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Chapter 1

The predicted, reduced forest production of industrial roundwood from natural forests, owing to a combination of factors including changes in land use patterns, depletion of the resource or withdrawal of forest areas from production for the provision of environmental services, is well documented.

The potential production of intensively grown high-yielding planted forests is such that in theory the present global demand for raw material for pulp could be supplied from an area equivalent to only 1.5 percent of the world's closed forest area (IIED, 1996).

Demand for forest products will continue to grow as world population and incomes grow. However, projections of wood consumption are lower than in the early 1990s and there have been improvements in forest management, productivities and yields from harvesting and processing technologies, expansion in new planted forest areas, and recognition of the critical role of trees outside forests (FAO, 2002).

Role of planted forests for industry

The average annual demand for industrial roundwood is projected to increase by 1 percent per year over the coming decade. These projections reflect an increasing trend in the consumption of pulpwood for reconstituted wood panels and paper. Pulpwood consumption is projected to increase from 700 million cubic metres in 1995 to around 1.33 billion cubic metres by 2045. Along with changes to the quantity and type of wood demanded, there are also changes to the regional demand patterns. Based on consumption projections to 2010, Asia is emerging as an important future market for wood products, driven by increasing economic development and population growth (Broadhead, 2002).

Table 1.1. Predicted industrial roundwood supply from planted forests by region













Europe and the former Soviet Union




North and Central America








South America








Source: Global Outlook for Plantations ABARE Research Report 99.9, 1999.

This level of industrial roundwood production from planted forests will require a significant increase in production area and/or gains in productivity.

The future expansion of planted forests and their role in supplying wood products will largely reflect the competitiveness of planted forest wood against other sources of wood and product substitutes, and the competitiveness of planted forests against agriculture, urban and other land uses. With prudent planning and management they provide renewable sources of wood and are energy efficient compared to product substitutes.


Since the expansion of planted forest programs in the tropics in the 1970s, planners have increasingly adopted participatory approaches in planted forest programmes. Examples are widespread in smallholder plantings involving the rural poor (Arnold and Dewees, 1997) and multi-purpose planted forests for biodiversity, production and protection purposes (Kanowski, 1997). However, examples of industrial planted forests established as a result of multi-stakeholder dialogue are less prevalent (see Fikar, Chapter 9 and Mack, Chapter 14 of this book; Arnold, 1997). The necessity of multistakeholder negotiation and dialogue increases as fewer planted forests are established directly by the state on permanent public forest land and more is being established by the private sector in a range of land tenurial instruments (management contracts, leases, partnerships, outright ownership) with a range of partners.

Kanowski (1997) indicated that the sustainability of planted forests will be enhanced and the benefits of investments fully realized where their purpose and practice are embedded within the broader social and economic context. In the future, the key questions will not be whether there will be enough wood, but rather where it should come from, who will produce it, and how it should be produced (FAO, 2002) .

Kanowski (1997) indicated that the environmental and social impacts of planting schemes pose the greatest challenge to foresters in the new millennium. To date there has been no widely available guidelines or checklists to assist corporate and smallholder investors entering into partnerships for industrial roundwood production. The structure, content and deliberations of this joint CIFOR/FAO workshop were designed to produce such guidelines aimed at facilitating the transparency of negotiations and the development of mutually beneficial partnerships. The workshop brought together the expertise from key stakeholders including national, international companies, government, NGOs, extension and research agencies from South Africa and Indonesia.

Studies commissioned

In 2000, FAO commissioned a report entitled "Global survey and analytical framework for forestry outgrower arrangements" led by Desmond and Race from the Faculty Department of the Australian National University. This was a global overview prepared from a postal survey and literature review. The overview identified the need for clear mechanisms for mutually beneficial partnerships between tree growers and private industry. In the interim between the publishing of that report and now:

IIED has conducted country case studies in several countries including South Africa, India, China and Indonesia, led by James Mayers and Sonya Vermeulen. A series of six detailed studies and around 60 examples of various types of partnerships were published in July 2002 under the title "Company-community forestry partnerships: from raw deals to mutual benefits".

CIFOR has conducted a series of comparative case studies between Indonesia and Philippines led by Ani Adiwinata Nawir. Publications are being prepared under the title, "Towards mutually beneficial partnership in outgrower schemes".

How guidelines to assess mutually beneficial partnerships are located in other ongoing initiatives

The idea towards sustainable forest management (SFM) has encouraged massive initiatives to create sets of guidelines, criteria and indicators to ensure that sustainability objectives are achievable. For years, the focus of these tools has emphasized natural forests management and not plantation management (see Table 1.2). The issues of developing forestry plantation in the tropics have become controversial owing to unsustainably large-scale managed plantations and the rights of surrounding communities have been disrespected. There have been growing pressures towards transferring the greater benefits of large-scale plantations to these communities, especially in cases where these plantations have been developed by converting natural forests on which significant numbers of people depend for their livelihood.

