RI, China ink agreement on forestry

Dicky Christanto, The Jakarta Post, Beijing | Sat, 09/25/2010 10:45 AM

Indonesian Forestry Minister Zulkilfli Hasan said the Indonesian government wanted closer cooperation with China to develop forest management, particularly in the use of bamboo and rattan.

“China has been widely known for its success in developing sustainable forest management. Its research and development division, in particular, is known for its success in developing the quality of non-timber products, such as bamboo and rattan,” Zulkifli said during a three-day visit to China recently.

“They know how to produce fine quality paper from bamboo while back home our capacity to use [bamboo and rattan] is still quite limited.”

Hadi Daryanto, director general for Production Forest Management said China had marketing ability.

“Their lamination technique is renowned and we should learn about it to add to the quality of our timber and non-timber products,” he said.

During the visit, the forestry ministry signed a five year agreement on forest management knowledge sharing. The China State Forestry Administration in Beijing was represented by Vice Minister Madame Yin Hong.

It was agreed to encourage the use of wood and non-wood products processing technology as well as biomass energy from sustainably managed forests. Also to carry out information exchange on forest land rehabilitation and social forestry.

The agreement also covered cooperation on wildlife and plant protection and the sustainable use of flora and fauna. Both sides agreed to promote forestry law enforcement and sustainable forest management and research.

Hadi said even before the agreement, China had assisted the Forestry Minister office, especially to promote legal timber trading.

“China’s authorities have warned the forestry ministry several times regarding illegal logging activities in the Papua region. Thus we have developed mutual cooperation long before this agreement,” he said.

The Indonesian Ambassador to China, Imron Cotan, said it was very strategic for Indonesia to work

with China to promote sustainable forest management because China was one of the world’s leaders in this field.

“With US$2.55 trillion of [Gross National Product] China has become recognized as one of the world’s new leaders. From the political perspective, there can be no major international problems discussed from now on without China,” he said.

China has 1.25 million square kilometers of forested areas equivalent to 75 percent of Indonesia’s total and area. China therefore has one of the world’s largest forest areas.

China’s administration has developed environmentally friendly economic activities in or adjacent to forest areas in the form of community forest programs. Through these programs, people get to lease land from the state for 30 to 35 years. They can plant trees and gain profits from forestry products.

The Chinese government said that with such programs there was an increase in the volume of lands planted with trees by local people.

Bilateral cooperation between both administrations on forestry development was initiated in 1992 following the signing of agreements on forest resources management and conservation as well as research, training and extension work.

Rattan businesses complain of gloomy prospect

Antara News, By Andi Abdussalam, Monday, July 26, 2010 18:25 WIB

Jakarta (ANTARA News) - Domestic rattan farmers and businesses which once have a glorious era in the past, are now complaining of gloomy prospect as demand for rattan-based products had been declining, causing more than 50 percent of rattan industries at home to close down over the past two years.

This condition has raised concern that the sustainability of the country`s rattan business could not be maintained if the government fails to adopt a proper policy regarding the country`s rattan potentials.

"The lack of a well-planned policy on rattan exports and the decline in demands for rattan products in the domestic and world markets are threatening the sustainability of rattan business in the country," Chairman of the Indonesian Rattan Business Foundation (YRI) Lisman Sumardjani said on Sunday.

Since 2007, the performance of the local rattan industries had begun to slow down and their number had been declining. In addition, the trade minister`s decree No. 36/ 2009 on rattan export restriction which came into effect as of August 11, 2009 was seen by Lisman as something which could not bridge the interest between the farmers and rattan furniture industries.

"The export restriction is actually also restricting the farmers` rattan business, because they could not sell their products to furniture industries which were not required to purchase the farmers` rattan," Lisman said last year.

In the meantime, demand for rattan-based products has been declining. Lisman said on Sunday the decline in demands for rattan made products was among others caused by the fact that most consumers began to turn to imitation rattan goods.

