Leo Lintu is Senior Forestry Officer (Products Marketing) in the Forest Products Division of FAO's Forestry Department.
This article reviews the current situation in the marketing of non-wood forest products; discusses some of the basic preconditions for efficient, successful marketing; and proposes development action for incorporating the marketing of non-wood forest products into the activities of sustainable forestry.
One way of adding value to the forest resource is by identifying the widest range of products with commercial value in the forests and then assisting forest-based communities and the society at large to take the fullest possible advantage of the resource variety through improved collection, processing and marketing. It is equally important to make policy-makers aware of the opportunities offered by products other than wood to allow a more harmonious approach to forest resource conservation, management and utilization and thus contribute to sustainable development and environmental protection overall.
Non-wood forest products represent one of the most challenging product groups from a marketing point of view because of their number, versatility, end-use variation, dissimilarities of the producer base and resource richness. A particular feature related to non-wood forest products is their great number and versatility. To take just one example, some 3 000 essential oils are known of which approximately 300 have a commercial importance. Producers of non-wood forest products may be individual gatherers, including subsistence farmers and rural poor (gathering non-wood products on a part-time or seasonal basis), or large-scale industrial plantations supplying either primary consumer goods or raw materials for further processing. Markets for non-wood forest products range from simple local village-level consumer markets to the most sophisticated industrial niche markets in numerous end-use sectors in both developed and developing countries. In terms of end-use, the markets for non-wood raw materials and primary processed products are numerous and may be extremely varied, even for a single product.
Gathering mahua flowers, a seasonal grain substitute in India
MARKETING NON-WOOD FOREST PRODUCTS: MAIN FEATURES
Available descriptions of marketing practices are very often limited to portraying them as physical activities which include haulage, sorting, grading, packaging, storage, display and so on. Value-based descriptions of marketing practices are really rare in spite of the fact that, ultimately, the buyer is directed by the values that are provided through the physical activities.
The marketing of non-wood forest products which are used as raw materials in industries is normally carried out in two main stages: the marketing of the raw material, i.e. from the gathering stage until it reaches the industrial user as a raw product; and the marketing of the semi-finished or finished industrial or finished consumer product either to other processing industries or to final consumers.
The most simple marketing practices for non-wood forest products can be found on local and national markets. An example of the local level practices is provided by leafmeal fodder marketing in the Philippines. Pre-sale activities include gathering of the leaves (usually leucaena), sun-drying, bagging in straw sacks and hauling (manually or by animal-drawn sleds) to the roadside. Although farmer leaf gatherers could sell directly to the leaf millers, they usually depend on local traders who assemble the farmers' produce and sell it in bulk to the mills. Another set of intermediaries act as dealers of milled leaves to the end-users. These intermediaries are recognized by both the farmer/leaf gatherers and the leaf millers as an important part of the marketing channel since they bear all the risks and costs related to the marketing of whole, powdered or pelletized leaves (Raintree and Francisco, 1994).
Processing Brazil nuts
Marketing is a largely information-based, "soft" technology. Efficient marketing requires relevant quantitative and qualitative information regularly, reliably and at the lowest possible cost. Information is needed on markets (demand, end-uses, supply), marketing factors (products, marketing and distribution channels, promotion and prices), competition, marketing environment (comprising social, economic, political, technological, regulatory, legal, cultural, infrastructural, etc. environments) and institutions related to marketing.
Systematically collected, analysed and disseminated information is seldom available except for a few selected products and markets. Much of the information on non-wood forest products is collected from the resource side or at the processing level. Even this information does not easily reach a broad cross-section of the lowest-level operators. Increased attention seems to be needed to collect information from the markets and end-uses to which the primary processing industry is selling its products. Similarly, collection of information on marketing factors needs to be improved.
A well-defined classification of products is the cornerstone for the efficient collection of data and information. It is equally important to identify and classify the end-uses in different markets to which the individual products can be sold. FAO has taken the first step in setting up a classification and definitions system for non-wood forest products by presenting a tentative classification scheme for discussion, refinement and adoption (FAO, 1995).
The demand for many non-wood forest products is derived, i.e. final consumption takes place after a great number of successive loops in the production-product-marketing chain. In order to understand better the actual needs and wants of the customers in the market, the specific values that customers associate with the products offered should be investigated and disseminated by the marketing information system.
