Non-Wood Forest Products: Economic Aspects

1. Non-Wood Forest Products: Economic Aspects Bintang C. H. Simangunsong, Ph.D. • Pekan Ilmiah Kehutanan Nasional IV, Seminar Hasil Hutan Bukan Kayu • Bogor, 25 October 2008

2. Category of Non-Wood Forest Products • Plant products: • Food : oil seeds, nuts and bamboo shoots • Fodder • Medicine/Aromatic: medicinal plants and spices • Colourants/dyes • Utensils/crafts/construction: bamboo and rattan • Ornamental plants: christmas trees • Exudates: tannin extract and raw lacquer • Other plants products: tendu leaves and lac • Animal products: • Living animals • Hides, skins and trophies • Honey and beeswax • Bushmeats • Medicine • Colourants • Other edible animal products • Other non-edible animal products

3. World’s NWFP Removals 2005: • Asia accounts for the largest removals. • China has by far the world’s largest (74%), consisting mainly of oil seeds, nuts and bamboo shoots, followed by India, the Republic of Korea and Pakistan in Asia; the Czech Republic, Finland, Italy and Sweden in Europe; and Brazil in South America China also accounts for 72% of removals in the category of exudates, such as tannin extract and raw lacquer, followed by Viet Nam. • India accounts for half of reported global removals of plant raw materials for medicinal and aromatic uses, mainly consisting of medicinal plants and spices. India also has a 42 percent share of total removals in the category of other plant products, such as tendu leaves and lac, followed by Brazil and Mexico. • Raw materials for utensils, crafts and construction, such as bamboo and rattan, were reported in large quantities from countries such as India and Myanmar. • Ornamental plants – Christmas trees among them were reported in large quantities from a number of European countries. • Among animal products, a few African and European countries reported large quantities of live animals, hides, skins and trophies, as well as wild honey and beeswax. • The reported figures for edible animals (game and bushmeat) are concentrated in Europe with 98 percent of the global total. • Increasing trends are seen for food and exudates, while both increases and decreases are seen for raw materials of medicines and aromatics and for other plant products. • Sources: Global Forest Resources Assessment 2005 (FAO, 2006)

4. Value of World’s NWFP Removals 2005: • Similar to wood removals, is an indicator of the contribution of forests and woodlands to national economies. It also indicates the contribution of the sector to poverty alleviation, as these products are mostly collected by relatively poor people living in rural area • In 2005, the total reported value of removals amounted to about US$4.7 billion. Plant products accounted for about three-quarters (or just under US$3 billion). Among these, food had the highest value (US$1.3 billion), followed by other plant products (US$0.5 billion). • Fruit, berries and nuts were identified as the main food products in most countries. • Of the animal products, the reported value of bushmeat removals was by far the most important, with a value of US$0.6 billion. • At the regional level, Asia and Europe accounted for almost 90 percent of the total reported value of removals, with values of US$1.7 billion and US$1.8 billion respectively. • In Asia, food was by far the most significant product, with a reported value of US$0.8 billion, followed by exudates and other plant products (US$0.3 billion each). • In Europe, the reported value of bushmeat removals was US$0.6 billion, followed by food (US$0.4 billion) and ornamental plants (US$0.3 billion) • Globally, it appears that the total value of removals increased from 1990 to 2000, then declined from 2000 to 2005. However, this is a function of the smaller number of countries reporting information for 2005 (in particular, China is missing). • Sources: Global Forest Resources Assessment 2005 (FAO, 2006)

5. Type of Indonesia’s NWFP • Rotan (Rattan) • Gondorukem dan terpentin (Pine resin) • Damar (Shorea resin) • Kopal (Agathis resin) • Minyak kayu putih (Cajaput oil) • Arang (Wood Charcoal) • Gaharu • Madu (Honey) • Benang sutera (Silk) • Arowana (a kind of Fish) • Gambir • Sagu • Kayu manis • Tengkawang • Jelutung • More than 90 non-timber forest products are traded in Indonesia, locally, nationally or internationally (FAO 2002), however most of their production data are lacking. Indonesia Forestry Statistics (2007) recorded only production of 15 NTFPs

6. Indonesia’s NWFP export values 2001-2006 • Sources: Indonesia Forestry Statistics, MOF, various years

7. Total economic value of the Indonesia's forest in US$/ha/yr at 2002 prices • Simangunsong (2005)

8. Economic Characteristics of NWFP • The most substantial and least recognized aspect of NTFPs is their subsistence use, which allows people to meet basic needs when they lack cash and easy access to markets (Pierce, et al., 2002). • NTFPs are particularly suited to serve as social safety nets in times of household hardship or economic crises, as well as a source of cash during periods when families have no other sources of income (Wollenberg and Nawir, 1998). • It also provides substantial employment for rattan farmers, especially in Kalimantan (O’Rourke, 2004)

9. Economic Characteristics of NWFP • Some NTFPs also play an important cultural or spiritual role in traditional practices. • NTFPs are accessible to the poor due to their low market value, and as they become valuable powerful interests generally appropriate the benefits (Dove 1993). • Although NWFP are available in open-access circumstances and provide more direct benefits to the poor, it can also be seen as a poverty trap due to low extractible benefits caused by high transport costs, few buyers and exploitive marketing chains in related to remoteness forest area) (Sunderlin 2003) notes.

