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Income and employment from non-wood forest products: What do we know?


Introduction
Some conceptual issues
Where do non-wood forest products belong?
What do we know?
Conclusion
References


C.T.S.Nair
Senior Programme Adviser
Forestry Research Support Programme for Asia and the Pacific
FAO Regional Off ice for Asia and the Pacific

Introduction

Almost all discussions concerning non-wood forest products development emphasise their employment and income generation potentials. Often their development is regarded as an important option for the socio-economic development of rural areas (FAO, 1993). Supporting these assertions (or hopes) are the statistics, in terms of millions of person days of employment generated and equally impressive figures of income that accrues to the rural poor (Shiva, 1994). It is hence not surprising that the topic has found a slot in this Consultation.

Describing what is already known has its advantages as well as disadvantages. Easy access to information, especially in the printed and electronic forms, makes the task of literature review easier. Such an advantage is however negated by several disadvantages, especially since, as taught in elementary statistics, reliability of predictions is most often dependent on the unknown variables. When the residual is substantial, the conclusions drawn become meaningless. This seems to be so with most studies on non-wood forest products. What we know is fragmentary, incomplete and conceals the reality. Nowhere is it more serious than the social and economic dimensions of non-wood forest products and more particularly on employment and income aspects.

Some conceptual issues

A detailed presentation of studies on employment and income is beyond the scope of this paper; nor is this possible on account of the limited time and short term relevance of such information. Statistics are meaningless unless they are used to answer the right questions. Unfortunately, available studies fail to deal with some of the key issues, largely due to certain conceptual problems. The most important of these are as follows:

Aggregation of products

Notwithstanding the wide range of products, catering to a variety of human needs and greeds - from essential foods that supplement the nutrition of forest dwelling communities to those ingredients used in candies and ice creams, from those used by native medical practitioners for healing ailments to those sold for their proclaimed aphrodisiac properties, from those that are essential wares for household uses to costly handicraft items that adorn the living rooms of the rich-, the historically acquired definition treats them as one broad category. Other than the source of supply, they have very little in common. Hence generalization, especially with regard to social and economic aspects, becomes meaningless.

Definitional problems

The traditional definitions of employment and income used in economics and the lack of effective measures to determine their levels in the less organised informal sector complicates the matter. Aggregation of employment and income, disregarding as to who is actually employed and during which season and the actual contribution of income to the household livelihood, conceals some of the key aspects relating to the potential (or lack of potential) of non-wood forest products. In the case of a number of non-wood forest products, those who are employed fall outside the definition of the working population and in a number of cases the number of hours worked in a week (or day) in non-wood forest product collection and processing is so low that it is seldom accounted for in national employment and income surveys.

Ill-defined objectives

National, sub-national or product-level estimates are primarily aimed at policy makers, planners and donor agencies, to substantiate arguments for increased investment for their conservation and management. Given this objective, there is a strong tendency to ignore (or even conceal) the real issues. Employment and income estimates become statistics to be annexed to project reports (and more particularly to proposals), ignoring their social dimensions. If employment and income are priority objectives of non-wood forest products development, we need more relevant information, from the point of view of the people involved in the various activities.

Snap-shot statistics

In almost all cases the historical perspective or the dynamics of the system are seldom taken into account and the figures that are provided reflect what exists at a given point of time. Livelihood strategies of households and communities respond to a variety of factors, both external and internal, and dependence on non-wood forest products waxes and wanes both spatially and temporally. A product focussed approach has resulted in collecting information that becomes meaningless over time and across space. Little is known about the process of change and how different factors interact.

Where do non-wood forest products belong?

Traditionally the classification of non-wood forest products has adopted an end-use oriented approach. Thus, it is customary to group the products as forest-based foods, fibres, medicines, cultural products, industrial products (which includes gums, resins, tannins), etc. For example, medicinal plants could be those utilised locally by the medicine-man in the forest dwelling communities or they could be those that are subjected to complex processing for use in distant markets. The broad group of forest foods include those collected and consumed locally with minimal processing as well as those which undergo industrial processing involving the addition of characteristics like palatability and appearance (or conversely removal of characteristics that impair appearance and palatability) and packaged under sterile conditions to be sold through super market chains in developed countries. Such a grouping seldom gives an indication as to the social and economic aspects of the products, especially who produces or collects the products, what kind of technology is adopted in collecting (producing), processing and marketing, who consumes the products, who controls the production systems and how the benefits are distributed.