In 1997, the International Tropical Timber Organization (ITTO) developed the guidelines for the establishment and sustainable management of planted tropical forests, which focus on large-scale management operations. In these ITTO guidelines, socio-economic considerations relating to the impacts of plantations on the communities were included in the feasibility assessment (p. 8), and more active involvement during the postestablishment management (p. 19). In 2000, CIFOR published the set of Criteria and Indicators (C&I) for Sustainable Plantation Forestry in Indonesia and India. Similar to ITTO Guidelines, the assessment process focuses at the level of Forest Management Unit. The CIFOR C&I set (2000) under the criteria entitled "Socio-economic performance of local community is enhanced" discusses the expectations for the plantations to provide greater contribution to the local communities, such as increasing the people's incomes and opportunities to work and be trained by the company, and to independently grow timber to supply the company with raw material (p. 21).

The two sets agree on the need to address socio-economic issues by more actively involving the local people/communities in economically more productive ways. Responding to various problems, mainly political and social, partnerships schemes (including outgrower schemes) between company and communities have been initiated. The need is first for an agreement and then to make it sustainable, feasible and effective. Many partnerships failed in the past owing to lack of transparency and accountability in the process of setting up the agreement. The key to sustaining partnerships in the long term is by ensuring mutually beneficial partnerships for both parties (company and community). The company or other parties who would like to initiate outgrower scheme partnerships need specific guidelines to ensure that companies invest in partnerships that will be socially and economically feasible in the long run. In fulfilling these needs, the Assessment Guidelines for Mutually Beneficial Partnerships were set up and provide the groundwork to be adjusted further. The CIFOR Assessment Guidelines of Mutually Beneficial Partnerships is the application of referenced sets that are mainly generic. These guidelines focus on the operational level, specifically on the forest management unit of small-scale plantations.

Table 1.2. Focuses of assessment of initiatives on assessing forest practices

Focuses of assessment

Initiatives on assessing forest practices

Natural forest management

Criteria and indicators in the ongoing international processes (established in 1995 by FAO and still ongoing)

CIFOR Generic Template of Criteria and Indicators on Sustainable Forest Management for Natural Forests (1999). This focused on the Forest Management Unit (FMU)

Large-scale planted tropical forests/ plantation forestry at forest management unit (FMU)

ITTO Guidelines for the Establishment and Sustainable Management of Planted Tropical Forest (1997)

CIFOR Criteria and Indicators for Sustainable Plantation Forestry in Indonesia (2000)a

CIFOR Code of Practice (2001)

Assessment guidelines for mutually beneficial partnerships to develop small-scale plantations

Principles and analytical framework of FAO Global Survey and Analytical Framework for forestry out-grower arrangements (2000)

CIFOR Assessment guidelines of partnerships in outgrower schemes (2000)b

CIFOR C&I for Sustainable Plantation Forestry was also developed for India.
This set was used as the basic set to be discussed in the FAO/CIFOR meeting (May 2002).

Complementary links

Figure 1.1 shows how different sets of criteria and indicators are linked together. The sets of CIFOR Generic Template of Criteria and Indicators on Sustainable Forest Management for Natural Forests (1999), CIFOR Criteria and Indicators for Sustainable Plantation Forestry in Indonesia (2000) and FAO Global Survey and Analytical Framework for forestry outgrower arrangements (2000) provided the solid basis in defining the CIFOR assessment guidelines for mutually beneficial partnerships to be used to assess the outgrower schemes in Indonesia and the Philippines.

The assessment guidelines mostly focused on partnership arrangements. However, these should be integrated in line with the technical aspects of Sustainable Planted Forests/plantation forestry. In the Assessment Guidelines, establishing small-scale plantations in outgrower schemes should follow the appropriate code of practices and other technical requirements to minimize risks. The ITTO Guidelines and CIFOR's Code of Practice in Linking C&I to a code of practice for industrial tropical tree plantations (2001) could become reference tools. The CIFOR Assessment Guidelines for Mutually Beneficial Partnerships were designed by following the hierarchical systems of Principles, Criteria, Indicators and Verifiers, as used by the earlier CIFOR sets (1999, 2000) (refer to Annex 4). Verifiers were not discussed since the users should develop these on the basis of locally specific conditions and situations.

Workshop rationale

In consultation with the proposed participating agencies, primarily the key institutions conducting research activities related to outgrower scheme issues, it was agreed that the time was appropriate to take this issue forwards and build on research already conducted by the various collaborating agencies. Immediate and logical action following from these various research initiatives would be to develop a joint proposal(s) for an action-learning programme based on guidelines for best practices drawn from various research initiatives. The proposed meeting between concerned agencies is a good opportunity to discuss collaborative research action agendas. Participants included representatives from research and extension agencies, private companies and non-governmental organizations (NGOs).

Objectives of the workshop: agendas to move forwards

The following suggested meeting objectives were circulated to participants prior to the meeting:

A preliminary consensus among the parties based on the literature and case studies of participating organizations of the principles, criteria and indicators and verification for mutually beneficial partnerships, and assessment criteria to identify potential sites based on sociocultural, economic, institutional and biological suitability for facilitating the scheme. These sets of principles and criteria are likely to devolve to subsets according to particular land tenure regimes, the extent of participatory contractual negotiations, and products and market level, etc. It will not be feasible in a two-day meeting to complete the discussion on this issue. Indeed, owing to so much variation and case-specific situations, it is neither a realistic nor a desirable objective. However, broad agreements of criteria to be included should be reached if joint activities are to move forwards.