10. Current Land Cover by Function(Total Land Area 187.9 million ha) • Source: Centre of Forest Inventory and Mapping, Bureau of Forest Planning, Ministry of Forestry, 2005

11. Current Forest Area, by Function and Island • Source: Centre of Forest Inventory and Mapping, Bureau of Forest Planning, Ministry of Forestry, 2005

12. Key drivers • Demographic changes (population growth, population density) • The political and institutional environment (decentralization, forest governance) • Economics changes (government revenue, job creation) • Future energy demand (bio-fuel) • Global impacts (trade liberalization, trans-boundary) • Technological changes • Environmental issues and policies (climate changes, forest and forest product certification)

13. Probable scenarios and their implications: Scenarios • Focus on total degraded forest area because of the vast land area involved (33.4 million ha), the rapid rate of change of land status from forested to non-forested, the relatively unmanaged status and the most obvious and logical places to begin to think about rationalizing the forest estate and allowing more equitable and pro-poor access and activities • Rehabilitation and plantation development are therefore of central importance to the forestry sector in Indonesia given the reduction in supply from natural forests • Two major forestry policy objectives: forest rehabilitation and plantation development were then considered within the two factors chosen: (a) effectiveness of policy implementation and institutions, and (b) economic growth rate

14. Probable scenarios and their implications: Scenarios

15. Forest resources: The Current and Future State, by forest type and scenario

16. Forest resources: Trend of total damaged forest areas during the period 2006-2020

17. Forest resources: The forest resource under Sustainable development scenario (S4)

18. Non-wood forest products and forest services: Changes in environmental costs and forest stock value 2006-2020 • Change in natural forest stocks implies change in natural forest capacity to provide NWFP and forest services so the future of non-wood forest products and forest services were addressed through estimating changes in natural forest stock values • Over the period 2006-2020, total changes in environmental costs and forest stock value ranges from US$3.91 billions to US$7.48 billions, respectively. Of which, +US$0.25 billions to +US$0.29 billions is due to changes in natural forest stock value given the future state of Indonesia forest resources in 2020

19. Recommended strategic actions and policies: • Strategic actions and policies focus on economic development and poverty alleviation options in degraded Production Forest, and promotion of environmental service delivery in degraded Protection Forest and Conservation Forest • Options for economic development and poverty alleviation: • Promoting community-company partnerships to open new kinds of benefit sharing for timber production to planting more trees for production/timber uses • Promoting Community forestry, social forestry, cooperatives and Small and Medium Enterprises (SMEs) • Opening space for communities and smallholders to be involved in forest utilization and management with longer time horizons • Providing technical assistance on management, models, and cross-learning

20. Recommended strategic actions and policies: • Options for producing environmental services and benefits: • Rehabilitating steep slopes and riparian land • Supporting land re-classification that harmonizes slope/condition with function • Reconfirming steep areas as watershed protection forests, in collaboration with local stakeholders and governments • Considering high conservation value forests within the protection forest areas as candidate areas for reallocation into conservation areas, especially if they are part of critical wildlife corridors or within the range of endangered or endemic species

21. Recommended strategic actions and policies: • Options for Improving Governance and Management: • Supporting Forest Monitoring and Assessment System (FOMAS) to improve transparency and rule of law • Building capacity to carry out law enforcement • Amending national laws and regulations to strengthen law enforcement efforts • Prosecuting those behind major forest harvesting, processing and transportation crimes to improve law enforcement • Reducing impacts of land clearing and the risks of fire • Defining and marking boundaries to prevent encroachment and allow community self-policing

22. Recommended strategic actions and policies: • Options for Improving Governance and Management: • Developing and implementing a mechanism in all levels of government to address concerns, resolve conflicts, process grievances, settle claims, and compensate for loses • Supporting institutional development to help clarify roles and responsibilities for district/province governments in management, implementation, licensing, and monitoring activities on forestlands • Capacity building in regional government forestry bureaucracies • Developing community-oriented and collaborative management approaches to promote, establish, support and sustain dialogue and decision processes on the future organization and management of the forestry sector