Smallholder farmers’ contribution to planted teak

4th International Congress on Planted Forests, 27-28 October 2018, Beijing, China

James M. Roshetko, Leader Trees, Agroforestry Management and Markets Unit, and

Aulia Perdana, Marketing SpecialistWorld Agroforestry Centre (ICRAF), Southeast Asia Research Program, Bogor, Indonesia

Outline

• Background

• Socioeconomics and Culture

• Teak Systems and Management

• Finance, Economics, and Markets

• Recommendations for Management & Markets

Teak – Tectona grandis• Best-known, most valuable, widely produced tropical timber

• Native: India, Myanmar, Laos, Thailand • 23 million ha (half in Myanmar)

Timber demand has always been great

Plantation production: Indonesia – 13th century?? Sri Lanka – 1680 India – 1840sMyanmar – 1856

• Currently grown in minimum 70 countries

• Global teak plantation 7 to 4 million ha

• 83% in Asia – India, Indonesia, Myanmar

Smallholder Teak

When and how did smallholder farmers start to be involved with teak?

• rural people worked as laborers for plantation establishment and management

Taungya system: intercropping with annual crops to improve teak seedling establishment and growth (off-set establishment costs) and increase involvement and benefit to farmers!• started in Myanmar 1850s • approach, and modifications, still promoted

Smallholder teak plantings (plantations) • well established in Java (Indonesia) in 1960s • Other countries: Laos, Thailand, Bangladesh, India, the Philippines, the Solomon Island, Nigeria, Togo, Benin, … Costa Rica, Panama

Smallholder TeakSmallholder teak plantings Important part of global teak estate• 19% of are in Asia and Africa • 31% in Central America • 34% in South America

Kollert and Cherubini, 2012

Smallholder area approximately ….- 920,000 ha

- roughly 21% of total

Smallholder teak systems• Integrated or segregated • Start as monoculture become mixed• prefer mixed with other crops & trees• Varies from 0.5 – 2.0 ha• Subsistent systems …… for commercial

production!

Smallholder Teak areas - Indonesia

*

Farmers – main source of industrial teak

Teak cubic m3 2006 2007 2009

Perhutani (State Forest Com.) 184,521 186,613 171,329

Smallholders 248,111 201,453 200,793

• ~1.5 million farm families grow teak on Java (Dep For 2005)• ~444,000 ha of mixed teak on fallowed ag land (Java, degraded)• ~3.1 million ha farmland teak in Indonesia (Kollert et al 2012)• 80% teak used by SMEs from farms (dbh <30) (Achidiawan et al 2011)• SMEs are 90% of Jepara furniture industry (Yovi et al 2013)

Teak log production Central Java (one of the two main teak producing provinces)

Smallholder have become an dominant source of teak

supply of smallholder teak will as plantation continue to

• Why do farmers plant teak?- 54% as family savings (teak is a living bank account)- harvest for $ needed - tebang butuh- 23% as cultural heritage - only 15% to max econ opportunity

• Prefer Mixed Systems :↓ risk; ↑ diverse crops, product & income for home; improve environ.; sustain traditional

• Farmers want to improve management: ….but not sure what to do!

Socioeconomics & Culture

Indonesia

Teak system % of systems Size (ha) Trees/ha Tree species

Tegalan

(intercropping)50.6% 0.47 1072 8

Pekarangan

(homegarden)21.9% 0.24 1177 13

Kitren

(woodlot) 21.9% 0.31 1532 5

Line plantings

(agric. land) 4.8% 0.31 138 7

75%

15%10%

Species UseTimber

Fodder / Greenmanure

Others

55.9%

11.3%

7.4%

5.8%

4.0%

2.4%

1.4%1.2%

1.1%

0.9%

0.8%0.7%

0.5%

0.1%

6.5%

SpeciesTeak

Mahogany

Leucaena

Acacia

Bauhinia

Gliriidia

Gnetum

Sesbania

Cassia

Coconut

Manggo

Cashew

Dalbergia

Jatropha

Others

Ave. family holding 1 ha (0.5-3 ha)30-50% under teak …. - 10% kitren - remainder mixed systems

Thailand & Laos • Also mixed tree-crop preferred• ..enable off-farm opportunities• include temporary migration

Dry areas (Benin, Togo, Nigeria)• Teak competes with crops

(land and labor) • …diversify, restoration preferred

Central & South America• Smallholder monocultures

All locations farmers need support – land, tech. & market knowledge and assistance

Farmer Silviculture• Regeneration: 72% wildlings,

30% local seedling, 20% coppice, 12% improved germ.

• Pruning: 65% farms, 55% trees – for fuelwood, 10-15 cm stub

• Thinning: 57% thinning (but really harvesting)

• Coppice: no thinning • Not management for

improving production /growth

Poor silviculture practices! → Farmers teak systems … overstock, slow growing, low quality, low productivity

Remember – harvest for needs!

Economics & Finance• farmer limited capital and household labor• deploy those resource with emphasis on short-term production• teak not prioritized for investment• self-source germplasm …intercropping → fert, weeding, etc

3.0%

11.6%

24.9%

60.5%

0%

10%

20%

30%

40%

50%

60%

70%

Timber, otherthan teak

Teak Food crops andlivestock

Off-farm work,remittance, retail

• This approach reasonable ...• Cash invest is marginally

profitable (if solely on teak)• Teak contribute

– 12% household income• …but teak system contribute

– 40% of hh income →→

• …good return on minimal investment!!

Market/Marketing

Age

(years)

DBH

(cm)

Price for farmer

(US$/standing tree)

Log volume after

processing (m3)

Log price to

traders (US$)

10 12 – 18 3 – 6 0.045 - 0.189 3 – 25

15 13 – 31 5 – 30 0.060 - 0.515 6 – 123

20 21 – 45 10 – 265 0.307 - 1.061 57 – 284

25 29 – 49 20 – 296 0.320 - 1.321 54 – 329

• role of farmer limited to producer• standing tree standard unit of sale for farm-grown teak• no clear quality or volume standards exist • 51% farmers discuss price with neighbors, 31% compare price with multiple traders, 18% are price takers • regardless of approach – farmers receive price ↓ market rate• traders ↑ transaction cost; so offer price ↓ • farmers sell small dbh logs (only 14% harvest by dbh class)

ManagementRecommendations

• Harvest for need approach is ok, but…

• Farmer should ↑ management, how?- better germplasm - wider initial spacing - coppice management - thinning best option for ↑ production

• Government and support agencies facilitate adoption of silvicultural - access to germplasm, extension and

training, information (manuals, bulletins), and demonstration trials

Similar recommendations: Thailand, Laos, Panama, Costa Rica, & general

• Produce larger diameter, better quality logs (know the market)

• Improve market position by accessing information

• Develop links between teak farmers and teak industries

• Engage in group marketing to ↓ transaction costs for all parties

• Provide farmers log grading and pricing system that is used by the timber industry

• Government provide more suitable timber trade regulations, specifically for smallholder timber

• Simplify timber trade regulations to - min. transaction costs) & make farm teak markets more efficient

Market Recommendations

Thank you!

Terima kasih!