Forests Sourcebook - HCV Resource Network

NOTE 2.1
COMPANY-COMMUNITY PARTNERSHIPS
Company-community partnerships in forestry are
active agreements for the production of forest
goods and services in which the parties share benefits,
costs, and risks with the expectation of a mutually
beneficial outcome. Companies are formal entities organized
for making a profit, and range from large multinational
corporations to small-scale local businesses. Communities
include local farmers, households, and community-level
units of social organization, such as producer groups or village
councils.
Most partnerships to date have formed around production
of industrial pulpwood (outgrower, joint venture, and
lease schemes) and high-quality timber (mainly lease
schemes). NTFP-based partnerships are most important in
the case of high-value NTFPs (such as certain resins and
medicinal plants). A niche is now growing for partnerships
around forest ecosystem services, including carbon sequestration,
watershed management, biodiversity, and ecotourism
(see note 2.3, Innovative Marketing Arrangements
for Environmental Services). The variety of partnership
models are covered in table 2.1.
Both company and community partners have a variety
of motives for entering into agreements. Immediate economic
motives include access to niche markets, access to
Box 2.3
Outgrower Contract for Wood Production:
Xylo Indah Pratama, Indonesia
The company Xylo Indah Pratama manufactures
pencils for sale through Faber Castell, Germany.
Because of wood supply shortages and the need to
access wood from certified sources, the company
set up an outgrower scheme in 1995 with local
farmers, using low-value uncultivated land to
grow Alstonia scholaris. Grower contracts over 11
years are based on a 50:50 profit-sharing ratio,
with the company providing most inputs, but
land-owning farmers free to sell to other buyers if
the company is unable to absorb the harvest at
current market prices. Farmers have benefited
from early revenues through trimming, and at full
harvest (from 2005 onward) returns are about
US$450 per hectare to both company and
community.
Sources: LATIN 2000; Nawir and Santoso 2005.
Table 2.1
Company-Community Partnership Models for Different Forest Goods and Services
Partnership model
Joint venture Multiple land
Outgrower or or lease on use on Social responsibility
Forest good or service sales contract community land company land contract
Timber and wood fiber ✓ (see box 2.3) ✓ — ✓ (see box 2.4)
Nontimber forest products ✓ (see box 2.5) — ✓ (see box 2.6) ✓
Ecosystem services — ✓ (see box 2.7) ✓ ✓
Source: Vermeulen 2006.
Note: ✓ = Such partnerships are feasible. — = Not applicable.
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