Economic Analysis of Sengon (Paraserianthes falcataria) Community Forest Plantation, a Fast Growing Species in East Java, Indonesia

background

This article examines Paraserianthes falcataria (Sengon) mixed community forest plantations in East Java, Indonesia. The Indonesian government launched a timber / reforestation program in 1990 but only 20% of projected timber supply has come from these plantations, and total reforested area is far below targets. Before 1997, forest resources were held by concession companies, and local access rights were denied. Under reforms however, government decentralization gave local governments more authority to manage their resources, and extensive deforestation (and low levels of reforestation) has followed.

Research Goals & Methods

The study used an interest rate of 17.5% to calculate Net Present Value and Benefit-Cost ratios. Average rotation cycle for timber was 8 years, and average plantation size was 1 ha. Sengon was planted in monoculture plantations or in mixed plantations with corn, papaya, pineapple, or other agricultural crops.

Conclusions & Takeaways

The study found that mixed plantations were usually more profitable than timber only plantations, and most profitable with pineapple. Farmers who did not choose to grow sengon often had very small plots (<0.25 ha). Outside of Java, smallholder timber plantations are very rare, even though these communities have access to land and tenure. Authors reason that this lack of forestry plantation activity could result from lack of access to capital, lack of social / technical support, or low market value of plantation timber (because of cheap timber from natural forest).