Export of raw timber yields to processing it at home

A ''bee forest'' grows in Java . . . a plywood factory rises in Kalimantan . . . and a pulp plant gets built in Sumatra.

These developments on the Indonesian landscape are signs that the government has begun to carve a new niche in the world timber industry, after decades of exporting raw tropical trees.

Government planners are getting serious about upgrading the use of their forests; so serious, in fact, that this year it was announced that exports of raw logs would be severely limited by 1985. Only processed-timber companies, such as plywood factories, will be permitted to export logs, and then only up to 20 percent of their production.

Indonesia, which has been the world's top exporter of tropical hardwoods, may be relinquishing that claim to neighboring Malaysia. Log exports, until last year, were second to oil exports in earnings. This year, rubber may become second.

But with uncontrolled deforestation, shortages of firewood for villagers, and potential loss of oil exports in the 1990s, Indonesia had little choice but to make the transition from a raw-timber industry to a processing one.

The best example of the change is the teak forests of Java. These valuable timbers, which commanded about one-quarter of the world teak market, suddenly began to disappear in the 1970s as peasants cut them down for firewood or to sell the high-priced commodity to local industries. Blacksmiths, for instance, find teak is excellent for hot coals.

The loss of wood was not limited to teak. In fact, as the population on Java rose, almost all the forests diminished. An average distance for a villager to walk for firewood increased from less than one kilometer to more than two.

The government concern, however, centered on the loss of teak, which it controlled through a public corporation known as Perum Perhutani. To save teak sales, the government told the corporation to persuade villagers not to cut down the forests, and it banned raw teak exports in 1975 in favor of processed teak, mainly for furniture.

This state forestry corporation came up with some ingenious programs, all under the category of community forestry, or giving the villagers a stake in the future of the forests. The task, says Hartono Wirjodarmodjo, president of Perum Perhutani, was to recover Java's lost forests by increasing the coverage from an estimated 22 percent today to 30 percent by the end of the centrury.

One strategy was to plant a species known as caliandra for villagers. This is a flowering tree that provides good nectar for bees, honey for the beehive owner , and firewood for the village. Another idea was to allow farmers to grow rice and other crops between the rows of newly planted teak trees, thus giving them an incentive to protect the trees from poachers.

''Wood is so scarce in some parts that people are collecting leaves for firewood,'' Mr. Hartono says. ''Wood is now an expensive commodity.''

Villagers are also being hired to harvest the teak more, and also assist in setting up their own ''firewood plantations.'' Mr. Hartono says the government now realizes that social changes are needed in the villages around the forests before the forests can be saved totally. With about 10 percent of Java's villages situated around its teak forests, the corporation plans to use half its profits for social programs, while the other half will go to the government.

Last year the forestry corporation had (US) $100 million in sales.

A more ambitious plan, however, is the government's design to raise plywood production from 0.4 million cubic meters in 1980 to 3.9 million cubic meters by 1985. This ten-fold increase in such a short time faces difficulties in road and ship transport, and shortages of managers and skilled labor. But Indonesia is set on going from 20 percent of the world plywood market to 70 percent. ''It will be very difficult,'' says a World Bank official. One problem, he says, is that Indonesia's quality of plywood does not always meet international standards.

Overall, the decline in raw timber exports through 1985, as the shift to processed wood takes place, is expected to lessen timber's role in nonoil exports from 32 to 22 percent. Plywood mills, now numbering 32, are expected to grow to more than 100 by 1984, with many investment incentives granted. One incentive is a subsidy on the prices of logs to the mills. This may cause trouble if the world market for plywood does not pick up in the next few years.

The government is certain it can transform the industry. It has a high priority for creating new jobs in an overpopulated country. And with one of the largest natural stands of virgin timber in the world, Indonesia wants to save it for the day when its valuable oil wells begin to run dry.

''While the rest of the developing countries are messing up their forests, Indonesia can afford to let its trees stay put, using only part of them for secondary processing,'' says a forestry expert with the Ford Foundation.

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