Commercialization of non-timber forest products luencing success | f - = aie 3 eee sg? mo St & res FS oe Lessons learned from Mexico and Bolivia and policy implications for decision-makers Editors: E. Marshall, K. Schreckenberg, A.C. Newton Digitized by the Internet Archive in 2010 with funding from UNEP-WCMC, Cambridge http://www.archive.org/details/commercializatio06mars NIN IA4& € ~Commercialization of non-timber forest products — Tegel ate) SUCCeSS Lessons learned from Mexico and Bolivia and policy implications for decision-makers Editors: E. Marshall, K. Schreckenberg, A.C. Newton NEP WCMC UNEP WCMC UNEP World Conservation Monitoring Centre 219 Huntingdon Road Cambridge CB3 ODL, UK Tel.: +44 (0) 1223 277314 Fax: +44 (0) 1223 277136 Publication and CD-ROM contents downloadable from project website: www.unep-wemc.org/forest/ntfp. THe UNEP Wor-b CoNseRVATION MoniToRING Centre (UNEP-WCMC} is the biodiversity assessment and policy implementation arm of the United Nations Environment Programme [UNEP], the world’s foremost intergovernmental environmental organization. The Centre has been in operation for over 25 years, combining scientific research with practical policy advice. UNEP-WCMC provides objective, scientifically rigorous products and services to help decision-makers recognize the value of biodiversity and apply this knowledge to all that they do. Its core business is managing data about ecosystems and biodiversity, interpreting and analysing that data to provide assessments and policy analysis, and making the results available to national and international decision-makers and businesses. RECOMMENDED CITATION: 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. A Banson production Graphic design: John Carrod Production editors: Karen Eng, Helen de Mattos Printed by Cambridge Printers, UK © UNEP World Conservation Monitoring Centre, 2006 ISBN 92-807-2677-3 The contents of this report do not necessarily reflect the views or policies of DFID, the United Nations Environment Programme or the UNEP World Conservation Monitoring Centre. The designations employed and the presentations do not imply the expressions of any opinion whatsoever on the part of these organizations concerning the legal status of any country, territory, city or area or its authority, or concerning the delimitation of its frontiers or boundaries Sponsor This 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) DFID ==: FRO Collaborating organizations Overseas Development Institute Bournemouth University CARE Grupo Mes6ofilo Grupo de Estudios Ambientales GEA: Methodus Consultora Red de Aprendizaje, Intercambio y Sistematizacion de Experiencias hacia la Sustentabilidad eee ee Authors Elaine Marshall UNEP World Conservation Monitoring Centre (UNEP-WCMC}, 219 Huntingdon Road Cambridge CB3 ODL, UK E-mail: Elaine-Marshall@unep-wemce.org marshallelaine@googlemail.com Kathrin Schreckenberg, Dirk Willem te Velde Overseas Development Institute (OD!) 111 Westminster Bridge Road London SE1 7JD, UK E-mail: k.schreckenberg@odi.org.uk A.C. Newton School of Conservation Sciences Bournemouth University, Talbot Campus Poole, Dorset BH12 5BB, UK E-mail: anewton@bournemouth.ac.uk Jonathan Rushton, Luis Pérez, Cecilia Viscarra CEVEP, Casilla 10474, La Paz, Bolivia E-mail: rushtonjonathan@yahoo.com Erik Arancibia, Florencio Maldonado, César Enriquez, Isidro Rodriguez, Fausto Lopez CARE, Casilla 6034, La Paz, Bolivia E-mail: eharancibia@yahoo.com.ar Maldonadoflorencio@hotmail.com www. carebolivia.org Fabrice Edouard, Raday Quero Methodus Consultora, Crespo 524 D Col Centro, Oaxaca, Oax CP 68000 Mexico E-mail: fabrice@raises.org methodus@prodigy.net.mx Www.raises.org Catarina Illsley, Tonantzin Gomez Grupo de Estudios Ambientales, Allende 7 Santa Ursula Coapa, Mexico DF CP 04650, Mexico E-mail: gea@laneta.apc.org Janett de los Santos, Juan Carlos Flores, Alvaro Gonzalez Grupo Mesofilo, Pino Suarez 205 Centro Historico Oaxaca, Oaxaca, 68000, Mexico E-mail: janettetno@yahoo.com, skatoflores@hotmail.com Alan Bojanic E-mail: alanbojanic@techemail.com Acknowledgements We gratefully acknowledge the generous participation of the case study communities and market traders in the research process, without whom this project would not have been possible. We thank community authorities and leaders of campesino organizations for helping us to obtain the necessary data With many thanks for the encouragement and constructive feedback from our reviewers: Mike Arnold and anonymous Forestry Research Programme external reviewer; Hannah Jaenicke, Margaret Marshall, Neville Ash and Kaveh Zahedi. Our thanks also to the many participants at the inception workshops in Mexico and Bolivia in 2001, including Esteban Garcia Pena, Emma Beltran, Cintia Aldana, Philip Bubb, Katrin Linzer, Ruben Leigue, Fernando Guadarama, Alvaro Gonzalez, Jorge Lopez and Diana Pritchard. Thanks also to Charlotte Boyd for making that invaluable first contact point for working with ODI and Savitri Abeyasekera for reviewing and providing feedback on our statistical approaches. Corinna Ravilious prepared the case study maps and James O'Carroll designed the CEPFOR project website; Katelijme Rothschild Van Look and Jody Sunley provided generous project administration support. Our thanks to Duncan Golicher for assistance with the development of the Bayesian belief network, and to Olivier Cottray and Finbarr O'Sullivan for designing the Java interface for the decision support tool. Last, but most certainly not least, the CEPFOR team is especially grateful to John Palmer for his unerring support of this project. Commercialization of non-timber forest products Foreword The challenges of addressing global poverty in a sustainable way are greater than ever. The well-being of more than half of the 1.2 billion people who live in poverty depends to a significant degree on the availability of non-timber forest products (NTFPs]. Such products are used to meet daily subsistence needs, making a significant contribution to food security, and also provide a valuable source of building materials and medicines. In addition, trade in NTFPs often provides an important source of cash income for the rural poor. Populations in forested areas are increasingly being subjected to changes brought about by economic growth and are being presented with new opportunities to engage in trade. This is transforming the way that forests are used. The opportunities for low-income producers to use natural assets to reduce poverty are significant, but this potential can only be realized if the right support is provided. The potential contribution of NTFPs to poverty reduction through sustainable trade and income generation is not being fully realized. There are many obstacles to subsistence farmers, local processors and traders securing a reliable and fair market for their harvested products. The capacity of the poor needs to be increased to fully benefit from the variety of services and goods that sustainable use of biodiversity can provide. Effective local governance and an enabling policy environment are needed to protect the natural resource base upon which rural livelihoods rely so heavily. Also, access is needed to information on how successful NTFP commercialization can be achieved in practice, so that external support and donor investments can be targeted more effectively. This research project, funded by the UK’s Department for International Development through its Forestry Research Programme, has examined the key factors that influence successful NTFP commercialization. This collaborative venture between UK institutions and project partners in Bolivia and Mexico provides a deeper understanding of how marketing networks are structured, and how NTFP commercialization can contribute to wider goals. Results of the research indicate that successful NTFP commercialization can reduce poverty, and can provide women with a greater sense of self-confidence and improved status within the household and the community. However, there remains a need to help the rural poor overcome the various challenges that constrain successful NTFP commercialization, including securing a sustainable resource supply, accessing market information and developing ways of overcoming uneven power and barriers to market entry. This publication summarizes the results of the project, in a way that should provide direct support to decision-making. Our hope is that the findings and recommendations of this work will help policy-makers direct their work and target their resources to help meet the United Nations Millennium Development Goals of reducing poverty and ensuring environmental sustainability. Cn. The Right Honourable Hilary Benn MP Secretary of State for International Development Government of the United Kingdom Executive summary Executive summary 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. This publication presents the findings of the CEPFOR project [Commercialization of non-timber forest products in Mexico and Bolivia: factors influencing success], a multi- disciplinary research initiative involving part- ners drawn from the UK, Mexico and Bolivia. The research team critically examined the factors influencing successful NTFP com- mercialization and tested and further devel- oped theory relating to the commercialization of NTFPs and rural development. Socio- economic and market research examined the impact of different NTFP commerciatization networks [value chains) on poverty reduction, women’s livelihoods, natural resources and rights and access of the poor, in eight communities in Bolivia and 10 in Mexico. The Flying from La Paz down to the rubber and cocoa communities located in the Bolivian Amazon. structure and function of 16 NTFP value chains were analysed, enabling identification of the attributes that make a chain successful. The main findings of the CEPFOR project are presented below. 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: DThere is a need to engage directly with com- munities and other stakeholders in the NTFP value chain, to jointly identify criteria of success and discuss the trade-offs that might be needed. bSuccess 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. b Success can usefully be considered at different levels, including households and the individuals within them, communities, and at district or national level. pDAt each level there are social, economic and environmental aspects of success. D Definitions of success may be dynamic, changing in response to variations In socio-economic circumstances and the behaviour of the market. Elaine Marshall Commercialization of non-timber forest products NTFP 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: D contribute between 7 per cent and 95 per cent of a household’s annual cash income; Dregularly 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; Db 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 Bb The importance of NTFPs in household livelihood strategies is closely linked to their seasonality and the way they may be combined with other income- generating 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 oppor- tunities for women in marginalized rural communities. Key findings include: Dd 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. Db 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: Bin the case of communally owned resources, improved management of the natural resource and better harvesting practices are common. D If land is held privately and the plant can be easily propagated, individuals begin to engage in small- scale domestication. DB There is no evidence that NTFP commercialization reduces access rights to the wild resource for the poor. DIndustrial 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 EITHER MEXICO OR BOLIVIA 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 formal- sector commercialization. BD NGO involvement can be important, but currently most NGC support is provided through donor- funded projects, which are rarely coordinated with government programmes. Dincreased national policy interest in NTFP commercialization is justified on the basis of its contribution to national economic development, local livelihoods and conservation. DAIL the products studied could benefit from being marketed as speciality (e.g. organic or community-traded) products. However, certifica- tion 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 NIFP value chains. Key findings include: D Innovation, both in terms of resource management and product processing and marketing, is often critical to maintaining market share. Db 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. Executive summa D The viability of a particular NTFP value chain may also depend on demand for another product. b Entrepreneurs can play a key role in facilitating access to markets by providing information, skills and financial support. b) 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: DA 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. DThe real value of market information lies in ensuring that the commercialization process is equitable, efficient and sustainable. ) Good organization of NTFP producers and pro- cessors contributes to improved product quality and quantity, more cost-effective transportation and increased negotiating ability. D 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. D Traditional knowledge can be very important in determining a community's interest and capacity to successfully commercialize an NTFP. IDENTIFYING COMMON FACTORS INFLUENCING SUCCESS A key achievement of the project has been to develop an analytical framework to compare the factors determining successful NTFP commercialization across a range of case studies. These factors form the basis of the CEPFOR decision support tool (CDST). This allows users to compare the potential success of different NTFP development options, to diagnose the reasons for failure of current NTFP initiatives, and to investigate the potential livelihood impacts of different policy options. 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. On the basis of the CEPFOR case studies, 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: dD 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. DA clear statement of which laws apply to NTFPs under which circumstances and who is responsible for implementing them. b Encouraging lending institutions to recognize the commercial potential of NTFP enterprises and make credit provision accessible to the rural poor and small-scale entrepreneurs. b Policy interventions that improve access to education and information, thereby increasing opportunities for more people to take on an entrepreneurial role. b) General improvements to transport and com- munications 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. D Provision of opportunities for greater involvement of women in NTFP activities that accommodate the constraints of traditional domestic duties. PBuilding the business capacity of potential entrepreneurs. D Provision of technical know-how and organizational skills to ensure sustainable resource management and harvesting, domestication where appropriate and product processing. All key project outputs including the CDST, its user guide and a methods manual for field/market-based research are provided on the accompanying CD-ROM and can also be downloaded free of charge from the project website: www.unep-wemc.org/forest/ntfp. Commercialization of non-timber forest products Contents AGEHOS de ACKMOWIEUGEMMEMNUS cesccecscccseoceyaascvectesvecenvecetor’ deni wastenysss 40% canopy cover ==> Commercialization routes Sources: MODIS [canopy cover]; ESRI [other topographical data) Case studies: Wild cocoa Wild cocoa Theobroma cacao (Sterculiaceae] Beans or paste? Different commercialization strategies to respond to the challenges of resource density and market access Florencio Maldonado, Erik Arancibia and Elaine Marshall The case study communities are situated in the Department of La Paz, Bolivia, in the municipalities of Ixiamas and San Buenaventura, some 450 km from the capital city of La Paz. The region is located in the tropical humid zone adjacent to Madidi National Park at an average altitude of 250 metres. This is one of the poorest regions of Bolivia. San Silvestre is located a two-hour walk from Tumupasa, where there is a tarmac road providing regular access to the towns of San Buenaventura and Rurrenabaque, 64 km away on the Beni river. The 22 families in San Silvestre belong to the Tacana ethnic group and have access to a total of 15200 ha of land. In 2004, the Bolivian government recognized their ownership by granting them the status of an indigenous territory [TCO - Tierra Comunitaria de Origen). The communities are affiliated with the Indigenous Council for Tacana Communities (CIPTA}] and consist predominantly of subsistence agriculturists. Average household incomes are only half those in Carmen del Emero (see below). Their land is relatively fertile; it has a high proportion of forest cover and a density of about 104 cocoa trees per ha. Trees are not individually owned, and the fruit is collected by whoever finds it first. Men principally carry out harvesting, often with their children, and women are solely responsible for processing beans into paste. All households are involved in cocoa trade, which contributes about 7 per cent of family income, although much paste is also consumed. Carmen del Emero (Emero) is located 280 km downriver from Rurrenabaque, a journey of 10 hours by motor boat. Emero has 47 Tacana families who have access to 30 000 ha Florencio Maldonado Cocoa harvesting, Carmen del Emero, Bolivia. of land. The cocoa trees occur naturally along the river fringes at a density of around 324 trees per ha. They are a communal resource with the fruits collected by whoever finds them first. Harvesting is undertaken by all families, involving both men and women, although men collect from sites located further away. There has been a recent move to establish cocoa plantations near the community, mostly using transplanted wildings, but a few farmers are also beginning to use improved varieties. Emero has a reputation for producing cocoa beans, and the activity contributes, on average, 14 per cent of family income. The other principal economic activity is the sale of dried fish, which accounts for household incomes in this community being almost twice those of San Silvestre. THE RESOURCE Cocoa occurs naturally in the humid lowlands of Bolivia {below 500 metres) and throughout the Amazon basin (Figure 3.1]. Although there is no evidence that the resource has been overexploited, households have initiated domestication to reduce collection times and increase their individual control over the resource. In recent years, many farmers in both communities have transplanted wildings to establish their own cocoa resource that Is situated closer to home. The growing economic importance of cocoa has been a driver in this process, and domesticated varieties 29 Commercialization of non-timber forest products have been established in informal plantations. There are two varieties of cocoa, which complement one another well in yield and flavour. One variety produces many pods per tree with low bean density, and the other has fewer pods but more beans per pod, and a preferred flavour. Taking the two communities together, some 38 per cent of interviewees are cultivating cocoa as well as collecting it from the wild, but there is no chemical management of the crop, and it is organically produced. The NGO CARE is working with existing community organizations to improve harvesting practices and promote fermentation of the beans to achieve better quality and consequently a higher market price. PRODUCT AND MARKET DESCRIPTION Cocoa is harvested during the months of January to March. Wild cocoa is known for its supreme butter quality, although yield per tree is lower than that of commercial varieties. A growing market for the organic chocolate paste has resulted in an increase in production of cocoa and an elevated price in recent years. Although the butter content is high, the quality of the processed seed needs to be improved to increase market share and price paid. Cocoa requires some processing at collector level _ Carmen del Emero Community Collectors “@— trader = and producers; collection of © cocoa pods ; Forsale poe Fermentation and dying ofthe bear ee Cocoa paste — production for sale and consumption Fermentation Traders in San Silvestre and drying of Tumupasa Collectors, the bean producers and : Processing to Cominnaahy cocoa paste for trades, =~ consumption and sale 30 before it can be sold: predominantly fermented and dried cocoa seed is traded from Emero, throughout the year, in units of 11 kg. The trade from San Silvestre is largely as cocoa paste, processed from the beans by women in the community. There is an option in both communities to sell to a community trader, and also to sell to regional traders (see Figure 3.2). San Silvestre is a two-hour walk from the nearest town, Tumupasa. The road from there to San Buenaventura is seasonal, and few trucks pass along It. This presents an obstacle to physical transport - particularly for a heavy product like beans - and to market information. San Silvestre has focused on production of paste because of the community's low density of trees, which means that insufficient beans are produced to attract traders along the poor-quality road to collect a bulky product. Furthermore, paste is a traditional product that is locally consumed and exchanged as a gift. Only the surplus product is traded, in 500-gram balls. This indigenous community is less experienced in commercialization and sells cocoa for a shorter period than Emero, directly following its harvest. The cocoa producers in Emero, despite their remote location, have greater outside contact provided through six regional traders, who visited initially to purchase dried fish Other processors = Chocolate Wholesaler in Rurrenabaque > El Ceibo Wholesale regional processor Cocoa paste traders in Tumupasa Consumption by the community Sent to relatives in Riberalta and Rurrenabaque Case studies: Wild cocoa Harvested cocoa pods vary greatly in size. San Silvestre, Bolivia. and now also exchange groceries for cocoa beans. These regional traders are either related to the community traders or have strong social obligations to them as godparents to their children. The volume of cocoa traded from Emero is highest when dried fish availability is low, but between the two products the traders have something to buy all year round. Women prefer to barter with the traders as they say that they are more likely than their husbands to select products important to the household, such as food and medicines. Although there is high demand for cocoa and the intermediaries have provided a marketplace for Emero, market information is restricted by these same inter- mediaries, and there are few ways for communities to overcome this. All the cocoa beans from the region are bought by a wholesaler cooperative, El Ceibo, some 170 km from Rurrenabaque. This cooperative pays a price premium to its members, who meet entry requirements relating to quality and quantity of production, but a reduced rate to non-affiliated producers such as the two case study communities. This study highlights the potential for NTFPs to be marketed into high-value niche markets — organic, in this case - as the cooperative is currently doing: El Ceibo receives a price premium for chocolate made from organic cocoa. Unfortunately this is not passed down to the producers from the case study communities, as their production is not certified as being organic. Access to market information at this point in the value chain is a significant obstacle to commercialization for producer communities. In addition, no households have access to credit, relying solely on informal lending arrangements between relatives for the establishment of plant nurseries. Both communities have received support from CIPTA, CARE Bolivia and the German Development Service (DED) to improve processing of the beans. Waiting for the intermediary to arrive, beans ferment in the sun, improving their flavour. 31 Florencio Maldonado Florencio Maldonado Commercialization of non-timber forest products Natural rubber [Hevea brasiliensis) e . . . . WA Species distribution Centres of production @ Case study community locations == Commercialization routes =» Commercialization routes [latex] 32 % canopy cover Non-forest 10-40% canopy cover an > 40% canopy cover Sources: MODIS [canopy cover]; ESRI [other topographical data} Case studies: Natural rubber gs y ed } re Ps fons Making waterproof ponchos by coating cloth cut-outs in rubber latex. Santa Rosa, Bolivia. Natural rubber Hevea brasiliensis (Euphorbiaceae) Waterproofs or latex? Different commercialization strategies determined by transport and tenure Isidro Rodriguez, Erik Arancibia and Elaine Marshall The case study communities of Santa Rosa de Challana and Tomachi are the longest-standing producers of rubber in the municipality of Guanay, La Paz Department, Bolivia, with more than 50 years’ experience of production, processing and sale. They are located eight hours by road (220 km] from the capital city of La Paz. The region lies within a tropical mountainous zone characterized by occurrence of valuable mineral deposits, including gold. Santa Rosa de Challana (Santa Rosa] is located at an altitude of 900 metres approximately 23 km from the town of Guanay. It consists of 26 families of the Aymara ethnic group, who migrated to the region in the early 1900s and established a well-organized community. The agricultural and livestock potential is limited by steeply sloping topography. The community possesses an extensive land area of 8500 ha, of which 40 per cent is dedicated to rubber production, from natural stands. Tomachi is located at an altitude of 360 metres approximately 26 km from Guanay. There are 140 families: 60 per cent of Leco origin, 30 per cent Aymara immigrants who arrived during the 1960s from the Altiplano and 10 per cent Quechua. The community owns 5 600 ha [and is in the process of establishing a TCO to exclude further immigration). The majority of land is cultivated, and 80 per cent of agricultural produce is sold, representing the principal source of income. Consequently, much of the surrounding forest has been cleared for rice cultivation. In general the community seems much richer, or has much greater wealth disparities, than Santa Rosa due to land titling (see below). There are 12 forest concessions in Tomachi, which generate a much higher income than traditional agricultural activities. 33 Isidro Rodriquez Commercialization of non-timber forest products Santa Rosa de Challana Processing {women} waterproof bags and coats Collecting Cleaning (men) (men and women) , Sales during the last year La Paz/El Alto Processing workshops, small industrial firms Football bladders Tomachi 15 concessionaires Rubber Two concessionaires have a small firm Elastic Gloves Pedals THE RESOURCE Rubber occurs naturally in the northwest of Bolivia from the Andes to the border with Brazil (Figure 3.3). Latex is extracted by cutting into the surface layers of the bark, but not as deep as the cambial layer, to avoid killing the tree. The harvesting is undertaken at night and in the early hours of the morning. Rubber is harvested along forest tracks {estradas), from which individual rubber trees can be accessed. The number of trees per track varies from approximately 50 in Santa Rosa to 200 in Tomachi. In Santa Rosa, rubber trees are communally owned, but each family has access to an average of three forest tracks, which were demarcated when areas were first worked. No community management plans exist, but rights to forest tracks are well respected, and individual collectors manage their resource - even without NGO intervention — including allowing the trees to recover for two months between cuts. Peak rubber yields occur during the rainy season. Extraction is predominantly by men due to the hard and sometimes dangerous physical labour involved, though women also collect from nearby trees. Women dominate the processing. Everybody benefits from rubber production in Santa Rosa, with 90 per cent of household cash incomes 34 Retail traders (retailers) In mining centres and Rurrenabaque Trader Guanay Buys bags Trader/haulier =» Wholesalers coming from the sale of rubber products. The large area available per person and the hilly terrain - which makes rice cultivation impossible - combined with a lack of alternative income-generating activities make rubber production a highly valued activity. This is one reason why forests in the area are well conserved, with no signs of agricultural clearings. The income from selling the final goods is used by women to cover household expenses. In Tomachi, land tenure is based around concessions for mineral rights established during the gold mining period. These were then transferred to forestry, giving the concessionaires ownership of 10-36 tracks of rubber each. During the course of this research, it became apparent to the NGO CARE that the title deeds had in fact expired, so community members are now seeking to achieve land redistribution with new titles. The concessionaires hire local men on a piecework basis to harvest the latex during six months of the year, and they will hire immigrants if the locals do not work hard enough. The remaining rubber resources are a short boat ride and a 90-minute walk from the village. When the mining industry was started during the 1980s, 40 per cent of the community was employed to collect rubber, but the Isidro Rodriguez quantity of work has diminished substantially over the last 10 years. Now only seven Tomachi families are involved in collection. PRODUCT AND MARKET DESCRIPTION Three distinct products are marketed: liquid latex, locally processed artisan goods and goods processed in a semi- industrial manner (Figure 3.4). The rubber from Tomachi is commercialized as liquid latex in 200-litre drums. This is possible because of the availability of good transport links: in addition to daily vehicle access to and from the community, Tomachi is also located next to a large river. Traditionally, people have both used the river to transport rubber, and used rubber to transport precious goods down the river, including placing small children inside rubber sacks and floating them across! Concessionaires in Tomachi control commercialization from collection to wholesale. Barrels of latex are sold to intermediaries working for the concessionaires, who then transport it to La Paz and El Alto, where it is sold to craftsmen and women working in small-scale industry. Two of the concessionaires themselves own workshops in La Paz, where products such as football bladders are made. By contrast, Santa Rosa is limited to a seasonal road with twice-weekly vehicle access. Poor infrastructure coupled with a low density of rubber trees in Santa Rosa make selling the raw rubber latex unviable, whether Tapping rubber trees: grooves are cut in the bark and the latex is collected in recycled cans. Case studies: Natural rubber individually or communally. Families process the relatively small volumes of latex, adding value locally and increasing the sold value per unit weight. Final goods include rubber ponchos and raincoats destined for miners, and bags farmers use to transport their rice downriver. Individuals sell their products to the mining centres of Guanay. Other commercialization obstacles in Santa Rosa are lack of market information and declining traditional markets provided by the gold mining industry, including water- proofs. Nevertheless, good community organization and innovation have enabled producers to develop new products to take advantage of the limited local market. Trade in natural rubber declined markedly during the 1940s following the appearance of synthetic latex. Substitutes remain a threat, but natural rubber has a rustic niche market, e.g. rubber boots. National demand for natural rubber remains relatively high; it is imported into Bolivia. The main obstacle to competing with this imported natural rubber is consistency in product quality and the wholesale price paid. Neither community has access to formal credit, nor is there any government support for natural rubber. Although there are no policies or norms impeding commercialization, rubber processing Is affected by the increasing regulation of ammonia supplies, due to its use in cocaine production. CARE has provided support in product improvement, including finding alternatives to ammonia for use in the production of rubber. A gold miner leaves for work wearing his waterproof poncho, made from locally harvested and processed natural rubber. 