Jason W. Clay
During the past decade, the idea of conserving the tropical forests by using them more appropriately has become more fashionable. This idea is not new, of course, since tropical forest people have a long history of exploiting the forest, frequently on a sustainable basis, although occasionally not, especially when population pressures or market demand drives exploitation to non-sustainable levels.
These pressures to exploit non-sustainably are growing at a rapid rate. Population in tropical countries is growing quickly and most governments use forests to relieve pressure in overcrowded agricultural areas. This results directly in deforestation, because the new residents are unfamiliar with the forest or desire to continue an agricultural way of life. As long as governments fail to address the population issue, forests will disappear.
At the same time, people everywhere in the tropics have increasing desires to consume as they are drawn deeper into the expanding world market economy. Local definitions of "quality of life" are changing as people listen to the radio and watch television, even if only once a month. In order to consume more, forest peoples must obtain money or trade goods, which can result in over-exploitation of one or more of their forest resources, especially if there are only a few with market value.
If governments fail to address population issues and continue to favor agricultural strategies over forest-based conservation strategies, the next century will witness the demise of the tropical-forest ecosystems of Africa, Asia, and the Americas. This does not have to happen. If governments and international development agencies decide to foster a forest-based economy this scenario could be avoided. This forest-based economy could evolve from forest extractivism, both in its current form and with management and marketing improvements.
During the past three years, Cultural Survival Enterprises (CSE), the trading arm of the not-for-profit human rights organization Cultural Survival, has worked with a few specific groups in the Brazilian Amazon to demonstrate that, in their areas, forests are worth more standing than razed for pasture or conventional agriculture. Scientific research and subsequent economic projections suggest that, in the long term, forest areas are worth more for their sustainably harvested wood and non-wood products than they are when clear cut for logging and/or conversion to pasture, agriculture or even plantations. As a result of work with local groups, for the first time these projections are not paper profits - theoretical calculations about the value of forest products - they are real incomes in real peoples' bank accounts.
CSE has concentrated on Non-Wood Forest Products (NWFPs) - nuts, fruits, oils, resins, essences, pigments, flours, and handicrafts. In the past three years, CSE has brought 350 different NWFPs out of the Brazilian Amazon for sampling by 120 different companies in the US and Europe. These companies range from Fortune 500 members to small, start-up operations created solely to market rainforest products and return profits to rainforest groups.
The major
lessons learned from these efforts are discussed in this chapter,
in order to provide a theoretical and practical outline for a
strategy to improve the marketing of NWFPs. Although these ideas
were developed in the Brazilian Amazon, they can be easily
adopted and adapted by producer groups, other NGOs, state and
national governments, and international development agencies in
any tropical forest area. The ideas alone, however, will not
immediately increase marketing of NWFPs. Therefore, a discussion
of some necessary research and development topics follows.
1. Land and resource
rights are essential. Forest residents are unlikely to
protect forest resources if they do not have clear rights or
guaranteed access to these resources or if they feel that at any
time they can be displaced by outsiders. After all, why should a
person save a valuable tree if someone else can come along at any
time and cut it?
Likewise, forest residents will not invest time or money in such activities as forest enrichment, sustainable harvesting techniques, processing equipment, facilities to reduce post-harvest losses or the reclaiming of degraded areas if they do not have guarantees that their resource rights will be protected. Clear title to resources is one way to guarantee them, but zoning and restricted access constitute what can be effective variations where rights are shared by the state and forest residents.
2. Start with products already on the market. Existing products offer the best chance of quickly creating national and international markets that can generate increased income in the short term for forest residents. Introducing new products, on the other hand, takes time: up to 5 years for foods, 10 years for personal care products, and 20 for pharmaceuticals. Yet, if forest residents don't start generating income from forests in the short term, much of the forest that is left will already have been destroyed before the new products come on line.
3. Increase Competitiveness. One of the main reasons that forest residents can be maintained in their current impoverished position is because they do not benefit from the value that their products generate. This situation was created by lack of competition in the marketplace. In order to increase local revenues, competition must be increased. There are various ways to accomplish this.
