More and more farmers, villages and communities in Java are planting teak (Tectona grandis) trees as an investment for the future.

This is good news in a densely populated country with a constantly growing demand for the valuable wood.

Teak is a high-quality wood prized throughout the world for its beauty and durability. Premium teak is the most sought-after tropical hardwood for prestige furniture, shipbuilding and decorative use in construction. Indonesian exports of teak furniture approached US$800 million in 2001. Because of this demand, the market for teak in Indonesia is very well established and an important source of employment and income for the people.

There are thousands of furniture-making enterprises in Java. Jepara, one of the most important furniture-production districts on the island, had more than 3000 legally registered establishments in 2000. Additionally, up to 3 million unregistered establishments of all sizes probably exist, employing 6 million people or 6% of the total population of Java. These establishments are engaged in a range of livelihoods, with a significant number undertaking teak-related activities. The figure is further increased if we include Illegal cutting of teak in the wild.

On a recent 2500 km trip through west Java, Julia Maturana, a researcher in CIFOR's programme on environmental services and sustainable use of forests, found privately owned teak plantations everywhere. "We saw a lot of teak growing in gardens with other useful species, as we expected," she said. "But we also found large areas belonging to villages or communities dedicated just to teak. Several were very well managed, with good spacing and showing a considerable investment in labour and capital."

The State-owned company Perum Perhutani has 3 million hectares of forests and forest plantations in Java and dominates the teak market. And before 1998 private sales of teak wood were forbidden. Even now a private agent wanting to sell the wood needs at least three special permits. "Despite these disincentives, people have planted teak in their own gardens to supply their own requirements of wood, as a ‘savings account’ for their children and to use in special cases of need," said Maturana. "Most of the plantings we saw were small and recent with trees ranging from 6 months to 5 years old. This suggests a new system is developing using new areas of land, adding to the already existing areas of teak."

Teak is an attractive long-term investment, with a first class 80-cm diameter log worth $830 a cubic metre in 2001. A fourth class log 4-7 cm in diameter brought $14 per cubic metre. "Chiefs of district forestry departments in west Java told us that the local people usually harvest teak early. The usual rotation period is 40 years or less," said Maturana. "So privately grown teak is sold in local markets at 20-50 percent below the official price. Even so, it still represents an important but sporadic source of income for rural people."

Despite constraints in market access and wood quality, the number of areas recently planted with teak shows it to be an attractive option for people’s investments. High market prices and a well-estab.ent, are attracting investment in teak plantations. Doors are open for rural agents because of the low capital requirements, for seeds and labour, that are mainly concentrated in the first 3 years. "But both of these are plentiful in rural Java areas," said Maturana.

Because of its slow growth cycle and the type of final products , teak plays an important role in soil and water conservation and sequesters considerable amounts of carbon. Maturana, with other researchers, has started researching the location and extent of privately managed teak plantations to understand their dynamics and the factors influencing their development. "We want to analyze these systems to understand their importance in the rural economy, their potential for wood supply and the kind of incentives needed to promote such systems," said Maturana.

Can these areas spread and become an important source of income for the people as well as an extensive, financially driven, reforestation effort? Is that even possible in an island with one of the highest population densities in the world? "How can we help this become a success story combining social, financial and ecological benefits?" asked Maturana. "This is the question donors, research institutions, governments and NGOs need to s We are working on it!"