Overview Objectives

The Indonesian government is currently under pressure to reduce deforestation, build a plantation estate to supply the timber industry and reduce rural poverty. Community-based commercial forestry (CBCF) has emerged as a strategy to achieve these goals, with the aim of fostering community involvement in half of commercial forestry enterprise by 2016. Given that 23 per cent of the population live amongst and depend upon forests for at least part of their daily livelihood, the multiple tiers of government in Indonesia are anxious to ensure CBCF becomes an effective policy and management strategy. However, there is little evidence to suggest that remote farmer forest groups have the market knowledge and business expertise to make sound investment decisions, raising concerns that CBCF may trap a new generation of farmers in a cycle of poverty.

FST/2008/039 will bring together a team of Australian, Indonesian and rural development workers with expertise in forestry, rural community development, socio-economic analysis, program evaluation and management, and community engagement. The project aims to analyse the social dimensions of CBCF and design a framework for assessing the livelihood outcomes for rural communities. It will critically evaluate the dominant business models of CBFC to inform a broader understanding of how to optimise the socio-economic and policy settings of the strategy, and encourage and influence priority stakeholders so they can create the optimum conditions for its effective implementation. Primarily, FST/2008/039 will identify how the dominant models of community forestry in Indonesia can be improved to maximise the socio-economic benefits for all partners.

Progress Reports (Year 1, 2, 3 etc)

Research context
Community forestry remains an important activity in rural Indonesia, as part of the mix of enterprises for smallholders (farmers), contributing to the timber supply for the commercial forestry sector, and to reduce deforestation. Community forestry remains an important policy area for the Indonesian government, which continues to devote considerable human and economic resources to achieve its targets (e.g. the Peoples’ Plantation Forests (HTR) program has been allocated a budget of Au$6 billion). The private sector is also actively pursuing closer engagement with rural communities, with a suite of partnership arrangements being applied to establish farm-based timber plantations.

However, there is little evidence that remote farmer forest groups have the market knowledge and business expertise to make sound investment decisions, raising concerns that the business arrangements for community forestry may trap a new generation of farmers in a cycle of poverty and make them vulnerable to the temptations of illegal and unsustainable forestry. This project is undertaking research to assess the strengths and limitations of the dominant business models used in the community forestry sector in Indonesia, and seeks to provide advice - to policy-makers, smallholders, NGO staff, the private sector - on ways to enhance different benefits so that the potential multiple benefits are realised.

Project collaborators
Given the multi-disciplinary nature of the issue, this project combines researchers with expertise in: forestry and forest policy, rural community development, socio-economic analysis, program evaluation and management, and community engagement. The project team includes researchers from the Australian National University (ANU), Indonesia’s Forestry Research and Development Agency (FORDA), the International Centre for Forestry Research (CIFOR), the University of Gadjah Mada (UGM), the Universities of Melbourne and Queensland, WWF Indonesia, Trees4Trees, and a wide range of local partners.

A feature of the project’s first 12 months of operation is the formation of a cohesive, collaborative and stable project team. The project team is fortunate to retain a mix of experienced and junior researchers, and has had three key researchers recently receive post-graduate qualifications.

Research so far
After taking several months to finalise the project details and contracts with partner organisations, the project commenced in April 2011 and the Project Inception Meeting held 16-17 June 2011. The research team has been very active during the past 12 months, focused on:
confirming the five (5) study locations for the research with local partners: Gunungkidul, Pati, Bulukumba, South Konawe, and Sumbawa;
communicating within partner organisations and with relevant people/organisations outside the project team;
designing (including pre-testing & refining) the methodology for undertaking the ‘social dimensions’ analysis [Research task #1];
collecting all field data required for the ‘social dimensions’ analysis; and
undertaking a review of relevant literature to inform the ‘forestry livelihoods’ framework [Research task #2].

The combined analyse the ‘social dimensions’ data and drafting of the research report (the project’s first research report) is scheduled for the 11-13 June 2012, where the key researchers involved in this research task will meet in Mataram (Lombok). The key results from the project’s ‘social dimensions’ analysis will be presented and critiqued at the project’s Annual Meeting, which is scheduled for 3-5 July 2012 in Makassar (South Sulawesi).

