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Omar PidaniForest Management Department,

Haluoleo (State) University, Indonesia

Farmers’ Motivation to Adopt Teak Tree Growing: A Case Study in South

Konawe District, Indonesia

Teak: been cultivated for hundreds of yearsSignificant Demand

Export market : 35,000 cubic meters per annum Domestic demand: 8.2 Million cubic meter per annum

(ITTO, 2006)Domestic teak supply: only 2.7 Million cu per annum

(ITTO, 2006)Excess domestic demand: 5 million m3 State-owned Perum Perhutani Plantations (1.3 million ha)

produce only 600,000 - 700,000 m3 of teak logs per annum (Suhendi, 2005; Midgley, 2007) – incl. outsourced timber

Market opportunity for small-scale teak timber production: approx, 1.2 million ha; estimated at 23.8 million m3 of standing stock (Nawir and Manalu, 2006)

IntroductionIntroduction

Farmers socio-economic conditions Low Income Limited livelihood Alternative Small landholding size

Insecure land ownership Complex Licensing Procedures

High transaction/transport* costs; Insecure investment

Limited market Information Poor Road Construction

Constraints to Commercial Teak Tree Constraints to Commercial Teak Tree Growing in IndonesiaGrowing in Indonesia

Livelihood Strategies (Scherr, 1995) a farmer will always try to maximize his/her utility or

welfare, by taking into consideration multiple livelihood objectives and resources to which he/she has access on, including lands, trees, labor, cash and on- and off-farm occupations

Induced Innovations (Hayami and Ruttan, 1971) innovation is a dynamic response to changes in resource

endowments and demand.

Risk Management (Byron, 2001) farmer act to continuously reduce critical risk factors to

her/his investment in order to fulfill livelihood objectives.

Theoretical FrameworkTheoretical Framework

Qualitative research method Semi-Structure / In-depth Interview Questionnaire (open ended questions)

Farmers and farm characteristics Teak tree growing experiences What hinder and motivates them to grow teak The role of the external parties in teak growing

Farmers, Government Officers (Provincial/Districts), the Cooperative Board and Facilitators (local NGO-JAUH & the Tropical Forest Trust)

18 Interviews (during 1st field trip), 12 follow up interviews (5 phone interviews)

Average one hour duration (Indonesian/Tolakinese Lang.), some were two to three hours (due to subtle answers)

Venue was chosen by farmers Direct observation (2004-2006)

MethodologyMethodology

Est. 2004Aimed for a ‘Social

Forestry (SF)’ program launched in 2003

Members: 186 farmers, 4 sub-districts in S.Konawe District, Indonesia

Total area: 159 haConsists of farmers,

mostly teak tree growers

The Case Study: Hutan Jaya Lestari The Case Study: Hutan Jaya Lestari Cooperative (KHJL)Cooperative (KHJL)

Granted FSC-SLIMF Certification in 2005, the first in Indonesia


Members Increased (as of Dec 2008): 755 farmers, 6 sub-districts, managed area increases: 847 hectares

Average annual production: 350 m3 (cutting volume), annual turnover: US$160,000 (FSC, 2008)

In 2008: Granted a Community Plantation Forest (CPF) Concession

To manage 4,639 Ha of Production Forests (Indonesian Ministry of Forestry Decree No.435/2008)

CPF Concession lasts for 100 yrsIn October 2010: Obtain FSC-COC (SW-FM/ COC-

001511 as) valid until 2015


Case Study LocationCase Study Location

ResultsResults

Perceived Benefits of Teak Tree Growing

Direct

Indirect

Enabling Incentives provided through the Cooperative

Technical Incentive

Financial Incentive

Legal Incentive

An established market

Higher teak timber market price

De-facto bank account

Ease of planting & establishment

Increasing land value

the potential for securing land ownership

Potential for environmental improvement

Tech. support in tree planting

Seed & seedling subsidies

Simpler timber marketing procedures

Timber marketing and transporting facilitation

Expectation for additional land

Loan Facilities

Financial support for harvesting & transporting timber

Dividend and Benefit Sharing

Perceived Benefitshigher teak timber market price

“price of teak logs and sawn timber are always higher than those of mixed forest timbers”

“if teak timber is sold to the cooperative the price can be much higher than the market price”

an established market (both for log and sawn teak)“If I plant teak I don’t need to worry, either the Papalele comes to me or I can sell them to the local furniture or sawmill”

de-facto “bank account” “simpanan masa depan” (future savings), “deposito” (deposit), “tabungan” (bank account) and many others.

“teak ca be sold not only for its trunk but also for almost all of its parts “

ease of planting and establishment“I just put the seeds on the ground and it will grow easily”

“I only need to do weeding for one or two years and it will grow up effectively [able to compete with other natural regrowth] and I can do something else”

“if there’s a fire, teak will survive”

ResultsResults

increases in the value of land planted with teak“If I grew my parcel with teak, it will increase the price of the land eventually”

the potential for securing land ownership “I don’t have the land certificate, but if I plant it with teak I can apply for a the girik and use it for SPPT [tax payment receipt]”

the potential for improving surrounding environmental conditions“I used to cut one block of teak at once, and there is no more water left in my well. I knew then that I need to spare some trees surround my well if I want the water remains”

ResultsResults

Enabling Incentives Provided by the CooperativeSeeds & seedling subsidies

“it’s really difficult to get the seeds, now that the cooperative provides us with the good quality seedling with cheaper price I will take the chance and make my own nursery”

Technical support in teak planting “ we have one officer from the KHJL in our village who has been teaching us how to plant and prune”

Simpler timber marketing procedure“it’s easier now to sell our teak. I don’t have to be bother with the IPKTM our self, we already got one under the cooperative for all of us”

Timber marketing and transporting facilitation“even with what they called legal processes are inseparable from bribes; if they can they will hold your permit as long as possible and there is no way for you to accelerate the processes but to bribe the officers”

ResultsResults

ResultsResults“even if you have got the SKSHH document (timber legal verification document) to accompany your timber, you still experience the police stopping your truck, asking you to unload your timber to be reinspected while the ship has about one minute to go”

Financial support for harvesting and transporting timber “skidding, loading and transporting teak cost us too much. The Papalele

used to deal with all of these but in return of giving us lower price for our teak”

Loan facilities“if I need immediate case the cooperative can give me down payment for my mature tea. It’s somehow better then selling one tree with lower price to the papalele”

Dividend and benefit sharing

Expectation of access to additional land (or support the cooperative)“ I join the KHJL and plant teak the they give me, I hope they can give me

some more land when they win the social forestry program”

Findings in this study confirm previous theories about farmers’ tree integration into farming land.

Factors that motivate farmers in this case study to grow teak are combination perceived benefits that are associated with teak tree growing venture, provision of enabling incentives through strategic partnership that continuously minimises constraints for teak tree growing and expectation to additional lands.

Successful promotion of teak tree growing in the future needs to: take into account the socio-economic and

ecological dynamics on farm level. encourage partnership that builds and strengthens

community institutions and constantly minimises legal, technical, capital and market constraints to tree growing ventures

Conclusion/RecommendationConclusion/Recommendation

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