High prices encourage illegal timber trading

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo said yesterday that the low purchasing power of timber users combined with the rising price of timber has led to a significant increase in the illegal trade and distribution of timber.

Speaking to House members of Commission IV, Djamaludin said that local consumers in timber-producing provinces are reluctant to buy timber from concessionaires operating in their own regions because timber prices on the black market are far cheaper.

"As a result, forest concessionaires do not want to meet their obligation to set aside part of their timber production for local utilization," Djamaludin told the commission, which oversees agricultural and forestry affairs.

The obligation, stipulated in a decree from the Director General of Forest Utility last May, requires a concessionaire to allocate five percent of its annual timber production for utilization in the province where it operates.

Djamaludin said the huge difference between the prices of timber produced by concessionaires and the purchasing power of local consumers has encouraged timber theft and the trade of cheap, illegal wood on the local market.

To solve the problem, he said, the Ministry of Forestry stipulates that state forestry enterprises must provide timber at price levels affordable to local users.

Prices of state-produced timber, he said, incorporate only the floor price with a reasonable profit margin, disregarding the developments of export prices.

Holders of logging permits, Djamaludin said, will only be allowed to use timber with a minimum diameter of 50 cm for export-oriented mills, while those with smaller diameters will be designated for local consumption and feedstocks for particle wood production.

Director General of Forest Utilization Titus Sarijanto said yesterday that a lack of penalties has led concessionaires to avoid their obligation to allocate part of their annual timber production for local consumption.

"The implementation of the (May 1995) decree is still disappointing because there are no clear penalties yet for violators," he said.

Shortage

Legislator Sukoraharjo yesterday questioned the ministry's plans to anticipate possibilities of a timber shortage in the near future in light of increasing consumer demand and government purchases.

He calculated that timber demand in Java in 1993 reached 7.5 million cubic meters, of which 1.3 million cubic meters were produced in Java and the other 6.2 million cubic meters were produced on other islands.

"According to available data, only two million cubic meters of the timber from islands other than Java were equipped with legal documents, but the remaining 4.2 million cubic meters were not," he said.

Djamaludin said that from the total demand of 7.5 million cubic meters in Java, about 1.5 million cubic meters were provided by the state-owned Perhutani forest enterprise.

The remaining six million cubic meters, he said, were obtained from "people's forests" on Java and other islands.

"Estimates say Java can potentially harvest four million hectares of timber a year from the people's forests, but the lack of monitoring facilities cannot confirm this as yet," he said. (pwn)