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Appendix 3

SUMMARY OF FIELD VISITS


The Consultation benefited from field visits in Java that illustrated the diversity of Indonesia's NWFPs, how they are managed, and how they contribute to human welfare. The visits were very carefully and capably arranged by the Ministry of Forestry's Bureau of International Cooperation and Investment, and Perum Perhutani, the state forestry enterprise in Java. Everywhere, during the field visits, the participants enjoyed the generous hospitality of the people of Central Java and their hosts of the Ministry of Forestry and Perum Perhutani.

Background

Java is the most heavily populated of Indonesia's 17,000 islands, with an estimated 1992 population of 112 million (62 percent of the national population). It is the most densely populated island in the world. Yogyakarta is located in the central part of Java. It is a special territory and a cultural centre of Indonesia.

Indonesia's rich forests contain the world's greatest biodiversity. Forest resource use provides a livelihood to about 6 million families, and forest-related employment accounts for 5.4 percent of the total work force. Indonesia is now a major world producer and exporter of forest products, notably plywood and rattan.

Rattan is Indonesia's most economically important NWFP, which brought in US$ 230 million in foreign exchange in 1993 (compared to US$ 4.5 billion for plywood, US$ 766.4 million for products of woodworking industry, and US$ 3.9 million for sawntimber). Other socially and locally significant NWFPs include medicinal plants, resins, essential oils, sago, nuts, raw silk, honey, and bamboo.

Herbal Medicine - PT Jamu Air Mancur

Manufacture of traditional medicine has been growing in Indonesia over the past 20 years, with the number of companies increasing from 176 in 1976 to about 350 in 1995. The industry cites an annual income of US$ 360 million, mostly from domestic sales. Exports amount to US$ 9 million.

PT Jamu Air Mancur is the third largest industrial producer of traditional medicine in Indonesia, with an annual income of US$ 10 million. Established in 1963, the Palur plant near Solo is the largest of the company's seven factories, employing 700 people. The company markets more than 100 products, in the groups of traditional medicine, phytopharmica, food and beverages, and cosmetics.

In 1980 the company began to export its products to Taiwan, Singapore, Malaysia, and Saudi Arabia. Occasional shipments also go to Europe. In 1987 the company received the Gold Star American Award for Quality, and in 1989 the National Upakarti Award for Industry Leadership from the Indonesian government.

The main products of traditional medicine, called jamu, come from the roots, tubers, stems, bark, leaves, flowers and fruits of more than 120 species, such as Pluchea indica (bluntas), Tinospora crispa (brotowali), Graptophyllum pictum (daun wungu), Zingiber officinale (jahe), and Nigella sativa (jintan).

The company's supply of raw material comes from farmers' fields and gardens, and from collections of wild plants from the forest, in roughly equal parts. Cultivation includes both monocropping and intercropping systems. Farmers growing medicinal plants for the company receive a fixed price for their crop. The price is set, with a contract-like agreement, when the farmers start planting to supply materials to the company.

Jamu Air Mancur maintains a 7-ha garden for research purposes about 30 km away from Solo, where important and endangered species are grown. The Purchasing Division of the company works with the Agricultural Department, Forestry Department, and the farmers to ensure a steady supply of raw material for production. The Stock Division supervises quality control of the materials, using a standard known as Standard Air Mancur (SAM). Based on SAM, varieties are being tested for the best cultivation and post-harvest management methods.

In expanding its efforts, the company is working towards satisfying the stricter Good Manufacturing Practices (GMP) standards for raw material as well as for final products. In this effort, the company cites improved wastewater treatment standards and air effluent reduction measures at several of its plants. In 1995, the Extraction Division will receive particular attention and additional capital investment.

Jamu Air Mancur maintains about 50 outlet agencies in Indonesia, as well as some in Singapore, Malaysia, and Taiwan. To broaden its market, it also employs film, television and radio advertisements, and exhibitions.

In its human resource development efforts, Jamu Air Mancur maintains agreements of cooperation with all of its 1,800 employees. Managers must possess a university degree in a field related to their work. Salaries are all above the minimum wage and above the regional minimum salary. Benefits include a pension plan, bonuses, and retirement benefits.

