Senior Fellow, WWF-USA
During the past decade, the idea of conserving natural resources by using them more appropriately has become both necessary and fashionable. This idea is not new, of course, since many people living in or near remote or fragile ecosystems have a long history of exploiting their resource base without destroying it. Increasingly, population pressure, shrinking resource bases, increased market demand, or newly found "needs" have driven many community-based groups to exploit their resources at non-sustainable levels.
People everywhere have increasing desires to consume. Wants have become needs as potential producers/consumers are drawn deeper into market economies. In order to consume more, however, local people must have goods to trade or sell. Often the production of marketable goods tests the limits, or even goes well beyond them, of traditional resource management systems, which have never had to provide for so many people or produce such surpluses for external markets. To increase, or more often even to maintain, their standard of living, many groups are degrading or even destroying the resource base that future generations will require for survival.
The questions then, are: Which income-generation, value-added strategies allow local groups to exploit their resources without destroying them? And, How can local groups think through these issues in ways that will help them design and implement successful development strategies, while conserving the resource base for future generations? This paper reviews how local people can reduce resource use and/or increase income. Strategies include to:
To date, considerable attention has been focused on the natural resource base of communities. What are the economically valuable species? Can their density be increased? How much of a product can be harvested without destroying the species or the ecosystem? There are, however, a number of strategies that communities can pursue that will decrease their use of resources and increase their income. The most well known of these is adding value to what they are already selling so that they can generate higher revenues without increasing the off-take of natural resources.
Value-added activities, however, go well beyond village-level processing and manufacture. Each time a product is harvested, stored, bought and sold, transported, processed or altered in some way, "value" can be added. Most communities who collect or produce products that leave their areas currently receive only 2 to 15 percent of the New York City CIF or "landed" price of the commodities that they sell. With population pressures, if producers continue to receive such a small portion of their products' value, they will inevitably be forced to degrade their resource base as they try to maintain their standard of living (not to mention improve it). Furthermore, many of the value-added strategies discussed in this paper apply equally well to communities that use their resources primarily to meet their subsistence needs and only sell surplus on the market.
To begin with, each community should evaluate the current production and trade structure for each product that is being considered for a significant role in their conservation and development strategy. Communities need to determine where value is being added for each product, where risks exist, and where they can gain or loose the most in the short, medium, and long term. Eliminating intermediaries by transporting products longer distances is one strategy. Negotiating directly with buyers or adding value through local or regional processing are others. In some instances, the best strategy is to develop independent product branding or labelling to capture additional value. The best strategies may involve two or more different activities. However, it should be noted that adding value locally, in a traditional sense through processing or manufacture of products locally, does not always make sense. (For a more detailed analysis of these issues, see Jason Clay, Generating income and conserving resources: lessons from the field, 1994, Washington DC: World Wildlife Fund.)
Research should be undertaken on each product that is seriously being considered as a part of a community's overall income generation strategy (e.g. once a community has identified two to four possible products). This research should focus initially on identifying, within the current production, trading/marketing and manufacturing systems, the point(s) where value can be captured by producers. Areas of potential intervention or exchange include:
Gathering basic information about the journey to market for each product is essential in order to determine which products offer a community the most opportunity for increasing income while conserving their resource base. In addition to the comparative analysis between products that such research affords, it also helps communities decide where they might intercede profitably in the system so that more value can be added or captured by the producer. With this information, a community can make informed decision about when it is advantageous to process their products, when it is not worth the risk or capital investment, or when they do not have the financial or management skills required for the job. Likewise, they can calculate when it makes sense to hire a truck to transport their product to a better market (it rarely makes sense to buy one!).
It is also important for communities to remember that it is possible (and often profitable) for groups to generate income from activities that they do not control directly. Through negotiations with traders or manufacturers, local groups can generate income on the resale of their products throughout the trading system. Many producer groups now receive a 5 percent "environmental premium," royalties, licensing fees or shares of profits from manufacturers on the sale of their product in New York or London. A 5 percent premium can equal 30 percent or more of the price that a local community originally received for the sale of its product.
