Scitech Journal of Research in Business, Economics and Management

Journal of Research in Business, Economics and Management

Research Vol 15,1 - 2020 Journal of E-ISSN: 2395-2210
Organisation E-ISSN: 2395-2210 ISSN

A Total Economic Value of Seberuang Ancestral Forest in West

Kalimantan - Indonesia: Benefit Transfer Method
Stefanus Masiun1, Eddy Suratman2, Memet Agustiar3
1
Universitas Tanjungpura, Jl. Hadari Nawawi, Pontianak 78124, West Kalimantan & [email protected]
2
Universitas Tanjungpura, Jl. Hadari Nawawi, Pontianak 78124, West Kalimantan & [email protected]
3
Universitas Tanjungpura, Jl. Hadari Nawawi, Pontianak 78124, West Kalimantan & [email protected]

Received: October 2, 2020; Accepted: October 13, 2020; Published: October 22, 2020

_______
Cite this article: Masiun, S., Suratman, E., & Agustiar, M. (2020). A Total Economic Value of Seberuang Ancestral
Forest in West Kalimantan - Indonesia: Benefit Transfer Method. Journal of Research in Business, Economics and
Management, 15(1), 29-41. Retrieved from http://scitecresearch.com/journals/index.php/jrbem/article/view/1948

Abstract.
The study of economic resources in ancestral forests continues to develop in line with the emergence
Abstract
agendas of sustainable development goals. In Indonesia, ancestral forests are undergoing a serious
alteration of its functions, leading to deforestation, ecological disasters, infectious diseases and social
problems.
This study The purpose of this study was to calculate the total economic value of ancestral forest in Riam
Batu Village, Sintang Regency, Indonesia by using the benefit transfer method. This study found the Total
Economic Value (TEV) of IDR 2.8 trillion per year or equivalent of US $ 189,672,579.00. The largest
composition is Indirect Use Value which is equal to 99.62% of TEV while Direct Use Value shares of
0.37%, and the rest is Non Use Value, 0.03%. The TEV is equivalent to 16% of the total GRDP of Sintang
Regency which is amounting to IDR 14.7 trillion in 2019, and is almost equivalent to the total GRDP of the
agriculture, forestry and fisheries sub-sector which reached IDR 3.1 trillion. This research succeeded in
building novelty in calculating isolated ancestral forest area that has not been much taken into account by
decision makers in designing development programs and policies.

Keywords: Total economic value; benefit transfer; ancestral forest; indigenous peoples.

1. Introduction
The paradigm of Sustainable development goals (SDGs) puts economic, social and environmental dimensions
in harmony, compatible and balance. This new development paradigm is believed to be able to bring prosperity and
justice in the life and order of the world community, including indigenous peoples and local communities. In line
with it, the study of the economic wealth of natural resources in ancestral territories including ancestral forests
continues to develop and promoted. There are four reasons why the economy of indigenous territories is important
to discuss. First, the environmentalist perspective looks at the natural resources should not be exploited, because it
will change the ecosystem as a whole. Second, the developmentalist perspective holds that nature resources must be
used and utilized to overcome poverty and improve the welfare of society. The third is the quasi (combined)
developmentalist and environmentalist view, in which economic and environmental interests run proportionately
(Saragih, 2001). Fourth, is the importance of proposing a development model, particularly the economic
development of indigenous peoples and local communities based on their local wisdom and resources to be
prosperous communities (Abafita et al., 2013; Ahmad et al., 2018). Local wisdom that grows and develops in
indigenous peoples’ communities is an integral part of the process of managing natural resources in a just and
sustainable manner (Khan, et al., 2018). In fact, it is the foundation for conservation of nature (Krutilla, 1967).
Culture and local wisdom are important conservation pillars since they are not only integrated with the preservation
and conservation of natural resources and the environment, but also directly with the economic life of indigenous

