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5

INSTITUTIONAL CONSIDERATIONS

INTRODUCTION


Institutional considerations relating to NWFPs including a common definition and classification was discussed based on two theme papers and three satellite papers (see Appendix 4.4): the resource persons Mr. El Hadji Sène and Dr. C. Chandrasekharan introduced the subject and presented their papers "Non-Wood Forest Products: The Institutional Aspects" and "Terminology, Definition and Classification of Products other than Wood" respectively.

A healthy institutional system is essential to provide an atmosphere conducive for development. One of the major ills afflicting the NWFP sector, more than any others in forestry, is the institutional neglect relating to policy, strategy and plans, legal rights and arrangements, incentives, development of skills, access to and availability of information and support from public administration. The Consultation considered that often there is a policy bias against NWFPs.

Most of the issues, constraints and problems affecting NWFPs are to a great extent institutional in nature, and linked to institutional deficiencies. These are exemplified by low priority and recognition for the socio-economic contributions of NWFPs, over-emphasis on timber values, inappropriate resource management and lack of incentives for better management, unplanned land use changes, backwardness of technology and wasteful use of NWFPs, lack of statistical and other information, and neglect of NWFPs in the system of national accounts.

The historical reluctance of modern institutions to recognise the large informal sector of NWFP activities stems in part from the lack of appreciation about the dynamics of ecosystems and their interlinkages with socio-cultural and economic systems. There is need to redefine the whole linkages and the role of institutions and institutional instruments in supporting development of NWFPs as an integral part of the forest ecosystem.

POLICY SUPPORT

The Consultation reviewed the present situation with regard to policy support for developing NWFPs. The lack of recognition of NWFPs as an important sub-sector, in their own right, contributes to the lack of clear policies for their development.

Sector Policies

In most forest sector policies, wherever they exist, NWFPs get a mention in passing, but without clear objectives, targets and strategies for development. In other cases, some of the component elements relevant to NWFPs can be found scattered under other sectors. This deficiency leads to the lack of appropriate plans, programmes and projects related to NWFPs, and inadequacy of investment. Because of this, there is hardly any emphasis on developing and maintaining a database on these products. There has been initiatives to improve the situation in some countries, but a lot more needs to be done, and urgently.

The Consultation stressed that a comprehensive and well-articulated policy is vital for development of NWFPs. Such a policy, among others, should specify the relative role of non-wood forest goods and services in supporting socio-economic development, poverty alleviation and environmental conservation, suited to the situation of the country concerned. It should also consider their externalities and the likely risks of unplanned utilisation of NWFPs.

The policy should provide an objective and balanced view of the sector. Rather than being overly obsessed with commercial interests or subsistence needs, it should address such issues as incentives, development of technology, level and nature of resource use and management, product development and promotion and institutional arrangements. It needs to provide a new legal and ethical framework to manage and regulate the different uses of NWFPs. Also, the policy objectives should be capable of being translated into action, in order to allow resources to be sustainably used.

In formulating such policies cognisance should be given to the role of NWFPs, of both plant and animal origin, in the subsistence and market economy.

The Consultation recognised the urgency to develop holistic policies that consider the need to protect the forest resources to benefit local communities, to meet their cultural and spiritual needs, to promote the development of NWFP-based enterprises and to enhance service contributions such as ecotourism. In developing such policies, it is necessary to use the services of multidisciplinary and multisectoral groups/task forces and to involve all interested parties. This can be facilitated by international organisations by providing a policy frame work to serve as a model to formulate national policies. The need for as clear a definition as possible, indicating the scope and boundaries of NWFPs to facilitate policy development was also emphasised by the Consultation. It was further noted that gaining the support of policy-makers for NWFP development requires careful awareness-raising efforts by development and research agencies, NGOs and universities. It requires more intensive efforts to evaluate all benefits of NWFP use in order to gain institutional recognition for the socio-economic roles of NWFPs.

