Trading Forest Products Can Help Make Poverty History

A new UN report (to be released on Monday, 6th March at the start of Fairtrade Fortnight) identifies how the commercial development of tropical forest products can enable rural communities to escape poverty, without irreversibly damaging the environment.

A new UN 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 onlysource of income, and communities are dependent on them for survival. 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 derivativesThe 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?

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 Dr. 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 favorable 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 specialize 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'.

As a result of their high economic value, and the fact that harvesting is often less environmentally damaging than timber extraction, commercialization of NTFPs has attracted great interest from development and conservation organizations. 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.

The research examined aspects of commercialization such as ?fair-trade' and ?eco-labeling', the role of entrepreneurs, and effects on environmental sustainability. Key findings include:

Eco-labeling may present a barrier to rural communities. Eco-labeling, 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 behavior 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 over harvested, leading to degradation of natural resources. Research results indicated that such over harvesting is widespread. This can however be successfully addressed through training and education.

CONTACTS

Bournemouth University Press office:

press@bournemouth.ac.uk

Charles Elder; Tel: +44 (0) 1202 961032; Mob: (07768) 771870

Zoë Monk ; Tel: +44 (0) 1202 961033; Mob: (07738) 143100

News 7th March 2006

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