FOOD AND AGRICULTURE ORGANISATION OF
THE UNITED NATIONS (FAO)
REGIONAL COMMUNITY FORESTRY TRAINING
CENTER FOR ASIA AND THE PACIFIC (RECOFTC)
NETHERLANDS DEVELOPMENT ORGANISATION
The Millennium Development Goals agreed by 189 nations at the United Nations Millennium Summit in 2000 call for the eradication of extreme poverty, while simultaneously ensuring environmental sustainability. Since a large proportion of the world’s poor remain heavily dependent on forest resources, there is a clear need to explore new prospects for the world’s forest-dependent communities. New strategies and approaches are needed to give opportunities for the poor to benefit from forests in ways that complement or substitute for existing livelihood strategies.
In recent years, forest-based poverty reduction strategies have largely focused on enterprises that process and market non-timber forest products (NTFPs). Substantially less emphasis has been given to the more complex and risky, but potentially much more lucrative, aspects of timber harvesting and processing.
In most forests, timber is commercially the most valuable resource. Globally, timber provides raw materials and employment for millions of people. But timber harvesting and processing are seldom considered at the forefront in strategies to alleviate rural poverty. There are several reasons for this. Firstly, modern timber harvesting and processing have evolved to be highly capital-, skill- and technology-intensive operations, effectively precluding those without ready access to capital and technology and those with limited skills. Secondly, the large potential profits to be earned from the timber have led to the sector being dominated by powerful and elite individuals and corporations, characterized in many areas by opaque transactions and shadowy or illegal activities. The poor are also often constrained from the timber sector by policies and regulations that hinder access of the poor to timber resources and their active involvement in managing timber enterprises.
A widespread assumption by policy makers is that allowing the poor to access and use forests will result in forest degradation or destruction (Scherr et al. 2004). Consequently, forest-dependent poor have been first in the line of fire for restrictive and punitive government measures on forest use. Given that the use of forest products by rural communities is often a livelihood strategy of “last resort” (Byron, 2006), such policies effectively undermine poverty reduction strategies and exacerbate existing conditions of poverty. Not surprisingly, therefore, only limited numbers of poor forest dwellers are currently benefiting substantially from timber harvesting and wood processing. However, examples of sustainable forest management consciously oriented toward achieving poverty reduction objectives are increasingly beginning to emerge.
To help assess experiences and explore new initiatives, the International Conference on Managing Forests for Poverty Reduction: Capturing Opportunities in Forest Harvesting and Wood Processing for the Benefit of the Poor was convened 3-6 October 2006, in Ho Chi Minh City, Vietnam. The conference specifically aimed to draw out recent experiences on pro-poor forest harvesting and processing, and to develop strategies for further enhancing the effective involvement of the poor in these activities.
The poverty reduction objective
Poverty is commonly defined as pronounced deprivation in well being, in terms of material deprivation (in income and consumption), lack of education and health services, vulnerability and exposure to risk, lack of opportunity to be heard, and powerlessness (World Bank 2000).
This definition highlights the multiple dimensions of poverty, the alleviation of which calls for a multi-dimensional approach. Poverty alleviation encompasses two discrete meanings, namely poverty mitigation and poverty reduction. Poverty mitigation implies that people are prevented from becoming poorer whereas poverty reduction describes a situation where people are being lifted out of poverty (Angelsen and Wunder 2003). It is necessary to recognize that these terms articulate different meanings and hence implications for the poor, and that the goals encompassed in the MDGs relate specifically to poverty reduction.
The role of timber in poverty reduction
The contribution of forests to poor people’s livelihoods is largely unrecorded in national statistics because the use of forest products for subsistence and local trade is difficult to track and measure. According to FAO (2003) there are three ways in which forests contribute to poverty reduction: i) by providing the forest resources that are important for maintaining well-being (e.g. medicinal plants, food resources, erosion control); ii) through continued access to forest resources and rents (e.g. access rights, income from forest products); and iii) by increasing forest production values (e.g. payment for environmental services, recreational uses).
Timber harvesting, processing and marketing (i.e. the timber-value chain) are generally not activities that explicitly target poverty reduction for a range of reasons. Barriers that restrict access to forest resources, such as lack of secure, long-term tenure and gaps in knowledge and technology, make it difficult for the poor to be in the “driving seat” of commercial timber exploitation. More often, the poor provide cheap labor for forest operations managed by the state or large commercial ventures. However, initiatives involving forest-dependent poor are beginning to emerge that can provide important insights into the opportunities and challenges faced by the poor in their attempts to benefit from commercial timber operations.
