Jason W. Clay & Charles R. Clement
This volume identifies a number of general issues that relate to the successful harvest, processing and marketing of non-wood forest products in ways that not only do not destroy the forests from which they came, but generate employment and income. The creation of income-generating forests in Amazônia that sustainably produce numerous forest products would do much to solve the region's problems. In addition, 19 species have been highlighted that already produce value products or that can produce value without undue additional research. This volume attempts to identify what needs to be done. Clearly there is considerable work ahead. The costs, however, are not exorbitant and if forest residents can work together with botanists, ecologists, development experts and marketeers, alternatives to some of the more destructive economic activities in the region can be achieved.
Developing markets for forest products is not easy; nor does it simply happen on its own. A considerable amount of time and money must be invested to expand or create markets in ways that return significant revenues to forest residents and the countries in which they live. Sustainable development, rainforest conservation, biodiversity conservation, etc. are also key marketing concepts that can differentiate some forest products from others and raise this market segment above a purely free trade orientation. This, in turn, allows the return of a greater portion of the consumer price to the forest producers.
Most development programs in Amazônia, and elsewhere in the world tropics, take a production oriented approach. Such programs focus on selling into the market rather than attempting to obtain a higher value in the market or changing the market entirely. Because of their production orientation, they frequently have the net effect of creating an increased supply of commodities, thus reducing prices, profitability and new income to producers. During the past two decades, the world market prices for cacao, rubber, oil palm and other tropical plantation crops have tended constantly downward. While this is well received by consumers, the environment is suffering and producers are looking for alternatives. A successful marketing orientation for forest products, on the other hand, should increase demand and value, thus allowing more product to enter the market without reducing the overall price of the commodity.
Numerous constraints and guidelines for marketing forest products are featured throughout this volume. Some of them, however, should be underscored at this point. While each community or regional association should attempt to market a number of different products and find a number of different markets for each product, one or two products will still account for most income for most producers. Sometimes groups may be able to market their own products in local, regional, national, or even international markets. At other times, local groups will want to limit or specialize their marketing efforts in certain areas and turn the rest of the marketing over to others.
Funders or donors who support forest production and processing initiatives should insist that local groups consider from the outset how their goods will be marketed and what role the groups will play, even if it takes years to get to that point. To be sure, forest producers will probably always be able to sell their products, but if they want good markets they will have to work to create them. Often at least one full-time staff person is necessary for each commodity traded. The marketing of each commodity works best if the person designated to trade it comes on staff at least one year prior to the start of trade.
If Amazonian groups wish to market their own products, they will need to establish offices and warehouses in each market they intend to penetrate (e.g., the south of Brazil, New York, Europe, Japan). It would probably be more efficient if several Amazonian groups worked through a single broker so as to spread the costs of such an operation over a large number of commodities. Setting up and running such an office will cost about US$ 1 million in Brazil, about US$ 4 million in the US, and about US$ 6 million each in Europe and Japan. These figures are based on Cultural Survival's past experiences. They represent an "educated" guess.
Even if local groups decide not to open such offices on their own, the more their representatives travel to the US and Europe to study such operations and understand their workings, the more informed they will be. In the short term, Amazonian groups will probably be forced to market the bulk of their products through others. There is simply too much to be learned about harvesting and processing at this stage, without adding another whole dimension of complexity. Nonetheless, any forest resident that shows an entrepreneurial bent must be encouraged to develop this, so that the forest peoples can eventually take over the entire operation.
A brief summary of Cultural Survival Enterprises' (CSE) market experiences is enlightening regarding the potential of NWFPs. While CSE's efforts have been under-capitalized, US$ 2 million has been spent on the trading program. In the same period, however, CSE generated more than US$ 3 million in trade and more than US$ 1 million in grants, loans and technical assistance to local groups. When CSE started its program it was unable to source any commodities of export quality directly from local communities. Now, thanks to our efforts and those of other like-minded funders, 9 of the 15 commodities traded come entirely from local groups. Four are purchased partially from local groups, with the balance supplied by existing commercial sources. Only two are purchased entirely from commercial sources.
If marketing work on forest products is done carefully, existing markets and market forces can be harnessed to change these markets in favor of forest residents and the nondestructive use of forest resources in regions like Amazônia. But, these efforts are neither easy nor inexpensive in the short term and it takes several years for trade volumes to reach levels that offset the costs.
Since commencing trade in forest products in late 1989, Cultural Survival has shown samples of nearly 1,000 forest products to nearly 200 manufacturers in North America and Europe. Fifteen commodities are now traded on a regular basis to some 50 companies who manufacture more than 150 products. Another 50 companies are at various stages of product research and development and about 70 companies are still in the initial contact stage.