Alternative markets and buyers help. The breakup of trading and shipping monopolies also increases competition. Investing in production systems that reduce overall costs helps by making production and processing more efficient. (One of the curious effects of monopoly capitalism as it has been exercised in the Amazon has been to discourage either sustainable harvesting practices or economically viable production systems.) Enrichment programs or reclamation of degraded areas also increases competition by forcing marketing or trading monopolies to compete when such programs are associated with processing or value-added programs.
4. Diversify production and reduce dependence on a few products. The diversification of products is absolutely essential to the overall viability of extractivism in the Amazon, and consequently the conservation of the forest and the maintenance of biodiversity.
Strategies should be developed one product at a time, however, and should focus initially on the largest volume and highest value commodities. (Interestingly enough, individual producers probably should not diversify their own production too much or they will reduce their efficiency and overall impact on any single market.) The resulting profits can then be reinvested to continue to diversify production. Particular attention should be paid to commodities that generate high value per unit of labor, complement the seasonality of other products, and provide food or other essential goods to the producer group.
5. Diversify the markets for raw and processed forest products. To reduce the overall risk to producer groups, the number and type of end users for each product should be diversified. For example, Brazil nuts (Bertholletia excelsa) can be used as nuts (shelled or unshelled), or in ice cream, baked goods, cereal, candy, oil, flour, and so on. Market diversification can also be achieved through market positioning - regular, organic, wild, or natural - and through local, regional, national, and/or international marketing strategies. Diversifying markets can also increase demand.
6. Add value locally. Evaluate the markets for each product, determining where value is added, where risk exists and where local communities stand to gain the most in the short, medium, and long terms. Sometimes, eliminating intermediaries through improved transportation might work; other times, adding value through local or regional processing could be most beneficial. Depending on the product, adding value locally does not always make economic sense.
7. Capture the value that compounds as the products travel farther from the forest. Each transaction adds value to products. While value is added according to labor, risk, and capital investment, it is also compounded through scarcity and monopoly. Most forest residents who collect products that are ultimately exported currently receive less than 15 percent of the New York City wholesale price of the commodities that they sell. (Keep in mind that they often pay equal or higher prices than those in NYC for basic commodities - sugar, rice, beans, meat, gasoline.) If they 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 make a living, or they will leave the forest altogether allowing colonists and ranchers to move in and degrade it.
8. There is strength in numbers. 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 factory, for example, produces 70 metric tons (MT) of Brazil nuts per year, but M & M Mars uses 70 MT of peanuts per 8-hour shift in Snickers candy bars. Individually, local Brazil nut shelling cooperatives could never convince large companies like M & M Mars to use their nuts. By working together, producer groups can control larger market shares, exerting considerable influence over entire markets.
In general, even trading higher volumes through local organizations rather than one-on-one through intermediaries will give individual producers access to higher prices. Furthermore, the same skills and institutional structures that allow groups to sell larger quantities of product into the market enable them to purchase manufactured items in bulk, and thus save money.
9. Make a decent profit, not a killing. It is possible to add value locally and to increase overall income. Pricing, however, is a tricky issue. High prices reduce overall markets for forest products and give manufacturers a reason to look for cheaper alternatives. Likewise, each decision to eliminate intermediaries as a way to add value locally must be carefully studied.
For example, Brazil nut gatherers are quite keen on eliminating the Belém shelling monopoly; -but if the monopoly was dissolved today, who would collectors sell to? Would they be better off in the short term? Would they even be able to stay in the forest? What other risks does that intermediary take, or services does he or she provide? Who will provide them in the future in that person's absence?
10. Solutions must be equal to the problems. Model projects with built-in subsidies are not viable solutions. Solutions that address only the needs of one of the different groups (Indians, rubbertappers, peasants, colonists) are not viable. Solutions that do not address the principal commodities traded in the region [Brazil nuts, rubber (Hevea brasiliensis), asset (Euterpe oleracea), babassu (Orbygnia phalerata)] are not solutions. Solutions must be on the same scale as the problems, yet divisible, starting with one village or group at a time. This being said, no single solution will reverse the destruction of the Amazon forest nor other tropical forest.
