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Indonesia is the largest archipelagic country in the world, with 17,000 islands of varying sizes and elevations, from lowlands to very high mountains, stretching more than 5000 km eastward from Sabang in Aceh to Merauke in Papua. Although occupying only 1.3% of the world’s land area, Indonesia possesses the third-largest rainforest and the second-highest level of biodiversity, with very high species diversity and endemism. However, during the last two decades, Indonesia has been known as a country with a high level of deforestation, a producer of smoke from burning forests and land, and a producer of carbon emissions. The aim of this paper is to review the environmental history and the long process of Indonesian forest management towards achieving environmental sustainability and community welfare. To do this, we analyze the milestones of Indonesian forest management history, present and future challenges, and provide strategic recommendations toward a viable Sustainable Forest Management (SFM) system. Our review showed that the history of forestry management in Indonesia has evolved through a long process, especially related to contestation over the control of natural resources and supporting policies and regulations. During the process, many efforts have been applied to reduce the deforestation rate, such as a moratorium on permitting primary natural forest and peat land, land rehabilitation and soil conservation, environmental protection, and other significant regulations. Therefore, these efforts should be maintained and improved continuously in the future due to their significant positive impacts on a variety of forest areas toward the achievement of viable SFM. Finally, we conclude that the Indonesian government has struggled to formulate sustainable forest management policies that balance economic, ecological, and social needs, among others, through developing and implementing social forestry instruments, developing and implementing human resource capacity, increasing community literacy, strengthening forest governance by eliminating ambiguity and overlapping regulations, simplification of bureaucracy, revitalization of traditional wisdom, and fair law enforcement. Full article

Most of the Indonesian agarwood in the international market is harvested from the wild, which raises concerns regarding its sustainability. The Government of Indonesia encourages agarwood cultivation produced from the cultivated Agarwood-Producing Tree (APT) to overcome this concern and replace natural agarwood. APT cultivation in Indonesia is not a new development, but it has faced various obstacles, ranging from production quantity and quality to funding and marketing. Therefore, an appropriate policy is needed to support the success of APT cultivation. This study aims to develop a dynamic system model in order to identify the gaps and determine appropriate policy strategies to improve APT cultivation in Indonesia. The model was established by compiling three conceptual stages: planting to harvest, cost–benefit analysis, and feasibility analysis. Agarwood from Aquilaria malaccensis Lam. cultivated by the community and private sector, which produces kemedangan (an agarwood grade in the Indonesian market) and oil, was chosen for the model. The model developed shows that APT cultivation development in the private sector and the community is unfeasible with the business as usual. There are three options to simulate the feasibility of agarwood produces from APT cultivation. The best scenarios are chosen based on the feasibility indicator, when benefit is higher than cost. The development of APT by the private sector that produces kemedangan and oil products is feasible, with the invention of more effective inoculant and processing technology (scenario 1), as well as applying high thinning, which can increase the yield. Oil production requires more investment, so the revenue obtained is lower than the production cost, resulting in the unfeasibility of the production. The development of APT by the community will be feasible with scenario 2, if there is government funding for the establishment of APT cultivation, inoculants application, and harvesting. Based on the model scenario, APT cultivation will be ecologically sustainable, economically feasible, and socially acceptable if carried out by the private sector or the community by applying inoculation techniques and selecting inoculants to increase production effectiveness, and will be supported by lower production costs and market stability. The Indonesian government needs to take several policies to encourage APT development, including financial assistance for APT development, setting inoculant standards at affordable prices, simplifying trade administration, stabilizing agarwood product prices at the local level, and law enforcement. Full article