Overstory #168 - Commercialization of non-timber forest products
Commercialization of non-timber forest products (NTFPs) has been widely promoted as an approach to rural development in tropical forest areas. However, donor investments in the development of NTFP resources have often failed to deliver the expected benefits in terms of poverty alleviation and improved conservation of natural resources. In order to ensure that NTFPs fulfil their potential contribution to sustainable development, it is important to understand the reasons for success and failure, and the conditions under which NTFP commercialization can make a positive contribution to the livelihoods of the poor.
Definitions of key terms
The term non-timber forest product (NTFP) encompasses a very wide range of forest products and marketing systems, and has been defined variously by different people (Belcher 2003). This study uses the definition provided by de Beer and McDermott (1989), which states that 'NTFPs encompass all biological materials, other than timber, which are extracted from forests for human use.' Examples of NTFPs include fruits, nuts, seeds, oils, spices, resins, gums and fibres, which contribute, in a raw or processed form, to rural livelihoods by improving food security and health. Many NTFPs are commercial products that can make a significant contribution to the cash economy of households. Individual forest products may be processed into one or more marketed products, and traded through a variety of different value chains. Commercialization is defined as the entire process from production, through collection or cultivation, to sale of a product in exchange for cash, or sometimes for barter, resulting in the product leaving the community of origin.
Successful commercialization means different things to different people
Success cannot be summarized by a single variable, and community perceptions of success need to be assessed and incorporated in project planning and evaluation.
Key findings include:
- There is a need to engage directly with communities and other stakeholders in the NTFP value chain, to jointly identify criteria of success and discuss the trade-offs that might be needed.
- Success should not simply be defined at the product level; success should be defined in relation to the needs of people.
- Different actors along a product value chain may have very different perceptions of what constitutes success.
- Success can usefully be considered at different levels, including households and the individuals within them, communities, and at district or national level.
- At each level there are social, economic and environmental aspects of success.
- Definitions of success may be dynamic, changing in response to variations in socio-economic circumstances and the behaviour of the market.
NFTP activities provide an important opportunity for poverty reduction
NTFPs are important in the lives of the rural poor, and income varies greatly even between households engaged in the same activity.
Key findings include that NTFP activities:
- contribute between 7 per cent and 95 per cent of a household's annual cash income;
- regularly provide a safety net for the poor to fall back on when other activities – such as subsistence agriculture or cash crops like coffee – fail to deliver as expected;
- sometimes provide a stepping stone to a non-poor life, and never lead to an increase in poverty.
NTFP activities often involve poor people but may also involve the less poor
- The importance of NTFPs in household livelihood strategies is closely linked to their seasonality and the way they may be combined with other incomegenerating activities.
- The more months a product can be traded, the more favourably households view the activity. Conversely, households involved in seasonal products are more likely to switch from NTFP activities to other livelihood options, reflecting their desire for a more consistent and year-round source of income.
NTFP activities can provide women with a greater sense of self-confidence and improved status within the household and the community
NTFP activities are one of the few cash-generating opportunities for women in marginalized rural communities.
Key findings include:
- Few product value chains involve only women. The involvement of both men and women can make an activity economically viable at household level because skills and time are shared.
- Women are more likely than men to be involved in processing and cultivation activities.
- Labour-saving technical innovation can improve the low returns to labour of women's NTFP activities.
In the majority of cases, increased commercialization initially leads to overexploitation of the resource
Tenure is a key factor in determining community and individual strategies to mitigate overexploitation and ensure that NTFP supply is sufficient to meet the demands of increased commercialization.
Key findings include
- In the case of communally owned resources, improved management of the natural resource and better harvesting practices are common.
- If land is held privately and the plant can be easily propagated, individuals begin to engage in smallscale domestication.
- There is no evidence that NTFP commercialization reduces access rights to the wild resource for the poor.
- Industrial plantations can displace harvesters of the wild resource as well as small-scale collectors/cultivators.
There is little policy or legislation specific to NTFPs in many places
Improved cross-sectoral coordination would help ensure that poor producers, processors and traders are better placed to meet the legislative and institutional requirements for successful NTFP commercialization.
Key findings include:
- Communities are often obliged to trade NTFPs in the informal sector because they lack the capacity to comply with the legal requirements for formalsector commercialization.
- NGO involvement can be important, but currently most NGO support is provided through donorfunded projects, which are rarely coordinated with government programmes.
- Increased national policy interest in NTFP commercialization is justified on the basis of its contribution to national economic development, local livelihoods and conservation.
- All the products studied could benefit from being marketed as speciality (e.g. organic or community-traded) products. However, certification costs could place trading beyond the reach of small-scale producers.
NTFP value chains are highly dynamic
Producers, processors and traders show a remarkable degree of resilience to external shocks and a great ability to adapt to changing contexts. Regardless of the governance of a value chain, the ability to negotiate prices and define the rules of trade is vital in determining the satisfaction levels of poor producers, processors and traders in NTFP value chains.
Key findings include:
- Innovation, both in terms of resource management and product processing and marketing, is often critical to maintaining market share.
- A specialized market niche and product quality can help protect against substitution.
- Most NTFP value chains are demand driven, and establishing a new one solely on the basis of existing supply is unlikely to succeed.
- The viability of a particular NTFP value chain may also depend on demand for another product.
- Entrepreneurs can play a key role in facilitating access to markets by providing information, skills and financial support.
- Concentration of power in the hands of a few is most likely in the value chains of highly processed or perishable products for an international market.
Lack of market information is the key barrier into NTFP trade
Information about markets, together with the capacity to act upon it, is an important prerequisite for entering, and maintaining a hold in, new markets.
