Previous pageTable of contentsNext page

3

PROCESSING AND MARKETING

INTRODUCTION

The documentation for facilitating the discussion of this subject consisted of two theme papers and three satellite papers (see Appendix 4.2). The resource persons, Dr. Tuley De Silva and Mr. Leo Lintu, introduced the subject and presented their papers; "Processing, Refinement and Value Addition of Non-Wood Forest Products" and "Trade and Marketing of Non-Wood Forest Products", respectively.

The Consultation recognised that NWFPs are consumed by people of varying social levels from shifting cultivators and subsistence farmers to affluent urban populations. Consumption takes place in the raw (immediately after harvest), semi-processed and processed forms. Some go through several stages of processing. Forest fruits, herbal medicine, bamboo mats, turpentine, food additives and fragrances are indicative of the range. Use of some NWFPs are primarily local in nature. Some are well-known. Some others suffer from lack of promotion. Some products meet bulk demand, others reach specific niches.

Utilisation of NWFPs generally consists of three major stages: harvesting of the produce, processing and marketing of the products for intermediate and/or final consumption. These activities are closely related, having intimate forward and backward linkages. The nature and scope of NWFP enterprises and the technological alternatives available are often influenced by these linkages.

There is considerable variation in the way in which NWFPs are harvested and utilised. This causes differences in the nature of linkages and these differences vary from product to product, region to region and even locality to locality. For rational and sustainable development of NWFPs, it is necessary to clearly understand these linkages and their implications; and there is need for mechanisms for information exchange between all parts of the chain.

The Consultation dealt in detail with the different aspects related to the utilisation of NWFPs.

HARVESTING

NWFPs are an extremely heterogenous group. The harvesting tools and techniques vary considerably for the various NWFPs.

Harvesting is the activity linking resource management and resource utilisation and thus influences resource sustainability.

The Consultation noted that harvesting of NWFPs of both wild and cultivated sources is different from wood harvest in terms of the use of tools and equipment, technology, pre-harvest preparations, post-harvest treatment and requirement of intermediate processing. Harvesting often does not involve a whole tree or plant, but only parts thereof. It varies from collection of nuts and leaves to tapping of latex, harvesting of palm hearts, extraction of medicinal plants and plant materials, honey hunting, extraction of wax and collection of decorative plant materials. The cycle of harvesting also varies from a few weeks (e.g. for tender shoots), to longer periods as in the case of mature fruits or rhizomes.

Since volume involved for individual NWFP is in most cases small, the attention devoted to their harvesting also tends to be less. The collectors are mostly unskilled and untrained in scientific methods. As a result the harvesting standard of many NWFPs are poor and rudimentary, and hence wasteful, destructive and unsustainable. Efforts are also not made, usually, to harmonise harvest of wood and non-wood products.

There are variations in the system of organizing NWFP harvest. One common system is the collection by local people under rights bestowed, for sale in the local market, or with some form of patronage and financial help from the purchasing agent. Another is by the employment of casual or contract labour by those who have obtained collection rights on lease. The collectors of NWFPs are often exploited by middlemen who control access to the market, or by those who control access to the resource. Thus the millions of NWFP collectors have no adequate incentive for practising properly controlled and sustainable harvesting.

Post-harvest care is also poor in most cases, and wastages are high. Wastage happens in quantitative and qualitative terms during collection, transport and storage. Physical infrastructure is more important when harvested products are delicate or perishable compared to those which can stand rough handling and long storage.

The Consultation stressed that planning and control harvesting operations by introducing more efficient harvesting methods and systems, establishing incentive systems for NWFP collectors, reducing harvesting waste and keeping overall costs of operations at the lowest possible level, improving post-harvest treatment, and providing for training and skill improvement are essential for utilising forest resource on a sustainable basis.

PROCESSING

NWFPs cover a wide range plaiting materials and utility items to food and food additives, gums, resins, aroma chemicals and medicinal extracts. NWFP-based industries are generally less polluting, less destructive of environment, neutral of scale and amenable for vertical and horizontal integration.