The ‘social dimensions’ analysis will include:
preparing a ‘social’ profile of the communities involved with each of the CBCF models (eg. describing the cultural & ethnic diversity, local decision-making structures);
describing the historical and current livelihood challenges and opportunities for the different community segments (eg. gender-specific health & welfare issues, food security for different members of the community, gender-specific enterprise opportunities);
describing the traditional and current management of forests for the different community segments (eg. gender-specific knowledge & roles, age-specific knowledge & roles);
analysing where land tenure is insecure or disputed, and the impact of insecure land tenure for the project’s key stakeholders (ie. local farmers/smallholders) and each of the CBCF models (eg. how should conflict over land tenure be managed);
analysing how the different community segments are engaged and affected by the individual CBCF models (eg. nature & scale of costs & benefits, how risks & contingencies are understood & managed by families); and
provide guidance to the project team about the important elements of a framework to enable assessment of the livelihood impacts for farm families involved in CBCF (ie. ‘forestry livelihoods’ framework).

Further information about the project’s activities and researchers can be obtained from the project newsletters, visit www.aciar.puspijak.org

Research context
Community forestry remains an important activity in rural Indonesia, as part of the mix of enterprises for smallholders (farmers), contributing to the timber supply for the commercial forestry sector, and to reduce deforestation. Community forestry remains an important policy area for the Indonesian government, which continues to devote considerable human and economic resources to achieve its targets (e.g. the Peoples’ Plantation Forests (HTR) program). The private sector is also actively pursuing closer engagement with rural communities, with a suite of partnership arrangements being applied to establish farm-based timber plantations. However, the commercial prospects for smallholders and their surrounding communities from forestry are challenging - with more profitable returns from oil palm and rubber in some districts, and considerable deficiencies in institutional capacity that limit the benefits from forestry. This is the context in which the research project - ‘Overcoming constraints to community-based commercial forestry in Indonesia’, is operating.

Project’s progress
This report documents the 2nd year of the project and includes some important findings that have emerged from the research over the past 12 months. Features of the project’s work over the past year include:
Finalising the report on the ‘Social Dimensions Analysis’ (SDA, Research Task #1);
Developing the structure of the ‘Forestry Livelihood Framework’ (Research Task #2);
Completing the baseline data collection for the ‘Forestry Livelihood Framework’;
Completing the data collection for the ‘Value chain analysis’ (Research Task #3).

The research continues to be ‘grounded’ in the experiences of community-based commercial forestry (CBCF) in the 5 study locations: Gunung Kidul, Pati, Bulukumba, Konawe Selatan, and Sumbawa; and involve and wide range of local partners (e.g. Bulukumba Forestry Office).

The project continues to benefit from a highly motivated and stable research team, with growing expertise covering the broad multi-disciplinary nature of the research topic. The research team is comprised of researchers from the Australian National University (ANU), Indonesia’s Forestry Research and Development Agency (FORDA), the International Centre for Forestry Research (CIFOR), the University of Gadjah Mada (UGM), the Universities of Melbourne and Queensland, WWF Indonesia, Trees4Trees, and a wide range of local partners. The project team meets regularly as a whole (Project Annual Meeting, 3-5 July 2012) and for specific research tasks (Research Task meetings held every 2-3 months), as detailed below.

Conclusions from the Social Dimensions Analysis
While for each of the project’s study areas a range of specific conclusions were drawn, the following overarching conclusions have been extracted from the SDA:
Communities in the project’s study areas experience a range of limitations to their livelihoods, such as low education, dry and sloping land of limited area, restricted access to markets, input and service providers, and limited opportunities (& incentives) to learn and engage in collective action. While numerous programs are designed to support rural development in Indonesia, there is a need for the building of capacity of service providers, such as extension officers and local government officials, to mobilise these programs to address the specific needs of communities in more tailored ways building on the existing (physical and human) resources and opportunities in a specific location. Farmers mainly need capacity building and organisational support, rather than provision of free inputs, which is what many programs tend to focus on. With effective farmer organisation comes the recognition of social structures in communities, which need to be reflective and supportive of all community segments.
CBCF plays an important role in the livelihood of farm families in the project’s study areas. While timber and NTFPs are not necessarily the largest source of annual income, they serve an important function of providing a substantial amount of money when large expenditures are needed in the household. The downside of this, however, is that farmers do not always prioritise the careful management of the forest crops, as no immediate returns will be tangible. Strengthening of production skills and management knowledge, as well as business analytical skills, is needed among farmers to maximise their output from CBCF systems.
In order to formulate appropriate support for the improvement of CBCF systems and measure the impacts of such support (interventions), an analytical framework should be holistic in its assessment of the contribution of forestry to the livelihoods of rural communities - reflecting the complex and multi-faceted way forestry contributes to the livelihoods of farm families. As such, we propose that an analytical framework based on the recognised ‘sustainable livelihood’ framework, with assessment across the five capitals that comprise rural livelihoods, would be a constructive way to assess the contribution and potential of commercial forestry to rural livelihoods. The broader research project aims to develop a ‘forestry livelihood’ framework that is grounded in the context of the study areas that formed the basis of this SDA report.

