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1. Introduction

Forestry development, whether in industrialised or non-industrialised countries often occurs because of positive partnerships between forest companies and growers. These can be designed to encourage forest management that is environmentally sustainable, cost-efficient and equitable.

While forest company-grower partnerships can take many forms the focus in this report is on forestry out-grower schemes. Here companies with inadequate forest holdings or access to public forests, seek to secure additional supplies to meet their demand for raw material. Under out-grower partnerships, growers allocate land and other resources to the production and management of trees and sometimes other forest products, for a processing company, with the company providing a guaranteed market. The varying responsibilities of each partner are defined by contract.

The incentives for forest processors to develop out-grower schemes include increased supply of wood resource, access to productive land, resource security without the need to purchase land, diversification of supply, and increased co-operation with local communities. For growers, the advantages include an alternate and additional source of income, a guaranteed market for products, reduced market risks and, in some cases, financial support for enterprise development.

Existing out-grower arrangements vary considerably in their ability to be mutually beneficial, achieve sustainable forest management, and meet the social, technical or economic goals of the partners. Not all out-grower partnerships are viewed as successful and poor grower-industry links are regularly identified as one of the major constraints to forestry development throughout the world. This paper attempts to highlight the important issues and to identify the key ingredients for mutually beneficial out-grower partnerships.

This paper draws on much of a recent research project undertaken by the Department of Forestry, Australian National University in collaboration FAO (Desmond and Race 2000). The research undertook a global survey and analysis of forestry out-grower schemes to:

It also builds upon earlier studies (eg. Arnold 1997; Curtis and Race 1998; Mayers 1999), although some of this work is in a preliminary stage.

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