This, then, offers a general context to the issue of value-added activities associated with harvest, processing, and transport of NWFPs. Other papers presented at this consultation cover these issues in more depth. The remainder of this paper will focus on the more specific issues indicated in the title. It should be noted, however, that communities should not separate many of the issues covered by the different papers. For example, harvesting should not be separated from inventories of natural resources. Likewise, markets, marketing and value-added processing should be linked to natural resource inventories and management schemes.
Most producers would benefit from the adoption of improved harvesting techniques. The implementation of improved harvesting techniques usually requires some training of harvesters, as well as new equipment and/or management strategies. In many instances, baseline data on economically valuable species is needed to measure the extent to which continued or increased harvesting may pose problems for such species.
Many times as people move from subsistence use of their resource base to more market-, surplus-oriented uses, they cannot continue to use their traditional harvesting techniques without degrading the resource base. Through research, it is possible to evaluate which new harvesting techniques make sense in terms of the time they require, their economic costs/returns, or their environmental impact. Research may also be necessary to provide the information that will convince harvesters to trade old practices for more efficient ones. A good review of how to determine the biological impact of harvesting products from different wild species (e.g. leaves, seeds, bark, root, sap) can be found in Charles Peters' 1994 manual entitled Sustainable harvest of non-timber plant resources in tropical moist forest: an ecological primer (Washington, DC: Biodiversity Support Programme).
It is quite possible that by merely improving the harvest of products, local producers can realize a 10 percent or greater increase in marketable products, and hence in income, from each product. Gains can be made both by reducing harvest and post-harvest losses (i.e. making more of what is harvested marketable) and by maintaining or increasing natural stands of the species rather than reducing them. If harvesters unnecessarily reduce the number of individuals from which they can harvest, they will spend more time finding others in coming years. In some cases, they will deplete the species on their land and will either have to move to find more, do without, or begin to sell new products.
Guaranteed land and resource rights (or usufruct rights) are key to the development and implementation of sustainable harvesting techniques for every product. Without clear resource rights, harvesters have no incentive to develop long-term harvesting strategies either for single species or more complex agroforestry systems. Resource rights also allow harvesters to make financial investments in the equipment they need to harvest products sustainably or add value to their products through processing.
For many products, the issue of sustainable production has as much to do with harvesting as any other single factor, particularly for wild-harvested, NWFPs. Furthermore, proper harvesting increases income not only in the medium and long term but in the short term as well. The following examples illustrate this point.
Many harvesters invest little time or money in reducing post-harvest losses. Yet many economically feasible techniques exist which would provide a handsome return to producers. The Brazil nut illustrates this point. The current harvest and handling techniques of harvesters result in the wastage of up to 10 percent of all nuts they harvest. Little is known, for example, about how to harvest or store Brazil nuts in the forest during the rainy season before they are transported to market. Should the nuts be picked up as soon as they fall off the trees, or is it better to leave them in the ouriço (the true Brazil nut fruit, a hard woody sphere that holds the seeds) on the forest floor until they can be sold? What are the best storage facilities? Should they be elevated off the ground? Should warehouses be thatched-roofed or slat-sided? Should cracks be left in their sides or the floor so that air can circulate? How deep should the stored nuts be stacked? How often should they be rotated? Under ideal conditions, how long can the nuts be stored unshelled before they go bad? How can collectors determine which of their nuts are bad? If harvesters increase the quality of their nuts, will they receive a better price?
It is not only harvesters that should reduce post-harvest losses, but traders also. Once Brazil nuts are sold to traders, for example, they are shipped by open barge to Manaus or Belém (1,600 to 4,800 km) where they are shelled and packaged for export. On these journeys of up to one month, 25 to 35 percent of the nuts rot. Covering the barges or processing the nuts closer to the forests could reduce the post-harvest losses, generate more employment, and make financial sense.
