2.1 The agents and their motivations
2.2 Situational factors determining plantation advantage
2.3 Social capital
Knowing who are involved in plantation and why they make the decisions they do, is critical to the analysis of policies and legislation affecting plantation development, and to the formulation and implementation of policy. Policy after all works through people - through agents. This sociological and psychological dimension to plantation policy is discussed by Buck (1995).
Plantation development is carried out by a number of key agents, including;
The same central government policies and legislation can act on each agent in different ways. Depending on the goals of the policy makers, this can lead to unintended consequences.direct agents of central government (forestry departments),
Each of these agents has different motivations and goals, different perspectives on risk, different time perspectives, and differing access to information and resources.
Only corporate agents and some private investors are likely to respond predictably to government policies based on rational financial motivation. Generally, corporate investors can be considered to be more motivated toward forestry investment than individuals. This is due to a better degree of information and knowledge available to them through labour specialisation, less constrains with resources such as capital. The motivation for corporate investors investing in plantations is generally to generate financial returns on investment. This return, however, does not imply a financially maximising strategy - rather it is a return considered in relation to risk and chosen strategy.
While a private investor can profit from a forest harvest while living far distant, the other multiple benefits that all forests provide - such as shelter, soil conservation, and other social and environmental benefits - are not so transportable. Their effects are immediate to the people and environments nearest to them. Given the local value of these forest services, it is not surprising that generally local community and individuals’ motivations are different from those of commercial investors and place less emphasis on financial returns. For such people government policies based solely on financial motivation are likely to be less attractive than ones with social or environmental goals.
Government agents have some similarities with corporates. They are often well motivated toward forestry investment, can possess a comprehensive degree of knowledge and expertise, and have access to available resources. They have proven to be very effective agents in plantation establishment. The key differences relative to corporate investors are the government agents’ emphasis on broader and longer-term goals, rather than shorter-term financial goals, and the greater social pressure placed on them by both central government and local community stakeholders (D’Silva 1997).
Those necessary conditions relating to motivation and information do not present the complete picture. Some appreciation of factors external to the agents is necessary.
Porter (1998) identified four key factors that determine competitive advantage in the international market place as being:
Porter’s theory also suggests that long-run international competitiveness cannot be based on factors such as exchange rate, and low costs of interest and labour (FAO 2000). These factors are subject to change over time in relation to a country’s economic performance, and are unlikely to be accurately predicted by investors in forest plantations.
These situational factors accord with commonly stated prerequisites for corporate and institutional investors to invest in plantations. They look for security of tenure, a strong legal framework, the prerequisites of profitable forest growth including growth potential, management options, infrastructure (physical, political, financial, and social), access to markets, and access to required products and services (Wiltshire 2000).
The factor on which Porter (1998) puts much emphasis relates to the ability to innovate and show enterprise. He attributed much of this ability to competition, pressure and challenge. However, social capital is also important. Putnam (1993) concluded that the quality of civic attributes, both within civic institutions and within the community, such as values of trust, honesty, a predisposition to compromise and work together, as well as traditions of collective enterprises and interest in current affairs, underpinned better economic performance.
On the basis of these social capital theories, policies that provide for an increase in the social capital of a country or region may have positive effects on overseas investors. Ahn (1999), who studied the foreign investment patterns in Viet Nam, found investment took advantage of high quality labour, including more literate communities, regardless of their income levels.
The theory of social capital also highlights the possible unintended consequences of pursuing a policy-making framework whose basis is too narrowly focused in theories of economic efficiency, particularly where social capital is eroded.
These ideas on social capital relates to the local individuals and communities that are agents in the development of forest plantations, especially those planted for social objectives such as provision of woodfuel or site rehabilitation, so important to rural economies. Planting trees can be a direct instrument in the development of social capital, just as much as the success of social forestry initiatives can rely upon the social capital that exists in the local community. An acknowledgement of the importance of social capital in the success of forestry plantings is reflected by the growing trend in community participation in policy making, and in the increasing acceptance that community attitudes and local knowledge play a major role in the uptake of forestry planting incentives.