To avoid the inadequacies of existing classification and to focus on the social and economic aspects, a slightly different grouping is warranted. Based on the system of production, processing, trading and the type of markets they cater to, non-wood forest products can be categorised into three, namely (i) traditional subsistence sub-sector, (ii) organised market sub-sector and (iii) an overlapping sub-sector, with a combination of characteristics of the subsistence and organised sectors.

Table 1 summarises the key characteristics of products belonging to the different subsectors.

Subsistence sector products

A substantially large number of products belong to the subsistence category, fulfilling the needs of the local economies. These include a variety of forest-based foods, medicines, and cultural and social artifacts, gathered or produced locally. Knowledge is passed on from generation to generation, and the close involvement with the products on a day to day basis facilitates the development of a well adapted indigenous knowledge system. The technology of production/ processing is simple, labour intensive, and supply of the products is largely nature dependent. People seldom make any sectoral distinction of products as belonging to agriculture, animal husbandry, forestry, fisheries. Since the products are locally consumed (or at best bartered with other individuals or communities) no complicated marketing is involved. Several products contribute to livelihood and there are always fall back mechanisms when one product is not available.

Determining the extent of consumption (or employment and income) derived from different products is difficult and sometimes meaningless. Not that those in the subsistence sector are unaware of the concepts. In allocating the time to various activities, they do take into account the relative advantages. Some of the products are not collected during certain seasons or periods, especially when other products requiring much less time are available. On the other hand, women and children will trek long distances to collect these products in the absence of alternatives. The kind of consumption pattern, the technology available and value systems dictate the extent of effort to gather certain products.

Products in the organised sector

At the other end of the spectrum are the products belonging to the highly organised and commercialised sector. This includes most of the plantation crops like rubber, cashew, coconut, spices (like cardamom, cloves, pepper) cultivated medicinal plants, lac, rearing of silk worms, bamboo and rattan plantations, etc. Some of these are often the subject of turf battles between narrowly organised government departments, with conflicting claims on who should manage them. Notwithstanding differences in the system of cultivation and management (for example they may be cultivated by small holders under mixed cropping systems or by large plantation companies as monoculture), the dominant feature is their close integration with the modern processing sector.

Technological inputs into these products, at all stages of production, processing and trade, have been substantial. Research, extension and other support services, including credit and marketing, are well developed. Demand from distant markets exerts a tremendous influence on the technology and systems of production adopted. Employment and income fluctuates in response to demand which is again determined by a variety of factors. These are primarily prices and availability of substitutes and complementary products.

Table 1. Key characteristics of non-wood forest products belonging to different sub- sectors

Characteristics

Subsistence sub- sector

Organised sub-sector

Semi-organised sub- sector

1. Production

- Technology

Traditional/Entirely relies on natural processes
Labour intensive

Modern/Environment modified significantly Labour intensive

Traditional/relies on natural processes Labour intensive

- Organization

Household/ Community unorganised

Household/Corporate Highly organised

Household/ Community organised

- Skill requirements

Very low

High

Low

- Input requirements

Negligible

High

Negligible

- Capital requirements

Negligible

High

Negligible

- Dependence on purchased inputs

Nil

Very high

Negligible

2. Processing

- Degree of processing

Very low

High

High

- Organization

Household/ Community

Households/ Industries

Households/ Industries

- Location of processing

Local

Varies

Varies

-Technology

Traditional

Modem

Traditional + Modem

- Skill requirements

Very low

High

Low to high

- Input requirements

Very low

High

Low to high

3. Markets and Marketing

- Location of markets/ consuming centres

Local

Distant markets

Local/distant markets

- System of marketing

Sharing of products - Exchange or barter

Cash transaction

Cash transaction

- Link between producers and end users

Producers and consumers are the same

Intricate network of trading channels

Network of trading channels

- Effect of market prices on production/processing

Nil

Very high

Very high

4. Allocation of Income from Final Product

Accrues entirely to the producing unit

Shared as
- Wage
- Payment for other inputs
- Taxes
- Profit
A major proportion goes to the processing and trading sectors

Shared as
- Wages
- Payment for other inputs
- Taxes
- Profit
Proportion of wages accruing to producers tends to be low

5. Examples

Forest based foods, nuts, fruits, bush meat, sago, local medicines, fish poisons, bark, etc..