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peoples. This is what makes the economic system of indigenous peoples socially and environmentally friendly
(Khan et al., 2018).
The TEV concept has been used extensively to identify and classify the benefits of natural resources. TEV
includes not only direct trade value (market) but also non-market value, ecological function, and non-use benefits
related to natural resources including forests (Djajadiningrat et al., 2014). TEV consists of use value and non use
value. The Use and non-use categories were introduced by John Krutilla in 1967 (Pascual et al., 2010). The use
value is distinguished by direct use value and indirect use value (Hawkins, 2003). Environmental valuation using
non-market method has developed to various parts of the world. This method developed in the United States in the
1960s and 1970s, in Europe in the 1980s and 1990s it has even become an important field. At the same time
developing in Asia, Latin America and Africa (Djajadiningrat et al., 2014). Benefit transfer (BT) method is one of
the methods commonly used in the valuation of ecosystem goods and services. Benefit transfer means the use of
benefits from one place and time as data to estimate the benefits of actions or studies carried out at other similar
places or times (Plumber, 2009).
Ancestral territory is the living space of indigenous peoples whose management uses customary norms.
Regulation of the Minister of Home Affairs of the Republic of Indonesia Number 52 of 2014 states that ancestral
territory is ancestral land in the form of land, water, and/or waters along with the natural resources on it with certain
boundaries, owned, utilized, and preserved from generation to generation and in a sustainable manner to meet the
living needs of the community, obtained through inheritance from their ancestors or claims for ownership in the
form of common-pool land or ancestral forest. Local wisdom is a form of intellectual creativity of indigenous
peoples from generation to generation covering various aspects of life, shaping the culture and spiritual identity of
indigenous peoples (Lakshmanan and Lakshmanan, 2014). Anna et al (2018) cited (WIPO, 2017; Simon et al.,
2016; Berkes, 2013), elaborated, local wisdom is knowledge, understanding, skills and practices developed, which
are sustainable and continue to be carried out from generation to generation in a community, forming their cultural
or spiritual identity. In addition, it also refers to the holistic understanding of indigenous peoples towards the world.
Local wisdom can be related to the past, but also includes existing community practices, spirituality, morality,
ideology, modes of artistic expression, intellectual creativity of indigenous peoples and the way in which
knowledge is acquired, is passed on through generations.
Currently, natural forests face a serious threat of deforestation in Indonesia. FWI's study in 3 provinces, North
Sumatra, East Kalimantan and North Maluku, shows the rate of deforestation is 240 thousand hectares per year in
the 2013-2016 periods. Deforestation rate of 72% in the three provinces are in areas of concession permits: timber
(Hak Pengusahaan Hutan, HPH), planted industrial timber (Hutan Tanaman Industri, HTI), oil palm plantations
(Hak Guna Usaha, HGU) and mining. These four schemes are the direct causes of deforestation (FWI, 2018).

Table 1. Concessions and Deforestation Rate per Large Island in Indonesia

Areas of HGU and Deforestation rate

Island Oher Concessions (Ha) % (Ha) %
Sumatra 1,632,029.00 2.98 251,000.00 18.72
Kalimantan 4,836,794.00 68.10 528,000.00 39.37
Sulawesi 144,888.00 2.04 247,000.00 18.42
Maluku 26,161.00 0.37 141,000.00 10.51
Papua 463,016.00 6.52 174,000.00 12.98
Total HGU 7,102,888.00 100.00 1,341,000.00 100.0
Source: FWI, 2018 and FWI, 2019

High rate of deforestation in Indonesia is closely related to land-based investment policies for the
development of oil palm plantations and other concessions. It can be seen from the distribution of land use permits
(HGU) for oil palm plantations and other concessions on major islands in Indonesia (Table 1 above). These permits
are generally outside Java. Java is no longer a target for developing land-based concessions. The data shows the rate
of deforestation parallels the extent of distribution of these concessions. If the development model based on natural
exploitation does not change, the rate of deforestation will remain high. It brings about environmental damages, loss
of ecosystems, infectious diseases, social problems and conflicts. Agustiar (2013) indicated in West Kalimantan,
economic structural transformation has occurred inevitably, it should wisely take into account the important role of
ecosystem including forest.
Previous studies on the economic valuation of indigenous territories using the TEV approach in Indonesia
have been carried out by a number of researchers. Halimatussadiah et al., (2018) conducted a study in Kesepuhan

