Assessing the Sustainability of NTFP-Based Community Enterprises: A Viable Business Model for Indonesian Rural Forested Areas

Abstract

Indonesia’s vast forested areas have the potential to serve as a crucial source of livelihood for local communities. However, the current contributions of these forests to community livelihoods are significantly underutilized in comparison to their potential. This study evaluates the financial performance and sustainability of community forest-based businesses operating around the forest management area of the Lakitan-Bukit Cogong forest management unit (LBC FMU). Data were collected through semi-structured and in-depth interviews with the key informants through purposive sampling. Financial viability analysis and a qualitative approach were used to assess the feasibility of the businesses. The findings revealed that all businesses show positive values for all financial indicators. From profit estimation and value-added distribution, all products are shown to be feasible. Concerning the value and supply chain, the rubber-processing industry has a remarkable flow. Moreover, small forest enterprises (SFEs) highlight natural capital optimization through multitudinous derivatives of products that could support a substantial regenerative economy, including citronella essential oil, native honeybees, rubber-based product, biochar, skewers, and liquid smoke. In addition, the multidimensional scaling and rapid appraisal for forest (MDS-RAPForest) approach generates a result based on multiple dimensions (ecology, economics, social and human resources, and institutional and administrative dimensions) showing that overall, SFEs are categorized as sufficient/quite sustainable. Furthermore, mainstreaming adaptable forest-based enterprises, jurisdiction approaches, and cross-production system strategies are also discussed. Our findings suggest that sustainable NTFP-based activities within a community context can be facilitated through interconnected market systems, appropriate price regulations, and support from stakeholders and legal frameworks.