Non-Wood Forest Non-Wood Forest Products:Products:

Economic AspectsEconomic Aspects

Non-Wood Forest Non-Wood Forest Products:Products:

Economic AspectsEconomic Aspects

Bintang C. H. Simangunsong, Bintang C. H. Simangunsong, Ph.D.Ph.D.

Pekan Ilmiah Kehutanan Nasional IV, Seminar Hasil Hutan Bukan KayuBogor, 25 October 2008

Category of Non-Wood Forest ProductsCategory of Non-Wood Forest ProductsCategory of Non-Wood Forest ProductsCategory of Non-Wood Forest Products

Plant products:

1. Food : oil seeds, nuts and bamboo shoots

2. Fodder

3. Medicine/Aromatic: medicinal plants and spices

4. Colourants/dyes

5. Utensils/crafts/construction: bamboo and rattan

6. Ornamental plants: christmas trees

7. Exudates: tannin extract and raw lacquer

8. Other plants products: tendu leaves and lac

Animal products:

1. Living animals

2. Hides, skins and trophies

3. Honey and beeswax

4. Bushmeats

5. Medicine

6. Colourants

7. Other edible animal products

8. Other non-edible animal products

World’s NWFP Removals 2005:World’s NWFP Removals 2005:World’s NWFP Removals 2005:World’s NWFP Removals 2005:

Sources: Global Forest Resources Assessment 2005 (FAO, 2006)

• 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.

Value of World’s NWFP Removals 2005:Value of World’s NWFP Removals 2005:Value of World’s NWFP Removals 2005:Value of World’s NWFP Removals 2005:

Sources: Global Forest Resources Assessment 2005 (FAO, 2006)

• 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).

Type of Indonesia’s NWFPType of Indonesia’s NWFPType of Indonesia’s NWFPType of Indonesia’s NWFP

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

1. Rotan (Rattan)

2. Gondorukem dan terpentin (Pine resin)

3. Damar (Shorea resin)

4. Kopal (Agathis resin)

5. Minyak kayu putih (Cajaput oil)

6. Arang (Wood Charcoal)

7. Gaharu

8. Madu (Honey)

9. Benang sutera (Silk)

10. Arowana (a kind of Fish)

11. Gambir

12. Sagu

13. Kayu manis

14. Tengkawang

15. Jelutung

Indonesia’s NWFP export values 2001-2006Indonesia’s NWFP export values 2001-2006Indonesia’s NWFP export values 2001-2006Indonesia’s NWFP export values 2001-2006

Total Exports Value (USD 2.62 billions)

Other9%

Spiritus Oil resin0%

Ter Kayu0%

Bahan Penyamak/Gambir/T

annin2%

Terpentin3%

Rattan handycraft2%

Fauna1%

Flora0%

Sirlak, Getah dan Damar73%

Wood charcoal10% Semi-finished rattan

products9%

Sources: Indonesia Forestry Statistics, MOF, various years

Total economic value of the Indonesia's forest in Total economic value of the Indonesia's forest in US$/ha/yr at 2002 pricesUS$/ha/yr at 2002 pricesTotal economic value of the Indonesia's forest in Total economic value of the Indonesia's forest in US$/ha/yr at 2002 pricesUS$/ha/yr at 2002 prices

Simangunsong (2005)

Total economic value 209.43 203.07 269.47 259.12Use value 199.84 195.48 251.55 241.20

Direct use value 109.73 93.02 135.09 135.09Timber 60.97 53.67 0.00 0.00Fuelwood 0.16 0.16 0.00 0.00Non-timber forest products 48.17 38.76 28.47 28.47Water consumption 0.43 0.43 106.61 106.61

Indirect use value 90.11 102.46 116.46 106.11Soil and water conservation 41.58 40.12 41.58 41.58Carbon sink 6.57 27.38 5.48 5.48Flood protection 25.82 24.52 53.26 53.26Water transportation 5.80 5.80 5.80 5.80Biodiversity 10.35 4.64 10.35 10.35

Non-use value 9.59 7.59 17.93 17.93Option value 3.40 2.95 7.58 7.58Existence value 6.19 4.64 10.35 10.35

Note: All figures are in US$ at 2002 prices

Type of valueProduction forest

Conservation forest

Protection forest

Primary forest

Logged over forest

The most substantial and least recognized aspect of The most substantial and least recognized aspect of NTFPs is their subsistence use, which allows people NTFPs is their subsistence use, which allows people to meet basic needs when they lack cash and easy to meet basic needs when they lack cash and easy access to markets (Pierce, et al., 2002).access to markets (Pierce, et al., 2002).