11. International markets are for the protection of ecosystems not for the people who live in them. Most consumers are concerned about the environment. Thus it is essential to invest in monitoring systems which ensure the sustainability of production. The sale of commodities must be linked with systems that ensure that the quantity of products taken from the forest does not destroy it.
By the same token, the harvest of any product will change the forest; yet such manipulations have taken place since humans entered the forests and have not destroyed them. What is needed, then, are careful environmental impact assessments and monitoring systems that examine at the outset the impact of increased trade on individual species. This is the type of monitoring that is required for products that are already being harvested and sold onto the market. For new products, such studies should be undertaken before the commodities are harvested. Monitoring and research needs to be undertaken for each commodity by scientists and forest residents. In the end, it is the local communities whose present markets and future livelihoods will depend on such certification. The authority to monitor and certify should be primarily theirs.
These are
the 11 major lessons learned through recent CSE efforts to market
non-wood forest products. Although they will probably be modified
over time, they are offered here as ways to help think about the
best strategies to conserve tropical forests, their people, new
arrivals and biodiversity. The program initiatives elaborated in
this chapter build upon these lessons, and suggest a
comprehensive short-term strategy to turn the tide of
deforestation in the Amazon. The ultimate success of this
strategy - both its broader, theoretical issues and its specific,
detailed suggestions - will only be possible if those interested
in these issues work together, addressing the problems in as
complementary and comprehensive a way as possible.
Currently traded forest products
Improved harvesting techniques
Chemical analyses and health and safety information
Reducing post-harvest losses
Transport
Commodity marketing systems
Processing and technology transfer/development
Marketing
The research outlined in
this section includes a number of general suggestions relating to
currently traded non-wood forest products. What is outlined here
are ways in which the rights of forest residents to such
resources could be guaranteed or respected through specific
marketing as well as legal strategies.
As a rule of thumb, initial
research should be focused on commodities that are already being
extracted, harvested, or otherwise produced and traded on the
market. Such production and trade implies not only that there is
already demand, but that some forest residents are supplying it
and, depending upon the length of time they have been doing so,
that production and trade might not be environmentally
destructive. Research and development should concentrate on four
general areas for each product: existing and potential markets;
sustainability of production over time; potential of each
commodity for possible enrichment programs; and the forest groups
that could benefit from market development.
If products are already being sold onto some markets, it should be easier, hypothetically, at least, to expand those markets. By contrast, creating markets for new or unknown products would take 5 to 20 years, as mentioned earlier. In addition, creating markets for commodities that forest residents have not previously collected will require changing overall production schedules and habits and could lead to environmental degradation and even species loss.
Research, then, needs to be undertaken on the history of trade of forest products in this century. The data can then be compared with today's market information. For example:
- What is or is not being traded today versus 90 years ago, and why?
- What is being collected and traded by some groups but not by others, and why?
- How can costs be lowered by eliminating intermediaries?
- What implications does such research suggest for follow-up studies (e.g., on transport, processing, etc.)?
- What other potentially marketable by-products come from the same plant, fruit, or seed?
- What would it take to develop markets for those by-products?
The answers
to these questions will help identify possible priorities to be
addressed not only by research institutions but by forest peoples
as well.
In many cases, the issue of
sustainably producing NWFPs from tropical forests has more to do
with harvesting technology than with actual levels of current
off-take. Pau rosa (Aniba roseadora),
an essential oil whose harvest has almost eliminated the species
from the Amazon, can probably be harvested sustainably. Likewise,
copaíba oil (Copaifera multijuga),
chicle (Manilkara zapota), and other
latexes, and certain fruits, can be harvested sustainably, even
though they often are not [eg buriti (Mauritia flexuosa)].
Some new techniques would require education rather than equipment, others the reverse.- For example, copaíba oil should be harvested by drilling a hole with a brace and bit and tamping it, rather than making a hole with an ax, which does not heal. (Research could reveal if trees can be patched and made productive again.) The brace and bit could be sold at the depot where the copaíba is purchased. They need not be fancy or expensive - one bent piece of iron tooled on one end with a section of pipe on the other, serving as the handle.
