Rattan deregulation 'will stimulate' export drives
JAKARTA (JP): The recent deregulation of the rattan trade will stimulate investment and boost exports, Director General of Forest Utilization Titus Sarijanto said yesterday.
He said deregulation of rattan exports should boost rattan farmers' and gatherers' welfare and therefore encourage them to increase their rattan output and improve the quality of their produce.
"Rattan as a main non-timber product has been an important source of foreign exchange. Indonesian rattan producers should benefit from the reduction of export taxes," Titus said in a seminar on the impact of rattan deregulation.
The government reduced export taxes on rattan to a maximum of 10 percent starting from Feb.1 as a part of the reforms agreed with the International Monetary Fund.
Previously, the government imposed an export tax of $15 per kilogram for raw rattan and $10 per kilogram for semi-finished rattan.
In addition to the reduction of the export tax, the deregulation also included the removal of the export marketing system and quotas for rattan carpets, or lampit, and the removal of formal and informal levies, fees and administrative burdens on rattan bound for export.
Due to various fees and export restrictions, rattan exports have been declining in recent years. The country's rattan exports dropped to US$674 million in 1996 from $736 million in 1995 while the export volume in 1996 decreased to 173,658 tons from 207,337 tons in 1995.
Production has followed a similar trend in the past 10 years. The country produced an average of 375,000 tons per year of raw rattan from 1993 to 1998, a sharp drop from an annual average of 511,000 in 1988/1993.
Titus acknowledged that the old export restrictions had resulted in a sharp drop in the price of rattan on the domestic market, due to an excess of supply.
"The situation discouraged rattan gatherers and farmers from producing rattan," Titus said.
Challenges
Titus said that Indonesian rattan producers would face many challenges in boosting rattan production due to the decreasing forest habitat for rattan as much rattan-producing land had been converted into industrial timber estates and oil palm plantations.
He said that Indonesia had the potential to produce up to 696,900 tons of raw rattan annually, but only 120,000 tons of this could be absorbed by the country's rattan processing- industries.
To boost production, Titus said mandatory forest royalties on rattan would be replaced by resource rent taxes, whose amount would be announced soon.
He said that the ministry was still considering imposing a zero percent resource rent tax on thick rattan to boost farmers' income and to encourage them to plant rattan.
"Most thick rattan is cultivated and not taken from the forests. The resource rent taxes should not be imposed on them," he said.
Christian Gnner, research fellow at the German-funded Sustainable Forest Management Project, said rattan gardens must be protected from land conversion wherever possible due to their important role as a source of income for local people.
He added that rattan farmers in East Kalimantan were suffering great losses due to the forest fires ravaging the province. These have already destroyed an estimated 300 tons of thick rattan in Jempang, a rattan-producing center in Kutai district. (gis)