The Consultation considered production and processing in respect of NWFPs in its broadest sense as a physical process/ carried out by institutional units/ that use labour and assets to transform inputs of goods and services into outputs of other goods and services. The output of goods and services are products.

Primary and downstream processing adds value to a product. In respect of NWFPs for subsistence and local use, processing involved is mostly in the form of post-harvest treatment or intermediate processing such as cleaning, shelling, heating, cooling, drying, fumigation, grading, bundling and storage.

Organising for local processing: the Philippines

The Kalahan Educational Foundation of northern Luzon, founded in 1973, represents members of the Ikalahan tribal communities. Through the first-ever community forest stewardship agreement with the Philippine government, the foundation secured legal rights to the Ikalahan ancestral forest lands. Thus motivated to protect their watersheds and obtain a good livelihood from the land, the community decided to produce needed cash from forest produce, rather than converting the land to agriculture.

The foundation selected two wild forest fruits to develop into three products: jelly, jam and butter. From that start, they have developed 15 recipes of preserves of wild and cultivated fruits.

With the help of the Asian Institute of Management, the foundation identified markets in Manila and preferences for packaging, container size, and volume. Their product line now includes jellies made from a small grape-like fruit, as well as others from ginger, tamarind and passion fruit.

The processing operation has required much planning, capital and storage space, as well as careful attention to quality control and product standardisation. Recipe development varies from year to year as variable weather conditions affect fruit contents of acid, sugar and pectin.

The enterprise has enhanced the local value of the forest, encouraged enrichment planting, and provided local employment for skilled labour. 

Delbert Rice, 1994. Marketing multipurpose tree products: the Ikalahan experience. In Raintree, J.B. and Francisco, H.A., eds., Marketing of multipurpose tree products in Asia. Proceedings of an international workshop held in Baguio City, the Philippines, 6-9 December 1993. Winrock International, Bangkok.

Market oriented production often goes through several levels of processing. The higher the level of processing carried out at or near the source, more of the products value can be retained locally. This offers the prospect for improving local employment, income and livelihood. At the national level this can support production of consumer articles in which NWFPs are used as components (e.g. perfumes, cosmetics) and help increased foreign exchange earnings.

However, in a developing country situations, harvested products reach the market, local or foreign, either after some intermediate processing in the form of cleaning and grading or after primary processing.

Market oriented downstream processing, for export markets, is highly specific on quality and stresses on reliability of supply. But due to the lack of technology, skilled manpower, management expertise, capital for investment and marketing arrangements, coupled with inadequate information on resource and resource development, sophisticated or refined downstream processing is limited in most developing country situations and often export is confined to primary products.

The Consultation took note that the range of variation in the level of processing of NWFPs is considerable. Most processing of NWFPs for local use is carried out in units which are small, dispersed, financially weak, primitive in technology and managerially poorly served. The lack infrastructure. They employ persons without any training, often working on part-time basis. The products of comparatively larger establishments carrying out primary processing for export, undergo further processing/refinement in developed countries. These impact adversely on enterprise survival rates.

Most traditional NWFP activities are labour intensive and cheap, and they tend to become early casualties in the process of economic development, and succumb to competition, unless measures are taken to improve them, capable of meeting the new needs and situations.

The Consultation pointed out that a national industrialization strategy to add value to the non-wood materials of the forests does not exist in most countries. Subject to feasibility based on stable supply of suitable NWFPs and analysis of economic and market factors, development through value-addition on NWFPs will call for appropriate process technology. Process technology for medicinal plants, for example, helps to isolate pure active compounds for formulation into drugs, to isolate intermediates for production of semi-synthetic drugs and to prepare standard galenicals (extracts, powders, tinctures, etc.).

Before launching on actual production, pilot trials are necessary. Polyvalent pilot plants, such as the one designed and developed by UNIDO, can be used to carry out operations in extracting flavour, aroma and medicinal constituents from plant material, such as aqueous or solvent extraction, continuous extraction, preparation of solid extracts and oleoresins, distillation of essential oils, fractionation of essential oils and processing of other economic plant-derived products.