According to Carandang (Raintree and Francisco, 1994) who analysed the market for small-scale multipurpose tree products in the Philippines, most producers depended on the buyers (mostly wholesalers) as their source of price information. Only 10 percent had actual access to prevailing market prices. This, of course, left the producers largely at the mercy of intermediaries as to the availability and accuracy of information on which they had to base their marketing decisions.
Some efforts have been made to set up marketing information systems to cater specifically for the needs of local-level operators. The Tribal Cooperative Marketing Development of India Limited (TRIFED) operates a marketing information system which mainly serves the agricultural sector but also covers some non-wood forest products. The system collects price information from domestic and export markets and disseminates it to the member cooperatives in a mimeographed publication; however, the information does not reach the local people.
The Agricultural Market Information Service in Indonesia is a large and expensive national marketing information system. The information is gathered by price collectors at selected markets. The system uses computers to process data and radio for national dissemination of information. At the local level, however, the system distributes information by using blackboards.
With the assistance of FAO a market information system specifically designed for forestry communities was set up in early 1990s in the Philippines [Ed. note: see iarticle by Austriai].
Market research. Detailed information on end-uses of individual non-wood forest products and means of accessing the markets has to be obtained through specific marketing studies. Marketing studies are needed to analyse the flow of raw materials from gatherers of non-wood forest products to primary processing industries. They are also needed to study the market opportunities and means of accessing the markets for products from the primary processing industries.
Some marketing studies are being carried out by local research institutes and universities. For example, in the Philippines, limited marketing studies on multipurpose tree species are conducted in research and academic institutions in different regions, particularly state universities and colleges. At the local level, marketing studies could be carried out with the assistance of extension workers. There is, however, a need for appropriate guidelines on how to plan and carry out such studies.
Many of the studies related to marketing of primary processed non-wood forest products would need to be conducted in export markets, employing specialized market research consultants. In view of the high costs of carrying out market and marketing studies in export markets, ways and means to conduct them jointly through farmers cooperatives, industry associations or some other institutional arrangement merit consideration. In some instances, international organizations could assist in planning and financing such studies.
Roofing material made from nipa leaves, ready for marketing in Indonesia
Marketing capabilities include a basic knowledge of marketing, skills to apply the knowledge in practice and appropriate attitudes to recognize and appreciate the value of marketing as one of the basic functions in a non-wood forest products business. Marketing capabilities are needed at all levels, from the gatherers and farmers of non-wood raw materials to operators of primary processing industries and eventually further processing industries. Members of the marketing and distribution channels who are specifically involved in marketing need these capabilities for their everyday operations. Government officials at the policy-making level, as well as regulatory authorities, need a basic understanding and appreciation of marketing. There are also people in various governmental and private organizations involved in the promotion of trade in non-wood forest products who need to have basic marketing capabilities.
According to surveys carried out by the FAO Forest Products Marketing Programme there are only limited training opportunities, specifically designed for forest products marketing, offered in the forestry faculties of universities. Industry-level marketing specialists acquired their basic training in marketing in business administration colleges, without any specific reference to forest products.
Some recent initiatives by non-governmental organizations (NGOs) to contribute to training in forest products marketing merit recognition. For example, the Workshop on Marketing of Multipurpose Tree Products in Asia, which was organized by the Forestry/Fuelwood Research and Development (F/FRED) project, together with other NGOs and donor agencies, and held in Baguio City, the Philippines in December 1993, tackled issues that are directly related to marketing of non-wood forest products.
Relevant training material - case-studies, non-wood forest product monographs and market profiles - is produced by FAO and the International Trade Centre UNCTAD/GATT (ITC), and by other organizations, for seminars and workshops on non-wood forest products marketing. Additional training material is being produced by FAO in the form of manuals and guidelines specifically targeted to community-level forestry operators.
Institutional and infrastructural support
Institutional support to marketing is provided basically on two levels. At the highest level it is formed by the government policy measures and the regulations governing their implementation. In the case of non-wood forest products marketing the implementation of trade policies and forest policies in particular has the greatest impact. At the operational level, institutional support comprises the various cooperative arrangements among producers, forest services, standardization organizations, product and quality monitoring and control institutions, research institutes, universities, extension and other human resource development services, banking and credit services, marketing information services, transport and communication networks, etc. Most of the institutional support is provided by government or other public organizations and is therefore to a large extent beyond the control of the individual operators of a single sector such the non-wood forest products sector. Non-wood forest products activities usually fall within the sphere of several ministries such as national planning, agriculture and forestry, trade and industry, health and education. Coordination of work at the national level is one of the preconditions for the successful development of non-wood forest products activities, including their marketing.
