Small and medium forest enterprises (SMFEs) are the norm in many developing country contexts. They often make up 80–90% of enterprise numbers and more than 50% of forest-related jobs. While there is little evidence that large-scale commercial forestry plays a substantial role in reducing poverty, SMFEs offer better prospects – especially when they work together in associations. SMFE associations offset scale disadvantages and cut costs, allow surpluses to be used in strategic upgrading, and strengthen bargaining power. They also help to reduce poverty in that they: accrue wealth locally, help to secure resource rights for local communities, empower local entrepreneurship, foster the creation of social capital as they strengthen their voice in local associations, engender greater local environmental accountability and maintain cultural preferences and diversity. Despite their potential, SMFE associations often struggle, especially in weak economic contexts. Poor transport and communication infrastructure exacerbate business deficiencies. The report reviews the growing consensus on best practice support structures for small and medium enterprises in a framework widely known as ‘market system development’. This framework unites attempts to strengthen enterprise associations, provide Financial and Business Development Services and transform the Business Environment.

Type of Case
Printed publication (book, sourcebook, journal article…)

Publisher
IIED

Region
Global

Biome
All

Forest Type
All forest types (natural and planted)

Primary Designated Function
All