35 Commercialization of non-timber forest products 36 Yacuiba a to Argentina i " Incense and copal % canopy cover (Clusia cf. ramosa and Protium puncticulatum)\* ~_Non-forest A Species distribution ps3 10-40% canopy cover Centres of production Ss > 40% canopy cover @ Case study community location == Commercialization routes * The two products have been grouped together as they have the same commercialization chain. Sources: MODIS [canopy cover), ESRI [other topographical data) Case studies: Incense and copal Incense and copal Clusia cf. ramosa (Guttiferae] and Protium sp. (Burseraceae] Two resins: different values, different uses, one value chain César Enriquez, Erik Arancibia and Elaine Marshall Pucasucho is located in the municipality of Apolo in northern La Paz Department, Bolivia. The average journey time from the capital city of La Paz, some 450 km away, Is 12 to 16 hours by road during the dry season. Products traded from this region, therefore, are likely to be most successful when they are high in value but low in volume. The case study community is one of only six communities seriously engaged in the incense trade. Pucasucho is located 70 km from the nearest town of Apolo at an altitude of 1 530 metres in the buffer zone of the recently created Madidi National Park. It has 43 families of Leco-Ahuachile and Quechua origin, 18 of which dedicate time to the joint collection of copal and the scarcer and higher-value incense. The families are subsistence agri- culturalists farming beans, maize and small livestock on approximately 5500 ha of land. Most external goods are acquired through barter, emphasizing the importance of incense and copal activities in generating a cash income. These NTFPs are viewed as a savings bank that can be drawn upon in times of need. Collection of these NTFPs is labour and time intensive, with an average of two days required to reach the harvesting sites within the park. There is an informal agreement with the park administration that collection may continue in existing areas, but not expand into new areas. It is not the poorest members of the community who collect incense/copal, but rather those who are recognized by the community as nominal owners of a zone of incense production, or rumbeo. Collection also requires the re- sources to cover costs for harvesting, including a mule or pony for transporting food and provisions. Collection is undertaken exclusively by men because of the distance travelled, time spent away from home and the dangers Copal resin on the underside of a piece of bark. Madidi National Park, Bolivia. encountered, such as venomous snakes. The products are available for harvest throughout the year, but collection trips are relatively dangerous during the rainy season. On average, three or four expeditions are undertaken each year, when money is needed for the home. THE RESOURCE The natural distribution of these species in Bolivia is in the foothills of the eastern Andes, from the Chapare region towards the north of the country [Figure 3.5). They exist in almost all patches of tropical montane or cloud forest, but are especially abundant in the Madidi region at 1 500-2 400 metres. The resin from both incense and copal is extracted by cutting a groove in the bark of the tree, from which the resin flows and solidifies into lumps. Both incense and copal can be harvested on collection expeditions, but incense is often preferred due to its higher market value. However, it is naturally much less abundant, and copal is collected to provide at least some returns to labour on the expedition. Testimony from collectors indicates that there is rarely enough incense to make an expedition worthwhile, and copal provides a readily collected alternative. Both resins are marketed along the same trade route, but are priced differently, and only incense is exported. As a result of the remoteness of the harvesting sites — up to five days can be invested in one collection outing — resource management is difficult. The lack of management capacity and lack of attempts to domesticate the species, coupled with harvesting without norms or management techniques, have had a negative impact on the natural resource. There has been an observed reduction in the productivity of remaining individual trees of both species and the gradual death of harvested trees. There are 37 Elaine Marshall Commercialization of non-timber forest products increasing reports of theft of incense/copal by individuals other than those to whom the right to harvest certain trees has been assigned. This results in overcutting of immature trees and reduced recovery time between harvests. As harvesting zones are individually assigned, no single community has a defined area, making community-level management difficult to organize. PRODUCT AND MARKET DESCRIPTION There is a stable market for incense and copal, which are used extensively in Bolivia and throughout Latin America for ritual burning in Catholic and traditional ceremonies, at parties, on saints’ days and for blessings. The Quechuas also use these aromatic resins as a medicine for various ailments. Incense appears to have a much wider application than copal owing to its chemical composition, and is used in the paint/varnish industry in Argentina and possibly Chile. Harvesting expeditions are organized by the har- vesting zone owners, who sometimes hire labour through the traditional Quechua minga system of communal labour. Although harvesting is looked down upon as a poor man’s activity, in the case of incense and copal the minga system allows individuals who do not have access to the resource to take part in and benefit from expeditions. Expenses such as food are advanced by the owner in return for half of the harvest. The volume of incense is increased through stock- piling as it moves along the value chain away from the collector. Incense is often traded first within Pucasucho, in quantities of 1-2 kg, and the price paid to collectors at Trader/ Smet Stee as Rie eat market z j transporter Argentina Pucasucho _ Owners of rumbeos and collectors © = (minga) Retailer Collection Trader —_——— Wholesaler Based in of product Based in Apolo — La Paz Cleaning and — drying of product . Retailers Based in Trader/ Cochabamba, RAnSnamen me oanta Cruz wholesaler level in the markets of La Paz is per unit of 11 kg or 45 kg. Few collectors in Pucasucho sell their resin in La Paz themselves due to the distance involved. Instead they sell to a small number of intermediaries (Figure 3.6) based in Apolo, who send the product on to family members in La Paz for sale. Intermediaries grade incense into three qualities according to the size of the resin drops harvested. Although intermediaries earn a premium on the largest drops of resin, collectors are not paid a price differential. The chain is inefficient at communicating market information, and the fact that the price differential is not passed on to the collectors may be a cause of resource overexploitation: higher values could provide greater incentives for sustain- able management. Community members sell individually, without adding value, e.g. through processing, and there is no formal credit provision. Access to market information is poor at community level largely owing to the distance between areas of production and centres of commerce. Collectors have no opportunity to exert market power, and prices paid to producers have remained virtually unchanged since the 1970s. The community has received support from CARE Bolivia for the elaboration of proposals for financing management plans, domestication trials and community trading initiatives. There is currently regional interest in both the trade of incense/copal and harvesting impacts on the resources by the United Nations Development Programme (UNDP) and international NGOs such as the World Conservation Society. International National market 38 Case studies: Jipi japa an Way 7 Jipi japa Carludovica palmata (Cyclanthaceae] Tourist crafts or hats: Weavers associating with an entrepreneur to reach tourist markets or immigrant women selling hats locally? Fausto Lopez, Erik Arancibia and Elaine Marshall Only the young jipi japa leaves are selected for weaving. They are dried and often dyed before being woven into hats, trinket boxes and mats. The case study communities of Candelaria, Potrero San Rafael and Carmen Surutu are located in the municipality of Buenavista, Santa Cruz Department, Bolivia. They are situated in a region of lowland humid forest in the foothills of the Ambor6 National Park. The region is connected by relatively high-quality roads to the city of Santa Cruz, some 160 km distant, with a journey time of under two hours. Candelaria has 40 indigenous Camba families, native to eastern Bolivia, who own 300 ha of land, including a forested river margin from which jipi Japa palm is extracted. The community depends largely on subsistence agriculture and the preparation of handicrafts, which involves more than 90 per cent of the population. There is a tendency for young people to migrate to Santa Cruz in search of paid work. 39 Elaine Marshall Commercialization of non-timber forest products Jipi japa palm (Carludovica palmata) % canopy cover Species distribution - ZA p r Non-forest 2 = Centres of production 10-40% canopy cover 2s Ss @ Case study community locations ag > 40% canopy cover 3 = eat St => Commercialization routes a= * Source of raw material 35 40 Case studies: Jipi japa Potrero San Rafael (Potrero) is similar to Candelaria, with 33 families of Camba origin who own 1 000 ha of land. Forest cover has almost disappeared as a result of agricultural encroachment, resulting in the need to purchase jipi japa from San Juan de Saguayo for processing and sale. The main activity is agriculture; only 25 per cent of the population work with jipi japa. There is marked emigration of young people. Carmen Surutu (Surutd) is the largest of the three communities, with 120 Valluno and Chuquisaqueno families organized in an agrarian syndicate, with 12 500 ha of land. As immigrants from the Altiplano, they learned to weave jipi Japa after arriving in the region. There is a continued high rate of immigration into the region, and this population pressure is, in part, contributing to high rates of forest loss. The principal activity is agriculture, and only 15 per cent of families are involved in the jipi japa trade. The shortest route from the community to Buenavista involves having to wade across a river, easily passable in the dry season but an obstacle in the rainy season. The collection of jipi japa is undertaken mainly by men, or it is bought from San Juan de Saguayo, and pro- cessing almost exclusively by women. As a result, women generate an income over which they have control, but many report the activity as overloading their daily commitments. THE RESOURCE Jipi japa palm is extensively distributed throughout the lowland tropics, extending from the centre of Bolivia northward into the Amazon basin (Figure 3.7]. Generally it is One collector supplies processors Potrero Leaves mainly bought Quality control and sale of products to Rural Art Buenavista found within forest fringes of foothills and around river banks. It grows in clusters of individual plants, and harvesters target young unfurled leaves from which to extract plant fibre to weave hats and other diverse crafts. Resource scarcity is considered to be largely a result of habitat loss - deforestation and mass land conversion to agriculture — rather than overharvesting. According to the National Service for Protected Areas [SERNAP], people wishing to harvest jipi japa must ask for a permit related to its function and future use - i.e. either domestic or with a commercial aim. The law states that whilst an individual may own the land upon which jipi japa grows, he or she does not own the actual resource. However, national regulation has little impact, and in reality this government department receives a negligible number of requests for extraction permits. As a result of depleted natural resources, some communities have attempted to domesticate the species, with the most promising results from growing it with other plants and under shade. The quality of young leaves cultivated under full sunlight is low, resulting in shorter length and greater rigidity. Candelaria is the only community that still harvests leaves; in the other communities, leaves are predominantly bought, and minimal amounts are harvested. There are two separate raw material supply chains for jipi japa (Figure 3.8): one collector located in Candelaria supplies processors in Candelaria and Buenavista; and families in San Juan de Saguayo collect jipi japa and supply processors in Potrero and Carmen Surutt and, to a lesser extent, Buenavista and Candelaria. Only families that can afford to Rural Art Warehouse Shops in in Santa Cruz Santa Cruz and La Paz Processing and weaving of tourist crafts Suruta Mostly buying; processing and =e weaving of hats by women Local retailers Buenavista Montero Retailer Hotel, Buenavista 41 Elaine Marshall Commercialization of non-timber forest products purchase the raw material can continue to weave. Inevitably, female processors are somewhat vulnerable due to their reliance on purchasing the leaves from a few male collectors, in addition to having no land on which to domesticate. PRODUCT AND MARKET DESCRIPTION Jipi japa hats and other woven goods have over time been displaced by cheaper plastic substitutes imported from Taiwan. However, there is an emerging interest in jipi japa for inclusion in alternative livelihood programmes originating from the Bolivian government's move to eradicate coca production. This is evident from the establishment of several weavers’ groups supported by regional NGOs and working with jipi japa and palms from other regions. This may have implications for resource supply and market share for many rural communities. Weavers in the communities of Candelaria and Potrero are affiliated with a private company called Rural Art, which established and supports an association of jipi japa weavers, providing them with training to supply its tourist shops with artefacts woven to specified designs and qualities. An NGO associated with Rural Art specifically supports indigenous people from the Santa Cruz region in an attempt to counter the high proportion of bilateral aid that has been directed at immigrants. Rural Art Freshly dried palm leaves ready for weaving or dying into different colours. 42 was established by a social entrepreneur with the aim of helping locally indigenous people by selling a range of handicrafts made by different underprivileged groups through the company’s shops. Association members see the concentration of market power in the hands of Rural Art as being mostly positive. Benefits include higher prices paid for goods, a social fund that pays health bills and a rotating fund that occasionally provides financial capital for investments. In addition, affiliation with Rural Art helps weavers overcome market barriers; through the organization, their products reach otherwise inaccessible tourist markets that are demanding in terms of quality but pay higher prices. Trade is direct and in the form of cash for all the communities, but Rural Art defers some of the payment for merchandise, placing it into a compulsory savings account. A portion of each seller's profit is held back for health services and year-end gifts for the members. The demand for products has remained stable over the last five years, although it is feared that the emergence of other associations in the marketplace will destabilize prices. The current trade network operates at a national level with outlets in the cities of La Paz and Santa Cruz, and smaller interventions in the towns of Beni, Trinidad, Rurrenabaque and San Borja. Weavers in the community of Surutu are not considered eligible to join the Rural Art association because they are immigrants to the region. They have established a community organization that successfully supplies the local markets of Buenavista and Montero, mostly with hats. A single woman is nominated to sell all the hats made in Surutu, in return for 20 per cent of the sales income. There are, however, no organizational benefits nor security for weavers, and reliance is almost entirely on a local market in Buenavista, and visitors to Amboro National Park. Jipi japa trinkets available for sale in a Rural Art shop, Santa Cruz. To] cs a Re o = a = ake a Case studies: Soyate palm Soyate palm Brahea dulcis (Arecaceae] Plaiting palm leaves: family production of hats and handicrafts Catarina Illsley, Tonantzin Gomez, Fabrice Edouard and Elaine Marshall Two indigenous communities of Nahua origin were selected for study, located in the dry lowlands of Guerrero State, Mexico. The region is located in the southern Sierra Madre mountain range, 60 km west of the state capital Chilpancingo and 25 km northeast of the regional economic centre Chilapa, to which it is connected by paved highways (Figure 3.9). The region is characterized by tropical dry forest that exhibits high levels of endemism and includes species of oak, other deciduous trees, grasses and palms. Topiltepec is located in the municipality of Zitlala, at an altitude of approximately 1800 metres. The 380 families in the community are subsistence agriculturalists with a total land area of 1 540 ha. A dam allows for more intensive and diversified irrigated agriculture. Tenure is complicated, with a long history of land use conflict. Essentially an agrarian community, part of the population is assigned individual plots with access to the remaining communal land for collected products including soyate palm, but excluding maguey [see next case study]. The remaining population consists of small landowners who have enclosed plots for their private use and consequently no longer have access rights to the communal land. There are hourly bus connections to nearby towns via a dirt road, and proximity to the region’s commercial centre has resulted in more girls and boys studying beyond primary and secondary school. La Esperanza is located in the municipality of Martyr of Cuilapa at an altitude of 870-1 980 metres. The 350 families are reliant on subsistence farming and have a communal land area of 3000 ha. All the community speaks Nahua, and some older women have never learnt Spanish. The dependence on natural resources is greater than in Topiltepec because there are fewer opportunities for paid work. Household cash income in both communities is largely sustained by remittances from young men who migrate both seasonally and permanently to other parts of Mexico, and recently to the United States. THE RESOURCE The soyate palm can grow in two forms: as a single trunk palm or in bushy clusters measuring up to 10 metres in diameter. It is a slow-growing evergreen species reaching a maximum height of 7 metres. Each frond produces between 10 and 24 leaves per year. The species is widely dispersed across the communal territory, and people are free to collect from any part. It is not unknown for some collectors to remain in their plots for days to prevent others coming and cutting the leaves at the wrong time. What is harvested depends on the collector's plans about what to make or sell. Historically, the palm trunk was harvested for roof posts, but as mature trees were all cut down, the community assembly imposed restrictions that are maintained to this day. Leaves are now the principal product harvested, predominantly from the bushy form of the palm. This form is promoted by cattle grazing, forest fires, logging and general degradation of the forest, and can occur on abandoned plots following slash-and-burn. As degradation is increasing, palm structure and cover are expected to change in favour of the bushy form. The exploitation of the palm, which is a wild plant with some in situ management, is not endangering the species per se. However, there is evidence that current levels of exploitation are having an impact on the size of the leaves. For making handicrafts, the still-folded and tender leaves must be at least 50 cm long. Harvesters report having to travel further from the community to locate suitable harvesting material. The community of Topiltepec has implemented a management plan to increase the productivity of the palms. The NGO Grupo de Estudios Ambientales (GEA) has provided technical and financial support to both communities over the past decade, including resource management assistance. PRODUCT AND MARKET DESCRIPTION Almost all the families (98 per cent} in both communities harvest palm and use the dried leaves to thatch roofs and the young unfolded leaves to make handicrafts. They also boil the leaves to soften them and then plait them into strips (cinta), which are sold in rolls of 20 metres and later sewn or woven together to make hats, saddlebags, table mats and so on. The palm fibre is resistant, but not of a high enough quality for fine weaving. Consequently, producers and processors are paid very low prices for their material. Collection and processing occur during traditionally quieter periods of the year, and provide an income when 43 30° 44 Figure 3.9 Commercialization of soyate palm in Mexico: ae distribution, centres, of production, case s stuc community locations and commercialization routes Commercialization of non-timber forest products Sooo Palig aeoe PaaS: 5 a eg esi Thy) eee to USA Only at church and at school is plaiting not permitted: everywhere else and at every other opportunity people plait. Plaiting is realized in parallel time. Cancun -90° 4 ft oP Panis ns ese sees Soyate palm (Brahea dulcis) ZA Species distribution Centres of production @ Case study community locations % canopy cover Non-forest 10-40% canopy cover > 40% canopy cover => Commercialization routes (artisan goods) = Commercialization routes (hats) Case studies: Soyate palm there are few other economic options. It takes approxi- mately six working hours to produce 20 metres of plaited strip worth US$0.15. The price paid to collectors has not increased with inflation over the last decade. However, plaiting the strips can be undertaken in parallel with other daily activities, explaining why more than 90 per cent of the families in both communities continue to devote time to this activity. It is also one of the only options available in either community for in situ cash income generation, especially for women, children and the elderly. Products are sold to buyers in the community as soon as they are made in order to obtain immediate income to cover basic needs. In addition to plaited strips, there are people in La Esperanza who simply sell the palm leaves to a couple of weavers who specialize in different palm articles, or to the two family-run handicrafts workshops making baskets, mats and hats (Figure 3.10). Some commercialization chains, especially those trading hats, are very long and complex. Hat production from the region was well established in the 1870s. According to Sanzekan Tinemi, a regional organization based in Chilapa and supported by GEA, palm leaves are now harvested by about 40 000 people, producing 500-800 tonnes per year, from just five municipalities. Principal Regional trader in One local og =H Ee from the community Local Tal ee sells 700 hats Hat makers in market teres Beak aweek Th ti : ese are large Aas one t workshops making ee sold as leaves 7 000 hats : per week Local trader | Large Leaf processing who sells rolls of | shops Most sold as strips; Plaited strips | heated with steam; s dried; plaited Trader buys cinta ene ad } into strips in the community, aes In —_> transports it to Wholesalers of Chilapa, where ea Christmas > hats and handicrafts, fea kitchen goods (place == _—shandicrafts mats, baskets, breadbaskets, etc.], | figures t strips ; centres of production and processing of plaited strips throughout Mexico are in Tlapehuala, Guerrero; Tehuacan, Puebla; Sahuayo; and Michoacan. However, Chilapa is one of the most important palm markets, with numerous processing factories for different products. The finished crafts are sold locally, regionally in the tourist centres of Acapulco, Taxco and Cuernavaca, nationally in other cities throughout Mexico and internationally via export throughout the Americas and into Europe. One of the challenges facing the commercialization of palm products is displacement by cheaper substitutes. Increasingly, plastic products and cheap Chinese palm goods infiltrate traditional markets, directly competing with local palm products and serving to further push prices down. Although the market has declined for some palm products, such as bedrolls and large bags, market share Is being maintained and even increased for smaller, more decorative items. The capacity of craftworkers to produce new designs and respond to market trends helps maintain a presence in the market. Sanzekan Tinemi has brought in qualified designers to work with weavers and has explored new commercialization chains, including fair trade markets in Holland, to date capturing 3-5 per cent of local production. Hat makers in distant cities Tlapehuala, Sahuayo, Tehuacan 45 Commercialization of non-timber forest products 400" 0° to USA } 30° | } | 5 Poa ge Ks pA Selecting the maguey plant to harvest the head for By, # fermenting and distilling in La Esperanza. sty f © [MEXICO CITY : - a { 5 gPuebla — pee | -100° me SS peer —— utes: z ~ oy Figure 3.11 Commercialization of maguey community locations and commercialization r ose Maguey papalote [Agave cupreata) % canopy cover WA Species distribution Non-forest Centres of production 10-40% canopy cover @ Case study community locations > 40% canopy cover => Commercialization routes 46 Case studies: Maguey papalote Maguey papalote Agave cupreata (Agavaceae] Community resource management supplies a traditional beverage for a niche market Catarina Illsley, Tonantzin Gomez, Fabrice Edouard and Elaine Marshall This case study was carried out in La Esperanza [see previous case for description). In the neighbouring community of Topiltepec, usufruct rights to maguey on communal land have never been clarified, so it is only harvested from individual plots. The maguey is sold on to mezcal distillers in La Esperanza. THE RESOURCE Maguey papalote is endemic to the area, growing naturally in the understorey of tropical dry forests, in oak woodland and in grasslands (Figure 3.11). Maguey is important to the culture of the Nahua communities, who use the plant for food, medicine, building, soil conservation and the production of the traditional beverage mezcal. In order to manufacture mezcal, agave plants are harvested at six or seven years, before they produce their single flower and fruit. It is important to cut the right part of the plant at the right time to ensure a good flavour: the centre of the rosette, or head, is used because of its concentration of sugar. In traditional distilleries, these heads are placed inside pit ovens, where they bake for three to five days over firewood and hot stones. Later they are fermented in wooden vats and finally distilled twice in copper Arab-style stills. Maguey in La Esperanza is a communally owned resource. The General Assembly meets every year and allocates maguey-harvesting rights to mezcal distillers on a monthly basis, rotating among them during the harvesting season of February to May. The income of US$150 per month from the sale of agaves benefits the whole community by covering the costs of social events. Distillers also buy maguey from other communities. Maguey is harvested from wild populations. Unlike other agaves, it only reproduces from seed. There is considerable pressure on the resource as immature plants are harvested with insufficient sparing of reproductive individuals, and forest fires and grazing livestock destroy many of the smaller plants. To protect the resource, the communal land is divided into two parts - rotated annually — half of which is designated for cattle grazing and half for maguey production. Traditional management practices include com- munity rules that ensure regeneration of wild populations. One traditional management system represents incipient domestication, promoting the forming of dense patches of agaves and selection of reproductive individuals accord- ing to desired traits. During the last decade, Sanzekan Tinemi has established a programme of maguey reforesta- tion through enrichment planting of the natural habitat. Collection of wild germplasm produces more than 2 million plants annually. PRODUCT AND MARKET DESCRIPTION Mezcals are spirits prepared by distilling cooked and fermented agave plants. The tradition of making mezcal has been passed down from one generation to another for hundreds of years, and production takes place in small rustic distilleries [fabricas] set in the forest close to water sources. Some 15 agave species are used in different regions of Mexico, and each mezcal is different, both because of species variation and because of the tools and processes used in its preparation. Few mezcals are made industrially, the most famous being tequila. Mezcal’s origin goes back some 10 000 years, when baked agaves were the main foodstuff for hunters and gatherers. Fermented agave was a basic alcoholic beverage, and Filipino slaves brought by the Spaniards in the 16th century introduced the practice of distilling. Some slaves escaped and blended with the Indian population, making mezcals the distinctive Indian liquors, especially in the dry tropical areas of Mexico. Production was maintained throughout the centuries in spite of a long history of prohibition and persecution that continued up to 1986 in Guerrero. Traditionally, only men are involved in the pro- duction and trading of mezcal. The distillery owners {fabriqueros) live in the region and are individuals who have managed to accumulate sufficient capital to install a distillery. Two of the local distilleries are privately owned, while one is managed by the community. A distillery owner may distil mezcal himself or rent the distillery out to other distillers [mezcaleros) in return for 50 per cent of the mezcal produced. The distillery owners, distillers and local men employed to harvest maguey earn sufficient income to prevent their seasonal migration in search for paid work. Individuals in need of cash or mezcal [e.g. for a family celebration) can establish agreements with a distillery owner to be hired in the harvest and production process. Private owners of maguey in other communities have a 47 Commercialization of non-timber forest products right to half the mezcal as payment for the raw material and work. Much mezcal in La Esperanza is sold and consumed locally. Only one distiller sells his mezcal outside the community (Figure 3.12], through complex national and distribution networks. The excellent quality of papalote mezcal is recognized by connoisseurs for its flavour and bouquet. A group of distillers from 30 communities recently formed a bottling and commercialization enterprise, which also formed an association of maguey growers and mezcal distillers of the Chilapan region to which La Esperanza belongs. This certifies the product as being of high quality, of limited supply, and harvested in a sustainable manner, according to self-regulating rules. Bottling identifies the source with labels detailing producer names. Open trading of mezcal in Guerrero began in the 1980s, selling in bulk to the important cities in the state, to Mexico City and to cities in the United States. The international boom in tequila induced a crisis in the supply of raw material and an increase in price, creating a market for mezcal and motivating the appearance of bottling enterprises. The observable increase in the demand for mezcal is also due to a trend embracing established traditions and customs. New brands provide the consumer and connoisseur with a range of different prices and qualities, from US$25 to US$2 000 per litre. The mezcal industry is most developed in Jalisco Collectors owners also sell maguey heads to the distillers 48 Most households interviewed undertook these activities La Esperanza ee i General Assembly Employed by distillers ae aes assigns cutting rights to harvest the oasting, on eerninpatignil to maguey heads; arial fermenting and aera] one to three distillers transport by donkey distilling per month during the to distillery three-month season, in return for ' harvesting fees; in situ Ak reforestation also Distillery Regional bottling undertaken Roasting, organizations fermenting and Buy mezcal, Private agave distilling — — — bottle the spirit, A single local processor who reported selling 2 000 litres of mezcal; this was eight times the amount produced by the other nine distillers in the survey and Oaxaca, where agave species have been domesticated on an agro-industrial scale, with enormous environmental and socio-economic costs. Barriers in the form of taxes and certification of origin [which requires a mezcal to originate from one of seven named states in Mexico) are significant for local producers and are on the increase. These policies are pushing small-scale distillers out of business or into clandestine production. At the same time, transnational tequila companies have expressed their interest in investing in other mezcals. COMPARING SOYATE PALM AND MAGUEY PRODUCTION AND TRADE Both case studies illustrate a high degree of specialization of tasks within the community, with many people carrying out slightly different activities. Though from the same community, soyate palm and maguey are produced and traded very differently. Soyate palm is a particularly socially oriented communal activity, involving men, women and children. Although it pays very little, everyone benefits. Maguey is a specialized activity, characterized much more as a private enterprise, involving a few skilled people: harvesters, distillers and distillery owners. However, despite the private nature of the work, the mezcal producers do pay harvesting fees to the community, and the activity provides employment for some men. Both species benefit from community organization for the management of natural resources. Family unit Individual label the product and sell to consumers or into larger markets A Case studies: Wild mushrooms Wild mushrooms Boletus edulis, Cantharellus cibarius, Amanita caesarea, Tricholoma magnivelare (Basidiomycetes) Fresh, dried and exported mushrooms: community business and entrepreneurs Fabrice Edouard, Raday Quero and Elaine Marshall Research was undertaken in two indigenous Zapotec com- munities of the Juarez mountain range, in the temperate zone of the eastern Sierra Madre mountains of Oaxaca state, approximately 60 km from Oaxaca city (Figure 3.13). San Antonio Cuajimoloyas (Cuajimoloyas) is located at 3 100 metres in the municipality of San Miguel Amatlan. Access is via a paved highway. There are 147 families who, in addition to forestry activities, are subsistence agricul- turalists producing potatoes, maize, oats and livestock. The three mushroom species that naturally occur in the forests of Cuajimoloyas have a lower market value than the matsutake collected in Latuvi [see below). Santa Marta Latuvi (Latuvi) is located at 2 500 metres in the municipality of Santa Catarina Lachatao. Access is via a partially paved highway. Here, 101 families are subsistence agriculturalists and also produce fruit and flowers for local trade. Latuvi commercializes matsutake [Tricholoma magnivelare), the production of which is related to forest type. Latuvi is more experienced in harvesting and trading than Cuajimoloyas. Both the case study communities are members of a collective administrative body of communities, called Pueblos Mancomunados, comprising eight localities that have a total common land area of 29500 ha. Forests of Amanita caesarea (upper) and Cantharellus cibarius (lower) are eaten fresh locally and traded throughout the region. this region are dominated by pine (Pinus spp.) and oak (Quercus spp.), and the forest industry is an important income-generating activity. In Cuajimoloyas, there is extensive business experience with a sawmill, which was originally a private business but was taken over by the community after a year’s struggle. Sale of timber provided enough funds to invest in a separate water-bottling business and secured access to credit to establish a drying business for mushrooms and fruit. The communities have also developed various successful ecotourism activities, but there is continued emigration of young people, who provide their families with remittance income. The poorer households in both communities are associated with the collection and trade of mushrooms; collectors with more experience generate a larger income. As mushrooms are available for only three months a year, the earnings generated do not represent a significant percentage of total household income, but the activity provides a complementary source of income during the rainy season, when agricultural and forestry activities are reduced. This income covers extra expenses rather than basic needs: it is spent on improving the home, purchasing school materials and uniforms and sometimes financing travel of family members to the United States. Women are predominantly responsible for collecting and, consequently, they manage the income. 49 Fabrice Edouard Fabrice Edouard Commercialization of non-timber forest products D = o = re} oO WwW o 2 = 2 oO iw Fabrice Edouard Tricholoma magnivelare are harvested in Latuvi and exported fresh to Japan. 