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Title Assessing the Sustainability of NTFP-Based Community Enterprises: A Viable Business Model for Indonesian Rural Forested Areas
ID_Doc 43
Authors Harbi, J; Cao, YK; Milantara, N; Mustafa, AB
Published Forests, 14, 6
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Abstract

The article evaluates the financial performance and sustainability of community forest-based businesses operating in the Lakitan-Bukit Cogong forest management unit (LBC FMU) in Indonesia. The study aims to determine the type of business suitable for the physical conditions of tropical forests, local culture, and profitability.

Introduction

Forest management in Indonesia has historically been complex due to its intricate connections with local societal factors, and the rural economy lacks a robust foundation, leading to high dependence on natural resources. The study aims to assess the financial performance and sustainability of community forest-based businesses operating in the LBC FMU.

Materials and Methods

The study was conducted in the LBC FMU, and data were collected through semi-structured and in-depth interviews with key informants, field inventories, and market assessment. The sample was purposively selected based on discussions with key informants, and the selection process also included field observations and a preliminary survey.

Results

The financial viability of the seven small forest enterprises (SFEs) was summarized in Table 4, which showed that all businesses have positive values for all financial indicators. The value and supply chain analysis of the SFEs revealed that three out of seven developed enterprises are derived from rubber trees.

Sustainability Status of SFEs

The MDS-RAPForest analysis showed that all stress and RSQ values indicate that the MDS results are an accurate representation of the situation at hand, forming a good model. The sustainability index and status can be indicated by the results of the RAPForest ordination chart.

Discussion

The study suggests that sustainable NTFP-based activities within a community context can be facilitated through interconnected market systems, appropriate price regulations, and support from stakeholders and legal frameworks. The jurisdictional approach and cross-production system strategies are also discussed as potential solutions.

Conclusions

The study concludes that the SFE with the highest level of sustainability is the Mellifera bees' honey enterprise, and the least sustainable aspects are the institutional and administrative ones. The key factors that need to be considered for the development of SFEs are the presence of raw materials without exploiting land resources, exploitation practices that are not environmentally friendly, market reach, yield/salary/wages, level of mastery of IT and marketing, commitment and motivation of the chairpersons and members, and village/regional regulations that govern operations.

References

The article references a range of sources, including academic journals, books, and reports, on topics such as community forestry, forest management, sustainable livelihoods, and jurisdictional approaches.

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Summary The article assesses the sustainability of non-timber forest products (NTFP)-based community enterprises in Indonesia's forested areas. The study focuses on seven small forest enterprises (SFEs) in the Lakitan-Bukit Cogong forest management unit (LBC FMU). The SFEs produce essential oils, honey, wood charcoal, skewers, and liquid smoke. Financial viability analysis and a qualitative approach were used to assess the feasibility of the businesses. The results showed that all businesses have positive values for financial indicators, suggesting their financial viability. The value and supply chains of the SFEs were analyzed, and the results indicated that the saps-processing industry has a remarkable flow. The Multidimensional Scaling and Rapid Appraisal for Forest (MDS-RAPForest) approach was used to evaluate the sustainability of the SFEs. The results showed that the SFEs are categorized as sufficient/quite sustainable, with the apiculture enterprise being the most sustainable. The study highlights the importance of promoting adaptable forest-based enterprises and jurisdictional approaches to support small-scale forest enterprises. The findings suggest that sustainable NTFP-based activities can be facilitated through interconnected market systems, appropriate price regulations, and support from stakeholders and legal frameworks.
Scientific Methods The research methods used in this study are:

