Crying at Upstream, Screaming at Downstream

Kompas

Workers prepare rattan for processing in the rattan cluster industrial area in Katingan Regency, Central Kalimantan, Tuesday (29/5/2012). The government plans to build centers for processing rattan into furniture and other handicrafts outside Java, especially in rattan-producing areas such as Kalimantan, Sumatera and Sulawesi.

The rattan industry is like tangled threads. In the upstream, the fate of rattan farmers is disheartening. In the downstream, industry players are finding it difficult to get raw materials. Ironic for a country that is abundant in rattan.

After decades of life revolving around rattan, Aji Bahar (58) is switching from this commodity. The low price of rattan has left this farmer from Katingan, Central Kalimantan, disheartened. The price of rattan is only Rp 1,300 per kilogram. In fact, a decade ago, the price was Rp 7,500-Rp 10,000 per kilogram.

"I have been earning a living from rattan for six years. Today\'s buyers are picky. From Cirebon, West Java, they ask for small [rattan]. In fact, we cannot be picky when harvesting because it will take time to cut down," said Aji, Friday (11/12/2020).

Also read: A “Dowry” of Rattan, a Heritage for the Future

When he still depended on rattan, in a day he could spend up to nine hours at his plantation in the forest. Foods, gloves and mandau (a typical Dayak machete) were his instrument when harvesting rattan. Almost every time he harvested rattan, his hands were pricked by thorns. So often did Aji get pricked that it seemed Aji no longer felt the pain. For him, the falling price was more painful. It continued to fall so that he could no longer run the rattan business.

Then, Aji switched to working on land that was less than half a hectare, planting rubber. However, the price of rubber also fell more frequently, so he now chooses to be a plantation worker who is paid Rp 90,000 per day.

Today\'s buyers are picky.

His fate was awful. The additional income that he usually received from cleaning the neighbor\'s garden ended. During the Covid-19 pandemic, many customers tightened their belts.

KOMPAS/DIONISIUS REYNALDO TRIWIBOWO

The residents of Rangan Surai Village are drying the rattan they just washed from the forest in mid-February 2019, Katingan Regency, Central Kalimantan. In Katingan, at least 30,000 hectares of land filled with rattan are not being harvested because the price of rattan has slumped.

This fact is ironic for Katingan, one of the major rattan producing regions in Indonesia. There are 104,572 hectares of rattan land that have not been harvested with a production target of 12,696 tons per month. Coordinator of Rattan Production Unit of the Katingan Rattan Farmers Association (P2RK), Gani Masayusi, said that apart from prices, floods and landslides had also discouraged farmers from harvesting rattan.

In fact, P2RK has about 270 members and its rattan products have received environmentally friendly certification from the Forest Stewardship Council (FSC). However, all was dashed when faced with sluggish prices.

The prices are unstable.

To harvest one ton of rattan, clean and dry it, Gani spent Rp 7.5 million. The selling price should be at least Rp 8,000 per kilogram. "However, buyers, most of whom come from Cirebon, buy Rp 6,000-Rp 7,000 per kilogram," he said.

The price of rattan, according to him, was also influenced by buyers who asked for unprocessed rattan, namely rattan that was neither washed nor dried. So, the collectors compete to get it. "The prices are unstable. That kind of rattan is sold for only Rp 5,000 per kilogram, sometimes even as low as Rp 2,000 per kilogram," said Gani.

Loss of momentum

As the rattan farmers in the upstream cried, the rattan furniture entrepreneurs in Cirebon screamed because it was hard for them to get raw materials and because of the Covid-19 pandemic. The lockdowns imposed in export destination countries caused a loss of income.

Reynaldi from PT House of Rattan said orders for rattan furniture fell by 20 percent. Luckily, after May, demand from overseas buyers jumped.

"The increase could be 100 to 150 percent compared to last year. But, due to raw material difficulties, we did not accept orders," he said. Of the export target of 14 containers per week, only three containers can be delivered.

KOMPAS/ABDULLAH FIKRI ASHRI

Rattan craftsmen make rattan products at PT House of Rattan in Cirebon Regency, West Java, Thursday (2/8/2018). A number of problems remain obstacles to the rattan industry, such as difficulties in raw materials and government regulations which are considered burdensome.

The lack of raw materials forced Reynaldi to reject some orders. If he insists and cannot fulfill the order on time, he will be fined 10-20 percent of the order cost. Buyer confidence also collapsed.

Almost all furniture entrepreneurs have experienced the same issue. However, a member of the Presidium of the Indonesian Furniture and Handicraft Industry Association (HIMKI), Satori, could not confirm how much rattan was needed. In Cirebon and its surrounding area alone, 9,000 tons of rattan is needed per month.

Satori dismissed the notion that rattan furniture business actors in Cirebon are pressing prices on farmers. "Here, we buy polished rattan for Rp 17,000-Rp 20,000 per kilogram. Previously, it was only Rp 13,000-Rp. 14,000 per kilogram," he said.

In fact, he highlighted the length of the rattan supply chain, from farmers, small collectors, large collectors, inter-island traders, traders in Java, retailers to the furniture factories. The chain is not long if you use the unprocessed rattan.

"In 2010, I checked and found Singaporean [businessmen] were staying at a rattan warehouse in Kalimantan. They took all kinds of rattan from the farmers, big and small. For us, we only take the favorite ones, such as the ones with 24-31 millimeters in size [for export],” he said.

KOMPAS/ABDULLAH FIKRI ASHRI

A number of rattan products were exhibited at the Cirebon Rattan Expo at CSB Mall, Cirebon City, West Java, Wednesday (28/8/2019).

The export of random rattan is prohibited in accordance with Trade Ministerial Regulation No. 44/2012 concerning List of Goods Not for Export. The regulation is expected to encourage the domestic rattan industry because domestic entrepreneurs are no longer fighting over raw materials with the importers. Moreover, about 80 percent of the world\'s rattan species are in Indonesia.

Even so, the problem of scarcity of raw materials is, in fact, still prevalent. Satori suspects that the scarcity occurs due to the smuggling of rattan abroad. A number of countries that lack of rattan in nature, such as Vietnam and Singapore, have successfully transformed into giant world rattan product producers.

Chairman of the HIMKI Presidium Abdul Sobur urged the government to find a solution for this issue. Apart from ensuring that there is no rattan smuggling, HIMKI also encourages the government to create a rattan logistics agency that connects the upstream and downstream sectors and ensures the availability of raw materials. "Next year, it is estimated that there will be a drastic export demand after this year\'s decline. Demand from the United States alone could increase by 6.5 to 8 percent later," he said. Do not let Indonesia fail to take advantage of this opportunity again.

Next year, it is estimated that there will be a drastic export demand after this year\'s decline.

These various problems also put pressure on rattan furniture exports. The Industry Ministry noted that the export value of rattan furniture in January-May 2020 was around US$37.6 million. In 2019, the export value was recorded at $81.3 million. In fact, in 2011, exports had reached $112.9 million.

Head of sub-directorate for timber and rattan industry at the Industry Ministry’s Forest and Agro Industry, Mediarman, said his office was currently collecting data on raw material needs and rattan production as well as preparing a reference price for rattan to solve the problem of raw material scarcity. "We will still maintain the ban on exporting raw materials," he said.

The survival of the national rattan commodity, which is the backbone of millions of Indonesians, clearly requires attention. If farmers continue crying at the upstream and businessmen keep screaming at the downstream, all that great potential will not be able to support the welfare of this nation, including in the post-pandemic period.