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Resin producing agroforestry in the Krui area of Sumatra in Indonesia is presented as an environmentally friendly, income generating land-use system which contributes to both development and conservation objectives. We studied the change in household income portfolios in three communities in the Krui area. The studies revealed that in the period 1995-2004 agroforestry remained the main source of income. We predict, however, that due to declining resin productivity per hectare, and rising price and demand for timber, an increasing number of farmers will cut their mature agroforests in the near future. At the same time our data suggests that farmers will continue tree planting activities. In result old agroforests may vanish while new ones will be established.

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Social conflicts with local people have caused some unsuccessful timber plantation developments in Indonesia. Company and community partnerships have provided opportunities for companies to accommodate local communities' involvement and attempt to overcome these difficulties. Constraints in establishing mutually beneficial partnerships were studied, mainly to improve their long-term viability. The main components of a successful mutually beneficial partnership were defined as: commercial feasibility, equitable contractual agreements, the full understanding of both parties of the potential benefits and costs, and risks of joining the partnership, and a shared understanding of co-management and participatory approaches. The implementation of all three case studies suffered from: a lack of mechanisms to build trust; challenges to commercial viability due to inadequate management planning and consequently poor implementation; inadequate assessment of community needs and resulting waste of companies' funds when developing income generating packages; no clear long-term reinvestment strategy; and poorly developed negotiation and renegotiation mechanisms.

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At the Earth Summit in Johannesburg in 2002, partnerships were touted as one of the key routes to sustainable development. But can partnerships really deliver improvements to rural livelihoods? This paper reviews one set of claimed partnerships, those between forestry companies and local individuals or communities, to assess the benefits, and the costs, to local livelihoods. Most arrangements between forestry companies and local communities are not equitable enough to be called partnerships, so the term ''deal'' is preferred. Positive local impacts of company-community deals include sharing of risks, better returns to land than otherwise possible, opportunities for income diversification, access to paid employment, development of new skills, upgrading of local infrastructure and environmental improvement. However, company-community deals have not yet proved sufficient to lift people out of poverty. They remain supplementary rather than central to income generation. Furthermore, while some deals have resulted in greater cohesion and organisation among community groups, there is as yet little evidence of substantial increases in community bargaining power. Ways forward to increase returns to communities (and to their counterpart companies) centre on moving towards more equal partnerships, by raising community bargaining power, fostering the roles of brokers and other third parties, and developing equitable, efficient and accountable governance frameworks.

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