NTFPs are particularly suited to serve as social NTFPs are particularly suited to serve as social safety nets in times of household hardship or safety nets in times of household hardship or economic crises, as well as a source of cash during economic crises, as well as a source of cash during periods when families have no other sources of periods when families have no other sources of income (Wollenberg and Nawir, 1998).income (Wollenberg and Nawir, 1998).

It also provides substantial employment for rattan It also provides substantial employment for rattan farmers, especially in Kalimantan (O’Rourke, 2004)farmers, especially in Kalimantan (O’Rourke, 2004)

Economic Characteristics of Economic Characteristics of NWFPNWFP

Economic Characteristics of Economic Characteristics of NWFPNWFP

Some NTFPs also play an important cultural or Some NTFPs also play an important cultural or spiritual role in traditional practices. spiritual role in traditional practices.

NTFPs are accessible to the poor due to their low NTFPs are accessible to the poor due to their low market value, and as they become valuable powerful market value, and as they become valuable powerful interests generally appropriate the benefits (Dove interests generally appropriate the benefits (Dove 1993). 1993).

Although NWFP are available in open-access Although NWFP are available in open-access circumstances and provide more direct benefits to circumstances and provide more direct benefits to the poor, it can also be seen as a poverty trap due to the poor, it can also be seen as a poverty trap due to low extractible benefits caused by high transport low extractible benefits caused by high transport costs, few buyers and exploitive marketing chains in costs, few buyers and exploitive marketing chains in related to remoteness forest area) (Sunderlin 2003) related to remoteness forest area) (Sunderlin 2003) notes.notes.

Economic Characteristics of Economic Characteristics of NWFPNWFP

Economic Characteristics of Economic Characteristics of NWFPNWFP

Current Land Cover by FunctionCurrent Land Cover by Function(Total Land Area 187.9 million ha)(Total Land Area 187.9 million ha)

Current Land Cover by FunctionCurrent Land Cover by Function(Total Land Area 187.9 million ha)(Total Land Area 187.9 million ha)

14.4

22.1

18.2

20.6

10.7

8.0

4.0

5.6

5.8

12.6

11.1

44.2

1.5

2.3

1.7

2.0

1.0

2.2

0.0 10.0 20.0 30.0 40.0 50.0 60.0

Conservation Forest

Protection Forest

Limited ProductionForest

Permanent ProductionForest

ConversionProduction Forest

Other Land Area(APL)

Million ha

Forested LandNot Forested LandNo Data

Source: Centre of Forest Inventory and Mapping, Bureau of Forest Planning, Ministry of Forestry, 2005

Current Forest Area, by Function and IslandCurrent Forest Area, by Function and IslandCurrent Forest Area, by Function and IslandCurrent Forest Area, by Function and Island(Total Forest Area 133.6 million Ha)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Papua Kalimantan Sumatera Sulawesi Maluku Jawa Bali & NusaTenggara

Mil

lio

n H

a

Conversion Production Forest

Permanent Production Forest

Limited Production Forest

Protection Forest

Conservation Forest

Source: Centre of Forest Inventory and Mapping, Bureau of Forest Planning, Ministry of Forestry, 2005

Demographic changes (population growth, Demographic changes (population growth, population density)population density)

The political and institutional environment The political and institutional environment (decentralization, forest governance) (decentralization, forest governance)

Economics changes (government revenue, job Economics changes (government revenue, job creation)creation)

Future energy demand (bio-fuel)Future energy demand (bio-fuel)

Global impacts (trade liberalization, trans-boundary)Global impacts (trade liberalization, trans-boundary)

Technological changesTechnological changes

Environmental issues and policies (climate changes, Environmental issues and policies (climate changes, forest and forest product certification)forest and forest product certification)

