8.1 Project Identification
8.2 Project Planning
8.3 Economic and Financial Analysis
8.4 Economics, Tree Growing, and the Rural Farmer
8.5 Monitoring and Evaluation
Developing a realistic set of goals and objectives upon which to base planning of farm and communal forestry activities can be complex, for these objectives and goals are usually much more for-reaching than those of conventional forestry approaches where progress is measured by comparing physical achievements with targeted goals. But farm and community tree growing programmes are not ends in themselves, and measures of physical progress only incompletely reveal project impacts and results. The number of trees planted, the number of foresters trained, the number of roadsides reforested in themselves tell us little about an activitys useful effect.
Increasing the number of trees in an area in order to produce fuelwood may be pointless if it is not related to local needs or markets. Similarly, a project should not be designed to protect a watershed as an end in itself. Rather, watershed protection should be seen as a means of attaining other social and economic goals. These could include: sustaining local or downstream agricultural production by maintaining soil fertility and reducing downstream flooding, protecting life and health through maintenance of water quality, or any number of other goals associated with the fundamental objectives and needs of local communities.
Although phrases like social forestry, and forestry for local community development have become fixtures in the vocabulary of development planners and foresters alike, there are nearly as many meanings to these terms as there are projects they have described. Projects have frequently simply been labelled social forestry to imply that they are intended to address (often preconceive) social constraints.
As was pointed out in Chapter 4, the term community forestry refers to a group of objectives, rather than to a single development norm. These multiple objectives may be divergent or even conflicting. While the aim of one activity might be to provide a means for rural people to take advantage of lucrative commercial wood markets, another activity might have an environmental objective or increased agricultural production, while still another might be intended to supplement household wood supplies.
The purpose of planning is to provide a clear picture of what the objectives really are and of the relative merits of different ways to achieve them. There are few activities which will be able to address the multiple needs of all the different groups of potential beneficiaries, since local conditions often impose their own complexities and contradictions. Some objectives may even turn out to be incompatible with others. Few programmes will be without their negative effects, and the process of project design will very likely involve a series of compromises and judgements about what is most acceptable and feasible to all concerned.
Successful planning of farm and communal forestry programmes must be a collaborative effort. The process should involve local people, particularly the intended men and women beneficiaries, as well as representatives from implementing agencies and funding organizations. This type of planning is seldom straightforward or simple. It may need the creation or strengthening of local level planning capabilities before it can succeed. However, experience has suggested that other more top down approaches will tend to reinforce the status quo; broad social objectives will usually not be achieved.
Forestry planning and management is a long-term process and requires a national policy framework for farm and communal forestry which reflects a sustained commitment to rural development. Where there are serious constraints to tree growing, the government must be willing to support legislation to remove them. It may be necessary to change land tenure systems to favour tree cultivation or remove constraints which limit market demands for wood and other tree products.
Although it is highly desirable for governments to develop overall land-use plans when designing national development strategies, these plans should reflect local preferences and allow flexibility in local applications. There is danger that national governments (as well as development aid agencies) will fall into a self-reinforcing cycle which is not based on a true appreciation of local needs. Political pressures or international fashion can bring issues to the forefront. These can become incorporated into legislation, budgetary arrangements, lending criteria, and public policy, and may determine developmental priorities - regardless of whether or not these priorities are especially relevant to rural peoples needs.
The resulting projects can often appear to be in search of a justification. Residents may simply not need more trees, but the political pressures on governments and aid agencies to support reforestation may result in the use of land - perhaps more valuable for other uses - for tree planting. The same pressures may further define what kind of trees are planted: fodder trees might be most appropriate, but fuelwood trees are planted instead.
In many countries, the need for foreign exchange is such a dominant concern that international assistance will be solicited for certain projects. Objectives are established and proposals are prepared, irrespective of local realities, in order to make them appear attractive to aid agencies. Locally prepared project proposals can often create an external impression that they are feasible even if they incorporate unrealistic or irrelevant targets.
