The Bamboo and Rattan Sectors in Asia: an Analysis of ... - INBAR

In the second period, during the ban (1979-92), there was considerable adjustment
within the industry. During this period, ASMINDO formed the Marketing Commission
for Rattan Products to assist its members to develop rattan products manufacturing
units, and to help them market their products abroad. For a number of reasons the
industry in Java benefited most from this assistance. Essentially, Java had a much
more advanced economy, with a larger pool of skilled labor, much better infrastructure
(including the all-important transportation and communications facilities) and more
collective experience in dealing with enterprise development and international trade.
Trade patterns changed significantly with the rule changes. Earlier the main
stakeholders were the collectors, the intermediaries, and the exporters who sold the
cane to the international market. With the export ban, a new group of inter-island
traders got involved in the trade of raw cane to Java. Semi-processing enterprises
began to build up in Sulawesi, even before the ban on inter-island trade in raw cane.
There were 42 units by 1990 and 58 units in 1995. By 1995, the local semi-processing
industry consumed 89% of the raw cane produced in the state: just 8% went to West
Java, and the rest to South Sulawesi, East Java and Jakarta. The bulk of the semifinished
rattan goes to Java, primarily as transfers within vertically integrated firms.
The four provinces of Sulawesi together supply 96% of the cane used in the large East
Java cane furniture industry.
The export ban was intended to protect raw material from overexploitation. In
fact, there is no indication that rattan production volume has decreased; it has remained
steady at around 20-30 thousand tons. Apparently, the domestic furniture and
handicrafts industries have absorbed the additional quantity available.
Constraints and opportunities
The authors identified the gatherers and the KUDs as being the highest priority
targets based on criteria of need and dependency on rattan. The main problem in the
system is the imbalance of power between rattan raw material suppliers and
consumers. The suppliers tend to act as price takers, for a number of reasons. The
rattan is legally allocated to the permit holder. Even though individuals are technically
eligible to obtain permits, they are excluded by the requirement for up-front payment
of royalties. The permits are only enforced (if at all) during the transportation of the
rattan; the cutting is effectively open-access.
The rattan cutters have few livelihood options available. They accept any price
to break even; if they don't accept it, someone else will. There is limited competition
among buyers. The cutters also lack appropriate technology to improve the quality of
the material they deliver, though under the current market conditions it is unlikely
that quality would be rewarded. There is very little incentive to replant or to harvest
sustainably.
There is much more strength on the demand side. Most semi-processors located
on Sulawesi are affiliated with manufacturers so that they have guaranteed demand
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