Rubber, cashew, pepper, cardamom, resins, cultivated, medicinal plants, tannins, producing trees, etc..

Collected gums, resins, bark for tannin, leaves(eg: tendu), bamboo, rattan, medicinal plants, fruits (eg: uppage) spices, etc.

Products in the overlapping sector

Products belonging to the intermediate category are most often collected in the traditional sector; but invariably they have strong linkages with the modern sector, where they are processed and traded. A large number of non-wood forest products belong to this category which includes forest foods, gums, resins, leaves, tannins, medicinal plants, cultural artifacts, etc. The technology of production (or collection) remains very simple and traditional, but the processing technology is often complex and the final product reaches the consumers through a long trading chain.

Quite often one or more products belonging to different sectors may co-exist, each contributing to the household livelihood in varying degrees. For example forest dwelling communities may derive part of their sustenance from fruits, roots and bush meat gathered from the forests. They may also collect products like medicinal plants, rattan and leaves for sale to local dealers, in addition to cultivating cash crops and fruits to meet the demand from distant markets. A variety of factors, primarily social, cultural, and economic determine the extent of dependence on each of the components. The subsistence sector dominates areas not penetrated by markets. In the other extreme case, the subsistence sector shrinks drastically, with the organised sector forming the main source of livelihood.

Instances of the same product forming an integral component of more than one subsector are not infrequent. For example, part of the bamboo and medicinal plants collected locally from adjoining forests, would be sold in the local market while the other portion is used directly by the household or the community.

What do we know?

Studies hitherto on non-wood forest products have largely focused on technical aspects- on botanical identity, properties, end uses, characterization of active ingredients, processing technology, etc. The social science dimension has been generally neglected - as is the case with forestry as a whole - and the limited studies have at best focused on the profitability of cultivation, processing and trading of the more important products.

Official statistics

Although a number of countries incorporate statistics on production and value of non-wood forest products in the annual reports of the forest departments, their usefulness is undermined by several factors:

1. Information is collected only with regard to products that are considered important from the point of revenue to governments. Items that contribute to subsistence consumption, but generate no revenue to government, seldom find a place in the official statistics.

2. A lot of the products are aggregated, especially when areas are leased out for collection. Notwithstanding stipulations concerning removal permits and reporting of what is actually collected, the information] remains quite unreliable. Products collected from outside the government forests seldom finds a place in the official statistics.

3. Even the limited information available, whatever this is worth, is not analysed to provide indicative conclusions. Existing information collection and retrieval systems continue to be outmoded, notwithstanding the electronic revolution, and too often published information is available only after a long delay.

Employment and income statistics are not collected as part of a regular system of reporting and the limited information available is based on specific case studies, or at best extrapolations derived from information on quantity or value of the products. When non-wood forest products are collected primarily for subsistence purposes, information on their contribution to employment and income are difficult to be estimated except through specific surveys. This is particularly true with bush meat, fruits, roots and a variety of other forest foods.

Product focused studies

Most of our knowledge on the employment and income aspects of non-wood forest products is based on product and location specific studies. There are, for example, studies on the quantum of income/ employment attributable to non-wood forest products (Rag, 1994, Caldecott, 1988), the extent of household dependence on these products (Fernandes et. al 1988) and seasonal variation in the degree of dependence. There are also a limited number of case studies dealing with the dynamics of the use of non-wood forest products (Peluso, 1992, Hadi, 1991) indicating how changes in markets and technology affect employment and income.

Employment and income from non-wood forest products are determined by a variety of factors, and more particularly the interplay of (i) market characteristics, (ii) technology, and (iii) organization. Most often the market characteristics, especially the income of the consumers, will determine the technology and organization of production, which in turn have a direct bearing on employment and income. The technology of production has a direct bearing on the long run sustainability of production.