The promise of quick results is another temptation to which those engaged in project preparation frequently succumb. Funding agencies have an understandable preference for projects which show visible results at an early stage. Rapidly implemented programmes may run into difficulties at a later stage if the basic research on which they have been based has been poorly conceived and carried out.
For all projects, but even more for projects involving the time span required by trees, there is a clear need for thoughtful and reasoned project planning. As discussed in Chapter 4, goals vary, and good project planning requires a clarity of purpose and the selection of a strategy which leads toward the chosen goals. Identifying this purpose requires knowledge of the project area.
In practice, collecting background information during project planning has often been the weakest feature of farm and communal forestry programme development. The result has been that many programmes have had unrealistic objectives and goals, and scarce resources have been misdirected. Lack of adequate information also carries the danger of obscuring real project successes. Programmes may be judged to be failures purely because they have fallen short of unrealistic goals.
It is unreasonable to specify or to try to predict the effects of a market-oriented programme without a thorough knowledge of the local markets for wood and wood products. Yet this basic information has often been lacking. In such cases, it is virtually impossible to make a realistic assessment of a programmes likely effects, particularly of who will benefit and who might suffer from whatever tree growing takes place.
Much of the criticism of farm forestry programmes in India, for example, springs from the fact that many projects have been implemented without a clear picture of the structure of market demand. As a result, they have evolved in directions and with consequences which were not foreseen by their promoters. With hindsight, it is clear that early market surveys would have made the outcome of these activities somewhat more predictable, and some of the criticisms could have been anticipated and perhaps obviated.
In the Sahel, also, a better knowledge of the wood supply and demand system could have resulted in more appropriate planning for village woodlot programmes. Among other things, an understanding of the rural wood economy should have resulted in a more broadly-based programme with an emphasis on other products in addition to fuelwood.
The extent and nature of background data necessary for effective planning depends on the scope and objectives of the programme. If the intention is to rely upon market incentives to encourage farmers to grow trees, then a comprehensive picture of the local wood supply and demand situation and links to the markets will be required. On the other hand, if programmes have environmental objectives, such as combating soil erosion and degradation, it is essential to know why these problems are occurring.
An understanding of the existing land tenure situation is crucial to any type of forestry activity. Similarly, traditions which define patterns of tree tenure must also be understood. This type of information will require collecting anthropological or sociological data. Often, the intended beneficiary groups will be able to provide useful socio-economic information through interviews, discussions and informal surveys. At the same time, cross checking is essential because of the local perception that certain advantages might be gained by giving false information. This information process can be strengthened when the rural people themselves are involved in problem identification and information collecting.
Background information is a crucial part of sound programme planning, but it may not be readily available. Provisions for the proper design of surveys and for the resources necessary for carrying them out are essential. These surveys should be designed to collect only information which is needed. The over-collection of data makes any comprehensive analysis of baseline information particularly difficult and time consuming. The challenge is not simply to widen the scope of data collection, but also to apply rigour in defining the information which is needed for programme planning and to design methods for obtaining this information in the most effective and economical fashion.
Project planners are usually interested in whether a possible forestry intervention will meet certain economic and financial criteria. They need to know whether their investment is going to pay off in the long run and what kind of returns can be expected both to the economy as a whole and to individual smallholders.
Economic analysis measures what society gains or gives up as a result of a project. Costs are often evaluated in terms of the opportunities foregone, and thus are called opportunity costs. Benefits are measured in terms of the goods and services which may become available to society as a whole as a result of a project. Financial analysis measures real monetary flows to and from the public and private sector individuals or entities involved in a project. Both economic and financial analyses will be needed for any project for which the use of public sector funds is being considered (Gregersen and Contreras, 1979).
Farmers are also interested in whether a project meets certain economic criteria. Their approach toward evaluating the impact of their involvement will be very different, however, from the approach a funding agency might take. Farmers are interested in knowing whether or not a particular course of action, which may involve tree planting, will benefit them in the short and long run, not whether a project is economic in the abstract.
Planners must understand that the farmers criteria are different. As a result, a project may have to be modified to respond to the rural smallholders economically-defined needs, possibly in a way which is inconsistent with the planners perception of whether or not a project is economically viable.