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Karang, Banten province. The TEV obtained from two main sources, the economic value of natural resources
products and environmental services, indicates total economic value of natural resource products is IDR 29.17
billion/year. Meanwhile, the economic value of environmental services is IDR 7.04 billion/year. The study
conducted by Bahruni et al., (2018) for the Kajang Community, South Sulawesi found the TEV of Direct Use
Value, Indirect Use Value and Existence Value reaching IDR 73,404,896;/hectare or IDR 60,021,437,201/per year.
The economic value of the Kajang ancestral territory without including the weaving culture is IDR 28.92
billion/year. Siyaranamual et al., (2018) conducted a study in Kaluppini Village, South Sulawesi. Based on the
results of the TEV, the economic value of the Kaluppini ancestral territory which includes natural resources
products and environmental services, the natural resources products are IDR 35.28 billion/year, and environmental
services are only IDR 0.31 billion/year. The TEV is IDR 35.59 billion/year. Napitupulu et al., (2018) conducted a
study of the economic value of the Saureinu ancestral territory, Mentawai, West Sumatra. Based on the results of
TEV, the wealth of the Saureinu ancestral territory from natural resources is IDR. 33.54 billion/year, while for
environmental services it is IDR 0.84 billion/year. Anna et al., (2018), the TEV's study of Moi Kelim in
Malaumkarta, West Papua. The wealth of the ancestral territory of Moi Kelim Malaumkarta for natural resource
products is IDR 7.96 billion/year, the total environmental service value is IDR 159.93 billion/year. In this research,
one of the methods used is benefit transfer. Finally, Khan et al., (2018) conducted a study in Riam Batu, Sintang
Regency. The focus of the study is on direct use value and indirect use value. The value of natural resource products
and environmental services of Riam Batu reaches a total of IDR 38.49 billion/year. This figure consists of the
economic value of natural resources products of IDR 27.14 billion/year and the value of environmental services of
IDR 11.35 billion/year.
The aims of this study are calculating the TEV of ancestral forest of Riam Batu, comparing the TEV to GRDP
and income per capita of Sintang Regency. The findings of the study can provide a basic argument for the legal
recognition of the ancestral forest to protect natural and economical assets of the community.

2. Review of Literature
Economists often explain, the exploitation and conversion of forest ecosystems is due to the low value of
ecosystem products and services provided by forest ecosystems (Gatzweiler, 2003). Ecosystem services are not
accurately quantified and are often not considered by policy makers (Costanza et al., 1997). The important role of
valuation is to value ecosystem goods and services in monetary terms as a consideration in formulating a policy,
management and protection options as well as being a bridge connecting beliefs to behave and act (Bartczak et al.,
2008; Boerema et al., 2017; Hejnowicz and Rudd., 2017).
The study of modern ecosystem services began in the 1970s, framing ecosystem functions benefiting humans
as economic services (Braat and de Groot, 2017). Ecosystem function is the capacity of natural processes and their
components to provide goods and services to satisfy human beings either directly or indirectly. Natural resources
and the environment (ecosystem) have 23 functions, with 4 main classifications, i.e. 1) regulatory function; 2)
habitat function; 3) production function; and (4) the information function (Costanza et al., 1997; De Groot et al.,
2002). Because of its great function for life, a new paradigm in environmental economics is emerging that the
natural environment is natural capital (Barbier and Heal, 2006).
Forest coverage almost reaches 30% of the earth's land, containing 80% of the terrestrial biomass, becoming
the habitat for more than half of terrestrial plants and animal species (Morales-Hidalgo et al., 2015). Between 2003
and 2012 an estimated 67 million hectares of forest burned each year, insect pests destroyed 85 million hectares of
forest and 142 million hectares of forest were damaged due to various other disturbances (van Lierop et al., 2015).
From 1990 to 2015, the world's forests decreased by 3%, from 4,128 million hectares down to 3,999 million
hectares (Keenan et al., 2015). Forest Resources Assessment of 2015 data reveals that the trend of afforestation is
increasing but forest degradation and loss continues to occur in poor tropical countries (Sloan and Sayer, 2015).
Until 2030, forest conversion in the world which is very risky will occur in tropical areas (D'Annunzio at al, 2015).
In fact, healthy ecosystems provide services that are essential for the sustainability of human life (Salzman et
al., 2001). Many ecosystem services have economic value because they contribute to well-being and can be scarce
but they are not recognized by society (Pimentel, 1997; Editorial, 1999; Brockerhoff et al., 2017). Local wisdom
contributes significantly to the solution to the crisis of biodiversity and climate change (United Nations, 2009),
furthermore, forests are also landscapes having spiritual significance (Perriam, 2015; Lowman and Sinu, 2017).
From the perspective of indigenous peoples, it is a holistic significance. Natural resources and the environment
(land and forest) tie relationships with each other, the ancestors, the universe and the Creator.
The Iban Dayak of Sungai Utik in Kapuas Hulu states "the land is the mother, the forest is the father and water
is the blood". The significance of forest for indigenous peoples is very different from the significance of forest as
defined by a globalized world that tends to be technically rational due to the influence of colonialism, imperialism