Joint development of programme and procedures for developing a draft version of best practices for mutually beneficial partnerships, and a Programme of Action Learning of testing those guidelines and tools in partnership with private companies, research and extension. The best practices guidelines aim to facilitate pluralistic extension services and third parties in consideration and development of such contracts. Best practice guidelines to be based on the case study literature, agreed criteria (Agenda item 1) and testing sites (Agenda item 3). (Guidelines to be accompanied by a training manual.)

Potential study site selections based on assessment criteria (Agenda item 1) for a proposed Programme of Action to test guidelines and tools (Agenda item 2) in partnership with private companies, research and extension agencies. Referring to the identified criteria (Agenda item 1), selection will be based on secondary data, and participants knowledge, to identify sites or countries where outgrower schemes possibly have the greatest potential for addressing sustainable forest management, national tree product market issues and outgrowers livelihoods. The assessment will be conducted according to a stratified ranking of key considerations. Selection will also include consideration of different subset of principles and criteria. Comparative advantages on geographical focuses of concerned participating agencies (FAO, IIED, ODI, CIFOR) will also be discussed.

Items 2 and 3 would form the basis of a project document to be further developed and jointly submitted for funding by interested participating agencies.

The workshop used the FAO-commissioned Månsson report (see Chapter 4, Månsson, 2002) as the framework for discussion. This report synthesizes the four major research inputs coming from FAO, CIFOR, IIED and Tyynelä, Otsamo, and Otsamo. Månsson's assessment of the research reports is broadly framed in the principles of sustainable plantation forest management and more particularly in the framework of mutually beneficial partnerships in outgrower schemes: principles, criteria & indicators developed by CIFOR.

During the meeting at CIFOR in Bogor, Indonesia, as reflected in the discussion during focus group sessions, one could identify that different groups (government, NGOs, corporates and research institutions) provided complementary perspectives and inputs to the Assessment Guidelines of the Mutually Beneficial Outgrower Schemes within the Sustainable Plantation Forestry Management (SPFM) framework. The applicability of the Guidelines was also considered. The inputs of participants were incorporated into the guidelines and this synthesis is presented in Chapter 2.


Arnold, J.E.M. 1997. Trees as outgrower crops for forest industries: experience from the Philippines and South Africa. Rural Development Forestry Network, Network paper 22a (winter 1997/98). London, UK, Overseas Development Institute.

Arnold, M. & Dewees, P.A., eds. 1997. Farms, trees and farmers: responses to agricultural intensification. London, UK, EarthScan.

Australian Bureau of Agricultural Resource Economics (ABARE). 1999. Global outlook for plantations. ABARE Research Report No. 99.9. Canberra, Australia.

Broadhead, J. 2002. Forest products trade and policy in relation to outgrower schemes. Document commissioned for FAO. Rome, FAO.

CIFOR. 1999. CIFOR criteria and indicators generic template. The Criteria and Indicators Toolbox Series No. 2. CIFOR C&I Team.

CIFOR. 1999. CIFOR criteria and indicators on sustainable forest management for natural forests. Bogor, Indonesia.

CIFOR. 2000. Criteria and indicators for sustainable plantation forestry in Indonesia, by D. Muhtaman, Siregar, C&P. Bogor, Indonesia, Hopmans.

CIFOR. 2000. Towards mutually beneficial partnerships in outgrower schemes: learning from experiences in Indonesia and the Philippines (first draft), by A.A. Nawir & M. Calderon. PLT Program Plantation Forestry on Degraded or Low-Potential Sites. Bogor, Indonesia.

CIFOR. 2001. CIFOR Code of Practice. Linking C&I to a code of practice for industrial tropical tree plantations, by J. Poulsen, G. Applegate & D. Raymond. Bogor, Indonesia.

Desmond, H. & Race, D. 2000. Global survey and analytical framework for forestry outgrower arrangements. Rome, FAO.

FAO. 2000. Forestry Department Fact Sheet. Forest Information Notes: criteria and indicators for sustainable forest management. Rome.

FAO. 2001. Forestry outgrower schemes: a global view. Based on the work of D. Race and H. Desmond. Edited by D.J. Mead. Forest Plantation Thematic Papers. Working Paper FP/11.

FAO. 2002. World Agriculture:Towards 2015/2030. Rome.

IIED. 1996. Towards a sustainable paper cycle. London, UK.

Kanowski, P.J. 1997. Afforestation and Plantation Forestry: Plantation Forestry for the 21st Century. Tenth World Forestry Congress, Antalya, Turkey, 1997. Topic 12.

International Tropical Timber Organization (ITTO). 1993. Guidelines for the Establishment and Sustainable Management of Planted Tropical Forest. Yokohama, Japan.

van Bueren, L. & Bloom, E.M. 1997. Hierarchical Framework for the Formulation of Sustainable Forest Management Standards. Tropenbos.

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