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Changing Policies Over Timber Supply and Its Potential Impacts to the Furniture Industries of Jepara, Indonesia

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Changing Policies Over Timber Supply and Its Potential Impacts to the Furniture Industries of Jepara, Indonesia JMHT Vol. XXI, (1): 36-44, April 2015 Scientific Article EISSN: 2089-2063 ISSN: 2087-0469 DOI: 10.7226/jtfm.21.1.36 Changing policies over timber supply and its potential impacts to the furniture industries of Jepara, Indonesia Dodik Ridho Nurrochmat1*, Efi Yuliati Yovi1, Oki Hadiyati2, Muhammad Sidiq3, James Thomas Erbaugh44 1Department of Forest Management, Faculty of Forestry, Bogor Agricultural University, Academic Ring Road, Campus IPB Dramaga, PO Box 168, Bogor, Indonesia 16680 2Ministry of Environment and Forestry of the Republic of Indonesia, Gedung Manggala Wanabakti Block I, 3th Floor Gatot Subroto, Senayan, Jakarta, Indonesia 10270 3CBFM and Agroforestry GIZ BIOCLIME, Jl. Jendral Sudirman Km. 3,5 No 2837 Palembang, Indonesia 4School of Natural Resources and Environment, University of Michigan, Ann Arbor, USA Received March 2, 2015/Accepted April 28, 2015 Abstract Though some scholars argue that Indonesian wood furniture industries are in decline, these industries remain a driving force for regional and national economies. Indonesian wood furniture has a long value chain, including: forest farmers, log traders, artisans, and furniture outlets. In Jepara, Central Java, wood furniture industries contain significant regional and historical importance. Jeparanese wood furniture industries demonstrated great resilience during the economic crisis in the late nineties. Although they were previously able to withstand the pressures of economic crisis, the enactment of Minister of Forestry Regulation (MoFor Reg.) 7/2009 on wood allocation for local use -as one of the implementing regulation of Decentralization Law 32/2004- causes a potential reduction of wood supply to Jepara. Since September 30th, 2014, however, the constellation of domestic timber politics has changed due to the new decentralization law (23/2014), which shifted most regulations on forest and forest products from the regency to the province. This study evaluates the dynamics of decentralization policy on timber allocation and examines the power of different stakeholders given the changing regulation and its consequences for Jeparanese wood production. Keywords: decentralization policy, Jepara furniture, timber supply, wood allocation *Correspondence author, email: [email protected]; [email protected], tel.: +62-251-8623805 Introduction This will be accompanied by an increase in demand for raw Furniture is one of the most economically important materials, in terms of both quality and quantity (Melati & wood products of Indonesia, and the growing market Purnomo 2013). demands of wood furniture requires an increased supply of The sustainability of the jeparanese furniture production round-wood and lumber (Sari et al. 2009; Yovi et al. 2009; is a concern, because Jepara's forests meet only 5% of the Nurrochmat & Hadiyati 2010). Producing furniture from industry's timber demand (Melati & Purnomo 2013). Thus, sustainably raised timber is also one of the most effective furniture production in Jepara depends on a continuous ways to pool carbon outside forests (Nurrochmat & Abdulah supply of timber resources. The imbalance between supply 2014). Currently, Indonesia comprised 1.8% of the world and demand of wood raw material is likely to seriously furniture market, with a total export value of USD2 billion threaten Jeparanese to furniture industries (Yovi et al. 2009), per year. However, the President of Indonesia seeks to especially as a recently passed decentralization policy (MoF increase this export value to USD5 billion, thus more than Regulation Number 7/2009) promotes the use of timber doubling the government earnings from furniture exports, by resources to benefit local needs. Giving priority of wood the year 2019 (Kompas 2015). A major portion of the allocation for local needs is important (Marwa et al. 2010); Indonesian wood furniture is produced in the Jepara Regency however, in the name of decentralization, local government of Central Java Province (Dishutbun Jepara 2009; BPS often tries to maximize benefits from natural resources Jepara 2010; Disperindag Jepara 2010). Roda et al. (2007) extraction, including timber (Nurrochmat 2005; Nurrochmat write that Jepara is home to approximately 15,271 furniture 2005a). The Ministry of Forestry (MoF) Regulation Number industries, 14,921 of which are small-scale industries. The 7/2009 states that each regency must allocate timber to fill jepara furniture industry is projected to generate more than local needs, instead of using cross-regency demand to USD250 million by 2023, assuming annual growth of 7%. receive more competitive prices for timber resources on JMHT