In some sectors of non-wood forest products trade there are national trade associations and even regional federations. These are, however, almost exclusively at the level of secondary processing. For example, the European Scientific Cooperative on Phytotherapy (ESCOP) was established in 1989 to advance the scientific status of herbal medicines in Europe and assist with their regulatory status.
In the area of fragrance industries the International Fragrance Association (IFRA) has been set up primarily to monitor the toxicological and other hazardous aspects of the various raw materials used in the perfumery trade. The Research Institute of Fragrance Materials (RIFM) assumes a similar role in the United States.
A significant amount of support to the non-wood forest products sector at the level of gatherers and primary processors comes from large and small non-governmental organizations. Their main concern is resource conservation and improved well-being of local communities through, among others, non-wood forest products activities.
There are international and national organizations which are active especially in the areas of product classification, standardization and quality control. For example, the International Organization for standardization (ISO) and many national standardization organizations have established standard specifications and testing conditions for various non-wood forest products. The World Health Organization (WHO) was requested by the 31st World Health Assembly in 1978 to develop international standards and specifications of identity, purity and strength for the most widely used medicinal plants and their galenical preparations. WHO has also finalized its Guidelines for the assessment of herbal medicines. The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) provides an international instrument for listing species of plants and animals whose numbers are considered to be endangered to the extent that commercial trade must either be monitored and controlled or prohibited. The World Conservation Union (IUCN) and the World Wide Fund for Nature (WWF) are working in the area of resource conservation and sustainable utilization. FAO, the United Nations Industrial Development Organization (UNIDO) and ITC have non-wood forest products as part of their programmes which deal with their resource, processing and marketing aspects. FAO also provides specifications for food, flavouring and colouring agents and other food additives through its various statutory bodies, international conferences, Codex Alimentarius and related guidelines and manuals which are disseminated as FAO Food and Nutrition Papers.
The work of various public and private organizations and institutions undoubtedly contributes to the common goal of increasing the awareness of the opportunities offered by non-wood forest products in sustainable utilization of forest resources and improving the related policy environment, information base and technologies for resource management, processing and marketing. Many of the activities are still, however, overlapping and parallel. Appropriate mechanisms to increase cooperation and coordination would be helpful in increasing efficiency in the subject matter area and in bringing the institutional support closer to the gatherers and primary processors.
There is a need to increase the recognition of marketing as an important means of contributing to sustainable utilization of forest resources. This awareness is necessary at all levels. Better knowledge of market opportunities for non-wood forest products is necessary, especially among gatherers and low-level traders. There is a need to recognize and use the appropriate means of taking full advantage of market opportunities. It is evident that price is too often used as the main, if not the only, means in marketing although many of the non-wood forest products are specialities in the marketing of which product characteristics, distribution channels and service factors play a more important role than price does.
Further action needed to improve non-wood forest products marketing
Marketing information is rarely available for most non-wood forest products. Information from local and national markets is the least developed sector. Poor availability of marketing information is closely related to the lack of capabilities in marketing. Infrastructures and institutions would require strengthening to give better support to marketing activities by gatherers and their organizations. Cooperation and exchange of information among existing institutions at the national and international level is needed.
It is clear that action in these areas needs to be strengthened and supported by all who have the necessary resource and institutional strengths at their disposal. It is apparent that several parallel processes need to be accomplished simultaneously in order to make forest products marketing contribute fully to the sustainable utilization of forest resources and, through it, to sustainable forestry and development altogether. Mechanisms are needed to prioritize and harmonize in an appropriate way the work that has already been done on many of these issues by numerous organizations at the national, regional and international levels. One such mechanism would be to organize a thorough global review of relevant issues and concerned institutions, culminating in an international meeting or expert consultation.
FAO. 1995. Terminology, definition and classification of forest products other than wood. Paper presented at the FAO/Government of Indonesia Expert Consultation on Non-Wood Forest Products. Yogyakarta, Indonesia, 17-27 January 1995.
Raintree, J.B. & Francisco, H.A., eds. 1994. Proceedings of the Workshop on Marketing of Multipurpose Tree Products in Asia, Baguio City, the Philippines, 6-9 December 1993. Bangkok, Winrock International.