Timber plantations are seen as a positive mechanism for combining reforestation with sustainable production. The plantation sector in eastern Indonesia is largely commercial, with the bulk of benefits going to the commercial processing companies and other commercial stakeholders. Smallholder farmers are often left out of the flow of benefits.
Sustainability arising from plantation growth is most effective when benefits flow to forest companies and smallholders. Government also has a part to play in creating the environment in which successful tripartite partnerships can operate, creating sustainability. Cost efficiency and social equity need to be balanced, providing opportunities for all stakeholders.
Indonesia's recent experience in this area has been disappointing, thus failing to reach the targets for timber plantations, especially in the country's east. One means of increasing plantings and linking companies to smallholders is to develop forestry out-growers schemes. Companies enter into agreements with smallholders to ensure supply of timber, utilising additional lands they do not control as a source of timber. The key to making this a workable option for mutual benefit is establishing effective partnerships that deliver results to both smallholders and companies.
Project objectives were to understand the nature and effectiveness of existing forestry partnerships and agreements in Indonesia and Australia through a scoping review, then to assess the strengths and limitations of specific forestry partnerships and agreements in the three case study regions, and provide clear recommendations to improve existing partnerships. Other objectives were to build capacity in a range of stakeholders to improve existing forestry partnerships and agreements, or initiate preferred partnerships, in these regions, and to communicate the key research findings to project partners and other relevant stakeholders to ensure the forestry partnerships achieve favourable outcomes for smallholders, communities and companies.
The research team conducted a scoping review to document the current status of forestry out-grower schemes and timber plantation development in eastern Indonesia and Australia. They prepared a checklist/questionnaire to ensure that field staff collected all the critical information on partnership arrangements, then produced a succinct research report for key partners with a user-friendly summary for wider dissemination to senior and field staff of FORDA and commercial timber companies, and village leaders in the project's target regions.
The team then engaged key organisations (e.g. FORDA, District Forestry, WWF and company staff) in targeted case study regions via a collaborative research approach to assess the strengths and limitations of existing partnerships. This involved analysis of the effectiveness and success of these partnerships, including a process of refining and testing them and designing alternatives.
Next the team implemented specific capacity-building activities with community groups, government agencies and timber companies to assist stakeholders to develop mutually beneficial out-grower schemes that support positive plantation development in eastern Indonesia. They provided specific training for stakeholder groups (e.g. community forest leaders, agency staff, local NGO's) on how to identify and negotiate beneficial partnerships.
The project identified important findings about the relationship between farmers and forestry companies, and in particular how this relationship can be expressed in contractual partnership that is mutually beneficial, fair and secure. The project worked closely with a wide range of partners in its three case study locations - Bulukumba and Sumbawa (in Indonesia) and the Green Triangle (south-east Australia).
The project team found many different types of partnerships used in forestry in Indonesia and Australia. The 'success' of a partnership is best determined by different partners using their own criteria. However, broadly successful partnerships in commercial forestry are those where all the partners have had their expectations met.
They found that smallholders often lack an understanding of the value (costs and benefits) of different components of commercial forestry, have a poor knowledge of market prices, and have weak links to competitive markets - meaning that they are unable to negotiate fair and beneficial agreements. This research identified the important prerequisites needed for developing contractual partnerships in commercial forestry that could bring improvements to the livelihoods of rural communities. They included:
increased knowledge by farmers of the operations and components of commercial forestry (e.g. awareness of forestry's value-chain)
improved understanding of the direct and indirect costs and returns of commercial forestry (e.g. rigorous cost:benefit analysis to identify net returns and opportunity costs)
improved access for forest growers to competitive markets (e.g. potential for growers to use market brokers or form cooperatives)
increased knowledge by growers of market dynamics (e.g. drivers of market fluctuations, awareness of market prices)
improved capacity of farmer forest groups at the district level to share experiences and information, and create new knowledge of commercial forestry (eg. build the social capital of farmer groups)
reduced administrative and financial burden of governments faced by small-scale growers (e.g. simplify regulations and streamline the processes for permits).
To help summarise a wide range of experiences, theoretical concepts, and research results, the project team developed a 'checklist' of the key attributes of partnerships expected to be beneficial, fair and enduring in the forestry sector. The checklist had many generic elements that could potentially be applied to forestry in other regions or countries, and possibly to other sectors.
Project findings emphasise that failure to develop contractual partnerships that are mutually beneficial, fair and sustainable can have profound impacts - with flawed partnerships in commercial forestry a contributor to illegal forestry, undesirable tropical deforestation, rural poverty and community conflict. For example, poor farmers who are locked into contracts that do not deliver fair prices are vulnerable to being tempted by the financial returns of short-term and exploitive forestry, even if their activities are illegal.
In conclusion, developing long-term, effective partnerships will develop a more productive and sustainable forestry sector - with benefits for industry, government and rural communities. However, further research is required to reveal how the principles for forestry partnerships translate to the highly varied commercial, biophysical, social and governance characteristics that exist in Indonesia and other countries.
Links:
[1] http://www.aciar.gov.au/country/Indonesia
[2] http://www.aciar.gov.au/programarea/Forestry