Cultural Survival Enterprises' current 5-year marketing strategy (based solely on its work in the US, for example) shows costs of US$ 3.4 million, to be covered by grants. During the same period, the program will generate US$ 48 million in overall trade, of which US$ 5.7 million while be returned in the form of grants and profit-sharing to local groups. CSE grew 450% in 1990 and 350% in 1991. If CSE averages 30% growth for 20 years, starting in 1990, by 2010 nearly US$ 1 billion will be returned to forest-based groups each year, either through direct purchases, environmental premiums or profit sharing agreements.
Thus, in the short term at least, funders should support some of the international efforts to develop markets for forest products, sustainably harvested timber, or medicinals that benefit local populations. These funds, however, should only be given to those national or international NGOs or groups that guarantee a decent return to forest residents and other NGOs working in areas such as Amazônia After all, forest residents will only conserve forests if it is worth their while. Cultural Survival, for example, guarantees that 100% of the funds generated through licensing and environmental premium agreements with companies that use Amazonian forest products and that use the concept of saving rainforests as a selling tool will be returned to Amazonian forest residents or their support groups.
If the marketing of forest products is undertaken with companies who agree to use their packaging to inform consumers about rainforest issues, then consumers will become informed about the positive impact their consumer habits can have on rainforest conservation. Since beginning its program, Cultural Survival has helped manufacturers reach an estimated 50 million consumers through their packaging. In addition, we have helped generate nearly 1,000 articles, as well as dozens of radio and television programs, to inform the public about CS's marketing program, what the connections are to tropical forests and what they as consumers can do to support these activities. Our approach has been to have the media run stories about the concept, rather than attempt to reach the public through regular advertising channels.
Considerable groundwork has been laid to create markets for forest products in the United States and to a lesser extent in Europe. It is these markets, ultimately, that will determine the viability of selling forest products as an alternative to using the same lands for agriculture or cattle in places like Amazônia. There is a delicate balance that must be maintained, however, between creating demand and stimulating production. Without that balance manufacturers could be left without product or producers could glut markets, forcing prices down. In either instance, the resulting problems would probably contribute to the further impoverishment of rainforest residents, thus prompting them to turn to more destructive uses of forest resources.
Unfortunately, however, any forest product that becomes successful will inevitably be taken out of the forest to be produced in conventional agricultural systems (see chapter 3). Consequently, not only must there be a continual influx of new forest products to the market but these must continually be differentiated from similar non-forest products and similar products obtained from non-sustainable systems.
While there are currently a number of organizations working to develop markets for sustainably produced forest products, there are few sources of information about "new" forest products. As pointed out in chapters 2 and 3, considerable information about each new product must be available to both the marketeers and the industries that are thinking of buying the material. Therefore, various Amazonian institutions should be strengthened or new ones created to provide this information on a priority basis.
Given the importance of Amazônia to global climate change and biodiversity, it makes sense to have an institute that would serve Amazônia an improved forest extractivism, and the rainforests, much as the CGIAR institutes serve specific commodities. In fact, Clement (1989, 1991) has already suggested this to work with Amazonian crop and forest genetic resources and Amerindian and caboclo agroecosystems. Based upon the ideas presented in this report, it is clear that this institute must also interact with agents of the market economy, especially entrepreneurs, processors, and traders.
The institute should concentrate on many of the topics outlined in this report, but specific details would have to be worked out in conjunction with government officials, forest residents, researchers, and other end users of the information. This multimillion dollar investment would only work if several bilateral and multilateral agencies supported it; none of the Amazonian nations have a strong enough economy to support it alone. It would cost US$ 5 million to US$ 10 million per year during the first few years. Given the potential benefits expected, i.e. sustainable economic development with forest and biodiversity conservation (and slowed global climate change), these costs are more than reasonable. In fact, these costs are less than US$ l per Amazonian inhabitant per year.
The institute must base its objectives on the needs of local communities, not only the forest communities, but also agricultural and urban communities, in determining the problems to be addressed, as well as the types of solutions considered. To avoid a top-down orientation, specific links between research and development/extension would have to be created from the outset. Perhaps a small budget could be set aside that would allow Local groups to undertake their own research with institute supervision.
The combination of one or several public institutions working with forest entrepreneurs should provide a new model for sustainable development, as well as fueling sustainable economic growth and social equity in Amazônia As pointed out in the introduction, however, social equity will only be obtained with changes in the social-political environment also. The combination of a sustainable economic model and an equitable social and political system will allow for the development of Amazônia without the loss of the forests. This short report is intended to contribute to this effort.