Key driversKey driversKey driversKey drivers

Probable scenarios and their implications:Probable scenarios and their implications:ScenariosScenariosProbable scenarios and their implications:Probable scenarios and their implications:ScenariosScenarios

Focus on total degraded forest area because of the vast Focus on total degraded forest area because of the vast land area involved (33.4 million ha), the rapid rate of land area involved (33.4 million ha), the rapid rate of change of land status from forested to non-forested, the change of land status from forested to non-forested, the relatively unmanaged status and the most obvious and relatively unmanaged status and the most obvious and logical places to begin to think about rationalizing the logical places to begin to think about rationalizing the forest estate and allowing more equitable and pro-poor forest estate and allowing more equitable and pro-poor access and activitiesaccess and activities

Rehabilitation and plantation development are therefore Rehabilitation and plantation development are therefore of central importance to the forestry sector in Indonesia of central importance to the forestry sector in Indonesia given the reduction in supply from natural forests given the reduction in supply from natural forests

Two major forestry policy objectives: forest Two major forestry policy objectives: forest rehabilitation and plantation development were then rehabilitation and plantation development were then considered within the two factors chosen: (a) considered within the two factors chosen: (a) effectiveness of policy implementation and institutions, effectiveness of policy implementation and institutions, and (b) economic growth rateand (b) economic growth rate

Probable scenarios and their implications:Probable scenarios and their implications:ScenariosScenariosProbable scenarios and their implications:Probable scenarios and their implications:ScenariosScenarios

Fast economic

growth

2. Unsustainable growth

Forest rehabilitation unlikely

 

Development of privately owned plantations possible but some government support needed. Little chance of development of community plantations although economic development may help resolve land disputes.

4. Sustainable development

Forest rehabilitation and plantation development proceed on the basis of effective policy implementation and sufficient investment.

Slow economic growth

1. Socio-economic development stalls

Forest rehabilitation unlikely

 

Plantation development unlikely.

3. Low-growth development

Forest rehabilitation still possible but only with policy measures based on allocation of land and rights rather than economic incentives.

Poor policy implementation Effective policy implementation

Forest resources:Forest resources:The Current and Future State, by forest type and scenarioThe Current and Future State, by forest type and scenarioForest resources:Forest resources:The Current and Future State, by forest type and scenarioThe Current and Future State, by forest type and scenario

Forestry Outlook Scenarios: Physical Indicator Comparison Areas of Different Types of Forest

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

Forest in 2006 S1 S2 S3 S4

Mill

ion

ha

Primary Forest Secondary Forest Plantations SILIN Non-Forested

2006 2008 2010 2012 2014 2016 2018 2020

25

30

35

40

45

50

55

60

65

Mill

ions

of H

ecta

res

Forestry Outlook Scenarios: Physical Indicator ComparisonTrend of Damaged Forest Area

S1S2S3S4

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

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

8.5

13.3

10.1

5.3

31.0

10.5

5.5

5.3

10.7

5.6

3.9

12.2

0.63.3 3.2 1.7

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Production Forest

Protection Forest

Conservation Forest

Convertible ProductionForest

Million ha

Primary forest

Secondary forest

Not forested

TPTII System

Pulpwood Plantation

Community Timber Plantation

Timber Plantation

Non-wood forest products and forest services:Non-wood forest products and forest services:Changes in environmental costs and forest stock value 2006-2020Changes in environmental costs and forest stock value 2006-2020Non-wood forest products and forest services:Non-wood forest products and forest services:Changes in environmental costs and forest stock value 2006-2020Changes in environmental costs and forest stock value 2006-2020

Forestry Outlook Scenarios: Comparison of Value IndicatorsEnvironmental Costs & Changes in Forest Stock Value

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

S1 S2 S3 S4

NP

V M

illi

on

s U

SD

Environmental Costs

Change in Plantation Forest Stock (Value)

Change in Natural Forest Stock (Value)

Change in natural forest stocks implies change in natural forest capacity to provide NWFP and 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 forest services so the future of non-wood forest products and forest services were addressed through estimating changes in natural forest stock valuesthrough estimating changes in natural forest stock values

Over the period 2006-2020, total changes in environmental costs and forest stock value ranges 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 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 +US$0.29 billions is due to changes in natural forest stock value given the future state of Indonesia forest resources in 2020Indonesia forest resources in 2020

