Current Status of: Community Forest Enterprise Products and its correlation to CBFM in Indonesia by Andri Santosa

CURRENT STATUS OF :

COMMUNITY FOREST ENTERPRISE PRODUCTS and its correlation to COMMUNITY BASED FOREST MANAGEMENT in INDONESIA 2013 Christine Wulandari and Wisnu Caroko I. INTRODUCTION Government of Indonesia stated the area of Indonesia forest, around 136,943,675.98 hectares. According to a report by General Directorate/Agency of Forest Planology of Ministry of Forestry and Central Bereau of Statistics (2010), forest in Indonesia has been divided to several purposes of production, protection and conservation. Until now, people still assumed that timber forest products as only one of financing source in national development therefore major concentration of national development is on production forests eventhough conservation forest is the largest. On other side, meanwhile the accumulation of forest quality defects due to deforestation of 1.17 million hectares per year in 2003-2006 fell to 0.8 million hectares per year in the years 2007-2009 (FIP, 2012) but in fact in the fields it still create a new crisis either forest degradation, e.g. forest fires and downstream flooding. Repetition of the environmental crisis has indicated that the government has not yet able to its curb the crisis at national and local level. The government incapability to handle the environmental crisis that influenced to the local economic growth. At the large extent, this was also ignite the global economy crisis. On the other hand, both environmental and economic crisis has forced many stakeholders to be aware and empowering the local. Development of CFE should be empowered and supported on each other to CBFM scheme (Arnold, 1992). The reinforcement and empowering of local is highly recommended due to the large number communities and villages living around the forest, see table 1. CBFM concept which is also regarded as Community Forestry (CF) e.g. Sistem Kehutanan Kerakyatan or Community's Forest System and Hutan Kemasyarakatan (HKm), is one of the adaptive solutions to empowering the local, not only based on the local uniqueness and context, but also integrated and distinctive. Hasanu Simon, Professor of the Faculty of Forestry, Gadjah Mada University(1994), stated that â&#x20AC;&#x153;CF is a new approach to manage production forest towards to anticipate the growing social problems surrounding the forest.â&#x20AC;? It means that CF is one best way to bring the harmony between people and nature relation, also economy and ecological issues. In addition, CF capable to integrate other values, such as democracy, morality, culture, and spirituality within civil communities. The government and national financial institutions were facing financial crisis affects to development program, but CF continuous develop and apply effectively supported by local communities engagement. The lack of financial support from the government and financial institution was also forced by economic liberalisation due to the prolonged economic crisis. At the moment it is known there are several groups of international forestry expert who suggested a global transition in the management of forest resources. This condition was indicated by the high development in policy and local communities in Northern and Southern countries onparticipation mechanisms of natural resources and forest management.

Table 1. Number of Village, Individu and Family Inside, Edge and Outside Forest year 2007 Number of Village No

Province

Inside Forest

Edge

Outside Forest

Number of Individu Inside Forest

Edge

Number of Family

Outside Forest

Inside Forest

Edge

Outside Forest

10136723

26519

248439

2205932

78795 1398635

3130319

17952

320848

727487

North Sumatera

165

1073

West Sumatera

263

609

Riau

361

1045

87175

919957

3663769

21755

206081

843376

South Sumatera

102

461

2215 165727

712291

6064979

41395

165823

1426430

Bangka Belitung Islands

143

368656

656134

450

90931

165252

Central Java

188

1581

26700771 162383 1441286

6778821

Bali

615

7752

340794

2923037

2065

89368

704302

West Nusa Tenggara

222

564

84432

791483

3355365

21987

216545

913927

East Nusa Tenggara

769

1896

85276 1138747

3073459

19600

249862

681798

West Kalimantan

119

524

887 184874 1052386

2825294

42639

245452

652098

Central Kalimantan

208

677

466 152787

797439

976543

38710

196607

247567

South Kalimantan

East Kalimantan

14 15

3677 115596 1103768

177

2173

6795 619587 5482916

233

39937

294071

2901995

11345

78048

764468

194

567

1680

583 118328

643851

2170011

28811

162480

558047

South East Sulawesi

645

993

32335

662001

1299218

8318

152830

297769

Maluku

340

507

20427

431627

898082

4701

92148

190795

Source: Ministry of Forestry and Central Bureau of Statistics, 2007

If the government does not effectively respond to the communities demands, conflict of forest resources will raise. Under these conditions, the CF are appropriately solution because local community need a guarantee for the future. And, indeed the forest resources must be redistributed to the primary interests of the people. Campbell (1997) said there are 20 steps in pursuing sustainable community forestry. These steps are divided into three categories; changes in attitude and orientation, institutional and administrative mechanisms, and management methods, see Table 2.

2 Community Forest Enterprise in Indonesia

Table 2. Changes of Community Forest Concept towards to Sustainable CF No.

From

A. Attitude and Orientation 1.

Control

Support/facilitation

Beneficiary

Partner

User

Manager

Unilateral decision-making

Participation

Reception orientation

Resource orientation

National benefit

Orientation of the local justice

Directed by plan

Learning process/evolution

B. Institutional and Administrative 8.

Centralization

Desentralization

Management (planning, implementation, monitoring) by the government

Partnership

10.

Top down

Participation/negosiation

11.

Orientation of target

Process orientation

12.

Rigid budget for big work plan

Flexible budget for micro plan

13.

Rules and punishment

Conflict resolution

C. Management Method 14.

Rigid

Flexible

15.

Single purpose

Multi purposes

16.

Uniformity

Diversity

17.

Single product

Diversity of product

18.

Fix management menu with single silviculture rule

Multiple options of silviculture for specific location

19.

Crops

Natural regeneration

20.

Human resource/Labor/collector

Manager/implementator/marketer

Source : Campbell, 1997.

Based on the conceptions of social community forestry there is can be drawn upon definition of CF, ie forest management done by individuals, communities, or groups, on state land, communal land, customary land or owned land (individual / household) to meet the needs of the individual / household and community, as well as cultivated commercially or for subsistence needs. This definition more dynamic and in accordance with the development of society. Actually pattern of technological development and community forestry organizations in order to meet the subsistence needs will be different with the commercial purpose. In practice, community forestry is not the only activity in rural communities, it can not be done alone and isolated from a variety of existing activities. Therefore Wulandari (2010) also emphasized that the community’s efforts in the economic aspect should be integrated with other activities, such as farming, fishing, and cooperative. Economic activities can be referred to as the CFE, which is defined as the forestry industry that is managed by local communities or indigenous peoples and others because it is their main livelihood. The advantage conducting CFEgained from the activities in the field of production, processing and trade of timber, NTFPs and can participate in the environmental services market (Clay, 2012). The purpose of this study, which is reviewing the CFE status, identify the types of products developed by the CFE in the field and rank its products. Two kinds of products CFE i,e. the first and second rank will be used as a basic material in the continue research namely value chain. Definition of “Status” here is the current state of production, institutional and policy CFE based on research results as well as the conditions that exist in the field.