One of the basic difficulties in carrying out a comprehensive economic or financial analysis is that the costs and benefits of a project, using either approach, may be difficult to assess. For instance, fuelwood is often a non-marketed commodity. In economic analyses, proxy-prices are assigned to it by assessing the cost of substitute fuels such as coal, kerosene, animal dung or crop residues, or by assessing the labour costs involved in its collection. The assumption is that alternative capital and labour resources are in fact good substitutes. This is not necessarily the case. As a result, fuelwood resources are inconsistently overvalued or undervalued in different analyses.
Environmental values are also difficult to include in economic analyses. Externalities such as watershed and habitat protection and soil conservation are widely recognized, but in many economists minds, trees are valuable only if they can be cut down - and not because of any environmental benefits which might accrue if they are left standing. Someone is paying for the effects of cutting down trees (or may be indirectly benefiting from the effects of planting them), but these costs and benefits are not reflected in the derived stumpage prices. In most cases, economic analyses include neither an analysis of negative nor of positive environmental impacts (World Bank, 1984).
It is easy to be critical of economic analyses for their deficiencies. On the other hand, there are few available alternatives which consistently address the same concerns and criteria for allocating funds of governments and international aid agencies.
The costs and benefits of planting trees tend to be assessed quite differently, depending on who does the assessment. The interests of a forest department in promoting agroforestry systems may reflect a desire to slow environmental degradation or to stabilize systems of land-use at low costs (Romm, 1980), while farmers are probably much more interested in immediate benefits such as increased crop production and may be unwilling to assume the cost of these broader social and environmental objectives. Taungya systems which may lower costs of tree planting for the forestry services may at the same time impose increasingly unacceptable costs and constraints on farmers (Seth, 1981). It has been found, for instance, that taungya systems in southern Nigeria often involve more physical labour, generate less income and provide less security to farmers than the shifting cultivation systems which taungya was intended to replace (Ball, 1977).
Many of the costs and benefits by which farmers evaluate different productive strategies are not defined by the market. Their interests are defined by how well their basic needs are being met: is there food, shelter, clothing? is the family healthy? is the farms productive capacity generally able to meet their wants? and so on. In accepting a new strategy, the labour costs to women and men farmers during various seasons, compared to other labour demands during those seasons, will be a key issue. Farmers will also take into account whether a change in their system of production, which might improve their situation if it worked, would leave them much worse off if it failed.
Understanding risk assessment from the perspective of the smallholder is essential if project planners are to gauge whether farmers will be willing to adopt new systems of production. Can failure be adequately compensated? Can the agricultural economy return to its earlier level of subsistence production should a forestry intervention fail? What will be the cost to society? To the farmer?
To a certain extent, the farmers perception of risk is defined by an implicit and often very high discount rate. A tree planted this year is much more valuable to a farmer in 2 or 3 years than in 10 or 15 years. There are, of course, exceptions to this generalization. Farmers may plant trees with the intention that their benefits will accrue to them in their old age, to their children or even to their grandchildren.
Whether or not a particular tree planting activity will directly benefit a rural smallholder in the short term will be an important factor for planners to consider. One of the advantages of using exotics and fast growing tree species is that they are responsive to the farmers high discount rate. They provide returns after a few years, and the farmers risk of making an investment in an alternative production strategy is somewhat lessened. The development of quick return products such as mushrooms is also an important strategy when accompanied by appropriate market linkages.
Risk aversion with respect to tree planting will also often be a function of the size of a farmers landholding. Tree planting is riskier for the small farmer because if the trees die, the alternative means of income generation are limited by the farmers landholding size. Owners of larger landholdings may not be faced with the same constraint because they have enough land to cultivate a number of other crops.
The fact that farmers on large landholdings are more able to divert land for tree planting, and can plant more trees than smallholders, often makes the achievement of distributional or equity objectives difficult. The problem is made even more complex if tree planting interventions are to be used to have a positive distributional effect on the disadvantaged sectors of the community. Tree planting interventions will tend to be most successful where they are targeted at groups with common economic concerns and objectives, defined by their access to and use of capital and labour resources (Arnold, 1983).
