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Can ‘People Plantation Forest’ policy stimulate independent community-based tree growing activities in Indonesia?

von Omar Pidani (Autor) Fitri Nurfatriani (Autor)

Hausarbeit 2009 29 Seiten

Forstwirtschaft / Forstwissenschaft




I. Introduction

II. Methodology
2.1. The Research Methodology: the Thematic Analysis
2.2. Data Collection Method and Analysis

III. The existing community-based tree growing strategies
3.1. Farm Frestry (Hutan Rakyat /HR)
3.2. Community Forestry Program (Program Hutan Kemasyarakatan)
3.3. Community-Company Partnership Program (Program Kemitraan)

IV. Benefits and Constraints of the past strategies
4.1. Farm Forestry Program
4.1.1. Benefits
a. Flexible decision for land management
b. Provision of financial and resources support
4.1.2. Constraints
a. Land and crop tenure security
b. Complex selling prodedures and high transaction costs
c. Poor market information and access
d. Low capacity of the farmers and minimum access to germplasms
4.2. community Forestry (CF) Program
4.2.1. Benefits
a. Increasing access to forest land and forest resources
4.2.2. Constraints
a. Land and resource Tenure
b. The weakness of local institutions
c. Minimum technical assistance
d. Complex licensing prodecures
e. Limited access to end products
4.3. Community-Company Partnership Program
4.3.1. Benefits
a. Provision of job opportunities
b. Financial and technical Support
4.3.2. Constraints
a. Insecure land and crop tenure
b. Potential loss of livelihoods
c. Lack of local stakeholder involvement
d. Economic and financial challenges

V. People Plantation Forest Policy

VI. Discussion
6.1. Land and Crop Tenure Security
6.2. Viable Production Technology
6.3. Market Structure and Access
6.4. Crops Protection Capability
6.5. Local Institutional and Capacity Building
6.6. Complex Licensing and Marketing Bureaucracy

VII. Conclusion


Can ‘People Plantation Forest’ policy stimulate independent community-based tree growing activities in Indonesia?


Forest plantations are important1 in Indonesia for both conservation and development aspects of forest management. They can provide a sustainable supply of wood resources to meet the increasing demands of wood 2 processing industries, rather than escalating pressure on natural forests reserved for conservation. Income from plantation forests can address the economic marginalisation of forest dependent people. Over the last three decades, three strategies have been put into practice to stimulate the development of both large-scale and small-scale plantation forestry in Indonesia: farm forestry, community forestry and community-company partnership. The success, however, has been limited. This paper reviews experience of these strategies in Indonesia, and considers this in the context of criteria and indicators for sustainable plantation development suggested in the literature. It then develops an analytical framework to assess whether a new policy proposed in Indonesia, “the People Plantation Forest” (PPF) policy, is likely to stimulate community-based tree growing activities.

Our analysis suggests that out of six elements identified in the framework, local institutional and capacity building, along with production technology and market access improvement are aspects that PPF might cope well and thus likely to encourage independent community-based tree growing activities. Whereas other elements such land and crop tenure security together with complex licensing and marketing bureaucracy are not dealt with thoroughly and consequently might still be major stumbling blocks in that regard.

For PPF to stimulate independent community-based tree growing, it requires commitment of government agencies across different jurisdictions to coordinate on the provision of technical, financial and regulatory support to minimise constraints in tree growing. Tenure security issue can be minimised through a more participatory approach for land demarcation and mapping; any initiatives conducted by members of community for such purpose should be accommodated. While complex licensing and marketing bureaucracy might be eased off through the creation of a simpler and more integrated procedure. This commitment of support, though, needs to be maintained in the long run given the nature of tree-growing ventures.

Keywords: smallholder tree growing, Hutan Tanaman Rakyat

I. Introduction

In Indonesia, community-based tree growing activities have been practiced over a long period of time. Amongst rural and forest margin people, such activities are mainly for subsistence production and income generation. However, the profit that the farmers obtain from these has been a little compare to other commercial timber production activities (Nawir et al., 2007). Underpinning this is a set of socio-economic and ecological issues. Minimum profit that farmers reap also explains why the poverty in and around forest areas is still high (Pradhan et al., 2000).