Strategy

Translating the policy objectives into action call for several strategic components including laws and regulations, technology and entrepreneurial development, involvement of stake holders, incentive systems, intersectoral coordination, adequate information base, trained human resources, improved planning capabilities and so on. A comprehensive strategy should ensure that these institutional measures appropriately cover resource inventory and management, harvesting, processing, utilisation and marketing. Policy instruments such as taxation, often, can influence development. Taxes on exports of unprocessed raw materials can encourage local processing and provide funds for investment. On the other hand, undeserved subsidies often serve as a disincentive for improving efficiency.

Legislation and Regulations

In many countries, existing forestry regulations are more control-oriented and not conducive to sustainable development. They do not adequately address key issues such as tenurial rights, access to resources, financial incentive systems, credit mechanisms, decentralisation of resource management, involvement of local communities and private sector in NWFPs development, protection from exploitative trade relations, intellectual property rights on resource information, contractual negotiations, and sectoral structure related to production, processing and trade. Improved and comprehensive legislation and regulations are needed regarding all aspects of NWFPs. In many cases contradictory laws need to be harmonized, and biases corrected. In reviewing and formulating legislation, rules and regulations, the countries in the various regions and sub-regions could collaborate and exchange experiences for mutual benefit.

SECTORAL BODIES


A number of sectoral bodies, governmental and non-governmental, are involved in the wide range of activities related to NWFPs. The Consultation observed that broad-based involvement and collaboration of all concerned institutions and entities appears to be a rational and desirable approach. This will help to pool resources and knowledge in order to address the urgent issues affecting the NWFPs sector. Households, local communities and organisations, private sector, business establishments, financing agencies, research and academic institutions, public administrative bodies and non-governmental organisations, all can play important roles in accelerating a healthy development of NWFPs. It is also necessary to curtail or eliminate some of the erstwhile practices which have lead to depletion of natural resources, e.g. role of exploitative middlemen, and debt-based relationship between traders and collectors/cultivators of NWFPs. The actual situation, in most cases, is far from the desirable.

Forest Administration Agencies

The need for effective public forest administration to implement the national policies and to enforce related rules and regulations was highlighted by the Consultation. It noted that such of organisations are often weak. Moreover, structures within the existing system of public forestry administration do not provide for separate identify for NWFPs nor for promoting linkages with various public and private institutions. In this regard the lack of a proper identity and a system of classification for NWFPs are bottlenecks in defining the role and missions of the relevant organisations.

Within the overall sectoral policy relating to NWFPs, the organisations/agencies should have specified missions, and they could include some or all of the following: provide guidelines for resource management and monitoring of management activities; ensure appropriate harvest levels and standards; enforce regulations relating to production, processing and trade; provide information services and other supports to decentralized units; carry out sectoral planning and intersectoral co-ordination; collect and aggregate statistics on NWFPs for use in the system of national accounts. In order to carry out these functions the national forest services would require reforms in their structure with clear lines of responsibility for NWFPs.

Local Community Groups

Local households and groups are major users of NWFPs for self consumption and income generation. Provided they have continued access and incentives for management of resources, they tend to take initiatives to develop sustainable harvesting practices with minimum support from government agencies. Examples include the extractive reserves of Brazil and community reserves elsewhere managed by local communities for sustainable NWFP extraction. Other examples are the management of acacia stands in Sudan and Chad, the management of sub-humid and dry woodlands in Africa, the extraction of chicle in Peten, Guatemala and joint forest management in India.

Non-Governmental Organisations

With the flexibility in their functioning, NGOs could play a very important role in developing community-based organisations and in promoting the development of NWFPs at local and national levels. The Consultation took note of the interesting experiences of the NGOs represented at the meeting.

Local organizations and NGOs working together can help to avoid unsustainable extraction of NWFPs. Past extraction of NWFPs from developing countries to satisfy external demands have been called "economic booms". However, these booms benefited only external economies and a small local elite, with local communities and local environments paying a high price. This was the case of the "rubber boom" in Amazonia in the early 1890s, which benefited mainly industrialized countries, and was accompanied by genocide of indigenous groups.

