Green Economy and Furniture Value Chains

Forest Asia Summit

Jakarta, 5-6 May 2014

Herry Purnomo

Green Economy

• Advocated after Rio+20 summit in June 2012.

• ‘The Future We Want’ (UN 2012):

• Poverty eradication

• Sustainable consumption and production

• Protecting and managing natural resource development

UNEP 2011

SBY Speech for Rio+21 Summit

We know the problems

We know the solutions

We must act now!

SBY@cifor

How can research support this? • Research for Development (ACIAR) • Research for Impact (CGIAR-CRP 6) • Action Research (FORDA and CIFOR)

Why VALUE CHAINS?

• Globalized trade make fragmenting of production

– In different location worldwide

• Linking to global value chains can provide better market access

• SMEs are becoming global players

Kaplinsky and Readman (2000)

Global furniture trade

The global furniture exports were US$ 74 billion

Indonesia’s share was about 2%, Malaysia 3% and Vietnam 5%

Jepara Furniture

• 10% of Indonesia’s export - $110 million annually

• 11,981 businesses

• 0.9 million m3 wood

• $0.8 billion economy

• Women are paid less than men

Hit by global financial crisis in 2008

Reduced market, incomes and Incentive to grow trees

METHODS

• Participatory Action Research (PAR)

• On the Reflection phase we implemented Value Chain Analysis (VCA), surveys and studies including gender.

Reflec-tion

Plan-

ning

Action

Moni-

toring

Scenarios based collective action

1. Moving Up

– Small-scale producers move up to the higher stages in the value chain

2. Green Product – Voluntary and mandatory

certification

1. Small-Scale Association (collective action)

2. Collaborating Down

3. Furniture Roadmap: District regulation development

MAIN IMPACTS

Improved incomes (statistically significant)

They produced certified furniture

Better furniture governance: the association involved in decision making process and its implementation

Lessons to be learnt

• Baseline study is a key to assess impacts

• Engage policy makers since the beginning

• Value chain analysis comprehends the distribution of income and power

• Action research can make difference on the ground

• Work at policy level to sustain the impact

Preliminary study

Planted forest

Industries

Landscape

Trade and market

Furniture

Pulp and paper

Construction

AgricultureNatural forest

Retailers

Wholesalers

End consumers

Wood panels

Log

flows

Product

flows

Money

flows

Money

flows

Vertical

inequality

Horizontal inequality

Non-

vegetated

land

• Researching landscape

• Investing landscape

• Multi-stakeholder approach

Thank You