Harvesting is often an arduous task. Transportation to market is difficult and often must wait until a change of season. Rodents, insects, and rot can reduce harvests by 25 percent or more even of durable items. All of these factors make the reduction of post-harvest losses an essential task as well as a potentially profitable one for every producer. In short, once so much effort (and in some cases money) has been invested in harvesting a product, it makes sense to ensure that as much of it as possible can be used or sold at the highest price. Individual harvesters or communities can reduce their post-harvest losses by 10 percent or more depending on the commodity. The ways to reduce post-harvest loss should be examined for each commodity a harvester or community trades or wants to trade. Any gains made in this activity are literally money in the bank.
Once harvesters have invested the time and expense of harvesting a product, they should try to obtain the highest price that they can for it. Most products, particularly wild harvested ones, often have well defined and relatively short harvest seasons. As production peaks, prices decline (often plummet). Lucrative markets for many products, however, could easily be sustained throughout the year if produce were available.
Due to the local glut of product on the market, producers receive very low prices for their product during periods of peak production. Holding a product (i.e. storing it, or processing it and storing it) is often a way to add value. To the extent that the product can be sold out of its normal season (i.e. during the "off" season when it is not common or not regularly available at all), it will not only command a higher price, it will also help to buoy a product's price during the period of peak production. This approach works quite well for regional or national markets. For example, it allows producers to process and freeze seasonal fruit pulps which could have tremendous year-round markets. IPHAE, a Brazilian NGO fruit processor that works with local producers, has found that it can process locally valued fruit pulps and freeze them in 250-g bags for sale in local markets. They receive more than two times the peak season price for frozen pulp, which more than covers the additional costs for freezing and handling.
Warehousing is essential for many international markets. Many manufacturers will not invest the time or money in new products if they are not assured that they will have a continuous supply throughout the year. Even if the supply is limited, most Northern manufacturers want product to be available throughout the year.
One of the main reasons that primary product producers can be kept impoverished is because they do not benefit from the value that their products generate as those products move through the economic system to the ultimate consumer. This situation is created by lack of both information and competition in the marketplace. In order to increase local revenues, competition must be increased. Some ways to accomplish this are to:
One of the curious effects of monopoly capitalism as it is practised
in many areas of the world is that it discourages either sustainable harvesting
practices or economically viable production systems. The extraction of
NWFPs is seen as the mining of resources which have no intrinsic value.
With a few exceptions, these resources' values reflect only the labour
and capital costs required to get them to market. In rare cases (e.g. gold
or diamonds) market scarcity gives independent value to that of the investment
of labour and capital. Two other factors that push the intrinsic value
of resources toward zero are (1) that each product nearly always has producers
from many parts of the world and (2) products usually have substitutes
(e.g. one oil can be substituted for another, one nut for another). Prices
tend to determined by the lowest-priced substitute.
|To add value or not to add value ?
that is the question
Whether or not it makes sense to add value locally is a complex issue. Decisions about if or when it might be appropriate to add value locally or how much value should be added vary widely from group to group, commodity to commodity, and region to region. The types of questions that should be considered when making such decisions include the following:
Value-added processing should not be done in a vacuum. The best strategies should allow producers or communities to potentially gain as much value as possible with the least risk. By definition, such programmes should be done, therefore, only after a thorough assessment of a community's natural, human and financial resources.
Another way a community can add value to its products is through marketing strategies. In some instances, this will be best accomplished by reducing the risk of not being able to sell one's product by diversifying the number and type of end users for each product they sell. There are several ways to do this. First, products can be sold on local, regional, national, or international markets, or a combination of all of them. In addition, producers can sell to end users who have different uses/markets for the product themselves. For example, Brazil nuts (Bertholletia excelsa) can be used as nuts (shelled or unshelled), or in ice cream, baked goods, cereal, candy, oil, flour, salad dressings, cooking sauces, soaps, shampoos and so forth. Likewise products such as fruits can be sold fresh, processed as juice, concentrate, or extract (for juices, yogurt, jams, jellies, ice cream or even personal care products), or dried (for use in snacks, fruit leathers, cereals, etc.).