100° Figure 3.13 Commercialization of wild mushrooms in Mexico: species pide pas case study community ‘locat re and commercialization routes / 3 ‘ pee: 3 Wild mushrooms % canopy cover (Tricholoma magnivelare - fresh) (Boletus sp., Amanita sp., Cantharellus sp. - dry and fresh) WA Species distribution Non-forest 10-40% canopy cover > 40% canopy cover @ Case study community locations = Commercialization routes [dry] = Commercialization routes (fresh) 50 Case studies: Wild mushrooms Market trader in Oaxaca Buys fresh mushrooms from collectors to sell in Oaxaca. Local fresh mushrooms sold at a fixed market stall Community-based trader Buys local fresh mushrooms {Amanita caesarea and Cantharellus cibarius) in the community and sells at a temporary market stall in Oaxaca Community Community National Natural food business business distributors shops La Forestal Envasadora y cad Gourmet Pueblos Empacadora products Mancomunados Pueblos Receives Mancomunados mushrooms Selects, dries from the = and packs the collectors, Boletus, registers their Cantharellus production, and Amanita Supermarkets pays for the mushrooms and retail product and traders also charges for the rights to collect in the forest Specialist National Matsutake distribution trader or broker in Japan firms intermediary Imports in Japan (Japanese and resells descendent) mushrooms Works with to other Japanese Japanese capital; firms selects and packs the mushrooms; sends the packed product to Japan by plane 51 Elaine Marshall Commercialization of non-timber forest products THE RESOURCE The wild mushrooms that are collected are produced by ectomycorrhizal fungi associated with roots of pines or oaks. Mushrooms are harvested leaving the fungal mycelium and plant root system intact, suggesting that harvesting is likely to be sustainable as long as the habitat of the fungi is not unduly disturbed. There is huge annual variation in the volume of wild mushrooms available for harvesting, attributed largely to climatic variability, especially rainfall. A limited understanding of the biology of these organisms makes it difficult to know the impact that harvesting will have on production over the longer term. Although communities sense a reduction in resource availability over the last decade, recently initiated resource monitoring does not provide data to support an overall decline. Improved resource management in high-yielding areas is advocated, as there are no options to domesticate any of the species. There is zoned management throughout the forest for timber and non-timber species. PRODUCT AND MARKET DESCRIPTION There are three distinct market chains: locally traded fresh mushrooms; regionally and nationally traded dried mushrooms; and fresh mushrooms exported to Japan (Figure 3.14]. Women dominate the local fresh mushroom and dried mushroom chains, with collection predomi- nantly by poor female collectors. As the export trade in matsutake mushrooms from Latuvi is more lucrative, men are also involved. Local fresh mushrooms. Amanita and Cantharellus mush- rooms are bought by a female community trader who A market trader of fresh mushrooms and local vegetables. Oaxaca, Mexico. 52 transports them from Cuajimoloyas to sell at a market stall in Oaxaca city. Sales of mushrooms took off during the last decade, and there is now a notable nostalgic market as a result of migration. Before intervention from the NGO Methodus Consultora, people did not know how to collect mushrooms in a sustainable manner, nor did they under- stand the species life cycles and links with trees. As no local employment is generated and few families are involved, the positive impact on the community as a whole is low. Dried mushrooms. In 2002, with infrastructural support from Methodus, a community business was established in Oaxaca city. This business dehydrates, packs and distributes its own brand of Boletus, Amanita and Cantharellus mushrooms to specialized outlets in Mexico. Drying the mushrooms extends their shelf life, conserves their flavour and provides a market in gourmet food outlets in Oaxaca and Mexico City. Trade has had a positive effect on the community as many families are involved. There is a move to further develop the activity and involve more communities to meet the increasing demand. Methodus has provided resource- and processing-management capacity to the communities, and supportive government policies subsidized an environmental impact assessment [EIA) required for a collection permit. A professional manager is employed to manage the dried-food business. Export mushrooms. Tricholoma [or matsutake) mush- rooms are exported from Latuvi to Japan by Korean and Japanese entrepreneurs. They have a good understanding of food-chain technology and established links with brokers who provide some of the funds for the airfreight, thus spreading the high risk between the Mexico-based entre- preneur and themselves. Trade began 10 years ago, following Japanese prospecting in response to diminishing Asian stocks. There is a significant demand in the Far East, and consumers are prepared to pay elevated prices of more than US$200/kg. Japanese brokers developed secure associates in Mexico, who were entrusted with accu- mulating mushroom stocks from different sources. Communities are paid US$7-30/kg of fresh mushrooms, which are then packed by the intermediary and airfreighted across the Pacific Rim. Latuvi is part of a supply network to meet the demand: 80 kg of mushrooms per day are needed to make expediting the mushrooms worthwhile. The trader reduces airfreight costs by booking a minimum volume in advance at a fixed cost, and bears the risk of not filling the container. There is good organization between the com- munities and the entrepreneur. However, these traders would not pay for the ecological study required in order to obtain a collection permit. Methodus consequently funded this, enabling the community to stay in the formal sector. Elaine Marshall Case studies: Pita a at Ae SIR Pita Aechmea magdalenae (Bromeliaceae] Traditional use, organization and domestication contribute to a successful niche marketing strategy Fabrice Edouard and Elaine Marshall This study was undertaken in two indigenous Chinantec communities located in the Papaloapan river basin, on the Atlantic side of the Sierra Norte, in the state of Oaxaca, Mexico (Figure 3.15). The communities are more than 200 km from Oaxaca city, accessible via a new paved highway. The Chinantla region is one of the most forested regions of Mexico and is characterized by extremely species-rich ecosystems of tropical rain and humid montane forests. Arroyo Blanco [Arroyo) is located at an altitude of 500 metres in the municipality of San Juan. There, 138 families own 2000 ha of land and are dependent on subsistence Women and girls are responsible for most of the initial pita processing, including the ‘rasping’ of flesh to extract the fibre. agriculture and traded coffee, which is cultivated in an agroforestry system. Pita is of traditional importance to this community. Arroyo is one of 18 communities that are members of the Union of Indigenous Towns of the Sierra de Lalana ([UPIS-L] cooperative. This municipal farmer-based Organization promotes improved livelihoods for its 1 200 members through socio-economic projects. San Rafael Agua de Pescadito (Pescadito) is located at 580 metres in the municipality of Valle Nacional. The com- munity’s 170 families have access to 5 800 ha of land, are largely dedicated to the commercial production of coffee and are involved to a much lesser extent in maize cultivation. There is no traditional use of pita. THE RESOURCE Pita, also known as ixtle, is a terrestrial spiny-leaved bromeliad that naturally occurs in the lowland forests of southeast Mexico and provides a source of fibre. All-year availability and the fact that its collection and processing is combinable with other agricultural activities make pita an attractive product to trade, and it is collected and processed two or three times a year, whenever money is needed. Pita is harvested in both communities from forest populations that have been enrichment-planted with wild germplasm. A price premium Is paid for longer fibre, so generally leaves are not cut until the plant is around six years old. When the demand for pita increased at the beginning of the 1990s, at a time of declining international coffee prices, Rolling the bleached and combed pita fibre into thread ready for use in embroidery. Elaine Marshall 53 Commercialization of non-timber forest products eT a een Ben ke ; Mery pte to: -90° J. Larson and Fabrice Edouard 30° ~ 30° | | Pita is niche marketed as a high-quality, natural | forest-harvested product. | } | | | | | |. Culiaean | i Durango 4% ts bn # | San Luis Potosi } | Guadalajara | o9° a Emilio Carranza 20° oe Y soe! a5 100° iceanane and commercialization routes Pita [Aechmea magdalenae) % canopy cover WA Species distribution Non-forest | Centres of production 10-40% canopy cover @® Case study community locations > 40% canopy cover == Commercialization routes | 54 overexploitation of wild populations began to occur, followed by a move towards domestication. Establishing a plantation is expensive; sufficient land is needed, and so the poorest and landless are often excluded. UPIS-L has provided loans, subsidized by the government, for plantations. PRODUCT AND MARKET DESCRIPTION Pita was originally used to make fishing nets and thread to sew sandals. The natural fibre is processed by washing, bleaching and combing before being rolled into thread. It is distributed via workshops to leather stitchers and other craftsmen (Figure 3.16). Popular items such as embroidered belts sell for US$40 to US$500, either directly from the leather workshops or via specialized stores in the centre and north of the country. Women are generally responsible for processing the leaves, and often help out Case studies: Pita with collecting and, in some communities, manufacturing the thread. Pita fibre is exceptional in terms of its brightness, refinement and strength, comparable only with silk. As a result of these characteristics the Chinantec, Lacandon and Popolucas indigenous groups of Mexico have used it for centuries to produce nets for fishing and hunting, as well as for a variety of ceremonial objects. The leather stitchers in the north of Mexico specialize in the manufacture of pita crafts, using the extracted fibre to embroider leather articles such as belts, boots and saddles, which are sold at the high end of the market in both Mexico and the United States. Following increased availability of synthetic fibres, the market for pita would have declined further without the interest and skills of craftsmen {and women) coupled with a fashion trend in North America that revived the (e.g. making thread) = Produce pita handicrafts rsfrom oyo access specialist workshops - van erase ph Fz Local processor Retailers Processes the fibre Handicrafts into thread workshops in and manufactures Veracruz leather goods Arroyo Blanco (e.g. belts) Pita cultivation, harvesting and initial processing Prisoners MES Regional trader Use the pita Retailers fibre for cleaning a eee ed to produce Sell ‘cowboy’ and combing local people to handicrafts products in shops carry out the near the Mexican Consumers secondary Industrial and US border in eee processing workshops ae: of the pita Indigenous community union for cleaning and ; tiat ith combing negotiates wit! other actors in the market chain) - for the Sierra de la Union of Craftsmen Handicrafts eas ee Lana region and Women workshops Pita cultivation, (provides training, Pita handicraft in Jalisco harvesting and : : l initial 5 market information regulator ae = crete and credit to {promotes product 0 extract the fibre qaenaser, and branding) 55 Marshall Elaine Commercialization of non-timber forest products cowboy/cowgirl style in the early 1990s. A decline in the demand for pita has been observed during the last few years because the market has not sustained this boom growth of the 1990s. However, the final products are highly valued in Mexican culture both in Mexico and throughout the United States. It is estimated that the current annual consumption of pita throughout Mexico is approximately 45 tonnes, equating to a market value of almost US$3 million. Pita is currently the most valuable natural fibre in the national market, exceeding the price of linen and silk, reaching prices of up to US$100/kg. The community of Arroyo has an established tradition of working with pita, and achieves higher production from a well-managed resource than the community of Pescadito. The majority of families in Arroyo cultivate pita and trade with the craftsmen and women and leather workers through the cooperative of which they are members. Families in Pescadito, who do not have a tradition of use and management of pita, have to sell in bulk to traders. When pita is managed intensively in a plantation, producers can obtain an income from 0.5 ha of pita plantation equivalent to that generated by 1 ha of coffee. In addition, the workload of cultivating pita is one-third that of coffee. Following the market growth of the early 1990s, increasing competition opened up between traders. This resulted in an improvement in the quality of the final product and reduced ‘super normal’, or inflated, profits along the The community of Arroyo Blanco in La Chinantla, Mexico. 56 commercialization chain. At the present time, with a declining market, it is the producers who are receiving the highest profit margins, and social companies such as UPIS-L need to maintain low processing costs and strive to further improve quality to secure a market niche. Successful negotiation between producers and leather workers to guarantee producer prices, in spite of falling demand, has been a critical factor in maintaining market share. The difference in market access between Arroyo, which belongs to the UPIS-L cooperative, and Pescadito, which trades alone and is poorly organized, illustrates how maintaining a hold in a declining market is highly dependent on good social organization. In Pescadito, when inter- mediaries were no longer interested in buying pita, trade stopped completely. Despite continued external support from the NGO Methodus, producers were unable to cope with crop disease, which destroyed whole populations. UPIS-L has obtained technical support and market information to improve product quality, and improved the availability of credit to enable direct trade. Methodus has provided market information to both UPIS-L and Arroyo, acted as a conduit for government support to the community and played an important role in supporting links between UPIS-L and craftsmen and women. The latter are organized in the Union of Pita Craftsmen and Women, which brings together many small workshops for processing pita and has been successful in branding pita products to protect against substitution. Case studies: Camedora palm The community of Monte Tinta. Oaxaca, Mexico. Camedora palm Chamaedorea elegans, C. concolor, C. oblongata (Palmae] Mexican palm fronds for the US floral industry: opportunities and threats presented by a successful entrepreneur Janett de los Santos, Fabrice Edouard and Elaine Marshall This study was undertaken in two indigenous Chinantec communities located in the river basin of Papaloapan, on the Atlantic slope of the Sierra Norte, Oaxaca, Mexico, situated some 300 km from the city of Oaxaca by partially paved highway (Figure 3.17). Both communities are situated in isolated mountainous locations, with limited access {between one and two hours’ walk) to the nearest road. Monte Tinta [Tinta] is an ejido [a social-legal entity formed after the Agrarian Revolution), which owns 3 000 ha of land at an altitude of 360-800 metres and is part of the municipality of Ayotzintepec. Its 73 families are dependent on subsistence agriculture and coffee production. The income generated from trading camedora fronds can compensate for shortfalls in the production of basic crops such as maize and beans and provide for gap periods in the agricultural cycle for farmers with few resources. Nueva Santa Flor (Santa Flor] pertains to the municipality San Felipe Usila, which has assigned it 2 000 ha of land located at 400-1500 metres. The 17 families here are subsistence agriculturalists, with coffee providing their main cash income. Collection of wild camedora leaves was widespread in the 1970s and 1980s but declined in the 1990s due to several fatal snake bites among collectors, lower prices, increasing distance to the resource because of overharvesting and rising transport costs. The community used to transport the leaves by boat directly to the edge of a dam, where buyers came regularly. A new road — which does not, however, pass through Santa Flor — has made the boat service infrequent and expensive, as 57 Santos Janett de los Commercialization of non-timber forest products Janett de los Santos 400° -g0° | to USA to Canada | to Germany and Holland | 30° Camedora palm leaves bundled up ready for refrigerated transport to the United States. 3 2, 20° MEXICO-CITY 2 ie yyy ay ee. al i , Figure 3.17 Commercialization of camedora palm in Mexico: species distribution, centres of production, community locations and commercialization routes | | Camedora (Chamaedorea spp.) % canopy cover WA Species distribution Non-forest Centres of production 10-40% canopy cover | ® Case study community locations > 40% canopy cover = Commercialization routes Ld ae DIS [canopy cover]; opographical data] 58 Case studies: Camedora palm most people travelling to the nearest market town use the bus. Plantations exist which generate a limited supply of leaves, but better community organization is needed to overcome transport problems. Furthermore, Santa Flor cannot obtain a permit for wild collection because of boundary conflicts. The political sensitivity surrounding the use of natural resources due to these conflicts means that it was not possible to collect household data for Nueva Santa Flor. THE RESOURCE The camedora palm, also known as xate, represents a set of species that belongs to the genus Chamaedorea and dominates the herbaceous field layer of montane forests. Access to the resource is relatively equitable, since it is largely collected from communal land with free access. However, over the last 10 years, distances to harvest sites have increased to three hours’ walk because of land conversion for maize and coffee, and as a result of overexploitation of the palm. The species reproduces easily via seed, requiring little light and possessing a high tolerance for humidity. For these reasons, several communities in the study area and other regions — Veracruz, Chiapas and San Luis Potosi - have begun to domesticate via understorey cultivation. When leaf fertilizer is applied in plantations, each plant can be harvested every three months. In the wild, peak harvesting, between April and October, follows the rains, when the quality and quantity is most readily available for two to three cuts. Some camedora palm species are on the Mexican protected species list and thus require an extraction permit. However, due to the cost involved in acquiring a permit, some communities cut leaves illegally and many have established small plantations. Around 50% of the camedora palm is sourced from communities (wild harvested and cultivated), the rest coming from Sr Palmero’s plantations Monte Tinta Local trader Tuxtepec — Continental Floral Consumers Collection and Employed by Regional Green (CFG) cultivation of the regional collection Collection (North American Mexico, USA leaves; centre, Tuxtepec Centre firm, San Antonio, and Canada transport to {Owned by : Texas) houses; storage Collects, selects entrepreneur . The palm is in houses; and and transports Sr Palmero) Y transported in first selection ——2= leaves fromthe “@> Selects, packs “= refrigerated trucks = community to and transports to USA. In USA, collection point community- another selection produced is carried out, and leaves from fronds are then the Chinantla transported to region major cities for sale Collection centre: La flor de Catemaco Other (Mexican branch of CFG) foliage section, Veracruz Consumers communities Plantation production of 15 types of foliage. —— It is owned by 10 people, one of whom is Sr Palmero Germany Wild and (the only camedora plantation owner) Netherlands plantation Sr Palmero grows camedora palm and supplies 50% of needs for this palm via Continental Floral Green 59 Janett de los Santos Commercialization of non-timber forest products PRODUCT AND MARKET DESCRIPTION The palm leaves are used fresh in floristry and have been exported from the humid tropical regions of Mexico and Central America since the 1940s. Mexico is the leading world exporter of the leaves and seeds of different species of camedora palm, predominantly to the United States. It is estimated that the global production of this foliage cur- rently meets only one-third of the international demand. In Mexico, the leaves are used in floristry, wreaths and bouquets; as traditional adornments for Easter and Palm Sunday; as a fresh base for exhibiting produce in supermarkets; and as garden plants. The leaves are highly sought after because once cut, they remain green for up to three weeks. Market access for communities depends largely on production capacity: commercial intermediaries are attracted to areas where there is sufficient volume to make trade worthwhile. Many families have to overcome several obstacles to access regional trade centres, including low- quality roads and lack of access to vehicles. Monte Tinta overcame this barrier by designating one community member to pool together the leaves and transport them, by donkey, to the road on the trader's route. In return the trader pays on time and compensates for the costs of accidents during collection. Due to the market demand for palm leaves, retailers need to work with a large number of community suppliers. The viability of this commercial activity and the ability to obtain significant profits is a result of traders sourcing from Taking the camedora palm to the intermediary. 60 numerous producer communities. In Chinantla, as in other regions of Mexico, six different actors are involved in the commercialization of palm leaves (Figure 3.18). Men collect the foliage and women grade it, preparing bushels of 140 leaves that sell for up to US$1.30 to a local stockist. A second actor transports the product to a regional wholesaler, who manages a centre where he accumulates, grades, packs and sells the product to wholesalers in Mexico City. Leaves are sold to the Mexican consumer at 12 leaves/US$1, and sold on to a foreign buyer, who retails them to the US consumer at six leaves/US$1. There are very few companies dedicated to the export of palm in Mexico, owing to the existence of a monopoly: the national market is concentrated in the hands of a single successful entrepreneur who had sufficient capital to invest in refrigerated transport and storage facilities. This individual is the sole representative of the North American company that imports camedora. The existence of a single company buying leaves makes communities somewhat vulnerable. This single buyer supplies half of the product from his own plantation. While this is important to maintain the value chain year round, it can also pose a threat to wild palm collectors who are restricted mostly to cutting only a few months in the year. Even though there is small-scale domestication of camedora palm in southern Mexico, these poorly organized communities are finding it difficult to compete with the industrial-scale plantations being established in the United States - with seed exported from the Chinantla region. Case studies: Tepejilote Tepejilote Chamaedorea tepeyjilote (Palmae] Palm flowers traded asa traditional aphrodisiac: how local markets became closer for rural men than women Juan Carlos Flores, Fabrice Edouard and Elaine Marshall The communities are situated in the municipality of Ixtlan de Juarez, known as El Rincon, in the Sierra Norte, Oaxaca, Mexico, 200 km by paved highway from Oaxaca city (Figure 3.19). The region is mountainous, rich in biodiversity, high in plant endemism and has extensive natural forests. Indigenous Zapotec communities have A community in El Rincon region, Oaxaca, Mexico. long utilized a variety of NTFPs including tepejilote and wild edible fungi. The area is also characterized by the cultivation of coffee, as part of an agroforestry system. Tepejilote has provided a valuable alternative source of income when coffee prices have been at their lowest, both in the late 1980s and again in the late 1990s. San Miguel Tiltepec (Tiltepec) is located at an altitude of 1 830 metres, and despite having 13 000 ha of communal land, it is considered more impoverished than Yagavila [see below). The 50 indigenous families here, whose ancestors arrived and settled over 500 years ago, are predominantly subsistence agriculturalists and coffee producers. Most families are involved in collecting tepejilote from communal land for both consumption and sale. The involvement of women in harvesting is considered impor- tant because the tepejilote palm flowers from January to April, when men work full time on the coffee harvest. This provides women with one of the only options to generate their own income, which is invested in the home. Santa Cruz Yagavila [Yagavila), at an altitude of 1 750 metres, has a larger population with 110 Zapotec families, but has only 2 400 ha of land. Subsistence agriculture and coffee production dominate. The community is considered less poor than Tiltepec and many other communities in the area 61 o ie w c = = o c +) wT) Commercialization of non-timber forest products -100° | | 30° #4 i a Mi te Le Hoe Mexico ony i a ; ‘ wiv Eas s Y | z EA “Ss | e > ‘ | ee ee | (te | Z 2 ae r Y Gee oe ig ee GEE 6, % fe tog J 1 Santa Cruz Yagavila ee EY 2 San Miguel Tiltepec ok Tepejilote [Chamaedorea tepejilote) ZA Species distribution Centres of production @ Case study community locations => Commercialization routes L = = -90° 2 3 a = oO Qa 2 oO 30° 2 3 2 = a 2 o | Tepejilote flowers bundled for sale. 20° % canopy cover Non-forest 10-40% canopy cover _ > 40% canopy cover 62 Case studies: Tepejilote due to its reasonable road and good basic infrastructure. Wild harvest of tepejilote takes place on communal land, but plantations have been established on privately owned land. There is less tepejilote available than in Tiltepec, with only a few men collecting, mostly for consumption rather than trade. The few that collect for sale, however, sell approximately the same quantities as collectors in Tiltepec. THE RESOURCE Tepejilote is the tender and edible inflorescence [cluster of flowers) of the Chamaedorea tepejilote palm: up to seven inflorescences are collected from each individual plant. The species is at its northern limit of distribution in the state of Oaxaca, occurring naturally as far south as Colombia. It is most abundant on damp ground near streams and rivers. In both communities the availability of wild tepejilote has declined because of land conversion for maize and, in Tiltepec, sugar cane. Yields of up to 1 700 inflorescences/ha of tepejilote have been reported over an average area of 3 ha. Unlike other camedora species, Chamaedorea tepejilote is not listed as at risk on the official Mexican list of threatened plants - NOM-059. However, in both Yagavila Men extract the flowers; make the bundles; transport them ~ to town Intermediary —_—_—— traders to buy the product every two weeks Intermediary traders in Josaa weekly market Tiltepec Women extract the flowers; make the bundles; transport them to town communities, local studies on population dynamics indicated that wild harvesting rates were having a negative impact on the resource. Further population studies have provided the basis for the establishment of sustainable yields and led to initiation of domestication. The domes- tication of tepejilote involves enrichment planting that requires a very low level of investment, does not sub- stantially increase yields or quality but does bring the resource closer to the community. In 2000, both Yagavila and Tiltepec established a communal nursery and later individual plantations, following training workshops organized by the Conservation and Sustainable Forest Management Project (PROCYMAF). In plantation, the first harvest is after three years. PRODUCT AND MARKET DESCRIPTION Tepejilote is consumed predominantly by indigenous populations throughout Oaxaca and Chiapas in Mexico, Guatemala and Honduras. It is a wild vegetable with a slightly bitter flavour according to its degree of maturity, and it is rumoured to have aphrodisiac properties. A third of the product collected is reportedly consumed by the family, and trade is largely confined to local traders who sell in Retailers in Oaxaca city Travel to Yagavila ee | 63 Elaine Marshall Commercialization of non-timber forest products A market trader is interviewed in one of Oaxaca's formal markets. regional markets, or via retailers who distribute various nutritional products (Figure 3.20). Almost all the traders pay for the product via mixed exchange of goods and money. There is a short chain between producers and consumers, and there are low entry costs to collection and marketing of the product, making it relatively attractive for the poor to work with. Typically, collectors sell 100 bundles of 10 tepejilote for US$30 to an intermediary, who transports it and resells it in regional markets for between US$50 and US$70. In Oaxaca city, it is sold in markets primarily to Zapotec migrants. The same situation occurs in Guatemala, where tepejilote is tinned and exported to the United States to satisfy the demand of the emigrants living north of the border. In Tiltepec, 50 per cent of the families harvest wild tepejilote. Those that harvest with the greatest intensity are those with the least resources, including the landless. Selling tepejilote provides them with up to 10 per cent of their total family income. It is a particularly important source of cash income for poorer coffee growers who have suffered from the decline in coffee prices. Some coffee growers have received support enabling them to sell organic coffee to a secure buyer for three times the price of conventional coffee. However, this support has been provided by an organization whose members are largely Catholic, leaving the non-Catholic producers struggling and relying more heavily on tepejilote. 64 Until a few years ago, tepejilote trade in Tiltepec was exclusively undertaken by women, with 70 per cent of sales made to a local intermediary from nearby Josaa. It is more difficult for women to leave the community for extended periods of time and pay the extra up-front cost to take the truck to the more distant market in Ixtlan, even though sales there are much more profitable. Therefore, when the market intermediary stopped visiting Tiltepec, trading transferred from women to men, who were able to make frequent visits to other local markets outside the community. By contrast, in Yagavila, less than 5 per cent of households collect tepejilote for sale. Nevertheless, those that do are more commercially successful than the collectors in Tiltepec, as they manage to sell direct to the local market at a higher price. This is attributable to a buoyant local demand and limited supply. Yagavila is on a good road and traders visit every fortnight. Despite the fact that the volume of tepejilote traded from Yagavila has increased over the last few years because of the ease of harvesting from locally established plantations, the traders from Yagavila sometimes have to buy from Tiltepec to meet demand. Producers consider that the market for tepejilote has increased over the past 20 years, explained in part by the fact that traditional consumption is rooted in the region, and that tepejilote is sold in markets catering for migrants. This has allowed tepejilote to become better known among urban consumers. 4. Defining success An introduction to the thematic analysis Kathrin Schreckenberg, Adrian Newton and Elaine Marshall The previous chapters have described each of the product case studies, focusing on resource issues, involvement of the poor and women and the functioning of the value chain. The remaining chapters of the book present a thematic analysis of the research results, drawing on material from all the case studies to address each of the project's research hypotheses. This chapter begins with a discussion of the different definitions of success identified by the project and provides a summary assessment of the success of the case studies according to a range of indicators. It then reviews the factors constraining success that are most widespread among the case studies considered. The chapter finishes with a brief introduction to the thematic analysis presented in the chapters that follow. WHAT IS SUCCESSFUL NTFP COMMERCIALIZATION? As discussed in Chapter 2, there are many ways of defining success. An understanding of how people define success under different circumstances is an essential prerequisite for the development of appropriate policy interventions, and governance and institutional responses. Measurement of the success of NTFP commercialization is of critical importance to the planning, monitoring and evaluation of conservation and development projects involving NTFPs. Such monitoring is essential to determine the impact of any management or policy intervention. Results of the CEPFOR project indicate that: bSuccess should not simply be defined at the product level, as the success of a given product may vary among different socio-economic situations. Instead, success should be defined in relation to the needs of people. ) Different actors along the value chain of a given product may have very different perceptions of what constitutes success; for example, while some traders are primarily interested in the size of profit margins, producers also cite aspects such as compatibility with other livelihood activities. b Success can usefully be considered at different levels with respect to households - and the individuals within them - and communities, and at district or national levels. Newly harvested pita leaves are de-spined before extracting the fibre to make thread. Some NTFPs can contribute to national prestige: pita products are given as gifts to other heads of state by the president of Mexico. DAt each level there are social, economic and environmental aspects of success. » Given this complexity, single measures of success are unlikely to be useful, and therefore suites of indicators may be preferred, including both quantitative and qualitative measures. D Definitions of success may be dynamic, changing in socio-economic in response to variation circumstances and the behaviour of the market. 65 Elaine Marshall Commercialization of non-timber forest products Some of the following definitions were obtained during discussions with key informants, producer communities and NGOs, while others were identified through analysis of data from producer and trader surveys. As many activities involve several people in the household, individual-level definitions of success were generally the 1. HOUSEHOLD LEVEL Economic } The product generates income and can be sold quickly. Dit provides employment and can generate enough money to create opportunities for the next generation. D The activity helps meet the family's basic needs. D Labour (particularly that of women) is rewarded. Social BThe income generated makes an important contribution to food, education and health. DB The work involved is agreeable. Dit provides opportunities to build capacity (through new skills and networking). Bb Producing something that is valued provides recognition and improves self-esteem. DThe activity contributes to making people happy. D It is compatible with other livelihood activities. 2. COMMUNITY LEVEL Economic DA high proportion of people within the community are involved and benefit. DA large percentage of the final product price stays in the community. DThe activity provides employment and the community can add value to the product. BThe producer community controls the supply (and therefore the price). D The product has more than one buyer. Dd There are price differentials for different qualities. Db The commercialization chain is not vulnerable to risk. Box 4.1 Some definitions of successful NTFP commercialization identified by the CEPFOR project same as those identified at household level, with the exception of a few relating specifically to women. The list includes both short-term indicators of success as well as definitions that take a longer-term perspective. All definitions recorded by the project are presented in CEPFOR (2005). Social BD There is an even distribution of profit margins along the market chain. The activity does not cause internal conflict within the community. Blt permits people to continue to stay in the community rather than having to migrate. Dit strengthens local culture and community organization. » The activity increases community prestige. Environmental Db The rate of commercialization is consistent with biological sustainability. DThe activity helps to conserve the forest resource. 