Smallholder timber plantation development in Indonesia: what is preventing progress?

Background

In the context of a supply-demand problem in Indonesia’s forestry sector in 2006 causing an increase in illegal logging, the government of Indonesia undertook measures to stem illegal logging and incentivize plantations. This paper evaluates a community timber plantation program in Indonesia called HTR (Hutan Tanaman Rakyat, community timber plantation).

Research goals & methods

Launched in 2006, the program seeks to establish over 5 million hectares of new plantations by 2016. Government authorities offered a range of incentives including low interest loans, assistance with the acquisition of land, streamlined application procedures and simplified reporting on operations. As of 2010, only a small fraction of the intended plantations have been established. Review of the policy content, incentives offered and financial profitability assumptions indicate significant policy design flaws and shortcomings in implementation. The policy also runs the risk of encouraging illegal forestry activities.

Conclusions & takeaways

The authors identify five policy adjustments that can potentially increase the success of the programme in the areas of financial feasibility and transparency in land allocation and financing. Namely, degraded lands should be prioritized for HTR investments; the legal status of lands designated for HTR must be clarified; better land tenure structures for community foresters must be established; misallocation of funds must be prevented; and technical assistance for community foresters with long-term forestry planning is required.