If NWFPs are to become a more important part of overall solutions for generating income for forest residents, reducing overall levels of deforestation, and protecting biodiversity, research should be undertaken on the harvesting techniques for each NWFP to determine what it would take to convince collectors to use alternative methods.
Guaranteed
land and resource rights (or usufruct rights) are perhaps even
more important than harvesting techniques in encouraging the
sustainable harvest of NWFPs. Such rights, in fact, can allow
producers to develop sustainable processing techniques.
Furthermore, they allow harvesters, to develop long-term
harvesting strategies for single species and multiple species
associations. Finally, they allow harvesters to make financial
investments in the equipment needed to harvest or add value by
processing their products.
The main impediment to the
entry of NWFPs into the personal care products market is the lack
of readily available health and safety data and chemical
analyses. Manufacturers of soaps and shampoos, for example, are
required in the US and England to have documented evidence that
the products they use in manufacturing are safe for human use. In
fact, the requirements are as strict for anything that goes on
the skin (since it is porous) as for products that go into the
body. Without health and safety data, NWFPs cannot be used.
Although documentation of past use in the country of origin can
supply important background information, it is not sufficient to
clear the product for use.
Much of the health and safety information needed by manufacturers probably already exists, but it is not readily available. It may only be found in obscure or private sources. Much of this data probably was compiled during the heyday of the trade in NWFPs from 1880 to 1930. Even though the scientific techniques were less precise at that time, the information could be very useful nonetheless. Much of this data, probably stored in the old Brazilian Oil Institute library, has been lost since the library was split up in the early 1950s.
A number of Brazilian government agencies probably have information on specific products, too, but no one has had the time or money needed to collect all the data in a comprehensive way. Likewise, Brazilian industries, research institutes, and individual scientists certainly must have data, but no one has been able to compile it. Once the compilation of this data is completed, it would become clear what additional studies would need to be undertaken.
In addition to health and safety data, industries must know the standard chemical properties for each product as well as the acceptable ranges within and between categories. These are also the guidelines that are used to determine if a product has been diluted or otherwise contaminated. Often a number of varieties of a single oil might exist (there are more than 30 varieties of copaíba in the Amazon, for example), so it is important to know the variety being received and/or the range for that or all varieties. Full, yet basic, chemical analyses cost up to US$ 1,000 per sample. More than one sample of each commodity from each region would have to be analyzed in order to generate baseline data.
Some
excellent research facilities exist in the Amazon to obtain new
data on those products identified as priorities for development.
In fact, new data can frequently change priorities as exotic
properties can have strong market value (e.g., the interest in
short chain fatty acids by the chemical industry).
Most products from the
Amazon have well defined and relatively short harvest seasons.
Markets for such products, however, could easily be sustained
throughout the year if produce were available. Harvest, itself,
is usually an arduous task. Transportation to market is difficult
and often must wait until a change of season. All of these
factors make the reduction of post-harvest losses a potentially
profitable activity. In short, once a product is harvested it
makes sense to ensure that as much of it as possible can be sold.
To the extent that the product can be sold for a longer period of
time, it will generally not only command a higher price during
the "off" season, it will also raise or at the very
least stabilize the price during the peak period of availability.
(Most forest residents are offered very low prices for their
product during periods of peak production.) To date, little time
or energy has been invested in reducing post-harvest losses.
The Brazil nut illustrates the point. Little is known, for example, about how to store Brazil nuts in the forest during the rainy season before they are transported to market. What are the best "forage facilities? Should they be elevated? Should they be thatched roofed, slat sided, etc? Should the nuts be picked up as soon as they fall of the trees, or is it better to leave them in the ouriço (the true Brazil nut fruit is a hard woody sphere that holds the seeds of commerce) on the forest floor until they can be sold?
Once the nuts are sold to traders, they are traditionally shipped from the Western Amazon by open barge to Manaus or Belém where they are shelled and packaged for export. On these journeys, 25-35% of the nuts rot. Covering the barges or processing the nuts closer to the forests would reduce the post-harvest losses and make financial sense.
The ways to
reduce post-harvest loss should be examined for each commodity.
