Indonesian smallholders reportedly produce 80 percent of the teak timber used by small and medium furniture producers in the country. This is linked to teak demand at national and global levels, and to the development of smallholder timber plantations.
A survey from the World Agroforestry Centre revealed that 54 percent of farmers still want to plant teak for family savings. They deem that teak is a ‘living bank account’. While only 15 percent of farmers want to plant teak in order to maximize their income, 23 percent want to plant teak to preserve cultural heritage.
Despite farmers holding a very important role in the furniture industry, they still use inefficient farming practices. In Indonesia, most individual farmers sell their timber to middlemen when they urgently need cash (known as tebang butuh). Collective selling can, however, offer more significant benefits as it gives smallholder farmers better bargaining positions.
Farmers also do not always acknowledge silviculture management techniques — a method designed to improve smallholder teak plantation. Most farmers still produce low-quality timber, including logs with a small diameter, knots, and defects.
“The price goes from Rp 500,000 to 5,000,000 for teak. But usually, for very bad quality, the price is less than Rp 1,000,000,” explained Dede Rohadi, a scientist from the Research and Development Agency of the Indonesian Ministry of Forestry (FORDA), during a panel discussion entitled “Equitable Development: Improving Livelihood Benefits for Smallholders in the Forestry Value Chain” at the 2014 Forests Asia Summit.
A further question surrounds the availability of a market for low-quality timber and the low added value of timber. The industry needs to manage the whole package, from upstream activities to downstream activities, by linking research to capacity-building projects such as those from the Australian Centre for International Agricultural Research (ACIAR).
To tackle these challenges, farmer management skills, effective extension services, and market information are required. Whether they agree or disagree with the concept, farmers need to be involved in downstream activities (including marketing) once they are able to apply sustainable practices in their smallholder timber plantations.
Then, improving the farmers’ market orientation, strengthening collective marketing, and eliminating regulation barriers are the three most important steps to enable smallholder farmers in Indonesia to become giant teak investors through sustainable farming methods.
Shinta Purnama Sarie is a communications assistant with the AgFor Sulawesi project.