What this chapter covers:
Chapters 1 and 2 provided an introduction to the study and an overview of contractual arrangements as important instruments of forestry policy. This chapter, together with the next two (Chapters 4 and 5), discusses the conditions that a country should put in place to design and implement forest contracts that secure social and economic objectives and resource sustainability, and enable the country to effectively supervise and manage forest contracts. Conditions for designing and effectively administering forest contracts are discussed under three areas of country capacity: the policy framework (in this chapter), the legal framework (Chapter 4) and the institutional framework (Chapter 5).
A sound policy framework has clear objectives and goals that will guide forest management into the future. Firstly it should respond to public interests/demands. This ensures that contracts and the process of contracting out embrace the value system of the country with respect to use of public forest lands. A sound policy framework should exist in writing and make explicit its purposes and how benefits are to be distributed among actors and the public. A clearly written policy should be in line with written contracts in that the latter provide both the proof of agreement among actors and a clear record for future reference. A sound policy framework also establishes the rights and responsibilities of actors and fair mechanisms for dealing with conflict. It also creates confidence and security in investors, other economic actors, both government and non-government constituencies, and local communities. Finally, a sound policy framework enables fairness and stability of the conditions required for business operations in the medium and long term.
Figure 3.1 shows the elements of a comprehensive forestry policy framework and the hierarchy of policy goals, principles, objectives and action priorities.
This component of the forestry policy framework establishes the broad national goals that the government has agreed to pursue in order to secure the public’s interest and the sustainability of forest resources. The national goals must be shaped from the demands and needs of the citizens and the underlying concern for the sustainability of the environment (Ontario Forest Policy Panel, 1993). Governments ought to conduct extensive consultations with the public and forest users to clearly articulate the relevant forestry goals of society. This would ensure attainment of good governance principles of protection of the public interest, transparency and equity.
The national goals should at least embrace the following three ideas which are central to sustainable forest management. First, guarantee present and future material and social needs for society. Second, be linked to the country’s strategic objectives for development. And third, ensure the long-term health of the nation’s forest ecosystems.
Figure 3.1: The main elements of a forestry policy framework
(after Ellefson 1992)
The principles of forest resources management are the cornerstone of the policy framework which support and facilitate goal setting. The general principles discussed here include those intended to ensure the long-term health of forest ecosystems, promote economic efficiency and encourage informed decision-making. They are shown in Figure 3.2.
Sustainable development is based on maintaining forest ecosystems as forests and maintaining them in a viable condition. Forestry policy planners and forest managers, in consultation with forest users and the public, will need to define what “viable conditions” mean. Policy planners and managers then need to identify and implement actions to maintain or achieve sustainable forestry. Where ecosystems are especially fragile, it may be necessary to restrict or prohibit human activities in order to stay within the physical and biological capabilities of the ecosystems (Kaufmann et al., 1994). Special actions may also be required to restore degraded forest lands.
In administering the forestry sector, governments must always endeavour to ensure that goods and services of any type be produced at a minimum cost, that resources be used for the production of society’s required goods, that people negatively affected by policy implementation are compensated, and that care be taken of the needs of less benefited groups. In Chapter 9, the concept of economic efficiency is addressed in more detail. Frequently, forest policies inhibit efficient use of the forest through complex or conflicting regulations, or through the non-enforcement of other regulations.
The sustainability of benefits to forest communities or regions is another major responsibility in the governance of the forestry sector. Without the community, sustainability of resources, profits and benefits will all be compromised. An essential element of both community and resource sustainability is employment which is included in the full meaning of sustainable development.
Figure 3.2: Forestry policy principles: key components of forestry policy
The policy principle of balanced decision-making presents three challenges for decision-makers. The first is to identify how to meet competing demands on the forest, while maintaining ecosystem sustainability. The second is to identify the trade-offs among the competing demands and forest uses, how one forest use affects another. The third is how to make compromises among competing demands on the forest when the forests cannot sustain all the demands people would make on them.
The decision-making framework must define how forest decision-makers and all those who advise them can work together to achieve balanced decision-making. Forest managers need to inform the public of the links among forest ecosystems, forestry policy objectives and forest management tools. The following criteria identify some of the key preconditions for better decision-making for public forests:
Establishing strategic objectives requires knowledge and understanding of the important issues and essential demands on public forests. Strategic objectives help governments to make the difference between “doing things well” and “doing the right things well”. They help governments to assign their scarce resources to those demands of society that really matter for people’s well-being and sustainable development. The forestry policy formulation process should allow for an objective way of identifying society’s demands. The process also allows for an objective selection of those demands that need to be addressed based on government resources and the expected future evolution of the country’s situation. Without a process for strategic planning, many governments end up implementing programmes irrelevant to society’s demand and values.