During the 1970s and 1980s a similar situation appeared again in Amazonia. Land-use conflicts between rubber tappers (in alliance with indigenous groups) and cattle ranchers resulted in the loss of hundreds of rubber tappers' lives. At the same time, strong, political and environmental community-based organisations (CBOs) emerged, and began to promote extractive reserves as forest managed by local communities for NWFPs, and as a means of improving the local standard of living while conserving the forest. Now there are in Amazonia many NGOs and CBOs, organised in structures that are at the same time political and environmental organisations, like the Confederation of Indigenous Peoples of the Amazon Basin (COICA), which comprises more than 400 indigenous organisations and plays an active role in forestry development in the region.

This illustrates how grassroots initiatives can help to resolve land-use conflicts.

Intersectoral Coordination

As an integral component of the forest ecosystem, NWFPs have considerable interface with several other sectors and activities, such as agriculture, horticulture, animal husbandry, fishery, food security, rural development, industry, trade and environment. The Consultation underlined that coordination at various levels (eg: policy, programme, activity) and between the concerned groups and institutions (between sectoral ministries, between governments agencies and community groups etc.) is very important. Inter-sectoral coordination should be an important responsibility of the public agency in charge of forestry in a country.

PARTICIPATORY DEVELOPMENT

Broad-based, willing and organised participation encompassing local groups, women, indigenous communities and private sector is an essential means of strengthening the institutional structure for developing NWFPs for their economic and ecological benefits. Appropriate gender considerations can help to improve the effectiveness and benefits of NWFP programmes at the local level. The Consultation expressed the view that people dimension of NWFPs should come out clearly in policies and strategies; and this would call for appropriate legal provisions regarding tenurial rights and security, incentives, equitable sharing of benefits and so on. When the value of products accrue to the intermediaries and the people engaged in their production remain poor, there will be no incentive to conserve and sustainably manage the forests. It is necessary to ensure that the primary producer receives remunerative prices for the products.
 
Overcoming constraints in marketing medical plants: Nepal

In central Nepal, there are two projects aimed to develop markets for medicinal plants, in order to promote forest protection through local income generation. Project activities include harvesting to establishment of a district-level industry, 

In the first project, 200 families organised into cottage industries and producer groups, supply materials to a factory that the project established to produce traditional Ayurvedic medicines. The factory advises producers on product standards and marketing requirements. The second project is aimed to develop a consumer market for Ayurvedic medicines.

Infrastructural obstacles faced by the projects were both physical (few roads) and social (lack of local knowledge on product standards, corrupt practices of some middlemen and officials, and an "underground" medicinal trade controlled by a few powerful people).

As in many countries, no legislation specifically governed NWFPs ? they were subject to timber laws. Foresters were responsible for managing the resource, but usually had poor knowledge of NWFP marketing. They expected villagers to pay royalties on plants collected from their own land, because the medicinal species were on the list of forest/timber species.

Rules governing forest products should be organised by source of plant origin (e.g. collected from forest, or grown on farm) and the intended use, not by grouping all forest species with timber, thus assuming forest origin. 

In developing local markets for Ayurvedic medicines, the project's analysis of the traditional medicine market showed a growing gap between the national medicines trade and local preferences and needs. Government policies regarding medicinal advertising and international institutions encourage the use of imported medicines and western methods, which are maladjusted for 85 percent of the population. The resulting devaluation of traditional medicine forced the project to use "modern" processing and marketing for its Ayurvedic products, and to devote a large portion of the budget to public awareness and advertising campaigns.

The project was the first to apply for credit from the country's Agricultural Development Bank for production of Ayurvedic medicine. Lack of established channels caused delays.

International NGOs were puzzled by the business aspect of the venture, and "afraid of the `reality' of the business world".

With mutual respect, patience, and persistence, the projects and their community partners overcame these obstacles. The second project took only two years to break even.