The project continues to undertake research and development activities to identify strategies to overcome constraints to community-based commercial forestry in Indonesia. The project has now completed the two field-based research for the key research tasks (Research task #2 and #3) and has undertaken considerable work on the final research task (Research task #4).
The key findings relating to the ‘forestry livelihood framework’ (Research task #2) are:
An assessment of farmers’ livelihoods using the ‘sustainable livelihood framework’ (SLF) provides identification of the broad strengths and weaknesses of their livelihood elements - assessed across the five capitals: human, social, natural, physical and financial. This provides a strong basis for greater precision in how support can be directed to farming communities. In particular, using the SLF approach that is ‘grounded’ in the local context provides evidence as to what elements or assets to support smallholders with a low ‘wealth’ status.
The physical (e.g. land) and social (e.g. local networks) capitals of small-scale farmers are often their strongest assets. However, for wealthier farmers the strongest assets tend to be physical and human (e.g. personal educations & skills) capitals.
Farmers with a low ‘wealth’ status rely more heavily of the social capital of their community, than farmers of medium or high ‘wealth’ status.
In terms of investment in community forestry, smallholders with a high ‘wealth’ status often more interested in timber production while poorer smallholders often seeking a wide range of NTFPs (e.g. fodder for livestock, fuel wood, medicinal plants) as well as timber.
The key findings relating to the forestry value-chain pathways (Research task #3) are:
That there are a wide variety of CBCF models in operation at the village-level, although where the physical infrastructure (e.g. transport & market hubs) is more developed, then there are often more variety in CBCF models. Yet, the type or diversity of CBCF models doesn’t necessarily lead to better outcomes for smallholders, with outcomes more determined by the capacity and competitiveness of specific markets.
For a given timber species, market prices for smallholder timber varied significantly according to their grade of quality and location. Diameter size and clear log form were the determining factors in the timber grading system.
The middlemen play an important role in smallholder timber marketing. The profit shares of middlemen were not always greater than those of growers, with no evidence that middlemen always get a greater profit share than growers. However, middlemen gain their profits in a relatively short period (e.g. a few days), whereas growers must wait many years (e.g. more than 20 years for Teak) to realize their profits - commonly giving the impression that middlemen are extracting unfair profits in the timber value-chain.
Current regulations for harvesting permits and timber transport tend to cause marketing barriers and high transaction costs. Even when middlemen in most cases paid the transaction costs, this cost is typically passed down the value-chain to smallholders leading to a lower ‘farm gate’ price for logs. The transaction costs in the current regulatory context are a disincentive to investment in smallholder timber plantations.
The project also undertook considerable work to design and deliver the initial training for an alternative approach for training farmers in commercial forestry (Research task #4). The course is currently being delivered and evaluated in each of the project’s five study sites. The key elements of the project’s ‘farming learning’ approach are:
designing an educational ‘package’ that engages a range of informative partners at the local (district) level, so experiences and ideas strongly reflect the local context (avoiding having information presented from a single definitive source);
involving a group of 20-30 landholders (targeting those actively involved in community forestry) in an interactive co-learning approach; and
ensuring that the curriculum covers 5 key aspects:
The role of landholders in community forestry;
Markets for forest products and services;
Measurement of trees and forests;
Management of trees and forests; and
Farmer-to-farmer extension and the role of farmers’ groups.
Other important activities achieved by the project included:
a ‘scientific writing workshop’ to support members of the research team prepare articles for peer-reviewed journals held in Bogor during August 2013;
the project’s Annual Meeting with stakeholders in Bogor in September 2013;
the project’s Mid-term Review conducted of the project by Tony Bartlett (ACIAR Forestry Research Program manager) in December 2013;
the ‘social science’ workshop held jointly with the parallel ACIAR project FST/2009/051 in Yogyakarta in April 2014; and
preparation of communication materials and presentations to a wide range of fora

Project ID
FST/2008/030
Project Country
Inactive project countries
Commissioned Organisation
Australian National University, Australia
Project Leader
Dr Digby Race
Email
drace@usc.edu.au
Phone
0419 638 406
Fax
Collaborating Institutions
Agroforestry Insight, Australia
University of Queensland, Australia
Australian National University, Australia
Forest Research and Development Agency, Indonesia
Trees 4 Trees, Indonesia
World Wild Fund for Nature - Indonesia, Indonesia
University of Gadjah Mada, Indonesia
Center for International Forestry Research, Indonesia
Project Budget
$932,335.00
Start Date
01/04/2011
Finish Date
30/09/2015
ACIAR Research Program Manager
Mr Tony Bartlett