Action priorities are essential in making things happen. They mark the difference between rhetorical declarations and making things happen. They deal with the practical actions required for timing, funding and implementing policies.
Figure 3.3: Functional linkages between cross-sectoral conservation and forest programmes
Table 3.1: Possible impacts of conservation policies on forest development
Policy instrument |
Cross-sectoral linkages arising from policy instruments |
Impacts on sustainability of forest development |
National environmental plans; soil conservation strategies; plans to combat desertification, air and water pollution |
Harmonized strategies encompassing all land use sectors; soil and water conservation improvements. |
National action plans for the conservation of natural resources; impacts on the sustainability of forests |
Adherence to international agreements and conventions |
Reduction or elimination of environmental pollution |
Health improvement of forests; restoration of damaged forests |
Legal establishment of protected areas and natural heritage forest lands |
Maintenance of biodiversity; protection of endangered species |
Possibility of wood harvesting in protected areas; lower wood availability; stricter environmental control on forest operations |
Source: Adapted from de Montalembert, 1995.
Up to here we have discussed forestry policy independent of other government policies. However, policies in other sectors of the economy can significantly affect the forest sector and distort forest policies (de Montalembert, 1995). In many countries, policies in other sectors have caused greater forest destruction than misdirected and misapplied forestry policies have. These include agricultural settlement and land clearing programmes for cash crops, such as rubber, oil palm, tea or cacao, cattle ranching (Repetto and Gillis, 1988) and energy policies that ignore rural areas and increase dependency on fuelwood. Other examples include land tenure and settlement policies that assign property rights over forested lands on condition that such lands are cleared and ”developed“ or ”improved“. Finally, some economic policies may appear to have little effect on forestry, but can be significant causes of deforestation. Examples include subsidized agricultural loans, highway programmes to open up areas to settlement, development strategies that depress the demand for unskilled labour, and farm policies that favour large-scale farmers over smaller holdings (Repetto and Gillis, 1988; Brown and Pearce, 1994).
The following sections discuss several policy areas outside forestry that impact on forestry and forest policies.
A common policy deficiency is the lack of coordination between conservation programmes and forest programmes and forestry policy (Schmithüsen, 1995). There are important linkages between forest policies and conservation policies. These are illustrated in Figure 3.3.
Land use planning is an important process for the coordination of forest policies and programmes, conservation policies and programmes, and other policies and programmes in agriculture, mining, transportation, etc. One of the important tools in land use planning for reconciling conflicts is zoning. Zoning ensures separation between compatible and incompatible land uses, while maintaining functional linkages between them. Table 3.1 provides a summary of policy instruments that governments can use to ensure linkages among conservation and forest development policies. It also gives examples of cross-sectoral linkages arising from such policy instruments.
Agriculture has perhaps had the greatest impacts on forestry. Agricultural policies have been a major cause of deforestation in many countries. In addition, landlessness and shifting cultivation have been significant causes of deforestation. In Sub-Saharan Africa, it has been estimated that encroachment of extensive agriculture into forest areas is about 0.6 million hectares annually (Sharma et al., 1994).
It is the government’s responsibility to secure harmony between agricultural policies and forestry policy. The government should create an enabling environment for sustainable agriculture, improving production from existing agricultural lands, upgrading technical services, developing rural infrastructure, developing appropriate technologies, removing policy distortions such as administered low producer prices for crops, and addressing land tenure issues. Agroforestry, the intercropping of tree and agricultural crops, for example, can both decrease the demand for new agricultural lands and increase wood supply, particularly fuelwood, as well as producing fodder and enriching the soil. Table 3.2 summarizes policy instruments that governments can use to ensure coordination among agriculture and forest development policies and shows examples of resultant linkages.