Summarized from Isabel LeCup, 1994. The Role of marketing of non-timber forest products in community development projects: Ayurvedic medicinal plants in Nepal. 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.

Past emphasis on the part of governments on revenue and scepticism about local abilities to manage forests must give way to the recognition of the reality of local dependence on, and concern for sustainably managing, forest resources. The recent development of joint forest management in India provides an excellent example. Under the new policy, the state retains ownership of the forest resource, but local communities participate in its management and receive 25-30 percent of the wood harvested, and 100 percent of NWFP harvests. This programme shows a recognition of increasing forest scarcity, and marks the shift from a revenue emphasis toward a priority of forest conservation through community involvement.

The scope of participation is not confined to economic benefits. It covers planning, knowledge sharing, and monitoring and evaluation of programme impacts. Local management objectives should be given adequate consideration. Knowledge on NWFPs to a significant extent is local, empirical and often linked to nature. Like in the case of planning, local people can give valuable inputs for identifying research problems.

The Consultation expressed strong view that in adding value to NWFP resources, each country has to design arrangements appropriate to its situation covering access, control, management and ownership of the resource and involving local people and groups, management agencies, industries and trade.

INSTITUTIONAL SUPPORTS

Development of skills and capabilities through education and training, research and extension are important institutional services. Efficiency of these services in relation to NWFPs, will be reflected in how far these products support socio-economic development and how far it succeeds in the market place, without jeopardizing their role in supporting local communities.

Capacity Building

The Consultation expressed concern that facilities for imparting skills and improving technological capabilities in the field of NWFPs are very limited in most developing countries. Because of the variety of products and processes involved, skills at various levels and covering different disciplines are essential.

Forestry education and training at all levels needs to be revised to include NWFPs as an essential component. It should be multidisciplinary and not dominated by the biological sciences. Special facilities are to be established for training of marginalised groups, such as indigenous people and women. Similar specialised facilities are also required for planners, entrepreneurs, NGOs and others.

Subjects related to NWFPs need to be included in forestry curricula at all levels, including in continuing education for resource managers, researchers, and extension workers. Forestry schools should encourage a multi-disciplinary selection of courses, including marketing, community organisations, and conflict resolution. Training of policy-makers and planners should take place through workshops, seminars, and trade fairs. Community-based organisations need training to strengthen their institutional capacity as well as technical abilities in NWFP activities like marketing and processing.

Research and Development

The generally poor situation of NWFPs in most producing countries is partly attributable to inadequate technology, extremely weak research support and/or lack of adequate attention to problems of NWFPs. Research needs for improving technology related to NWFPs are tremendous, touching upon all aspects of their management and development. This would cover among others: enhancing knowledge about NWFP resource; methods of inventory for different NWFPs; gathering scientific data on the nature of the products; prospecting, screening, evaluating and classifying plant species (e.g. by pharmacological and toxicological studies on medicinal plants) and identifying candidate species for development of specific products; domestication and cultivation including aspects of monoculture and agroforestry; control of pests and diseases; on-farm experimentations such as species introduction trials; plant breeding and genetic improvement including use of germ plasm resources in the wild for improving yield and resistance of established crops to pests and diseases; improving of agronomic practices; improving harvesting methods and practices to reduce wastage and damages and to increase yield; adaptation of imported technology; improvements in processing, packaging and distribution of products; and product diversification including improvements of quality.

Considering the variety of NWFPs and the related management situations, and the need to address the complex array of problems, the urgent need for strengthening research support is obvious.

The Consultation reaffirmed that development of NWFPs depends on how far its succeeds in the market place. Therefore, to be effective, among others, research institutions need: competent and motivated scientists, support staff and research managers; ability to conduct continual strategic evaluation of market conditions and opportunities; autonomy and opportunities to be self-financing; means to interact directly with producers and users to influence production and marketing. Linkages and networking arrangements need to be established with related institutions (e.g. with botanical, phytochemical and pharmaceutical research organisations) to facilitate information exchange and transfer of technology.

