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Forestry extension officers, non-government
organisation (NGO) workers and district
government officers have received a manual
in Bahasa with practical guidelines on the use
of improved teak planting stock and proper
While it's one thing to grow better quality
teak, it's another to negotiate a good price for
your trees when you have little understanding
of the market and what might increase value.
Farmers usually sell their standing teak trees
to a middleman who cuts and transports the
timber before trading it on. The farmers can
only bargain on the basis of what they were
paid for the last tree sold or what they know
their neighbours received.
"We developed a model to estimate the value
of farmers' teak trees," explains Aulia Perdana,
marketing specialist with the World Agroforestry
Centre Indonesia. "Using an objective method for
measuring and valuing standing teak trees can
increase the sale price by up to 10%.
"We also looked into collective marketing,
which increases economies of scale and can
greatly reduce transaction costs. It makes it
possible for farmers to trade with larger market
players, in this case wood-processing industries
Farmers were introduced to teak processors
in Yogyakarta who export certified furniture,
and were trained in what it takes to produce
certified teak wood.
Another way to increase the benefits farmers
receive from their teak is for them to become
involved in adding value by processing their
trees into timber. A policy brief was prepared
in 2010 and used in discussions with the
government of Gunungkidul regarding how
policy can be strengthened to foster such
industries and support smallholder silviculture,
micro-financing and marketing. The district
government has already taken steps to
improve smallholder farmers' access to quality
germplasm and silvicultural technical support.
The third obstacle the project sought to
address is farmers' limited access to capital,
which is often what leads them to sell their
trees before they reach premium size.
"We sell our teak mainly if we need urgent
cash for school expenses and daily needs," says
Sayadi, a farmer from the village of Katongan.
"My daughter is progressing in her schooling,
she needs a lot of money. We have to sell our
teak to cover her expenses."
Teak trees of 20--30 centimetres in diameter
fetch about Rp 80,000 (A$9). But if the tree is
maintained until it reaches more than 30--40
cm, the value could increase to around Rp
"If farmers had better access to micro-credit
they wouldn't have to prematurely harvest their
teak trees," Mr Perdana says. "Formal banks are
reluctant to provide credit to farmers because
they view teak growing as too risky or long-
term, or because the farmers do not have the
collateral to guarantee a loan."
The project team worked with nine farmer
groups to establish the Lembaga Kredit Mikro
(LKM) Gunung Seribu micro-finance institution.
In the past two years it has provided loans
to 300 households to help improve timber
Mr Roshetko believes this project, which
operated for four years in the district, has seen
significant improvements in smallholder teak
"Teak growers in Gunungkidul are equipped
with the know-how to grow higher-quality
trees, they have a better understanding about
marketing, and a model micro-finance scheme
has been established," Mr Roshetko says. " The
district government has also been made aware
of how it can do its part to support farmers."
Recommendations have also been made
to the central government on simplifying
regulations, such as those related to trading
and transporting teak.
"If the economic benefits of growing teak
in Indonesia can be maximised then it will
become an even more attractive business
prospect for smallholders," Mr Roshetko says.
"And this would lead to more productive land,
better quality teak wood being produced and
ACIAR's Forestry Research Program manager
Tony Bartlett says: "This project has provided good
practical scientific results on both teak growing
and enhanced returns for farmers. When coupled
with other ACIAR research on improving value-
added processing by furniture makers in Java,
it will lead to enhanced livelihoods and more
sustainably produced wooden furniture being
sold on international markets."
The ACIAR-funded project, 'Improving
economic outcomes for smallholders growing
teak in agroforestry systems in Indonesia',
was a partnership between the World
Agroforestry Centre, the Center for International
Forestry Research, the Forestry Research and
Development Agency of the Government
of Indonesia, Institut Pertanian Bogor, the
Australian National University and Kelompok
Kerja Hutan Rakyat Lestari, Kabupaten
Gunung Kidul. n
PROJECT: LFST/2005/177 -- Improving
economic outcomes for smallholders growing
teak in agroforestry systems in Indonesia
CONTACT: Dede Rohadi, firstname.lastname@example.org
Measuring harvested timber to gauge expected returns.
Timber quality is an important determinant of which logs to harvest.
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