Key findings include:
- A lack of market contacts and knowledge, followed by lack of financial capability and poor infrastructure, consistently constrains poor producers, processors and traders from advancing within NTFP value chains.
- The real value of market information lies in ensuring that the commercialization process is equitable, efficient and sustainable.
- Good organization of NTFP producers and processors contributes to improved product quality and quantity, more cost-effective transportation and increased negotiating ability.
- Access to credit can enable poor people to improve their NTFP-based income generation through increased volume of trading.
- General improvements in market, transport and communications infrastructure would facilitate commercialization of many products, including NTFPs.
- There is no significant difference in formal education between households engaged in NTFP commercialization and those that are not, although NTFP traders often have significantly higher levels of education than producers.
- Traditional knowledge can be very important in determining a community's interest and capacity to successfully commercialize an NTFP.
Identifying common factors influencing success
In summary, the research findings lead to a definition of successful NTFP commercialization as a transparent, equitable and sustainable activity that has a positive impact on poverty reduction, gender equality and resource access, tenure and management. It is possible to make the following recommendations for interventions to improve the contribution of NTFP commercialization to sustainable development.
Promising government-level interventions include:
- Rural livelihood support policies that go beyond a narrow focus on one product or sector (e.g. agriculture, livestock or forestry) and support NTFP activities as part of a diversified livelihood strategy.
- A clear statement of which laws apply to NTFPs under which circumstances and who is responsible for implementing them.
- Encouraging lending institutions to recognize the commercial potential of NTFP enterprises and make credit provision accessible to the rural poor and small-scale entrepreneurs.
- Policy interventions that improve access to education and information, thereby increasing opportunities for more people to take on an entrepreneurial role.
- General improvements to transport and communications infrastructure that will facilitate market access.
Key options for direct assistance at community level through government, NGOs or private sector intervention include:
- Enhancing community organization to increase the market power of NTFP producers and processors and decrease their vulnerability to external shocks.
- Provision of opportunities for greater involvement of women in NTFP activities that accommodate the constraints of traditional domestic duties.
- Building the business capacity of potential entrepreneurs.
- Provision of technical know-how and organizational skills to ensure sustainable resource management and harvesting, domestication where appropriate and product processing.
Belcher, B.M. 2003. What isn't an NTFP? International Forestry Review 5(2) 161-168.
de Beer, J.H. and McDermott, M. 1989. The Economic Value of Non-timber Forest Products in South East Asia. The Netherlands Committee for IUCN, Amsterdam.
This article was excerpted with the kind permission of the authors and publisher from
Marshall, E., Schreckenberg, K. and Newton, A.C. (eds) 2006. Commercialization of Non-timber Forest Products Factors Influencing Success. Lessons Learned from Mexico and Bolivia and Policy Implications for Decision-makers. UNEP World Conservation Monitoring Centre, Cambridge, UK.
The original publication is an output from a research project funded by the United Kingdom Department for International Development (DFID) for the benefit of developing countries. The views expressed are not necessarily those of DFID. (R7925 Forestry Research Programme)
About the authors
Elaine Marshall is formally trained in agriculture and natural resource management, and has worked for much of the past ten years in Latin America on community based natural resource use projects. She has experience undertaking participatory research with communities to explore sustainable resource use and alternative income generation, and she is particularly interested in the role of women. She has worked on Darwin Initiative projects, and managed the DFID Forestry Research Programme funded project, CEPFOR, between 2000 and 2005. She is currently working as International Coordinator for the Reducing Vulnerability Programme at Practical Action, U.K. E-mail firstname.lastname@example.org
Kate Schreckenberg is an independent researcher on rural development forestry issues with a special interest in improving the benefits obtained by small-scale forest producers. She is a forester with a PhD in Geography from the School of Oriental and African Studies in London. Her current research includes an investigation of the poverty impacts of participatory forest management, understanding the factors that determine the success of commercialisation of non-timber forest products, and a study of verification systems in the forest sector. Other recent work focused on domestication of indigenous fruit trees in Cameroon, and conservation of on-farm tree resources in Honduras and Mexico. With 19 years experience of forestry research and policy advice in the developing world including work in Benin, Bolivia, Burkina Faso, Cameroon, Honduras, Indonesia, Kenya, Mexico, Namibia and Thailand, she is increasingly interested in facilitating lesson learning from South to North. She is a Research Associate with the Overseas Development Institute in London, where she worked and was editor of the Rural Development Forestry Network from 1996 to 2004. She can be contacted at email@example.com
Adrian C Newton is currently Reader in Ecological and Geographical Sciences at the School of Conservation Sciences, Bournemouth University, UK. His research interests focus on the conservation biology of tree species, and the conservation ecology of forest biodiversity. Recent work has included analysis of forest fragmentation and its impacts on floristic diversity in the temperate rain forests of southern South America and Highland Mexico. He is about to begin a major new international project focusing on restoration of dryland forests in Latin America, involving the use of spatial modelling techniques to examine forest dynamics at the landscape scale. Contact info Dr Adrian Newton, School of Conservation Sciences, Bournemouth University, Talbot Campus, Fern Barrow, Poole, Dorset BH12 5BB, UK. E-mail ANewton@bournemouth.ac.uk
Erik Arancibia, Florencio Maldonado, Cesar Enrique, Isidro Rodriguez, Fausto Lopez CARE, Bolivia. E-mail firstname.lastname@example.org
Fabrice Edouard, Raday Quero Methodus Consultora, Oaxaca, Mexico. E-mail email@example.com
Caterina Illsley, Tonantzin Gomez Grupo de Estudios Ambientales, Mexico E-mail firstname.lastname@example.org
Jonathan Rushton, Luis Pérez, Cecilia Viscarra CEVEP, La Paz, Bolivia. E-mail email@example.com
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