3. BEYOND COMMUNITY LEVEL, INCLUDING NATIONAL Economic b A market chain exists that connects producers to consumers. Bb The market works well lie. prices at producer level reflect those at consumer level). Dd There are price differentials for different product qualities. Bb The commercialization chain is not vulnerable to risk. Dd The activity increases employment. D It increases tax revenues to national governments and export earnings. DB It generates national prestige. Social D It improves the welfare of consumers. Environmental D It strengthens the conservation and sustainable development of natural resources. The CEPFOR project identified many different definitions of success through its community and household surveys, value chain analyses and project workshops involving a variety of different stakeholders (CEPFOR 2005). Some examples of definitions of success identified during 66 the project are listed in Box 4.1. In general, the results of this project emphasize the need for a participatory approach to both defining and measuring success, which should ideally incorporate perspectives from all of the actors involved in NTFP commercialization. Approaches developed and tested during this research provide guidance regarding how this can be achieved in practice [see Methods manual on CD-ROM}. HOW SUCCESSFUL ARE THE CASE STUDIES? As outlined above, there is no single measure of success for NTFP commercialization activities. Table 4.1 presents a selection of different measures used in this study, some defined by the project and others derived from application of the CIFOR scoring system (as described in Chapter 2] to the CEPFOR case study communities. This subset provides a useful summary of how the case studies compare in terms of their impact on livelihoods. In the case of the two pita communities, for example, Arroyo has a markedly higher score for combined household and community impact than Pescadito, reflecting the better level of organization and a long tradition of working with pita in the former and the devastating effects of disease on the resource in the latter. The very different combined score for the two rubber communities reflects the differences in their NTFP value chains, with the more successful Santa Rosa having a more egalitarian production system that involves most of the community in the production of waterproofed goods for the local market. However, different value chains do not necessarily result in a different livelihood impact score, as is shown by the two cocoa communities: Emero markets beans while San Silvestre produces cocoa paste, but their overall scores are not that different. One of the features of these results is that impacts on livelihoods at the household level are not closely related to impacts at the community level. For example, while the most positive impact score at the household level was obtained for rubber goods in Santa Rosa, the highest score at the community level was obtained for maguey in La Esperanza. The latter’s success is achieved in spite of the involvement of relatively few people and low returns to labour because the community is organized effectively and sells its communal maguey resource as well as operating a community distillery. However, this level of organization does not extend to the commercialization of soyate palm, which is also carried out in La Esperanza but receives a very low community impact score. A very important finding of this project is that different measures of success do not necessarily correlate. In Table 4.1, pita in Arroyo and rubber in Santa Rosa appear to be the most successful value chains from the combined community and household perspective. However, from a national perspective, both products have seen a decline in demand in recent years, and local success is due to their specialized niche markets - pita thread for stitching leather cowboy products and rubber for bags and ponchos. In Cuajimoloyas, low participation in mushroom Defining success A household in La Esperanza, where soyate palm weavers consider the activity to be successful because they can combine it with other activities. commercialization nevertheless leads to significant community benefits in the form of an associated drying enterprise, training and ecotourism. This underlines the need to be flexible when assessing a new NTFP intervention, as stakeholders’ perceptions of success are likely to be diverse. An important first step is to define and prioritize measures of success In each community. As discussed in later chapters, different activities may be required to achieve different types of success, and it may therefore be necessary to agree whose definitions should be prioritized. For example, the main success definitions identified during discussions with the case study communities were financial in nature. However, NGOs were particularly interested in equity issues, particularly those relating to the possible impact of NTFP activities on women and poorer segments of society. Such differences in perception need to be made explicit to ensure that interventions are correctly targeted and possible trade- offs agreed between stakeholders. FACTORS DETERMINING SUCCESSFUL NTFP COMMERCIALIZATION As described in Chapter 2, on the basis of the project case studies, it was possible to identify 66 factors that contributed to determining successful NTFP commercialization, where success was defined very broadly taking into account the livelihood asset base of both households and communities. These factors were scored, and the resulting data formed the basis for the development of the CEPFOR decision support tool [CDST], which is discussed in more detail in Chapter 11. Some factors con- tributed to successful commercialization in just a few cases, 67 Elaine Marshall Commercialization of non-timber forest products Table 4.1 Different scores of success of NTFP commercialization in the case study communities Resilience of Proportion of Proportion of Returns to Household the value chain households consumer price labour score involved captured by 1=90% 3=High nd = no data Community score Range from -36 to +36 Range from -80 to +80 68 Defining success while others occurred in a larger proportion of cases. Factors that had a positive effect on the capital assets of households and communities - and thus supported successful NTFP commercialization - in some communities are conversely considered to limit success in the com- munities in which they do not occur. Table 4.2 presents those factors that limited NTFP commercialization in more than 60 per cent of the case studies, roughly grouped into three categories. The individual factors will be discussed in more detail in the following chapters. A number of generic issues can be raised here: BThe percentage value in the second column represents the proportion of communities in which a particular factor limited success by reducing the availability of physical, natural, financial, human and social capital assets required for commercialization. } The grouping of the factors highlights the fact that value chain issues are particularly widespread for households and communities, with factors relating to natural-resource issues or the social and eco- nomic context of communities being of importance to a relatively low proportion of case studies. DAs will be highlighted in the following chapters, households, communities and traders show a high degree of innovation in overcoming factors constraining successful NTFP commercialization. Some factors, however, such as integration of producers into the cash economy, are outside their control. As will be discussed in Chapter 11, understanding the degree to which different actors in the NTFP value chain are able to influence different factors is important for determining appropriate policy interventions. D The linked nature of some of the factors - e.g. lack of producer/processor organization can result in inequitable exertion of market power by other actors in the value chain - suggests the need to recognize that policy interventions designed to address one factor may have knock-on effects on other factors. INTRODUCING THE THEMATIC ANALYSIS The thematic analysis in the remaining chapters of this book examines the different elements of successful commercial- ization, using the project’s key research hypotheses as an organizing framework. Chapters 5-7 focus on identifying the impacts of commercialization, based on the belief (discussed in Chapter 1] that NTFP commercialization can only be deemed successful if it has no adverse effects on the poor, women and the resource [or access to it by the poor). Chapter 5 focuses on how the poor benefit from NTFP commercialization (hypothesis 1) while Chapter 6 specifically addresses the benefits for women (hypothesis 2). Chapter 7 considers resource status and access issues, addressing both hypotheses 3 and 4. The following three chapters examine the con- ditions under which commercialization is more likely to be successful, beginning with the legal, policy and institutional framework in Chapter 8. Chapter 9? presents results related to the nature and establishment of NTFP value chains (hypothesis 5}, while Chapter 10 explores how individuals Table 4.2 Factors limiting successful NTFP commercialization in more than 60 per cent of the case study communities ecole aS a Say Structure and function of the value chain Inequitable exertion of market power along the value chain 79 Price of the product does not vary in response to changing costs of production Low development of the brand identity Lack of an organization that links producers or processors to buyers NTFP value chain does not use the value chain of other products Lack of provision of financial capital to commercialization (e.g. credit and loans) by entrepreneurs No traditional link between the producers and the consumers 68 Producers do not have good access to market information (price, quantity, quality) 68 Consumer preference for product quality is not reflected in the price paid to producers 63 Lack of entrepreneurs facilitating NTFP commercialization [e.g. through market information and contacts) 63 Community social and economic context Lack of a communication network 68 ST No external financial support available in the form of credit or loans 68 | | Low level of integration of producers into the cash economy 63 = Natural resource issues S| NTFP quality is adversely affected by poor harvesting methods Ves 14 | Limited amount of resource available ae Competing land uses for NTFP production areas 63 69 Commercialization of non-timber forest products } ~ A Ss = Z = = wo 5k w i Ze lu oe o= Ze 23 is Co ou DE 22 c fe] 5 Cannot Can cover Can more Ss cover basic basic needs than cover needs basic needs L Nevertheless, for most communities it was possible to group both NTFP and non-NTFP households into different well-being categories. As shown in Table 5.1, households engaged in NTFP activities are relatively poorer than other households in five of the communities. In two communities they tend to be more concentrated in the middle well-being groups, while in two communities they are more concentrated in the top well-being groups. The relatively high level of well-being of the small number of NTFP households in Pescadito is explained by the fact that pita is mostly cultivated in plantations, requiring Incense and copal collectors rest on the two-day walk into the harvesting sites. There is ‘free’ access to this traditionally used resource. 72 significant financial capital and access to sufficient land. Incense collectors in Pucasucho are those who have traditional access to collecting areas and the capital to finance costly harvesting trips. A third of interviewed households engaged in NTFP activities consider that they are not able to meet their basic needs during the course of the year [see Figure 5.1). Households engaged in NTFP activities were also asked how successful they considered themselves to be relative to their peers. In Bolivia, most NTFP households in the incense, cocoa and rubber-trading communities consider themselves to be as successful as their peers. Only households in the jipi japa-trading communities feel less successful, which may reflect the fact that this activity is carried out almost exclusively by women in poorer and less well-educated households. In Mexico, households engaged in NTFP activities generally consider themselves to be less successful than other households in their communities. While income data support this perception regarding the case of Monte Tinta, in the case of Pescadito, households engaged in NTFP activities generally have higher household incomes than those who do not. The generally negative perception of their relative success suggests that, in the Mexican communities, NTFP activities are considered inferior to other livelihood options. In the Bolivian communities, this possibility is less likely to arise as there are few, if any, alternative income- generating options available. ARE ALL ACTORS IN NTFP VALUE CHAINS EQUALLY POOR? All value chains include at least two separate functions — production, through collection and/or cultivation - and sale of the product. Most also require some combination of processing, storage, transport and marketing. In most value chains, the roles of producer, processor and trader are quite distinct. Processors and traders tend to make higher profits than collectors and cultivators except when processing occurs within the collector household and is carried out by women and children, who have few, if any, other economic opportunities. In both Bolivia and Mexico, income, access to credit and level of education is higher/more developed for NTFP traders than for non-traders. This is perhaps not surprising, because most traders are from outside the community. It means that very few poor NTFP collectors and producers are able to move along the value chain and become traders. Moving into trading is particularly difficult because the returns per unit of product collected tend to be higher than the returns per unit traded. In most cases, therefore, traders can only make a reasonable return if they trade high volumes, for which financial capital to buy, store and transport the product is needed, as well as NTFP commercialization and the rural poor investment - often financial - in developing networks of collectors and buyers. HOW MUCH DO NTFP ACTIVITIES CONTRIBUTE TO HOUSEHOLD INCOME? Households typically engage in a range of activities, generating a combination of in-kind, or subsistence, income and cash income. As discussed in Chapter 1, NTFP activities can be categorized as poverty traps, safety nets, gap fillers or stepping stones, depending on how regularly they are carried out and how much income they generate. The CEPFOR data show that the importance of NIFP-based incomes in livelihoods varies greatly between products and communities, and that there is also a great deal of variation in productivity between households. In the fresh mushroom case, for example, three different types of collectors can be distinguished: D occasional collectors, who collect approximately 10 kg per season; Daverage collectors, who collect about 70 kg per season; Dserious collectors, who collect up to 300 kg per season. This suggests that individual activities can fit into one or more of the categories below, depending on the degree of intensity with which a household engages in them. The kinds of characteristics that may be important in determining how much effort people invest in NTFP commercialization activities are discussed further in Chapter 10. Poverty traps None of the value chains within the CEPFOR case studies resulted in the kind of debt peonage = in which producers are paid in advance, often with commodities at inflated prices, leading them into a vicious cycle of borrowing and repayment — that has been reported for some NTFPs, such as Brazil nuts and rubber extracted from the Brazilian Amazon. Nevertheless, in a few cases - soyate palm, cocoa beans and incense — producers may barter their NTFP for household goods rather than being paid in cash. In the cocoa and incense-collecting communities, all of which are located far from the nearest town, producers are very reliant on the honesty of traders to provide them with a reasonable value of products in exchange. In the case of cocoa, strong social relations between producers and traders promote transparent interactions. Safety nets The selection process for the case study NTFPs almost ruled out the possibility of including any products that are only used as safety nets when household circumstances are particularly bad. Nevertheless, some of the activities have he NTFP provides eVelde 2005 100 fe e oS 80 z 2) ne ee eae ease eee’ Qqoo © ree ks 20 -——&8—_g———_e—________——_ Zx g e 0 0 4 6 8 10 12 Number of months NTFP is traded S| played a safety-net role in the past: collection of both pita and tepejilote palm, for instance, increased when coffee prices fell. Interviewees also highlighted the fact that products such as pita and incense/copal are available all year round and collection can be undertaken as and when the household needs cash income. One incense collector explained that ‘the knowledge that incense and copal is available to be harvested and traded acts as a guarantee that, no matter what, some income can be obtained’. Gap fillers Most case study products fall into the gap-filling category, in which NTFP-derived income is supplementary to more important farm and off-farm income-generating activities. NTFP activities are carried out on a regular basis, often in the non-agricultural season, and contribute between 7 and 95 per cent of cash income to the household. On average, 34 per cent of case study households in Bolivia depend on NTFP trade for more than half of their total income, while the corresponding figure for Mexico is 15 per cent. This reflects the fact that there are more economic Sp ED ao z+ =f om vo ov co go ce ag £= == 22 o> 50 (ety Us 0 40 Percentage of cash income provided by NTFP activity © Bolivia @ Mexico 73 Commercialization of non-timber forest products Box 5.1 Combining NTFPs with other activities in Bolivia and Mexico A characteristic of all the products studied is their ability to be combined with other livelihood activities. For producers, the NTFP must fit in well with the agricultural cycle and not require them to choose between alternative activities. Soyate palm fibre, for example, is plaited into long strips by all community members at the same time as they go about their other activities. If carried out on its own, the returns to labour would be so low as to make it not worthwhile. Collection of camedora palm fronds, which are available all year round, occurs predominantly in the April dry season and again in August-September, when there is little agricultural activity, and peaks in October to provide money for the Day of the Dead celebrations. Some NTFPs combine with each other. Thus the relatively rare incense is collected on special expeditions which would not be worthwhile if it were not for the opportunities, and general income levels are higher, in Mexico than in Bolivia. It is also a reflection, however, of the fact that there is a highly significant relationship between the proportion of total income contributed by NTFP activities and the number of months they are traded (Figure 5.2). This, in turn, is usually related to the seasonal availability of individual products. Those that are only available for short periods - predominantly the Mexican cases of mushrooms and tepejilote palm, as well as the Bolivian cocoa case - typically contribute less to a household’s annual income than NTFPs that are available all year round. It should be noted that availability does not always determine the number of months traded, as in the case of pita, which is available all year round but only harvested for a few months. As shown in Figure 5.3, even products that only contribute a relatively small share of a household’s cash income may be perceived to play a valuable role in a household's livelihood strategy. This is because the NTFP activity may be the main source of cash available to a family. This is the case for many of the Bolivian communities, some of which are extremely remote. It is less likely to be the case in Mexico, where the case study communities have easier access to other income-generating activities, including through migration to the United States as well as agricultural subsidies and various forms of social security. Another reason that even small amounts of NTFP- derived income can be important is that they may come at times of year when households have no other income- generating activities. The timing of the income from many of the NTFP activities complements the often highly seasonal income from agricultural activities, providing the household 74 assured availability of the more common copal. In addition, incense collectors may also benefit from these expeditions to hunt wildlife for food. For traders, the NTFP must complement other products being traded in terms of seasonality, or be of sufficiently high value to warrant sole trading. Fresh mushrooms, for example, are only available for two months and are taken to market by a trader who travels to Oaxaca every week to sell the bread that she makes and other farm produce that she buys from households in Cuajimoloyas. In the community of Emero, organic cocoa beans and dried fish are bought by the same traders, with cocoa dominating from December to February, when dried fish is not available. This case also illustrates the risk associated with combinable activities, namely that NTFP activities may be dependent on their ‘partner’ activities for success. Thus the cocoa trade from Emero is both dependent on the dried fish trade and vulnerable to any changes that may occur in it. with a combined income flow that is both greater and less variable. A good example is mushroom collection, which is concentrated during June-August, at a time when agri- cultural and forest industry incomes are low but school fees need to be paid. Other examples are provided in Box 5.1. Stepping stones For most people, income generated from NTFP activities enables them to cover the cost of basic subsistence goods. Only rarely do these activities provide sufficient income to permit the accumulation of substantial savings. The women weavers who are members of the jipi japa association benefit by obtaining access to a rotating fund, which has enabled many of them to put tin roofs on their houses, a re = z E ° e a= vo € ° oO = x) o 2 oO = wv 0 2000 4000 Annual income in PPP$ NTFP commercialization and the rural poor a common indicator of a lower level of poverty. In the mushroom-collecting communities, some people have used their NTFP income to acquire land to build a house or to invest in other forms of income-generating activity, including purchase of sewing machines, or sending a family member to work in the United States. NTFP activities are more likely to provide a path to socio-economic advance- ment for those who engage in the activity most seriously, either by trading large volumes of the product - such as the rubber concessionaires or the soyate palm wholesaler - or by moving along the value chain towards the consumer, e.g. mushroom traders, or the mezcal distillers. A measure of how much income the NTFP provides to the mezcal distillers is the fact that they are no longer forced to engage in seasonal migration to feed their families. DO POOR PEOPLE RELY MORE ON NTFP INCOMES? For some products, households with a greater overall income also derive a greater share of that income from the NTFP, suggesting that richer people benefit more from the activity. This is true for incense, for which collection trips require advance financing; cocoa, where there is a variable level of investment in plantations [see Figure 5.4a]; and soyate palm, where a few households have bought or rented sewing machines and focus almost exclusively on producing higher-quality hats for sale. For the other products, the NTFP share decreases as total income rises, suggesting that it is poorer people who are most involved in NTFP activities. A typical example is Cuajimoloyas, where only a few people in the higher livelihood status groups are involved in mushroom collection, but the activity is carried out by all households in the lowest livelihood status group. Jipi japa is a similar product: its significance increases as people’s cash income declines, making it particularly important to poorer people (Figure 5.4b). a ra = 5 i= z e a ie wo o ‘= =) =) = 500 1000 1500 2000 2500 3000 3500 Annual cash income in US$ DO PEOPLE ENGAGE IN NTFP ACTIVITIES OUT OF NECESSITY? Decisions about engaging in NTFP activities appear to span the whole spectrum from desperation to positive choice, both within and between communities. In Mexico, poorer households are less likely to want to continue in the NTFP trade, suggesting that they are - for the most part - engaged in the activity out of necessity. In Bolivia the situation is less clear, and the seasonality of product availability appears to be particularly important in decision- making; the more months a product can be traded, the more likely households are to want to continue with the activity. Conversely, households involved in seasonal products may want to move away from NTFP activities into other activities, reflecting their desire for a more consistent year-round source of income. Bolivian NTFP traders interviewed are poorer than traders - who are similar in terms of communities and markets served — of other products such as agricultural and horticultural produce. The poorest among them are more likely to want to move into other activities, suggesting again that the poor engage in NTFP activities out of necessity. However, less poor NTFP households in Bolivia tend to want to move on to another stage in the same NTFP value chain rather than moving out of it altogether. The national context may also be a factor in determining how important NTFPs are to poor people. In Bolivia, for example, poor people have no access to agricultural subsidies or various forms of social security, and NTFPs may play an important role in fulfilling these functions. Yet the Mexican cases, where egricultural subsidies are available to almost all households, show that there is a positive correlation between amounts of agricultural subsidy received by a household and the income derived from NTFPs. This suggests that NTFP income can be seen as additional to agricultural and subsidy income and not as a substitute. Economic factors are not the only ones determining a household's livelihood strategy. In Santa Rosa, for example, people prefer to engage in rubber collection and processing than rice cultivation, in spite of the former's lower returns to labour, because they find the work - standing up in the shade - more pleasant. Pita producers explain that pita collection is much less laborious than their main livelihood alternative, coffee production, and, unlike coffee, the activity can be engaged in at any time of the year. WHAT CHANGES IN NTFP COMMERCIALIZATION HAVE THE GREATEST IMPACTS ON THE POOR? A feature of poor people's lives is that they are very vul- nerable to risk because they lack the necessary assets 75 Elaine Marshall Commercialization of non-timber forest products Local market traders tend their stall in Rurrenabaque, Bolivia. to buffer them against unforeseen circumstances. On the one hand, NTFPs play an important role in reducing the vulnerability of poor people because they are one of the few cash-generating activities available with sufficiently low entry requirements for very poor people to access. Even where entry requirements are higher, poor community members may benefit from being employed in NTFP collection [e.g. incense, latex rubber and maguey), cultivation and/or processing [e.g. distillation of mezcalJ. In addition to the commercial use of NTFPs, their subsistence use, which is not discussed in this book, may also play a very important role in reducing household vulnerability. On the other hand, the fact that many poor people rely on NTFPs for various elements of their livelihoods also makes them particularly vulnerable to external changes and shocks affecting NTFP commercialization. The impacts of change will vary depending on the type of shock and where, within a specific value chain - for example, collection, cultivation or processing - the poorest are active. Important changes highlighted by the case studies include: D general decline in demand; D local decline in demand due to loss of established trading channels, e.g. because of changes in transport infrastructure; D substitution by other products; Dnatural variation in product yields, e.g. because of diseases; Dintroduction of new regulatory requirements, e.g. relating to harvesting permits; D domestication of the resource, in situations where the poorest have no land or access to planting stock. These changes are discussed in more detail in the following chapters. 76 CONCLUSION: WHAT MAKES NTFP ACTIVITIES SO ATTRACTIVE TO POOR PEOPLE? The CEPFOR case studies suggest that NTFP com- mercialization activities usually involve the poorer - but not always the very poorest - members of a community. The fact that many poorer producers and traders of NTFPs would rather be involved in other livelihood activities sug- gests that they are generally engaged in NTFP activities out of necessity. However, none of the case study activities acts as a poverty trap. Some provide a safety net and all play an important gap-filling role in people's livelihoods. How much NTFPs contribute to household incomes is very variable both between activities and between households engaged in the same activity. For a very few people, they can even bring in enough income to provide a stepping stone out of poverty. The following features of NTFP activities make them par- ticularly attractive to poor people: Db Source of cash income in subsistence communities where families often have no other cash-generating opportunities. The year-round availability of some products is an added attraction. b Low fixed and variable costs. Almost all costs are labour, so good health is the main requirement for poor people to engage in these activities. D Low level of formal education required. NTFP activities, particularly at collection level, require little formal education, relying on skills learned ‘on the job’ [see Chapter 10). Db Free access to the resource, often on communally owned and managed land (see Chapter 7). D Traditional use of the resource. For some products, a culture of using the resource [e.g. cocoa paste, tepejilote palm inflorescences] means that it can be consumed or sold depending on need. D Ability to be combined with other activities [see Box 5.1). CHAPTER HIGHLIGHTS D 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 how they can be combined with other income- generating activities. The importance of NTFP income is extremely variable between households. DD NTFP activities can be safety nets, gap fillers and sometimes even a stepping stone out of poverty. 6. Women and NIFPs Improving income and status? Kathrin Schreckenberg and Elaine Marshall Aweaver hands in jipi japa trinkets to the Rural Art association, Buenavista, Bolivia. Each Monday, weavers are able to sell their home-woven goods, keen to deliver high quality in exchange for a premium payment. This chapter examines the project's second hypothesis, namely the extent to which NTFPs are particularly important for women. It considers the kinds of NTFP activities that women tend to be involved in and the range of benefits they obtain. It also addresses the concern that changes in the NTFP production and marketing system can have a negative impact on women’s ability to derive benefits from these activities. WHAT IS THE INVOLVEMENT OF WOMEN IN NTFP ACTIVITIES? In three value chains —- latex rubber, incense and maguey — all activities from cultivation and collection to sale are carried out exclusively by men, but in none of the CEPFOR cases are women solely responsible for all activities. There are three value chains in which women carry out all the processing and sale activities but may be dependent on men to provide the resource. In the case of Santa Rosa, some women do harvest rubber if trees are close to home, but others rely on male family members to provide them with the raw resource for processing, as is also the case for soyate palm. In the case of jipi japa palm, women purchase the fibre from a male collector, while for dried mushrooms women are responsible for most activities with the exception of some joint decision-taking in the drying plant. In general, men are more likely to be involved in collection and any transportation of the product (Figure 6.1). In some activities there is also a high level of involvement 77 Fausto Lope Commercialization of non-timber forest products Number of community case studies (n= Collection Cultivation Processing Transport 8 Men and women ee Women only & Men only Commercial company |g = zz |) || i || ee Promotion Sale ee n/a of this: women in Tiltepec used to sell the inflorescences to a trader who came to the community, but when this trader stopped visiting, men began to take the inflorescences to a market in a neighbouring community. Only 37 per cent of traders based outside the community are women. Availability of other income- generating activities In many communities there are alternative income-generating opportunities for men - for example as hired labourers in the mining and forest industries or tending cash crops - but none for women. Women will of children, particularly in collection, production and processing. In the case of cocoa, for example, children from the age of seven are among the main harvesters owing to their ability to climb into the branches of the trees. Where cultivation occurs, women are more likely to be involved than men and, with the exception of rubber latex and maguey, are always involved in any processing that takes place, though sometimes together with men. Marketing and sales activities are carried out by men and women. In activities carried out jointly by men and women, the cultural norm is for men to have the final decision-making power. WHAT DETERMINES WHETHER OR NOT WOMEN ARE INVOLVED? An important factor in women’s involvement is whether or not the activity takes place far from the community, as distance tends to present an obstacle to women. In La Esperanza, where men traditionally accompany women on trips to collect soyate palm, this was explained by men as ‘women shouldn't wander the hillsides on their own...’