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

that they might be able to get for their produce would be unlikely to compensate the
incremental costs of making the sale. Therefore, collectors and growers are willing to
accept the terms offered by traders, as long as the price is higher than their opportunity
cost. In many cases, where opportunities are so limited, this means that in actual
terms they are satisfied with anything better than break-even prices. The same logic
applies at transformation points higher up the PCS.
The same pressures that drive large-scale traders and manufacturers to establish
contract relationships with suppliers have also led to true vertical integration,
especially in the rattan sector. In Indonesia, many East Java furniture manufacturers
are also exporters and own semi-processing factories in Sulawesi. In the Philippines,
the large furniture manufacturers are also furniture exporters and some are beginning
to get into raw material growing. In Laos, the practice of allocating cutting rights to
the furniture manufacturers ensures that they maintain a high level of control over
the raw material harvesting and delivery. One of the impacts of this trend is that the
small-scale manufacturers face difficulty competing to acquire raw material. Another
impact is that this kind of linkage works to limit competition for raw material and
so keeps prices down, reducing incentives for sustainable management of the material.
These contract arrangements, coupled with weak tenure/open-access condition of
the resources in many cases, result in low farm-gate (forest-gate) prices and poor
incentives for improved management or enhancement of the resource. This is discussed
further below.
In the bamboo sector, large-scale industrial users are often able to get concessions
(e.g. in Madhya Pradesh and Kerala) which they harvest using hired labor.
Governments, eager to encourage industrial development, have offered concessionary
prices at the cost of reduced access and higher prices to small-scale (politically less
powerful) craft workers and artisans who compete for the same raw material.
Horizontal Linkages
In most of the systems studied, horizontal linkages at the early stages of the PCS
are relatively weak. Raw material producers do have some contact with other
producers from their village and from neighboring areas, and so have that opportunity
to share information. Likewise, traders may have some information contact with
other traders. However, the vertical links are stronger than the horizontal links at
these stages in the systems.
A major exception is in the Philippines, where some regional manufacturers
have attempted to use their collective bargaining power to get more favorable prices
for raw material inputs and for sales. Also, the gatherers' associations in the Philippines
have the potential to facilitate strong horizontal linkage at the rattan collecting stage.
In practice, some of the gatherers' associations are realizing this potential. Others
have just shifted power to individuals or facilities from among the indigenous people,
but in effect have merely replaced other traders as the main buyer of rattan. To the
collectors there is little difference.
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