Participants involved in or representing institutions carrying out research in different aspects of NWFPs ? FAO Forestry Research Support Programme for Asia Pacific (FORSPA), Centre for International Forestry Research (CIFOR), FAO Asia-Pacific Agro-forestry Network (APAN), International Centre for Research in Agroforestry (ICRAF), Australian Commonwealth Scientific and Industrial Research Organisation (CSIRO), Appropriate Technology International (ATI), National Institute of Biodiversity of Costa Rica (INBio), Natural Resources Institute of UK (NRI), Veld Products Research of Botswana ? shared their experiences with other participants at the Consultation. The importance of international collaboration, particularly at regional and sub-regional levels to address common research problems (eg. of arid zones, upland regions) and exchange information through regional networks was highlighted. The Consultation observed that regional agreements and structures could realize alliances for sustainable forest development. A recent initiative in this area is the Central American Convention on Forests (CCAB).

The Consultation noted that incentives for researchers remain geared toward academic accomplishments, and not enough to solving of real-world problems and "hard" topics, such as multiple-use management, product development, and market research. There remains much duplication of costly scientific effort. Social-science issues are mostly ignored. It agreed that institutions need to better focus their efforts on problem-solving approaches.

Multidisciplinary research should be encouraged based on community involvement and community-identified priority problems. Researchers should act as facilitators and problem-solvers, ensuring that their research produces solutions to the problems of target communities. The results of research should be made available in local languages or through innovative media.

The Consultation urged the international assistance agencies and industrialised countries to facilitate freer transfer of technologies and information to developing country institutions to improve their capacity to undertake research initiatives.

Extension

The Consultation emphasized that extension, including delivery of inputs and technology, is an important task. An aspect further stressed is the importance of research-extension linkage which incorporates participatory research and demonstration.

INFORMATION BASE


Traditional Knowledge

Information on traditional systems of management and utilisation of resources often provides valuable insights for improving and upgrading these systems. Over centuries of close relationship with the forests and nature, the forest dwelling and rural communities have discovered innumerable natural products, many of them of non-wood origin. Their knowledge about medicinal and food plants are considered particularly interesting and valuable. However, hard information to underpin this statement is sorely lacking. With few exceptions, the NWFPs have never been studied in depth, neither in respect of quantities produced nor of their socio-economic importance. Except for few case studies, the situation is marked by an almost total lack of information particularly of those products that are consumed locally. Efforts are required to collect and compile such information. These can supplement technical information derived through research and scientific investigations.

Statistical database covering production, trade and utilization, and costs and prices is another component of the information system and these are essential for planning NWFPs development.

Statistical Information

The Consultation recognised that planning and informed decision-making is highly demanding on both quantitative and qualitative information. It is necessary to delineate the organisational responsibility for data compilation and analysis. Researchers have a responsibility to provide information on technological aspects, biological characteristics, environmental implications and so on. Often the international conventions and agreements such as CITES, and attitudes and preferences of consumers have implications on the use and trade in NWFPs, and these would require detailed studies.

The need to enhance and expand the information base on NWFPs cannot be overstated.

While statistical information at the local and national levels are vital for planning, those at the international level help intercountry comparisons and analysis of trade. The Consultation was informed about the efforts of FAO in the area of forest products statistics at the international level and the need for developing a system of international statistics in NWFPs. To facilitate better statistical coverage, at national and international level, it is necessary to have an agreed system of classification for NWFPs.

The Consultation suggested that as a first step, consideration should be given to assembling and disseminating statistical data for selected groups of internationally traded NWFPs in a more concise and readable form than is presently available. Included with statistical data should be information on price movements, and supply and demand trends gleaned from trade sources.

PLANNING NWFPs DEVELOPMENT

Achievement of Development objectives call for proper and detailed planning.