. In addition, women need to be near home for childcare and other domestic responsibilities. Thus most products that are harvested solely from the wild are collected by men. The exception is mushrooms for fresh and dried sale: these are predominantly collected by women and children in forests about four hours from the community. When processing activities occur, they usually take place in the home and generally involve women, as In the case of jipi japa palm and community-level rubber processing. Selling increasingly becomes a male activity if it involves travel from the community. The case of tepejilote palm is a good example 78 therefore engage in NTFP acti- vities even though these generate very low returns to labour, because their opportunity costs are low, whereas men may choose to concentrate on other, more lucrative activities. In Santa Rosa, for example, men collect rubber for several weeks at a time, achieving returns to labour of US$4.20 that are above the local daily wage rate of US$3.40. However, the returns to labour for the processing are only US$2.50. Men therefore leave their wives to process the rubber while they work in the more lucrative mines, returning only when their wives have finished processing a batch of rubber. This is an example of a product that would not be viable for a family to engage in if it were not for the low opportunity-cost of women’s time. A similar situation exists in the cases of pita, where women and children do the processing, and tepejilote, which women collect. In both cases, men can earn a daily wage working as a labourer, or managing a cash crop such as coffee. Family situation Women’s income-generating activities need to combine with their childcare responsibilities. Several former pita weavers, for example, gave up weaving because caring for their children left them with insufficient time. This is not to say that childcare is an insurmountable problem for women wanting to engage in NTFP activities. Those NTFP activities occurring at or near home are reliably combinable with domestic chores, including childcare. In six of the 10 product case studies, the NTFP activity was sufficiently close to home for children to accompany their mothers and help in the collection. Basic processing, when undertaken by women, is also often carried out by girls, providing them with a form of apprenticeship. Moving out of the parental home to marry may deprive young women of the oppor- tunity to learn the skills necessary for more complex activities. For example, one woman explained that she could not continue weaving after she left home as she no longer had her mother to teach her. Domestic consumption of the product The case of mushroom collection illustrates the fact that women may be more involved in activities that also contribute to their family’s nutrition. In Cuajimoloyas, women collect mushrooms for fresh and dried sale at the same time as they are collecting fresh mushrooms for family consumption. In the case of Latuvi, where matsutake mushrooms are collected only for export and not used in traditional cooking, men are more involved in the harvesting process. HOW DO WOMEN BENEFIT FROM INVOLVEMENT IN NTFP ACTIVITIES? In some NTFP activities, both men and women are involved, and therefore the family as a whole benefits. The CEPFOR case studies indicate that, if women are involved in selling, this tends to give them greater control over the income generated. The clearest example of this is the case of cocoa in Emero, which is sometimes bartered for goods provided by traders. Women generally barter the cocoa beans for medicines, school books and other household goods, whereas men are more likely to accept alcohol and cigarettes in exchange. In the case of Santa Rosa, women use the income from processed rubber goods to cover family expenses. If men want income of their own, they process and sell a small number of items themselves. Training and social support The Jjipi japa palm case is one in which women benefit greatly from being involved with a commercial enterprise with strong social objectives. Not only does it train women and provide a guaranteed market for specified products, but it has also helped women set up a rotating fund and provides health care. This has led to an increased recognition and appreciation of the economic role of women at both household and community levels. The introduction of the mushroom trade has also been especially positive for women because the income and accompanying training accrues almost exclusively to them. Prior to this activity, forest management was undertaken solely by men working in timber production. Self-confidence and status Involvement in income-generating activities gives women a greater sense of self-confidence and improves their status within the household and the community. For many women Women and NTFPs in the case study communities, especially those working with jipi Japa and mushrooms, the NTFP activity is their first cash-generating activity and is important in giving them confidence in their ability to learn new skills and achieve goals. These benefits are particularly visible if the activity is linked with some kind of organization, as in the case of the jipi japa Weavers’ association established by the Rural Art enterprise, which provides a focus not just for training but also for social exchange and economic advancement. CAN THE INTRODUCTION OF NEW TECHNOLOGY DISPLACE WOMEN? In the CEPFOR case studies, innovation generally improves the situation of women. Thus Rural Art's introduction of new product styles increased sales potential for women. Similarly, in the case of soyate palm, there has been some new subcontracting to women of production of specific woven items. Fresh and dried mushroom commercialization has been adopted almost exclusively by women, possibly — as outlined above — because of its link to food. Only in the case of pita has the management of a new fibre-cleaning machine been taken over by men. Although women are able to use it at minimal cost, they have to leave the home to do so and, for many, processing at home remains easier to combine with domestic duties. CONCLUSIONS: WHAT IMPACT DO CHANGES IN NTFP COMMERCIALIZATION HAVE ON WOMEN’S LIVELIHOODS? NTFP-based activities are frequently the only source of cash income available to women in rural and marginalized forest Trading natural rubber products - catapults, elastic bands and inflatable football bladders - on the streets of La Paz, Bolivia. 79 Isidro Rodrigue yf non-timber forest products Female mushroom harvesters in Latuvi, Mexico, receive training from Methodus on resource management and harvesting techniques. areas. However, very few product value chains are women- only. Thus development projects intending to work with women must understand at what stage contributions from men - typically for collection and transport - are likely to be essential, and then work with both men and women to improve these stages. In the cultural context of the case study communities, women’s activities, such as production or processing, need to be focused close to the home to enable the women to continue to fulfil traditional domestic and childcare duties. Alternatively, the activity must provide sufficient economic gains for families to replace the women’s tasks, for example by paying for childcare or buying in food. Given the more limited livelihood options available to women, they are more likely to feel the impact of changes in NTFP commercialization than men. Some of the more difficult changes for women to deal with are: b Reduction in the resource base. This can oblige women to switch from collection to purchase of the resource, thus making it more costly for them to engage in the activity. b Change in location of selling point. Leaving the community can present a greater obstacle to women because of their childcare and domestic duties, leaving men to take on the selling role. b Changes in processing location. Centralization to increase efficiency, for instance, can take jobs and 80 income away from rural women, possibly to the benefit of urban women. A change that can have a positive impact is the introduction of new technology such as labour-saving devices, which can increase the usually low returns to labour. An important proviso, however, is that women should retain control over the process through good social organization and clear definition of responsibilities, as illustrated with the jipi japa and mushroom case studies. In addition to income generation, non-financial benefits, such as status, health care or membership in a social fund, can be important rewards for women’s work. CHAPTER HIGHLIGHTS Dd Few product value chains are women-only. NTFP activities are one of the few cash-generating opportunities for women in marginalized rural communities. wv By providing an income, NTFP activities can be an important source of status and confidence for women, particularly if they are members of an NTFP-related organization. 7. Access rights and resources The impacts of NTFP commercialization Kathrin Schreckenberg and Elaine Marshall Incense and copal harvesters walk through several different vegetation types on their long journey to the montane forests where they collect resin. The management of this traditional resource has been largely based on mutual respect for each individual's area. This is being challenged as interest in commercialization increases and distance makes resource sites difficult to monitor. This chapter explores whether increased commercialization leads to overexploitation of the resource, the project's third hypothesis, and whether possible outcomes are influenced by type of resource tenure and the existence of competing land uses. It further addresses hypothesis 4, the issue of whether increased commercialization, particularly when it leads to domestication, has an impact on resource access rights for the poorest. Finally, it examines the way in which commercialization strategies are affected by the type of resource. HOW CAN SUFFICIENT RESOURCE SUPPLY BE ENSURED TO SUPPORT INCREASED COMMERCIALIZATION? Limited resource supply is a constraint to successful commercialization in 68 per cent of the case study communities. The cases illustrate a variety of strategies used by communities and individuals to ensure that NTFP supply is sufficient to meet the demands of increased commercialization (Table 7.1). Overexploitation When the NTFP being harvested is a flower, fruit or fruiting body, exploitation rarely damages the resource severely. Damage can occur, however, when the leaves or even the whole plant — as in the case of maguey - are harvested. A degree of overexploitation is evident in 75 per cent of the communities studied. It tends to occur where individuals or the community have no effective control over the production area. This is particularly problematic when the resource is very distant, as in the case of incense, for which the 81 Charles Veitch Commercialization of non-timber forest products collecting areas — though nominally owned by individuals - are situated up to 120 km away from the community. Furthermore, when collecting areas fall within locations subsequently designated as a national park, their legal status is unclear and nobody takes responsibility for enforcing sustainable harvesting practices. None of the communities, however, complains of serious resource depletion as a result of NTFP commercialization. This may be because they have all begun to find solutions to the problem, often with NGO support, as summarized in Figure 7.1. Collecting from distant locations Closely linked to local overexploitation is the shift to harvesting the product in other locations situated at greater distances from the community. This is the case in 35 per cent of the case study communities, and may occur even where there has been no increase in the volume of Table 7.1 Responses to resource depletion in the case study communities planting of wild and hybrid cocoa Yes 13 Only in Yes, No Harvest Tomachi but 15 years further from the (due to agriculture) _ to first harvest community Yes 52-87 Some, due to Subject of No, Project promotion of poor harvest experimentation small trial for better management; technique for incense. harvesting moving to incense new areas Yes 2.1-3.0 Yes, clearing for Yes, Yes, Purchase of raw agriculture in two years transplanting material; harvest from two of three to harvest from the new areas communities and wild overexploitation Yes 1.5-2.1 Yes, overcutting No No Improved resource leaves management; harvest ‘ from more distant AY areas; purchase of Fi Ef : Palma real from other = ? communities Maguey — ae Yes 09-25 Yes, Yes Yes, Better resource Ar a overharvesting of enrichment management and See i whole plant planting extraction systems in 4 La Esperanza Mushrooms ‘ No 31-44 Community No No Zoning of community BER EIR EST perception of for different land resource decline is uses to protect oe not supported by mushroom resource; Nae monitoring by NGO training in harvesting techniques Pita : Yes in 05 Yes, including Yes Yes, Cessation of : Arroyo; removal of wildings enrichment the activity in Pescadito F a no in for plantation planting often in when fungus destroyed i : 2 Pescadito establishment coffee plantations plantations Yes 21 Yes, overcutting Yes A little, Harvest from of leaves, and loss but mostly by the — new areas leading to of resource to intermediary increased collection deforestation time Yes 14 No Yes Starting n/a enrichment plantations 82 Access rights and resources commercialization. In the case of both soyate palm and camedora palm, for which demand levels have been relatively stable during the last 10 years, average collection times have nevertheless increased significantly in the same period. This suggests that people now need to travel much further to locate sufficient resources to meet current demand. In all of these cases, communities are also engaging in other strategies - domestication and/or improved resource management - to make up for reduced resource availability. Domestication Some 45 per cent of the case study communities, including four in which there is no evidence of resource depletion, have begun to domesticate the resource to some extent (Table 7.1). For some products, however, such as wild mushrooms, it will never be possible (Box 7.1). In the case study communities, domestication typically consists of transplanting wild germplasm with the main aim of establishing a resource closer to home rather than improving its quality. While the distance to collection sites is very variable between and within products, domesticated products are found closest to home. Many domestication efforts are supported by NGOs. In Emero, for example, increasing demand for wild cocoa is being met by a combination of enrichment planting, using wild planting stock to establish a community nursery and manual cross-fertilization to increase yields. In the case of maguey, in which the whole plant is harvested just before it flowers, enrichment planting is beginning to combat resource depletion. Domestication may change the status of a resource from one collected mostly from communally managed land to a predominantly privately produced resource, dis- advantaging those harvesters who lack appropriate land for establishing plantations. In a few cases, domestication outside the community can have potentially negative reper- cussions for the whole community. In the case of camedora palm, the intermediary trader has established large plantations enabling him to supplement the community- produced fronds from wild collection and small-scale domestication with more consistently high-quality planta- tion stock. Half of his trade is supplied from his plantations, and an increase in this proportion would disadvantage the communities. The large-scale export of camedora seeds from the Chinantla region for establishment of plantations in the United States also poses a potential risk to the future viability of community production of palm fronds. Improved management of the natural resource In all the cases studied, traditional resource management has not been geared to the extraction of commercial Figure 7.1 Raw material supply strategies in case study © communities with and without resource depletion _ Note: there can be more than one response per community 10 o 2 = 8 =) E 6 Es 562 oC" ss . re) = 2 =! a 0 o = wn DEO c D = E € Lo oo Sion 2 = =) — neo no) Ale =| ie ok @ o ov Dp one — £ 2 £2 Pao 7 = oe wc e252 2 ° oO o r= c o 4 >F = os oS ° 3 c 3 = = oO Eo i=} = a pie = wo i= i] te a = oO || Evidence of resource depletion fa No resource depletion volumes. Poor harvesting techniques and insufficient recovery time between harvests have therefore led to resource depletion, particularly for maguey, soyate palm, incense and jipi japa. In 74 per cent of the case study communities, low NTFP quality caused by poor harvesting methods is considered a constraint to successful commer- cialization. However, 35 per cent of the communities studied, including three in which there is no resource depletion, have initiated efforts to improve resource management. In the case of mushrooms, for example, an improved understanding of the fungi’s biology has led the communities to institute a land-use zoning system in which part of their forest is designated for NTFP harvesting, particularly of mushrooms, and protected from destructive activities such as timber extraction. Harvesters are also trained in best- practice collection methods. A land use rotation system has been introduced in La Esperanza to optimize the com- munity’s maguey resource. In half these cases, NGOs initiated the resource management activities, while in the other half their intervention was critical to support or im- prove existing community resource management practices, for example through provision of technical information. Purchasing the resource from another area In the case of the jipi japa palm, two of the study communities no longer have access to locally available supplies, due to a cambination of land use change and some overexploitation of the palm, and they now purchase the raw material from a third community. In the case of soyate palm, a decline in resources has meant that some people purchase a different species, Palma real, from other areas. 83 Commercialization of non-timber forest products Box 7.1 Can all species be domesticated? Six of the 10 NTFPs studied are the subject of some degree of domestication. Whether or not domestication is possible and/or likely to succeed depends on a combination of the following factors. Biological characteristics: Mushrooms that grow as mycorrhizal fungi are not readily domesticated as they are difficult to propagate and establish. Other species, particularly trees, take a long time to become productive; for example, incense and rubber do not produce until 15 years of age. There is no experience of domesticating the soyate palm as its biological characteristics make it difficult to plant, but it is managed and phenologically manipulated jn situ. In these cases, the communities will inevitably be more dependent on wild resources for supply of the product. Tenure characteristics: Tenure can determine whether a community improves its management of the wild resource — possibly supplementing it through enrichment planting or regulating practices that lead to overexploitation - or whether a process of individual domestication on private plots takes place. In the case of organic cocoa, people wanted to increase their ownership of the resource and have therefore begun to plant it rather than relying on common property resources. Opportunity cost of collection versus production: Domestication is generally more costly - in terms of land and capital resources - than collection. It is usually only worthwhile, therefore, if the resource has become relatively difficult to collect or demand is sufficiently high. HOW IMPORTANT IS TENURE? Tenure regimes [see Table 7.2) influence how a resource is managed. In practice, three basic categories exist in the case study communities. Open access Nobody has control over the resource and anybody can harvest at will. This situation typically arises where the legal status of land is uncertain or has changed, and nobody takes responsibility for, or has the wherewithal to enforce, systematic resource management, as may be the case in some protected areas, for example. Communal land Many of the products studied are collected from areas of community-owned land that are designated for communal use. However, community-based management systems are not always effective if organizational structures break down or cannot adapt to changing levels of resource use. This is 84 Overexploitation of the camedora palm led to domestication by the main trader. In the case of organic cocoa, there has been no overexploitation, but increased demand has led to the establishment of a community nursery using wild germplasm. Where substitutes exist, as in the case of rubber, domestication may not be worthwhile unless start- up costs are very low. Legislation: Most of the domesticated case study NTFPs provide highest yields if cultivated in forestlike systems. However, in Mexico, crops grown under forest shade are considered neither subsistence nor agricultural crops. Pita is therefore not legally permitted as a plantation crop. Traditional knowledge and management capacity: A history of using a plant can be advantageous both for natural resource management and domestication. This is illustrated by the different impact of a fungal disease on pita plantations in Arroyo, where the indigenous community used its traditional knowledge to restrict the damage, and in Pescadito, where the immigrant population was unable to prevent the devastation of their plantations. Within communities, it is rare for domestication to be undertaken by people who have not previously collected the product from the wild. Technical and organizational capacity: Technical know-how can be a constraint to domestication, and this is an area in which NGO intervention was found to be particularly helpful in the CEPFOR cases. Where domes- tication takes place on communal land, the ability of the community to organize itself to manage the resource is also a critical area frequently requiring NGO support. true of maguey and soyate palm, for example, which are benefiting from NGO interventions to strengthen community organizations and to support adaptation and enforcement of community norms. Similarly, NGO support has helped to establish a new community system of resource management in the case of mushrooms. Individual land In many of the communities, communal land is gradually being allocated to individuals, mostly as a response to agricultural investment. This means that individuals possess some plots of land over which they can take most decisions, although some are still subject to a degree of community control. In several cases, domestication has benefited from the existence of these plots. In the case of Emero, the desire to domesticate cocoa has been the motivation for some ‘privatization’ of community land. There are many overlaps between the above categories, and few communities can be characterized by a Access rights and resources single form of tenure. In Pucasucho, for instance, the very widespread copal can be collected from anywhere. Incense, however, is much rarer and individuals inherit rights to collect from a specific zone of incense trees. The harvesting zones are named and recognized - though not always respected — as individual property within the community. A complicating factor is that all the harvesting zones are located within the boundaries of a national park, with which an informal agreement to allow collection exists, but expansion of collection into new areas is prohibited. Inasmuch as it is possible to clearly distinguish the land tenure system involved, there appears to be no simple correlation between tenure type and the existence of resource overexploitation. Overexploitation is as likely to Table 7.2 Changes in resource tenure and access brought about by commercialization In both communities, cocoa trees are predominantly located on communal land. No community norms restrict access. hanges brought about by Due to demand for cocoa, wildings are being transplanted on to private plots. In Santa Rosa, each family manages an __ average of three forest tracks on ~ communal land. In Tomachi, a dozen concessionaires from outside the community each have 10-36 tracks, hiring community members to harvest the latex. Incense collection occurs several days away from the community in the recently created Madidi National Park. A tacit agreement exists that collection may continue in existing areas but not expand into new areas. Most weavers buy the fibre, as harvest areas have been converted to agriculture. The remaining collectors collect from the Amboro National Park buffer zone. Soyate palm is collected from community land, subject to some community-imposed restrictions on volumes and days harvested. Communally managed resource. In La Esperanza, harvesting rights are allocated to distillers on a monthly basis in return for payment of harvesting fees. In both communities, all land is owned by the community and access to mushrooms is open to all. For agricultural reasons, Arroyo decided to parcel land into individual plots, and it is from these that pita is collected. Camedora palm is collected from communal land with no restrictions. In Monte Tinta, most individuals also have private plantations. In Tiltepec, tepejilote is collected from open access communal land. In Yagavila, the palms are planted on private land. In Tomachi a dispute over ownership of the forest tracks has led to an agreement by which the concessionaires pay the community an annual harvesting fee (see Box 7.2). Certain incense harvesting areas are traditionally respected as the nominal property of particular collectors, handed on within families, though no official papers exist. Control has become more difficult as interest in commercialization has increased. Commercialization has led to increased demand, but not sufficient to encourage domestication by the female processors. Some poor people do not have access to private land for planting. No particular impact. Access depends on having rights toa harvesting zone or being hired to join a collecting trip (the proceeds of which are shared]. The main constraint for poor people is lack of capital to fund collecting expeditions. Women who used to collect jipi japa now need to buy the leaves. Overharvested resource, but no change in access rights. Recent increase in commercialization. Overharvesting has led to enrichment planting by community. Apparent overexploitation at national level has put matsutake and Boletus on Mexican protected species list. Cuajimoloyas has carried out an EIA to obtain a harvesting permit and zoned land to protect mushrooms from timber extraction activities. Commercial interest has led to establishment of agroforestry plantations of pita on individual plots. A few individuals in Pescadito have taken over areas of communal land with high densities of pita. Overexploitation has reduced physical access to the wild resource. The main trader has established large plantations of camedora palm, providing 50 per cent of his supply. No change. The same community norms apply to all. No disadvantage to the poorest. Poorest are never likely to have sufficient capital to become distillery owners, but are employed as harvesters. In Cuajimoloyas, positive impact on the poorest, who rely more on mushrooms than on timber. In other communities, poor are unable to harvest mushrooms legally because of lack of funds (ca. US$10 000) to carry out an EIA. Poorer people are prevented from establishing plantations because of high start-up costs (US$1 000 per ha} and a five-year lag before plants begin to yield. Greater distance to the resource means that only the poorest still engage in collection. Small-scale domesticators displaced by trader's plantation. No impact on poorest. People with wetter land can plant more of the palm. DS an Note that open access means no community norms. Anybody can collect from any plant at any time. 85 Commercialization of non-timber forest products @ Soyate palm @ Maguey Pita @ Mushrooms. Tepejilote palm Camedora palm Papen cna haace Laas Ee 0 5 10 15 20 25 30 a uw E ra E o = o 2 o <= uw o € ° ¥ = Income share from agricultural subsidy take place on private as on communal or open access land. The tenure type does, however, have a strong impact on the forms of improved management undertaken in response to overexploitation, with domestication most likely on private land and improved management of the natural resource taking place on communal land. CAN NTFP PRODUCTION COMPETE WITH ALTERNATIVE LAND USES? In 63 per cent of the case study communities, competing land uses for NTFP production areas are a constraint to successful commercialization. In four communities the NTFP was not valuable enough to resist land use conversion to agriculture. The jipi japa case highlights the importance of understanding who benefits from the alternative land uses: the benefits of agriculture accrue mostly to men and exceed the benefits women derived from collecting jipi japa. As a result, the majority of land was converted to agriculture, obliging the women to buy in jipi Japa fibre from other communities. Trends may also be reversed. Thus many wild populations of the spiny pita plant were destroyed in the 1980s, when large-scale plantations of coffee under shade were introduced. Declining coffee prices, however, have resulted in the partial replacement of coffee by pita plantations. These cases illustrate how responsive communities are to changes in market prices and opportunities. In Mexico a number of subsidies, e.g. Procampo and Progreso, are available, many of which are aimed at stimulating agricultural production. They might be expected, therefore, to make agricultural land use more attractive and reduce household reliance on NTFP income. At a product level, this seems to be the case (Figure 7.2): a high proportion of income contributed by subsidies is associated with a high share of income from agriculture but a low share of income from NTFPs. However, within 86 communities, households obtaining a greater share of their income from subsidies also appear to obtain a greater share from NTFP activities, suggesting that NTFP income is additional to agricultural income and not a substitute. In a few communities, NTFP use is providing justification for forest protection. This is the case in Santa Rosa, where intensive rubber collection, and processing, from essentially private forest tracks has led to a decline in the number of agricultural clearings in forests with high densities of rubber trees. It is also true in the case of mushrooms, where forest zoned for mushroom production is effectively protected from timber extraction by the local administrative body, as is the case with private understorey pita plantations. HAS COMMERCIALIZATION LED TO A CHANGE IN ACCESS RIGHTS FOR THE POOR? The effect of commercialization on access rights is a complex issue {see Table 7.2]. !n most of the study cases there has been no formal change in access rights over the last 10 years. An exception is the case of mushrooms. Here there have been changes at the national level as several mushroom species, including Boletus sp. and Tricholoma magnivelare |matsutake), have been placed on the Mexican list of protected species. This imposes a new requirement for an environmental impact assessment (EIA) before harvesting is permitted. The required study costs around US$10 000 and is prohibitively expensive for a community to undertake without significant support from an NGO. This was forthcoming in the case of Cuajimoloyas, where the community now requires Boletus harvesters to attend a course on correct har- vesting techniques and charges buyers, including the community-owned drying enterprise, an annual permit for forest use. Another legal change has occurred with the creation of the Madidi National Park, Bolivia, which includes the incense stands accessed by the community of Pucasucho. The park administration permits current collection to continue, but no new activity will be approved. In this case, the change of status has affected all incense and copal collectors equally, with the poorer ones being constrained more by the cost of mounting a collecting expedition than by the park’s existence. Box 7.2 describes how increased interest in rubber collection in Tomachi has led to a tenure dispute with some benefits for the community. At community level, research results from the CEPFOR case studies indicate a definite trend towards privatization of access rights as commercialization of a product becomes a more profitable activity. Any collection Access rights and resources from semi-private land will tend to disadvantage the poorest, as they may have less access to land. Rights to establish pita plantations, for example, are theoretically the same for all community members providing they have sufficient land under forest or secondary forest cover, but the capital required - up to US$1 000 per ha, with first returns after five years - is prohibitive for poorer people. The youngest members of the community, who do not yet have access to their own land, are also excluded from plantation crops. Thus, although domestication does not have a negative impact on the access of poor people to the wild resource, it may disadvantage them if they continue to rely on the wild product and it is less easy to trade - for example because of poorer quality or less consistent yields - than the domesticated one. If carried out on an industrial scale, as in the case of camedora palm, domestication may put whole communities at a disadvantage. WHAT IMPACT DOES THE RESOURCE HAVE ON COMMERCIALIZATION STRATEGIES? Just as increased commercialization can have an impact on the resource, so the biological and ecological characteristics of the resource may constrain commercialization in a number of ways. Variable resource densities Two pairs of communities illustrate how different resource densities, combined with transport constraints, can lead to differing commercialization strategies. In the case of natural rubber, the community of Tomachi has access to a large rubber tree resource and produces sufficient latex to attract regular traders in spite of difficult access by boat. In Santa Rosa, the fewer rubber trees available do not produce sufficient latex to attract traders. The community has therefore turned to processing the latex into bags and raincoats for direct sale to local miners. A similar situation exists in San Silvestre, where low production levels of cocoa have led the community to concentrate on sales of processed cocoa paste rather than the much heavier beans. Variable yields Mushroom yields vary greatly from year to year, depending on climatic conditions. This deters people from investing time in possibly fruitless collection. For some products, such as cocoa, although individual plants have alternate good and bad years, production across the whole population is fairly stable from year to year. Variable qualities Incense resin can be collected from a number of species, but the quality varies considerably among them. Box 7.2 Rubber harvest leads to improved access rights for community The NGO CARE has been working with the indigenous people of Tomachi to improve the benefits they obtain from trade in latex rubber. Community members are employed as rubber tappers in concessions located within the community's territory. Initial community meetings highlighted the fact that the legal status of these concessions, all owned by people from outside the community, was not clear. On reviewing the documentation, the community established that the concessionaires had not paid taxes to the government for many years. At a joint meeting, the community therefore advised the concessionaires that, due to this failure to meet their obligations, they should stop extracting latex. The concessionaires responded by obtaining title deeds, of dubious origin, that gave them the status of a colonia (neighbourhood) they called Isapuri. This heightened the conflict, as the community did not agree with the presence of this new colonia on its land. Further discussion has led to a temporary resolution of the conflict with the concessionaires agreeing to pay an annual fee of US$80 to the community for use of the concessions. Erik Arancibia Perishability of harvested product Successful commercialization of perishable products requires rapid access to the market, refrigerated transportation or processing. Fresh mushrooms and tepejilote inflorescences must both be sold within a few days following collection. Although slightly less perishable, camedora palm fronds — which last two to three weeks - need to be transported in refrigerated trucks to maintain quality, while mushrooms can be dried to prolong shelf life. Vulnerability to disease of domesticated plant Some plants are very susceptible to diseases when cultivated in plantations. The pita trade from Pescadito, for example, was devastated when all the plants were killed by a fungal infection. Danger of collection Collection can be difficult and dangerous either because of characteristics of the plant - such as the presence of spines on pita - or because of its location. Incense col- lectors complain of the dangerous snakes and very steep terrain they may encounter during their long collection trips. The fact that several camedora palm collectors have been killed by snakes is the reason given by some collectors for cessation of trading. 