Provided that appropriate management capability, skills and technology are available, several developing countries have the potential to install improved facilities for processing of NWFPs, including for export. However, it is necessary to know the specific market needs as well as the product specifications and standards required, before deciding to venture into export-oriented production. There is also need to link the production to a reliable and captive source of raw material supply. More efficient modern technology can cause more destruction if tied to inconsistent supply. The Consultation warned that although adding value locally is important, attempting to produce end-user commodities without adequate preparation or studies will be risky.

Future Prospects

Prospects for promoting NWFP-based processing enterprises appear bright in view of a number of developments worldwide. These, among others include:

  • Commitment by governments to implement UNCED (1992) recommendations relating to forestry which proposed priority attention to non-destructive uses of forests and NWFPs.
  • Growing recognition of the need to address socio-economic disadvantages faced by communities living near forests.
  • Creation of new markets due to "green consumerism" and growing demand for natural products.
  • Economic policies favouring open market that encourage private sector involvement and relaxation of trade regulations.
  • New research and development initiatives by industries into new drugs, agro-chemicals, natural pesticides and fragrances.
  • Considerations for Development of NWFP Processing

    The Consultation discussed about some important factors and steps involved in developing NWFP-based processing industries, encompassing materials, means and methods, management, manpower, and market.

    Same raw material can provide different products (e.g. food additive and medicine), and acceptability of raw material resources for specific uses depends on their nature, extent, quality and other significant aspects. Knowledge about these aspects is essential to plan for their utilisation.

    It is necessary to have a clear idea about the options for production based on the potential demand or felt need for products. This could cover the need to develop new products or improve old products.

    Market assessment to obtain information about price levels, quality and safety standards, packaging and handling requirements and appropriate level of production is an essential prerequisite.

    Another aspect to be considered is the capacity of the supply source to provide raw material on a stable and sustainable basis, from natural and/or domesticated sources.

    Assessment of existing technology relating to harvesting, handling, post-harvest treatment and processing and the need for their improvement is yet another step in establishing NWFP-based processing units. Complex technology is required to produce refined and high-value products. The emphasis should be to reduce environmental stress of consumption without affecting consumer satisfaction by improving competitiveness of natural products with environmental advantages. Ways and means of developing or acquiring improved technology is an issue to be addressed in this regard.

    The role of research and allied institutions is very important to provide producers with information on potential processing options, taking all relevant aspects into consideration. Producers also need information on real threats posed by substitute products and trends of change in consumer preferences.

    Access to information, particularly about new uses, whether generated locally or acquired from outside, is vital for improved utilisation of resources. In the case of some plants which were not considered important as providing NWFPs, new uses are being identified and products commercially developed. An example is neem (Azadirachta indica). A range of products including neem oil, neem soap and an insecticide (Azadarachtin) have been developed from the seeds of neem tree.

    Pilot scale processing trials, before embarking on full-scale production, will help to indicate the strengths and weaknesses of the system and the needed modifications/improvements along the production chain.

    Training and human resources development (including training in enterprise management for local people), generation of needed skills, improvement of infrastructure and institutional support including credit facilities through financing institutions are other aspects requiring serious consideration.

    The Consultation reiterated that policy environment can play a decisive role by facilitating development of NWFP-based processing through: appropriate regulatory controls, providing research and extension support, strengthening linkages with private sector, promoting participation of local communities and NGOs, encouraging (by providing incentives) exports and import substitution and establishing credit and marketing facilities.

    Consideration of all the above factors will help to indicate the feasibility of developing NWFP-based processing enterprises from the social, economic, commercial, technological and environmental points of view.

    The Consultation highlighted the importance of freer flow of information, transfer of technology and financial assistance from developed to developing countries to promote NWFP enterprises. Also, regional cooperation is particularly relevant for sharing expertise and facilities for improved and sustainable utilisation of NWFPs.

    The consultation noted with interest the INBio-Merck collaboration on bio-diversity prospecting in Costa Rica and the new initiatives taken on developing sustainable NWFP enterprises by Conservation International, Appropriate Technology International and WWF/USA.

