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Benefits and risks of commercialising NWFPs: The case of ngalinuts in the Solomon Islands


Introduction
Commercialisation of ngalinuts in the Solomon Islands
Ngalinuts in Solomon Islands society
Benefits of commercialising ngalinuts
Risks of commercialising ngalinut
Considerations for commercialising ngalinuts


Pitakia M Pelomo
Marketing Manager, Commodities Export Marketing Authority

Introduction

As more and more hectares of rainforest become vulnerable to logging in the South Pacific, governments, conservationists and forest resource owners are making extra efforts to find income generating forest products other than timber. There are many non-wood forest products (NWFPs) that have potential commercial value. These include fibres, medicinal plants, oils, oleoresins, edible greens and nuts.

In the Solomon Islands, edible nuts offer the greatest potential as alternative cash crops for forest owners. There are many edible nuts in the islands but the most promising ones are ngalinuts (Canarium spp.), cut-nuts (Barringtonnia spp.), bush elite nuts (Terminalia sp.) and dola nuts (Inocarpas sp.). These nuts have been part of the traditional diet of the islanders from time immemorial and they have been traditionally traded, particularly the ngalinut.

In 1988, the Solomon Islands Government began a national project to investigate the commercialisation of ngalinuts with the aim of providing another cash earner to the rural villagers of the Solomon Islands. Commercialising a crop which has great traditional value to the villagers is difficult, to say the least. One wonders whether, in the end, the benefits out-weigh the risks especially when non-monetary values are considered. This paper briefly highlights current progress of our attempt to commercialise ngalinuts. It also discusses the benefits and risks peculiar to the venture and offers suggestions to reduce the risks and optimise benefits of commercialising ngalinuts in the Solomon Islands' context.

Commercialisation of ngalinuts in the Solomon Islands

Traditional trading of ngalinut products, including nuts-in-shell and processed kernels, previously existed at the subsistence level. It involved exchanging ngalinut products for other goods, services or obligations. As the cash economy penetrated the subsistence sector, ngalinut products in the forms of nutsin-shell, fresh kernels and dried and roasted kernels were exchanged for cash within villages and in urban markets.

However, the real attempt to commercialise ngalinut products was instigated by the government in 1988. This involved organised purchase of nuts-in-shell throughout the country by the Commodities Export Marketing Authority (CEMA). The nuts were cracked and processed into packaged kernels and oil by the Dodo Creek Research Station. The finished products were then sold by CEMA on the domestic market and, in the case of oil, overseas.

CEMA uses 11 strategically located buying centres to purchase the nuts-in-shell from the nut owners who are dispersed throughout the country. Purchase prices for nuts-in-shell range from US$ 0.17 to US$ 0.34 per kilogramme, depending on the species of Canarium and the grade, which is based on the kernel-to-nut ratio.

Purchases slowly increased as more villagers became aware of the scheme. In 1989, 3,456 kilogrammes were purchased. This increased to 45,763 kilogrammes in 1991 and 205,228 kilogrammes in 1992. In 1993, purchases dropped to only 7,216 kilogrammes because only one species of nut was bought. The quantities purchased represent only about 10 percent of total ngalinut production. The majority are used by villagers, while a small portion is never collected. Sales have totaled $134,289 since the buying program began, with $50,264 from local sales and $84,025 from export.

Although the project has achieved its main objective of generating additional income for the villagers and earning foreign exchange for the country, the level of success is only moderate. Many factors have affected the success of commercialising the ngalinut in the Solomon Islands. These factors include commercial as well as non-commercial considerations peculiar to ngalinut and the perception of derived benefits by the nut owners.

Ngalinuts in Solomon Islands society

One of the most important factors which affects attempts to commercialise ngalinuts, is rural owners' perception of, or values concerning, ngalinuts. Ngalinuts, unlike other edible nuts, are significant in Solomon islands' traditional society. First, the fresh or roasted kernels form a significant part of the local diet as snacks and main meals. For some villagers, ngalinuts are their only source of protein and energy. Processed ngalinut kernels are an essential ingredient, together with taro, for customary feasts. A traditional feast is of little value (not fit for the elders or chiefs) if ngalinuts are not included.

However, ngalinuts are held in even higher esteem for their traditional importance in nonfood terms. Ownership of the trees, or of the processed kernels, is a measure of wealth or social standing. Furthermore, ngalinut trees are grown in groves marking tambu sites and old villages, which in turn serve as boundary markers for parcels of land between tribes and families. The trees are more scattered within the boundary of a given tribal land. Traditional ownership is communal unless a tree is actually planted by a particular individual.

Processed ngalinut kernels are also used as a medium of exchange for pigs, plots of land, and traditional shell money. Hence, traditional trading with ngalinuts helped accumulate wealth and standing in society.

Ngalinuts are also important to local societies in that other activities revolve around the ngalinut season. So important is the ngalinut season that harvesting and preserving the nuts are regarded as the prime social events of the year. In some societies, the vernacular word for "year" is equivalent to "the ngalinut season." The project has discovered that owners' perceptions of the trees and the nuts are important considerations when commercialisation (and the introduction of the profit motive) is attempted.