II. DEFINITION AND CHARACTERISTICS OF CFE In most of field implementation, the sustainability of the CFE is associated with the program "community forestry" (Arnold, 1992). The main focus of the CFE activities is to collect and to sell timber products and NTFPs. This paper will mainly describe the CFE for NTFP products because these products is commonly found in the field that produce by CBFM in Indonesia. The field implementation of CFE is vary in terms of the social and cultural context, organizational systems, levels of development and the nature and level of market integration (Sanchez Pego, 1995). The common characteristics of CFEs that distinguish from industrial systems (Padoch and Pinedo-Vasquez, 1996; Salafsky et al, 1997) are as follows: 1. Rights of resource are owned by or managed directly by the community (or the part of their members). 2. CFEs members mostly live near the location of their companies and their lives depend on the forest. 3. Harvesting by CFEs are generally on a smaller scale and less capital-intensive than industrial systems. CFEs tend to rely more on labor than capital-intensive machinery and technology. The CFEs characteristics can provide greater flexibility to change the pattern of production and management purposes in response to fluctuating market prices. 4. CFEs are trying to add value to raw materials, or its location is close to the harvest location. 5. CFE capital and its gains tend to be invested at the local level. Thus the development of CFEs have a greater benefit than the industry since it can maintain their forest resource stocks, though they may be more vulnerable to changes in interest rates and macroeconomic fluctuations and so on. Supported policies and a favorable political environment is very important for the CFE, but often existing policies are not adequate to support the development of CFE (ODA 1996, Poffenberger 1996; Richards, 1997). The existing policies are often weak or unstable or there is a repressive government. The law are somehow limited and sometimes biased since the existing policy is more favorable for the industry interest. It also happened in Indonesia and is one of the constraint factors toward the development of CFE. One of the regulatory elements framework needed to support the CFE is the property rights. Appropriate business associations are also required by CFEs as well as to defend their interests in the political arena and participate in the formulation of policy. Currently in Indonesia there are several business associations CFE, including AWKMI (Asosiasi Wirausaha Kehutanan Masyarakat Indonesia or Community Forestry Indonesian Entrepreneur Association) which was founded in June 2012 and initiated by stakeholders. Previously existing APIK (Asosiasi Pengusaha Industri Kecil or Small Industries Association), APIKRI (Asosiasi Pengembangan Industri dan Kerajinan Rakyat Indonesia or Association of Industry and Handicraft Development Rakyat Indonesia), JMHI (Jaringan Madu Hutan Indonesia or Forest Honey Network Indonesia, located on the island of Sumbawa), APDS (Asosiasi Periau Danau Sentarum or Association Periau Sentarum Lake), etc. Most, but not all of CFE can be defined as SMEs, either because the number of employees or because of the amount of capital. The difference came up because some CFEs have more workers and capital than are allowed in the definition of SMEs before, but they still can be synergized with the aim of the company's economic social based on environmental objectives and public purposes. The CFEs role in countries of tropical timber-producing countries including Indonesia is significantly increased particularly in influencing the domestic and global markets. CFEs development supported by social conditions, market, and policy and regulatory framework, including the status of land ownership. They are many who have a record of success in sustainable forest management and in managing the supply of various raw materials and final products to the domestic and export markets as well as having partnerships with formal processing industry. They also contribute significantly to the general economic status and welfare of the community through job creation and investment in goods and social services, conservation of natural resources and cultural assets (Barry et al 2003; Bray and Klepeis, 2005; WRI, 2005; Jenkins, 2004, Scher et al. 2004). Despite the CFEs success records, there were yet any policy that supported its development. In addition, CFEs in Indonesia are still encountering several difficulties including social conflicts, limited scale of the products as well as its quantity and quality. These factors have been shown to affect its growth. The same thing is stated by Diah Raharjo on the 4 Community Forest Enterprise in Indonesia

opening of the first symposium of AWKMI in 2012 in Semarang. She wa stating that there are 4 (four) matters affecting the development of CFE in Indonesia, namely: (1) lack of access to capital, (2) lack of access to market, (3.) lack of ability to manage the business, and (4.) lack of effort in maintaining continuity of good quality product.

III.

STATUS AND POLICIES OF CBFM AS DEVELOPMENT INSTITUTION OF CFEs IN INDONESIA

Exploring the CFE must be considered to the mechanism agencies that manage and operate the CFE. According to Uphoff (1986) in Suharjito (1999), institutions are organizations that norms are complex and serve collective goals. The definition emphasizes the institutional rules and be a reference for the behavior of members of the community who develop the rules. According to Ruttan and Hayani (1984), institutions are the rules in a community group or organization that facilitates coordination among its members to help them with expectation that everyone will be able to work together or in contact with one another to achieve a common goal. The definition of institution that proposed by Williamson (1985) are more suitableto CFE model. He thinks institution is include institutional arrangement, namely an arrangement of relationships between economic units and in cooperation or competition. In addition, there are further questions about the economy actors that will related to contract or transaction in the CFEs (Williamson, 1985). For Indonesia, the institution that run the CFE would not be separated from the existing institutions in the CBFM program because the community is the main actor. In Indonesia, CBFM program that puts the community as the main actor, is a Community Forestry (HKM), Forest village, Model of Village Conservation, Community Forest Plantation (HTR) and community or private forests that located at outside the state forest as well as a partnership program with the private sector. The programs are implemented in the private land, and partly on the state forest, i.e. production forests, protected forests and conservation areas. Physical context of the forestry programs usually a mixed garden, yard, private forest, businesses of honeybee and worm silk etc. , or in other words managed by agroforestry and the results are then sell through CFE either individually or groups. In addition, there is also the umbrella of institutional CFE is a mixture of various existing schemes such CFE makes and sells wooden furniture which wood sources come from HTR, Community Forestry or HKm in production forests. Institutional aspects of forest management depends on the function of forests. For Forest Conservation, due to the central governmentâ&#x20AC;&#x2122;s control on, it negates Indigenous Forest and Community Forest scheme. In Forest Conservation, it has been completely divided into forest institutions that hold rights or legal permit; the government agency that has been given the mandate both at the central, provincial and city. While Protected Forest and Production Forest patterns are based on the permissions that more emphasis on using aspects of commodities, such as timber, non-timber and environmental services. It is not on the rights to manage a region. Exception applies to the Forest Village scheme since it should be implemented by village regulation or Peraturan Desa (Perdes). In addition, before obtaining a business license based commodities, firstly village community institution or Lembaga Masyarakat Desa (LMD) must received the handover of the rights of Village Forest Management Rights (HPHD). For HKM, management is delegated to the local communities in the form of a business group or cooperative.

