products. Besides the involvement of companies, many small-scale farms have evolved in industrial plantation of forest. There are many types of economic linkages have been establishedbetween the private forest sector and local forest planters. However, the implementation of these economic integrations has not been effective so far because the connection between the wood companies and famers has shown weaknesses and the legality of the contracts is not high. Thus, in recent time, many wood processing facilities lack raw timber materials while the planters have to sell their wood at low prices when the harvest season comes. The people whose livelihood depends on the forest are still poor, the household economy in forestry shows many limitations and much fragmentation, and the effectiveness of forest plantations, harvesting, wood processing and forestry production have not been commensurate with the potential. The purpose of this study is to examine models of agreements between wood processing enterprises and local forest communities; also initially discussing the hypothesisof the main factors that make the implementation of the timber trade contractsbecomming less effective. The papertry to find the policies recommendations and efficient solutions for developing the agreements between timber processing companies and local forest comunities. The study is a part of growing the body on the research on linkages in timber production and marketing. By finding the weeknesses of the timber trade agreements, this study will contribute to future researchs on relate topics.