Development of timber and non-timber forest products’ production and market strategies for improvement of smallholders’ livelihoods in Indonesia.

1. Policy Framework for Complementary Integrated
Management of Timber and Non-timber Forest Products to
Enhance Local Livelihoods in Indonesia
‘Development of timber and non-timber forest products’ production
and market strategies for improvement of smallholders’ livelihoods
in Indonesia’ (ACIAR - FST/2012/039, April 2013-Dec. 2016)
CIFOR & collaborator team
Ani Adiwinata Nawir,
A. Maryudi, S. Syafii, Y. Nomeni, W. Putro, Antonius Kian , P. Sumardamto, Y.
Amirah, P. Manalu, Julmansyah, P. Danayasa, & R. Hakim
Forest Governance Session, IUFRO Research Group 3.08 Small-scale
Forestry Conference, 12 October 2015

2. Presentation outline:
1. Complementary integrated timber
& NTFPs management
2. Policy constraints & a favourable
policy and regulation framework
3. Overview of research sites &
management characteristics
4. Findings (2 parts)
5. Project intervention in Year 2-4
6. Conclusions & recommendation

3. 1. Three important components of ‘complementary integrated
timber and NTFP management’:
A type of management that supports the enhancement of a
complementary income portfolio at the household level,
which comes from the optimisation of timber and NTFP production
system, supported by more cost-effective value chains
The implementation of the integrated management between
timber and NTFPs will enhance the ecological function of the
landscape
The whole processes are facilitated by favourable policy and
regulation frameworks.

4. 1. insufficient understanding of the trade-offs: allocation of household
labour and financial capital
2. ineffective silvicultural practices: do not optimise the production of
timber and NTFPs;
3. insufficient understanding of market characteristics and what the
markets require to improve the products’ qualities;
4. there has been conflict with integrated uses and management of
timber and NTFPs in the region; and
5. unfavourable policy frameworks that prevent production system &
value chains from effectively providing fair profit margins
Such integration, however, faces significant impediments:

5. 2. Policy constraints to facilitate
cost-effective smallholders’production, and
integrated marketing of timber & NTFPs

6. Landscape
level
NTFPs
No. 35, 2011)
(2) Overlapping policy & regulation frameworks: regional autonomy
Production system Marketing chains Buyers
(Processing company)
Timber
Farm level
management
Management access:
E.g. Community Forestry
(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, PHBML, & SVLK)
Pro-big scale industry
(Ministry of Trade Decree
No. 36, 2011)
Inter-islands trade
(Min. of Trade Decree
(1) Overly regulated system – varied based on types of management
District level regulation (Peraturan Daerah-PERDA)
District level regulation (Peraturan Daerah-PERDA)

7. Overlapping policy & regulation frameworks
Buyers
(Processing companies)
Marketing
chains
Production system
Landscape
level
Farm level
management
Central government
legislation & regulation
(e.g. MoF)
Provincial government
District government
(e.g. Forestry District Agency;
Transportation District Agency)

8. Afavourable policy and regulation framework
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)
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).

9. Participatory action research with scope of activities:
3.1. Review policy and regulatory frameworks that hinder timber and NTFP
production and marketing:
 Identify & analyse incentives and specific disincentives to the cots-
effectiveness of production and marketing chains
3.2. Propose improved regulations and government support, focussing on
effective and practical implementation
 Develop a policy working group at district level (in consultation with
provincial level relevant agencies) – recommendation to the national level
 Collaboratively develop recommendations for applying the improved
policy and regulations with key government agencies.
 Properly consulted and refined recommendation
3.3. Support trial applications of the new policies and/or regulations and monitor
the impact of these changes
 Participatory analysis on the impacts of different scenarios

10. 1. Smallholders’ farming areas in Indonesia’s poorest provinces of West Nusa Tenggara
and East Nusa Tenggara, and
2. Smallholders’ teak production areas on its most densely populated island (Yogyakarta,
Central Java).
Gunungkidul,
Yogyakarta, Java
Sumbawa, West Nusa
Tenggara Timor Tengah Selatan,
West Timor,
East Nusa Tenggara
3. Overview of research sites & management characteristics

11. Teak (Tectona grandis) is a commercial
wood species important to cottage wood
industries producing furniture and
woodcarving.
NTFPs play important role in enhancing local
household incomes: bamboo, jack fruits, etc
Management characteristics in Yogyakarta, Java:
intensive teak plantations managed on privately-owned lands

12. 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 (WNT) & East Nusa
Tenggara (ENT): NTFPs are important & limited trading of timber
Pinang (Areca catechu) for menyirih
(daily snacking) (TTS, ENT). Other products:
Tarum (Indigofera sp.) as natural dye material
Timber is not traded commercially and it is
limited for domestic uses (TTS, ENT)

13. 4. Findings (1):directing project intervention:
Household livelihood strategy in managing
timber and NTFPs is driven by forestry policy
and regulations

14. 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
West Nusa Tenggara and East Nusa Tenggara
Inter-relation: household livelihood strategy (timber & NTFPs) & forestry policy and regulations

