Towards a more sustainable natural rubber industry in Indonesia: The special role of smallholders

Zahari Zen

Sustainable development has been defined through a global political process to be a simultaneous improvement of the economy and the environment; further, this is suggested to be only feasible if it is managed locally through a socially and politically sensitive process. This thesis examines the natural rubber industry in Indonesia to see if the sustainable development model can provide some realistic policy options. The industry is examined from economic and environmental perspectives both upstream (plantation and smallholder or swidden grower) and downstream (large rubber processing factories). The key problem is seen to be the low productivity of smallholders and the poor quality of the rubber delivered by smallholders to the factories. This not only means that smallholders are trapped in a cycle of poverty as their product fetches the lowest price on international markets, but it leads to massive environmental deterioration downstream from the wastes produced as well as continuing pressure on the forest upstream. The social and political context to the industry is outlined before presenting a possible approach, which could enable the deep seated environmental and economic problems to be addressed. A survey of key players from government, civil society, factory management, plantations and smallholders is used to clarify the nature of the problems and the potential for the new approach to work. The core of the approach is to enable the smallholders to continue their swidden life style (in terms of mixed farming practices, but reduced need to open up more forest), whilst providing incentives for them: • to upgrade their practices in both producing more rubber (and other crops) and in improving the quality and cleanliness of the rubber product, and • to process the rubber upstream using village scale technology.

Towards a more sustainable natural rubber industry in Indonesia: The special role of smallholders

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