Table 3.2: Possible impacts of agricultural policies on forest development
Policy instrument |
Cross-sectoral linkages arising from policy instruments |
Impacts on sustainability of forest development |
Incentives, subsidies and support either: 1)to expand food and agricultural production; or 2) to assist activities and services other than food production and set aside schemes for agricultural land. |
1)Agricultural pricing versus wood pricing; subsidized mechanization; fiscal support to agriculture. 2)Abandonment of marginal agricultural lands; support for alternative land use; assistance to farmers in disadvantaged regions. |
National action plans for the conservation of natural resources; impacts on the sustainability of forests. Natural regeneration; reforestation for social, environmental and economic purposes on abandoned agricultural lands. |
Legislation and fiscal measures |
Encouragement of economically and environmentally sustainable practices. |
Increase in agroforestry practices; increased availability of agricultural land for alternative uses; reforestation. |
Source: Adapted from de Montalembert, 1995.
Trade, fiscal, exchange rate, privatization, public expenditure and pricing policies in various sectors can all distort forest policies if they are not well planned and coordinated. A World Bank review of Argentina’s forest sector (World Bank, 1993) revealed how inefficient macroeconomic polices resulted in negative economic growth rates. This economic decline, by reducing alternative job opportunities for the rural population dwellers, increased the attractiveness of subsistence agriculture and contributed to the loss of native forests. In Thailand, the logging ban and the suspension of all forest concessions in 1989 caused a serious wood supply shortage for the wood processing industries. This led to illegal logging in Thailand and deforestation in the neighbouring countries of Laos, Cambodia and Myanmar.
Finance and planning ministries, and ministries responsible for macroeconomic policy and their coordination, can ensure consistency and complementarity among policies and their impact on forestry. There are a number of policy instruments that governments can use to achieve cross sectoral linkages between macro-economic policies and forestry. Table 3.3 summarizes those macro-economic policy instruments and identifies their impacts on the sustainability of forestry.
Table 3.3: Possible impacts of macroeconomic policies on forest development
Macroeconomic policies |
Policy instruments and cross-sectoral linkages |
Impacts on sustainability of forest development |
Economic integration |
Concerted policies and investment programmes |
Greater national and international flow of investment in forest development; increased competition and trade in forest products |
Greater emphasis on quality of life |
Development of life indicators (health, environment, education, culture) |
Increased demand for forest conservation, recreation and community forestry |
Monetary and credit policies |
Credit allocation and subsidies, interest rates |
Discount rates, subsidies, investment capacities determine the competitiveness of investment in forest development as compared to competing activities |
Trade policies |
Exchange rates, import controls, promotion of further processing and exports |
Potential for modernization of forest operations and efficiency of processing, impact on raw material requirements |
Fiscal policies |
Tax levels, royalties |
Capturing economic rents, influencing the fiscal regime of the forestry sector and behaviour in forest management and harvesting |
Privatization and changing role of the public sector |
Legal framework, reduction in public sector’s role and expenditures |
Expansion of private sector’s role, reform of public institutions including forest agencies, impact on social and environmental functions of forests |
Source: Adapted from de Montalembert, 1995.
With increasing population comes increased demand for land for agriculture and other forms of subsistence. Actions are needed to reduce population pressures contributing to poverty and environmental degradation in many tropical countries. Table 3.4 summarizes policy instruments that governments may use to promote cross-sectoral linkages between population and forest development policies.
Table 3.4: Possible impacts of population policies on forest development
Policy instrument |
Cross-sectoral linkages arising from policy instruments |
Impacts on sustainability of forest development |
Incentives to increase job creation |
Investment in small industries and new activities/training development |
Better use of resources and capacities |
Reallocation of public funds to social welfare |
More funds for rural development in remote and poor areas in which forestry may be an important development opportunity |
Increased investment in forest management, reforestation, wood production; development of job creation through processing and marketing |
Population expansion and new settlements |
Population expansion and new settlements |
Degree of effective planning and government enforcement of incorporating forests and related activities |
Source: Adapted from de Montalembert, 1995.
The majority of energy in most tropical countries comes from forests or on-farm wood biomass. Fuelwood cutting is the second major cause of deforestation in many countries. Table 3.5 summarizes policy instruments that governments can use to ensure linkages between energy and forest development policies and shows examples of linkages that could arise.
