The Impact of Eco-labeling and Forest Certification on Teak Forest Plantation

Abstract

This paper deals with eco-labeling and certification process of forest. There are two objectives of the paper are; (a) to evaluate the impact of eco-labeling and forest certification on teak forest plantation, (b) to determine the financial feasibility of eco-label teak plant business with paddy rice (intercropping). This research was conducted in South Konawe District, South East Sulawesi, Indonesia using stratified random sampling with 62 farmers as respondents. Data were analyzed quantitatively and descriptively. Quantitative analysis was performed by using paired sample test, NPV, B/C and IRR. The result of the research indicates that ecolabel certificating process in KHJL involving many parties (collaboration) and conducted through these processes: selecting certificate giver, avoiding gap between certificate giver standard and KHJL forest management, consulting with stakeholders, reporting and certificating forest management; The ecolabel certificating process gives effect on the changes of planting pattern and the size of teak plant field. The effect on changes of planting pattern is indicated by the shifting of agroforestry planting pattern to simple agroforestry. The effect on field size of teak plant field is indicated by the improvement of average size of field from 0.53-2.07 ha per farmer. By considering three criterions (NPV value of df 18% equals to Rp 63.978.638,- NBCR value is greater than 1 in the amount of 8, and the IRR value of 41.26% or IRR > 18%), it can be said that, financially the certificated teak processed for business worth for exploration and expanded.