Commercial forestry offers opportunities to address, in various ways, each of the five aspects of poverty identified by the World Bank. Material deprivation can be addressed directly by increasing income through improved access to timber harvesting and processing activities. This requires increased involvement of forest-dependent poor in the timber-value chain. Increased income at the household or community level can in turn improve access to educational and health services, which enhance economic opportunities and well-being, as well as reducing vulnerability in the face of rapid social change and environmental stresses such as drought or flooding. Additionally, participatory processes that support poor people’s involvement in decision making related to the management and utilization of forests and commercial forestry operations help to foster greater political empowerment and opportunities for marginalized voices to be heard more broadly. However, to date, many of these potential avenues are largely unexplored and more research is needed to understand how and to what extent they might be realized.
While conventional approaches to commercial forestry operations focus on capital- and technology-intensive enterprises, forestry undertaken for, and by, the rural poor presents unique environmental and social benefits.
The International Conference on Managing Forests for Poverty Reduction discussed opportunities for, and constraints to, managing forests and processing wood for poverty reduction. Five important aspects of forest harvesting and wood processing were highlighted in the Conference themes and elaborated by the two keynote speakers (Chapters 2 and 3):
Policies and legislation
Policies and legislation provide the essential foundation of rules and regulations that guide sound forest harvesting and management practices. The forestry sector in many countries is constrained by weaknesses in the legal framework, including poor enforcement of laws and regulations, for reasons ranging from lack of capacity and resources to outright corruption. Illegal logging undermines opportunities for sustainable, pro-poor forest management by channeling cheap timber into the market that legitimate enterprises (both large and small) are unable to compete with. Policies also sometimes designate preferential subsidies and access rights to large-scale operations, further disadvantaging small-scale forestry operations.
Discriminatory rules and regulations present a fundamental challenge to small-scale commercial forestry. Even though most laws and regulations were not intended to be exclusionary, many were formulated to address large-scale forestry operations and too complex and demanding for small-scale operators. Small-scale forestry operations often involve people with sound forest-related skills, but without the specific expertise needed to negotiate the complex rules and regulations prescribed for harvesting and processing of forest products. Pulhin and Dugan (Chapter 5) describe these constraints in detail, including the need for poor rural communities in the Philippines to hire costly professional foresters to assist in preparing complex forest management plans in order to gain approval to harvest even small volumes of timber under the country’s Community-Based Forestry Management Program. Some initiatives are succeeding in breaking through these barriers, however. Cuny et al. (Chapter 4), for example, describe how a community forestry approach is contributing to the socio-economic development of a community in Cameroon despite major challenges in implementation.
Given the risks and long timeframes associated with timber production, and the insecurity of access to resources for many rural people, the success rate for small-scale forest-based enterprises is, not surprisingly, low. Sound forest management that shares benefits with the rural poor requires policies and legislation in many countries to be revised to better reflect the realities on the ground. A key area of action emerging from the conference was the need to make policy-development processes more transparent to ensure greater representation of marginalized groups, including the rural poor.
There are substantial revenues to be made from timber, but economies of scale often favor large-scale commercial enterprises. For poverty reduction purposes, it is important to explore the conditions under which small-scale forest enterprises can be truly competitive in forest product markets. For example, products with prospects for growth in demand in local, national or international markets, or niche products with a limited number of producers, may offer the best potential for success for small-scale enterprises (Scherr et al.2004). In all cases, sound analyses and feasibility studies are essential in order to avoid misdirected investment. Kelly and Aryal (Chapter 8) elaborate on the importance of good market information and feasibility analysis (over the market-value chain) in their case study describing the experiences of two sawmills in Nepal that suffered large losses due to a inadequate feasibility assessment before entering the market. The sawn timber they produced exceeded market demand, resulting in far lower financial returns than anticipated.
It is possible, however, for small-scale producers to take advantage of knowledge about local markets and their proximity to local consumers. There are also opportunities for small-scale producers to capture more of the timber-value chain through added processing, for example, through on-site wood processing.
At the village level, community forestry user groups have played an important role incollective forest management. Chand and Ghimire (Chapter 7) reveal how community forestry user groups can, with support and mentoring, broaden their mandate to include business management. Their case study describes the experience of a community forest user group in Nepal that has earned more than US$24,000 from their pine plantation to date, with income steadily increasing over the last four years.
Forest management modalities and institutional issues
Local-level rules can play a crucial role in achieving pro-poor development in forestry, as highlighted in the case of Bhutan by Temphel and Beukeboom (Chapter 11). The impact of policies and regulations at the local level is shaped not only by their implementation and enforcement, but also by the ways in which target groups respond to them (Tyler and Mallee 2006). Hence, outcomes of policy implementation often rest squarely on local conditions and are subject to influence from a range of actors, including local government, communities, NGOs, private enterprises and individuals, who all interpret and implement rules and regulations according to their specific context and interests.