It is also essential that the farmers analysis of potential profitability be based on an understanding of changing market conditions. Especially where tree growing is introduced on a large scale, the estimated financial returns at the beginning of a project may be greatly reduced over the life of an activity which has any impact on reducing market scarcity. Planting around 600 million trees in Gujarat over the last few years is very likely to have an impact on scarcity when they become marketable, and estimated returns may well not be realized.
Project monitoring and evaluation activities are necessary for enabling project management to chart and understand the progress of any forestry sector intervention. Primarily, the process enables a projects management to take corrective action in response to problems when they arise during implementation.
Monitoring measures a projects outputs and its effects against established criteria. It can be quite straightforward: the completion of scheduled tasks - the construction of nurseries, the production of seedlings, etc. - as an indication of operation and performance. Periodic reports of progress in completing these tasks need only be collected, processed into a useful format and transmitted to the appropriate level of management.
Evaluation is the analysis process which links monitoring to improved project management and performance. On-going evaluation involves continuous analysis and assessment of a projects operation and its impacts. It should thus be oriented toward problem-solving. To be effective, the project design should be dynamic in the sense that the project should be able to respond to the changing needs of management and to resolve new problems as they are identified.
An important concern of evaluation activities is an assessment of the projects context - the socio-economic environment in which the project is intended to operate. An understanding of the context is essential in order to match a projects objectives with those of the intended groups of beneficiaries, and to modify the objectives or the scope of a programme if it becomes necessary. (French, 1985).
Evaluation of project effects, impacts, and context is based on such things as dynamics of production and consumption of wood products, perceptions of wood scarcities and responses to them, patterns of social organization with respect to tree planting and management, commercialization of wood products, and prices of wood products in various markets. Obtaining such information will usually involve field studies and surveys carefully designed to avoid over-collection of data and with information always disaggregated by gender (Chambers, 1978).
Terminal evaluations, carried out at the end of a project, and ex post evaluations, carried out some years after the projects completion, assess the achievement of longer term objectives and goals. These evaluations are intended to clarify some of the lessons learned and to provide guidance for future projects and activities.
The relationship between project management and those responsible for monitoring and evaluation is important. An administratively separate monitoring and evaluation unit could approach its task with critical independence. At the same time, since a major purpose of monitoring and evaluation is to assist project management in operating more effectively, it is increasingly recognized that close collaboration is very desirable (FAO, 1985).
Responsibility for this type of monitoring and evaluation may need to be placed at a relatively senior level of the bureaucracy of a projects management. Influence, status and freedom to pass on both negative and positive information to key decision makers is often essential.
In contrast, for some evaluation functions, dispassionate involvement is highly important. The tendency to overstate local achievements is a recurrent problem and is especially so when achievements fall far short of targeted goals. These dual needs reinforce the notion that monitoring and evaluation activities should draw on multiple and overlapping sources of information.
Local conditions and constraints on data collection must also be taken into account. In Nepal, for example, written communications are understood to be legal documents for which the writer can be held accountable, while the completion of systematic monitoring reports is inconsistent with the traditional administrative culture which relies, for the most part, on verbal communication. Further, field personnel worry that figures reported to the monitoring unit could be used for auditing purposes in which discrepancies could be attributed to the misuse of funds (Bhattarai and Campbell, 1985).
Because of the innovative nature of participatory forestry projects, it is crucial that continuous flow of information and its assessment be made an integral project management tool. Differences in styles of management, in project objectives, and in intended beneficiary groups will call for systems with different emphases and focuses. Adequate monitoring and evaluation systems of a more participatory nature have yet to be developed. Nonetheless, local participation will be a necessary component in programmes designed to increase local self-reliance in resource management.
Monitoring and evaluation by itself is not a solution to problems which may be encountered during project implementation. However, they can be very effective tools if a projects management is able to pursue responsively and flexibly alternative strategies. Many of the problems with farm and communal forestry which are only now becoming apparent could have been identified and resolved at an earlier stage if they had been more effectively monitored and evaluated.