Rattan Furniture for Export - PT Wirasindo Santakarya

Indonesia has the world's richest and most diverse rattan resources ? some 600 species, of which the major ones are Calamus manau (manau), C. caesius (sega), C. trachycoleus (irit), C. irops (tohiti), and C. scipionum (semambu). Before the 1988 ban on exports of unprocessed rattan, Indonesia supplied 80-90 percent of world demand for raw rattan. Now it is being cultivated as a crop by communities living near forest areas.

The natural forests of Sumatra, Kalimantan, Sulawesi, and Irian Jaya are estimated to be able to sustain an annual harvest (all species) of almost 575,000 tonnes. Indonesia's production of rattan in 1993/94 was 88,149 tonnes.

Following the ban of unprocessed rattan export in 1988, Indonesia's rattan furniture industry has grown. Product marketing and quality control were problems experienced by the infant industry. To overcome these problems the government supported the "nucleus" approach, whereby a nodal unit took care of 100 or more small units which could be either households or group of households.

PT Wirasindo Santakarya, a private company, was established in 1991 as one such nucleus or node for production and export of rattan furniture. The company obtains export purchase orders, commissions village groups to fill the orders, and supplies them at least 50 percent of the raw materials, which come mostly from the islands of Sulawesi and Kalimantan. The company also supervises product quality control, and arranges export through trade associations in Jakarta and also directly to destinations based on arrangements with foreign agents. Products are shipped FOB.

Consultation participants viewed the finished products in the company's showroom in Solo, and visited the company's workshop in Sukoharjo (which produces 8-10 containers of furniture per month, or roughly 8 tonnes), and the home industries in Trangsan village. At the last mentioned, participants observed rattan being bent to shape under heat, lashed and woven, and assembled. Payment to workers is based on numbers of units produced and their complexity.

Cayuput Growing and Processing for Oil KPH/ Gundih

Cayuput oil is extracted from the leaves of Melaleuca leucadendron (cayuput) for use as a local medicine. Perum Perhutani has established 12 distillation plants on Java for oil extraction from its 9,000 ha of Melaleuca plantations. The plants have a total intake capacity of 32,000 tonnes of cayuput leaf/year. In 1993, cayuput oil production was 279,808 kg, accounting for a considerable portion of Perum Perhutani's income.

KPH Gundih covers an area of 30,005 ha, including plantations of Tectona grandis (teak), Melaleuca leucadendron, and Dalbergia latifolia (rosewood). Other species in Perum Perhutani-managed forests of this part of Central Java include Swietenia macrophylla (mahogany), mulberry, and mangroves. The area of cayuput plantations is about 3,200 ha. Cayuput grows well on poor soils that, due to erosion, can no longer support teak. KPH Gundih has 43 forest villages totalling over 245,000 people.

Perum Perhutani works with farmers and encourages them to grow cayuput through agroforestry, which during 1992-1994 occupied 990 ha in Gundih and involved 63 local farmers. Farmers receive credit for seed purchases, subsidized fertilizer inputs, contract wage for their labour, and livestock for additional income. Perum Perhutani contracts with the farmers to manage the trees for three years, renewable year by year, during which they can grow annual crops between the trees (taungya system). The farmers are also entitled to the usufructs from fruit trees grown interspersed and along the boundaries of forest plantations. Fruit trees include Mangifera indica (mango), guava, and annona. These are marketed locally.

For leaf harvests, Perum Perhutani has entered into contracts with 306 farmers. Cayuput is coppiced at a height of 110 cm when it is about four years old; the leaves are stripped from branches of over 1 cm in diameter, and bagged for transport to the distillation plant.

The eight-boiler cayuput distillation plant at Krai was established in 1969 and produced 78,014 litres of oil in 1993, from 8,900 tons of cayuput leaf; 1994 production was expected to reach 91,315 litres. After boiling, the oil passes through separators. Waste leaves are used to fuel the boilers, and for organic manure. Wastewater is cooled and recycled through the condensers. The plant runs around the clock, operated by three shifts of workers. Most of the production is sold in the domestic market. The plant employs 67 people.
 

