The Jakarta Post, Jakarta
People living in the remote regencies of Sumatra and Kalimantan will be able to earn extra income by the end of the year by participating in reforestation schemes funded by low-interest loans from the Reforestation Finance Agency (BPPH).
The agency, which has been established by the Forestry Ministry, is gearing up to provide loans of up to Rp 6.34 million (around US$698) per hectare for those interested in planting trees on denuded or degraded land.
"The agency has selected 28 fast-growing species, including Acacia, which can be harvested for timber after seven to eight years," said Roni Saefulloh, head of the directorate general of cooperation at the Forestry Ministry during a panel discussion held by a not-for-profit environmental organization, the Elsda Institute, on Wednesday.
The agency has earmarked 5.4 million hectares for the project, which covers eight provinces in Sumatra and Kalimantan, most of which have been badly affected by illegal logging.
Roni said that the reforestation program should provide livelihoods for 360,000 families, each of which could plant up to 15 hectares.
"Each family will have to plant 1.75 hectares in the first year, and another 1.75 hectares in each subsequent year," said Roni, adding that scheme had been specially designed to be gradual so as to enable the agency to oversee its progress.
"If they are allowed to cultivate all of the 15 hectares at once, we are afraid they might spend the loans on something else," said Roni.
Sumiati, a unit head at the Finance Ministry and member of the agency, said that the interest charged on the loans would be based on the interest rate set by the Deposit Insurance Agency (LPS), which currently stands at 8.5 percent, below the average commercial lending rate of some 14 percent.
Roni said that those taking out loans would have to repay them after their first harvests, which meant seven to eight years down the track.
In addition to providing loans to individuals, the program will also target timber firms, Roni said, adding that in total the agency intended to disburse Rp 1.4 trillion in loans to both individuals and firms.
The loans will be taken from the reforestation fund, which holds monies paid to the Forestry Ministry by companies operating in the timber industry.
Roni said, however, that the loans to the timber firms would carry commercial interest rates.
"The agency has identified 3.6 million hectares for the industry reforestation program, with the loans amounting to between Rp 8.2 million and Rp 11 million per hectare," said Roni.
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