Table 3.5: Possible impacts of energy policies on forest development
Policy instrument |
Cross-sectoral linkages arising from policy instruments |
Impacts on sustainability of forest development |
Pricing and distribution |
Availability and prices of fuels for domestic and small-scale industries; and of petrol for mechanization and transport |
Harvesting and increased commercialization of wood for fuel in forests; urban and rural demand for woodfuels; expansion of agriculture through forest clearing and marginal land cultivation |
Energy self-reliance; research development of alternative fuels |
Increased reforestation; harvesting; use of urban waste or industrial residues; integration of electricity systems |
Better management of forests; improved forest industrial development |
Source: Adapted from de Montalembert, 1995.ù
Many tourism activities are forest-based. These include various ecotourism activities, wildlife viewing, camping and hiking. As a result there is a potential for conflicts without cross-sectoral planning. Tourism can impact on forestry in unusual ways. For example, the 220,000 tourists who visited Nepal in 1986 contributed to increased fuelwood consumption, added to the fuelwood shortage and contributed to increased forest degradation (FAO, 1993). Table 3.6 summarizes policy instruments that governments may use to manage the linkages between tourism and forest development policies and shows examples arising from the linkages.
In addition to the policies discussed here, there are other policies and institutions that impact on forestry policy. These include the legal system, discussed in Chapter 4, the institutional framework, discussed in Chapter 5, and the structure of property and tenure rights, discussed in Chapter 6. The next section discusses the policy process and the steps in formulating new policies or revising existing ones.
Table 3.6: Possible impacts of tourism policies on forest development
Policy instrument |
Cross-sectoral linkages arising from policy instruments |
Impacts on sustainability of forest development |
Investment in rural jobs, infrastructure and other activities |
Ecotourism investment; slow down of internal migration |
Reforestation; protection and conservation of natural resources; increased rural income and wood demand for infrastructure |
Legislation and incentives to protect aesthetic and cultural values in rural areas |
Protection of rural environment, landscape and amenities |
Increased control on forestry activities; more protected areas; rural income; education in environmental issues |
Source: Adapted from de Montalembert, 1995.
A clearly defined process is required for sound decision-making and good policy implementation. It also serves to guide the formulation of new, and the revision of, existing forestry policies. Having a clear, well-defined policy process will improve the transparency and efficiency of government policy making, and facilitate people’s participation in the process.
Many models of public policy process exist. The policy process is often described as a problem-solving process. Several texts describe problem-solving processes that match policy processes (e.g. Koberg and Bagnall, 1983; Hanks et al., 1977).
The policy model and process described in this chapter involves six steps: 1. Problem identification and definition; 2. Policy agenda; 3. Policy formulation; 4. Policy adoption; 5. Policy implementation; and 6. Policy evaluation.
The first step in policy development involves identification of a problem. What are the problems that demand public policy attention? Which groups of individuals seek changes in the current policy (status quo) and why? Possible participants in problem identification and definition may include senior policy-makers in ministries or planning bureaux, politicians, government bureaucrats and professionals, non-governmental organizations, state enterprises, industrial forestry companies, forest communities, indigenous peoples, the media, or academic institutions.
For changes in existing policies, problem identification starts with a review of experience and problems with the existing policy; what has worked well, what has not met the objectives, what has been learned from implementation of the existing policy.
Not all problems identified in the first stage will merit further policy analysis. Many will be minor, or reflect only narrow interests rather than broad public interest. In this second stage, the need to address the problem has to be recognized. In development of the policy agenda, government will be the major player, and resources will be assigned to deal with the problem and develop the policy analysis agenda. At this stage, it is important to review related policies and determine the nature of their relationships to either the new or old policy. This will ensure that the cross-sectoral linkages are complementary, not conflicting, and avoid policy distortions. For forest contractual arrangements, it is particularly important to ensure that one contract does not jeopardize the realization of other strategic objectives.
Once the policy agenda has been developed, policy formulation begins. At this stage, acceptable and alternative courses of action are identified and developed to deal with the problem issues. The array of technically feasible courses of action may be large, but many may be rejected as inconsistent with the policy principles identified earlier in the chapter. It is important at this stage to include all the possible, but feasible, policy alternatives taking into account the policy principles of ecological sustainability, economic efficiency and community sustainability, and balanced decision-making.
The range of technically feasible approaches is narrowed to a smaller set of economically and administratively feasible alternatives. The final choice is influenced by concern to avoid political, environmental and economic risks, to minimize administrative costs and to improve administrative procedures. Policy adoption implies that the government intends to follow the new course of action. Adoption also implies that the funds, organization and personnel must be made available to implement the new or revised policy.