Market strategies can also be used by communities to differentiate their products in order to command higher prices. Products can be labelled to differentiate them in the marketplace, e.g. organic, wild, green, natural, or socially responsible. Of course, claims will have to be backed up with written information (preferably, though not necessarily, certified by a third party). If consumers are asked to pay more for differentiated products, they will want a transparent system that allows them to see that they are getting what they pay for (i.e. some form of certification). Inevitably, this will increase the costs of the producer community. In addition, if a community differentiates its product, what happens if it cannot meet the demand of manufacturers? This may, in fact, make it harder to get buyers. These issues need careful consideration, and communities need fall-back positions (e.g. identify other possible producers if demand exceeds their supply).
Communities can also reduce the risks associated with selling their product by selling it in different markets, e.g. local, regional, national, and/or international markets. Diversifying markets can also increase demand and consequently, a commodity's price. For example, creating new markets increases overall demand and pushes prices up. Creating new markets is an essential aspect of any strategy where producers want unit prices for their product to stay the same or increase. This type of market differentiation has costs, however.
In 1989, Brazil nut collectors were paid only 2 to 3 percent of the New York value of their nuts. (Some were not paid cash at all, but instead were kept in a constant state of indebtedness ? a company store system ? by local traders.) A quick study of Brazil nut marketing showed that transporting the nuts to the regional market centre would double their value. Shelling the nuts for export would allow collectors to earn ten times the in-forest value, because it adds value while reducing transport costs (shelled nuts are only one-third the weight and volume of unshelled nuts). In some instances, shelling nuts locally makes it possible to sell Brazil nuts which, in the shell, are not worth the transport costs. (In 1994, only an estimated 5-10 percent of all Brazil nuts were harvested and sold; centralized shelling and transportation costs make it not profitable to harvest the remainder.) Turning nuts into oil would double or even triple the shelled nut values. These are the types of strategies that could be developed for each commodity.
In general, priority, value-added processing activities should be undertaken to reduce post-harvest losses, reduce the weight and volume of raw products, increase their standardization, and guarantee consistent quality and acceptability in multiple markets. In this regard, decentralized processing allows communities to reduce post-harvest losses and sell their products competitively in distant markets by reducing transportation and handling costs. In the case of Brazil nuts, the reduction in costs is about 70 percent.
Another important rule-of-thumb is that local value-added activities should increase rather than decrease the ability of a community's products to enter multiple markets. For example, it may be easier to sell semi-processed goods to a wider range of manufacturers than it is to sell finished products to retail outlets or directly to consumers. Although adding value locally is important, with the exception of handicrafts or the sale of flowers or houseplants, attempts to produce end-user commodities are probably not a good idea. At the very least, the production of finished products should be started slowly. For example, a community rarely has on hand all the different ingredients that would be required to make a finished product. Processing and manufacturing also require reliable sources of energy.
Finally, finished products are often larger and less efficiently transported than either raw materials or semi-processed goods. Thus, end products would require shipping not just the product, but the air and packaging (packaging would probably be shipped into and out of the area), great distances at energy and environmental costs that do not justify the economic (or political) impetus for local manufacture. Such environmental factors might undermine the ability of producers to market their products as "green" or environmentally friendly.
Communities should not attempt to produce finished products if they have little idea about what consumers outside of their areas want. This is particularly true if the distance between the producer and the consumer as well as the difference between their cultures and lifestyles is great. A Brazilian soap company that works with babassu and donates money on the sale of each bar illustrates this point. They have found that their soap, which is produced in Brazil, is too scented for the American market but not perfumed enough for the Italian or French markets.