Actually, he said, world demand for rattan-based furniture and rattan-made handicraft products are relatively high, where in 2008 and 2009 reached around US$100 and US$104 billion.

Of the total market share, Indonesian rattan-based products could only reach 2.6 billion dollars in 2008 and 2.3 billion dollars in 2009. "This indicates that the market for rattan-based products was virtually wide open. We need to take advantage of the available market," he said.

He said that the absorption capacity of the domestic market for locally made rattan products was only about 30,000 - 40,000 tons this year, or about 50 percent of the country`s production capacity of 696,000 tons.

Lisaman said that the government so far had no well-directed policy about the rattan business. It only often changed its export regulations. And what happened was a disruption of the growth of rattan-processing industries.

If in 2007 the number of rattan-processing industries reached 614 units, in 2008 it dropped to 234, because the declining rattan consumption at home and the banning of raw rattan exports had affected 2.3 million rattan collector farmers.

"Rattan which was formerly a reliable source of living of the locals could no longer be expected to become a source to live on," he said.

He said that in a condition where certain types and volumes of rattan exports had been restricted, the value of rattan exports could only reach 240 million US dollars while in a condition where rattan exports were not restricted the value could reach 1.53 billion dollars. This is based on the figure of exports in the 1990-2004.

With the gloomy prospect, Lisman expressed concern that rattan at home is now facing rapid extinction. He said that the sustainability of rattan could be maintained if world consumers continued to need rattan and its by-products, including rattan-based furniture, and this would benefit local rattan farmers.

"Farmers will gather rattan only if rattan industries at home grow and develop well. Without all these, the story about Indonesia`s rattan potential which controls 85 percent of the world market would remain only as a story," he said.

According to Lisman, if managed well, Indonesia`s rattan potentials could earn an annual income of 4 billion dollars a year and could provide jobs for about 5 million people.

Therefore, Lisman asked the government to provide political support in order to revive the demand for processed rattan products. "Besides, all the nation`s components should take part in promoting the use of rattan products, such as successful promotion of the use of `batik`," he said.

Deputy Chief Economic Minister for Industry and Trade Coordination Edy Putra Irawady supported the appeal of the YRI chairman, saying that government agencies should help promote and use rattan furniture.

Edy concurred with Lisman that the sustainability of rattan in the country would face rapid extinction if all parties failed to promote rattan products. Moreover at least 2.3 million poor rattan farmers and rattan collectors earned a living from this sector.

According to Lisman, rattan farmers are the most disadvantaged party with the present condition of rattan business in the country.

He said the government`s latest decision on rattan export restriction failed to encourage rattan farmers to help maintain sustainable rattan cultivation.

"It is true if the government has to guarantee rattan stocks for the rattan industry at home but it must also guarantee that rattan farmers would be able to market their rattan products and reap reasonable profit," Lisman said recently.

He said that the government has issued a policy which restricted rattan exports to meet local industries` needs for raw rattan but the furniture industries were not required to purchase the farmers` rattan.

The trade minister`s decree No. 36/ 2009 on rattan export restriction which came into effect as of August 11, 2009 did not bridge the interest between farmers and rattan furniture industries, he said.

He said that the export restriction is actually also restricting the farmers` rattan because they could not sell their products to the furniture industries which were not required to purchase the farmers` rattan. This would discourage the farmers to preserve the continuity of rattan plantations, threatening the sustainability of the country`s rattan industry.

"Farmers are in the front line in the cultivation of rattan that would eventually guarantee the sustainability of rattan in the country. If farmers and locals near forests do not gain benefit from it, they would not help preserve rattan cultivation," he said.

Furniture makers want more rattan available

The Jakarta Post, Jakarta | Sat, 02/28/2009 2:23 PM

Lacking in rattan supply, the nation's furniture and handicraft industry have proposed to the government to take off the 10 percent value-added tax on semi-processed rattan sales in the domestic market.

Ambar Tjahyono, chairman of the Indonesia Furniture Industry and Handicraft Association (Asmindo), said the removal of the tax was needed as producers now prefer selling it to overseas markets.