Poor people often face barriers to full participation in decision-making processes, such as community meetings, if they are not specifically targeted and supported. Moreover, benefits that accrue from community activities are often unequally shared, based on factors such as gender, age, social status or ethnicity (Mahanty et al. 2006). The paper by Acharya (Chapter 10) highlights that approaches that target and prioritize marginalized groups through appropriate institutional arrangements, such as through preferential membership or access to shares in enterprises, have shown some success in addressing this constraint.
Vickers and Mackenzie (Chapter 12) address the issue of pro-poor benefit sharing and participation in describing a case from Vietnam. They elaborate how the decisions surrounding institutional arrangements for a community forest timber harvesting scheme are dominated by rich men in the village who also capture most of the benefits. In other cases, institutional mechanisms to protect the interests of the poor have been more successful and there is greater focus on equitable sharing of benefits (see for example Bampton and Cammaert (Chapter 9) and Bao Huy (Chapter 6)). Some of the best results for delivering benefits to the poor seem to be through affirmative action that gives preferential support to disadvantaged groups and other similar pro-poor policy mechanisms.
Large-scale commercial forest enterprises have advantages in accessing financial and technical resources and the ability to establish economies of scale. In contrast, small-scale enterprises often have advantages related to low-cost labor inputs and the potential to react quickly to changing market conditions. However, the influx of harvesting technologies without capacity building, good planning and compliance with sustainable practices can equally threaten the sustainability of both forests and local enterprises. In the case of chainsaw milling in Ghana, Pinard (Chapter 14) finds that the poor are easily able to procure chainsaws in spite of a ban on chainsaw milling. Since the benefits from authorized large-scale logging do not accrue to the poor, there is widespread support among poor households for chainsaw milling despite its illegality and high levels of waste. Supplementing the introduction of improved technologies, with improved planning and better compliance with sustainable practices, could increase benefits to the poor, while enhancing the sustainability of operations, a point also supported by the PNG case by Akivi (Chapter 15).
In addition to appropriate equipment for logging and milling, physical access to markets also plays a vital role in delivering benefits to small-scale forestry. Poor people living in remote areas are often impeded in gaining access to markets because the modes of transportation are few and infrastructure is poor. Mohns (Chapter 13) explores methods of transporting bamboo logs in Laos where access to markets from remote forest areas is constrained by lack of roads or skid trails. Horse skidding and bamboo rafting on rivers both offer good prospects for expanding markets. Such approaches illustrate how traditional technologies can be effectively adapted to address modern challenges.
Appropriate and sustainable technologies and affordable equipment do exist, but they need to be applied in appropriate ways that fit the scale and capacities of small-scale producers. Where production technologies are locally adapted and properly applied, adoption risks are minimized, and maintenance costs are reduced.
Marsh (Chapter 20) highlights how good market knowledge and access can help to identify emerging opportunities for small scale producers. This is, however, a key challenge for small-scale enterprises that typically lack the experience and ability in gathering information about market conditions. Despite these obstacles, several successful experiences of small-scale enterprises can be found. Demonstrating that such challenges and solutions are not unique to developing countries, Birkemeier (Chapter 16) highlights how a small-scale, family forestry enterprise in a rural community in the United States achieved success by developing a strong business focus and by controlling the entire value chain from small-scale harvesting all the way to installing custom flooring and cabinets in the homes of the end consumers.
Landis (Chapter 17) complements this vision, by describing the success of a training program for artisans, introducing “old-world” technology in Honduras. From the outset there was a focus on local demand and low-cost technologies. These pragmatic approaches have helped to effectively involve local artisans. Moreover, a thorough assessment of market opportunities before establishing the business was a crucial element of success.
The formation of associations can also help leverage advantages of scale, pool market information and improve bargaining power and operational conditions. By pooling resources and product outputs, such associations are better able to compete with large-scale commercial operations for market access and share. The combined strength of such associations can also help overcome bureaucratic constraints, reduce transaction costs of legal compliance, and enhance the ability to collect market information. Macqueen (Chapter 18) highlights how associations can challenge the power of middlemen and obtain better returns for their products. In a case from Indonesia, Barr (Chapter 19) further illustrates how the formation of a community cooperative helped to reduce the transaction costs in timber certification, and successfully received Forest Stewardship Council group certification less than two years after its establishment.