III.1. Region Permit Aspect Participation and rights of community in forest development are regulated in Law of Forestry No. 41/1999 as stated in the Article 67, 68, 69 and Article 70. According to the Act, there are several opportunities for social forestry development in the form of indigenous forests, village forests, community forests and forests with special purposes. The government also gave opportunities to the community forestry development in their own land or private land. The scheme is called Community Forests. Other regulations are Government Decree or PP No. 34/2004 on Forest Management and Forest Management Planning, Exploitation and Use of Forest Area converted to PP 6/2007 which then revised under Regulation No. 3 of 2008 on Forest Management and Forest Management Planning, and Forest Utilization set HKm, HD and Forest Partnership as the implementation of community empowerment schemes in and surround the forest. The PP also provides access for community to legally exploit the forest which in this case is also open wider opportunities to capitalize on the timber plantation through Forest Plantation or HTR. â&#x20AC;&#x192;â&#x20AC;&#x192;5

Permit of Region to Harvest Forest Products in the State Forest, based PP 6/2007 and also PP 3/2008, CFE in the form of business groups/cooperatives to obtain permission to utilize forest products (NTFPs and environmental services mainly) on state forest land. Permit of region in term of collection area/scale utilization in certain area and a certain amount and is only limited to one commodity. Should they want the collection/utilization of other commodities, they must have another permit even in one area. Permits in this area can be overlap between some commodities and among some businessmen, often also overlap with mining permits.

III.2. Aspect of Utilization There are three products that can be used by communities in forest management through some of the CBFM schemes. The products are wood, NTFPs and environmental services. Wood is only for schemes that are in production forest areas and private forest. As for the function of protection and conservation community can only utilize NTFPs and environmental services only. Special NTFPs government has issued Permenhut No. 35/2007 which defines NTFPs as forest products both vegetable and animal biodiversity and its derivative products except wood from the forest. The decree listed about 570 species/group of species that can be classified as NTFPs when it was taken/utilized from within the forest. The list consists of 507 plant and 63 animal. In this regulation also explained that if a product in the category of NTFPs, then management should under the rules of Forestry department. NTFPs are listed or not listed in the list, subject to and governed in accordance with the forestry sector (Article 3, paragraph 1 and 2). Conversely, if the same product is not in the category of NTFPs (although listed in the list but was taken from outside the forest) then follow the rules in paragraph 3. The verse explains that NTFPs are listed in the appendix, but come from outside the forest, subject to and governed by other rules (which is not a forestry regulations). Management of forest products are always subject to the existing rules in the Forestry department. Management are meant both collecting or planting, enrichment, maintenance, protection, harvesting and marketing. The forest products itself can come from outside the forest area and in forest area. For non-wood forest products originating from forests according to Law No. 41 of 1999 and Government Regulation No. 6 of 2007 and its amendments can be divided into: (a) NTFPs derived from protected forests and known by the name of the collection, (b) derived NTFPs of production forests both natural forests and plantations known as utilization. Collection and utilization of NTFPs must pay Forest Resource Provision (PSDH). The amount of PSDH determined by the decision of the Minister of Forestry on the basis of NTFPs. According to PP 6/2007, forest harvesting both wood and non-wood is activity to collect forest products with time constraints, broad and/or specific volume. To be able to do the collection required Collection Permit (CP) or Izin Pemanenan (IP). The CP is given for 1 year and may be extended (by evaluation every 6 months) to individuals or cooperatives and the licensing authority can be done by the Regent/Mayor, governor or minister, depends forest areas under its jurisdiction. Utilization activities of the forest is activities to exploit and commercialize forest products without harming the environment and reducing the principal function. The utilization activities could be land preparation, seeding, planting, maintenance, harvesting, and marketing. To be able to utilize, the condition is a form of permission from the State Business License Utilization of forest products (IUPHH). Permission may be granted to individuals, cooperatives, BUMS Indonesia, state-owned enterprises or for a maximum of 25 years and can be extended and evaluated every year. Licensing can be done by the Regent/Mayor, Governor or Minister, it depends on forest areas are in the jurisdiction. In terms of liabilities, stakeholders of IIUPHHBK or State Business License Utilization of non timber forest products and IPHHBK or the utilization of non timber forest products obliged to carry out activities that are identical to the activities carried out by the holder of the permit holder and the utilization of timber harvesting (IPHHK). Example of the identical activities is work area delineation must be made one year after being granted (Article 72 and 71 on PP No 6/2007 and Regulation of the Director General of Forestry Production No. P.01/VI-Bpha/2005 concern on General Guidelines for Activities/Business Improvement Project Community Around Production Forest.