This information can be gathered in the commodity specific market
research suggested below. (It should be noted, however, that such
losses, often give the appearance of being value added, because
they force the price up at the next market stage, e.g. processing
in Belém.)
The development of markets
for sustainably harvested commodities and the destruction of the
rainforests both depend, ironically, on the same thing: improved
transport systems. Today, this usually means the construction of
roads. Anyone familiar with the Amazon has seen the satellite
photos clearly documenting the impacts of road building or
subsequent paving. Often the roads are built for a specific
short-term purpose - oil or mineral exploration, surveys, and so
on. Yet each year the deforestation creeps out further from the
roads' radii as new feeder roads expose more and more forests to
chain saws.
Forest residents have long realized that roads are both their salvation and their demise. Unfortunately, roads make land too cheap; not valuable enough to protect. They make the supplies of land seem limitless, so few invest in relatively more expensive conservation practices when it is simpler to move a few miles down a road.
Roads also represent another kind of market freedom, however. In the past, every commodity traded in the Amazon was monopolized regionally by elites who controlled river transport, usually by controlling through violence the mouth of a river system. Without roads these monopolies would continue. If roads are built before land rights for forest residents are established, however, long-term residents are inevitably pushed aside in the rush of colonists, rich and poor alike.
Although large roads are now inevitable, alternative transport systems in the Amazon should not be overlooked. River transport can surely regain some of its importance once the river trading monopolies are broken, land rights to large indigenous and extractive areas are guaranteed, and the high cost of constructing and maintaining roads and moving commodities by truck are better understood. Rubbertappers in Xapuri now use river transport to export their nuts to the US even though only three years ago it was assumed that the large Brazil-nut trading monopoly in Belém was able to prevent "unauthorized" exports.
River transport, though slow and in some cases seasonal as water levels drop, is far more efficient than overland transport. What is needed are good economic studies to determine which commodities would benefit most from investments in which types of riverine transport systems.
The studies then need to be followed by government and entrepreneurial action. Before the TransAmazon highway initiative and the creation of the Manaus Free Zone, the state and federal governments and the regional banks all supported river transport, the former with incentives and favorable regulations, the latter with working and building capital. The revival of river transport will require the renewed action of these regional agents.
Another form of transport, blimps, should also be examined carefully as a nondestructive means of transporting goods out of and into inaccessible areas. The most common manned blimps have been used by the US Navy. There are hundreds in existence that have carrying capacities varying from 200 to 2000 kg, excluding the pilot.
Most existing blimp designs do not have the thrust to lift logs that weigh an average of five tons (» 5 m3). Even if blimps could be designed with enough capacity for a five-ton payload, the current price of mahogany or cedar in most of South America (US$ 56/30m3) is equivalent to only $US 0.01 to $US 0.03 per kg. The idea of the blimp as the workhorse of the rainforest has merit, but not for logging at current prices.
NWFPs have much higher per-kilogram values than even the most expensive tropical hardwoods. Furthermore, they occur in much smaller units. Brazil nuts in the shell, for example, are worth US$ 0.06 to US$ 0.20 per kg depending on their distance to the shelling plant. If they were shelled in the forest prior to transport, they would increase in value to US$ 0.60 to US$ 0.80 per kg. Copaíba and patauá (Jessenia bataua) oils are valued at about US$ 2.00 per kg. Andiroba (Carapa guianensis) oil is worth about US$ 1.00 per kg. Vanilla (Vanilla planifolia) from the western Amazon is worth US$ 10.00 per kg. Cupuassu (Theobroma grandiflorum) is worth about US$ 0.80 per kg (and both seed and pulp can be sold). Handicrafts range from US$ 2.00 to US$ 100 per kg. Even ecotourists or birders are worth US$ 0.30 to US$ 0.40 per kg per hour. (According to tour guides, blimps could be kept busy during the dry season at a rate of US$ 200 per person for a group of six plus guide, on a four-hour trip.)
Although
river transport may sound mundane and blimps farfetched,
alternatives to roads will certainly make economic sense in many
areas and are definitely worth researching and developing as
priorities.
In order to determine how
to generate income for forest residents and other local
producers, research must be undertaken on each potential
commodity to identify the bottlenecks in the current system and
the point where value can best be captured by the producers. Each
commodity has a different production and marketing system.