Market characteristics

A substantial number of non-wood forest products cater to low income markets and this imposes certain limitations on the income that could accrue to the producers of such products. A typical example is that of bamboo mats and baskets, used by farm households. Considering the low income of most of the agricultural households, the value of the products tends to be low. Income that accrues to those involved in production of mats and baskets tends to be lower than the agricultural wage rates.

Low wages and hence marketability is often maintained by employing those who are outside the labour market. Basket and mat weaving are sometimes dominated by women and children; in a situation of high unemployment and underemployment, the opportunity cost of their labour tends to be low and they are hence available for wages far below the normal wages (Joseph, 1992). Production systems - especially the putting-out system, in which most of the work is done in the household - facilitate this and help to circumvent the application of the labour laws.

One approach to enhance income is to tap high income markets through product diversification. A typical example of this is the export of rattan - finished or unfinished - to high income markets. Interestingly, the organizational structures required to tap such markets (which are not directly accessible to the producers) will limit the income that eventually accrues to those involved in collection and preliminary processing. Marketing handicraft items in tourist centres is not different and unless there are significant improvements in the organization of production and marketing, the impact of market shifts is unlikely to have much impact on employment and income.

Technological innovations in response to market changes also fail to have the desired effect. A typical example is that of the manufacture of bamboo boards, or bamboo plywood, adopting the same capital intensive technique as used by the plywood industry. It was assumed that this would help to overcome the decline in the demand for bamboo mats and enhance the income to mat weavers through value addition in the processing sector. However, the way the labour market is segmented, benefits from value addition have remained within the capital intensive processing sector. Wages in the traditional sector continue to be determined by the opportunity cost of labour, ensuring that the income remains very low.

Social restrictions on working outside the household have accentuated the problem. Entrepreneurs have conveniently taken advantage of this by developing putting-out systems of production. Raw material is supplied to the households and mats and baskets can be made during the spare time, combining it with other household chores. Although some of the women work for more than 10 to 12 hours a day, low wages tend to be justified on the argument that they would otherwise be earning nothing.

The interplay of social factors often make the non-wood forest products sector a low wage trap, inhibiting any development. Since wages are low, households have a strong compulsion to employ all family members including children, who drop out of the school at a very early age to join the labour force. Given the low level of education and skill acquisition, they are virtually trapped in the sector, with no opportunity for enhancing their income and standard of living (Nair and Muraleedharan, 1983). The situation is not much different in the case of several other non-wood products like beedi leaves and medicinal plants. Aggregated information on employment and income conceals this reality.

Backlash effects of technology

Quite often efforts have been made to develop appropriate technology which in theory could be easily adopted by those involved in collection and processing of non-wood forest products. But again the inequities in access to the technology often have negative effects. A typical example of this is introduction of the power lathe for the production of wooden beads in the Indian state of Karnataka. Traditionally women were involved in the production of beads using hand operated lathes, limiting the quantity of beads that could be produced. The Small-scale Industries Centre facilitated the introduction of power lathes, which increased productivity, and hence income, many times.

Interestingly, the desired benefits didn't materialise. Men who were earlier reluctant to work in the bead industry on account of the low wages, monopolised bead production using power lathes, while women were relegated to the traditional low productivity activity (ISSI, 1987). Access to technology, and not just its availability becomes critical in determining the extent of employment and income that accrues to the workers.

Technology and long run sustainability

One of the major issues concerning non-wood forest products management is their long-term depletion and its impact on employment and income. Decline in production occurs through diversion of forests for alternative uses (especially logging and agriculture) (Conelly, 1985) or through intensive exploitation in response to commercialization (Peluso, 1992). Policies, especially on access to resources and tenure are critical in determining the level of harvest and the long-run sustainability of production.

Local communities, traditionally dependent on non-wood forest products, were able to sustain production largely due to their dependence on a range of products and their strategy from switching from one to another. Commercialization of selected products has in the initial stages resulted in intensive exploitation of what is available naturally. Management, including cultivation, commences at a much later stage, when depletion enhances profitability on account of price increases.