Efforts to add value locally should not be based on subsidies. While it may be acceptable to subsidize processing in the short term, in the long term, business plans should have to show that the subsidies would be eliminated or else such programmes could not be options for wider replication in the real world.
Programmes to add value should also be ecologically sound. For example, what is gained through sawing tropical timber or processing rattan locally, as in Indonesia, if it is done so inefficiently that more trees or vines must be harvested to achieve the same overall production (or even less net profit) when all subsidies are taken into account? Why not leave the processing to the most efficient commercial processors? Or, if the volume justifies it, why not invest in more efficient local processing plants or establish a joint venture with a more efficient processor? It rarely makes financial or environmental sense to produce finished products in isolated communities. Fortunately, there are usually better ways (many outlined in this paper) to add or capture value locally.
Question technology. Adopting appropriate technology is another way producers can save their time or improve the quality of or add value to their products. On the other hand, technology is also an area where producers can waste a tremendous amount of time and money and become terribly frustrated with development programmes in general. Broken and rusting equipment throughout the world is not only a testimony to failed development strategies but to dashed dreams and increasing cynicism on the part of local communities.
Rapid advances in technological innovations, however, specifically relating to local production and processing activities, can be a real asset to local producers. In addition, researchers can develop applications of existing technology that are particularly suited to solving local problems of scale and expense. When setting up a Brazil nut shelling plant, a community was faced with the expense of a US$ 25,000 vacuum-packing machine. This was a lot of money (equal to all the other expenses of establishing the factory combined) for a project that was not yet proven to be viable. Instead of buying the machine, factory management decided to use small oxygen-absorbing packets designed by Mitsubishi for shipping electronic equipment. These packets (at US$ 0.25 each) were far cheaper to use for absorbing oxygen in the plastic bags of nuts. Two years later the large vacuum packing machine was purchased when production increased significantly and justified it.
Much technology is user friendly and extremely reliable. Sometimes it is designed to address precisely the bottleneck that a community has identified. Sometimes it is for a different product entirely but is readily applicable to a wide variety of other activities. If technological bottlenecks are identified within the overall strategy of a community, every effort should be made to contact other individuals or groups outside the area that might have faced similar problems or know of solutions to them. In short, all technology should be carefully evaluated to determine if it is indeed appropriate, reliable and user friendly, or if, as can be the case, it is more trouble and expense than it is worth.
Most communities do not own or have access to efficient, reliable and cost-effective systems of transport. This is true not only of getting into forest areas, harvesting products and transporting them out of the forest, but getting the product to markets (or better markets), to their own warehousing or processing facilities, or getting processed or semi-processed goods to the next stage on the marketing ladder.
One of the main problems with transportation is scale. It is often the case that non-wood products are cumbersome for individual harvesters to carry, yet they are so seasonal that their transport does not justify the purchase of any kind of animal or vehicle solely for that purpose. It is also the case that the weather or seasonal variations can often make it difficult if not impossible to arrange for the right transportation ahead of time in an efficient and cost-effective way. In other instances, the produce of one harvester does not allow that individual to purchase (or even rent efficiently) appropriate transport.
Given these constraints, what should harvesters or communities do? First of all, there is strength in numbers. What does not make sense for one harvester (e.g. hiring a boat or truck to pick up their produce at the edge of the forest or haul it to a regional market centre to avoid one layer of middlemen) may well make sense for a group of producers.
Second, if an animal or a machine is used for transport only a few months of the year, it might make sense to rent them rather than buying them, which ties up scarce resources in assets that are only productive for such a short period of the time. Communities, acting on behalf of several producers, should be able to negotiate better transportation contracts than any single individual. Also, if a community is transporting products together, it might think about selling them together. Many buyers will pay a higher unit price for a larger volume than they will for the same amount of product if it is divided up into a 100 different lots. It saves the buyer time and money to make one purchase, so the seller should be able to get some of that savings as a service to the buyer.