6 Community Forest Enterprise in Indonesia

III.3. Implementation aspect of various CBFM policies and schemes related to CFE Development 3.3.1.People Forest and Customary Forest CFE in people forest is usually cultivated in the private land that was formally recognized by the government as well as private land that is recognized at the local level (customary land). Generally, on people forest cultivated plants/ trees which mainly produce timber, for example sengon (Paraserianthes falcataria) and acacia (Acacia auriculiformis), which mainly produce latex: frankincense (Styrax benzoin), damar (Shorea javanica), and which mainly produce fruits: candlenut (Aleurites moluccana) and nutmeg (Myristica fragrans), and the bamboo forest. According to a study by the Center for Forestry Research and Development - Ministry of Forestry in 2012, one of the CFE program with timber and non-timber forest resources are from the people forests in Pati District, Central Java. In this district, the highest contribution of timber products (Sengon, Jengkol and Mahogany) is in the Payak Village (67%) while the high contribution of revenue from non timber products is in the Giling and Gunungsari village (71% - 87%). The types of non timber products have a high revenue contribution are fruit plants (31.58% - 75.11%) and plantation crops (22.13% - 55.41%). The vast of people forests in Indonesia in 2008 was 17,211.4 hectares, later in 2009 covering an area of 29,692.40, and in 2010 was 4,440.30, thus the total people forest area up to 2010 is 51,344.10 hectares (DG of Area Rehabilitation and Social Forestry-MoF, 2010). In addition, there are forest products derived from people forest in the form of clan forest or customary forest outside the state forest. One example of this forest area is in the province of Lampung, West Lampung District precisely. The community gain non-timber forest products (NTFP) which mainly produce pepper, cacao and coffee. A part of the products are immediately consumed and partly sold. Selling price of this NTFP is very fluctuating because it depends on the price at the global level. This condition makes the people marginalized in scope of cacao and coffee trade at the national level and moreover at the global level. Marginalization of communities happens because they do not understand about the price index in the market on the commodities that they have earned on their cultivated land. People forest itself was never built to produce a single product. Both Java and even more so outside of Java, people forest is developed for multiproduct purposes: not only as timber producers, but also non-timber forest products which are tangible and intangible. For outside Java, the main products are even generally non-timber, for example damar plantation in Krui that produces damar latex (main), petai, durian, etc., and frankincense plantation in North Tapanuli which produces incense (main), petai, duku, durian and so on. With emphasis on the word “people”, open the opportunity for people around the forest to manage forests on the state land. If the current terminology of people forest will be maintained, it is necessary to have a policy to diminish the chance of private companies (medium and large) to controls the people land to cultivate the forest. But it is not impossible that the people of land owner cooperatives to cultivate the forest. Especially for such cooperatives in the people forest, for example is a cooperative in Gunung Kidul, Yogyakarta Province that is also developing people forest certification program. The forests is on the land that recognized as people’s weather communal or individuals which is on the land that has been burdened land rights proven by pedestal title or land rights. Legal basis related to forest rights in Indonesia are stated in the Act No. 41 of 1999 on Forestry, in particular in Article 1 paragraph 5. In the explanation clearly mentioned that the forest rights on the land that burdened by common land rights is known as people forests. The appointment of this right forest function is based on the Spatial Plan of a district/ city. By law, one area can not be considered as rightforest (although the land is private land) if the land is not appointed or designated as ‘right forest’. The area must be appointed or designated by the regent/ mayor as ‘rightforest’ based on the spatial map of the region concerned. Customary forest in the beginning is a state in the customary areas which its management is delegating to the indigenous people (Act No. 41 of 1999); Based on the insistence of many parties then it conducted Judicial Review to the Constitutional Court to reject the state’s control on customary forests. Finally came out the Court Decision No. MK/35/PUU-X/2012 which removes the word “State” in the forestry principal constitutions. As since May 16, 2013 the definition of ‘customary forest’become ‘the forest located in the custom territories. Due to the dynamic terminological development, until now there is no Customary Forests established by the Minister of Forestry. The Customary Forest today is limited to designated or appointed by decision of the head of the region, so that the existing Customary Forests are not yet to be categorized as forest area. Thus, the existingcustomary forest outside the State forest 7

as it existed in West Lampung district can be termed as customary forests. There is another interesting example which has been conducted by the Local Government of Kerinci District, Jambi Province. In its ‘Perda’ which numbered 24/ 2012 stated that from the year of 2013 to 2032 the district has plans to have 10 customary forests. 3.3.2.Community Forest. Community Forest (CF) is state forest which its utilization primarily intended to empower local communities. CF is expected to increase the capacity and autonomy of local communities so that they get the benefits of forest resources optimally and fairly through capacity building and provision of access in order to improve the welfare of local communities. In the Fifth of Five-Year Plan document (1989/1990 to 1993/1994) stated that in order to improve the welfare of the community, it need to be assured that forests able to provide benefits to the surrounding community. Development of community forest gain its understanding and new form in 1995, as established by Ministry of Forestry Decree No. 622/Kpts-II/1995 dated 20 November 1995. In this Decree, community forest developed in the area of production forest or protected forest which is not being concessioned to the concessionaires (HPH or HPHTI holders). Forest products that can be used is limited to the non-timber forest products. Decree No. 622/1995 is then updated trough Ministry of Forestry and Plantation Decree No. 677/Kpts-II/1998. In Decree 677, community are allowed to cultivate state forests and get the benefit of timber and non timber products. In Decree 677 is also mentioned the cooperative iss the only institution that acts on behalf of the community and will be developed as a community forest concessionaires (HPHKMs). This right is limited to the utilization of non-timber forest. Ministry of Forestry also designed a credit services to people who are interested to start business units based on forest products. This form of CF promotion is an approach that can minimize forest degradation and improve the local economic level. Then the Ministerial Decree is changed by issuing Ministry of ForestryDecree No. 31/Kpts-II/2001. By this decision, the community is given greater flexibility as the main actors in the forest management. But again, it do not produce maximum results due to the policy confusion and there is no accommodation of the local communities rights. Decisions on theCF above is also used by the government to protect forest areas especially production forests which are not covered by the large-scale logging concessions. The policy was then further refined through the Regulation of the Minister of Forestry (Permenhut) No. P.37/MenhutII/2007 on The Community Forest and then followed by its changes (Permenhut No.P.18/Menhut-II/2009, Permenhut No. P.13/Menhut-II/2010, until Permenhut No. P52/Menhut-II/2011). In this regulation, the government explained the technical guidance relating to the procedure for obtaining the management rights of community forest, including the details of the licensing process and licensing of utilization of the community forest management (IUPHKm). CF is only applied in the protected forest and production forest. The provisions, the forestis not burdened by rights or licenses in the utilization of forest products and become a source of livelihood of local communities. The License of Utilization of Community Forest Management (IUPHKm) is granted for a period of 35 years and extended based on the evaluation results in every 5 years. CFis reserved for the local poor people who live in and around forests and its livelihoods depend on the forest resources. So far, the main product from the community forest in Sumatra Island is coffee and cacao. There are several types of plants that qualify a place to live and had enough economic value to be used as the canopy for coffee in West Lampung (Wulandari, 2012), that is Avocado, Sugar Palm, Candlenut, Mango, Melinjo, Petai, Jengkol, Banana, Jackfruit, and Pepper. One example is the Community Forest Group of Binawana in Tri Budi Syukur in West Lampung Districts which is so far cultivating coffee with the fruits or forest trees as the canopy. They have provisions even not yet written, that is in the area of community forest management, they planted with the composition of 70% fruit trees and 30% forest trees. Further elaborated that approximately 25% of Sumberjaya farmers commonly plant Cacao, Pepper and Cardamom. According to the Chairman of the Binawana CF Group the products of 1 (one) Sugar Palm tree since started to able to be harvested until the peak age in the range of 15-20 years could generate 15 million - 20 million IDR per tree per year from the sap water that has been processed into palm sugar and or ants sugar. In addition, there are interesting things that have been implemented by KWT Melati which is also CF community group in Tri Budi Syukur Village, where they maintains luwak(mongoose) as one of the diversification management in the coffee-based agroforestry manage on their cultivated land so they can produce luwak coffee with a high value, at the price of 500,000 IDR per kilogram. In addition, there are still many products of NTFPs from CF in Jambi, West Nusa Tenggara, South Sulawesi, East Java, and so on.