The problem of rural poverty, along with others such as unsustainable supply and high demand of wood from production forests, minimum access to state forest lands, and maintenance of a wood production system have driven the government to adopt community-based tree growing approaches into its strategies. There have been a range of programs being put in place to address forest-related problems as above. Some of these programs are: farm forestry (Hutan Rakyat), community forestry (Hutan Kemasyarakatan) and company-community partnership (kemitraan perusahaan-masyarakat). Each of these strategies offers both advantages and disadvantages. Hence, their impacts on the ground have been variable (Kusumanto and Sirait, 2000; Poffenberg, 2006).

In 2007, the government issued a new decree regarding the ‘People Plantation Policy’ (Hutan Tanaman Rakyat). This policy is aimed at enhancing the contribution of forestry sector in the development through the improvement of production forest’s quality, the alleviation of poverty level and the improvement of the rural and forest-margin people’s livelihood (Ministry of Forestry, 2006). There are not many information as to whether or not this policy will be able to remove the key impediments to community-based tree growing activities. Nawir and ComForLink (2007) look specifically into ‘partnership’ and ‘developer’ model and argue that this policy fails to provide a proper guideline for partnership. Nordwijk et al., (2007) argues that this policy is not yet able to cope with key constraints of the past strategies such as tenure status, quality wood production capacity of the local people, over arching regulation to market access, and lack of reward for environmental services, yet they have not touched comprehensively on other aspects such as crop protection capacities, licensing procedure, and institutional and capacity building.

Therefore, this paper contributes to the on-going debate about the extent to which the “People Plantation Forest’ (PPF) policy will be able to encourage farmers to further integrate trees into their farming, particularly through its independent model (will be discussed in section IV). The paper first reviews benefits and constraints of the past policies of community-based tree growing in Indonesia and combine them with other criteria and indicators for sustainable small-scale plantation as suggested in literatures, particularly by Byron (2001) and Nordwijk et al. (2007), in developing an analytical framework to assess independent scheme of PPF policy.

The rest of the paper is divided into five sections. The next section briefly describes the research methodology applied. After that, it explores the existing strategies of community-based tree growing strategies in Indonesia and their respective key benefits and constraints. Subsequently, it describes the main attributes of the new ‘People Plantation Forest’ Policy. The final part of this paper includes discussions and policy recommendation.

II. Methodology

2.1. The Research Methodology: the Thematic Analysis

Methodological approach used in this paper is thematic analysis. Thematic analysis is a method for identifying, analysing and reporting themes of patterns within data (Boyatzis, 1998, Joffe and Yardle, 2004, Braun and Clarke, 2006). Unlike its twin, the content analysis, that tends to describe numerically features of particular texts or images, thematic analysis explores more on qualitative aspects of material analysed (Joffe and Yardle, 2004). Thematic analysis used to be applied more in psychological and clinical trial researches but is increasingly used in others policy research topics (for example, see Agar, 1983).

2.2. Data Collection Method and Analysis

The data collection method used for this paper is mainly document study. Documents reviewed were secondary data and included scholarly publication such as peer-reviewed journals and articles, book chapters and the official government regulations and reports. In particular, the review over past strategies of community-based tree growing in Indonesia utilised data published over the period of 1998 until recently. The analysis was conducted manually, and involves reading the documents, taking notes and assessing them against official reports and government documents.