15.  Clan-based customary land
ownership with strict
management rules
 More effective in guiding
day-to-day communal
forestry management
practices for NTFP
collection (i.e. Forest
honey)
 Maintaining the surrounding
nature reserve.
Nature
reserve
Protected
forest
Clan-based (SUF): Customary rules complementing state
regulations on limiting community access to protected forest:

16. 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
Regulated following
agriculture products
Regulated locally
based national policy

17. Findings (2):
Alack of understanding about policy and
regulation at household level

18. Inadequate level of understanding of respondents about certain regulations

19. Perception on the existing regulations & day-to-day management practices
Batu-
dulang
Pelat Total Fatumnasi Bosen Total Karangduwet Bejiharjo Total
No 60 38 45 26 13 19 88 89 89
Yes 32 8 16 8 2 5 12 10 10
Do not know/answer 8 54 40 66 86 76 0 1 1
No 13 11 12 12 25 19 4 6 5
Yes 87 82 84 60 63 61 96 92 93
Do not know/answer 0 6 4 28 13 20 0 2 1
No 8 5 6 11 17 14 22 12 15
Yes 92 89 90 60 69 64 78 84 82
Do not know/answer 0 5 4 29 14 22 0 4 3
2. Is it important to understand the regulations?
3. Interested in having more information about the regulations?
Perceptions SUMBAWA TIMOR TENGAH SELATAN GnKIDUL
1. Wheter regulations have impended day-to-day management practices?

20. 5. Project intervention in Year 2-4:
Propose improved regulations and government support,
focussing on effective and practical implementation

21. Village level District
government
National level governmentRecommendation
on improved policy &
regulations
Improved policy &
regulations
Policy
Working
Group
Provincial
government
Participatory Action Research: Policy Working Group

22. 1. Approaches: series of consultation (FGDs and meetings) with various
stakeholders at village, district & provincial levels
2. West Nusa Tenggara (Sumbawa):
Strategic planning document at district level (grand design/) for
integrated management of timber and NTFPs
3. TTS:
Strategic planning document at district level (grand design) for NTFPs
development and management
4. Java (Gunungkidul, Yogyakarta):
improving the cost effectiveness of policy on timber verification &
certification & promoting NTFPs as part of local government
development strategy (honey, bamboo, & herbal plants)
5. Supported by producing local level regulation framework to support the
implementation (i.e. PERDA/PERBUP)
Project intervention: at district level

23. Capacity building: law & legality knowledge
(1) Training for policy working group membes: improving the
understanding about law & legallity
(2) Training at
(3) Training at community level in understanding different regulations
on:
Verification requirements for timber origin,
Administering land certificate/paper, and
Procedures to form cooperative and accessing financial
assistance for developing small-scale and medium enterprises.

24. Scenario policy analysis at the landscape level:
inter-relation between products &
landscape level management
Project intervention Year 3

25. Upstream forests:
honey trees (Boan:Tetramales nudiflora)
Downstream area:
City of Sumbawa
Sumbawa
island
Conserving watersheds: upstream forests
Main program of FMU in Sumbawa: Batulanteh - 32,776 Ha
(Limited production forest – 55%, production forest – 23%, protected forest – 22%)
Main
watersheds

26. A landscape-platform of a certain ecological function that allows:
 Conservation, rehabilitation and economic and sociocultural
activities can be complementary implemented in addressing
ecological problems, as well socioeconomic and tenurial conflicts
under an integrated management
 Interaction between key stakeholders, including local communities,
to collaborate in managing the resources and resolve conflicts
participatively
Forest Management Unit (Kesatuan Pengelolaan Hutan-KPH)

27. Problems & threats

28. (1) Managing
protected forest while
enhancing livelihoods
(4) Rehabilitating degraded area
while enhancing livelihoods
District capital city:
Sumbawa Besar
(3) Illegal logging in state-own
company rehabilitated forests
(2) Forest encroachment

29. Product & landscape heterogeneity offers:
(1) Resilience and diverse options in the face of climate
variability,
(2) Ability for local households to adapt to government
management policy
(3) Strategy for reducing the pressures to protected
forest/nature reserve/protected forest

30. Water catchment area:
protected forest, nature
reserve (800-1300 m)
Buffer zone:
upstream watersheds
(400-600 m)
Commercial production
area: private property – less
secure tenure (50-100 m)
Timber (local species),
rattan, honey, etc
Bamboo
Casuarina sp Teak plantation & mixed
timber species (low value)
Coffee plantation
Candle nuts Herbs, vegetables,
cashew nuts, fruits, etc
Rice fields

31. 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. Alack of understanding about policy and regulation at household
level – increasing community knowledge about policy and regulation
is crucial (part of project intervention).
6. Conclusions (1)

32. 2. Formal legislation and regulations applied at the local level, affecting
local communities in making decisions on their livelihood strategies;
there are inter-relationships between:
(1) complementary incomes coming from timber and NTFP at the household
level;
(2) forest land rights; and
(3) the landscape type of nature reserve or protected forest surrounding the
villages.
3. 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)
Conclusions (2)

33. Recommendation (working progress):
Conducive overarching institutional and policy
framework aims for feasible and competitive smallholder
enterprise management

35. Thank you