Understanding policy frameworks to facilitate smallholders’

production and integrated marketing of timber and NTFPs in Indonesia

(Central Java, West Nusa Tenggara, & East Nusa Tenggara)

(ACIAR FST/2012/039, April 2013 – Dec 2016)

CIFOR

Ani Adiwinata Nawir

Philip Manalu

Collaborator Team

M. Ridha Hakim, Syafrudin Syafii, Yeni F. Nomeni (WWF NT),

Julmansyah (KPHP, Sumbawa), Maryudi (Gadjah Mada University),

M. Widodo (Mataram University) & Antonius (Undana University)

Policy constraints to facilitate

cost-effective smallholders’ production, and

integrated marketing of timber & NTFPs

Landscape

level

Marketing chains

Buyers

(Processing company)

Timber

NTFPs

Farm level

management

Production system

Com. forestry scheme (HKm):

MoF Decree No. P. 37, 2007 &

No. P 18, 2009)

NTFPs cluster policy

(MoF Decree No. 21, 2009)

Timber legality verification schemes:

various MoF decrees

(SKAU, SKSKB, FA-FKB, SVLK)

Pro-big scale industry

(Ministry of Trade Decree

No. 36, 2011)

Inter-islands trade

(Min. of Trade Decree

No. 35, 2011)

1. Overly regulated system – varied based on types of management

2. Overlapping policy & regulation frameworks: regional autonomy

District level regulation (Peraturan Daerah-PERDA)

District level regulation (Peraturan Daerah-PERDA)

Integrated timber & NTFPs management

Facilitated by a favourable policy and regulation

frameworks, type of management:

enhances a complementary income portfolio at the

household level

optimisation of timber and NTFPs production system,

more cost-effective value chains,

eventually improves management at the landscape

level.

A favourable policy and regulation frameworks

Serve as incentives for optimisation of timber and NTFPs production

system and more cost-effective value chains, through policies and

regulations that are:

tailored to local context

resulted from participatory processes: take into account inputs from

stakeholders that are affected in the implementation

benefits and risks are predicted and manageable (including the

transaction costs of implementing relevant policies and regulations).

Policy instruments that increase the comparative advantages

of small-scale forestry management practices, and thus stimulate investments

in its establishment and management.

(Adopted from Enters et al., 2004 and Meijerink, 2007)

Preliminary findings:

Household livelihood strategy in managing

timber and NTFPs is driven by forestry policy

and regulations

Landscape of community teak plantation

and rice fields in Pelat (Sumbawa, WNT)

NTFPs in the local outlet in the city

of Sumbawa (WNT)

Household income portfolio in West Nusa Tenggara & East Nusa Tenggara:

NTFPs are important & limited trading of timber

Pinang (Areca catechu) for menyirih

(daily snacking) (TTS, ENT)

Other products: honey, ginger, bamboo

Timber is not traded commercially and it is

limited for domestic uses (TTS, ENT)

Limited timber uses

(in village-trading)

Household income portfolio

Privately-

owned lands

Protected forests

or nature reserve

Domesticated NTFPs:

e.g. candle nuts

Policy regulating

access to utilize

the forests

(Limited) extractive

NTFPs: honey

Timber management

permit (IPKTM,

(District level Perda)

Verifying timber legality

(SKAU) – national level

P. 30/Menhut-II/2012

NTFPs Processing & Market

Timber processing & marketing

Transporting timber

Transporting NTFPs

Regulated locally based

national policy

Customary

norms &

rules

Regulated locally

based national policy

Inter-relation: household livelihood strategy (timber and NTFPs) & forestry policy and regulations

(West Nusa Tenggara and East Nusa Tenggara)

Household income

portfolio

Privately-owned lands

Processing

More flexibilities

in exploring

various

economic

opportunities

Harvesting -Transporting:

SKAU (P. 30/Menhut-II/2012)

Seasonal incomes

throughout the year

Savings

Marketing

Transporting

NTFPs

Timber

Processing

Marketing

Household income portfolio in Yogyakarta, Java:

Timber & NTFPs are managed on privately-owned lands;

more regulations along the marketing and processing chains

Following agriculture

products

Regulated locally

based national policy

Procedures for verifying the legality of timber coming from privately-owned lands

Vil

lage

leve

l

Dis

tric

t and

pro

vinc

ial l

evel

s

File: Diagram SKAU Ch 6.doc

Privately-owned tree

plantation

(1)

Application

for SKAU

Village office

(4)

Measurement

(Volume by timber types)

Transporting

Logs Sawn wood

(2)

Assessment of

ownership entitlement

S K A U

(3b)

Legality confirmed

(3a)

Rejected

(5)

Issuing the SKAU

by the head of the village

(6)

The SKAU document

attached to wood transported

Provincial Forestry

Agency (PFA)

Distributing

the SKAU

forms

Compiling

and reporting

monthly

Forestry District Agency

(FDA)

Submitting requests

for SKAU forms and

reporting monthly on

documents issued

Allocating

the SKAU

forms

Source: Nawir (2012)

54%-84% HHs

do not have

land paper

Privately-owned

land

(3a)

Rejected

(3b)

Legality confirmed

(1)

Application

for SKAU

(2)

Assessment of

ownership entitlement (4)

Measurement

(Volume by timber types)

(6)

The SKAU document attached to

wood transported

(5)

Issuing the SKAU by the

head of the village

Scenario policy analysis at the landscape level:

inter-relation between products &

landscape level management

Timber (local species),

rattan, honey, etc

Bamboo Casuarina sp

Coffee plantation

Candle nuts

Herbs, vegetables,

cashew nuts, fruits, etc Rice fields

Pelat (NTB) Batudulang (NTB) Karangmojo (Gunungkidul)

Water catchment area:

protected forest

(800-1300 m)

Buffer zone:

upstream (400-600 m)

Commercial production area:

private property (50-300 m)

Teak plantation &

mixed timber species

(low value)

Fatumnasi (NTT) Bosen (NTT) Bejiharjo (Gunungkidul)

1. Current policy frameworks restrain smallholder producers from

benefiting optimally due to:

a. Disincentives to production systems and low cost-effective value adding

industries

b. Overly regulated regulations applied independently to timber and NTFPs

– high transaction costs

c. A lack of understanding about policy and regulation at household level –

increasing community knowledge about policy and regulation is crucial

(part of project activities in Year 2).

Conclusions (1)

2. Roles of middle-men & brokers – trade offs between:

a. Suppressing farm gate prices (enjoying significant profit margin) (-)

b. Covering the costs (markets, transportation & transaction & sources

of financial capital for investment & household needs (+)

E.g. 38% of total (formal) costs sold at farm gate

(based on the analysis in West Nusa Tenggara)

3. Product & landscape heterogeneity offers:

a. resilience and diverse options in the face of climate variability,

b. ability for local households to adapt to government

management policy

Conclusions (2)

Thank you