Trading forest products can help make poverty history
A new UNEP-WCMC report identifies how the commercial development of tropical forest products can enable rural communities to escape poverty, without irreversibly damaging the environment.
London, UK, 28 February 2006 - Half the world’s 1.2 billion poor people depend on harvesting wild natural resources for their livelihoods. These resources include what are known as ‘non-timber forest products (NTFPs)’, such as cocoa, rubber, incense and other plant derivatives. The value of NTFPs in global trade is currently estimated at US$4.7bn annually. But how can poor communities cash in on these products in order to lift themselves out of poverty, without destroying the natural resources on which they depend?
As a result of their high economic value, and the fact that harvesting is often less environmentally damaging than timber extraction, commercialisation of NTFPs has attracted great interest from development and conservation organisations. Over the last 15 years, many attempts have been made to develop these products commercially in ways that contribute to environmental conservation as well as economic growth. But while some attempts have been successful, many others have failed to deliver the expected benefits.
A new UNEP-WCMC report, entitled Commercialization of non-timber forest products: factors influencing success, describes the results of an international, multi-disciplinary research project (CEPFOR), which looked at why some commercialization initiatives succeed while others do not. The research examined 19 different NTFP case studies in Mexico and Bolivia, including products ranging from wild mushrooms and palm fibres to incense and the agave-based traditional beverage, Mezcal. In many areas these products provide the only source of income, and communities are dependent on them for survival.
The research examined aspects of commercialization such as ‘fair-trade’ and ‘eco-labelling’, the role of entrepreneurs, and effects on environmental sustainability. Key findings include:
· Eco-labelling may present a barrier to rural communities. Eco-labelling, while providing a financial incentive for environmental sustainability, was found to be expensive and bureaucratic and out of reach of many rural communities.
· Entrepreneurs can play a critical role in determining whether the trade is ‘fair’. Entrepreneurs often provide a link between the producers and the market place. Their behaviour can have a major influence on whether trade is fair to producers or not. In the CEPFOR research, entrepreneurs were found to play a number of positive roles, including identifying markets, providing business contacts, advancing capital and providing training to producers. However, the inequitable distribution of power along the market chain was widely considered by producers to be a major factor limiting commercialization success. This reflects the relatively small number of entrepreneurs active in the commercialization of many forest products, resulting in a lack of competition. Many communities are entirely dependent on one or a few entrepreneurs for bringing their products to market, which can result in exploitation and ‘unfair’ trade.
· Product price often does not vary in accordance with changing costs. Globalization is having a severe impact on many producers in developing countries, who increasingly have to face competition with cheaper imported goods. As a result, the price obtained by some of the products (such as soyate palm) has remained static over many years.
· Brand identity is often poorly developed. A strong brand identity is critical to obtaining a fair price. Producers need assistance to help develop a brand identity, from people skilled in business and marketing.
· Harvesting methods are often poor. One of the biggest risks to commercialization of wild resources is that they may be overharvested, leading to degradation of natural resources. Research results indicated that such overharvesting is widespread. This can however be successfully addressed through training and education.
A key recommendation of the research is that aid should be targeted at developing the business skills of rural communities to help them avoid exploitation by others. Many rural communities do not have a tradition or experience of doing business. “Why not provide learning opportunities to rural people in developing countries in the same way that Sir Alan Sugar’s TV programme ‘The Apprentice’ educates young people here to do business? I’d like to see the UK exporting its business acumen to help these rural communities develop economically as part of the international aid that it provides,” comments Adrian Newton of Bournemouth University, one of the researchers on the CEPFOR project.
Another recommendation is that support should be given to socially-minded entrepreneurs. ‘Such entrepreneurs deserve support, because of the risks that they take and the critical role that they play in commercial success’ states Dr Kathrin Schreckenberg (ODI), a member of the research team. ‘Another key finding was the importance of producer organizations, which can provide opportunities to come together and share information and contacts. This can greatly strengthen their ability to negotiate favourable business deals, and command a higher price for their products’.
‘Many producers in developing countries are extremely poor, and have little access to health care or education’, adds Elaine Marshall (UNEP-WCMC), coordinator of the project. ‘Their geographical isolation and lack of access to transport infrastructure also constrain their ability to market their products. Given these difficulties, communities should perhaps specialise in producing high quality products or goods. However, there is no doubt that if provided with the right kind of support, trading forest products can genuinely provide a route out of poverty’.
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1. Non-timber forest products (NTFPs) include a wide range of commercial products traded internationally, including nuts, seeds, fibres, resins, fruits, oils and spices, used for foods, crafts and medicines, among many other uses.
2. The report Commercialization of non-timber forest products: factors influencing success, edited by Elaine Marshall, Kathrin Schreckenberg and Adrian Newton, is published by the UNEP World Conservation Monitoring Centre (http://www.unep-wcmc.org). The report is available in English and Spanish as a free download at: http://quin.unep-wcmc.org/forest/ntfp/outputs.cfm. Hard copies are available from Dr Adrian Newton, email@example.com (address above). It is being launched on March 6th, at the start of ‘Fair trade fortnight’.
3. The research project (CEPFOR) on which this report is based was a collaborative venture a collaboration between the UNEP World Conservation Monitoring Centre (UNEP-WCMC), the Overseas Development Institute (ODI), Bournemouth University, and five locally based organisations in Bolivia and Mexico, and was sponsored by the UK’s Department for International Development, Forestry Research Programme.
4. The report includes a computer model for assessing the viability of new products and offers a toolkit for identifying those products that are more likely to be successful – or for identifying potential problems before they arise.
5. Quote from one of the Bolivian producers involved in the project: ‘The rain forests are our bank – when we go and harvest the resin from our trees, it is a way of earning interest on our capital’. Quote from community member in Guerrero, Mexico: ‘Those of us who earn enough money from the forest products to be able to stay in the community and not have to migrate to look for work, consider it a huge success’. Quote from community member, Santa Rosa Challana, Bolivia: ‘We are realising that to be successful in the rubber trade has meant needing to innovate and diversify our products, and trying to respond to new customer demands’.
6. The fair trade movement has recently witnessed a rapid growth in interest, both in the UK and overseas. A number of organisations are now offering products that have been bought on the basis of a fair trade, for example by buying direct from producers at better prices. Some 19 organisations now run Fairtrade Labelling Organisations International (FLO) (http://www.fairtrade.net/), which is an international standard setting and monitoring body that labels products that have been fairly traded. Examples of fairly traded products growing rapidly in popularity include Divine chocolate (http://www.divinechocolate.com/) and Traidcraft tea and coffee (http://www.traidcraft.co.uk/).
7. Two high-profile attempts to commercialise non-timber forest products in ways that support the economic development of rural communities include Ben & Jerry’s “Rainforest Crunch” ice cream, and the Body Shop’s brazil nut oil. However both of these have been criticised for failing to deliver the expected benefits: eg see http://www.jonentine.com/articles/boston_globe.htm; http://www.mcspotlight.org/beyond/companies/bs_ref.html