III. The existing community-based tree growing strategies

3.1. Farm Forestry (Hutan Rakyat/ HR)

Farm Forestry (Hutan Rakyat)3 is defined in Indonesia’s Forestry Act 1991 as tree-growing activities undertaken on community-owned lands. The Farm Forestry program was initially adopted by the government for re-greening4 and reforestation5 program in around 1970 (Nawir, 1998) targeting the areas of Java and the Outer Islands (BAPPENAS, 1998; Suharjito et al., 2000 cited in Subarudi et al., 2004). It also has been associated with other socio-economic objectives such as livelihood improvement of rural and forest-margin people, and fulfillment of log demand for wood processing industries (BAPPENAS, 1998; Suharjito et al., 2000 cited in Subarudi et al., 2004). There are approximately 3.43 million of farming households applying a farm forestry approach on their land (FAO, 2001 cited in Nawir et al., 2007). Common species include Sengon 6 (Paraserianthes falcataria) and Jati (Tectona grandis) (Nemoto, 2002; Nawir et al., 20077 ).

To accelerate the implementation of farm forestry (FF) programs, the government has provided various incentives for participating farmers. These incentives range from credit schemes and production input subsidies, which are generally channeled through central government agencies, and technical assistance which is handed over to the local government (as stated in Government Regulation (PP) No.62/1998). For instance, circa 1990, the Directorate General of Reforestation and Land Rehabilitation launched a scheme, the so-called ‘farm forestry credit(Kredit Hutan Rakyat / KHR) under which participating farmers were offered financial incentives (up to Rp. 2 Million per hectare at a subsidized interest rate of 6% per annum) to plant trees on their land for the provision local goods and services. Another similar scheme was the ‘credit for watershed conservation’ (Kredit Usaha Konservasi Daerah Aliran Sungai: KUKDAS) which was aimed at rehabilitation of critical lands within catchments.

3.2. Community Forestry Program (Program Hutan Kemasyarakatan)

A Community Forestry (Hutan Kemasyarakatan) program is commonly defined in Indonesia as tree-planting activities within state production and protection forests which is aimed at allowing greater access for the community to forest land and resources (Nawir et al., 2007b cited in Nawir, 2008). Until 2003, CF program was regulated by a series of decrees, namely the Ministry of Forestry decrees (SK) No.622/1995, SK No.677/1997, SK No.865/1999, and SK 31/2001. Through these decrees, the community is given a range of rights such as the right to utilize non-timber forest products (SK No.622), the right to manage the forests under 25 year leases; provided community grouped together into a cooperative (SK No.677), the rights to utilize wood and non-wood forest products (SK No.865) and the rights to implement the program (SK No.31). In 2004, a new Ministry of Forestry regulation (Permenhut) No.1/Menhut-II/2004 regarding ‘Empowerment of people living in and surrounding forest area toward Social Forestry’ was issued. Social Forestry (SF) program is slightly different to CF program in terms of rights’ recipients and administration complexities. SF program target both private and state forest areas and requires proposer to submit a much more detail proposal which covered the management plan (kelola Area), institutional arrangements (kelola lembaga), and business arrangements (kelola bisnis).

Although the Community Forestry (CF) Program is perhaps the most advanced and comprehensive effort so far to encourage community engagement in forest management (BAPENNAS, 1998), the impact on the ground has been limited (Fay and de Foresta, 1998; Kusumanto and Sirait, 2000; Poffenberg, 2006)(See Figure 2). This can be seen from the percentage of forest area under community- management which is small (0.5%) compared to the total 135 million hectares of forest areas in Indonesia (Poffenberg, 2006). There are various socio-economic and technical reasons for this the slow progress and some of them will be discussed in a latter section of this paper (see Section 4).

3.3. Community-Company Partnership Program (Program Kemitraan)

Although ‘Community-Company Partnership’ (CCP) has been an obligation for timber concessionaires to set up as stipulated in the forestry act and regulations8, it has become more prevalent since 1999/2000 (Awang et al., 2004; Nawir, 2008). In Java, the CCP program was largely initiated by Perhutani (state-owned company) through ‘Community Collaboration Management Program’ (Pengelolaan Hutan Bersama Masyarakat / PHBM), while in the outer islands it was pioneered by several timber-estate companies (Nawir and Gumartini, 2003; Maturana et al., 2005; Awang et al., 2008). In both regions, the development of the CCP program has been driven by the escalating land-related conflict between community and companies especially post-decentralisation period in 1999, and economic marginalisation of forest dwellers (Nawir et al., 2003;Maturana et al., 2005; Awang et al., 2008). Since such conflicts have often been poorly understood by the authorities and create uncertainties for business, some companies have taken the initiative to build partnerships with the communities. This is expected to minimise unexpected risks and at the same time improve the local communities’ livelihoods (Nawir et al., 2003).