8 Community Forest Enterprise in Indonesia

3.3.3.Village Forest. According to the legal framework in the Act 41/99 particularly in the explanation of Article 5, the village forest is state forest that burdened by management rights granted by the state or village communities. In terms of community, customary forest is a forest located in the customary areasand village forest located in the village areas, regardless of whether in the state forest area or not. Later in PP 6/2007 village forest is defined as a state forest that has not burdened a license or rights which are managed by the village and for the welfare of the villagers. The basic principle of the Village Forest is to open up access to certain villages, precisely forest villages, to the state forests which are included in their territory. As we know, there are a lot of villages in and around forest areas. It is worthfor such villages to get the access to forest resources in their area, for the welfare of the village community. Access rights to the state forest in their village territory is then translated as village forests. Granting access is stated in the Regulation of the Minister of Forestry Number: P.49/Menhut-II/2008, on Forest Village, which was set on August 28, 2008. This regulation was then followed by the amendments as described in Permenhut No. P.14/Menhut-II/2010 and Permenhut No. P53/Menhut-II/2011. In the Village Forest, management rights permanently granted by the Minister of Forestry / Local Government to the village institutions with the range of time about 35 years and can be extended. Forest Village Licenses can be assigned in the area of protected forest and production forest as well which are located in the administrative area of the village concerned. Determination of working area of the village forest is conducted by the Minister of Forestry trough the proposal of the Regent/ Mayor. In this case, the rights that can be granted is the village forest of non-rights with permanent status in the state forest. Associated with forest village, based on Ministry of Forestry Decree No. 154 and 155/Menhut-II/2013 on March 8, 2013 the Minister of Forestry has granted a validation on the first community management rights in Riau Province, that is in Segamai Village, Teluk Meranti Sub district and Serapung Village, Kuala Kampar Sub district, Pelalawan District, of about 4,000 hectares. Both villages are located in the Production Forest Management Unity (KPHP) of Tasik Besar Serkap. For CFE development in the Village Forest scheme such as might occur in the VF that is pretty well known its institutions, as an example is VF in Bantaeng District, South Sulawesi. Forest products managed by the village forest in this location include coffee and honey. There are also VF in Jambi, Bali and Riau with the production of coffee, rattan, rubber resin, and fruits. 3.3.4.Community Plant Forest. Community Plant Forests (HTR) is the plantation forest in the production forest which established by community groups to improve the potency and quality of production forest by applying silviculture in order to ensure the sustainability of forest resources (PP No. 6 of 2007 chapter 1 article 1). HTR can be simply translated as forest that built by the people in state forest areas using the pattern of plantation forests. In addition to accelerating the development, HTR plantation forests are also intended to improve the welfare and community participation in the management of state forests (providing legal access to the people in the use of production forests).PP 6/2007 in particular Articles 40 and 41 besides regulating the establishment of areas for HTR, also regulates access to financial institutions, and determination of the basic price for HTR timber to protect and provide market access for the peoples. Thus the HTR policy is also one of community economic empowerment efforts to overcome poverty through the provision of greater access to legal, financial institutions and markets. Policies that issued on HTR is more comprehensive, including: •• Permenhut No. P.23/Menhut-II/2007 on Steps of Licensing Applications for •• Timber Forest Product Utilization inthe People Plant Forest in the Plantation •• Forest; •• Permenhut No. P.5/Menhut-II/2008 on the Permenhut amendments No. •• P23. Menhut-II/2007; •• Permenhut No. P.9/Menhut-II/2008 on the Requirements of Farmers Groupto •• get Revolving Fund Loan of HTR Development.

While there is a development pattern of HTR that is planned:

1. Independent Patterns. Local communities form groups and governments allocate a vast of area and Decree of IUPHHK-HTR for each individual or group. Each group leader is responsible for the implementation of the HTR, proposal and repayment loans, markets, and assistance from the government. 2. Partnership Patterns with HTI (Industrial Plant Forest) of BUMN/S (State/ Private Owned Enterprise). People form groups proposed by the Regents and Ministry of Forestry. Government issued Decree of IUPHHK-HTR to individuals and assign partners. Partner is responsible for mentoring, inputs/ capital, training, and markets. 3. Developer Patterns. State/ Private Owned Enterprise as the developer to develop the HTR and then submitted by the government to the community. Government gives Decree of IUPHHK-HTR hereinafter the development costs accounted as a loan of Decree holder and gradually repaid according to the agreement. The late of HTR achievement are partly because the relationship among institutions are still very weak which is characterized by inequality in understanding HTR policies, especially in terms of forest use, funding, and the role of forestry officers. To complete the site preparation and implement licensing procedures, the Forest Office does not have enough budget, because there is no specific budget allocations both from the National Budget of Revenue and Expenditure (assistant task) or from Regional Budget Revenue and Expenditure. Based on the results of research in the Province of Riau and South Kalimantan, noted that both communities had a bad experience in planting trees with the crops of timber as a commercial commodity. In South Kalimantan, once planted Jabon timber species (Dalbergia latifolia) that was planned as a raw material supplier of PT Hendratna, but did not implement because the company went bankrupt. Similarly, from the discussion in the Village of Tanah Laut Ranggang, revealed cases of community forest “project” of mahogany (Mahogany, sp) in Tanah Laut, the funding comes from the National Budget of Revenue and Expenditure (APBN) through the Province Office of Forestry, but the marketing of its products is unclear. In Riau also had an experience in planting sengon (Albizia falcataria) and Sungkai (Peronema canescen) but not sold at harvest time, because of the cheap price and high administrative costs. This experience - which has become publicsecret - could indirectly reduce the political will of the local government for HTR development, as reflected for example the lack of the budget allocation for this programpreparation. Government services in providing rights and access for local communities in a social forestry is generally hampered by the time of the location appointment (Noordwijk, et all, 2007). This is because the government does not have a particular framework for determining the location of the HTR, but the location searching is charged in the licensing process. Such case follows the policies pattern of the location determination for big companies since the 1970s, which the transaction cost of location determination was borne by the big companies (Kartodihardjo, 1998; Mardipriyono, 2004). However, if it for the community, including the prospective HTR license holder, if they also bear the cost of location determination, it is proved to be a problem.

