The Formulation of Sustainable Replanting Policies in the Indonesian Rubber Industry Supply Network

The Indonesian natural rubber industry is facing a reduction of natural rubber supply because many rubber plantation areas are entering their low-productive phase. There are significant opportunities to sustain future supplies by managing the replanting of these low-productive areas. Early discussions with Indonesian stakeholders in Northern Sumatera indicated a demand for strategic planning tools to support decisions related to replanting and described significant effects of replanting to the whole region and individual players within the network. The examples of these effects include the level of future supply from the region and the flow of natural rubber between players, which in turn affects income of these players. In addition, a key finding from a review of literature indicated the importance of integrating three dimensions of sustainability (economic, environmental and social) in planning for future supply networks. The aim of this research was to explore ways in which social, economic and environmental aspects of sustainability can be used to inform decisions related to the formulation of replanting policies.
This research contributes a sustainability assessment and optimisation method for use in the formulation of sustainable replanting policies. The sustainability assessment method consists of suitable sustainability indicators and an integrated assessment tool. Indicators at district and individual levels for three dimensions of sustainability were identified through case study investigation and a review of literature. A combination of system dynamics and agent-based simulation was developed as the integrated assessment tool, which demonstrates an ability to assess long-term sustainability impacts of replanting at district and individual levels. The optimisation method was developed to enable the used of the integrated assessment tool to inform the formulation of replanting policies, comprising a combination of composite indicators and dynamic programming. Composite indicators were used to translate sustainability impacts of replanting calculated using the integrated assessment tool into indices of replanting impacts and dynamic programming was used to determine optimum replanting policies using these indices. The application of the method using real world data demonstrated the process of formulating sustainable replanting policies for the North Sumatera Natural rubber industry.