In any complex institutional system, conflicts of interests are natural. But they are resolvable through compromises, if the development objectives are clear and well understood. For example, almost no one will argue that environmental conservation is to be achieved by halting economic progress. However, there is need for certain well-founded criteria as to how conflicts can be avoided in achieving different objectives. With regard to NWFPs, this is not an easy task. Each country will have to design criteria and related norms appropriate to its situation and this should incorporate national objectives of welfare and equity.

Improved Planning Capability

In this connection, proper planning is very relevant and crucial. Plans provide the basis for investment and development. And plans are only as good as the information on which it is based. Lack of adequate information makes plans on NWFPs weak.

The social costs and benefits involved in the use of NWFPs are not fully reflected in the market value, and it is therefore necessary to apply new tools and methods to estimate their true values as a means to support realistic planning for cost effective development. It is essential that the countries and concerned institutions acquire improved planning capability to support development of NWFPs.

Role of International Assistance

It was recognized by the Consultation that international assistance in key areas of NWFP development can play a very valuable and catalytic role. This role could include facilitating transfer of technology and know-how, dissemination of information, support for capacity building and provision of funds and market opportunities. In this regard it is necessary for international agencies and development banks to incorporate NWFPs as an important component in their policies and programmes.

TERMS, DEFINITION AND CLASSIFICATION

The Consultation kept this sub-theme to the last in order to obtain a better perception and feel, based on discussion of other related themes, about the importance of terms, definition and classification for clearly understanding what is involved in sustainable management of forest resources.

The meeting recognised that forest values include three specific components ? wood products, non-wood products and externalities (i.e. non-transactable benefits).

Terms

The Consultation reviewed the relative merits of the different terms used for referring to forest products other than wood. It agreed that the term non-wood forest products is more specific in its scope, precise and consistent, has greater universal applicability and incorporates components which are better quantifiable; and therefore, technically and scientifically more appropriate for general use. It may, however, be necessary to use other terms in special circumstances and contexts. In such cases, the terms need to be defined for the context of their use.

Definition

A definition attempts to state the meaning of a term specifying its limits and scope, nature and distinctiveness as precisely as possible. The need for a clear definition of non-wood forest products, indicating scope and boundaries was emphasised by the Consultation. After discussing several alternative definitions the Consultation proposed the following to be adopted for general universal use:

Non-wood forest products consist of goods of biological origin other than wood, as well as services, derived from forests and allied land uses. The Consultation recognised that the definition of NWFPs includes both goods and services of plant and animal origin and confirmed that it should be so. One of the important purposes of product definition is to facilitate product classification, providing a framework for consistent accounting. Accordingly the boundary of NWFPs is defined to be in harmony with the accounting definition (used in the System of National Accounts ? SNA) of production. Production is understood as a physical process carried out by institutional units that use labour and assets to transform inputs of goods and services into output of other goods and services. All products, both goods and services, are capable of being transacted. Thus the definition of non-wood forest products does not incorporate intangible non-transacted benefits such as cultural values and influence on climate.

The Consultation welcomed that the definition of NWFPs has recognised the increasingly important service functions of NWFP resources. For example, eco-tourism is the fastest-growing division of the world's largest industry, tourism. And, the forest/wilderness/wildlife component of eco-tourism should be recognized within the scope of NWFPs.

Likewise, biodiversity prospecting is now placing economic values on an environmental function. National sovereignty over biodiversity, as well as increasingly important intellectual rights for communities and countries where biodiversity is being prospected, have recently gained international recognition. National governments need to act decisively to secure these rights for their people.

Classification Scheme

Classification refers to a rational system of relationships wherein distinction and coherence between elements are put into shape by logical structure and ordering, within defined boundaries. Classification is essential to help provide data by homogenous categories and to display interconnections between categories. Product classification, specifically helps to trace the flow of goods and services through the economic system from the producers to the eventual users and facilitates systematic analysis to support development.