3.3.5.Conservation Village Model (CVM). CVM program is in harmony with the development priorities of forestry which is a policy of the Ministry of Forestry which is a follow up of the Issued letter by the General Directorate of Forest Protection and Nature Conservation No. S523/IV-Set/Ev-2/2005 April 11, 2005 on the Proposalof Site/Village Candidate of Pilot Project in Community Economic Development Around Protected Areas. Then this CVM program is also in accordance with Article 49 paragraph 3 of Government Regulation (PP) No. 28 of 2011 which is a revision of Regulation No. 68 of 1998 on the Management KPA and KSA. In Permenhut No. P.16/Menhut-II/2011 on General Guidelines of National Program Implementation of Community Forestry Empowerment mentioned that Development CVM is aimed to help increase the independence and welfare of the community of buffer zones, which will gradually become one of the leading partners in supporting the conservation area management. Subsequently in 2012, the Director of Conservation Areas and Protected Forests issued a decree as a guidance of CVM implementation in the field. CVM itself means a village that is used as a model in the effort to empower communities around the conservation forest by involving aspects of conservation, social, economic, and cultural. If CVM is located in a conservation area then it should be done in the special zones and the communities already existed in that region for generations. There are three main activities carried out in the CVM including: (1.) Community empowerment, (2.) Conservation-based Spatial Planning, and (3.) Conservation-based rural economic development. Thus in the CVM, it is very possible for the development of CFE. The examples of CFE development in CVM is in Ujung Kulon NP – West Java, in the village of Tamanjaya, that is CFE in the form of souvenirs making, Wasur NP – Papua in the form of eucalyptus ol and orchiid cultivation, Mt. Halimun Salak NP– West Java the CFE is in the form of dried flower crafts, livestock and ecotourism. Moreover, in Lore Lindu NP– Sulawesi with herbal crop as in Meru Betiri NP - East Java, and in Mt. Rinjani NP – NTB having CFE activities by business of bottled water. 10 Community Forest Enterprise in Indonesia

3.3.6. CFE development in Collaboration or Partnership with Private Parties. Perhutani Director Decision No. 671/KPTS/DIR/1990 continue to revision until 2009. The results of the most recent revision and that currently applies is Director Decision No. 682/KPTS/DIR/2009 on Guidelines for Forest Resource Management with the Community (or Community Based Forest Management/CBFM). This decision implementation is supported by decision of Perhutani’Director No. 683/KPTS/DIR/2009 on Guidelines of Social Management which is a guide in conducting a series of social forestry activities that aimed to establish harmonious relationship between Perhutani with the employees, workers, communities and other parties within the framework of sustainable forest management. Development of Social Forestry program by Perum Perhutani in Java is an improvement ofprosperity approach programs , that is intercropping intensification and PMDH (Forest Village Community Development) that held in 1972. Social Forestry by Perum Perhutani is given understanding as development program and forest protection by involving communities in forest management that aimed to increase forest functions optimally and improve the welfare of the community as well as improving the environment and maintain its sustainability (Perum Perhutani, 1988, 1989, 1992). Understanding Social Forestry is more emphasis on the program rather than as a system of forest management. Therefore at the beginning of its development by Perhutani, Social Forestry program includes activities in the forest area, that is the development of agroforestry and outside the forest area, that is the development of forest farmer groups (KTH) and other productive businesses: livestocks, household industry, trade. Agroforestry development is development effort of more intensive cropping patterns so that community gain greater and longer (during the main crop cycle) benefits.The efforts are widen the plant distance between staple crops planting (forestry) and maintain fruit crops, such as pineapple and papaya in BKPH Kediri. There are also jackfruit, guava, srikaya, avocado, as well as crops that are commonly grown in intercropping systems. Based on the record of planting in the forest area in 2013, the community has been able to harvest Rice of 101,773 ton/ year on average, Corn of 258,486 ton / year on average, and Nuts 80,180 ton/ yearon average. Forest farmer groups are established to improve reciprocal communication between farmers and Perhutani, thus achieved a shared understanding and a harmonious relationship to realize equal partners. The group is also used as a forum for mutual learning among farmers and develop business together. Development of productive enterprises outside the forest area is developed further through USKOP coaching program (Small Business and Cooperative). In 2013 has fostered as many as 925 cooperatives of Forest Village Community Institution. Additionally Perhutani also have CSR programs so that the community able to maintain silkworms, making household scale manufacturing industry of Terong Belanda lunkhead, mulberry bags, coffee and so on. Besides Perum Perhutani, there are actually several other forestry companies who are also held coaching program for the community in terms of the CFE. For example RAPP and Sinar Mas through its CSR program have implemented CFE programs that generate timber or non timber forest products.

3.4.Business aspects. Business management of timber or non timber forest products is made by the Minister under the Regulation number 6/2007 which was later revised as PP 3/2008. Proposal of listingsign of the primary industry of forest products processing and its primary industry business license are submitted to the Regent/ Mayor (NTFPs) and to the Governor or the Minister (TFPs). The responsibility of the primary industry business license holders, both timber and non-timber forest products, in the running industry is the same (Article 115 PP number 6/2007) which include: conducting industry business in accordance with the license; proposed extension permit if the production expansion exceeds 30% (thirty percent) of the permitted production capacity; prepare and submit a compliance plan industrial raw materials (RPBBI) every year; prepare and submit monthly reports of fulfillment realization and the use of raw materials and production; prepare or submit a report of forest products mutation; conduct industry business activities in accordance with those established in the license; report periodically about the industry’s activities and its products to the licensing agencies that has been authorized in the coaching and development of primary forest products industry, and employ measurement and testing of certified forest products.

3.5.Distribution and Marketing of CFE Products Aspects. Government also regulates the distribution and marketing of forest products derived from State forest, referred to the administration of forest products. The distribution of forest products must be equipped with the identity including types, weight volume and/ or number and performed by authorized personnel (PP 6/2007 in conjunction with PP 3/2008). Technically the administration is regulated in Permenhut 55/2006 on the Administration of Forest Products Derived from State Forests. In the upstream, each license holder who harvest the forest products must always records the harvest/ collection which includes the data of type, heavy volume and / or number and reported in the form of Production Report (PR). For the purpose of production report, the license holder must also have special officers who qualified as Forest Product Examiner appointed by the Head of the Provincial Office. Production report will then be verified and then approved by the forest office through Official Certifiers of Forest Production Report. Recapitulation of PR is the basis for list making of forest product to make the legitimate license to carry forest products to other place. The carriage license called Freight Invoice (FI). FA Publishing must be attached by Forest Product List in accordance with the PR that was approved and paid in full its Forest Resource Management License . FA publisher is collecting company officer who assigned by the Head of District/ city. Freight invoices are used to distribute the origin forest product. Forest products which are not original/ processed products are using the company’s memo. FA document is for one-time use, one owner, one type of commodity, one conveyance and onedestination. It is allowed for one conveyance carrying more than one type of forest products. At the destination point, forest product which has migrated must be recorded. If it then processed by the primary industry reports, it must be reported its mutation (MR). MR must be reported each month to the forest office.