Individual producers or producer groups have little power in the marketplace. They cannot provide the quantities of product that even a small manufacturer would need. The Xapuri Brazil nut-shelling cooperative in western Brazil, for example, produced 70 metric tons (mt) of Brazil nuts per year during its first two years, but M&M Mars uses 70 mt of peanuts per eight-hour shift when manufacturing Snickers candy bars. Individually, local Brazil nut shelling cooperatives could never convince large companies like Mars to use their nuts. By working together, producer groups can supply some of the largest manufacturers, control larger market shares, and exert considerable influence over entire markets.
In general, even trading higher volumes through local organisations, rather than one-on-one through intermediaries, will give individual producers access to higher prices and lower costs. For example, it takes the same administrative time and expense to sell one container (14 mt) of Brazil nuts as it does 100 kg. Furthermore, the transportation costs are much less per unit (e.g. kg, litre). The standard shipping costs of one container from Brazil to the United States are about US$ 2,500, or US$ 0.17/kg. A small shipment of 100 kg would have to be sent air freight at about US$ 2.25/kg.
Furthermore, the same skills and institutional structures that allow groups to sell larger quantities of product in the market enable them to purchase manufactured items in bulk, and thus save money. If one of the main reasons that local groups need money is to purchase consumer goods, then community organisations that are being established to harvest, purchase, process and sell local products should also be used to bring in the consumer goods that community members want to purchase. A revolving fund to purchase raw products from community members can just as easily be used to purchase consumer goods in bulk and resell them to residents at half the price merchants charge. The same skills are needed to run both systems. Plus, whatever system of transport is being used to haul produce out of the area can be used to bring manufactured goods back into it. Back-hauling (i.e. making use of transport that often returns empty from a one-way job) is considerably cheaper than one-way hauling. For example, hauling goods by truck into Amazonian cities costs US$ 0.10-0.12/kg, whereas hauling product out of the area (on trucks that would otherwise return empty) costs just US$ 0.6/kg.
In very few communities, use of forests for subsistence or for cash income is limited to non-wood forests products. In fact, timber and other construction materials are often the most important (commercially, at least) uses of forests by local communities. The question then quickly becomes, how can communities maximize the use of forests for both wood and non-wood products with the least impact on the different economic species, as well as on the ecosystem as a whole?
Again, the most important way to harmonise the two sometimes conflicting uses is through establishment of good baseline data regarding a community's natural resource base. From this information, it will be possible to see what the potential is for complimentary strategies for harvesting wood and non-wood products is as well as where there might or will be conflict between uses. In some instances a species-specific strategy for wood might negate a strategy for non-wood products. For example, a timber tree might also produce a marketable fruit or nut. In other instances, the harvest of a timber tree might have an adverse impact on other species that provide non-wood products. With good baseline data, a community should be able to come up with a strategy that allows for the harvest of all the species that interest them. In rare cases, however, informed choices will have to be made between species. In these instances, a community will have to determine which use is strategically more important to pursue.
The extension and training needs of each harvester and each community will vary considerably. A one-size-fits-all extension system will probably not work very well for NWFPs. The biggest hurdle may be to get the harvester or community to realize the areas where they need help. The next hurdle is to make sure they know where to find it and seek out assistance. If harvesters or communities do not see the reason to seek assistance, even the best-designed and -run assistance programmes will have little impact.
Still, there are a few general areas where most harvesters and communities could benefit from appropriate technical assistance. In no particular order of importance, they are:
Systematic reporting and information. Lack of information keeps many forest residents in subservient positions to traders. A more level information playing field (or more transparency in the marketing chain) would improve the lot of forest residents considerably. Activities that fall under this general heading could include:
Training in undertaking resource inventories. Few communities have the kind of detailed resource inventories that are essential for developing sound, long-term natural resource management plans. Technical assistance should focus on having biologists and resource economists work with communities to undertake baseline inventories of the natural resources and develop long-term resource monitoring programmes. From this information, in conjunction with local priorities, groups would be able to develop long-term strategies for using NWFPs.
