Govt expects $193m from forestry fees, royalties

The Jakarta Post, Jakarta

With the country's timber production recently showing signs of increasing, the government believes it can increase next year's revenues in royalties and fees from the timber industry to Rp 1.9 trillion (US$193.39 million), the forestry minister has said.

Speaking during a hearing with the House of Representatives' Commission IV on agriculture, fisheries and forestry on Tuesday, Minister of Forestry Malam Sambat Kaban said that the expected revenues would consist of Rp 1.04 trillion in taxes for reforestation, Rp 868.5 billion in timber royalties and Rp 6.6 billion in logging permit fees.

He said the revenue forecasts were based on the assumption that the country's timber production would reach eight million cubic meters next year.

"The figure is a 46 percent increase over this year's target of 5.4 million cubic meters," he was quoted as saying by Antara.

Kaban explained that the rise in timber production would mainly be boosted by an increase in demand arising from reconstruction work in tsunami-stricken Nanggroe Aceh Darussalam.

The government also expects state timber firm Perhutani to increase its timber production to 26.6 million cubic meters and its non-timber production to 422,500 tons.

"This is the result of the government's 'soft landing' logging policy, which helps sustain forests and make optimal use of other forestry products besides timber," he said.

Kaban said that revenues from logging permit fees were expected to increase as a result of the ministry's plans to auction off logging permits for some 414,000 hectares of forest land throughout the country.

Apart from the royalties and fees, the government is expecting the timber industry to contribute some $9 billion in foreign exchange earnings this year compared to an estimated $7.8 billion last year.

During the hearing, Kaban also said that his ministry would seek a budget allocation of Rp 1.6 trillion to help finance its efforts to develop and improve the country's timber industry.

Indonesia is the world's third largest forestry country, but is struggling to sustain its forests, which are being decimated by illegal logging.

Some 2.6 million hectares of land are deforested every year, and the country's remaining 40 million hectares of primary/natural forest are under threat.