agreements that arise

in Customary Law communities between

landowners with cultivating farmers and generally

the agreement is not realized in written form but

only verbally based on mutual trust.

Based on the discussion above, therefore; the

author aims to apply Juridical-Empirical method for

this research. The searching in the discussion of this

article is the search toward true knowledge

(scientific) because the result of this research will be

used to answer specific problems. Legal research is

a process to find law regulations, law principles, or

law doctrines to answer the law issues that being

faced.

This definition is consistent with the prescriptive

characters of law science. Legal research is

conducted to produce new argumentations, theories

or concepts as the prescription in solving the faced

issues. Juridical-empirical method was used as the

method in this research, the data were acquired

through field and literature studies. Field study was

performed by interviewing respondents and

informants while literature study was conducted by

reading text books and law regulations.

3 RESEARCH METHOD

Based on the discussion above, therefore; the author

aims to apply Juridical-Empirical method for this

research. Empirical research is defined as any

research where conclusions of the study is strictly

drawn from concretely empirical evidence, and

therefore “verifiable” evidence. This empirical

evidence can be gathered using quantitative research

and qualitative research methods. In this research an

author collect data using evidence that is collected

through observation, interview or experience or by

using calibrated scientific instruments to analyse the

problem. All of the above origins have one thing in

common which is dependence of observation,

interview and experiments to collect data and

analyse them to come up with conclusions. The

searching in the discussion of this article is the

search toward true knowledge (scientific) because

the result of this research will be used to answer

specific problems. Legal research is a process to

find law regulations, law principles, or law doctrines

to answer the law issues that being faced.

This definition is consistent with the prescriptive

characters of law science. Legal research is

conducted to produce new argumentations, theories

or concepts as the prescription in solving the faced

issues. Juridical-empirical method was used as the

method in this research, the data were acquired

through field and literature studies. Field study was

performed by interviewing respondents and

informants while literature study was conducted by

reading text books and law regulations.

ICPsy 2019 - International Conference on Psychology

232

4 RESULT AND DISCUSSION

The results of this research show that the community

made the profit sharing agreement orally. Then there

are two sytems of profit sharing agreement at Blang

Krueng and there are several obstacles faced by the

community in implementing the profit sharing

system at Blang Krueng, Baitussalam, Aceh Besar.

4.1 The Reasons Community of

Gampong Blang Krueng Conduct

Verbal (Unwritten) Profit-sharing

Agreement

Profit-sharing is a method that still being

implemented by the local people of Gampong Blang

Krueng in Baitussalam District of Aceh Besar

Regency to support their economy especially in the

agricultural sector. The implementation of this

method can be seen from the vast area of agricultural

land cultivated in Gampong. It won’t be surprising if

most of the local people conduct profit-sharing

agreement and the transactions through profit-

sharing method to manage the agricultural lands.

The form of profit-sharing agreement in

Gampong Blang Krueng is unwritten; the local

people conduct the agreement verbally based on the

principle of mutual trust between both parties

without any witnesses from neither of them. The

agreement is also not legalized by the authorized

official.

If referring to Article 3 of Law No.2 Year 1960

concerning Profit-Sharing Agreement, thus, the

profit-sharing agreements which occurred within the

community of Gampong Blang Krueng are not

consistent with the Law provisions applied at

present. Until today, the cultivators and the owners

of agricultural land have been conducting profit-

sharing agreement verbally and it becomes their

habit, thus, the parties conduct unwritten agreement

with some underlying reasons. The underlying

reasons of the parties are as follows:

 It has been passed through generations

 Greater mutual trust exists

 Uncomplicated procedure

 Not aware of Law No.2 Year 1960 concerning

Profit-Sharing Agreement.

Profit-sharing also functions as an institution that

strengthen the relationship between relatives. In this

profit-sharing agreement, the relationship with

relatives is still prioritized to cultivate the

agricultural land, if there is no more relatives or

families who want to cultivate the land, the right to

manage the land will be given towards neighbors or

immigrants in the Gampong which have no

kinship/family relationship with the land owner.