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and neo-liberalism (Gonzalez and Kroger, 2020). Forests are a gift that supports life (Deb, 2014). To preserve the
services of environmental and natural resources, and avoid worse impacts in the future, studies and models should
be created by economists to convince state leaders to take concrete action by providing significant budgets to
overcome the risks being faced (Kuusela and Laiho, 2020).
The quantification of ecosystem services value is important for social recognition and ecosystem management
at various geographic scales (Villa et al., 2002). The efforts to calculate the value of environmental and natural
resources in a landscape have been carried out since the late 1960s. Non-market valuation was even first carried out
by Hotelling (1949) when he estimated travel demand. Forest valuation was first carried out by Clawson and
Knetsch in 1966 to assess forest recreation (Stenger et al., 2009). Pascual et al., (2010) stated six reasons for
valuation to be carried out, they are (1) missing markets; (2) market imperfections and market failures; (3) for some
biodiversity goods and services, it is important to understand and appreciate alternatives and their alternative uses;
(4) there is uncertainty involving demand and supply of natural resources, especially in the future; (5) governments
may prefer to use valuation rather than limiting, managing, or operating market prices to design
biodiversity/ecosystem conservation programs; (6) to arrive at natural resource calculations, methods such as Net
Present Value, valuation are mandatory.
TEV consists of Use Value and Non Use Value. The use value is further differentiated from the direct use
value and indirect use value. Direct use value refers to the direct use of the consumption of resources such as wood,
sugar palm, fish, primary agricultural commodities, etc. for both commercial and non-commercial purposes.
Meanwhile, indirect use value refers to the value that is enjoyed indirectly such as the function of preventing floods
and preventing landslides or the function of forests as carbon sinks (Anna et al, 2018). Another component is non-
use value or passive value. This value is not directly related to the actual use of the goods and services produced.
Included in the non-use value categories are the Existence value, Bequest value and Option value. Existence value
is the value of existence. This assessment is given on the existence or maintenance of certain resources even though
the community will not necessarily use them. This value is also called intrinsic value.
The bequest value is defined as the value provided by the current generation by providing or bequeathing
resources for future generations. Bequest value is measured based on the willingness to pay the community to
preserve it for future generations. Option value is defined as the value provided by the community for the choice to
enjoy environmental goods and services and natural resources in the future. Option value is also a maintenance
value so that options to utilize it are still available in the future (Anna et al, 2018).

Picture 1. Type of Benefits (Hawkins, 2003) Adapted from Edwards and Abivardi (1998)

TOTAL ECONOMIC VALUE

USE NON USE

VALUES VALUES

DIRECT INDIRECT OPTION BEQUEST EXISTENCE

NON-
CONSUMPTIVE
CONSUMPTIVE
USE
USE

Benefit transfer is a monetary valuation of ecosystem goods and services using the benefits from other places
and times as data to estimate the benefits of actions or studies conducted at other similar places and times (Plumber,
2009). The BT method has evolved in environmental and natural resources studies due to the needs and demands of

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policymakers for estimating environmental benefits, particularly non-market benefits (Bartczak et al., 2008; Noel et
al., 2009).
Considerable empirical studies on the quantification of ecosystem services have been conducted. Since 2005 it
has increased exponentially. Of the 405 studies reviewed, they were scattered in 74 journals in 83 countries
(Boerema, et al., 2017). Most studies were regulating services (48%), with the least being provisioning services
(26%) and cultural services (26%). The weakness of these studies is, they focus more on one aspect, the ecological
side or the socio-economic side. Therefore, they do not describe the functions, benefits and values as a whole.
Barbier and Heal (2006) noted, one of the best examples of policy formulation based on the value of a single
ecosystem service is the provision of clean water by the Catskill Mountains to New York City.

3. Methodology
This is a descriptive study using a quantitative approach. This study was conducted to determine the Total
Economic Value (TEV) of Seberuang Riam Batu ancestral forest with the benefit transfer (BT) method, using the
TEV approach with the following formula:

TEV = DUV + IUV + OV + EV

TEV : Total Economic Value
DUV : Direct Use Value
IUV : Indirect Use Value
OV : Option Value
EV : Existence value