87 Elaine Marshall Commercialization of non-timber forest products Pita growing as part of an agroforestry plantation in the community of Arroyo Blanco, La Chinantla, Oaxaca, Mexico. Domestication of pita in the forest understorey protects the forest from being cleared for agriculture. It also brings the resource closer to home and under tighter individual control. CONCLUSIONS: WHAT IS THE RELATIONSHIP BETWEEN COMMERCIALIZATION AND RESOURCE STATUS? Overexploitation of the resource is evident to a lesser or greater extent in 75 per cent of the cases studied, occurring equally on private plots, communally managed and open access land. In the face of this overexploitation, there are several options available for ensuring sufficient supply, ranging from improved management of the wild resource to domestication, or purchase of the raw material from other areas. Which option a community prefers depends partly on land tenure. Domestication is particularly suitable on individual plots, while improved resource management and/or enrichment planting are appropriate on community- owned land. Another approach is to introduce processing in order to obtain higher value from a more limited resource base. Whichever route is chosen, the CEPFOR cases illustrate the importance of external intervention, pre- dominantly by NGOs, to initiate and/or support changes in resource management. Whether or not an NTFP is valuable enough to lead to the conservation of the forest resource depends on the relative value - and to whom it accrues - of the competing land use. In one case - jipi japa - the use of an NTFP by 88 women was not valuable enough to prevent land use change to agriculture. However, in at least two other cases - rubber and pita - NTFP commercialization was considered an important reason why forest land was not being converted to agriculture. In the case of mushrooms, where domestication is not possible, the community has zoned the forest to protect the mushroom resource, which provides an important income during the rainy season, when there is less employment in the timber industry. The case studies demonstrate that a shift from subsistence use, which is legal in all cases, to extraction of commercial volumes of NTFPs, which requires permits, in many cases reduces access rights for the poorest producers. The main reason for this is that the permit requirements for commercialization of NTFPs, particularly if they are considered to be a species in need of conservation, are often beyond the reach of poor communities. The same applies within communities, where poorest members may find it hardest to respond to the requirements of community norms that are more strictly applied as the resource becomes more valuable. Where domestication occurs on individual land holdings, poorer community members without access to the right kind of land and no voice in decision-making may well be excluded from this activity. In one case, the establishment of plantations outside the community meant that although there was no change in the community's rights of access to its own resource, its market share was declining. CHAPTER HIGHLIGHTS » There is no simple correlation between tenure type and the existence of resource overexploitation. Dd Tenure influences how communities try to assure resource supply. Domestication is dominant on private land while improved natural resource management dominates on communally managed land. Industrial plantations can displace harvesters of the wild resource and small-scale domesticators. Successful domestication is determined not just by the biological characteristics of a plant but also by socio-economic and legal context and traditional knowledge. 8. Policies, laws and institutions What framework for NIFP commercialization? Kathrin Schreckenberg, Jonathan Rushton, Alan Bojanic and Fabrice Edouard Maguey harvesters load up a donkey with agave heads to transport to the distillery. They will be fermented in the production of mezcal. Making mezcal was formerly a clandestine activity, but the days of moonshine are now over. This chapter provides a brief overview of the policy, legal and institutional context within which NTFP commercialization takes place in Mexico and Bolivia. WHY ARE GOVERNMENTS INTERESTED IN NTFPs? National interest in NTFPs may be catalyzed by a number of different concerns, leading to a range of policies with the aim of supporting or controlling NTFP commercialization. National economic advancement The Mexican government has decided that a focus on niche markets will allow the country to compete in international markets at the same time as pursuing poverty-reduction objectives [Ramirez Farias 2001). It has therefore created the Non-Traditional Agricultural Products Trade Promotion Programme within the Ministry of Agriculture, Livestock and Rural Development and the Inter-American Institute for Cooperation on Agriculture [IICA), the aim of which is to identify market niches for higher-value small-farm agricultural products. Although not specifically designed for NTFPs, the latter would be well served by inclusion in this system. The national government has also created an official seal of quality, From Mexico to the World, and is promoting this seal at fairs and exhibitions for non- traditional agricultural and livestock products. A few NTFPs, such as embroidered pita belts, are considered items of national prestige and are exchanged as gifts with visiting heads of state. 89 GEA Commercialization of non-timber forest products Supporting local livelihoods With the exception of Brazil nut and palm heart, the government of Bolivia has not supported the promotion of NTFPs as potential export products. This may be in part a cautionary approach based on the ‘boom and bust’ experience of these two products [see Box 8.1). Nevertheless, there is a strong interest in the potential role of NTFPs in supporting livelihoods, particularly as a possible alternative to coca cultivation. As all the case studies are located outside the principal coca-growing areas, they have not benefited from any support linked specifically to finding alternatives to coca. All of the products studied could, however, benefit from being marketed as organic or community-traded niche products. Intellectual property rights In the interests of protecting national production and intellectual property rights, Mexico has registered an Appellation of Origin for mezcal. Seven states are included in the protected region, though mezcal is traditionally produced in more than 20 states. Although well intentioned, poor understanding of the distribution of mezcal production has meant that this new appellation is forcing many traditional producers to abandon the name ‘mezcal for their product, and is causing increasing conflict. At the same time, certification costs within the protected region are beyond the reach of small-scale producers, causing them to abandon their trade or continue it in a clandestine manner. Conservation Government interest in NTFPs may be part of a con- servation agenda. This may lead to the development of Box 8.1 Boom and bust in the NTFP trade Commercialization of many NTFPs is characterized by ‘boom and bust’ scenarios, where a rapid increase in trade is followed by a rapid decline. Bolivia’s two most important NTFPs are good examples of the important role of legislation and the market in bringing about this pattern. In the case of canned palm heart (Euterpe precatoria), the bust was brought about by sanctions imposed by Brazil, the main importer, because of the supposed presence of botulism in palm heart processed under poor hygienic conditions. These sanctions resulted in the number of processing plants in northern Bolivia falling from 26 in 1997 to under six in 2003 (Stoian 2004a), aggravating existing problems of poverty and seasonal unemployment in the source areas. In the case of Brazil nuts (Bertholletia excelsa), overproduction at the end of the 1990s led to a decline in prices, and collectors were legislation that restricts NTFP commercialization {see below) but can also have a positive effect. In the Chinantla region of Mexico, for example, the government's interest in maintaining forest areas led the National Commission for Protected Areas (CONANP] to fund a study to identify harvestable forest products, which highlighted the development potential of pita. Further government support was then provided to private-sector development in the form of the UPIS-L cooperative of private members, although an NGO was instrumental in helping to access the funding. DOES THE LEGAL FRAMEWORK SUPPORT NTFP COMMERCIALIZATION? Depending on the details of the existing legislation and how it is implemented, the legal framework can either support and/or constrain NTFP commercialization. Legislation is particularly critical in determining whether and how NTFP commercialization moves from the informal, and often illegal, sector to the formal sector. The case studies highlight several issues. No legislation specific to NTFPs Legal issues are generally not a constraint to small-scale NTFP producers operating in the informal market, and few of the community members interviewed knew anything about the legal requirements for trade of NTFPs [Box 8.2]. This reflects the fact that neither Bolivia nor Mexico has much legislation specific to NTFPs, and that which does exist is poorly implemented by overstretched officials. In both countries, NTFPs are covered by various environ- mental laws and regulations that are predominantly also hit by new sanitary regulations imposed by the European Union requiring improved collection and processing methods [to reduce the level of aflatoxins). With phytosanitary costs now being met by processors, the price is currently at a new peak. Several of the case study products have benefited from busts in other products or other locations, an indica- tion that they themselves may be vulnerable to a similar scenario. In the case of exported matsutake mushrooms, for example, a bust in Asia, caused by overharvesting, led Japanese and Korean prospectors to seek new supplies in Mexico. Maguey has similarly benefited from the fact that tequila supplies have not been able to meet the boom in demand, leading to interest in mezcal as an alternative. On a lesser scale, the world decline in coffee prices has allowed for the enrichment or replacement of coffee plantations with pita. 90 Policies, laws and institutions Box 8.2 The benefits of being legal Lack of enforcement means that NTFP traders generally do not feel constrained by their lack of collection permits. Proper permits could, however, enable them to increase their benefits through more secure contracts with traders in the formal sector, as illustrated in the case of the camedora palm. The SEMARNAT office in the Chinantla region would like communities to obtain permits for harvesting camedora, as this would enable them to sign agreements with buyers, guaranteeing prices and medical assistance in return for a specified volume and quality of palm fronds. In spite of technical support from SEMARNAT and financial support available from the Forest Development Programme {PRODEFOR], the requirements are so complex that most producers continue to harvest palm leaves without the permits specified by the law. J Elaine Marshall concerned with timber production and/or biodiversity conservation. In Mexico, for example, there are three different environmental laws - the Ley General de Equilibrio Ecologico y Proteccion al Ambiente {LGEEPA], the Ley de Desarrollo Forestal Sustentable, and the Ley General de Vida Silvestre [LGVS). The overlay of often contradictory regulations originating from each of these laws generates confusion among both NTFP producers in the formal sector and the institutions issuing NTFP exploitation permits [see Box 8.3 for an example relating to soyate palm). Administrative control is further complicated by the existence of additional state-level laws dealing with the environment and forest resources, many of which apply different criteria from those in federal legislation. Lack of coordination in the creation of new legislation Poor coordination between the departments that create the laws can inadvertently lead to contradictions or policies that promote environmental degradation and biodiversity loss. The declaration of the Appellation of Box 8.3 The never-ending road to legality: fighting bureaucracy to manage soyate palm in Topiltepec Since 1991, the NGO Sanzekan Tinemi has tried to encourage sustainable - and legally recognized - management of soyate palm in its partner communities. In compliance with the 1986 Forest Law, which required a management plan for extraction of timber and non- timber products alike, Sanzekan spent many years working with Topiltepec and the NGO GEA on the necessary ecological, socio-economic and organizational studies. When the community finally submitted its Management plan for soyate palm to the authorities in 1997, it was informed that the law had changed and a management plan was no longer needed. Compliance with the new law only required a notification of extraction for NTFPs. However, this turned out to be less simple than it sounded. The notification and the associated permit required the community to provide quarterly reports, signed by an authorized forest engineer, of the quantity of palm harvested. Unfortunately the income generated from selling the palm was insufficient to pay the costs of the forest engineer. Still intent on obtaining legal recognition for the sustainable management system it had by now put into practice, the community consulted SEMARNAP (the predecessor of today’s SEMARNAT]. It was told that, according to new legislation, it should establish an environmental management unit (UMA), which would allow for legal harvesting without a | management plan or quarterly reports. Working through the documentation required to establish a UMA, the | community realized that a UMA was more appropriate for fauna and that extraction of non-timber products would still have to be approved by a forest engineer. Back at square one, the community is today still looking for the best way to achieve legal recognition of its manegement plan. In the meantime, after four years of sustainable management, Topiltepec is proof that community-based resource management is possible. Catarina Illsley 91 Commercialization of non-timber forest products Origin for mezcal, for example, was achieved by the Minister for the Economy. However, as described above, a lack of biological and cultural insight means that mezcal has been considered in the same light as tequila - a product of monoculture agroindustry - and policies derived from the declaration create confusion and overregulation. Collection permit requirements difficult to fulfil In both Bolivia and Mexico, plants cannot be extracted from tropical forest areas - except for domestic use - without a management plan and/or an environmental impact study. In Bolivia, the key document required is a certificate of forest origin, issued by the Forest Superintendence on the basis of a management plan supported by annual operational plans. Evasion is rife as the system was designed for timber extraction and is excessively costly and technically difficult for small-scale NTFP producers. In Mexico, commercialization of species on the protected list [NOM-059-ECOL-1994] - including some camedora palms and Boletus and matsutake mushrooms - must comply with the requirements of two different laws. One requires communities to create an environmental management unit (UMA or Unidad de Manejo Ambiental), and the other requires communities and individuals to present a professionally prepared EIA. Without this, SEMARNAT is unable to issue a collection permit. The EIA format is complex and little adapted to activities such as mushroom collection. In the dried mushroom case, the community received NGO assistance to cover the US$10 000 cost of the EIA. However, mushroom collectors in other areas lack the capacity to undertake the onerous and costly task of obtaining a valid EIA and therefore continue to collect - and sell to exporters — without reporting their production. Permits required for NTFP cultivation An EIA is also required if communities want to cultivate NTFPs in natural forest areas, e.g. pita and camedora palm, both of which are grown under shade. Without external support, communities do not have the financial or technical capacity to meet these requirements, resulting in a situation in which most extraction and much domestication is illegal and unregulated. Yet, as described in Chapter 7, well-organized extraction, e.g. of mushrooms in Cuajimoloyas, can lead to protection of the forest resource, and pita plantations are a more environmentally friendly option than forest clearance for agriculture. A few NTFPs can be cultivated without a permit, such as maguey, which is considered an agri- cultural crop because of its biological similarity to the agave used for the industrial production of tequila. 92 Complicated export requirements In addition to harvesting and/or cultivation permits, commercialized NTFPs must also comply with a range of trade requirements. In Bolivia, very few NTFPs other than Brazil nut and palm heart are subject to taxes for domes- tic trade. In most cases, traders pay their municipalities a small fee - unrelated to volume sold - for a stall in a particular market. Export of NTFPs is administratively complex, however, requiring at least a dozen documents to be presented, including a commercial bill prepared by the exporter; registration of the enterprise at the Forest Department; an export declaration; a packing list; a notice of confirmation to confirm weight and value of product; transport documents prepared by a transport company; phytosanitary certificates; and a certificate of Bolivian origin. As with the EIAs, these requirements are extremely difficult to meet, particularly for small-scale producers of products for which little information, e.g. on phytosanitary issues, exists. Alliances with foreign companies, as in the case of the camedora intermediary and the fresh mush- room exporter, can help national producers to meet the necessary requirements. Impacts of new protected areas Introduction of new - or new enforcement of existing - regulatory requirements, e.g. relating to harvesting permits, can create formidable barriers to NTFP com- mercialization for poor communities. Establishment of Bolivia's Madidi National Park, for example, has restricted the extension of harvesting zones for incense and copal. Legal status of community enterprises Comparing Bolivia and Mexico, it is clear that Mexican communities are at an advantage when establishing community enterprises. Of the 7 000-9000 communities owning forest land, an estimated 2400 are Community Forest Enterprises with varying control of the value chain from resource management to sale of processed timber products [Bray et al. 2005). Their success is considered to be due in part to the relative security provided by the collective land tenure awarded after the Mexican Revolution. A second factor is the previous impact of the Mexican timber industry, which not only established transport and processing infrastructure that has now been taken over by communities, but also inadvertently mobilized a well-coordinated protest movement that later became the principal impetus for government policy reforms. In Bolivia, in spite of recent initiatives to strengthen community control of land, such as through the estab- lishment of TCOs, communities are much less secure in their resource rights, and the legal basis for them to establish a community enterprise is more complex. Their Policies, laws and institutions A community nursery of maguey plants was established from local germplasm, with the help of funding from GEA supporting reforestation and enrichment planting around La Esperanza. limited administrative capacity and a macroeconomic policy that restricts credit to small producers also mean that funders rarely have confidence in them unless they are allied with an NGO. Community norms In the case study communities, individuals are aware of and tend to respect community norms. In several cases, NGOs have been instrumental in strengthening community institutions and providing technical help for resource Management. Under current circumstances, therefore, community-level regulation is often more effective than national legislation in achieving sustainable use of NTFPs. INSTITUTIONAL FRAMEWORK The institutional framework for NTFP commercialization is closely linked to the legislative framework described above and, in the same way, can be both a support and a hindrance to successful NTFP commercialization. Multiplicity of government institutions The fact that NTFPs are subject to several general natural- resource laws in each country inevitably means that a variety of institutions are also involved. In Bolivia, for example, although the 1996 forestry law led to more nar- rowly defined responsibilities of forest institutions, NTFP resource issues are still variously in the remit of: D The national Forestry Superintendence, responsible for regulating, controlling and supervising the sustainable use of forest resources, including granting permits for NTFP collection. BD The national Agriculture Superintendence, res- ponsible for all agricultural land, including the large areas of forests which may be located on individual farms. DThe National Service for Protected Areas [SERNAP], responsible for administering more than 40 protected areas. PD The Ministry of Sustainable Development and the Environment, of which the Forestry Superintendence and SERNAP are part, and which is responsible for planning and coordinating environment-related activities and a new biocommerce action plan. DThe Ministry of Agriculture, which retains some responsibilities for forest activities. BD The National Agricultural and Livestock Health Service [SENASAG], responsible for issuing phyto- sanitary certificates and food safety. 93 Elaine Marshall Commercialization of non-timber forest products In Mexico, the key institutions involved in NTFP production and trade are: Bb The Ministry of the Environment and Natural Resources [SEMARNAT], the normative body responsible for regulating extraction and implementing some support policies. } The National Forestry Commission (CONAFOR), a decentralized arm of SEMARNAT established in 2000 to promote and fund forest management projects, including NTFP projects. » PROCYMAF, a World Bank-supported project within CONAFOR designed to sustainably develop community, ejido [a social-legal entity formed after the Agrarian Revolution, concerned with the administration of land and other col- lective properties in Mexico} or small producer- owned native forests in certain priority regions. Many of the 600 initiatives funded between 1997 and 2003 included NTFP components, with pita and mushroom-collecting communities being amongst the beneficiaries. bd The National Commission for Protected Areas (CONANP), another decentralized arm of SEMARNAT, which funds projects that support conservation in reserves and sustainable extrac- tion from forests located in areas of biodiversity interest. CONANP was the first organization to fund NTFPs in the country (starting in the Chinantla area). » The National Institute for Ecology [INE], also a | Box 8.4 What kind of support can NGOs provide? Non-governmental organizations can play a very important role in supporting individual communities and NTFP supply chains. They can also play a role in promoting debate about issues related to NTFP commercialization at national level. Some of the activities undertaken by partner NGOs in this project include: Technical support to production and processing B Technical and organizational support to im- prove harvesting techniques and establish more sustainable management of the natural resource, including development of manage- ment plans. Db Technical support for the domestication of the natural resource, including collection of seed, establishment of nurseries and agroforestry plantations. DB Technical and marketing support to improve post-harvest processing techniques in order to respond to market demand for better- quality products. Business and marketing support BTechnical and business support for the establishment of a social enterprise and an alliance of processors. b Marketing support to develop recognized product brands. b Acting as a trade intermediary between com- munity and buyers. Funding support b Support in obtaining funds from domestic and international sources for technical projects such as nurseries, storage facilities, etc., and to meet regulatory requirements. BD Direct provisions of funds or subsidies for processing equipment, exchange visits, training. D Provision of credit. Information provision b Participatory research on resource manage- ment, alternative technologies and marketing through which producers and community leaders could take control of the development of their activities. D Provision of contacts with management experts, designers, national and international clients, and funders both public and private. b Accessing information from private enterprises operating in the same sector, including useful information from ‘failed’ businesses. Db Attending national and international trade fairs to obtain price and quality information. DB Accessing national and international literature. Information dissemination and advocacy » Broad dissemination of issues related to NTFP commercialization through workshops with other organizations, and to the general public, e.g. by initiating an annual mushroom fair. A number of conditions are required for the successful implementation of such initiatives, including appropriate intervention for local conditions taking into account scale and focus, etc.; sustained initiative with long-term investment and gradually reduced support; collaborative intervention to promote uptake, along with provision of capacity building and training to ensure an effective handover to relevant stakeholders. 94 part of SEMARNAT, responsible for undertaking and promoting ecological research. D The National Council for Science and Technology (CONACYT), which has funded a range of aca- demic research projects on NTFPs, particularly on resource management, through a joint fund with INE. The majority of these institutions in Mexico and Bolivia are mandated to be involved in NTFP resource issues. Additional institutions are involved if NTFPs are commercialized, particularly if products are exported. Institutions designed to support commerce are not always designed appropriately to support natural resource enterprises. Thus the support provided by PROCYMAF in Mexico to help communities develop an enterprise study is limited to just one year, which is not long enough to ensure the successful establishment and operation of an enterprise. Poor coordination between institutions The large number of different institutions is compounded by the fact that they may have different administrative boundaries, thus hindering coordination of activities. In Mexico, for example, there are many programmes available to help communities, but accessing them is often difficult. Agricultural programmes are decentralized to individual states and may favour organizations close to government rather than small communities. Forest programmes, in contrast, are still centralized and must be accessed via SEMARNAT and CONAFOR delegations. In Bolivia, the instability of administrative jobs hinders the development of long-term programmes and effective inter- institutional coordination. In general, authorities have a great deal of discretion in the way they interpret and apply different regulations, leading to uncertainty among producers and the NGOs working with them and, in some cases, to overexploitation of resources due to lack of implementation. Non-governmental organizations Civil society organizations, particularly in Bolivia, have very little capacity to support communities in their NTFP commercialization activities. Most NGO support is therefore provided through donor-funded projects, which are rarely coordinated with government programmes. The results of the CEPFOR information-needs assessment undertaken in Mexico, Central America and Bolivia, involving 42 NGOs, donors and government organizations working on NTFPs, show that most NGOs [more than 75 per cent) focus on resource management issues and community strengthening, with relatively little emphasis on Policies, laws and institutions commercialization. Yet this project's case studies indicate just how important NGOs can be in supporting commer- cialization activities (Box 8.4). CONCLUSIONS: HOW SUPPORTIVE IS THE POLICY, LEGAL AND INSTITUTIONAL CONTEXT FOR NTFP COMMERCIALIZATION? There are few policies, laws or institutions designed specifically to promote NTFP commercialization. For the most part, collection and cultivation of NTFPs are covered by a number of sometimes contradictory natural resource laws designed to deal with timber harvest and resource protection. Processing and sale are the remit of trade and export policies not developed with wild harvested products in mind. Neither set of policies and laws is designed to facilitate compliance by small-scale producers with poor access to technical information and credit. However, lack of enforcement means that the legal context, while not providing any help to small-scale producers, is also not a real hindrance until NTFP commercialization enters into the more formal, large-scale or export arena. In general, the most effective support for communities is provided by NGOs. However, these are themselves in need of capacity building, particularly with respect to product marketing and sale, and efforts are needed to achieve better coordination both between government institutions and between NGO and government interventions. CHAPTER HIGHLIGHTS D National-level interest in NTFP commercialization may aim at promoting national economic development, local livelihoods and/or conservation. >» Communities are often obliged to trade NTFPs in the informal sector because they lack the capacity to fulfil the legal requirements for formal-sector commercialization. D NGOs can play an important role in helping communities access the technical and financial support they need to obtain permits for legal trade of NTFPs. » Harmonization of legislation and more coordination between institutions would reduce the obstacles for communities wanting to commercialize NTFPs. 95 Table 9.1 Key market features of the case study value chains in Bolivia and Mexico After Rushton et al. 2004 Cocoa beans Demand appears to be increasing. Both communities produce organic cocoa but are not certified and receive no price premium. National/ international In Emero, intermediaries dictate price and often pay for cocoa beans in the form of barter. Their cocoa is eventually exported by a cooperative. High Cocoa paste Stable local demand and price. San Silvestre sells cocoa paste to consumers and traders. Local High Latex rubber Rubber goods local demand declines. Incense/copal to remain stable or increase. Producer prices unchanged since 1970s. National demand for latex is declining due A few concessionaires control trade. Prices depend on National Medium: to substitution. Price received by those of synthetic rubber. Latex and processed products competition community is stable in Bolivianos, but are sold in La Paz. from synthetic drastically reduced in US$. and imported rubber Prices for rubber goods have decreased as__ Processors of rubber goods are unable to influence the _—_ Local goods falling prices and shrinking market. Demand is currently unmet and expected Prices fixed by three intermediaries, who profit by International High selling the resin in seven different grades. Large external market. Jipijapa palm Bolivian government is promoting jipi japa tourist crafts as an alternative to coca cultivation. This may flood the small market and cause prices to decline. The government hopes for exports, in spite of competition from high- quality jipi japa products from Ecuador. Jipi japa hats Stable high demand for soyate palm, with some adaptation of the goods to changing market tastes. Prices unchanged for the last decade in spite of increasing living costs. Soyate palm Mezcal | for local consumption Demand for mezcal is expected to increase, with an accompanying rise in price. Mezcal for national sale Communities selling through the Rural Art company National Medium: receive social benefits, but generally low prices when vulnerability labour costs are considered. of resource to conversion to Surutu value chain produces lower-value products fora _ Local agriculture wider range of buyers. Some trading networks were established over 100 years National Medium: ago and appear to be more stable than more recent substitution by ones. Large numbers of sellers and intermediary synthetics and buyers. other palms Local commercialization of mezcal occurs through a Local High, complex market network, with many actors. as long as management prevents over- National and international markets dominated by highly —_ National exploitation industrialized tequila mezcal and medium industrialized Oaxacan mezcal. Growing appreciation of regional craft mezcals from endemic species. Appellation of Origin declaration has given seven states commercial advantage through right to use the word ‘mezcal’. Regional organization sells directly to urban consumers. of resource Fresh mushrooms Demand appears stable and growing. Price reflects the scarcity of the resource. Dried mushrooms Sold locally by one or two community-level traders. Sold through a community drying enterprise to National wholesalers/retailers of gourmet foods and restaurants. Exported mushrooms Final consumer price is high. Mushrooms also collected in other countries so producer price fixed by the intermediary does not reflect local scarcity of the product at certain times during the production cycle. Pita palm Declining demand, but artisans willing to purchase at same price to maintain good relations with producers and ensure product quality. To improve quality, the costs of production i.e. plantations) have increased, reducing profit margins. Nevertheless, producers feel secure enough to continue investing in plantations. Camedora National demand expected to remain stable palm or grow. But case study communities report slight decline in demand. Marked price fluctuation in the 1990s; now single trader maintains producer price stability. Low: extreme dependence on single trader Value chain of exported matsutake mushrooms is International dominated by one intermediary. Medium in Arroyo: niche market vulnerable to changes in fashion Association of producers in Arroyo enables producers to _ National deal directly with craftsmen. Low for Pescadito: inability to manage pita disease Pescadito sells fibre through intermediaries who are abandoning the trade due to decreasing demand. Low: domestication of resource by single trader Trade controlled by an individual buyer who operates as__ International a wholesaler and distributor. Some risk of exploitation of producers. Producers expect local demand to decline slightly while prices remain unchanged. Tepejilote palm Short value chain, with collectors selling direct to Local consumers. Regional market. 