The government will push community forest development by providing cheap loans to help rehabilitate Indonesia's forests to boost the logging industry.
Addressing a two-day seminar on developing forests, focusing on community forests, Forestry Minister M.S. Kaban said the government had allocated a total fund of Rp 1.4 trillion (US$149 million) to loan to those who were eligible to develop "community forests".
"We will only provide funds to selected people at an interest rate lower than banks.
"We do this to ensure forests are properly developed.
"There is also an opportunity to ask for more funding from the state budget if necessary," he added.
He said the funds were managed under the ministry's BLU (Balai Layanan Umum), a revolving fund for forestry investors.
With the BLU fund, the ministry predicted Indonesia should have community forests covering an additional area of 1.55 million hectares within the next five years.
Approximately 300,000 hectares of the total area will be developed in partnership with the private sector.
Based on data from the ministry, Indonesia currently has 3.58 million hectares of community forests, mostly located in Java. About 2.74 million hectares are located on the island.
The total area of community forests has the potential to produce 20 million cubic meters of logs per year.
Kaban said as log production from natural forests declined, the government had accelerated the development of industrial forests - production forests and community forests - to meet the rising demand from Indonesia's forestry industries.
During the period between 2004 and 2008, the log production from natural forests decreased from 25 million cubic meters a year to just 7.4 million cubic meters.
Production from industrial forests rose from 10.3 million cubic meters to 24.5 million cubic meters.
Data from the Forestry Ministry in 2008 showed Indonesia needed 80 million cubic meters to be sustainable.
Due to the declining logging of natural forests, many industries have begun logging from community forests.
Kaban pointed out developing community forests would also slow down deforestation, which has been recorded at 1.08 million hectares per year.
According to the minister, deforestation had jumped from 1.8 million hectares per year in 1997 to 2.8 million hectares per year in 1998.
But since 2000, Kaban claimed his ministry managed to decrease deforestation from 2.8 million hectares per year to just 1.08 million hectares per year in 2009.