It is evident that small-scale, forest-based enterprises can be important players in sustainable forest management, while simultaneously increasing benefits to a wide range of beneficiaries. The conference presentations and discussions underscored that forests can contribute to poverty reduction if:
Related to the first condition, it is evident that illegal logging and unsustainable management practices are responsible for the loss of forest resources and the deflation of timber prices in many areas. If sound forest management principles are applied and harvesting volumes do not exceed allowable cuts, then forest resources can be sustainably managed. Long-term perspectives and planning on the part of forest enterprises play important roles in sustainable harvesting and maintenance of a healthy forest resource base.
The second condition requires the development of policies and regulations that guarantee and simplify access to forest resources by the rural poor and support their effective involvement in wood-processing enterprises. Instead of making forest resources available only to large, well-connected enterprises, the rural poor should be granted ready access to forests through clearly defined, well-supported and fully protected rights together with the responsibility to plan and effectively manage these forests. With a stronger focus on pro-poor forest policies, both poverty reduction and sustainable forestry are made more likely.
The third condition calls for changes in how we value the products provided by forests. Greater emphasis needs to be placed on value-adding processes that maximize the benefits from timber that is derived from forests. With support in making market linkages, small-scale producers have been successful in efficiently process wood into higher value products and targeting high-value markets. The rural poor will also likely realize increased benefits when there is greater appreciation and recognition of the full range of benefits from forests, including non-timber forest products, biodiversity, clear water, carbon sequestration, ecotourism and other values.
The potential for local forest management to contribute toward poverty reduction objectives warrants further exploration. Small-scale logging techniques, using appropriate labor-intensive technologies can result in far less environmental impacts than those of large-scale forest operations. One area that would benefit from further exploration is that of opportunities for small-scale forest enterprises to develop partnerships with large-scale commercial entities, capitalizing on the comparative advantages of both. Small-scale producers often have access to labor and (in some cases) control of the land and resources, whereas larger enterprises usually have greater access to capital, skills, technologies and markets (Angelsen and Wunder 2003). There would appear to be considerable scope for melding the strengths of these two groups.
The International Conference on Managing Forests for Poverty Reduction concluded that it is timely to build constructive linkages among the various stakeholders involved in forestry and poverty reduction. Mutually beneficial partnerships among local communities, policy makers, the private sector, development organizations and donors are essential to accelerate progress in managing forests for poverty reduction and enhancement of environmental sustainability. The conference statement earlier in these proceedings, adopted by all participants, emphasizes these opportunities.
The chapters that follow discuss in detail the opportunities and constraints related to forest harvesting and wood processing purposefully oriented to benefit the poor. Individual papers provide valuable insights into numerous pioneering initiatives from around the world. Collectively, they underscore the daunting challenges of these approaches. At the same time, however, they provide cause for optimism. Experience indicates that if constraints and challenges are addressed effectively, there is good potential for managing forests and forest enterprises in ways that positively contribute toward poverty reduction objectives, while simultaneously safeguarding the environment, empowering the poor, building capacity, and fostering entrepreneurship.
Angelsen, A. and S. Wunder, 2003. Exploring the forest – poverty link: key concepts, issues and research implications. CIFOR Occasional Paper No. 40. Center for International Forestry Research, Bogo, Indonesia.
Byron, N, 2006. Challenges in defining, implementing and renewing forest policies. Unasylva 223(57): 10-15.
FAO, 2003. State of the World’s Forests 2003. Food and Agriculture Organization of the United Nations, Rome.
FAO, 2005. Microfinance and forest-based small-scale enterprises. FAO Forestry Paper 146. Food and Agriculture Organization of the United Nations, Rome.
de Haan, A, 2001. Social exclusion: enriching the understanding and deprivation. Paper prepared for the World Development Report (2001) Forum on “Inclusion, Justice and Poverty Reduction.”
Mahanty, S., J. Gronow, M. Nurse, and Y. Malla, 2006. Reducing poverty through community based forest management in Asia. Journal of Forest and Livelihood 5(1): 78-89.
Mayers, J. and S. Bass, 1998. The role of policy and institutions. In F.B. Goldsmith (ed.), Tropical rain forest: a wider perspective. Chapman & Hall, London: 269-302.
Scherr, S.J., A. White and D. Kaimowitz, 2004. A new agenda for forest conservation and poverty reduction: making markets work for low-income producers. Forest Trends, Washington, D.C.
Tyler, S.R. and H. Mallee, 2006. Shaping policy from the field. In Tyler, S.R. (ed.), Communities,livelihoods and natural resources: action research and policy change in Asia. ITDG Publishing/IDRC, Ottawa, Canada: 347-372.
World Bank, 2000. World development report 2000/2001: attacking poverty. Oxford University Press, New York.