Again, many policy changes that would best promote the long-term, sustainable use of NWFPs would be commodity specific. However, in this arena too, there are some obvious areas where policy changes could benefit (or at least be neutral toward) the harvest and sale of NWFPs.
Taxation. Taxation policies should be used to encourage the rational use of forest resources and generate income and employment in forest areas. One way to do this is to tax unprocessed raw materials. This both encourages local processing and provides funds for investment in it.
Land and resource rights. Secure land and resource rights for producers. Producers need long-term resource security if they are to be expected to invest in improved and more sustainable harvesting programmes, management plans, enrichment programmes, or improved warehousing, transport or processing systems.
Credit. Financial institutions need to rethink their lending policies and criteria. In particular, they need to reevaluate their loan-guarantee criteria. New criteria could take into account, such as:
A few administrative or organisational arrangements that would support the sustainable use of NWFPs include:
Rural extension. Create a system of rural extension and technical assistance supported by research in natural resource management, reduction of post-harvest losses, value-added processing, and product development which address the current and future needs of those harvesting NWFPs.
Take non-wood products seriously. Local, national and international markets for NWFPs comprise many billions of dollars per year. Even so, they are not taken seriously by most government officials. We need to change official (and often unofficial) regulations and attitudes concerning community-based commercial and processing activities in general, and harvesting NWFPs in particular. Local groups rarely have access to the investment or working capital from government programmes that they need to invest in the changes that would allow them to increase the returns from their use of natural resources as well as their labour.
Enforce rights that exist. Often constitutions or government policies provide considerable protection to forest-based groups on paper, but these rights are not enforced. These groups face systematic discrimination. At other times, forest-based groups do not have ready access to political power and are therefore neglected relative to other groups.
Do not have long-term subsidies for non-wood programmes. Eventually, all non-wood product programmes and strategies must stand on their own, i.e. be self-sufficient. If communities become dependent on subsidized programmes (whether financed by governments, multilateral agencies, foundations or NGOs), they will never be able to exist on their own and compete in the marketplace.
This paper has mentioned a number of specific examples of successful harvesting and value-added processing programmes. More details can be provided on request. There are, however, very few detailed studies of such programmes. Usually, the literature is filled with mention of specific facts about one or another aspect of a programme, but not an analysis of the entire strategy, its history and its successes and failures. Often in this work, success or failure is relative. Some parts of every programme are more successful than others, but lessons can usually be drawn from both.
One current business plan for the sustainable harvest, processing and sale of heart of palm involves a management system that is actually more productive than the traditional harvest patterns in the area. Consequently, though it has increased costs (e.g. hiring a botanist to oversee harvesting and monitoring of the long-term biological impacts), the system actually generates considerable profits, even when the product is sold at the normal market price. However, because there is a management plan in place, the product can be certified and sold for 10 percent more than the normal international market price.
While there are few case studies, there are a number of examples:
There is tremendous potential for local residents to benefit from the harvest, processing and sale of NWFPs. Undertaken carefully, such programmes not only generate increased income, they can also safeguard a community's natural resource base for future generations. At the very least, communities will be better able to understand trade-offs that different strategies offer both at this time and in the future.
This paper has mentioned a number of economic benefits (mostly in the form of increasing income or reducing production costs) that might be achieved by pursuing various suggested activities. The potential impact of each activity is commodity and community specific. The differences a community can achieve through any of these activities might vary considerably from the parameters stated here. Furthermore, no community could undertake all of these activities simultaneously. Some of them are, in fact, mutually exclusive. Others require so many human or financial resources as to virtually preclude other strategies. In short, communities or individual harvesters need to examine each of the suggested activities described above and outlined below carefully. In general, the higher the potential financial return, the greater the risk, although even that does not always hold. Each community should carefully examine its options before embarking on any of them.
