This presentation by Ani Adiwinata Nawir and Philip Manalu from CIFOR given during the Forests Asia Summit in the discussion forum "Equitable development: Improving livelihood benefits for smallholders in the forestry value chain " focuses on policy constraints to facilitate cost-effective smallholders’ production, and integrated marketing of timber & NTFPs, integrated timber & NTFPs management and Scenario policy analysis at the landscape level, especially inter-relation between products & landscape level management.

1. 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)

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

3. 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)

4. 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.

5. 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)

6. Preliminary findings:
Household livelihood strategy in managing
timber and NTFPs is driven by forestry policy
and regulations

7. 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)

8. 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)

9. 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

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

11. Scenario policy analysis at the landscape level:
inter-relation between products &
landscape level management

12. Timber (local species),
rattan, honey, etc
Bamboo
Casuarina sp
Coffee plantation
Candle nuts
Herbs, vegetables,
cashew nuts, fruits, etcRice 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)

13. 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)

14. 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)

15. Thank you