Rattan is a vine that grows in tropical forests and is used primarily in the furniture industry. It is a billion-dollar industry involving hundreds of countries but the raw material is overwhelmingly collected from forests. Indonesia is the world’s largest supplier of rattan. This article uses a value chain approach to elucidate the market, environmental, and social implications of an Indonesian policy that bans the export of un- and semi-processed rattan, which started on 1 January, 2012. The justification for policy was to reduce competition so that domestic furniture producers would fare better in export markets. A year after the policy took effect, actors benefit differently depending on where they are in the value chain and the nature of their activities. Only the largest and highest-end furniture factories on Java have experienced increased in sales. Forest-adjacent rattan-supplying actors in Kalimantan, Sulawesi and Sumatera are adversely affected. Those engaged in rattan smuggling from Indonesia are receiving the most immediate benefits. Together, these findings show that in the short term, the policy serves elite interests, whose political prowess enabled the policy to pass. In the long term, the industry is at risk of suffocation and the forests are jeopardised.
Topic: trade policy,value systems
Publication Year: 2014
Source: Forest Policy and Economics 50: 210-219