news focus: export ban to disadvantage rattan farmers?

Jakarta (ANTARA News) - The government will stop raw rattan exports amid a `war` between rattan industries and rattan producers over whether the exportation of the commodity needs to be halted.

Rattan industry entrepreneurs have urged the government to stop rattan exports so that they will have enough raw materials while rattan farmers do not want the government to stop exports on the ground that local industries had proven unable to absorb all the rattan they were producing.

"We will issue a decision to stop export of rattan as a raw material but the policy will be formulated holistically in consideration of conditions in rattan producing regions," Trade Minister Gita Wirjawan told rattan entrepreneurs in Cirebon, West Java, on Friday.

The government will soon stop rattan exports and let local industries absorb the country`s raw rattan output so as to create more jobs and added value. The government decision is in favor of industry which has called on the government to stop raw rattan exports.

"We hope that the new trade minister will not extend a trade ministerial decree which allows the exportation of rattan raw material. The regulation should no longer be implemented," Chairman of the Indonesian Rattan Handicraft and Furniture Industry Association (Asmindo) Sumartja said.

The trade minister`s decision No. 36/2009 allows the exports of raw materials, including raw rattan, causing local industry to face difficulties in obtaining raw materials. As a result, many rattan industries in Cirebon, one of Indonesia`s rattan industry centers, closed down.

"The new trade minister is expected to issue a new regulation which boosts export of finished rattan furniture and handicraft products, not raw rattan," Sumartja said.

He said that the permit to export raw rattan based on the minister`s decree in 2009 had caused the drop in the production of rattan industry. Before the regulation was introduced in 2009, rattan-based product exports could reach 3,000 containers per month. But now it dropped to 700 containers only, said Sumartja.

Thus, tens of rattan industry entrepreneurs in Cirebon hailed Minister Gita`s statements, saying they had suffered great losses over the past six years because of raw rattan scarcities as a result of government regulations.

The government regulations concerned were Trade Minister`s Decree No 12/2005 as revised by Trade Minister`s Decree No 36/2009.

In the meantime, Industry Minister MS Hidayat who also attended the meeting with Cirebon entrepreneurs said the government was resolved to revive the domestic rattan industry`s 1980-2000 glory because rattan was one of the country`s most precious natural products that should be used for the welfare of the majority of the people.

"So, the policy to stop rattan exports will not only be to serve the interest of Cirebon or West Java rattan industries but also for developing rattan handicraft industries in provinces that are also producing rattan," he said.

Cirebon district head Dedi Supardi said in the heyday of the rattan industry in 1988-1989, the value of rattan handicraft and furniture exports from Cirebon reached US$124 million a year while as many as 300,000 people were employed in the industry.

In 2010-2011 however the export value dropped by 70 percent. "Only 30 percent of the rattan industries has survived until now while many of their skilled workers have changed profession or become unemployed," Dedi Supardi said.

He said rattan as a raw material was now worth only US$1 to US$1.5 per kilogram but when it had been turned into finished products it could be worth US$8 to US$20 per kilogram. "This is the added value that has so far been enjoyed by other countries," he said.

However, from the rattan farmers` point of view, the closure of raw rattan exports is disadvantageous lest there is a guarantee their products would be absorbed by industry at home.

Thousands of tons of rattan, for example, are now piling up at production centers because industries stopped buying them from rattan farmers and collectors. This happens as the export quota has not yet been decided.

Chairman of the Indonesian Rattan Farmers Association (APRI) Sabar Nagarimba said that the allocation for export quota has not yet been issued so that they could not yet export their products.

Actually, the minister`s decision No. 36/2009 which expired on August 11, 2011 has been extended until December 31, 2011, but the export quota has not yet been issued.

Therefore, APRI asked the government not to stop raw rattan exports because it would have negative impact on two million rattan farmers and collectors and two million traders in Java, Sulawesi and Sumatra.

Sabar said that Indonesia had a large surplus of rattan stocks. APRI predicted that rattan consumption by industry at home in 2011 is only 15,000 tons while production reaches 696,000 tons.

Secretary General of APRI Lisaman Sumardjani said that in 2009 alone, Indonesia`s rattan which was not exported accounted for 628,014 tons or equal to US$1.414 billion in value. The volume of those exported ones was only 67,986 tons.

"It would be a pity not to take advantage of this. If the government bans rattan exports, it should think of how to make use of the rattan surplus at home" Lisman Sumardjani said.

About 85 percent of the world`s rattan population is found in Indonesia. World demand for rattan-based furniture and rattan-made handicraft products are relatively high, where in 2008 and 2009 reached around US$100 and US$104 billion.

Of the total market share, Indonesian rattan-based products only accounted for 2.6 billion dollars in 2008 and 2.3 billion dollars in 2009.

"This indicates that the market for rattan-based products was virtually wide open. We need to take advantage of the available market," Lisman Sumardjani said. (*)