Based on the result of this research, regarding

the profit-sharing agreement in Gampong Blang

Krueng of Baitussalam District - Aceh Besar

Regency, there is a farmer group named Beudoh

Beurata. This farmer group has 138 (one hundred

thirty eight) members which consists of men and

women in various ages. This group also consists of

farmers. The farmers who registered in this Beudoh

Beurata group are not only the men but also the

women. Random sampling was performed to 138

(one hundred thirty eight) individuals which consist

of some cultivators (farmers) and land owners that

will be furtherly described. The areas of the

agricultural land which will be cultivated by farmers

are varied as well with the width from 1,000 m

7,000 m

In addition, the decreasing trust of the

community’s members in the present era can trigger

horizontal conflicts between the Gampong’s people

such as the dispute related to the ownership and the

management of agricultural land in Gampong. In

that order, the agreement of agricultural land

management should not be done verbally, but in

written form and spectated by the witnesses or with

the consent of village’s chief. This action is done to

prevent the occurrence of future conflicts and

disputes.

4.2 The Implementation Systems of

Profit-sharing Agreement in the

Cultivation of Agricultural Land in

Gampong Blang Krueng of

Baitussalam District – Aceh Besar

Regency

The implementation systems of profit-sharing in

Gampong Blang Krueng, Baitussalam District, Aceh

Besar Regency consist of 2 (two) systems. The

shared profit in this context is not money but the

yields of the agricultural land. The system of profit-

sharing agreement in Gampong Blang Krueng can

be seen in the explanation below. The

implementation system of profit-sharing in its

Gampong has been mostly used 1:4 system (Waled

2018, personal communication, 22 November).

The most applied profit-sharing system was the

allocation system in which the owners of the

agricultural land receive one portion and the

cultivators receive four portions with a condition

that all costs of seeds, fertilizers, toxicants, paddy

plow, and harvesting fees are afforded by the

Analysis of Implementation of Proﬁt Sharing Agreement in Rice Fields Cultivation: Case Study at Gampong Blang Krueng Baitussalam,

Aceh Besar

233

cultivators while the agricultural land owners only

delegate the right of their lands to the cultivators for

the lands be managed in accordance with the deal

agreed upon both parties.

The results of interview conducted towards

respondents have showed that the profit-sharing

systems which can be found in Gampong Blang

Krueng are as follows:

a. 1:3 Allocation System

The profit sharing with 3 (three) proportionate

or one-third system is implemented by the

people of Gampong Blang Krueng twice every

one (1) year. The portion is one for the owners

and three for the cultivators with the same

condition applies on 1:4 system i.e. all costs

such as seeds, fertilizers, medicines, toxicants,

paddy plow, and other costs of crop treatment

are afforded by the cultivators. The running of

this system is also depending on the existing

water debit and water pump machines. Usually

the local people of Gampong Blang Krueng do

not use this system because the existing water

debit is not sufficient, thus, they preferred to

use 1:4 system (Waled 2018, personal

communication, 22 November).

This system has been long existed and

grown in Gampong Blang Krueng, however,

because this system requires more water debit,

therefore, this system is applied by depending

on the rainfall to water debit available in

Gampong Blang Krueng.

b. 1:4 Allocation System

This system is used by the local people of

Gampong Blang Krueng, Baitussalam District,

Aceh Besar Regency. This system has been

existing since the past in Gampong Blang

Krueng. This one-fourth (1:4) system is a

system in which its water debit is low (rainfed

land), depending on the rainfall and the

existing water debit depends on water pumping

machine, this system is usually implemented

once a year because its irrigation center is

located in the area of Gampong Tanoh Abe of

Seulimum District of Aceh Besar Regency.

In this allocation system, the owners

deserve to acquire 1 (one) portion with a

condition that the owners do not afford costs

like seeds, fertilizers, medicines, toxicants,

paddy plows, and other costs of crop treatment.

In this system, the cultivators get 4 (four)

portions with a condition that they have to

afford all costs such as seeds, fertilizers,

medicines, toxicants, paddy plows, and other

crop treatment costs.

The profit-sharing system in this profit-

sharing agreement in Gampong Blang Krueng,

Baitussalam District, Aceh Besar Regency is

influenced by the habits or traditions that still

maintained and grow throughout the

generations. Referring to the Presidential

Instruction of Republic of Indonesia No.13

Year 1980 concerning the Implementation of

Profit-Sharing Law, the amount of profit-

sharing has been stipulated in Article 4, thus,

the agriculture profit-sharing system which

implemented in Gampong Blang Krueng,

Baitussalam District, Aceh Besar Regency has

been in accordance with what regulated in the

regulation.