Benefits of commercialising ngalinuts

Numerous benefits of commercialising the traditional trading of ngalinut products have been noted:

· Owners receive monetary benefits when they sell excess nuts.

· The country benefits, especially when kernels and oil are exported for foreign earnings.

· Nuts are now available, even out of season, for traditional purposes, and as food for islanders and the more adventurous expatriates.

· Commercialisation of ngalinuts has created more jobs through entrepreneurial processing and marketing of the product.

· As the owners realise the potential monetary value of this traditional and indigenous resource, they are more inclined to protect and preserve the trees - saving the forest from indiscriminate logging.

· Gathering and cracking of the nuts involves women and children; unlike traditional nut preparation, which only benefits fathers' social esteem or status, women and children can now receive monetary benefits more directly.

· Commercialisation of ngalinuts has encouraged the processing of other secondary, tertiary and by-products which makes the ngalinut tree more valuable.

Risks of commercialising ngalinut

While the benefits are numerous, the risks involved are just as numerous. The actual and perceived risks can be categorised as socioeconomic, trade, commercial and technological in nature.

Socio-economic risks

Socio-economic risks cover a multitude of problems that are peculiar to traditional society. As soon as CEMA started to buy nuts in 1988, many questions and problems arose both for the nut-owners and CEMA. They included the following:

1. There have been some disputes concerning nut tree ownership and individual rights to sell from the common holdings. This is compounded because ownership of trees may imply exclusive rights to the land.

2. Cash incentives encouraged sales and reduced local consumption. For those who depend on the nuts as their main source of protein and energy this is like selling fresh fish to buy tinned tuna.

3. Producers have to decide between temporary monetary gains and more permanent social gains.

4. The mode of marketing is biased against individual entrepreneurs.

5. Theft of nuts from the forest increased.

6. Some communities completely banned selling to CEMA or any other buyer. This arose from suspicions that profits were being made at their expense.

Trade risks

The greatest trade risks relate to initial mistrust. This is particularly true when overseas individuals and companies are involved. Often villagers have been duped by various marketing gimmicks, and have received little profit compared to other partners. Villagers also worry about the sustainability of the venture. Cultivating trust and confidence among nut owners is important.

On the other hand, the marketing expertise and arrangements contributed by the overseas partners cement the trade link once they are understood and accepted by the villagers. Questions of product patent rights have also been raised. The current trade link (trade, not aid) with Bodyshop International has been developed on mutual trust.

Commercial risks

The main commercial risks concern ensuring constant supplies of nuts, given that village priorities are often not cash oriented. The cost of collection from widely scattered production units is also very high. Another disadvantage is that the total quantity of nuts available is low, thus increasing marketing costs. In addition, on the international market, this unknown product will meet resistance or indifference until the nuts become recognized.

Technological risks

The project has had to start from scratch as far as technology is concerned, without a body of knowledge or experience to draw on. Thus, empirical work is being done on processing, quality packaging and marketing of the product. These problems are not so difficult for the local market, but are more challenging for the overseas market. Appropriate machines, equipment, processing and packaging technology have yet to be identified or developed.

Considerations for commercialising ngalinuts

Ngalinuts are an ideal product to market as an NWFP. There are many opportunities, especially in niche markets which often pay high prices. However, to sustain such a market the supplier must meet all the stringent requirements of international trade, including high quality and sustainable supplies. Ngalinut products have more chance of success in the local and regional markets, at least at this early stage of development.

Whether marketing ngalinuts to domestic and regional markets or internationally, success depends greatly on maximising the financial benefits and social well-being of the nut owners, while reducing the risks and challenges that commercialisation brings. Grassroots consultation with villagers must take place and there must be deeper study of the importance of ngalinuts within society. If this is done, the knowledge can be exploited to the villagers' advantage.

Second, villagers are very skeptical of outsiders (local or overseas) who make promises to market their products. "Ripoffs" are too many and too painful to forget. Hence, any trade arrangement must be carefully worked out for the benefit of all concerned. Rural villagers particularly resent losing rights to their product. Another consideration is that the venture must be sustainable. A period of subsidies, may be needed to build confidence in market commitments.

Once the structures of production, processing and support services are established, the market and its sustainability must be determined. This is the responsibility of the marketing partner. Often the villager judges his or her partner by the level of physical investments that are contributed to start the project. The onus is on the marketer or processor to provide relevant equipment, finance and technology to get the venture established. There are also advantages in using existing facilities and organisations.

There are many risks associated with the commercialisation of ngalinuts in the Solomon Islands. However, with a thorough appreciation of culture, consultation, proper marketing strategies and appropriate technologies, commercialization is likely to be successful, sustainable, and rewarding.

Traditional uses of NWFPs may point toward commercial opportunities - local cosmetics in Myanmar.


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