The use of benefit transfer method in this research based on cost-effective and time-effective consideration as
in essence, ecosystem valuation is expensive and time-consuming (Colombo and Hanley, 2008; Isaza, 2014). BT
has long been used in designing policies and applied environmental studies.
Boutwell and Westra (2013); Smith at al., (2002) in Anna et al. (2018) elaborated, BT is a method that adapts
value estimates from previous research for the value of natural resources and environmental services that are the
same, but separate, and changing in different sources. The weaknesses of the BT method include high risk of
research error, the estimation of the value of the unit quickly unused, and recent research may be difficult to obtain.
The advantages are in terms of costs, time, labor, easier adjustment to affected people and most techniques are
maintained for the transfer of economic value (Robhati and Kusumawardani, 2016). There are two main forms of
BT, 1) The unit transfer method is the simplest method of transferring estimated benefits from research sites, or the
average of several study sites, to a policy site; 2) The function transfer method is transferring the benefit function
from other studies. The benefit function relates to people's willingness to pay for ecosystem characteristics and the
values they arise. This study uses the first form.
This study was conducted in Riam Batu, Tempunak District, Sintang Regency, West Kalimantan Province.
Tempunak district geographically is at latitude coordinates 00 09 'NL to 00 26' latitude and longitude at 1110 14
'east longitude to 1110 24. The village with an area of 5,213.36 hectares consists of 3 hamlets: Mulas, Lanjau and
Lebuk Lantang, 266 households, with 997 people (511 men and 486 women).
The ancestral territory of Riam Batu consists of 61.03% ancestral forest, 19.13% cultivation area, 12.10%
rubber, 6.52% (shorea forest), 0.95% ex settlement (secondary forest) and 0.27% settlement. The main livelihood is
as traditional farmers, rubber farmers and forest products takers. The land contours, especially in Mulas and Lanjau,
are generally hilly except Lebuk Lantang which is more flat. The educational facility available is primary school in
Lanjau. This ancestral territory is rich in natural resources such as wood, tengkawang (shorea), resin, rattan,
bamboo shoots, dogfruit, stink bean, mushrooms, game, birds, fishes, vegetables, natural fruits, medicines. The
sources of cash income are rubber, chilly, pepper, dogfruit, stink bean, and banana. Customary laws are obeyed by
all citizens.

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Picture 2. Riam Batu Within the Tempunak District Map

Riam Batu

The uniqueness of Riam Batu is Bukit Saran, the highest hill in West Kalimantan, 1,741 meters above sea
level. Bukit Saran, apart from being endemic for a number of species, is a sacred place for prayer traditionally. This
is where the souls of the ancestors and magical people live. Bukit Saran is a farm hut (langkau uma) of Inai Abang,
one of the figures in the legend of Buah Main of the Ibanic Dayak group.

Picture 3. Map of Riam Batu Ancestral Forest

Ancestral Forest
2,936.59 hectares

In this study, the benefit transfer value used is the BT value from a number of references. Most of the benefit
transfer values are taken from a report published by the Food and Agricultural Organization - FAO (2009) in Annex
4 which presents the total economic value (TEV) of Indonesian forests in 2002 in units of US $ per hectare per year
as shown in the table below.

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Table 2.Total Economic Value (TEV) of Indonesian Forests 2002 (US $/Hectare/Year)

Primary Logged Over

Type of Production Forest Conservation Protection
Value Forest (Secondary) Forest Forest
Total Economic Value 209.44 203.07 269.47 269.47
Use Value 199.84 195.48 252.55 251.55
Direct use value 109.73 93.02 135.09 135.09
Timber 60.97 53.67 0 0
Fuelwood 0.16 0.16 0 0
Bon-wood forest products 48.17 38.76 28.47 28.47
Water consumption 0.43 0.43 106.61 106.61
Indirect use value 90.12 101.46 116.46 116.46
Soil and water conservation 41.58 40.12 41.58 41.58
Carbon sink 6.57 27.38 5.48 5.48
Flood protection 25.82 24.52 53.26 53.26
Water transportation 5.80 5.80 5.80 5.80
Biodiversity 10.35 4.64 10.35 10.35
Non-use value 9.59 7.59 17.93 17.93
Option value 3.40 2.95 7.58 7.58
Existence value 6.19 4.64 10.35 10.35

