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\hypersetup{pdftitle={Which Smallholders Are Willing to Grow Fast Wood? Evidence from a Choice Experiment Study},pdfauthor={Dwiko Permadi, Michael Burton, Ram Pandit, Iain Walker, Digby Race},pdfsubject={Tropentag 2016: Abstract},pdfkeywords={Afforestation contract, choice experiment, Indonesia, smallholders, welfare change},pdfpagemode=None,colorlinks=true}
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\parbox[b]{13.4cm}{\centering \large{\textbf{Tropentag, September 18-21, 2016, Vienna, Austria}}\\[1ex] \Large{``Solidarity in a competing world ---\\fair use of resources''\\[2ex]}}
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\Large{\textbf{Which Smallholders Are Willing to Grow Fast Wood? Evidence from a Choice Experiment Study\footnote{\textbf{Contact Address:} Dwiko Permadi, The University of Western Australia, School of Agricultural and Resources Economics, 27 Caporn Street, 6009~Crawley, Australia, \mbox{e-mail}: \email{dwiko.permadi@research.uwa.edu.au}}\\[0.8ex]}}
\normalsize{\textsc{Dwiko Permadi$^{1}$, Michael Burton$^{2}$, Ram Pandit$^{3}$, Iain Walker$^{4}$, Digby Race$^{5}$}}
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\begin{itemize*}
\item[]{\small{\textit{$^{1}$The University of Western Australia, School of Agricultural and Resources Economics, Australia}}}
\item[]{\small{\textit{$^{2}$The University of Western Australia, School of Agricultural and Resource Economics, }}}
\item[]{\small{\textit{$^{3}$The University of Western Australia, School of Agricultural and Resource Economics, }}}
\item[]{\small{\textit{$^{4}$CSIRO, Australia}}}
\item[]{\small{\textit{$^{5}$The University of Sunshine Coast, Australia}}}
\end{itemize*}
\index[author]{Permadi, Dwiko}
\index[author]{Burton, Michael}
\index[author]{Pandit, Ram}
\index[author]{Walker, Iain}
\index[author]{Race, Digby}
\begin{center}
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\textbf{Abstract}
\begin{abstract}
\normalsize{
To increase the equity between large"=scale and small"=scale forestry, the Indonesian government has budgeted to prioritise the development of smallholder forests via afforestation programs. It has also designated that one"=third of national timber production, 25 million m$^{3}$/year, will come from smallholder forests outside forest areas by 2019. However, growing complexity in the socio"=economic, cultural, and institutional aspects of forest rehabilitation programs may hamper the outcomes. This implies that not all smallholder forests that exist today will exist into the future. Therefore, it is important to identify the sorts of forest policy that encourage the establishment of new and permanent smallholder forests, especially through planting trees. This will best be achieved by policy changes that have direct impacts on the incentives of smallholders to grow trees under long"=term afforestation contracts.  This study explores potential changes in smallholders' willingness to adopt fast growing trees, i.e.: acacias for pulpwood in private land, given changes in the levels of afforestation contract attributes, and identifies causes of heterogeneity in the preferences. We use a Choice Experiment (CE) technique to detect changing willingness to accept proposed afforestation contract options and estimate marginal value of the attributes in monetary terms. We collected data from 340 smallholders in Indonesia to estimate six attributes of afforestation contracts: contract duration, labour participation, timber insurance, training, road improvement, and expected income. The results show that higher income and road improvement would significantly induce smallholders to grow more fast"=wood, while a longer the contract length would decrease smallholders' probability of accepting the contract options.  The heterogeneity in preferences using latent class modelling revealed that four types of smallholders valued each attribute in different ways, with implications for targeting smallholders more effectively and allocating incentives more fairly.  These heterogeneous preferences stemmed from different forest transition stage, occupation, experience in tree farming, and risk orientation.  We conclude that changes in afforestation attributes should focus on a hybrid strategy, a combination of production and socio"=economic strategies, to produce fairer outcomes for both smallholders and forest agencies.}

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\noindent \textbf{Keywords:} Afforestation contract, choice experiment, Indonesia, smallholders, welfare change
\index[key]{Afforestation contract}
\index[key]{Choice experiment}
\index[key]{Indonesia}
\index[key]{Smallholders}
\index[key]{Welfare change}
\end{document}
