Authors: Meijaard, E; Achdiawan, R; Wan, M; Taber, A
We investigated the production and trade in rattan along the supply chain. We focused our study on Indonesia,the global leader in natural rattan production, and more specifically, West Kutai in East Kalimantan. Our analysisof local livelihoods in 2004 and 2011 indicates that communities have abandoned rattan as their main sourceof income, primarily because of low rattan farm-gate prices. Our interviews and econometric analysis indicatethat rattan prices are kept artificially low through price fixing within a cartel of rattan traders. Farm-gate pricesare also kept low by export quotas. The result has been a substantial reduction in export volumes of Indonesianrattan products (as opposed to unprocessed and semi-processed rattan). Other contributing factors includereduced overseas demand, the relative strength of the rupiah and the loss of Indonesia’s competitive edge overother countries. Compared to its competitors, Indonesia has higher transaction costs, including taxes, tariffs,administrative costs and transportation costs. We conclude that a lack of reliable data on rattan resources andunstable policy have hampered efforts to develop sustainable management strategies and annual allowableharvest volumes. We recommend the development of a national rattan action plan, based on reliable scientificdata. This would require more accurate information on rattan trade, future development in the rattan productsmarket, production capacity in forests and planted rattan gardens, and international trade, including illegal trade.Such information could guide rattan policies, specifically determining what trade legislation would have the bestmacro and microeconomic results for Indonesia.