Riam Batu Ancestral forest is protected forest. Therefore, the benefit of TEV transfer taken is in the protected
forest category of FAO (2002). After recalculating, the TEV of Protected Forest per hectare per year is US $ 269.48
instead of US $ 269.47 as stated in the original table. In the table above, there is no transfer benefit value for oxygen
provider (O2), so the benefit transfer value for forest as oxygen provider (O2) is taken from Gerakis approach
(1974) in Afrizal et al (2010) and Darmawan (2015) which states that every 1 M2 area of forest vegetation can
produce + 50.625 grams of oxygen per day.
The calculation of the value of water production refers to the measurement of the Tempunak river water which
receives water supply from this ancestral forest in 2017, by Mr. Gunawan, a micro hydro electric plant expert CV
Cihanjuang Bandung. His measurement found that the Tempunak river water discharge in the dry season was 2,500
liters per second while in the rainy season it was 7,000 liters per second, or an average of 4,750 liters per second. In
2017, the average amount of rainfall in Sintang regency was 258.5 mm3 with the largest amount of rainfall
occurring in September, i.e. 404.1 mm3 with 19 days of rain in a month. The lowest rainfall in June was 54.6 mm3,
with 14 rainy days. According to the Susilo Sintang Meteorological Station, the high intensity of rainfall was
mainly influenced by the condition of tropical forested areas and high humidity (Kabupaten Sintang Dalam Angka
2018).
The price per liter of water is counted by referring to the Sintang regency tariff for Class IIA households, the
households using 10-20 cubic meters at a rate of 1 cubic of IDR 3,304. The tariff per liter is IDR 3.304; (Three
point three zero four rupiah). This provision is regulated in the Regulation of the Regent of Sintang Number: 31 of
2015 concerning the Structure and Tariff of Drinking Water in Sintang Regency. The calculation results are in table
4.
The next is the calculation of wood volume. The wood (timber) is not cut down since it is protected forest. The
Ministry of Environment and Forestry also decided it as protected area. For the need of wood value valuation, its
volume needs to be calculated. This study only calculates the volume of commercial timber for Class 1 meranti type
(shorea sp) and commercial timber Class 2 mix as regulated in the Minister of Environment and Forestry Regulation
No. P.64/MENLHK/SETJEN/KUM.1/12/2017 Concerning Determination of Benchmark Prices for Forest Products
for Calculating Provisions for Forest Resources and Compensation for Stands. So far, no data provided on the
potential of this wood in the Melawi KPH XIII (Forest Responsible Board) which supervises the Riam Batu
ancestral forest, so the benefit transfer value for calculating the volume of wood refers to the findings of Azham and
Bakrie (2014), i.e. Analysis of the Potential to Strengthen the Results of Forest Inventory in KPHP Model Berau
Barat, East Kalimantan. Their study took a sample of 45 hectares, finding that the average volume of wood was
177.40 m3/hectare. The average volume per hectare of meranti (shoreas sp) species was the largest at 55.93
m3/hectare (Class 1 commercial wood), medang (phoebe hunanesis) 13.23 m3/hectare and keruing (dipterocarpus
retusus) 12.57 m3/hectare (Class 2 commercial timber). The calculated wood volume is 20 up.

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The value per cubic of wood for Class 1 type of meranti refers to the Minister of Environment and Forestry
Regulation No. P.64/MENLHK/SETJEN/KUM.1/12/2017. The regulation stipulates that Class 1 commercial timber
is meranti type, the price of medium log is IDR 780,000/cubic. The price of large logs is IDR 810,000/cubic, the
average price is IDR 795,000/cubic. Meanwhile, for Class 2 commercial wood originating from the Kalimantan
region, the price of Medium Log is IDR 480,000/m3; and the price of large logs is IDR 500,000/m3. The average
price is IDR 490,000/m3. The calculation is shown in table 5.

4. Data Analysis
The total economic value (TEV) of Riam Batu ancestral forest is as follows:

A. The TEV of Riam Batu Ancestral Forest Based on Benefit Transfer Calculations according to FAO (2009)
Protected Forest Category

Table 3. Total Economic Value of Riam Batu Ancestral Forest Based on Benefit Transfer
Calculations according to FAO (2009) Protected Forest Category

Per hectare of Area of

Type of forest/year Ancestral Value *
N0 Value ( US$) Forest Area of Ancestral Forest
Total Economi Value 269.48 2,936.59 791,352.27
A Direct use value
1 Non-wood forest products 28.47 2,936.59 83,604.72
2 Water consumption 106.61 2,936.59 313,069.86
Sub Total A 135.08 396,674.58
B Indirect use value
1 Soil and water conservation 41.58 2,936.59 122,103.41
2 Carbon sink 5.48 2,936.59 16,092.51
3 Flood protection 53.26 2,936.59 156,402.78
4 Water transportation 5.8 2,936.59 17,032.22
5 Biodiversity 10.35 2,936.59 30,393.71
Sub Total B 116.47 342,024.64
C Non-use value
1 Option value 7.58 2,936.59 22,259.35
2 Existence value 10.35 2,936.59 30,393.71
Sub Total C 17.93 52,653.06
A+B+C (US $) 791,352.27