    MARKETING

    A market is created whenever potential sellers of a good or service are brought into contact with potential buyers, and a means of exchange is available. The medium of exchange may be money or barter. Exchange agreements are reached through the operations of the laws of supply and demand.

    The terms marketing and trade are often used interchangeably. Trade, in its limited sense is the act of exchange of products for money or other products, i.e. the transaction. Apart from agreement relating to price, trade transactions are influenced by policies, regulations, legal restrictions, controls and standards. International trade, particularly, is affected by tariff and non-tariff barriers, quality specifications, terms of importation and exportation and exchange mechanisms.

    For all intents and purposes, market is the seat of trade in time and space. And, marketing is the process of creating markets, comprising of several related actions or steps. Marketing offers a set of technologies that producers can use to identify market opportunities, analyze competition, develop appropriate approaches to obtain market access and make profit. Marketing involves product, place (including channels of marketing and distribution), promotion, and price.

    In sustainable forestry, the role of marketing is to help create better linkages among resource management, processing, and the end-use. Marketing can reinforce sustainable forest management by indicating the kind of products and raw materials required, and by providing incentives through income distribution.

    Some lessons in green marketing

    Tagua Initiative of the Conservation International, launched in 1990, aims at marketing "vegetable ivory" from the tagua palm of Ecuador and Colombia to garment manufacturers in the United States for use as buttons. In its first year, the project generated sales for an amount of US$ 500,000. The project promoted tagua as a high-quality material and its sale as a way to conserve tropical forests through sustainable community development.

      After almost three years, lessons learned included:
    1. The conservation impact is greatest when production is integrated withcommunity development, scientific research, education, and policy work.
    2. International marketing of biodiversity products brings together at least two very different cultures and economies. To succeed, projects must be carefully designed to accommodate the distinct needs of these disparate worlds, and good communication among all parties is a must.
    3. Community-level enterprise development must be geared to local development.
    4. Biodiversity products must be profitable for every player in the economic chain.
    5. Local enterprises should be supported with loans rather than grants, wherever possible, to encourage a sense of ownership and responsibility.
    6. Options for local processing need to be pursued on a continuing basis.
    7. Opportunities should be explored in local and national markets, in addition to international markets.

    8. From Laura Tangley, 1993. Marketing Biodiversity Products: The Tagua Initiative, Conservation International, Washington DC.
    Cultural Survival Enterprises, also begun in 1990, has worked with groups in the Brazilian Amazon to market NWFPs to companies in the United States. In its first two years it averaged 400 percent growth. Further lessons in green marketing from its experience include:
  • Start with products already on the market. Introducing new products can take up to five years for foods, 10 for personal-care products, and 20 for pharmaceuticals.
  • Organise for strength in numbers.
  • Monitor the sustainability of production. Green-market consumers are interested in protecting ecosystems, not necessarily the people who live in them.

  • From J.W. Clay and C.R. Clement, 1993. Selected species and strategies to enhance income generation from Amazonian forests, FAO, Rome.

    The Consultation recognized that the nature/type, size, spatial spread and scope of markets would vary. Thus it is possible, based on their special characteristics, to distinguish: local/rural, urban, national and international markets; markets for goods and services such as recreation and tourism; bulk and niche markets.

    For orderly, efficient and equitable functioning of markets, and to facilitate healthy competition, information relating to product specifications and quality, safety and hygienic requirements, packaging specifications, consumer preferences and concerns, price levels, supply and demand outlook is vital. Lack of information results in market distortions. Marketing studies and research are relevant in this regard.

    With specific reference to product information, the Consultation identified some additional considerations: perishability vs. durability/storability of the products; consumer preference for natural products and influence of green consumerism; income and price elasticity of products; cultural and social factors influencing demand and consumption; and potential substitutes and their likely impact.

