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

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

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.

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:

2. Policy constraints to facilitate

cost-effective smallholders’production, andintegrated marketing of timber & NTFPs

Landscape

level

NTFPsNo. 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)

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)

A favourable 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).

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

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

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

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)

4. Findings (1):directing project intervention:

Household livelihood strategy in managing

timber and NTFPs is driven by forestry policy

and regulations

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

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:

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

Findings (2):

A lack of understanding about policy andregulation at household level

Inadequate level of understanding of respondents about certain regulations

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?

5. Project intervention in Year 2-4:Propose improved regulations and government support,

focussing on effective and practical implementation

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

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

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.

Scenario policy analysis at the landscape level:

inter-relation between products &

landscape level management

Project intervention Year 3

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

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)

Problems & threats

(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

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

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, etcBamboo

Casuarina spTeak plantation & mixed

timber species (low value)

Coffee plantationCandle nuts Herbs, vegetables,

cashew nuts, fruits, etc

Rice fields

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 intervention).

6. Conclusions (1)

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)

Recommendation (working progress):

Conducive overarching institutional and policy framework aims for feasible and competitive smallholder

enterprise management

Thank you