"We have had discussions with the Trade Ministry and Industry Ministry on the proposal," Ambar told The Jakarta Post on Friday.

Asmindo hopes that the removal of the value-added tax will encourage suppliers to intensify their supply of rattan to local furniture and handicraft companies, which depend largely on the commodity for their raw material.

The removal on the tax will also enable craftsmen to purchase raw material at a cheaper price, so helping to make their final products more competitive.

Higher costs and a lack of rattan supply have been the major problems facing the rattan furniture and craft industries over the years.

Despite Indonesia contributing some 80 percent of the world's rattan supply, local craftsmen have often faced problems when it comes to accessing raw materials.

As well as value-added taxation on the domestic sales of rattan products, better export prices for rattan have also discouraged suppliers from selling to the domestic market.

The commodity's price in the domestic market is around Rp 10,000 (US 80 cents) per kilogram while according to a report on the Industry Ministry website, the export based prices for the commodity are between $0.82 and $1.40 per kilogram.

To ensure rattan availability in the local market, the government has introduced a regulation banning the export of the commodity in 2005. But recently, the government lifted the regulation.

Asmindo discussed with the government how to sustain the availability of rattan domestically after the regulation is lifted, and came out with some other suggestions.

"First, every rattan supplier must fulfill their obligations by supplying 70 percent of their output to the local market and second, Asmindo will hold a monthly audit to ensure implementation of this provision."

Despite the problems however, the country managed to increase its furniture exports to $2.7 billion in 2008, from $1.9 billion recorded in the previous year.

"We try our best to at least retain exports for 2009 at the same level as in 2008, during the global crisis. We will also diversify our market. We will try to penetrate markets in Russia, Latin-America and the Middle-East."

According to Ambar, the country's locally produced furniture products now dominate the domestic market taking up a market share of around 70 percent. (hdt)

Palu municipality takes steps to become center of rattan industry

Ruslan Sangadji, The Jakarta Post, Palu

The Palu administration plans to make the city a rattan industry center by establishing a school and a technical supervisory unit for rattan craftsmen.

Palu supplies 50 to 60 percent, or 50,000 to 60,000 tons of rattan, for national trade, an official said.

Indonesia supplies 80 percent of the world's demand for rattan raw material, mostly to Asia, America and Europe.

"This is a good chance for Palu to compete in the international rattan trade," Palu Mayor Rusdy Mastura told The Jakarta Post.

He said his administration would work to make Palu a national rattan center in the near future.

Data from the Palu Cooperatives, Trade and Industry Agency shows that Central Sulawesi has 12 special types of rattan.

Rusdy said Palu produced high quality rattan because the soil there contained a large amount of silicate, which made the rattan more flexible.

In order to make Palu a rattan center, the administration has opened the Kriya Rotan school and sent five teachers to Cirebon, West Java, to learn more about processing rattan for furniture.

The Palu administration also has made an agreement with all stakeholders to establish a Palu Technical Supervisory Unit.

The unit will provide rattan processing machines, training and an education program, as well as a trade facility.

To support rattan processing, the administration will also build two factories and a warehouse.

Head of the planning unit for the Cooperatives, Trade and Industry Agency, M. Fatih, said the administration was encouraging rattan craftsmen to concentrate their business on finished products from home industries or small-scale factories.

Fatih said Cirebon had been successful in developing its rattan trade due to a focus on home industries.

To ensure product quality, the Palu administration will also serve and guide rattan craftsmen in improving their skills.

To achieve this goal, the administration will hold training workshops to cover several specialty areas such as rattan design, manufacturing and preservation.

"We have made an agreement with the Cirebon administration to send instructors here, and they will teach the local rattan craftsmen to provide them with new skills and better ways (to craft rattan).

"We hope by establishing the Technical Supervisory Unit, the local craftsmen will be able to increase their knowledge, as well as their incomes," Rusdy said.