    However, those at the production end of the marketing chain often do not have access to information. In the absence of a transparent institutional link between the input sector, exacerbated by lack of market information, the cultivators, collectors and resource owners of NWFPs do not get a fair share of the value added. More often they are served by traders/middlemen who collect products from widely dispersed producers and sell them in the market or supply the products as inputs to processing units. Though the middlemen serve an important function in developing countries, they tend to exploit the market asymmetries and the weaknesses of primary producers. This results in a distorted incentive system where huge profits are made by trader middleman. In such a system efficiency in resource management becomes a casualty.

    By promoting producers cooperatives or associations, small-scale producers can be helped to gain access to information, greater negotiating strength and economies of scale to be competitive with larger enterprises. This calls for strong policy support and regulatory instruments to correct market imbalances and distortions.

    Market strength through cooperatives: India

    The Agroforestry Federation of Maharashtra, headquartered in Nasik, consists of 25 district-level tree-growers' cooperatives. It provides marketing and technical support to its member cooperatives and individual farmers, mainly in the marketing of eucalyptus wood and seeds of Jatropha curcas.

    The Nasik Tree Growers' Cooperative Society already gives its members a rate of return 30-40 percent higher than what they could get individually in the market. Other benefits that members gain through collective organisation include:

    • advice on demand and supply conditions at the district, region, and nationallevels;
    • lower transportation costs through combined loads;
    • technical advice on harvest timing and methods;
    • greater responsiveness to changes in regulations;
    • economies of scale for storage of produce at optimum locations;
    • collective bargaining and even cash advance during periods of storage.

    • Ranjit Issar, 1994. Development of market intelligence and infrastructure for agroforestry in India, in Raintree, J.B. and Francisco, H.A., eds., Marketing of multipurpose tree products in Asia. Proceedings of an international workshop held in Baguio City, the Philippines, 6-9 December 1993. Winrock International, Bangkok.

    Special Features of NWFPs

    The Consultation noted several special features on NWFPs which impact on their market: heterogenous nature of products, seasonal nature of harvests and availability of raw materials, multiple uses and multiple sources of raw products, amenability for production in small-scale/household units, feasibility of producing different end products from the same source material, influence of socio-cultural factors on its use, and widely dispersed and ephemeral nature of the markets. In additon, other important features include higher environmental externalities (e.g. biodiversity), and complex nature of resource tenure. Furthermore, NWFPs are not limited to the conventional concept of a physical product; apart from services, they also consist of rare microorganisms and other biological research materials.

    Local markets and related trade involve less risk than either national or international markets. Local NWFP markets, although often "invisible" in accounting records, are vitally important to local communities. However, the conditions by which many NWFPs traditionally benefit local economies (often household-based, diverse range of products, seasonal, labour-intensive) tend to be disadvantages in efforts to gain wider markets and increased rural income. This requires creative management solutions.

    Urban markets in most countries tend to involve growing numbers of people migrating to the city, who bring their rural cultural preferences and uses of NWFPs with them. These markets provide a growing prospect for items like traditional medicines. The patterns of these urban markets deserve more study since they can often be large.

    International markets for NWFPs are more sophisticated and involve more risk, particularly since NWFPs that gain international demand quickly are subject to competition from synthetic substitutes or cultivated materials, and are sensitive to consumer preferences and quality considerations.

    Regional and sub-regional markets comprise another level that have received little attention. But in these cases shared preferences and common tastes often would make it feasible to develop products for a larger market.
     

    Women in NWFP markets: Ghana

    In Ghana's largest daily urban market, in Kumasi, more than 90 percent of the traders are women. There, trade in NWFPs involves some 700 people on a full-time basis. Among then:

    • 100 leaf traders (for wrapping foods for sale); monthly sale value exceeds US$ 47,000;
    • 100 medicine traders (mostly women);
    • 25 full-time basket traders (selling 1,000-5,000 baskets/month);
    • 50 full-time traders of smoked bushmeat and 15 for fresh meat (annual sale value of US$ 209,000).

    • Julia Falconer, 1992. Non-timber forest products in southern Ghana: a summary report. ODA Forestry Series No. 2, ODA, London. 