Copaíba oil is different from andiroba or babassu oil, and they
are all different from Brazil nuts, cupuassu fruit, or honey.
Traditionally each product has its own set; of producers,
traders, marketers, and processors.
Gathering such information is essential to determine where to intercede in the system so that more value can be added closer to the forest. With this information, local producers or harvesters can evaluate when it is profitable to process their products and when it is not worth the risk or capital investment, or when they do not have the skills.
Brazil nuts illustrate the point. In 1989, 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 - by a company store system - by local traders.) Transporting their nuts to the regional market center doubles value. Shelling the nuts for export allows collectors to earn 20-40 times the in-forest value, because it adds value while reducing transport costs (shelled nuts are only one-third the weight and volume). In some instances local shelling makes it possible to sell Brazil nuts which in the shell are not worth the transport costs (at this time, it is estimated that only about half of the areas with Brazil nuts can be profitably harvested). Turning nuts into oil would double or even triple the shelled nut values. And so it goes. These are the types of data needed for each commodity.
Of course,
this is just one commodity. A better way to increase the economic
viability, or at least reduce risk to producers, of extractive
economies is to diversify production and sources of income.
Although this cannot be done overnight, each commodity can
generate some of the money required to diversify income sources.
For example, the export of Brazil nuts can be used to guarantee a
loan to purchase equipment for processing a higher, more valuable
grade of rubber, even though the rubber will only be marketed
within Brazil. Copaíba, cupuassu, vanilla, vegetable ivory (Phytelephas
aequatorialis), and other products can be added to
the mix. Groups should strive to be less dependent on single
products or purchasers, but such a strategy makes more sense on a
regional basis rather than the level of an individual producer.
One of the ways in which
local groups can benefit from the sale of NWFPs is to add value
locally. Some of the more general principles to be considered
when thinking about investments in value-added initiatives are
explored in this section.
In every instance, attempts should be made to determine ways to add value locally. In general, processing should be done to reduce post-harvest losses, reduce the weight and volume of raw products, increase their standardization, and guarantee consistent quality and acceptability into multiple markets. In general, local value added should increase the ability of NWFPs to enter multiple markets rather than restrict the number of markets that would accept them due to overprocessing.
Efforts to add value locally should not have built-in subsidies. While it may be acceptable to subsidize processing in the short term, in the long term plans would have to show that the subsidies would be eliminated or else such programs would not be options in the real world. Nor should programs to add value be ecologically unsound. For example, what is gained through sawing tropical timber locally if it is done so inefficiently that more trees must be harvested? Why not leave the processing to the most efficient processors? Or, why not invest in more efficient local plants?
Whether or not it makes sense to add value locally is a complex decision. Such decisions about if it is appropriate to add value and 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:
- What is the volume of the commodity in question?
- What is the seasonality of production?
- Could the facilities to add value be used in other ways during the off season?
- Is capital readily available?
- Is there sufficient labor?
- Would local people know how to manage a plant, both in technical and financial terms?
- What are the easiest ways to add the most value?
- Which forms of processing open the product to a wider market?
- Which forms restrict its markets?
- Which forms of adding value expose the producers to unnecessary risks?
Although adding value locally is important, with the exception of crafts and houseplants, attempting to produce end-user commodities is probably not a good idea. Rarely does an area have on hand the different ingredients that would be required. Furthermore, manufacturing takes energy and often results in products that are larger and less efficiently transported than either raw materials or semiprocessed goods. Thus, end products would require shipping not just the product, but the air and packaging, great distances at energy costs that could not justify the political impetus for local manufacture.
Initially, at least, groups should focus their efforts on production and sale in larger units. Quickly these efforts can be expanded into processing commodities into higher value, more efficiently transported commodities (e.g. shelled Brazil nuts, expelled oil, frozen fruit pulp). In fact, processing raw materials into more efficiently shipped, widely acceptable commodities generates considerable employment in its own right while allowing the commodities to penetrate more diverse markets.
In the
following chapter, some value-adding initiatives will be
presented along with an introduction to the species highlighted
in this volume.