B. Oxygen Provider Value (OPV)

The oxygen provider (O2) uses the benefit transfer value according to Gerakis production approach (1974), in
Afrizal et al., (2010) and Darmawan (2015) which states that every 1 square meter of forest-vegetated land can
produce 50,625 grams of oxygen every day. The calculation is as follows:
 Every square meter of forest vegetated land per day produces : 50,625 grams
 Per hectare per day : 506.25 kilograms
 Per hectare per year : 184,781.25 kilograms
 Total oxygen produced by the forest (2,936.59 hectares) per year : 542,626,770.95 kilograms
 1 kilogram of oxygen is IDR 4,000; x total production : IDR 2,170,507,083,750.00;

The price of the oxygen refers to the data at the oxygen agency (PT. Papasari) on June 4, 2020 in Pontianak, 1
kg oxygen is IDR 4,000. Total value of the oxygen of Riam Batu Ancestral forest per year is IDR
2,170,507,083,750.00;

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C. Water Production Value

Table 4. Calculation of the Water Production Value of Riam Batu Ancestral Forest

Average Volume HOUSEDHOLD

(Liter) Unit of Time Price/liter
N0 CATEGORY IIA (IDR)
1 4.75 Per second 15,694 3.304
2 285 Per minute 941.64 3.304
3 1,710,000 Per hour 56,498,400 3.304
4 410,400,000 Per day 1,355,961,600 3.304
5 12,312,000,000 Per month 40,678,848,000 3.304
6 147,744,000,000 Per year 616,605,696,000 3.304

D. Wood Volume Value

Table 5. Value of Wood Volume of Riam Batu Ancestral Forest Based on Potential
Forest Resources Azham and Bakrie Approach (2014)

Volume of Forest (m3/hectare) Value

Average Volume of Forest (m3/hectare) 177.4
A. Commercial wood Class 1 Category Shorea sp (Meranti)
1. Average Volume for Shorea sp (Meranti) per hectare 55.93
2. Area of Riam Batu (RB) Ancestral Forest (Hectare) 2,936.59
3. Volume of Shorea sp/hectare x RB Ancestral Forest (hectare) 164,243.48
4. Average price per cubic (IDR) 795,000.00
Total A 130,573,565,566.50
B. Commercial Wood Class 2 (Forest mix)
1. Average volume of Phoebe hunanesis (Medang) and Dipterocarpus
retusus (Kruing) per hectare 25.8
2. Area of RB Ancestral Forest 2,936.59
3. Volume of Phoebe hunanesis (Medang) and Dipterocarpus retusus
(Kruing) x RB Ancestral forest area 75,764.02
4. Average price per cubic (IDR) 490,000.00
Total B (IDR) 37,124,370,780.00
Total A + B (IDR) 167,697,936,246.50

The assumption of 35 years of selective harvesting is in accordance with the applicable regulations in Forest
Concession Rights (HPH), with an annual cut of 83.90 hectares, the average value per year is IDR
4,791,369,609.90.

5. Results
The Total Economic Value (TEV) of Riam Batu Ancestral forest is as follows:

Table 6. Summary of Total Economic Value (TEV) of Riam Batu Ancestral Forest

TEV COMPONENTS VALUE (IDR) VALUE (USD) % NOTE

I. DIRECT USE VALUE (DUV)
A. Wood
1. Commercial wood Class 1 3,730,673,301.90 252,456.32 0.13 Per year
2. Commercial wood Class 2 1,060,696,308.00 71,777.79 0.04 Per year
B. Non –wood forest products 1,160,266,266.69 78,515.73 0.04 Per year
C. Water consumption 4,344,783,515.69 294,013.43 0.16 Per year
10,296,419,392.28 696,763.28 0.37 Per year
II. INDIRECT USE VALUE (IUV)
1. Soil and water conservation 1,694,551,123.98 114,671.03 0.06 Per year

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2. Carbon sink 223,331,853.78 15,112.97 0.01 Per year