Vol. XXI, (1): 36-44, April 2015 Scientific Article EISSN: 2089-2063 ISSN: 2087-0469 DOI: 10.7226/jtfm.21.1.36 sequently, this may lead to a larger deficiency of timber including Jakarta, Bogor, Semarang, and Blora. Forms of supply for non log-producing regions, including Jepara. primary data collection included key-informant interviews In light of this unique combination of furniture and focus group discussions (FGDs). production, decentralization, and policy requirements, this Stakeholders were divided into 2 groups: those inside and study addresses 3 questions: (1) how adequate is the those outside Jepara. Within the “inside Jepara” group, key- decentralization policy in allocating regency timber supplies informant interviews were conducted with 3 types of to serve local needs?, (2) how does the power of stakeholders stakeholders: (1) policy makers, which includes the Local inside Jepara and oudside Jepara differ in terms of timber House of Representative (DPRD) of Jepara, Regency Forest supply policy and its potential implication for jepara and Plantation Service (Dishutbun) of Jepara, Regency furniture industries?, and (3) what are the best policy options Industrial and Trade Service (Disperindag) of Jepara, and for jepara furniture industries in response to the new Regional Development Planning Board (Bappeda) of Jepara, Decentralization Law Number 23/2014? (2) bussiness entities, which include stakeholders within the Indonesia Furniture and Handicraft Industry Association in Methods Jepara or Asosiasi Industri Permebelan dan Kerajinan Study framework According to MoF Regulation Number Indonesia Komda Jepara (ASMINDO Jepara), as well as 7/2009, logs (round-wood) from community forests come stakeholders within the Association of Wood Artisans in from small scale private forests (HR), while the forest Jepara or Asosiasi Pengrajin Kayu Jepara (APKJ), and (3) company category is applied to logs that originate from the academic actors, including stakeholders working in or with state-owned forest enterprise of Perhutani (Figure 1). the local university of Sekolah Tinggi Ilmu Ekonomi Figure 1 indicates the 4 steps of this analysis. The first Nahdlatul Ulama (STIE NU) Jepara. The interviewees were section discusses wood allocation policy for local needs, sampled via snowball sampling and participated in FGDs at according to the MoF Regulation Number 7/2009. The the regency level. The secondary data within this study second section assesses different stakeholder interests and consists of official reports, related documents, and other scenarios in response to wood allocation for local needs, relevant data sources that we use to cross-check and inform while the third section discusses the consequences of the primary data. wood allocation policy for local needs as determined by In addition to the interviews in Jepara, several “outside different scales of Jeparanese furniture industries. Finally, Jepara” stakeholders were interviewed. These stakeholder section 4 advances a policy recommendation concerning groups include (1) policy makers, containing key-informants wood allocation for local needs, with regard to the new from the Timber Producing Regency of Blora, the Province decentralization law 23/2014. Forest Service of Central Java (Dishut Jateng) in Semarang, and the Ministry of Forestry (MoF, now named Ministry of Data collection Although this study focuses on the jepara Environment and Forestry/MoEFor), in Jakarta; (2) business furniture, data were collected from several other locations, entities, including informants from the headquarters of the (1)Wood allocation’s policy (2) Stakeholder (3) Policy (4) Policy interests consequences recommendation Supporting timber Readiness of Local wood producer’s industries in wood Decentrali Max. 100% producer’s regency regency to zation Law Small-scale develop timber 32/2004 private forests industries (HR) Scenarios Threatening jepara Min. 0% furniture industries Others Small scale MoF Origin Regulation Policy of logs Number Medium scale recommen- dations 7/2009. Others Large scale Min. 95 % State forests Scenarios of Perhutani Max. 5% New Local Decentra- lization Law 23/2014 Figure 1 Study framework. Focus of study ( ). 37 JMHT Vol. XXI, (1): 36-44, April 2015 Scientific Article EISSN: 2089-2063 ISSN: 2087-0469 DOI: 10.7226/jtfm.21.1.36 Indonesian Association of Furniture and Handicraft or each stakeholder associated with the wood allocation policy ASMINDO Pusat (ASMINDO-P) in Jakarta and also for local needs in Jepara. Table 1 indicates the criteria for Perhutani Divisi Regional I of Central Java in Semarang measuring “interest of stakeholder” on wood allocation for (Perhutani); and (3) academic actors, including researchers Jepara furniture industries. In addition to measuring interest, from the Center for International Forestry Research it is also important to evaluate the influence of each (CIFOR), Bogor
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