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

In order to increase income of small-scale processors, there is need to enhance
the development and availability of improved product designs that can be replicated
at the microenterprise level. To improve the income-generation potential of bamboo
and rattan PCS, interventions are needed to forecast market demand and facilitate
access of disadvantaged groups to those markets.
Horizontal Linkages
The studies found that the vertical linkages are very strong and that horizontal
linkages are relatively weak in most PCS. Stronger linkages among actors in the early
stages of a PCS would help increase bargaining power for producers and local traders.
This could be done by providing training in management and other skills to
cooperatives (not by creating monopoly cooperatives). As discussed earlier, the
experience of the rattan gatherers' associations in the Philippines provides a useful
model. A variety of incentives were provided to encourage such associations (the
most important being the eligibility for rattan collecting permits) that facilitate
horizontal linkages.
Generally speaking, improved horizontal linkages in the industry appear to
be beneficial in terms of increasing capacity and reducing transaction costs.
However, the case of ASMINDO in Indonesia provides a warning that too much
horizontal control can be detrimental to the wider national interests. The statutory
marketing/exporting activities of ASMINDO seem to have had a negative impact
on the sustainability of the rattan raw material production in the country. The
case of the KSBC of Kerala demonstrates that care is needed in designing
appropriate interventions. Institutional mechanisms should be flexible and
responsive.
Market Conditions
It is clear that the various players in NTFP markets occupy unequal positions.
The raw material producers tend to be the worst off, with very little access to
information about prices, quality requirements, timing of demand or other information
that would help them to plan their management and harvesting in the short or long
term. They act purely as price takers, accepting prices that are more or less equivalent
to the wage value of their labor. The balance of power could be shifted in favor of
raw material producers by improving market institutions. Interventions could include
making market information available along with other agricultural commodity price
broadcasts and publications, developing and promoting the use of appropriate rattan
grading standards/rules, and perhaps developing rattan (and other NTFP) auction
markets where competitive bidding would help increase raw material prices and
reduce other transaction costs. This would reduce the monopsony powers of the
traders. In practice, collectors might still have to rely on traders to take their material
to market, but the auction mechanism would help move the price and quality criteria
into the public view.
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