Forests Sourcebook - HCV Resource Network

Due consideration should be given to the different values
recognized by different types of SMFEs. The diversity of
SMFEs is paralleled by a diversity of values. For example,
profit-driven SMFEs may place economic values above
social or environmental concerns (Macqueen 2006), while
local or indigenous forest groups attribute up to 13 different
values to forests (Brown and Reed 2000), of which “commercial
values” used by economists in cost-benefit analysis
or internal rate of return calculations represent only 6 percent
of the sum of scaled forest values (Rowcroft, Studley,
and Ward 2006).
SMFEs have variable social impacts. Depending on
enterprise type, management disposition, and circumstances,
SMFEs may differ in their social impact. Distress
diversification or “SMFEs of last resort” often fail to deliver
increasing social welfare. Particular care is required where
outsourcing to SMFEs is prevalent (Clarke and Isaacs 2005),
and greater benefits are evident in “upwardly mobile”
SMFEs (Arnold and Townson 1998; Belcher, Ruiz-Perez,
and Achdiawan 2005). For some products and services,
market opportunities expand with the SMFE’s increasing
income, and the economic distance between SMFEs and
large enterprise technologies, and employment standards,
start to fall. Identifying which is which—whether the SMFE
is of last resort or upwardly mobile—is a critical first step
for appropriate intervention.
SMFEs have variable environmental impacts; enterprise
type, management disposition, and the policy environment
largely determine environmental impacts. SMFEs may cut
environmental corners in the search for economic competitiveness,
especially if the underlying legal and regulatory
framework and government capacity for implementation
are weak. Informality of operations, insecure tenure, inadequate
investment, and low profitability may reduce environmental
benefits. For example, SMFEs face great difficulty
with third-party certification (Higmann and Nussbaum
2002) despite group schemes designed to accommodate
them (Forest Stewardship Council 2004). For many SMFEs,
local accountability for environmental impacts can enhance
environmental quality, especially at the landscape level
(Clay, Alcorn, and Butler 2000; Scherr, White, and
Kaimowitz 2004; Durst and others 2005).
OPERATIONAL ASPECTS
Annex 2.2A to this note provides a checklist of key issues to
consider to determine SMFE program direction and feasibility.
This section discusses some of these issues in more
detail.
Strengthen transparent access to land and
resources for SMFEs. There are no cure-alls that will
ensure transparent access to land and resources, and
neither individual title, nor, conversely, community forest
management, strengthens SMFEs in all cases. In some
cases, clear land titling helps. In others, it is the democratic
involvement of marginalized groups in decisions over
common land that is critical. A priority is to identify and
address, jointly with SMFEs, ill-developed or poorly
understood codes and institutions that govern these rights
(see note 1.4, Property and Access Rights). Many forest
products or services with SMFE potential come from
common property resources, which cannot be privatized,
thus collective rather than individual decisions are
required.
Support local sovereignty and orient SMFEs
primarily to local product or service markets.
SMFEs can flourish in situations where they respond to civil
society concerns about where products are originating, how
they are produced, and who is profiting. 1 With regard to
wider applicability, it is worthwhile to support SMFEs in
identifying demand in local markets that are not yet highly
competitive, local skills that can be used, options for
specialization over time, and nonperishable products,
unless excellent infrastructure exists. See box 2.8 for
examples from India and Guyana.
Identify “superior” products or services for which
demand rises with increasing income. Products that are
only useful as subsistence safety nets or seasonal gap fillers
Box 2.8
Local Sovereignty, Markets, and SMFEs in
India and Guyana
In India, the Madhya Pradesh Minor Forest Produce
Cooperative has successfully developed a task
force on ayurvedic herbal medicines with a retail
outlet and consultations to support primary NTFP
medicinal plant collection and processing societies
(Saigal and others 2006). In Guyana, the Surama
Eco-tourism Enterprise has developed a tourism
package to showcase Makushi cultural identity and
natural resources—a win-win combination for
culturally sensitive development and the environment
(Ousman and others 2006). An important
lesson is that, unless ethical market niches or a
unique world-class resource exists, it can be
unwise to target export markets.
78 CHAPTER 2: ENGAGING THE PRIVATE SECTOR IN FOREST SECTOR DEVELOPMENT