96 NTFP value chains What happens between production and consumption? Kathrin Schreckenberg, Jonathan Rushton and Dirk Willem te Velde All NTFP activities take place within a production-to- consumption system (Belcher 1998), or ‘value chain’. The project's fifth research hypothesis emphasizes the need to understand the structure and function of these systems in detail if appropriate improvements are to be made. This chapter analyses the case study value chains in terms of their activities, actors and governance structures. It also examines the importance of innovation and concludes by presenting some factors that contribute to determining the sustainability of value chains. WHAT IS A VALUE CHAIN? A value chain describes the full range of activities required to bring a product from the producer to the consumer, emphasizing the value that is realized and how it is communicated. Different literatures use the terms ‘supply’, ‘value’ and ‘marketing’ chain. The terms differ slightly in their emphasis. ‘Supply chain’ is favoured by economists to highlight issues of competitiveness (Porter 1985], industrial organization and clustering. The sociological literature tends to use value chain’ when examining the relationships between actors. Where products are traded internationally, the term ‘global value chain’ is used, the analysis of which is concerned with how lead firms go about setting up and maintaining production and trade networks (Gereffi 1999; Gibbon and Ponte 2005). The most thorough review of commercialization in the NTFP literature (Neumann and Hirsch 2000) has used the term ‘marketing chain’. This book uses all three terms synonymously, with a preference for ‘value chain’. ‘Commercialization network’ is also used to emphasize the numbers of different actors and routes involved to bring a product to consumers. Key features of the case study value chains are summarized in Table 9.1. WHAT ACTIVITIES ARE CARRIED OUT ALONG A VALUE CHAIN? All value chains comprise a number of different activities. These may include: DB collection of the wild resource; } management of the wild resource; D cultivation of the resource; } processing - from cleaning or air-drying to more complex processing requiring specialist skills (e.g. rolling pita fibre into thread, weaving jipi japa), purchased inputs (e.g. ammonia for rubber goods) or technologies (e.g. mezcal distilleries); } storage — including accumulating the raw product and/or the processed product at different points in the chain; In Santa Rosa, rubber sacks are made by coating old fertilizer sacks with the harvested latex mixed with ammonia. Isidro Rodrigue 97 Commercialization of non-timber forest products D transport — from the harvesting site to the home and along the value chain; ») marketing - identifying and developing good market niches; D sale - often between several sets of actors in the value chain. In addition, there are less obvious but no less critical activities, such as information gathering and provision, and capacity building. It would be a misconception to think of value chains as simple linear sequences of activities. This is only true of the shortest chains, such as for tepejilote palm. Most value chains more closely resemble networks in which many of the activities, such as storage and transport, are repeated several times by different people and at different locations before the final product reaches the end consumer. This intricacy greatly complicates their analysis. WHO ARE THE ACTORS IN A VALUE CHAIN? As illustrated in the case study chapters, NTFP value chains involve a large number of different actors. It is only in the shortest chains that the producer harvests the product, carries out the processing and sells the product to the final consumer. In all other chains, different activities are car- ried out by different individuals, groups or organizations. However, it is often the case that a particular actor is engaged in more than one activity. Actors may include: D Private or community owners of the resource. D Individual collectors of the product. D Individual cultivators of the plant from which the product is derived. For the products studied, cultivation (26 per cent) is much less common than collection (74 per cent), and overall, half of the cultivators also collect. D Individual processors. Often this is quite a specia- lized task, with only 4 per cent of interviewees involved in processing as well as in collection and cultivation. D Informal groups of producers. In one of the cocoa communities, an existing water management group is beginning to coordinate cocoa production and marketing; women in Surutu select one indivi- dual to take their jipi japa palm hats to market. >» Community-based traders. Their main role is to transport the product from its source to the market, often accompanied by accumulation of the product and a degree of quality control. D Traders and companies situated outside the community. These may be responsible for initi- ating a new value chain [as in the case of exported mushrooms], providing information to producers, quality control and long-distance transport. 98 >» Community-owned enterprises. Dd Cooperatives. The pita producers’ cooperative acts primarily to negotiate quantities, qualities and prices of thread sold to leather workers - themselves also organized in an association - as well as providing its members with training and access to credit for pita plantation establishment. b Associations. The jipi japa weavers’ association established by the Rural Art enterprise provides women with many of the benefits of a cooperative, except for a role in decision-making. » Government departments. These have both a regulatory role - issuing and monitoring permits — and a role in promoting more sustainable NTFP resource management and commercialization, including provision of grants, often via NGOs, to support environmental or market studies. BD NGOs. These play a key role in the provision of information, and of technical and business support. Understanding the specific role of each actor is essential if conditions for the poorer actors in the chain are to be improved. In an equitable chain, all actors should be reasonably compensated for their contribution, including labour, technical expertise, marketing skills and so on. In contrast to the situation in some other countries, this study found no examples of parasitic actors who reap benefits from the chain without carrying out any useful activity. HOW ARE VALUE CHAINS ESTABLISHED? NTFP value chains can be established on the basis of trading goods to meet an identified demand. Alternatively, it may be that through supplying a product, a demand Is created. Which approach dominates depends in part on the kinds of markets different actors in the chain can access. How the chain is established will largely determine where power lies within the chain and how information is passed between actors. Are NTFP value chains supply driven or demand driven? Short chains are typically supply driven, with collectors and producers making all the key decisions. Longer chains, particularly those trading products beyond national boundaries, are almost always demand driven, with actors closer to the consumer determining what is produced where, when and how. An exception is the latex rubber value chain from Tomachi, which is rather unusual in that a few of the actors are both suppliers who own the forest tracks and demanders who own workshops in La Paz. Many conservation and development projects working with communities begin by taking a supply-driven approach, focusing on those NTFPs that can be produced in quantity in an environmentally sustainable manner. Because they assume an unlimited market demand, these projects often overestimate the potential value of the NTFP (Belsky and Siebert 1998, cited in Neumann and Hirsch 2000). Subsequent attempts to identify or create demand can end in failure due to lack of understanding of market networks, contacts, sustained demand and so on. While none of the products studied by the CEPFOR project were completely new, two cases illustrate that, under certain conditions, it is possible for demand to be stimulated on the basis of existing supply. The dried mushroom market, for example, has been stimulated by the community, with NGO assistance, by holding an annual mushroom fair and providing targeted training for chefs in the nearby town of Oaxaca, a significant centre for foreign tourists. Demand has also benefited from a growing fashion for Italian restaurants and healthy-eating campaigns. In the case of mezcal, the regional association of distillers has learned from the growing demand for tequila and has begun a marketing campaign highlighting the region and agave species of origin. This is changing the popular perception of mezcal as a second-rate liquor to one of a higher-quality traditional drink with a recognized label. These cases suggest that the key conditions that allow this approach to work are: } recognition of an incipient market, possibly located away from the community, for a product available in the community; D existence of an effective intermediary to establish links between the community and the market, particularly with respect to communicating the consumers quality and quantity requirements to the producers; BD community organization enabling it to adapt pro- duction and/or processing to meet the dernands of the new market while maintaining the resource. For demand-driven chains to succeed, there must be a good flow of information from the consumer back to the producer, often moderated by an intermediary and/or community organization. A good example of this is the fresh matsutake chain, where the demand from the Japanese market was recognized by an intermediary who sourced the mushrooms in Oaxaca and then worked, in parallel with NGO efforts, to develop the supply - through training and improved harvesting and grading practices — to better meet the demand. Understanding demand trends is important for producers to determine the appropriate levels of investment in production and processing. As an example, the local fresh mushroom market is growing but limited, whereas the market for dried mushrooms within Mexico is currently not being met, with the volume of sales continuing to NTFP value chains Drying racks full of sliced mushrooms in the community-owned factory. Oaxaca, Mexico. increase from the same small network of suppliers. Effective communication can also ensure that producers are able to respond quickly to changes in demand, whether for a greater quantity or a different quality of product. In one-third of the case study communities, the viability of the NTFP value chain was in part dependent on demand for another product. For example, the collection of the rare and highly valued incense is made economically viable by the simultaneous collection of the lower-value copal. However, copal is sold predominantly in domestic markets, and if this demand were to cease, it might make incense collection less attractive. Similarly, cocoa beans from Emero might be less attractive to traders if the community did not also produce dried fish, the seasonal availability of which is complementary to that of cocoa. The incentive for women to collect mushrooms is that they can harvest species for sale at the same time as collecting other species for domestic use. Does the successful commercialization of an NTFP depend on market access? Market access consists of knowing about the market, i.e. possessing market information, and being able to transfer the product to the market either through direct physical access or via an intermediary, i.e. having market contacts. 99 e Edouard Fabric Commercialization of non-timber forest products | Box 9.1 Assessing levels of exploitation of NTFP producers Exploitation may occur if one or more actors in the value chain obtain an unfair share of the profits, and/or if they unfairly control the levels of profit made by other actors. Several factors make it difficult to determine actual levels of exploitation. Business sensitivity: It is very difficult to analyse the distribution of profits along value chains that are dominated by single individuals or enterprise- like associations who may be concerned about revealing the information necessary to calculate their enterprise budgets. Costing risk: The financial costs of the risks borne by traders are difficult to quantify - and are often not recognized by communities. They include the costs of visiting communities and finding insufficient product to buy, or advancing transport and packaging costs of perishable products. Different volumes sold: In many of the case studies, profit margins appear to be reasonably well distributed along the chain, but the final person in the chain sells a large volume and therefore makes a larger profit. Changing nature of the product: Where products are transformed through processing, it becomes very difficult to compare the margins received by actors early in the chain with those closer to the final consumer. Relative profit margins: NTFP value chains link rural and urban people with very different costs of living. This makes it difficult to compare their absolute profits from the trade. Given that all these difficulties were ex- perienced in studying the case study value chains, it is possible that levels of exploitation in the CEPFOR case studies were higher than have been documented. However, the use of triangulation between several methods including economic analysis, community discussions and interviews with key informants suggests that the conclusions presented here with respect to the relatively low levels of exploitation found are valid. In most of the national and international value chains studied, market information is provided, and sometimes controlled, by intermediaries or NGOs. In half the communities studied, producers have no choice about where to sell their product. In the other half, the choice is usually between direct sales of the product to a 100 nearby community or sale of the product to an intermediary. There is no clear pattern as to the relative profitability of different routes. The direct sales route is more profitable for rubber goods in Santa Rosa, jipi japa palm hats in Surutu and tepejilote palm. The intermediary route, however, is more profitable for producers of soyate palm, incense, cocoa beans in Emero and latex rubber in Tomachi. In all of the value chains in which products are moved beyond the local area, intermediaries play a key role in ensuring market access. The downside of this reliance on single intermediaries is that the producers generally have little capacity to exert market power, defined as the capacity of an actor to impose his or her trade terms on another actor. Traders may cease to operate for a variety of reasons, from personal, such as changes in family circumstances, to product related, as in the case of camedora palm, where the insufficient quantity produced meant that the single trader ceased visiting the community. One way of helping to ensure that intermediaries remain faithful to a community is to build social contacts with them. In some cases they may be people from the producer community who have moved to a town. In the case of one of the organic cocoa communities, which relies entirely on traders arriving by boat, traders typically act as godparents to children of their community partners, entering into a relationship of mutual dependency. Another way for producers to attract intermediaries is to become more organized (see Chapter 10). Community organization can enable producers to offer sufficient produce to interest traders and/or to negotiate an improved relationship with a trader. This is the case for exported fresh mushrooms, for which the intermediary - and the availability of air transport - makes the Japanese market accessible. In the case of pita, both the community co- operative and private traders, with their better organization and market contacts, can reach larger markets and therefore pay producers more for their fibre than local processors who do not have the same access. How important is adding value locally? Adding value by processing is often considered an important aim for NTFP commercialization projects. Local bottling and labelling of mezcal, for example, increases its value from US$6 to US$18/litre. Yet most of this additional income is lost through taxes and other legal costs. In the three case studies in which comparisons are possible, returns to labour are lower for the more highly processed products: cocoa paste versus beans; rubber goods versus latex; soyate palm hats versus plaited fibre. Nevertheless, as described in Chapter 10, in the case of cocoa paste and rubber goods, processing is essential to increase the value per unit weight/volume of the products sufficiently to overcome supply and transport constraints. In all three NTFP value chains cases, the local processing also plays an important role in providing economic opportunities for women. VALUE CHAIN GOVERNANCE: RELATIONSHIPS BETWEEN ACTORS The governance of value chains refers to how control is exercised within the chain, reflecting the relationships between different actors. It plays an important role in determining the sustainability of the overall chain and the equitability of benefit distribution, and can also influence how production capacities are upgraded. Important issues include how producers are organized, where power is concentrated, how transparently prices are set and whether any actors feel exploited by others (Box 9.1). Vertical and horizontal integration Vertical integration occurs when successive stages in the value chain are placed under the control of one enterprise. This may be necessary when a product must be supplied to exacting conditions and the local capacity in terms of skills and capital for achieving this is so low that an intermediary or company needs to take control. A degree of vertical integration exists in several of the value chains studied, for example that of exported mushrooms, camedora palm and jipi japa palm tourist crafts. In all three cases, entrepreneurs play a major role in organizing the quality and quantity of supply. Given that the chains are relatively recent, it is too early to assess the extent to which these actors may at some point in the future exert their market power (see below) to the detriment of the producers. In Tomachi, a few rubber concessionaires own part of the value chain from the rubber trees to the processing workshops in La Paz. This extreme vertical integration enables them to achieve success in more distant urban- based markets. A different approach has been taken in Santa Rosa, where individual families collect, process and trade natural rubber products. Individually they have been successful in supplying the easily accessible local mining and cattle industry markets, but they are not able to access more distant markets. In the case of cocoa beans, the current lack of differentiation in the quality of the product, e.g. between organic and non-organic cocoa, and the low level of technology in processing the beans, reduces the need for vertical integration. Vertical integration may become a more important issue if the chocolate factory that eventually buys the beans begins to monitor its sources of Organically produced cocoa in response to certification and phytosanitary requirements. Horizontal integration involves the cooperation of all actors undertaking similar roles, e.g. producers or processors. It is generally the preferred option for project interventions, as it increases the bargaining power and Note: concentration of power is defined as the degree to which a single individual or firm controls the value chain; scored subjectively on the basis of market reports and Rushton et al. 2004 | i =16) Number of value chains {n Oo rmF NWO Kk WO DO Local National International Lengtn of value chain Concentration of power: i Low fi Medium High economies of scale of small-scale producers and processors. Among the cases studied, horizontal integration is relatively rare, occurring in only a few cases with a broad producer base. In the pita case, there is an effective producer cooperative as well as an active association of leather workers that has managed to reverse a declining trend in pita demand by establishing a brand name and guaranteeing authentic quality. A regional association of mezcal traders has achieved a similar feat. Concentration of power The source of market power may arise from social status, taking advantage of the needs or ignorance of the other, superior financial or technological capacity or a monopolistic position in the market. A typical example is an actor who controls access to the market because he owns the only truck available or provides loans, creating forms of dependency. Excluding producers from a particular ethnic group or locking suppliers into a specific production role are other examples. In the CEPFOR case studies, concentration of power is greatest in value chains producing highly processed or perishable products for a sophisticated international market. Of the 10 NTFPs traded beyond the local scale, seven show evidence of concentration of power (Figure 9.1] in a single individual or small group. This is a result of the large distance to market information sources and the low education levels of the producers. Individuals who have taken up the role of entrepreneur have particular characteristics that have enabled them to implement innovative marketing strategies, e.g. Korean and Japanese descent in the case of exported mushrooms, contacts with an American businessman for camedora palm, a well- 101 Fausto Lopez Commercialization of non-timber forest products if A. | Members of the Rural Art jipi japa weaving association. This provides an income-generating opportunity for women to undertake in harmony with traditional domestic roles, including childcare. educated and socially aware businesswoman in the case of jipi japa palm tourist crafts. While there is a clear danger of abuse of power, only in the case of camedora palm does the entrepreneur appear to be disadvantaging producers by sourcing increasing amounts of palm fronds from his own plantations. In four of the seven intermediary-dominated chains, the intermediary plays a very positive role by assisting suppliers with training and financial support to achieve consistent quantities of the desired-quality product. Transparent price setting An important element of value chain governance is the manner in which prices are set. In a perfect market the price received by the producer should closely reflect actual production costs. The latter are sometimes difficult to define, particularly with respect to the costs of the labour involved, as local wage rates can vary by season. In the case of women, labour rates are often spurious, as no other income-generating activities exist. In spite of this caveat, it would seem that there are only a few communities in which producers are able to set the price according to their production costs, namely of mushrooms sold locally, rubber goods, tepejilote palm and pita when sold to the cooperative. In a few other cases, producers are able to set 102 the price but must do so in relation to competing products rather than to reflect their costs; e.g. jipi japa and soyate palm hats must be priced to compete with plastic imports. In all other cases, the producer price is determined by an intermediary with little reference to producer costs. In some cases, products are sourced from many areas and producer prices reflect production costs in other supply areas. This is the case for fresh matsutake mushrooms exported to Japan. These mushrooms can also be obtained from other parts of Mexico, and indeed the world, so the price paid to collectors in Oaxaca does not change even in years when production in the region is very low. The critical issue that determines whether or not producers perceive that they are receiving a fair return on their efforts appears to be the level of transparency and clarity in price-setting rules - for example, whether or not all producers are treated according to the same rules. In the case of jipi japa palm, the company-promoted association has a highly differentiated price list for the range of woven products that it buys. Although some association members feel constrained in the items they are required to produce, they are content with the prices received and the additional benefits - health cover, rotating credit fund and status in the community - associated with their membership. The relatively new community dried-mushroom enterprise is still in the process of establishing the most appropriate price to pay individual collectors versus the contribution it makes to the community as a whole. In the case of pita, the producers’ cooperative provides very clear information about prices for different standards of product, and there are few complaints about inequity. Nevertheless, a few pro- ducers feel that they might be in a better position if they were able to choose between a larger number of buyers. In only 37 per cent of case study communities Is consumer preference for product quality reflected in the price received by producers. The resulting dissatisfaction among both producers and traders is greatest in the soyate palm communities. Here the price for the woven fibre has remained unchanged for the last 10 years in spite of a dramatic rise in living costs. The opportunity cost of collecting and plaiting the fibre is such that it is only profitable if labour is valued at zero. While producers receive very little money, traders can make reasonable profits if they sell a sufficient volume of plaited soyate fibre. In the cocoa beans and incense cases, there Is evidence that increases in benefits are not necessarily being passed on to the producer. In both cases, producers are paid a standard price irrespective of product quality. The incense traders then sell on the resin in three different quality grades, achieving very substantial profits as a result. Similarly, in the cocoa case, the community's cocoa is first purchased by community and regional traders, in some cases in the form of barter, which gives producers little control over the price. It is then purchased by a wholesaler before being bought by a chocolate factory that specializes in organic production. The community, however, receives no premium for producing organic cocoa. Although efforts have been made to bypass the wholesaler, the factory prefers to work through a wholesaler who is able to guarantee consistent quality and quantity. In both the cocoa and incense cases, producers are very dependent on the NTFP as a source of cash income and - because the communities are relatively inaccessible - are highly marginalized in terms of access to information, both factors likely to reduce their ability to negotiate prices. Types of value chain governance Based on three independent variables - [i] the complexity of the information required to sustain a particular supply transaction; [ii) the ability to codify and transmit this information between the supplier and demander; and [iii) the capabilities of suppliers to respond to the requirements of the transaction - Gereffi et al. (2005) have distinguished five types of global value chain governance: D Markets: repeated transactions amongst different actors with low costs of switching to new actors. NTFEP value chains } Modular value chains: suppliers make products to a customer's specifications. Dd Relational value chains: there is mutual depen- dence regulated through reputation, social and spatial proximity, family and ethnic ties, etc. » Captive value chains: small suppliers depend on much larger buyers for their transactions and face significant switching costs and are, therefore, ‘captive’. D Hierarchy: implies vertical integration with mana- gerial control. Of these governance types, the CEPFOR cases fall into three main groups (te Velde et al., forthcoming): market types, relational types and captive types. Market types include all the products that are only sold to the local market, often with relatively numerous suppliers and consumers, as well as those with a fairly simple domestic market. For pita and dried mushrooms, the more distant markets are made accessible by the existence of a good community-based producer association. Relational types are cases — cocoa beans and maguey - in which cultural ties and family networks play a key role in ensuring the success of commercialization efforts. Captive types include the three entrepreneur-dominated chains - jipi japa tourist artefacts, exported mushrooms and camedora palm. The critical factor in determining governance type would appear to be the physical distance of the consumer from the NTFP collector and the need for specialized skills in processing, marketing and presentation of the product. The models predicted by Gereffi et al. (2095) are not clear-cut, as governance may differ at different points in the value chain. Thus the maguey value chain is relational at the collector and community-based distilling level, but beyond this it becomes hierarchical in nature. Similarly, the latex rubber chain begins as a market type with many labourers available for hire by many rubber concessionaires. Once the latex is collected and moved to the La Paz workshops, the chain becomes more hierarchical. The importance of understanding the value chain governance lies in the impact that governance can have on the ability of different actors in the chain to innovate and upgrade their activities [Gibbon and Ponte 2005). In captive value chains, the dominant entrepreneur may dictate the kind of innovation a community or other individual may carry out, maintaining the supplier in a less powerful position. There is some evidence of this in the jipi japa value chain, in which some weavers expressed dissatisfaction with the fact that the Rural Art company dictates the range of artefacts that can be produced, though Rural Art is arguably in a better position to know what products can be easily sold in its shops. 103 Commercialization of non-timber forest products Table 9.2 Responses to substitution and competition in the case study value chains Product Substitute available falue chain response With NGO help, Emero has invested in improved fermentation technology {process upgrading) to produce a more Organic cocoa Non-organic cultivated cocoa widely Intermediary company is profiting from available and often of better and more the growing organic cocoa niche market, consistent quality. but community receives no price premiums. consistent-quality cocoa bean. Naturalrubber Severe competition from oil-based Niche marketing in both communities. synthetic rubber, which tends to be cleaner and smell better than natural rubber. Often sourced from Asia. Santa Rosa sells rubber bags and ponchos to local miners. Tomachi sells latex to urban workshops producing goods (e.g. football bladders, medical equipment) for which natural rubber outperforms synthetic substitutes. ree Incense ani None copal None Santa Rosa processors have experimented with different products and colours to meet local market demand [product upgrading}. In both communities, NGO has introduced new chemicals and techniques for rubber processing to replace ammonia, which is difficult to obtain (process upgrading). None Woven products can be replaced by plastic, or by fibres from other palms. Focus is on producing high-quality craft items branded as jipi japa’ for the tourist market. Jipi japa palm Rural Art company supervised development of new range of products (product upgrading) to meet tourist demand. Soyate palm Community has benefited from innovative marketing and branding initiated by a regional association of distillers to sell mezcal as a high-quality drink for national New domestic dried-mushroom market (chain upgrading) supported by NGO, through subsidized capital investment in drying facility and innovative promotion activities. For exported matsutake, trader introduced grading and packaging Pita cooperative accumulates larger quantities of fibre [process upgrading]. Innovation at marketing level by creation of ‘authentic pita’ brand by association of pita craftsmen [functional upgrading). NGO support for better grading of pita leaves. Woven products can be replaced by Soyate products sold so cheaply that they None plastic, or by fibres from other palms. out-compete their potential substitutes. Maguey Mezcal can be substituted by adulterated Mezcal industry has changed regulations or blended low-quality mezcal. to allow 20 per cent blend of other sugars, decreasing quality but increasing benefits. Tequila industry permits a 51:49 blend. An alternative approach promotes branding of market [chain upgrading). 