The economic benefits from the activities outlined above can be summarized as follows:
|- improve harvesting techniques||increase income 10 % or more|
|- increase harvest efficiency in the forest||increase income 5-10 % or more|
|- reduce post-harvest losses through mproved:
forest storage and/or transport
install or improve local warehouses
transport to distant processing plants
reduce losses by 5 %
reduce losses of 25 % of product reduce losses of up to 35 % of product
|- improve transport through:
process to reduce water and waste matter
reduce costs by as much as 10 % reduce costs by up to 50 %
reduce costs by up to 70 %
|- hold product and sell in off season||increase gross up to 200 %|
|- add value locally through processing||increase gross up to 1,000 %|
|- have access to better pricing information||increase income by 10 %|
|- improve credit terms||reduce credit costs up to 50 %|
|- capture green premiums in Northern markets||increase income 10 % or more|
|- have income sharing agreements with manufacturers||increase income 10 % or more|
|- purchase consumer goods in bulk||reduce costs up to 50 percent|
|- transport consumer goods in bulk||reduce costs up to 10 percent or more|
In addition to the economic impacts, the social impacts of non-wood product strategies also deserve special attention, precisely because they are so unpredictable. Increased income at the level of the community, for example, does not necessarily translate to increased social equity. Local sub-groups that have not received benefits from economic changes in the past are not likely to do so through any of the activities described in this paper, unless special care is taken to monitor the ongoing impact of the above described activities and adapt them accordingly. Special groups to be considered are: women, the elderly, the illiterate, those without resource rights, those that are less acculturated (e.g. do not speak the national language).
One way to redress some of the social problems that already exist in a community or that might be created or exacerbated through the activities outlined above is to set aside part of the increased returns from the above activities for funds to be used to address social inequities or chronic social problems. For example, some funds from premiums or income-sharing contracts could be retained by the community (rather than divided up and passed back to individual producers) to be used to fund credit programmes or other social services targeted at specific groups. These community funds might also be used more generally to improve such things as health care, communications, schools, or water systems.
While increased income can generally be assumed to have positive social impacts, it is certainly not a given. In fact, the social impact of increased income is one of the least studied aspects of development programmes in general.
Finally, if social inequities already exist at the community level, it might be safe to assume that there are local reasons for it as well as local vested interests to maintain those inequities. At the very least there will probably be considerable inertia to change them. Unless outside funders insist that social equity is an overall goal of harvesting, local processing, and transport of non-wood products, it is doubtful that these activities will change existing inequities. If anything, they might increase or exacerbate them.
Communities must make a commitment to the overall success of any NWFP project if it is to succeed. In most cases this means changing the way they think about and use resources. They will also have to invest considerable time and money to identify, much less pursue, new strategies. They will have to put up local resources as collateral, provide local materials to the project thereby reducing the overall cost, provide cash and labour.
Income-generation projects that are funded entirely with grants from outsiders all too often create dependency relationships between grantor and grantee. The point here is for outside entities to lend a hand, not give a handout. When a local group run into problems, one wants it to solve them, not write a proposal for assistance.
While grant money might be useful to undertake some of the preliminary studies and background research, communities should realize from the outset that they are investing in their own future and that it costs money to make money. That is the way a business operates, and the way their businesses will have to operate, too, if they are to succeed. Thus projects should be evaluated in terms of whether they are good financial risks or not.
At the same time, communities need to form strategic alliances with other producers, businesses, government agencies, and non-profit organisations to get access to the human and financial resources that they need but do not have within their own communities. Neither communities nor well-meaning outsiders can solve all the problems associated with the successful and sustainable harvest, transport, processing, and sale of NWFPs. Through desire and effective partnerships, however, communities can determine priorities and design and implements strategies that will generate substantial social and economic benefits for their members.