GREENPRENEURSHIP AT THE BASE OF THE PYRAMID: A SMALL SCALE COMMUNITY-BASED AFFORESTATION PROJECT IN INDONESIA

Abstract

Approximately 41% of the Earth’s land surface is covered by drylands thatsupports 36% of the world’s human population. In Yogyakarta Province, Indonesia53% of the province is covered by drylands in which the driest regency, GunungKidul that occupies nearly 47% of the province, is covered by 70% agriculturaldryland. Despite the phenomena of forest degradation activities for agriculturaldevelopmet by large corporation, nearly abandoned agricultural drylands such as inGunung Kidul Regency exists all over Indonesia. Such drylands have not attractedlarge investors nor government to develop into agricultural activities due toeconomic reasons. This research explored a community based afforestation projectbeing carried out by the support of social investors and academic researchers,virtually without involvement of the government. Among other, teak is one of onlyfew plantations that could grow in such dryland areas and being the corecompetency of local farmers. The basic arrangement between the investors andfarmers was mudharabah revenue sharing as an alternative to conventional pay-incashto land owners and smallholder farmers. The economic benefits of theprogram were valued by using enterprise budget method by considering the capitalinvestment and operating expenses in which cost inflation and teakwood pricesincreases were incorporated. This research proved that the community-basedteakwood afforestation activities along with mudharabah revenue sharing inmarginal drylands could fairly improve the wealth of all stakeholders in theprogram.