In certain respects, the CCP program developed in Java is much more limiting and less flexible compared to that in the Outer Islands. Moreover, the content of the partnership contract suit Perhutani ’s needs more than those of the people and community groups. The PHBM model commonly adopted in Java allows farmers to use allotments inside the company’s concession to grow cash crops, fodder trees and fruit tress between the rows of teak trees. While the yield from cash crops, fodder and fruit tress remain largely with the farmers9, some of the proceeds of selling the teak (25%) are distributed to the community through ‘Forest Village Community Institution’ (LMDH) established by Perhutani (Djayanti, 2006). The farmers can only use the allotment for up to two years until teak is expected to be free from weeds or any other competing plants and they have to move on. However, there is no technical assistance provided by Perhutani in terms of institutional building and agricultural inputs (Awang et al., 2008).

In contrast, CCP programs implemented by timber concessionaires in the Outer Islands cover tree growing within concession areas that are claimed by forest dwellers, in surrounding concessions areas and/or on community owned lands. Companies cover all the costs for plantation, technical assistances and extension activities. Communities are required to plant 90 to 100% of the area with timber crops and the rest with they preferred cash crops. All yields from cash crops belong to the farmers, while profits from timber selling are shared between company and tree-growers in various proportions: 50:50, 60:40, 80:20 or 90:10. Companies retain the right to conduct harvesting, and communities hold the right to supervise jointly-managed lands and planted timbers. However the latter are obligated to ensure the maintenance of land ownership and the security of planted timber from theft and fires. In addition, contract duration ranges between 43 - 45 years, with thinning cycles in and between (see Nawir and Gumartini, 2003).

IV. Benefits and Constraints of the past strategies

4.1. Farm Forestry Program

4.1.1. Benefits

a. Flexible decision for land management

One of the benefits of farm forestry approach is that farmers have the ability to make decision about land management. Although particular credit schemes such as KUK-DAS (see 2.1.1) require farmers to plant particular tree species in their land, they do not restrict them from planting other ‘cash crops’. The people, thus, have the opportunity to meet their various subsistence needs while at the same time benefit from the provision of resource support.

b. Provision of financial and resources support

The HR program is also beneficial as it provides funding and resource support (seedlings, technology and training) for the local communities. The provision of funding and related resources enables farmers to improve their land’s productivity as well as enhancing the quality of the trees planted. In practice, however, farmers have to deal with intricate procedures to obtain this. For example, farmers may be eligible for ‘farm forestry credits’ (Kredit Hutan Rakyat / KHR) by grouping together until they reach a total planted area of 900 hectares, and find a business partner to administer the loan.

4.1.2. Constraints

a. Land and crop tenure security

Land and crop tenure security are often confused by the overlapping institutional arrangement of land ownership, particularly between customary/traditional arrangements and state regulations and laws. The basic laws, such as the Agrarian Law 1960 and the Forestry Act 1991, only recognise customary/traditional arrangements half-heartedly. The Forestry Act 1991 acknowledge customary land tenure arrangements only if they do not overlap the national interest and only as far as the use of above-ground resources. The agreements do not include below ground resources such as mining resources. The Agrarian Law 1960 only approves a land certificate issued by the Agrarian Office as proof of land ownership but this has not been fully adopted by most traditional communities. As the result, customary/traditional arrangement is often undermined (McCarthy, 1999; Fay et al, 2000; Contreras, 2005). Prior to 1980, there was an alternative way to accommodate the existence of customary land tenure arrangements through the issuance of a notification letter by the village head. Yet this is now very weak under formal laws (Nawir and ComForLink, 2007).