    Market Situation of NWFPs

    Because of the range of variety of NWFPs, ranging from fruits and nuts to aroma chemicals and phytopharmaceuticals, they find use in a wide range of markets at the local, national and international levels, as well as for bartering in subsistence economy. Globalisation of economies has opened up further opportunities for producers of NWFPs. Since they are natural products, however, they are intrinsically variable in both quality and supply, and this can impose some limitations on their use.

    A large number of vendors are involved locally in selling NWFPs. Many of them sell products collected by them for making extra income; others are supported by a network of merchants and several levels of buyers. The main products locally sold include fruits, leaves, tubers, bags, baskets, thatch and other building materials, meat and skins, palm oil, and medicinal plants.

    In cases where NWFPs are sold outside the locality, local traders and merchants are the main intermediaries who buy the products cheaply from collectors and sell it to exporters or processors or their agents at a high price. Because of the absence of cooperative organisations of collectors, non-availability of market and price information, and lack of access to credit to meet operational needs, these collectors are at the mercy of the intermediaries. Traditionally, the supply of NWFPs has thus involved networks of local collectors and intermediaries bound by long-term, often debt-based, relationships. It is a trader-dominated system and it is not conducive for the birth and growth of enterprises. The system is often exploitative and not supportive of sustainable development.

    There are only rare cases where processing units are supported by captive sources of NWFPs or other formal arrangements for collection and supply of raw materials.

    NWFPs are an important source of foreign exchange for many countries. A recent FAO study identified 116 items of NWFPs as commercially important in international trade, considering the group of medicinal plants as one item. Available information suggests that 500 to 600 different medicinal plants enter international trade.

    The Consultation deemed it necessary, especially in respect of commercially important products, to have a marketing orientation rather than simple production orientation. Simple production orientation have the effect of creating increased supply, thus reducing price and profitability. A successful marketing orientation for forest products, on the other hand, should increase demand and value, thus allowing more of the products to enter the market without reducing the overall price of the concerned commodities. Market analysis and research, product development, and market development are important in this regard. The Consultation noted that lack of information is a major constraint in carrying out trend and outlook studies and analysis of factors involved in price changes; also to see whether the prices and costs reflect the true values and whether production controls can improve the situation.

    Strategic Market Development Considerations for NWFPs

    Markets for goods and services can be sustained through maintenance of high quality standards and stable and reliable supply.

    It is true in any market that products of better quality will attract higher demand and better prices. Quality of primary NWFPs is influenced by post-harvest handling, processing and storage conditions. Most producers lack skills and knowledge in this regard. The situation needs correction. There exists a problem of quality control for NWFPs at the primary producer level. There are no guarantees in conventional harvesting/processing/marketing of NWFPs for ensuring quality.

    Regulations for grading and standards exist in many countries for traded products. General quality standards for internationally-traded products are established by the International Organization for Standards. Quality and safety/sanitary regulations, including packaging standards, established by food and drug administrations and consumer protection groups of importing countries are often rigid in respect of items such as medicinal extracts, phytochemicals, food colorants and additives. Inability to meet the standards would normally lead to loss of market.

    Basic requirements by consumer markets include sustainable and continuous product availability; reliable and predictable supply; and stable quality of products. Recognizing these, and distinguishing the differences among geographic aspects of markets (i.e. local, urban, international) are key to successful marketing of NWFPs.

    The Consultation noted that there has been, over the years, an erosion of international market share of NWFPs. In many instances, cheaper substitutes have been developed. As a result, prices have fallen. The vulnerability of NWFPs have been attributed to unstable supply, inconsistent quality and unreliability of their source.

    The role of information is vital in this regard. Marketing is essentially a "software-based" function where knowledge and information are important ingredients along with attitudes and skills of those who are involved in market development. Production and product marketing involve several loops forming a chain, from commodity production to marketing of consumer products. Although primary producers are influenced by all the repetitive loops, they usually manage only the first loop. It is essential to know well enough the whole chain of these loops and one's own position in the full chain, as well as the particular role and importance of the NWFPs concerned in the final product, to claim, and justify getting, a "fair" share of the total wealth created between the extraction of NWFPs and the sale of the final consumer goods. The need for an appropriate marketing information system for NWFPs thus becomes vital. The Consultation pointed out that NWFPs need to be promoted as natural products, free from chemical insecticides and fertilizers. The benefits of environmentally sound business practices associated with NWFPs need to be highlighted.