1.
Mixed-methods approach
: The study combines both qualitative and quantitative methods to gather data. Qualitative methods, such as semi-structured and in-depth interviews, were used to gather data on the financial viability and sustainability of community forest-based businesses. Quantitative methods, such as financial analysis and MDS-RAPForest analysis, were used to evaluate the financial performance and sustainability of these businesses.
2.
Semi-structured interviews
: Semi-structured interviews were conducted with key informants, such as the head of LBC FMU, forest extension personnel, and other researchers, to gather data on the financial viability and sustainability of community forest-based businesses.
3.
In-depth interviews
: In-depth interviews were conducted with members of forest-based business groups to gather data on their experiences and perspectives on the financial viability and sustainability of their businesses.
4.
Financial analysis
: Financial analysis was conducted to evaluate the financial performance of community forest-based businesses.
5.
MDS-RAPForest analysis
: MDS-RAPForest analysis was conducted to evaluate the sustainability of community forest-based businesses.
6.
Survey
: A survey was conducted to gather data on the financial viability and sustainability of community forest-based businesses.
7.
Field observations
: Field observations were conducted to gather data on the financial viability and sustainability of community forest-based businesses.
8.
Analysis of secondary data
: Secondary data, such as reports from the FIP 2 program and government documents, were analyzed to gather data on the financial viability and sustainability of community forest-based businesses.

The study used a variety of data sources, including:

1.
Primary data
: Primary data, such as data from semi-structured and in-depth interviews, were used to gather data on the financial viability and sustainability of community forest-based businesses.
2.
Secondary data
: Secondary data, such as reports from the FIP 2 program and government documents, were used to gather data on the financial viability and sustainability of community forest-based businesses.

The study used a range of data analysis techniques, including:

1.
Descriptive statistics
: Descriptive statistics, such as means and standard deviations, were used to summarize the data.
2.
Financial analysis
: Financial analysis was conducted to evaluate the financial performance of community forest-based businesses.
3.
MDS-RAPForest analysis
: MDS-RAPForest analysis was conducted to evaluate the sustainability of community forest-based businesses.
4.
Regression analysis
: Regression analysis was conducted to examine the relationships between variables.

Overall, the study used a mixed-methods approach, combining both qualitative and quantitative methods to gather data on the financial viability and sustainability of community forest-based businesses in Indonesia.
Article contribution This article presents an in-depth analysis of small-scale community-based forestry enterprises (SFEs) in Indonesia, specifically focusing on their financial viability and sustainability. The study evaluates the seven SFEs operating in the Lakitan-Bukit Cogong (LBC) forest management unit (FMU) and assesses their financial performance, value chain, and supply chain. The results show that all seven SFEs are financially viable and have positive values for all financial indicators.

The study highlights the potential of SFEs as a viable business model for rural forested areas in Indonesia, providing livelihoods for local communities. The findings also suggest that sustainable NTFP-based activities within a community context can be facilitated through interconnected market systems, appropriate price regulations, and support from stakeholders and legal frameworks.

The article contributes to the field of regenerative economics by highlighting the importance of small-scale forestry enterprises in providing economic benefits for local communities while also promoting sustainable forest management. The study's findings can inform policymakers, researchers, and practitioners working on sustainable forest management, forest-based enterprises, and community livelihoods.

Key contributions of the article to regenerative economics:

1.
Financial viability of SFEs
: The study demonstrates that SFEs can be financially viable, providing a new source of income for local communities.
2.
Sustainable NTFP-based activities
: The research highlights the potential of NTFP-based activities as a means of promoting sustainable forest management and supporting local livelihoods.
3.
Interconnected market systems
: The study suggests that interconnected market systems can facilitate the development of SFEs, providing a platform for local products to reach wider markets.
4.
Price regulations and stakeholder support
: The findings emphasize the importance of price regulations and stakeholder support in promoting the sustainability of SFEs.
5.
Regenerative economics approach
: The article presents a regenerative economics approach to forest management, focusing on the provision of economic benefits for local communities while promoting sustainable forest management.

Overall, the article provides valuable insights into the potential of small-scale forestry enterprises in promoting sustainable forest management and supporting local livelihoods in Indonesia. Its findings can inform policymakers, researchers, and practitioners working on sustainable forest management, forest-based enterprises, and community livelihoods.

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