Forests Sourcebook - HCV Resource Network

NOTE 1.5
Making Markets Work for the Forest-Dependent Poor
Improving market access of forest-dependent communities
could enhance the contribution of forests to rural
livelihoods. With 25 percent of the world’s forests currently
under community control, the expansion of agroforestry,
and the development of community forest plantations,
indigenous and other small communities own more
than three times as much forest in developing countries as
do private firms and individuals (see chapter 3, Meeting the
Growing Demand for Forest Products). This creates new
opportunities in commercial forestry that could serve a
broader vision of meeting demand for forest products and
forest conservation in ways that also address the livelihood
needs of rural poor low-income producers (see note 1.2,
Community-Based Forest Management, and note 1.3,
Indigenous Peoples and Forests). Furthermore, changes in
market structure, new market instruments, and forest companies’
new interests in business partnerships with local
people are opening market niches for which local producers
have or could develop a competitive advantage. Environmental
sustainability concerns are also creating new markets
for certified forest products and environmental
services.
Low-income forest producers 1 have potential competitive
advantages for important segments of commercial forest
markets. Forest dwellers located near population centers
have lower transport costs, are more familiar with local
preferences, and have the flexibility to supply small quantities
of forest products as needed by local traders. Furthermore,
they have an advantage in branding for specialty markets,
enabling them to target socially responsible market
niches. For example, the Rainforest Alliance supports Brazil
nut-product organizations to enable them to access such
market niches.
Community forest owners, comanagers of public forests,
and farmers in forest-scarce locations near rapidly growing
inland population centers can be competitive suppliers of
commodity wood for construction and fuelwood. Furthermore,
community forest owners with high-quality, accessible
timber, strong community organization, and good marketing
and management skills can profitably sell tropical
hardwoods as well, such as that sold from community
forests in certain regions of Mexico. High-value timber can
also be profitably sold by farmers from agroforestry systems.
Benefits can also be gained from certified wood markets
if there are established contracts or agreements with
certified wood users or market intermediaries. For example,
in Brazil a pulp and paper company assists small-scale
farmer producer groups to obtain certification and to supply
the local furniture company demand (Scherr, White,
and Kaimowitz 2003, 2004).
Many local producers will benefit from preprocessing of
forest products to reduce waste, increase quality, or reduce
transportation costs, as well as from production of furniture
and commodities for poor consumers in growing rural
or urban markets. Small-scale sawmilling will also be viable
in markets where there is no competition with highefficiency,
industrial mills. Additionally, in densely settled,
forest-scarce countries with large markets for pulp, farmers
or communities near mills could supply industrial pulpwood,
especially on lower quality lands. Mondi Ltd. pulp
and paper company in South Africa’s Eastern Cape provides
technical assistance and start-up capital to communities
organized in common property associations.
NTFPs represent economic potential for those lowincome
producers or collectors of products with inelastic
demand. In Cameroon, the demand for some NTFPs has
grown dramatically in the past two decades as a result of
increasing urbanization and a growing international market.
Innovative marketing arrangements for environmental
services also offer a market niche for those forest dwellers in
areas with high levels of biodiversity or other values such as
watershed protection or carbon sequestration (Scherr,
White, and Kaimowitz 2003, 2004; also see note 2.3, Innovative
Marketing Arrangements for Environmental Services).
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