IV. CFE COMMODITIES THAT DEVELOPED THROUGH CBFM Under the existing definition, it can be concluded that the activities of CFE is the utilization of wood or NTFPs for example the manufacture of furniture, handicrafts, or activities since processing up to marketing such as the processing of sugar and brown sugar, civet coffee (Kopi Luwak)processing by the community by taking direct raw materials from the forest. Level of CFE management developed by CBFM can be distinguished as follows: 1. Cover: Wood (sengon or Paraserianthes falcataria, teak, Jabon, Acacia), fruits (cashew, durian), sap (meranti or shorea, agathis, pine), wild honey (kempas). 2. Central plant/multipurpose trees: woody plant with medium height that the cultivation does not require intensive maintenance. For example: coffee, cloves, cacao, mango, mangosteen, avocado, orange. 3. Under cover plants: herbaceous or grasses e.g. empon-empon, porang, pepper, cardamom, bananas, elephant grass, and others. 4. Management area: livestock (horses, goats), ecotourism, beekeeping. 5. Management area surrounding forest (buffer); plant cassava, peanuts, maize, upland rice, livestock (horses, goats), ecotourism, beekeeping.

4.1. Identified products of CFEs in forest that managed through CBFM Based on discussions with the parties and also in the field survey and desk study then there are some forest products are identified, namely: 1. Timber The types of wood that have been identified are Teak, sengon, Jabon. Most of the timber comes from private forests in Java, and specifically to the identity of many that have been certified. From state forests is only has one source that can permit logging IUPHHKM, for example is the community forest in Gunung Kidul, Yogyakarta but has yet to produce. Real wood production potential has considerable but disadvantages in terms of licensing when the timber will be sold because most people still sell timber forest products such as logs. In Java, there are also people who are doing the processing of building materials (frames, battens), mebeulair and crafts.

12 Community Forest Enterprise in Indonesia

2. Cashew The availability of cashew is relatively large, especially in community forests, for example in Java is Mount Kudil and Wonogiri, Sulawesi is Jeneponto, Buton and Muna. Center of cashew in Nusa Tenggara is Dompu and Sumbawa. Until now, people still sell it as green, and the community business has not found any to that do for the post-harvest cashew and the cashew fruit. 3. Coffee The types of coffee that are identified in the State forests and community forests also are used by the public as one of the products CFE is Robusta, Arabica and Coffee Dutch that commonly referred to as Liberica. Availability of coffee in the airy relatively large and abundant both in Sumatra, Sulawesi, Java, and Nusa Tenggara. Until now, communities began to cultivate coffee from plucked, outer skin removed (by the method of damp/wet processing) and then dried. The coffee beans are sold in the form of dried peeled epidermis (PECO) or peeled seeds dry clean. There are also people who, although only a few are in the process of doing the post drying coffee. There are also people who sell it in the form of ground coffee. Specially for ground coffee, it usually comes from one strain of pure coffee. Community has already started to develop a natural or civet coffee or kopi luwak which is eaten by a civet in the forest and also by mongoose that deliberately kept in cage, e.g. in northern Bandung and Lampung in Sumatra or some other areas. 4. Forest Honey Bee The honeybees that deliberately kept by the community as CFE is vastly available with varying quality. The honey are produced from virtually all corners of Indonesia, for example, from the island of Sumatra, Kalimantan, Sulawesi, and Nusa Tenggara. Communities generally sell honey with no processing, then sold per bottle. Now communities are plans of making honey soap. 5. Sugar palm The Latin name of palm tree is Arenga pinnata. The tree can be found in forest areas with CBFM systems, e.g. in Java, Sumatra and Sulawesi. For Indonesia as a whole, the availability of sugar can be said is still relatively moderate. Postharvest production is in the form of palm sugar and brown sugar (or gula semut). 6. Cocoa The availability of cocoa in the field or in the forest is still relatively moderate despite the increasing number of people who start to replace coffee with cocoa crops. Cocoa was found in a forest area of Java (eg in Gunung Kidul), Sulawesi (e.g in Bantaeng and Bulukumba), and Nusa Tenggara (e.g Jenggala District). Most of the people are processing of cocoa beans with no fermentation, although there are also people who do processing with fermented cocoa beans, for example, in Gunung Kidul. Even in this district there are people who do post-production processing to make sweet toffee-like confection Cocoa. 7. Rattan In Indonesia, rattan has a relatively large availability. Rattan plants are found in Sumatra (Manau type), Kalimantan (Sega type) and Sulawesi (rod and lambang type), and a few are found in Nusa Tenggara (worms type rattan). During this time in the form of logs wicker be sold to the middlemen with no treatment or only do cleaning only. In some locations, it was found that there is little to be processed rattan and wicker traditional crafts. 8. Empon-empon Empon-empon widely planted under forest stands that are managed by the community and another type of CFEs product. Availability empon-empon relatively moderate because it had a lot of people who apply in their management of land. In Java, empon-empon which generated a lot of ginger, kencur, turmeric, temu-temuan and in Sulawesi Island is turmeric. Communities sell empon empon production is still a log (raw material). Empon empon-specific processing in Java for example in Gunung Kidul regency and Instant Herbal Medicine in Wonogiri regency. There is information that the plan will be the establishment of medicine plant estate in Wonogiri. â&#x20AC;&#x192;â&#x20AC;&#x192;13

9. Porang The availability Porang can be said is still relatively moderate. Perum Perhutani is currently being intensively planting Porang. The center of its activities is in Blora regency, Central Java. Most people still sell it in the form of logs bulbs, although some are sold in the form of chips, but the quality is still not good (it was black). Increase in the price of a tuber logs into chips could reach 10 times, and if it is then sold in the form of powder then the price could double the price of the chip. 10. Clove The cloves commodities are found in areas of State forest and private forest particularly at temperate climates. Thus it is understandable if the availability is relatively moderate. Cloves development done by many people and majority be partner with Perum Perhutani in Java.Cloves are sell in the form of logs after natural drying fruit under the sun. 11. Hazelnut The availability of hazelnut in forests managed CBFM can be relatively moderate. These commodities are found in Sulawesi (Maros), and Nusa Tenggara (Bima and Sumbawa regency). Nowadays a lot of people who sell it in the form of loose skin hazelnuts. 12. Cinnamon The availability of cinnamon relatively modest because only found in several areas in Sumatra (ie in Jambi and West Sumatera) and province of South Kalimantan (Malaris). Until now, cinnamon processed by industry. Communities mostly simple processed and sold in the form of dried bark timber without sorting. 13. Damar and Kopal Although the growing area is protected areas and called as area with the special purposes (KDTI or Kawasan Dengan Tujuan Istimewa) in West Lampung regency but apparently the availability of damar still relatively moderate. Its mean that area need to be protected because it is a resin-producing areas of Shorea javanica or Damar Matakucing. In Kalimantan and Sulawesi, communities also produce similar sap derived from Agathis sp tree, which called copal. The process is undertaken by the communities; the sapping from forest till clearing process. Especially in Lampung, the selling is done after grading. While in Kalimantan and Sulawesi, it is sell without grading. 14. Durian In Indonesian, durian is the fruit of a much-loved or favorite, but its availability in nature is actually only a relatively moderate because it depends with fruiting season. Durian has many types and are found in Sumatra, Kalimantan, Sulawesi, and Nusa Tenggara. Fruit plant communities are generally sold in the form of whole fruit. Some are selling in the form of durian fruit sweet toffee-like confection, Lempok or Tempoyak (acidified durian fresh is then usually used as a cooking ingredient). 15. Banana and Cassava Bananas and cassava are found in almost all provinces of the country, particularly in Sumatra, Java, Sulawesi and Nusa Tenggara. Communities that manage the forests and make banana and cassava as products CFE then process into banana and cassava chips. There are a few people continuepost producing of the banana as “fried sale or wet-sale”, name of snack. 16. Livestock Communities who manage forests with CBFM scheme also raise livestock, such as horses, goats, cows, and bees culture to produce honey. Especially for horses, there many found in Dompu, Sumbawa Island because the wild horses produce a milk. Livestock such as cows and goats will usually be sold before the sacrificial feast day (Idul Qurban) or Hari Raya (Ied Fitri day). Yielding of cattle and honey bee done by many people throughout Indonesia. There are many community networks beekeepers and honey sellers, one of which is JMHI that honey is certified and has marketing network with Amway.

