Forestry on farms in Indonesia Supporting government initiatives through profits for smallholders

The Government of Indonesia is encouraging farmers, through incentives, to grow timber as a strategy to reduce poverty and increase forest cover and wood supply. With initiatives and incentives in place, the past decade has seen smallholder timber plantations multiply.

However, with 40 million hectares of potential land available, the uptake by farmers has been relatively low. Why? Timber profits just haven’t been that good for farmers.

So, in 2011, CIFOR’s Dede Rohadi and his colleagues joined the ACIAR-funded Community-based Commercial Forestry Project. The team aimed to identify barriers to good returns and use that knowledge to reinvent business-as-usual in smallholder forestry.

With the project coming to an end in 2014, changes to policy have been made with smallholders in mind, and the impact on the ground looks set to spread.

Overcoming Constraints to Community-Based Commercial Forestry in Indonesia

Funding partner:
The Australian Centre for International Agricultural Research (ACIAR)

The Australian National University; Forestry Research and Development Agency, Ministry of Forestry of Indonesia; The University of Gajah Mada; The World Wide Fund for Nature (WWF) Nusa Tenggara; Trees4Trees; local governments in Gunungkidul, Pati, Sumbawa, Bulukumba and South Konawe; and community groups

These changes are only the beginning; if it continues, more and more smallholders will integrate forestry into their farms.

Dede Rohadi
CIFOR Scientist
Area of smallholder timber plantation


The business and the barriers

People at Halimun Salak National Park

This farmer sets aside 10% of his land for growing teak, which he uses as a type of savings account — selling it when in need of cash. However, this weakens his bargaining power, and often means his trees are still small at the time of sale.

He also doesn't have the cash or training to process the timber, so the wood is sold as a tree, which is often crooked or has defects. Finally, the middleman the farmer sells to subtracts the mounting costs of meeting timber trade regulations from the final payout.

The farmer wonders if he should have stuck with growing crops.

Changing business-as-usual

From the top On the ground


Make selling timber less complicated and less expensive by simplifying regulations for smallholders.


Improve farmers’ timber value and bargaining power.


The team leveraged their partnerships and strong data to get the message to policy-makers, including presenting the key findings at an international conference organized by Indonesia’s Forestry Research and Development Agency.


  • Delivered the research findings to communities.
  • Provided simple tools and techniques to improve wood quality.
  • Trained 30 farmers to be ‘master tree growers’ with expert knowledge of market characteristics and tree management techniques.
  • The master tree growers then trained 150 more farmers in their region.


The Ministry of Industry and Trade announced a new regulation that simplified the previously time-consuming and expensive documentation required for smallholders to sell their timber.


After a training session, a farmer invited Dede and the team to make specific recommendations for his teak plantation. As with this farmer, Dede believes others are motivated to learn and that the knowledge and techniques are spreading.

Related publications

The businesses of most smallholder timber growers are not strictly market-oriented. Consequently, opportunities to make better income from timber selling are often lost. Timber plantations generate important additional income for farmers. In Gunungkidul district, Indonesia, where smallholder teak plantations are grown, timber selling contributes about 15% of farmers total income.
Di berbagai provinsi dan kabupaten, hukum dan kebijakan yang sama bisa jadi sangat berbeda penerapannya. Peran serta para pengguna lahan adat dan masyarakat setempat masih bersifat ad hoc (tidak permanen/insidental) dan tetap diperlukan penguatan dalam penerapan aturan, hal ini dikarenakan kurang rincinya kebijakan-kebijakan pengaman yang telah ada.