Forest management has hitherto focused on a limited number of products, especially timber and other major products. Efforts at enhancing production are directed at intensive management of commercially important products. Systems that help to overcome conflicts in the management of a diverse range of products are not in place yet.

Organizational changes and their impacts

Commercialization and the resultant changes in the system of production are not necessarily always beneficial. The system of production employed under intensively managed plantations tend to exclude those traditionally involved in the collection of the products from natural forests. New jobs created in the plantation sector require different skills, while those traditionally involved are unable to adapt themselves as wage labourers under a plantation system. A more organised plantation sector thus displaces those who are traditionally involved in the activity.

Rubber cultivation by the Indonesian forest dwellers and cardamom collection by the hill tribes in India are examples of how compulsions of organised production could have a detrimental effect on those traditionally involved in the activity. In the latter case, plantation scale production has not facilitated the employment of the local people. On the other hand, most cardamom plantations are managed by labour brought from the plains (who of course have become the most dominant group in some of the areas, encroaching on land traditionally used by the hill tribes). The boom-bust cycle of cardamom, in response to supply-demand interactions, has aggravated the situation, undermining long-run ecological stability of production.

Conclusion

What will be the scenario of development of non-wood forest products? This is rather difficult to predict especially in view of the rapid changes in technologies. Most significant changes in nature or human life are not the outcome of a gradual process. but a result of occasional and often unpredictable quantum jumps. Since the broad category of non-wood forest products include a large number of items, whose properties are yet incompletely known, their potential for new uses is very high. Such breakthroughs in technologies are more likely to emanate from outside the forestry sector.

To match these technologies we will require completely different institutional structures. Our effort should be to take full advantage of the breakthroughs for ensuring that the communities who have been the guardians of the resources get a fair deal through better employment, income and improved access to goods and services. There is substantial scope for improvement, but realization of this depends on a variety of factors and more particularly social engineering skills.

It was not too long ago that the role of forest-based industrialization was given considerable prominence in the forestry strategies of developing countries. At that time it was considered as a panacea for all the rural development problems, and more particularly unemployment and low incomes. With hindsight we have realised how the assertions at that time have proven incorrect. In theory there is nothing wrong with the strategy, but the failure was due to our inadequate understanding of the social and economic dimensions of the problem. Let us guard against this to ensure that the non-wood forest products development strategy does not end as a missed opportunity.

References

Caldecott, J. 1988. Hunting and wildlife management in Sarawak. IUCN. Gland, Switzerland.

Conelly, W.T. 1985. Copal and rattan collecting in the Philippines. Economic Botany 39(1): 3946.

Fernandes, W., and G. Menon, and P. Viegas. 1988. Forests, environment and tribal economy. deforestation, impoverishment and marginalization in Orissa. Tribes of India Series. Indian Social Institute. New Delhi.

FAO. 1993. More than wood. Forestry Topics Report No 4. Forestry Department, FAO. Rome.

Hadi, S. 1991. Forest-based handicrafts in Indonesia. FAO Community Forestry Case Study No 4. FAO. Rome.

Institute of Social Studies Trust. 1987. Small-scale forest based enterprises with special reference to the roles of women. Karnataka State overview paper. Report of the Institute of Social Studies Trust, Bangalore. FAO. Rome.

Joseph, K.J. 1992. Reed people of Kerala. FORSPA, FAO. Bangkok.

Nair, C.T.S., and P.K. Muraleedharan. 1983. Rural institutions for development of appropriate forestry enterprises. a case study of the traditional reed industry in Kerala State, India. Kerala Forest Research Institute. Peechi.

Peluso, N.L. 1992. The political ecology of extraction and extractive reserves in East Kalimantan, Indonesia. Development and Change 23(4): 49-74.

Rao, A.L. 1994 Study on beedi leaf collection and utilization in India. FORSPA Occasional Paper 24. FAO. Bangkok.

Shiva, M.P. 1994. Determinants of the key elements of demand and supply of non-timber forest products. Paper presented during the International Workshop on India's Forest Management and Ecological Revival, February, New Delhi.

Statistical data is particularly weak for NWFPs which do not generate revenue for governments.


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