There are special characteristics in the

profit-sharing agreement in which there is one

party who referred to as the land owner (the

party who own the land to be farmed) and

another party who referred to as the cultivator

(the party who farm the land) (Musli 2018,

personal communication, 19 December). The

land owner only gives the land to be cultivated

while the cultivator who conducts the farming,

spending energy, providing seeds as well as

managing agricultural land as agreed by both

parties. In more modern activities, the parties

who will perform the work provide the capital,

expertise, and their own equipment. The

outcome will be divided with the parties who

own the asset. The allocation of the amount of

percentage of each party is depending on the

provision of both parties.

There are no certain provisions concerning

the amount of profit-sharing portion which

becomes the rights of the owner or the right of

the cultivator in Customary Laws (Mustafa

2018, personal communication, 19 December).

In Gampong Blang Krueng, there is a

Customary Institution which highly influences

the success or failure the implementation of

profit-sharing system of an agricultural land

cultivation that exists in Gampong Blang

Krueng, Baitussalam District, Aceh Besar

Regency, and this Customary Institution named

Kejruen Blang. The duty of Kejruen Blang is in

the agricultural land sector as mentioned in

Article 25 of Aceh’s Qanun No.10 Year 2008

concerning Customary Institution.

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4.3 The Barriers Faced by the Local

People of Gampong Blang Krueng

in the Implementation of

Profit-sharing Agreement

The implementation of profit-sharing agreement in

Gampong Blang Krueng, Baitussalam District, Aceh

Besar Regency leads to the occurrence of barriers in

implementing its profit-sharing system. The barriers

are regarding the dissent between the owner of

agricultural land and the cultivator, the dissent can

be related to the matter of portion received by each

party, therefore; there is a party who has an

argument which contradicts with other parties

regarding the yield of agricultural land (Waled 2018,

personal communication, 22 November). In

Gampong Blang Krueng, Baitussalam District, Aceh

Besar Regency, the conflict management is solved

by deliberation. The occurring dispute between the

parties is small conflicts which according to the

parties can be solved by deliberation so it won’t end

up in court level (Bakar 2019, personal

communication, 28 February). In solving the

disputes, the community use cultural approach by

involving the parties related to the disputes including

the apparatuses of Gampong Blang Krueng as well

as both conflicting parties, thus, the settlement won’t

have to be brought into a court level.

Some shortcomings were found in the

implementation of profit-sharing agreement in

Gampong Blang Krueng, Baitussalam District, Aceh

Besar Regency. One of those shortcomings is the

implementation of verbal agreement in profit-

sharing agreements that occurred in Gampong Blang

Krueng (Muklis 2019, personal communication, 24

February). Due to that matter, clear and assertive

limitations regarding rights and responsibilities of

both parties were undescribed. This situation

emerges a high possibility for both parties to violate

the rights and responsibilities which have been

agreed in prior.

Profit-sharing agreement in Gampong Blang

Krueng is also giving lack of legal insurance for the

parties who conduct the agreement because the

agreement cannot be proved if any disputes occur

and this situation is a result of the agreement which

made verbally without the consent of Village Chief

as the authorized official, thus, legal protection and

basis of rights which can be used as legitimate

evidences if any disputes emerge between both

parties are unavailable. Therefore, it is crucial that

the profit-sharing agreement is made in written form

to acquire legal insurance in case that a conflict

between the two parties occurs. The majority of

local people in Gampong Blang Krueng,

Baitussalam District of Aceh Besar Regency

conducted the profit-sharing agreement as the

secondary source of income due to its relatively

short period. The duration of the agreement is

approximately 4 (four) months from the seeding to

harvesting period (Agla 2018, personal

communication, 17 December).

5 CONCLUSION

In view of the above discussion, conclusions can be

drawn as follows: In the practice, the local people of

Gampong Blang Krueng of Baitussalam District –

Aceh Besar Regency do not use written agreement

instead they use verbal agreement and provide no

witnesses from both parties and do not require

authorization from the relevant district head or other

officials on that level. Most of the people did not

know about the existence of Law No. 2 Year 1960.

The profit-sharing system in Gampong Blang

Krueng, Baitussalam District, Aceh Besar Regency

was implemented through 2 (two) systems. The first

system is the implementation of 1:4 system. The

second system implements 1:3 system. Between

these 2 (two) systems, the community of Gampong

Blang Krueng were using 1:4 system more

dominantly.

Disputes occurred in this profit-sharing

agreement. The matter of dispute was regarding the

dissent between the owners and the cultivators, the

dissent was associated with the allocation of portion

that received by each party and a party with bad

intention.

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