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

Rattan is sold by weight in Indonesia, and the small-diameter canes have a higher
proportion of their weight in peel than do canes of larger diameters. Therefore, with
the peel devalued, rattan processors switched to higher volume (larger diameter)
canes as a source of core.
There has also been a policy to regulate the rattan processing industry, with
restrictions on the investment in the area. For example, in 1989, all foreign and
domestic investment in raw rattan processing and semi-finished rattan production
was closed, as was foreign investment in finished products manufacturing. Later, this
restriction was relaxed to allow investment in rattan processing outside of Java.
However, a number of other factors ---- such as higher labor costs, poor infrastructure
and lack of trained workers ---- made investment outside of Java less attractive. This
policy was finally fully relaxed in 1995, but in the meantime it has probably kept
rattan processing capacity below what it would otherwise have been.
Another important policy affecting rattan farmers has been the establishment of
a Joint Marketing Board, an approved exporters system, and an export quota system
for lampit, by a decree from the Ministry of Trade. These measures were taken to
prevent 'unhealthy competition' among lampit exporters and also to prevent
overexploitation of rattan.
As a result of these policies, the Indonesian lampit industry has gone through a
pronounced growth and then recession in the twelve years since the raw rattan export
ban. In 1984, there were just 21 lampit manufacturing enterprises in Amuntai (for
example) making 64 000 m 2 of lampit valued at Rp 415 682 (US$1 = Rp 2 363). By 1987,
the industry was as its peak, having swollen to 435 units producing over 1 million m 2
worth Rp 7.6 million. Total value of output was reduced to just Rp 553 000 in 1993,
the last year for which statistics are available. The total number of enterprises had
dropped to 20! In South Kalimantan as a whole, production of lampit shot up from 537
tons in 1987 to peak at 19 000 tons in 1991, then went down to a low of 9 800 tons
in 1994, before rebounding to 15 400 tons in 1995. In the process, the unit price
changed (in nominal terms) from US$6.38 (1987) down to as low as US$1.22 (1990)
and back to US$8.39 (1995).
The drastic reduction in output has likewise reduced demand and prices for raw
material. The lampit manufacturing industry is concentrated in South Kalimantan,
and most of the raw material for the industry originates in the rattan gardens. These
events have therefore had a severe impact on the rattan farmers. Current raw material
prices are almost the same in nominal terms as they were in 1987 and have decreased
significantly in real terms. Many farmers complained of low prices during participant
interviews in the area. Researchers in other rattan farming areas in Kalimantan report
similar or more pronounced trends. In more remote areas, with higher transport and
other transaction costs, there have been no buyers for several years. This is leading
farmers to discontinue the practice of planting rattan, and even to abandon existing
rattan gardens.
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