Can poor villages improve their livelihoods and protect their environment?

A new law in Indonesia gives funds for development but villages don’t have the capacity to carry it through. A workshop identified rewards-for-environmental-services’ schemes as potential capacity builders


The Government of Indonesia’s recently promulgated Law no. 6/2014 on Villages provides village governments with a stronger mandate for development with an accompanying budget, the equivalent of up to USD 90 000 per village per year. There is a potential synergy between this development initiative and environmental reward, or co-investment, schemes.

According to Dr Betha Lusiana of the World Agroforestry Centre, who is coordinating the Indonesian component of a three-nation research project called, Climate-smart, Tree-based, Co-investment in Adaption and Mitigation in Asia (Smart Tree-Invest)—supported by the International Fund for Agricultural Development and the CGIAR Research Program on Forests, Trees and Agroforestry—environmental co-investment schemes of the sort being developed in Buol District, Central Sulawesi can be designed to accommodate collaboration between third-party facilitators (such as the World Agroforestry Centre) and district and village governments, to maintain and improve ecosystem services and villagers’ livelihoods.

Betha Lusiana, LIPI workshop, Jakarta, May 2015

Betha Lusiana presenting at the LIPI workshop. Photo: World Agroforestry Centre/Sacha Amaruzaman

‘In particular’, said Dr Lusiana, ‘these kind of schemes can build the needed capacity of village governments, and provide the missing guidelines, to carry out development planning, particularly in relation to conserving environmental resources and improving people’s livelihoods’.

She was speaking at a workshop on Co-Investment of Ecosystem Services for Sustainable Village Development, held 5 May 2015 in Jakarta. Organized by the Population Research Center of the Indonesian Institute of Sciences (LIPI) and the World Agroforestry Centre, participants included representatives from the Ministry of Environment and Forestry, Ministry of Villages and Developing Area Acceleration, International Fund for Agricultural Development, Buol District Government and national universities. The intention of the workshop was to share knowledge about environmental co-investment with policy-making bodies, particularly in relation to the new village law.

The need for building capacity in development planning among village governments was underscored by Dr Ivanovich Agusta of the Village Sociology Department of Bogor Agricultural University (Institut Pertanian Bogor).

‘Currently, only 50% of villages have received proper guidelines for, and training in, development planning’, explained Dr Agusta. ‘A significant increase in budget will be useless if the village government doesn’t have the capacity to plan and budget for development. Furthermore, most of the district governments in Indonesia have only limited resources to act as a facilitator for the many village governments under their jurisdiction. On the other hand, Law no. 6/2014 has also mandated collaboration between people interested in village development’.

Beria Leimona, LIPI workshop, Jakarta, May 2015

Beria Leimona presenting at the LIPI workshop. Photo: World Agroforestry Centre/Sacha Amaruzaman

Dr Beria Leimona, regional coordinator of the Smart Tree-Invest project, explained that rewards-for-environmental-services schemes typically featured poor land-managers receiving financial and non-financial compensation for managing the ecosystem services in their area.

‘Such schemes are often narrowly interpreted as market-based transaction schemes’, she said, ‘but co-investment in stewardship of the environment has more flexible conditions based on collaboration and mutual trust between the people with interests in a given landscape’.

In Buol District, most of the direct beneficiaries of the ecosystem services that are managed by poor communities are themselves poor. There are no private-sector beneficiaries, such as drinking-water companies or hydropower plants. The Smart Tree-Invest research team accordingly concluded that co-investment by the public sector was more feasible rather than payments from direct users of the environmental services.

Buol, villagers, landscape

Villagers in Buol are looking for development that also protects their environment. Photo: World Agroforestry Centre/Aunul Fauzi

Smart Tree-Invest has been researching how to develop environmental co-investment schemes that will help smallholders to adapt to, and mitigate, climate change and also socio-economic shifts. In Indonesia, the project is operating in eight villages in the watersheds and coast of Buol District. The team have used the Capacity-strengthening Approach to Vulnerability Assessment method to identify the socioeconomic and biophysical aspects of the Buol landscapes that influence farmers’ vulnerability and resilience to climate change and market forces. After a year’s observation and studies, the team are now ready to develop the test schemes.

Mr Ibrahim Rasyid, representing the Buol District Government, confirmed that they were ‘ready to co-invest and commit a portion of our development budget to support Smart Tree-Invest activities’.

LIPI workshop on villages, Jakarta, participants, May 2015

The workshop participants. Photo: World Agroforestry Centre/Sacha Amaruzaman

Dr Herry Yogaswara from LIPI commended the commitment by the Buol District Government and encouraged them to see the schemes through to maturity with the support of the World Agroforestry Centre not only for the benefit of the poor smallholders of Buol but those throughout Indonesia and, indeed, globally.

‘The lessons learned in the Smart Tree-Invest project in Buol District can be a model for co-investment in environmental services in other villages in Indonesia’ he said. ‘We look forward to the World Agroforestry Centre sharing the knowledge widely’.



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Climate-smart, Tree-based, Co-investment in Adaption and Mitigation in Asia is supported by the CGIAR Research Program on Forests, Trees and Agroforestry'

Sacha Amaruzaman

Sacha Amaruzaman is an ecosystem services specialist with the World Agroforestry Centre Southeast Asia. He co-manages the Climate-Smart, Tree-Based, Adaptation and Mitigation in Asia (Smart Tree-Invest) project that is operating in Indonesia, Viet Nam and the Philippines. He also carries out research under the CGIAR Research Program on Forest, Trees and Agroforestry, mainly focusing on ecosystem services, socioeconomic and institutional aspects.

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