14 Community Forest Enterprise in Indonesia

17. Crops and other plant In addition to the products that already mentioned, there are several other products resulting from the CFE and be managed through CBFM, namely palawija or crops such as corn, soybeans, and peanuts and purple sweet potato, pepper, and jackfruit which is then processed into chips and sweet toffee-like confection as produced by the community in Lombok. At some community forests, they use Bamboo tree for erosion control and manage boundaries, and then used as material to produce Bamboo craft. In addition, there are also other kinds of fruits are mangosteen, avocado, olive, Duku. Also produced remedy kitchen herbs, Kapoldomba, Kapolaga and nutmeg. There are also special products of mangrove forest and produced by communities, such as syrup, sweet toffee-like. In addition, around the beach, there are community who do the planting and cultivation of seaweed shells to produce pearls. 18. Environmental Services Forests managed through CBFM can produce forest ecosystem or environmental services, e.g Ecotourism, water utilization, biodiversity and carbon. For Indonesia, the common development in terms of environmental services of forests is ecotourism services and water services, such as the development of environmental services in watershed or DAS Cidanau watershed, West Java, and in Sub Watershed or Sub DAS Mendalam in West Kalimantan. Based on field conditions and opinions of stakeholders who attended the discussion, most of CFE NTFPs as the results of this study are very different from NTFPs mentioned in Ministry of Forestry Regulation or Permenhut No. 35/2007. This regulation governs all NTFPs that under Ministry of Forestry NTFPs. In addition, the availability of secondary data ofquantity or volume each type of CFE product was minimal or limited andvalidity of available data is questionable thereforenot mentioned in the elaboration. It has be done due to according to the agreed Term of Reference, this study is a desk study and researchers did not go to the field to gather primary data to enrich and validate the quantitative data.

4.2. CFE Commodities based on the result of multistakeholders selection Based on discussions with the multistakeholders and existing conditions in the field, it has concluded that there are 7 (seven) types of commodities need to be selected and analyzed using the priority ranking tools produced by UNCTAD Biotrade and Profound. Two types of commodities which later was ranked one and two will be further analyzed in study of value chain. Seven types of commodities based on priority ranking analysis result as follows: Cashew, Coffee, Aren, Porang, Orchid, Empon-empon, and Herbs. Cashew, Coffee, Aren and Empon-Empon is chosen as CFE products because of its numerous quantity and available in almost all regions and provinces in Indonesia. Its processing does not require a high-tech interventions. While Orchids, Porang and Herbs, based on the discussion of the multistakholder who recommend these products to be developed in the area of strategic CFE development based on market consideration.

â&#x20AC;&#x192;â&#x20AC;&#x192;15

4.3. CFE Commodity Analysis Results with UNCTAD Biotrade and Profound Results of analysis of 7 (Seven) commodities using the UNCTAD Biotrade and Profound are as shown in Table 3. Tabel 3. Analysis result of CFE Products in Indonesia using UNCTAD Biotrade and Profound methods No

Parameter criteria for product selection

Cashew

Coffee

Aren

Empon

Porang

Herba

Orchid

Economy and market (trading and marketing aspects)

Environment and biodiversity (ecological aspects)

Social and political aspects (socio-economic aspects)

Technological and infrastructure (sociotechnological aspects)

Total

Ranking

Source: primary data processed, 2013

Based on the results listed in Table 3, it is known that the CFE Coffee is a product that is dominant and has the potential to be developed in forests managed through CBFM scheme. Followed with cashew that has a fairly high economic value as a type of food which is much-loved by the people of Indonesia. The third and its product remains are: Porang, herbs, empon, Aren and orchids. Coffee commodity chosen as a first-ranking despite having the same total score with Cashew because its ecological value or higher score. In addition, the distribution of the coffee plant is wider than the cashew crop. Based on two workshops and UNTAD Biotrade and Profound methods analysis, Coffee and Cashew recommend for further analysis using value chain. It is applied to see what interventions should be done so that the product can provide prosperity for communities who develop sustainable forest management.

V. CONCLUSIONS AND RECOMMENDATIONS Patterns of community forestry that developed recently is an opportunity for the community to prove that they can manage that forests sustainably and provide them prosperity. Scheme of forest management through HD, HKM, HR or HA, HTR, MDK and Partnership with a Private Party is a critical momentum despite some questions of the State (represented by the Ministry of Forestry) on how effectively people can manage the forest and how “right or proper” they are managing the forest area. The products under CEF, either to timber and environmental services are: coffee, cacao, cashew, aren, nuts, damar, copal, durian, honey, nutmeg, cinnamon, rattan, empon-empon, porang, clove, banana, cassava, livestock, and crops. Creating forest products through communities engagement is a tool to prove that community can manage their forests properly. But the challenge is now much heavier since the priority CFE results from this study i.e. coffee and cashew are not under Ministry of Forestry authority (based on Permenhut No. 35/2007). Thus CFE management has moved from the work area of Ministry of Forestry heading into the work area of other ministries, such as Ministry of SMEs and cooperatives; Tourism and Creative Economy, Industry and Trade. In this context, consolidation and intervention with market considerations is highly recommended. Based on the analysis using the UNCTAD Biotrade and Profound methods, cashew and coffee commodity is chosen as two types of Community Forestry superior products that must be explored and managed more seriously. There is need better understanding on supply and demand, market governance, opportunities and barriers in the system for both the commodities markets This means that further study is needed on these aspects for Coffee and Cashew. 16 Community Forest Enterprise in Indonesia

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