- A network of district governments across Indonesia is working on transitioning away from commodity-based economic development to sustainable, nature-based solutions.
- Many of these districts are heavily reliant on monoculture plantations like palm oil, or other extractive industries like oil and gas, and are making the shift to better preserve forests and peatlands, as well as indigenous Indonesian forest commodities.
- Among those making progress is the district of Siak in the palm oil heartland of Riau province, where large palm oil and pulpwood companies are supporting the development of nature-based commodities by local communities.
- The national government is also involved in this search to “innovate economic models outside of plantation commodities that can support forest conservation and are locally based.”
JAKARTA — Since its inception in 2017, the Jakarta-based Sustainable District Association, or LTKL, has brought together district governments and other stakeholders to take collective action toward greater sustainability, mainly in the palm oil industry.
Most of the nine districts that currently make up the LTKL network have economies that are heavily reliant on monoculture plantations like palm oil, or other extractive industries like oil and gas. To break this reliance and build a more sustainable economic model, the network is experimenting with various nature-based commodities, from coffee and cocoa, to coconut, bamboo and agroforestry byproducts.
The shift is necessary to better preserve forests and peatlands, as well as indigenous Indonesian forest commodities, according to LTKL head Ristika Putri Istanti. She said that while the member districts of the association have lots of potential to produce nature-based commodities, they lack the resources and capacity to identify potential buyers and market their products.
At the same time, there’s growing global demand for nature-positive products, Ristika added.
“We can’t tap [the market] because the pipeline’s not ready yet,” she told reporters at a recent press event in Jakarta.
Part of the problem, she said, is that there isn’t a robust source of information on what nature-based commodities are available in a given district, who’s produce them, and how to buy them.
“This pipeline [of data] is what we’re preparing,” she said.
The LTKL is also preparing to establish entities at the local level to engage with investors and potential buyers, Ristika said. These entities will comprise members of local communities, including youths, she added. This way, smallholder farmers can focus on cultivating their produce rather than spreading their efforts thin to also have to market their produce and finding buyers, she said.
“To date, we’ve been forcing farmers to become businesspeople as well,” she said. “[But we should let] farmers be farmers.”
Nine districts across Indonesia are currently members of the LTKL: Aceh Tamiang, Siak and Musi Banyuasin on the island of Sumatra; Kapuas Hulu, Sanggau and Sintang in Borneo; and Gorontalo, Sigi and Bone Bolango in Sulawesi. Several of them are preparing their investment portfolios and developing downstream industries beyond the large-scale plantation commodity model.
Notably, Siak, in the palm oil heartland of Riau province, has shown significant progress in developing its nature-based commodities in a shift away from large-scale monocrops, Ristika said.
“They have started to develop nature-based innovations like pineapple, sago, and striped snakehead fish,” she said. “And these commodities already have a market.”
At the same time, Siak is pushing for greater sustainability in its large-scale commodities like palm oil, with the publication of a plan for sustainable commodities called the “Green Siak Road Map,” Ristika said. The road map is supported by a private sector coalition that includes palm oil giants Astra Agro Lestari, Wilmar and Musim Mas, and pulpwood growers APRIL and Asia Pulp & Paper (APP).
Included in the road map are efforts such as landscape monitoring, product traceability, smallholder assistance, capacity building, certification, and auditing.
“So all sourcing from Siak is hoped to be sustainable,” Ristika said.
To support the transition of commodity-producing regions like the LTKL members toward sustainable development, it’s crucial for these districts to tap into funding for nature-based innovation, said Rizal Algamar, director for Southeast Asia at the Tropical Forest Alliance.
“Companies and investors see potential synergies between sustainable palm oil and nature-based innovation to drive prosperous jurisdictions with healthy nature,” he said.
Besides the private sector, the government also plays an important role in helping districts develop and ramp up their nature-based commodity models while preserving forests along the way.
Musdhalifah Machmud, the deputy for agriculture to Indonesia’s chief economics minister, said the government has detailed plans to develop innovation and research-based industries to promote nature-based economies and high-value-added green industries such as food biochemistry and herb processing. The plans are cited in the government’s long-term development program, running from 2025 to 2045, Musdhalifah said.
“The government supports all efforts to achieve a sustainable economy, among others, through promoting sustainable practices in the plantation industry on a multicommodity basis, whether palm oil, cacao, coffee or rubber, for a balance of social, economic and environmental interests that simultaneously need to innovate economic models outside of plantation commodities that can support forest conservation and are locally based,” she said.
Banner image: Indonesia is a top producer of coconut oil. Image by Junaidi Hanafiah/Mongabay Indonesia.
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