Farm Tree Planting and the Wood Industry in Indonesia : a Study of Falcataria Plantations and the Falcataria Product Market in Java

Given that the cutting pressure on natural forests in Indonesia must now be reduced, it is vital that the forest industries adjust accordingly and shift their resource base from natural forests to plantations. This study is presented in an attempt to help develop a tree plantation strategy for Indonesia and so facilitate this industrial transformation. Focusing in particular on the issues surrounding farm tree planting, a case study format is adopted in a treatment of Falcataria, a preferred plantation species used in agroforestry systems mainly in Java. This study describes i) some characteristics of the Falcataria product market ; ii) the institutional framework that accommodates Falcataria plantations ; and iii) the role of the government in the development of Falcataria plantations. By way of conclusion, this study asserts that the Falcataria-based industries possess a suite of promising characteristics in the context of current trends in the world wood trade on the grounds that they support a high value-added market for environmentally friendly products. This study also highlights the need for local markets in Indonesia to be nurtured in order that Falcataria products can be successfully advanced onto the international market. In developing a plantation strategy for private lands, the government is cautioned that any scheme is likely to fail in the absence of adequate preparation. Thus it is seen as essential that incentive measures be put in place in support of market growth ; several such incentive measures are reviewed here. In this respect, it may be necessary for the public sector to learn what constitutes a successful initiative from the example set by private enterprise. This document also stresses various issues relating to land tenure and the operation of plantation systems. Nonetheless, given the broader context of a resource development strategy for Indonesia, it is recognized that tenure and plantation systems are not the sole avenue for analysis. A more robust understanding of market-based issues is also required. Such themes may include the development of market research methodology ; the use of forest certification in marketing ; and the creation of various incentive measures for tree plantations. In order to develop a national resource development strategy, consensus building by way of workshops which involve all concerned individuals and organizations is now a process fundamental to achieving successful reform in the forestry sector.