    Probably the most important factor in sustaining a market is the price level of products, which should be remunerative to the producer and equitable to the consumer. However, this aspect is often ignored in respect of NWFPs where the traders and middlemen (unlike entrepreneurs) seem to have a tendency to maximise windfall as long as the opportunity lasts. There is need to improve the economic benefits and incentives to the local producer if supply is to be stabilised in terms of quantity and quality.

    One aspect which gives some indication about the possibility of rationalising and improving efficiency of the marketing system is the vast difference between the price paid to the collector or local producer and that obtained for it in the market. It has been reported that for several items of NWFPs, the local producer receives only a negligible portion of the price for it in the developed country markets. As an example, it was noted that one crude drug sarsaparilla (Smilax) commanded a price 200 times as much in New York as the Amazon collector received for the root. Sarsaparilla is just an over-the-counter herb, not a finished pharmaceutical prescription. Finished pharmaceuticals are often several magnitudes more expensive than the crude plant products from which they are derived.

    The participants were informed of the experience from the Natural Resources Institute (NRI) of the United Kingdom, which illustrated both the central importance of the commercial aspect of NWFP enterprises and the potential for strategic production and marketing of NWFPs to reduce over-exploitation of forest resources.

    An ODA-funded project for sustainable forestry in the Amazon basin, managed by NRI and executed by Brazilian institutions, is based on the idea of promoting commercial production of an oil for which there is known demand, but from a sustainable plant source alternative to present destructive harvesting of wild tree species in Brazil, China and Viet Nam. Production of a safrole-containing leaf oil from an Amazonian Piper species was chosen because:

    Other examples highlighted the benefits of a market-led (rather than supply-driven) approach to development projects involving NWFPs, and the ways in which the entrepreneurs can play an important role in the development work undertaken by public institutions.

    Development of those NWFPs which enter trade requires a market-led approach but this must not disrupt local and subsistence use or lead to other adverse socio-economic consequences; nor should it compromise sustainable management of the resource.

    Considerable research efforts are needed to rationalise market development for NWFPs (new products and new uses for known products) covering both formal and informal sectors, together with appropriate mechanisms for disseminating the research results.

    The variety of NWFPs and the range of their markets (from local to international) means that producer groups dealing with several products need some familiarity with the full range of marketing practices. This requires considerable training to develop knowledge and marketing skills. Appropriately trained extension services can help to develop local marketing capabilities.

    Related to the need for skills in processing and marketing is the need for better entrepreneurial skills among producers. This is a problem for small enterprises everywhere. Failure rates of small enterprises is comparable in respect of both advanced and developing countries.

    Proper deal-making is a special skill required by producers and producer groups involved in marketing their products; yet enterprise programmes often overlook it. Training in this area is needed. An example is the initiatives by the Biodiversity Support Programme, sponsored by the US Agency for International Development, which has linked small-scale enterprises and cooperatives in southern India with sources of information on business management, biological resources, and social issues. In many developing countries, an underlying need in enterprise development is for funding agencies to assume a share of the small-scale enterprise risk.

    In addition to improving entrepreneurial skills among small producers, programmes on NWFPs should raise the awareness of existing businesses regarding the long-term benefits of environmentally sound NWFP ventures. The new attitude towards consumption resulting from the concern for environmental conservation and the consequent preference for natural products is providing a new advantage and acceptance for NWFPs.

    The Consultation considered that given the new interest in developing "green consumer" markets, there is considerable potential to cultivate this young market through educating the consumers about the advantages of NWFPs and their production. Training materials and informal education systems should be developed which will improve marketing skills and entrepreneurship of NWFP producers, including those of cooperatives. At the national level, government officials also need to have more familiarity with the market forces that affect communities, and policy-makers need an understanding of these basics in order to know which polices create a conducive business environment for sustainable exploitation of NWFPs. Workshops and seminars can help to target these groups.