Recommended strategic actions and Recommended strategic actions and policies:policies:Recommended strategic actions and Recommended strategic actions and policies:policies:

Strategic actions and policies focus on economic development Strategic actions and policies focus on economic development and poverty alleviation options in degraded Production Forest, and poverty alleviation options in degraded Production Forest, and promotion of environmental service delivery in degraded and promotion of environmental service delivery in degraded Protection Forest and Conservation ForestProtection Forest and Conservation Forest

Options for economic development and poverty alleviation:Options for economic development and poverty alleviation:

Promoting community-company partnerships to open new Promoting community-company partnerships to open new kinds of benefit sharing for timber production to planting kinds of benefit sharing for timber production to planting more trees for production/timber uses more trees for production/timber uses

Promoting Community forestry, social forestry, cooperatives Promoting Community forestry, social forestry, cooperatives and Small and Medium Enterprises (SMEs)and Small and Medium Enterprises (SMEs)

Opening space for communities and smallholders to be Opening space for communities and smallholders to be involved in forest utilization and management with longer involved in forest utilization and management with longer time horizonstime horizons

Providing technical assistance on management, models, Providing technical assistance on management, models, and cross-learningand cross-learning

Recommended strategic actions and Recommended strategic actions and policies:policies:Recommended strategic actions and Recommended strategic actions and policies:policies:

Options for producing environmental services and benefits:Options for producing environmental services and benefits:

Rehabilitating steep slopes and riparian landRehabilitating steep slopes and riparian land

Supporting land re-classification that harmonizes Supporting land re-classification that harmonizes slope/condition with functionslope/condition with function

Reconfirming steep areas as watershed protection forests, Reconfirming steep areas as watershed protection forests, in collaboration with local stakeholders and governmentsin collaboration with local stakeholders and governments

Considering high conservation value forests within the Considering high conservation value forests within the protection forest areas as candidate areas for reallocation protection forest areas as candidate areas for reallocation into conservation areas, especially if they are part of critical into conservation areas, especially if they are part of critical wildlife corridors or within the range of endangered or wildlife corridors or within the range of endangered or endemic speciesendemic species

Recommended strategic actions and Recommended strategic actions and policies:policies:Recommended strategic actions and Recommended strategic actions and policies:policies:

Options for Improving Governance and Management:Options for Improving Governance and Management:

Supporting Forest Monitoring and Assessment System Supporting Forest Monitoring and Assessment System (FOMAS) to improve transparency and rule of law(FOMAS) to improve transparency and rule of law

Building capacity to carry out law enforcement Building capacity to carry out law enforcement

Amending national laws and regulations to strengthen law Amending national laws and regulations to strengthen law enforcement effortsenforcement efforts

Prosecuting those behind major forest harvesting, Prosecuting those behind major forest harvesting, processing and transportation crimes to improve law processing and transportation crimes to improve law enforcementenforcement

Reducing impacts of land clearing and the risks of fireReducing impacts of land clearing and the risks of fire

Defining and marking boundaries to prevent encroachment Defining and marking boundaries to prevent encroachment and allow community self-policingand allow community self-policing

Recommended strategic actions and Recommended strategic actions and policies:policies:Recommended strategic actions and Recommended strategic actions and policies:policies:

Options for Improving Governance and Management:Options for Improving Governance and Management:

Developing and implementing a mechanism in all levels of Developing and implementing a mechanism in all levels of government to address concerns, resolve conflicts, process government to address concerns, resolve conflicts, process grievances, settle claims, and compensate for losesgrievances, settle claims, and compensate for loses

Supporting institutional development to help clarify roles and Supporting institutional development to help clarify roles and responsibilities for district/province governments in responsibilities for district/province governments in management, implementation, licensing, and monitoring management, implementation, licensing, and monitoring activities on forestlandsactivities on forestlands

Capacity building in regional government forestry Capacity building in regional government forestry bureaucraciesbureaucracies

Developing community-oriented and collaborative Developing community-oriented and collaborative management approaches to promote, establish, support and management approaches to promote, establish, support and sustain dialogue and decision processes on the future sustain dialogue and decision processes on the future organization and management of the forestry sectororganization and management of the forestry sector