Multi-business forestry could boost forest economic value tenfold: Ministry

The Ministry of Forestry is driving a transformation in forest area utilisation through a multi-business forestry scheme, which it believes can increase the economic value of forests tenfold compared to conventional timber-reliant business models. Laksmi Wijayanti, Director General of Sustainable Forest Management at the Ministry of Forestry, stated during a media briefing in Jakarta on Thursday that the low economic value of forests remains a major challenge in sustainable forest management. This condition often makes forest areas less competitive against other land uses deemed more profitable. “If we continue business as usual, the value per hectare of forest is low. When you look at what a forest actually contains, it is clearly underpriced. It is understandable why people think it is better to just replace it with something else,” she said. Studies indicate the direct economic value of forests is relatively low. Research from the Faculty of Forestry and Environment at IPB University records the value at approximately Rp4 million per hectare per year, far below oil palm plantations which can reach around Rp40 million per hectare per year. To address this, the government is developing a multi-business forestry scheme that allows for the simultaneous utilisation of various forest potentials, including timber and non-timber forest products, agroforestry, environmental services, nature tourism, and carbon trading. Laksmi said this scheme can significantly increase the economic value of forest areas while maintaining their ecological functions. “We hope that with multi-business forestry, the value per hectare will increase tenfold. This is just by initially incorporating agroforestry for food reserves. That alone automatically increases the value tenfold,” she added. She noted that the transformation is necessary because the current forestry business model, which relies on timber, faces competitiveness challenges.