    Collective or cooperative institutions are poorly developed at the producer/collector level and this hinders access to knowledge about resource stocks, processes and markets. It also gives producers little bargaining power in the marketing of NWFPs. Producer cooperatives or similar organisations which will assist the processing and marketing of NWFPs need to be strengthened or developed.

    Also, national institutions concerned should formulate guidelines and monitoring systems to ensure that production of NWFPs is subject to sustainability conditions. Trade channels need to be rationalised and made more efficient and transparent. Risk-averting strategies are required to minimize the effects of fluctuating markets on producers and processors of NWFPs. National standards institutions should , where possible and appropriate, develop quality control and certification procedures for NWFPs in accordance with market requirements. Measures need to be taken to increase awareness within financial institutions of the social and economic benefits which accrue from production of NWFPs in order to encourage investment and greater willingness to extend credit and other services to entrepreneurs and other groups.

    The physical infrastructure for marketing and trade in NWFPs (which is critical to service industry, such as eco-tourism, as well as to the rapid movement and handling of items of trade) is often deficient and needs to be improved.

    The Consultation further pointed out that the NWFPs' marketing environment is affected by the macro-level environment, including international conventions and agreements (e.g. the Biodiversity Convention, the Convention on International Trade of Endangered Species or CITES) and national regulation, as well as those at the micro-level, namely the community conditions.

    Access to Information

    The producers of NWFPs need better information on the various markets for their products. There needs to be a better flow of information and technology among producers/collectors, processors, and end users supported by a strong knowledge base. This should include information on quality, grades, and prices of products, processing requirements and marketing structures. Producers also need to know the real threats posed by competing sources and substitutes.

    Marketing studies are ways to collect comprehensive and detailed information for specific purposes. Where these are needed (e.g. to study an urban market for a product), it would be cost-effective for producers to group together to share the cost of the study.

    Local market information systems are also needed to track trends in available markets. Producer groups could tap available information systems (e.g. agricultural marketing services) and set up their own systems where possible. Market monitoring and early warning systems for certain types of NWFPs will help to reduce producers' risks.

    The Consultation emphasised that the knowledge base of the informal sector would also need review in order to identify and establish support mechanisms. Indigenous production practices also need to be documented and improved as necessary.

    Support of governments at national and local levels and of NGOs will greatly help to improve the transfer of knowledge to all parts of the marketing chain as well as to strengthen links between research institutions and producers of NWFPs. Also, support of international agencies and donors will help to improve the dissemination pathways between countries.

    Trade fairs, newsletters and bulletins are some of the vehicles to disseminate information on costs and values, uses, quality standards, environmental implications, etc. Guidelines and handbooks for ready reference are important early steps to promote and support development of NWFPs. These, along with other technical and resource information would help: categorize as many types of NWFPs as possible, indicating their end uses; list specific examples of items within each category with an indication of the level of trade which they reach (local, regional, international) and where they enter international trade; indicate the main suppliers and markets; describe options for value-added processing; indicate likely problems to be encountered and risks involved; adopt steps to be followed to reach the identified markets; and provide a list of institutions/organisations with knowledge/expertise in particular areas from which further information can be obtained.

    The participants were informed that recently FAO has collaborated with several national governments to draft guidelines for use by local producers of NWFPs. These have been tested in the Philippines, Uganda, Peru and the Solomon Islands, and will soon be published by FAO as Guidelines for the creation of community-managed marketing information systems for non-wood forest products. Other forthcoming publications on this subject include: Manual on markets and marketing in agroforestry and community forestry systems and Compendium of computer-based databases of relevance to forest products marketing.

    The Consultation considered several other issues, among them:

    RECOMMENDATIONS

    Recommendations made by the Consultation relating to processing and marketing can be seen in Section 6 of this report.

    Previous pageTop of pageNext page