The Consultation noted that an internationally accepted classification and a common measurement system for NWFPs would help:

The lack of an internationally accepted classification for NWFPs has hindered the compilation of statistical information. Statistical information on NWFPs are not properly or regularly reported, and they hardly feature in national accounts. Few of the products on which information is available normally get reported under other sectors: agriculture, horticulture, etc. Thus, what we get is a distorted picture of the NWFP sector.

The tentative classification scheme for NWFPs given in the theme paper on the subject was accordingly intended to provide an identity and clarity to the diverse group of products, whereby NWFPs could enter into established international classification systems of economic activity and trade, and thereby enter the SNA. This is especially important for improved statistical compilation and aggregation, which in turn influence decisions on support for development.

The proposed system of classification builds on several systems already in place: the International Standard Industrial Classification of All Economic Activities (ISIC), the Standard International Trade Classification (SITC), the Harmonised Commodity Description and Coding System (HS), and the Provisional Central Product Classification (CPC) system. Particularly relevant is the proposal to treat NWFPs in an annex to ISIC, as has been done for the diverse components of the tourism industry.

The Consultation considered the classification scheme and recommended that the scheme be pursued for developing a comprehensive and refined system of classification, involving specialists in the field. It recognised that a classification for NWFPs, harmonised with other existing systems and adopting multi-digit coding are adequately flexible and therefore capable of being adjusted to the contexts within which different organisational units operate and to the specific situation of individual countries.

The Consultation agreed that improvements in the classification of NWFPs have to take place within an improved system for forestry as a whole. It was underlined that treating it in isolation will be artificial since forest benefits, wood and non-wood goods and services, are inextricably linked. Forest influences and many intangible benefits (for example, watershed values) cannot be classified either with (or as part of) wood or non-wood products.

FOREST ACCOUNTING

The System of National Accounts (SNA) provides a coherent, consistent and integrated set of macro-economic accounts, balance sheets and tables based on internationally-agreed concepts, definitions, classifications and accounting rules. All the other systems feed into SNA. It is thus harmonized with related statistical systems.

Proper forest accounting, based on a harmonized system of classification will facilitate its incorporation into SNA. As indicated earlier, forest accounting will have three components ? wood products, non-wood products and externalities. The first two are normally quantifiable.

Wood products are reasonably well classified and, except in the case of fuelwood, are adequately covered by a system of statistical reporting. Unlike in the case of wood products, bulk of transactions of NWFPs takes place outside the formal and organised system. In such cases, national accounts and other statistical systems can accept estimates based on proxy measures and other valuation methods. The number of people benefitted, or the imputed value of unreported consumption of NWFPs such as fodder/forest grazing, traditional and herbal medicines, non-wood construction materials, food and edible products from wild sources are acceptable as a basis for estimation. Adequate efforts in that regard, however, are yet to materialize. A challenge is to plan and implement innovative approaches for measurement of non-wood values, which are equal to the magnitude and complexity of the problem involved.

Unlike the cases of wood and non-wood products, valuation of externalities has to be undertaken as a satellite accounting system. Satellite accounts generally stress the need to expand the analytical capacity of national accounting for selected areas of concern in a flexible manner. It helps to provide additional information on particular social concerns; it also helps the use of complementary or alternative concepts when needed to introduce additional dimensions to the conceptual framework. The latest edition (1993) of SNA has brought in environmental accounting in a satellite accounting framework, i.e. the System of Environmental Economic Account (SEEA). This makes it possible to deal with economic and environmental concerns in a compatible manner, as they apply to the concepts of sustainable growth and development.

There have been increasing number of attempts to improve and make use of economic techniques to value the externalities; and different techniques are being tried in different situations. These include methods such as replacement cost, shadow prices, surrogate market, compensation, sample questionnaire surveys, travel cost/travel time valuation, hedonic pricing, and contingent valuation.

The Consultation stressed that forest accounting and related aspects deserve greater attention.

RECOMMENDATIONS

Summary of Recommendations relating to institutional considerations for NWFPs development can be seen in Section 6 of this report.

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