Damar agroforest establishment and sources of livelihood a profitability assessment of damar agroforest system in Krui, Lampung, Sumatra Indonesia

Damar agroforest or repong damar in Krui, West Coast of Lampung Province, Sumatra, Indonesia, is a forest-like land use system that was developed by small holders to meet multi-dimensional objectives. From conservation point of view, damar agroforest system affords environmental benefit. The forest-like structure of agroforest allows the conservation of large part of natural forest biodiversity. From economic perspective, this land use system provides a wide range of source of income to farmers, their neighborhood and the actors along damar trading chain. One of the interesting parts of the damar story, on which this study is emphasized, lies on the way of farmers to initiate and develop this land use that need 20 - 25 years. Two research questions can be addressed in this assessment therefore : is repongdamar establishment economically and financially profitable and what is the return to land and labor Traditionally, agricultural undertakings during repong damar establishment were done without any external farm input application. Since the middle of 80s there has been significant development in the agricultural undertakings : fertilizer application for coffee and pepper cultivation during kebun stage, herbicide for weed control and implementing more frequent tree-pruning to reduce the shade in order to prolong productive lifetime of coffee and pepper. Based on farm budget calculation, the study reveals that this system (namely semi intensive system) has higher return, employs more labor and also more profitable than the comparable traditional system. Efforts to prolong the kebun stage bring about significant change in the farmers’ economy and the neighborhood as it creates more employment opportunity in the village. Profitability assessment figures out that repong damar establishment both traditional system and semi-intensive system are profitable. Based on the macroeconomic parameters of on July 1997, returns to land per hectare at private prices are Rp 6.98 million for traditional system and Rp 9.32 million for semi-intensive system. Economically (farm budget calculation valued at social prices), returns to land for those systems are respectively Rp 9.50 million (traditional system) and Rp 13.45 million (semi-intensive system). Similarly for returns to labor. Both systems provide returns to labor about three times higher than the average wage rate in Sumatra. The prevailing monetary crisis in Indonesia had increased the systems’ attractiveness, because the prices of the main agricultural product (coffee, pepper and damar) are increased along with the Rupiah depreciation against US$. Hence, the returns to land are increased by 46.3% to 51.9% at private prices calculation and 57.8% to 55.3% in social prices calculation. Whereas return to labor are increased about 47% in private prices and 52% in social prices.

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