Sericulture

After a decline in indigenous silk production in 1968, due to a market downturn and pebrine disease affecting the silkworms, Perum Perhutani started its sericulture programme in 1974. It now manages seven mulberry plantations: three in Central Java and four in East Java. The participants of the Consultation visited the Central Java site of Regaloh, KPH Pati, which employs more than 1,000 people about 540 at the silkworm-rearing house, 400 at the mulberry plantation, and 75 at the reeling plant. Species grown at the plantation include Morus alba, M. multicaulis, and M. cathayana. Farmers receive Rps 1,500 (about US$ 0.71) per kg of mulberry leaves harvested.

Very near the plantation are two silkworm rearing houses. Perum Perhutani staff raise the worms for the first 10 days, then local workers take care of the mature silkworms for 18-20 days in the rearing houses.

A small plant for separating the raw silk from the silkworm cocoons was established in 1972. The cocoons are boiled and then the silk is separated manually and threaded onto reels. Each cocoon yields 1,400 m of raw silk filament. From about 118 tons of cocoons per year, the plant reels 16,579 kg of raw silk and 900 kg of twist yarn.

Prospects for the future appear good, with upward trends in domestic and international demand for silk and stable environmental conditions locally in the area of the mulberry plantation.

Beekeeping Unit

Established in 1991, the Regaloh beekeeping unit is one of three under the authority of the National Beekeeping Centre, Bogor (the other two are in Sukabumi, West Java, and Tretes, East Java). Activities at Regaloh focus on beekeeper training, honey bee culture, and bee forage. The plants grown for honey pollen are Ceiba pentandra (kapok) and Calliandra callothyrsis (calliandra). The centre, a source of beekeeping information for Central Java (including stocking and marketing information) has trained more than 350 beekeepers.

Perum Perhutani has been providing loans for cooperative beekeeping ventures for more than 20 years. Loans are relatively small (totalling US$ 27,000). In 1994 about 430 beekeepers produced more than 84,000 kg of honey, valued at US$ 135,000 (sold mainly in the domestic market), about five times the total of loans.
 

Resin for Gum Rosin and Turpentine

Managed by Perum Perhutani, the KPH Kedu Selatan plantations provide resin for a nearby distillation facility for gum rosin and turpentine.

Plantations of Agathis lauranthifolia (agathis) were started in 1959 and now covers 44,700 ha. Pine planting began in 1981 and now extends over an area of about 125,000 ha. The soil in the area is dominated by litosol and latosol. The forest area of KPH Kedu Selatan is managed by 712 Perum Perhutani employees. About 8,000 local residents are involved in resin tapping, and 6,000 farmers are engaged in "taungya" farming in replanted areas, extending over an area of 6,800 ha.

Tapping begins when the trees (pine or agathis) reach 11 years of age, or a minimum diameter of 15 cm. Tappers work ten days per month, supplementing their farm income. In 1994, tapping yielded 9,600 tons of pine resin, and 142 tons of agathis resin. Various tapping methods have been tried, including the "rill" method and the Chinese "falling" method. Of these, the rill method appears better.

For timber, agathis is harvested at the age of 40 years, and pine at the age of 25.

The participants of the Consultation visited the gum rosin and turpentine plant in Sapuran. It began production in 1987. With a floor area of 750 m2, it is the smallest of Perum Perhutani's four plants. In 1993, the plant processed 5,800 tons of pine resin into 3,984 tons of gum rosin (recovery rate of 69 percent) and 80 tons of turpentine oil (recovery rate of 13 percent).

Both the turpentine and gum rosin are forwarded to the Perum Perhutani unit in Semarang for storage and marketing. Ninety percent of the turpentine is exported. Seventy percent of the gum rosin is also exported, mostly to Japan, South Korea, India, Taiwan, Thailand, and several European countries. The other 30 percent of the gum rosin is sold to end-user industries in Indonesia for use in paper sizing, cosmetics, paints, emulsifier for synthetic rubber and varnishes.

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