It remains to choose among various ways of implementing the policy decision. There are alternative policy instruments from which to choose, and various ways of organizing implementation activities. For example, implementation activities may be carried out by the government directly or under contract with private parties. They may be implemented under forest regulations, under performance requirements, or by means of performance incentives. Measures to implement contractual arrangements through regulations, performance requirements, or incentives will occupy much of the discussions in the following chapters.
Administrative agencies are the most important actors in implementing new or revised policies, but the legislature or the courts may also be involved. Legislatures may circumscribe administrative discretion through legislation, or by selectively funding individual items in agency budgets. Although courts do not enact legislation, they are often asked to interpret legislation, regulations, or administrative procedures.
The policy framework traces a policy from the problem formation stage to its evaluation stage. Adding evaluation to the process introduces a feedback process and makes policy-formulation or revision an iterative process. Policy evaluation makes it easier to adapt or modify forest policies to accommodate changing situations, or newly emerging realities. For example, forest utilization contracts designed one or two decades ago may need modification or revision because of changing forest situations, altered economic situations, or changing societal preferences among forest uses or forest preservation. A formal process of evaluation should be established. Critical review leads to re-evaluation of objectives and means and, if necessary, policy change. In revising existing policy, it is important to identify conflicts between the existing policy or proposed changes, and related policies, and to resolve these conflicts.
Governments continually receive informal evaluation and criticism of their policies from lobby groups, non-governmental organizations, commissions of inquiry, political debate and a variety of other channels. Informal feedback or formal evaluation of the policy may produce minor or major changes in policy, legislation, regulations, or administrative procedures.
In the real world, policy-making is often a less orderly process than the policy-making sequence presented here, often with confusing and shifting mixtures of players and interest groups, bureaucratic manoeuvring, lobbying and political influence. Policy initiatives are frequently undertaken in response to crises, with policies designed hastily to meet the urgency of a particular time, and without much thought of conflicts with existing policies.
Katrina & Pearce, David W. 1994. The causes of tropical deforestation: the economic and statistical analysis of factors giving rise to the loss of tropical forests. London. UCL Press.
G. 1993. Changing trends in forest policy in Latin America: Chile, Nicaragua and Mexico. Unasylva, 175(44): 29-35.
Montalembert, M.R. 1995. Cross-sectoral linkages and the influence of external policies on forest development. Unasylva, 182(46): 25-35.
Montalembert, M.R. & Schmithüsen, F. 1993. Policy and legal aspects of sustainable forest management. Unasylva, 175(44): 3-9.
P.V. 1992. Forest resources policy: process, participants and programs. McGraw-Hill, Inc. New York. 504 pp.
1993. Forestry policies of selected countries in Asia and the Pacific. FAO Forestry Paper 115. Rome.
K., L. Belliston & Edwards, D. 1977. Design yourself. William Kaufmann Inc. Calif. 142 pp.
M.R., Graham, R.T., Boyce, W.H., Moir, D.A., Ferry, L., Reynolds, R.T., Bassett, R.L., Mehlhop, P., Edminster, C.B., Block, W.M. & Corn, P.S. 1994. An ecological basis for ecosystem management. USDA Forest Service, Gen. Tech. Rep. 246.
D. & Bagnall, J. 1983. The all new universal traveller. A soft-systems guide to creativity, problem-solving and the process of reaching goals. William Kaufmann Inc. Calif. 128 pp.
R. & Gillis, Malcom. 1988. Public policies and the misuse of forest resources. New York, World Resources Institute, 105 pp.
F. 1995. Evolution of conservation policies and their Impact on forest policy development: the example of Switzerland. Commonwealth forestry review, 74(1): 1-14.
Emil & Ullsten, Ola. 1999. Our forests, our future. Report of the World Commission on Forests and Sustainable Development, Cambridge University Press, Cambridge, UK.
Narendra P. (ed.). 1992. Managing the world’s forests: looking for balance between conservation and development. Kendall/ Hunt Publishing Company, Debuque, Iowa, USA.
N.P., Rietbergen, S., Heimo, C.R. & Patel, J. 1994. A strategy for the forest sector in sub-Saharan Africa. WE Technical Paper No 251. Washington, DC, World Bank.
Bank. 1993. Argentina-Forestry Sector Review. Washington, DC.
Resources Institute (WRI). 1996. World resources report 1996-97. Washington, DC, World Resources Institute.
