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Value chain analysis has emerged since 1990s as a novel approach for understanding how power and benefits are incorporated in and distributed to various actors along the commodity chains. Furniture is one of Indonesia’s main natural product exports, contributing 2% of the global wood furniture trade in 2007. National exports of wood furniture in 2007 were worth about US$1.5 billion. The value chain connects tree growers in Java and furniture producers based in Jepara, the center of Indonesian furniture, with furniture retailers in Australia, Europe, the United States and Japan. Inefficiencies throughout the value chain, however, result in the over-harvesting of plantations, poor incentives for wood producers, and misuse of timber resources. There has been a long tradition of high-quality furniture making in Jepara, coupled with ready access to very high quality teak, and with the adoption of environmentally and socially sound practices, Jepara could become once again a strong competitor in international markets. This ACIAR funded project (2008-2013) aims to improve the value chain for mahogany and teak furniture enterprises in Jepara by enhancing the structure and function of the furniture industry to benefit small-scale producers and improving marketing by small-scale producers and their organizations.
(Roda et al. 2007)