b. Complex selling procedures and high transaction costs

Another constraint to the FF program is the strict regulation and complex procedures for selling log or primary wood products (e.g. square log or sawn timber) which come from private forest in Indonesia (Kusumanto and Sirait, 2000). In order to be able to market log or primary wood products from community-owned land, the farmers must purchase ‘the Permit of Timber Utilization from Community-Owned Land’ (Izin Pemanfaatan Kayu dari Tanah Milik: IPKTM) (as per decree No.20/Kpts-II/1997). This requires farmers to undergo intricate procedures starting from land ownership documentation verification10 up to endorsement by the district government head / Bupati (Kusumanto and Sirait, 2000). Such intricate procedures open up the possibilities for rent-seeking by the government and intermediaries (broker). Farmers’ also have to pay per-cubic levy of timber stock as well as other non-formal miscellaneous fees, such as costs for purchasing reference letter for logs or or primary wood products’ form community-owned land (Surat Angkutan Kayu / SAK) (BAPPENAS, 1998). The costs accumulated from such a complex procedure are often too expensive to be covered by low-income farmers and often hinder them to participate in tree-growing activities.

c. Poor market information and access

The growing local and export-scale wood market has been one of the reasons behind the success of FF program (Nemoto, 2002; Nawir et al., 2008). Farmers, however, are still unable to get the most benefit of such condition and only get the small profit from log and/or processed wood production (Nawir et al., 2007). There are several reasons for such condition. Firstly, farmers have minimum market information and often unable to deal with complex log-selling procedure and high transaction costs; these then cause the farmer to sell their wood in lower prices (Nawir et al., 2007) (Nawir et al., 2007); Secondly, wood processing industries have an exclusive agreement11 with the government which hinder them from purchasing wood from community-owned land (Byron, 2001).

d. Low capacity of the farmers and minimum access to germplasms

In most cases observed, small-scale tree growing activities are characterized by limited proactive management and planning. Gunasena and Roshetko (2000) argue that this is partly because farmers often lack technical capacity. It is also due to minimum institutional and capacity building facilitation provided by the local government, often caused by the lack of capacity in the local government. This, along with the problem of minimum access to ‘high quality gerplasms (Gerhard et al., 2004), has often resulted in low quantity and quality products.


1 College of Asia and the Pacific, Australian National University, ACT, 0200, Australia

2 Research Center for Forest Socio-Economic and Policy, Indonesian Forestry Department, Jalan Gunung Batu No.5, Bogor, West-Java

3 also termed as farm forestry or private forest

4 Rehabilitation of critical land outside of state domain

5 Rehabilitation of critical land within state domain

6 Generally termed as Sengon by the local people, although often identified as different species such as Albizia falcataria (L.) Fosberg, Paraserianthes falcataria (L.) Nielsen, Albizia falcate (L.) Backer, Albizia Moluccana Miq. And Adenanthera falcataria L. (Nemoto, 2002).

7 Stimulating smallholder tree planting - lessons from Africa and Asia scheme’

8 This matter is clearly stipulated in all forestry laws starting from Forestry Law No.5/1967 to Government Regulation No.6/2007 regarding Forest Management (see Maturana et al., 2005and Hendra, 2007)

9 In some cases, farmers might be required to share their cash crop selling profit with Perhutani

10 Proof of land ownership can also be restraining as traditional communities often unfamiliar with formal land certificate system (Kusumanto and Sirait, 2000).

11 Wood processing companies are required to submit an annual plan of sustainable supply (Jaminan Pasokan Bahan Baku Berkelanjutan) which says that industry is able to fulfill its installed capacity. This lead industries to seek for cooperation with plantation companies and/or forest concessionaires to secure their supply but at the expense of small- scale wood producers.


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Titel: Can ‘People Plantation Forest’ policy stimulate independent community-based tree growing activities in Indonesia?