3. Flood protection 2,170,557,780.84 146,882.61 0.08 Per year
4. Water transportation 236,373,149.16 15,995.48 0.01 Per year
5. Biodiversity 421,803,907.38 28,543.66 0.02 Per year
6. Water production service 616,605,696,003.24 41,725,981.80 22 Per year
7. Oxigen production service 2,170,507,083,750.00 146,879,180.09 77.44 Per year
2,791,859,397,568.38 188,926,367.62 99.62 Per year
III.NON-USE VALUE (NUV)
1. Option value (OV) 308,915,259.30 20,904.43 0.01 Per year
2. Existence value (EV) 421,803,907.38 28,543.66 0.02 Per year
730,719,166.68 49,448.09 0.03 Per year
TOTAL ECONOMIC VALUE
(TEV) 2,802,886,536,127.34 189,672,579.00 100 Per year
Note: Conversion to USD is based on the exchange rate as of 3 September, 2020, 1 IDR 14,777.5/US $

6. Discussion
The TEV calculation above shows that;
• Direct Use Value (DUV) of IDR 10,296,419,392.28 or US $ 696,763.28 (0.37%)
• Indirect Use Value (IUV) of IDR 2,791,859,397,568.38 or US $ 188,926,367.62 (99.62%)
• Non-Use Value (NUV) which consists of Option Value (OP) and Existence Value (EV) of
IDR 730,719,166.68 or US $ 49,444.09 (0.03%).
• TEV(DUV + IUV + NUV) Riam Batu ancestral forest is IDR 2,802,886,536,127.34/year or
US $ 189,672,579.00/year.

Thus, the largest component is IUV, i.e. 99.62%. The biggest contributor to this IUV is the production of
oxygen and water. Oxygen and water are very vital components for human life. The TEV value above is 16% of the
GRDP of Sintang Regency in 2019, which amounted to IDR 14.7 trillion or almost the same as the amount of
GRDP for the agriculture, forestry and fisheries sub-sector which reached IDR 3.1 trillion in 2019.
Forest productivity per hectare is IDR 954,469,822.52 (US $ 64,589.40). The TEV divided by the total
population (977 people in 2019), per capita per year is IDR 2,868,870,558.98 or IDR 239,072,546.58 per month
(US $ 194,137.75). Compared to the per capita income of the residents of Sintang regency of IDR 35.16 million
(US$ 2,379.29) or 2.93 million (US$ 198.27) per month in 2019, the welfare level of the Riam Batu community is
far above the average population of Sintang regency.
The Seberuang Riam Batu continues to protect their ancestral forest. Currently, they make use of clean water,
micro-hydro power plants and non-timber forest products. Their ancestral forest possesses economic, social,
cultural and spiritual values. These values are the pillars of the sustainability of the ancestral forest. In this case, the
government policy support is needed that is legal recognition. Through legal recognition, the prevailing customary
rules in protecting ancestral forest get affirmation from the State. The recognition also provides legal certainty that
the ancestral forest will not change hands to other parties. Internally, the recognition provides the power to prevent
it from illegal logging. The management of ancestral forest based on local wisdom has proven effective and
substantive. Indigenous peoples are able to manage their resources sustainably. It can be a reference for the state to
entrust the indigenous peoples to manage their own ancestral forests.
Since Sintang drinking water company (PDAM) raw water is taken from the Tempunak river, whose water
supply comes from this forest, therefore, the community expects there is a benefit sharing policy between PDAM
Sintang and Riam Batu community. The benefit sharing expected is a budget allocation annually for village
infrastructures, high school and higher education scholarship schemes, health care, access improvement and
maintenance from Riam Batu to the main road and a quota to become employees of PDAM Sintang.

7. Conclusion
The TEV of Riam Batu ancestral forest which includes 12 components using the benefit transfer method is
IDR 2,802,886,536,127.34 (US $ 189,672,579.00). The largest component is IUV, which is 99.62%. Forest
productivity per hectare is IDR 954,469,822.52 (US $ 64,589.40). The TEV divided by total population (977 people
in 2019), per capita per year is IDR 2,868,870,558.98 or IDR 239,072,546.58 per month (US $ 194,137.75).

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Compared to Sintang regency’s residents per capita in 2019 which is IDR 35.16 million (US $ 2,379.29) or
IDR 2.93 million (US $ 198.27) per month, the welfare level of the Seberuang Riam Batu is far above the average
population of the Sintang regency.
The data shows, the TEV of Riam Batu ancestral forest is enormous. Therefore, it is understandable if the
community will not convert it. Consequently, any project may be adopted in this area should take into account the
above TEV. The TEV can serve as a basis for the state recognition to protect the ancestral forest. The state
recognition provides legal certainty for the community.

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