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Towards a sustainable business model for rubber agroforestry in Indonesia

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Authors: Elok Mulyoutami, Dia Mawesti, Triana, Edi Purwanto and Atiek Widayati

Indonesia - 2024

ISSUE No.: 62

DOI: http://doi.org/10.55515/KUXT7092

Language: English

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Agroforestry systems, particularly rubber agroforests, are crucial for Dayak communities in Indonesia, providing economic benefits and vital assets for their livelihoods. Two common types in Simpang Dua sub-district are tembawang (traditional fruit gardens) and rubber agroforests. Both have flourished for generations but they now face threats of conversion due to declining rubber prices and the oil palm boom. Tembawang is considered more resilient due to better protection of tenure rights under local customary law and its greater provision of socioeconomic benefits. In some instances, rubber agroforests are only maintained because of their deep rooted social and cultural importance, but they have potential to still be economically valuable. Rubber agroforests can provide a diversified income, offering resilience against volatile rubber markets, and although oil palm provides higher income in the short term, rubber agroforests can provide higher income over the entire system cycle.

Long-term financing is essential to improve yields and product quality, to support smallholder rubber agroforests, but obtaining this type of financing is difficult. Obstacles include low rubber prices, poor-quality latex, a lack of productivity of agroforestry crops and low attention from investors, financiers, and markets. Non-commercial financial support, including technical support, could help strengthen farming practices and market-based instruments, including carbon payments, could help stabilise farmers' income. The expansion, however, of large-scale oil palm plantations has shifted the rural labour force from rubber smallholders to plantation workers. Efforts to address these challenges include the establishment of a rubber processing and collective marketing unit, UPPB, to improve market access and prices for smallholder farmers. Founded in 2022, the unit aims to arrange collective marketing and provide technical capacity for farmers to meet the specifications of Standard Indonesia Rubber. By aggregating rubber slabs, farmers can earn up to 25% higher prices than individual farmers, but irregular supplies from farmers and low prices are affecting their success. Despite facing challenges, local farmers' groups remain resilient in organising themselves to improve their systems with the support of NGOs. Commitment from government and private sector stakeholders is additionally needed to further promote sustainable and inclusive rubber agroforestry businesses. 

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Agroforestry at work

"Why do many farmers still resist adopting and scaling agroforestry? Are the economic benefits not enough, or not perceived to be enough? Or are there other reasons? These are the questions that were asked when work began on Tropical Forest Issues 62.

This issue contextualizes agroforestry in four introductory articles in terms of economic viability and resilience, gender inclusiveness, interactions with climate change and biodiversity and barriers to adoption. We then present 26 case studies from Africa, Asia, and Latin America that show the clear and tangible benefits from the adoption of agroforestry.

These 26 examples of agroforestry at work, from a range of developing countries, all show that agroforestry provides direct and indirect benefits to farming families and the wider economy. The well-documented case studies show that agroforestry “works” — it contributes to improved livelihoods (including direct cash income), subsistence activities, employment and other community benefits. In highlighting the reasons for its success in a range of contexts, we hope to demonstrate that agroforestry can spread, encouraging other farmers to develop and expand more diversified, productive and resilient farming systems. Depending on the local context and individual traditions and perceptions, different farmers will have a preference for different agroforestry practices. This shows the importance of developing locally owned agroforestry production systems in order to achieve the full range of benefits. The articles in this issue describe a wide range of agroforestry practices from an array of environments and socioeconomic conditions.