100 per cent agave mezcal by region and species of origin. Mushrooms Exported mushrooms compete with Strong relationship between buyer and mushrooms collected in other areas or community, and cultural links between countries. But Oaxacan mushroom season Mexico-based buyer and Japanese is earlier than that in Asia. No competition importers ensures sustainability of the from cultivated mushrooms as Japanese value chain. market values medicinal properties of wild mushrooms. methods. Pita Pita thread can be substituted by cotton or Pita craftsmen have created a brand nylon thread, and embroidered belts can name and focused on producing be substituted by cheaper plastic belts. high-quality goods. Camedora palm Potential substitution by domesticated Close link between main Mexico-based palm, other species and palms collected from other areas. buyer and US importers reduces risk. Large-scale cultivation gives intermediary greater control over the value chain (process upgrading). INNOVATION IN THE VALUE CHAIN The case studies illustrate that innovation - the introduction of new things or methods - is very important to the sustainability of value chains by enabling them to adapt to external change. There is evidence of innovation at some point in all but two of the case study value chains — incense and tepejilote palm. Innovation tends to be a response to resource scarcity, leading to better management or domestication [discussed in 104 Chapter 7); or it is a response to the threat of substitution, leading to improved processing, improved marketing and branding, or to development of new products. Are substitutes a real danger to NTFP value chains? Substitutes are available for most of the products studied {see Table 9.2]. The value chains are nevertheless viable because of product innovation to meet specific market niches. A strong and very specific market offers good protection against substitution. This is illustrated by pita fibre, which could be substituted by nylon thread. However, the artisans who use pita to embroider belts have countered this threat by producing high-quality articles aimed at a strong niche market, and developing a brand to guarantee authenticity of their products. Similarly, although the demise of the Brazilian natural rubber industry demonstrates the severe competition from oil-based synthetic rubber, small- scale natural rubber products appear to have found two different and quite specific market niches within Bolivia. How important is technical management capacity? Technical management capacity is important with relation to resource management {see Chapter 7]. It is also important for processed products sold into markets demanding a high-quality product involving grading, etc. When com- mercialization begins, processing Is often very basic or non- existent. Improved processing becomes important when the market expands and producers find themselves in competition with other producers or substitute products. A few case study communities adapted their processing, but effective innovation — both of the processing technology and the capacity to manage it —- has generally been supported by NGOs or intermediaries (see Table 9.2). How are value chains upgraded? Value chains can be upgraded (Kaplinsky and Morris 2001) in several ways (see Table 9.2]. Process upgrading increases the efficiency of production processes within or between stages of the value chain. This can occur, for example, through accumulating larger quantities of the product, domestication and introduction of new technologies. Product upgrading - or the improvement of product quality and the introduction of new products — is the most commonly observed form of value chain upgrading among the case studies. Functional upgrading changes the mix of activities conducted within a value chain or an individual firm. For example, the pita producers’ cooperative has taken on new roles of credit provision, capacity building and marketing. However, the presence of one strong actor in the value chain can stifle the efforts of others to change their activities or take on more responsible roles. Thus the desire to take greater control of their activities and market higher-value products has led some jipi japa weavers to work inde- pendently of the constraints of the jipi japa company. Producers may also be affected by the changing activities of other actors in the chain, as in the case of the camedora palm trader also moving into production. Chain upgrading involves moving to a new value chain, as is the case in the dried mushroom chain, which is a new venture for the existing dried-fruit factory. NTFP value chains Table 9.3 Case study community responses to overcome shocks to the value chain Natural variation in product yields, including plant disease Decline in resource base, e.g. due to overharvesting and/or land use change Introduction of new regulatory requirements, e.g. permits Changed market — demand Established trading channels lost, e.g. because of changes in transport infrastructure or loss of key market traders : "Substitution by other products Concentration of _ market power, _ leading to potential abuse of power s to ensure falue chains In Arroyo, indigenous knowledge of pita Management saved the crop, which was lost to disease in Pescadito. NGO technical support helped cocoa farmers plant different varieties that yield different qualities and quantities. As discussed in more detail in Chapter 7, community organization and NGO technical support are key ingredients in the main responses of domestication and/or improved management of communal resource. NGO support helped mushroom-collecting communities pay for EIA required for a harvesting permit. Soyate palm weavers unable to sell woven mats and bedrolls. Responded by identifying new demand, e.g. for hats and baskets. Community identified one person to gather and transport camedora leaves by road when transport by boat became impossible. Men took over trade from women, taking tepejilote to the nearest market for sale when trader ceased coming to village. Identification of niche market for specific goods in the case of rubber and soyate palm. Branding and certification in the case of pita thread and mezcal. Strong social ties cement relationship between cocoa producers and buyers in Emero. Cultural ties between Japanese importers and Korean traders help maintain exported mushroom chain. WHAT DETERMINES THE SUSTAINABILITY OF A VALUE CHAIN? A value chain is sustainable if it continues to deliver a consistent supply to meet demand. To achieve this, a value chain must display a degree of resilience to external shocks of various kinds, ranging from changes in demand to problems of supply [Table 9.3). The greater the resilience of a value chain, the less vulnerable the livelihood strategies of the actors in it are likely to be. A number of factors discussed in this and earlier chapters play a role in determining how well the actors in a value chain can recover from external shocks. DA good understanding of the plant and its imanagement. Whether based on indigenous knowledge or acquired through NGO support, this understanding can enable a community to avoid or manage diseases of the plant. D Effective communication between actors in the 105 Commercialization of non-timber forest products chain. Good relationships between producers and consumers and/or intermediaries are important to ensure effective information flows to combat the danger of competition and substitution. BThe ability to innovate. Innovation in resource management can help increase the sustainability of the supply, whether through domestication and/or improved natural resource management, while innovation at other points in the chain is an essential response to substitution. Product innovation requires the ability to define a niche market, as well as the organization and flexibility to act upon the new information. Dd Length of chain. Resilience is greatest for shorter chains. This reflects the fact that some of these products, e.g. fresh mushrooms, tepejilote and local production of maguey, have a long tradition of use and socio-cultural importance. These value chains are also less demanding in terms of meeting the demands of sophisticated consumers. D Low concentration of market power. As outlined above, market power and length of chain are correlated. However effective some of the entrepreneurs in the project case studies have been, concentration of market power in a single individual is a risk for the producers. Resilience of the value chain is greater where market power is less concentrated, or relationships between the dominant entrepreneur and other actors in the chain are strong enough to avoid abuse of market power. Db Organization. At producer and processor level, resilience to external shocks can be improved through organization. This will be discussed further in Chapter 10. CONCLUSIONS: STRUCTURING A SUCCESSFUL VALUE CHAIN Successful NTFP value chains come in many guises, from short local chains with direct connections between producers and consumers to long international chains with several intermediaries. The different functions in a market chain can be carried out by a range of actors. Market access is important, and entrepreneurs often play a key role in finding markets with sufficient demand to support the whole value chain. Markets can also be made accessible by community organization. In general, NTFP value chains are more likely to be demand driven except under very special circumstances — e.g. mushrooms and maguey - where, with the help of a knowledgeable intermediary, it is possible to create a specific demand for a type or source of product for which a general interest already exists. 106 Horizontal integration or organization - both of producers and processors - can be a useful way of decreasing vulnerability of the chain to external shocks. It does not necessarily increase the prices obtained but can improve the chances of attracting traders and negotiating deals with them. Organization is less important if demand is buoyant and suppliers can easily get the product to the sales point. Vertical integration is more common in cases with differentiated product quality, complex processing and/or difficult and costly transport requirements because it enables the dominant entrepreneur to reduce their own risk by verifying quality and quantity. It appears to offer some advantages to collectors during the early stages of value chain establishment, but, in the longer term, there is the risk that the dominant companies or individuals may at some point abuse their market power. Whatever the governance of a value chain, a key to satisfaction for poor producers is transparency, both in the setting of prices and in defining the rules of trade. External actors, whether NGOs or entrepreneurs, are particularly important in supporting innovation, which is vital to maintain the viability and resilience of value chains in the face of competition. CHAPTER HIGHLIGHTS D Control of profits is exercised mainly by those who control market information and capital. » Aspecialized market niche and product quality can help to protect against substitution. » Most NTFP value chains are demand driven. Establishing a new NTFP value chain solely on the basis of existing supply is unlikely to succeed. » Concentration of power is most likely in value chains producing highly processed or perishable products for a sophisticated international market. D Innovation is critical to maintain market share. » Horizontal integration increases the negotiating power of the poor, but vertical integration may facilitate establishment of specialized niche-market value chains. Transparent price setting and terms of trade are key to ensuring satisfaction among poor producers. 10. Overcoming barriers Strategies and capabilities for successful NTFP commercialization Kathrin Schreckenberg, Jonathan Rushton, Dirk Willem te Velde and Alan Bojanic How do poor producers, processors and traders gain access to NTFP value chains? This chapter deals with hypothesis 6 and examines the constraints, or barriers to entry, for new entrants to a value chain, and the characteristics individuals and/or communities need to commercialize NTFPs successfully. BARRIERS TO ENTRY Barriers can block the entry of new actors to a particular activity in the value chain. The presence of one or more actors making super-normal - above average - profits is clear evidence of the existence of barriers to entry inhibiting greater participation, and therefore competition, in a particular activity. Barriers to entry vary along the value chain. At producer level, they may relate to obtaining access to the resource and the necessary skill for harvesting and processing the product for sale. As activities become more specialized further along the value chain, there are greater opportunities for single traders or small groups of traders to exert their market power and establish mechanisms to prevent others entering the business. These are often related to market power in the form of relative access to financial capital, access to strategic information, single- buyer arrangements, family ties or access to market contacts. The costs of overcoming these barriers and other transaction costs (see Box 10.1) are lower for those within the group than for outsiders. In some cases the costs may be too high for outsiders to enter the business. Frequently such costs represent a series of social arrangements within the power group. A key challenge facing any development inter- vention in NTFP commercialization is determining the main barriers to market entry for poor people and to identify ways of removing them so that more actors can enter the marketplace. In the CEPFOR case studies, interviewees identified the main barriers to entry to selling NTFPs as lack of market contacts and knowledge of the market, followed by lack of financial capability, including lack of access to credit. In Bolivia, lack of appropriate infra- structure (particularly transport, but also market and communication}, family situation (usually cited by women with domestic duties) and, to a lesser extent, a lack of The NGO Methodus Consultora has been organizing annual fairs in the mushroom communities to promote wild edible fungi and the many recipes for preparing them. This has promoted local interest, and regional and national demand has been bolstered by the availability of Mexican dried mushrooms. | WB Mexico (n=133) MM Bolivia {n=122) | 80 | } 0 = | = g | z | o 40 a a o 2 a S | = | 9 ! c Qo uw > c => Cc uw o | ais Ee, eee ae 2 henry ete} a eee ae ate nares = = vile Mes! | eS 2 irda oie ee are = 27 = ni o S = / Ty nage 2 e To) =) & oO 3° ea A esis lies Giese i = fo aa ee = Ss ae ye = ) re = = a ee 5 ae |p o 2 o = ine 7 o oO c =< E o On) int) ba = o ON See oc 5 E jae 4 = Si ° Gia 6 =: = | pe tere | = 0 re} Lyle aise | | 107 Fabrice Edouard Commercialization of non-timber forest products Box 10.1 What are transaction costs? Transaction costs — the costs of negotiating a transaction such as the sale of a certain volume of NTFPs - include costs incurred prior to the transaction, such as the need to search for information to safeguard an agreement, and costs incurred afterwards, such as paying for the results of errors. Some transaction costs may be fairly easy to | quantify, while others are much harder to define and measure. Below are listed some of the transaction costs recorded in the project case studies. Some of these costs, particularly the ones difficult to measure, are often hidden, which makes it difficult to assess the full extent of costs associated with any single transaction, or indeed with all the transactions making up a value chain. | Examples of easily quantifiable transaction costs DB Taxes [mezcal, mushroom and camedora palm exports, jipi japa tourist product sales, chocolate and mezcal formal sales). | D Legalizing contracts [matsutake contracts with the Japanese). D Obtaining permission to harvest the resource - both by carrying out environmental impact assessments [EIAs] (mushrooms, and attempts in the case of camedora palm and soyate palm) and/or agreeing to pay harvesting fees to communities. Dd Fulfilling export requirements [certificates of origin, phytosanitary documentation, etc.) for | NTFPs (mushrooms, camedora). »} Communications [matsutake, camedora). D Financial costs of waiting le.g. by storing a product). } Information that can be bought [e.g. EIA studies for mushrooms}. » Costs to fulfil agreements (pita, mushrooms and camedora palm). Examples of difficult-to-measure transaction costs DB Covering the costs of a social feast [cocoa bean traders). dD Time to attend meetings or searching for buyers {for rubber products such as bags and ponchos; cocoa paste and tepejilote palm sellers going to local towns to search for buyers; identification of new buyers by president of pita cooperative). } Handing out gifts or otherwise giving attention to trade partners [jipi japa social arrangements, providing facilities and technical advice on quality in the case of mushrooms}. DTricks and misleading, e.g. not fulfilling an agreement, using wrong measures, misinforming {copal/incense buyers and cocoa bean buyers selling to the chocolate factory who do not pass on differentiated price information). DLearning the skills of marketing, selling and negotiating — lower for someone brought up in a family involved in the trade. Dinvestments in establishing supply chains - many intermediaries only make a reasonable return if they trade high volumes, which requires investment in developing networks of producers from whom to purchase the NTFP, and networks of sales opportunities. Dd Bribery - not visible in case study communities but likely further along value chains. technical capacity were also considered serious barriers, while Mexican respondents also mentioned a general lack of information [see Figure 10.1). Market information Market information — together with market intelligence, the ability to use that information — is an important prerequisite for entering new markets and maintaining market share. It includes various kinds of information relating to the quantity, quality and price characteristics of particular products in different markets. It can include contacts with particular traders, knowledge of alternative sales points and information about trends in demand further along the value chain. In addition to being the most important barrier to entry across the sample of NTFP actors surveyed in both countries, market information is also the main concern of 108 organizations working with producer communities. For many community-level producers, the real value of market information lies in ensuring that the commercialization process is equitable, efficient and sustainable. Lack of market information can have a very direct impact: in Bolivia, households that perceived market information to be a problem were found to achieve significantly less added value than households that felt market information was less of a concern. Where lack of market knowledge and contacts are considered a significant barrier to market entry, this may mean that there is insufficient demand to sell products easily or that there is poor coordination between supply and demand. Information and contacts generally present less of a problem if demand is high. This explains why information is not an important barrier for short value Overcoming barriers chains of ungraded and unprocessed produce such as fresh mushrooms and tepejilote palm sold locally. It becomes much more important for commercialization of processed and/or graded products selling at different prices. In the case of dried mushrooms or fresh matsutake mushrooms exported to Japan, it is unlikely that producers would have known about the markets without the intermediary. In the matsutake case, the entrepreneur has played an important role in providing market information and translating this information into price differentials for the types of quality demanded by the consumer. With a few exceptions, where producer or proces- sor organizations exist, the only source of information between producers and a distant physical market is often an intermediary. In 37 per cent of the cases, entrepreneurs are considered to play a positive role in facilitating NTFP commercialization through the provision of market information and contacts. In cases with only one or a few intermediaries, however, the producer has very limited ability to check the information provided. In the case of cocoa beans, for example, the community has benefited as information about demand for organic cocoa emanating from the El Ceibo chocolate factory has stimulated trader activity and increased their contacts with communities. At the same time, insufficient information at the community level has resulted in the community not receiving the benefits of price premiums for its organic product. An important point to note is that information alone is not sufficient to ensure successful commercialization. Producers also need to have the capacity to act on the information that they receive. In the case of camedora palm, some people are aware of prices and market requirements but are unable to organize themselves to collect sufficient quantities of the leaf to attract a trader to their community. In the case of jipi japa, the lead entrepreneur (Rural Art} has acquired the necessary market information to sell a given range of jipi japa products successfully. It is relatively straightforward to communicate this information - with respect to designs and colours and quantities of different products - to its associated weavers. However, the pro- ducers’ lack of capacity to respond to the information has meant that Rural Art has had to invest heavily in training its weavers to obtain the desired quality and in establishing a system of payments to reward the quality. Access to credit Low financial capability is considered a barrier to entry by 31 per cent of households interviewed in Mexico and 43 per cent in Bolivia. Access to credit is important for all products that require some level of up-front investment, e.g. for planting, long-distance collection trips, accumulation of produce or processing. There is very little intra-community variation in access to credit in the case study communities. Typically, credit is available either to all households or to none at all. In fact, very few communities have access to formal credit provision, and interest rates are often exorbitantly high for loans provided by local lenders. One of the most appreciated features of the community-led pita cooperative and the privately initiated jipi japa asso- ciation is that they both provide their members with access to credit. Beyond the producer level, access to credit is fundamental to the existence of some of the longer value chains. The mushroom-drying factory in Oaxaca is owned by a union of communities [Pueblos Mancomunados), which used other commercial activities — timber sales and bottling water - to raise the government loans needed to establish the drying factory. In the case of the exported matsutake mushrooms, the Mexican intermediary receives credit from Japanese brokers, just as the North American importer initially provided the training and credit required to establish the camedora palm intermediary. The fact that respondents who consider NTFPs to be more important in their livelihood strategies today than in the past cite credit as an important determining factor suggests that the easier availability of credit for NTFP- related activities - such as establishing nurseries and plantations or stocking and transporting the product - could help more people to engage in activities and generate higher incomes. Community meeting in Agua Pescadito to discuss the feasibility of establishing pita plantations. 109 Elaine Marshall Commercialization of non-timber forest products Box 10.2 Overcoming transport constraints: how important is value per unit weight? The products with the highest value per unit weight - fresh mushrooms exported to Japan and incense exported to Argentina - are also the two with the most difficult or longest journey between producer and consumer. Overall, value per unit weight is not a signi- ficant constraint to commercialization unless transport is a constraint. Two cases illustrate the importance of adding value locally if transport is a problem. b Rubber: One community cannot sell rubber latex in an economically sustainable manner because of the low quality of transport infrastructure available to it. Families therefore process the latex into rubber goods for sale to local miners. b Cocoa: One community with poor transport infrastructure and a limited supply of cocoa beans processes the beans into paste in order to increase the product's value per unit weight sufficiently to make sales economically viable. Infrastructure Market, transport and communications infrastructure are all important in determining the ease with which NTFP commercialization can develop in different areas. Poor infrastructure is a particular problem in Bolivia, where 34 per cent of respondent households see it as a constraint to NTFP commercialization, compared with only 8 per cent in Mexico. Market infrastructure: For products for which there are many sellers and buyers, there may be an advantage in terms of transaction costs to bring them together in a physical place, but this is rarely the case for NTFPs, which typically have a restricted number of buyers at a par- ticular point in the value chain. None of the case study communities has access to a physical market for their product within their locality. In some cases, producers have to take their products to a market in a nearby community or town, and are therefore at the mercy of the local transport system or dependent upon one or more inter- mediary traders. These first-stage markets tend to be simple unloading centres with no appropriate storage or packing facilities, leading to high post-harvest losses. Typical strategies for overcoming lack of access to a physical market include: [i] processing [adding value locally], which decreases the unit weight and makes the product easier to transport or more attractive to traders {see Box 10.2); [ii] building effective working relationships with intermediaries; and [iii) organizing the accumulation of sufficient product within the community to attract traders. 110 Transport infrastructure: Transport infrastructure can be critical in determining a community's NTFP commercialization strategies. In the Mexican community of Santa Flor, the construction of a new road nearby - usually considered beneficial for communities - has reduced the frequency and increased the price of a boat service that previously enabled camedora palm collectors to transport their fronds quickly, cheaply and directly to a collection centre. Although community members have invested in domesticating the palm, they are not yet able to guarantee a sufficiently large and high-quality supply to make the additional expense of accessing their community worthwhile for traders. Low-quality roads or access by river almost always mean that producers must rely on selling to intermediaries who can cover the relatively high transport costs. These intermediaries may be based in the community, as in the case of a baker in Cuajimoloyas who uses her car to take bread to a weekly market in Oaxaca, and who also takes fresh mushrooms during the two-month season. In other cases, such as cocoa beans and latex rubber, traders regularly access the communities by boat to collect the NTFP. Although not considered an insurmountable problem in most of the case study communities, the lack of physical infrastructure becomes a real hindrance to the expansion of international trade, as an inefficient distribution system results in high handling losses and makes phytosanitary requirements difficult to meet. Communications infrastructure: Where transport infrastructure is poor, communications infrastructure becomes very important to enable producers to assess the range of prices available and the quality and quantity demanded by consumers. However, communications infrastructure is so poor as to be considered a constraint to successful NTFP commercialization in 68 per cent of the case study communities. As a result, producers have to rely on people - often the traders - visiting distant markets for information on prices, product quality and quantity. The introduction of telephone communication can make a real difference to producers. A simple but important service provided by the NGO in the pita case was to provide a telephone for communication between producer and supplier. Legality As highlighted in Chapter 8, only a small proportion of respondents feel that regulations are a barrier to entry. This is, in part, a reflection of the poor implementation of existing rules and regulations to the point that they are almost irrelevant to most community members. However, the experience of mezcal distillation from maguey illustrates the potential impact of a change in legal status on NTFP commercialization. It was only after mezcal Overcoming barriers production ceased to be an illegal activity in the mid-1980s that traders began to associate and to develop the branding that underlies the successful marketing strategies of today. However, recent changes in legislation, especially the declaration of Appellation of Origin, are forcing some small-scale distillers back into illegality because of their inability to meet the elevated costs and bureaucracy of being legal. In general, any kind of legal uncertainty is likely to lead to reduced benefits for producers, either because of their decreased bargaining power or because of the transaction costs involved in circumventing or meeting legal requirements. INDIVIDUAL CHARACTERISTICS OF ACTORS The project's data reveal substantial differences in various indicators of success (Chapter 4) - such as share of income obtained from the NTFP activity or value-added achieved — across communities and products. Some of this variation is clearly the consequence of the characteristics of the product traded, for example short seasonality, or of the producer community, such as level of social organization. However, the high degree of variation between households within a particular product/community case study suggests that the characteristics of individuals are also very important in determining how much effort households invest in NTFP activities and how successful they are. These may include the following. Education Education is accepted as an important factor in determining people's capacity to engage in income-generating activities, but its impacts on success in NTFP commercialization are mixed. Levels of formal education are generally basic: in 90 per cent of the communities, only one or two interviewees had secondary education. In the case of soyate palm, the more educated the producers, the larger the share of their income contributed by NTFP commercialization. Heads of pita-producing households are significantly better educated than households not engaged in pita activities. This probably reflects the fact that pita domestication is an activity primarily carried out by people with access to both land and financial resources. In the cocoa and jipi japa cases, however, heads of NTFP-collecting households have significantly fewer years of formal education compared with non-NTFP households, indicating that collecting is not an activity that benefits from many years of formal education, and that lack of education may be a barrier to adopting alternative livelihood options. For other NTFPs, there is no significant difference in formal education between households engaged in the activity and those not. At producer level, informal education and learning on the job may be more important in ensuring a household's success. With the exception of the recent mushroom activities, the average length of experience of producer households with case study NTFPs ranges from six to 42 years. Traders have a significantly higher level of education than collectors in both Bolivia and Mexico. As described in the previous chapter, several value chains are dominated and even established by very influential individual entrepreneurs, all of whom have high levels of formal education. In some cases, the necessary education to make the value chain succeed Is initially provided by the staff of supporting NGOs, followed by training of community members. One or more educated individuals are needed in all but the shortest value chains to establish the context within which people with less formal education can participate. However, individuals lacking basic literacy and numeracy skills are unlikely to be able to move beyond simple production and processing activities in the value chain. Business skills and experience Marketing skills are essential for traders such as the La Paz natural-rubber workshop owners, who must continue to out-compete cheaper oil-based rubber substitutes. Market contacts are particularly important if there are a number of different markets in which to sell products. Experience is an important asset for traders who remain surprisingly faithful to particular products, with 95 per cent stating that the NTFP they are trading Is as important —- or even more so - in their livelihood strategies now as it was 10 years ago. Box 10.3 illustrates how important experience has been for the camedora palm trader to establish market contacts and build up ‘credit worthiness’. For sellers of perishable products, experience Product diversification has helped rubber goods from Santa Rosa, Bolivia, maintain a foothold in the marketplace. 111 Isidro Rodrigue Commercialization of non-timber forest products is particularly important to gauge volumes to be sold. In the case of cocoa, age is positively correlated with success, but the reverse is true for pita. Willingness to take risks A characteristic that is difficult to assess but that interviewees highlighted as being important for attracting the interest of new clients and gaining their confidence is a degree of audacity, together with a willingness to take risks. The latter is particularly important for traders from outside the community who bear a high degree of risk, usually in terms of capital investment. In the case of cocoa beans, the regional traders have very low margins, suggesting that they are risk takers. The pita cooperative has become much more active since its presidency was taken over by a young and dynamic man with an interest in exploring new opportunities. Box 10.3 The road to becoming a camedora palm trader From having but a limited knowledge of camedora palm, Sr Palmero has advanced to a position where he controls Mexican exports and produces half the volume from his own plantations. A man in his 60s, he began work in the camedora palm sector at a young age, and as a warehouse employee in Veracruz, he observed closely the trading patterns of the palm. A chance meeting with an American businessman who repre- sented the major US trader of camedora palm gave him access to training, a source of investment capital and the opportunity to travel and observe the trade. Sr Palmero built on his body of experience, and a conviction that future demand could be supplied from cultivated palms, to establish his own plantations. There are no guarantees when capital is invested, but hard work and being prepared to take risks are the factors Sr Palmero sees as critical to his success. Of his countrymen, he says: These farmers are happy to sit and receive subsidies. Many communities who have extraction permits for camedora palm don't collect because they prefer easy work! They are too fearful of the risks involved, like snake bites.” Sr Palmero puts these risks in perspective: You would never do anything if you always thought of what could go wrong. He has been unable to convince the com- munities to get more involved in working with the palm. The communities, meanwhile, continue to think the acti- vity is too risky and only harvest palm when cash is needed. ‘It is not an activity we want to do day in day out, but it is an important part of our livelihood’, they say. Janett de los Santos 112 Social networks and cultural connections The risks mentioned above can be attenuated if a trader has recourse to strong social capital in the broadest sense. Thus the right to cut maguey is given to individuals who have been good citizens, fulfilling their responsibilities in voluntary community labour, rituals and ceremonies. Successful mezcal distillers do not just produce high- quality mezcal but also establish agreements with reliable clients who pay well year after year. In the case of tepejilote palm, some traders inherit contacts to good buyers from their parents, who traded before them. In the case of cocoa, intermediaries establish close contacts with community members by becoming godparents to their children. The matsutake mushroom chain was established by traders who were of Japanese and Korean origin and had family connections to the consumer market. In the case of incense, the trade is economically sustainable for the intermediaries because they are able to reduce expenses by staying with family members in the city. They are also skilled in being able to communicate both with the rural producers and their international clients. The fresh mushroom sellers in Oaxaca are originally from the collector communities and therefore know their products well. Organizational support Social capital is often informal in character, but entrepreneurs can also benefit from formal organizational support. This can come from the private sector, the government, NGOs and/or communities. The camedora palm trader, for example, received substantial support to establish his business from his US contacts. In the pita case, the entrepreneur is the president of the pita cooperative, who also works closely with the association of processors and receives NGO advice. The matsutake mushroom entrepreneur is reliant on an effective community organization to provide him with a good-quality supply of mushrooms. COMMUNITY CHARACTERISTICS The success of an individual may depend in part on the community lived in, particularly in the case of communities where NTFP trade is organized as a community activity. Beyond the infrastructure issues raised earlier, several other community characteristics can play a part in determining how successfully a community engages in NTFP commercialization. Culture/traditions Most of the case study products have some traditional use. A community's indigenous knowledge can be very important in determining its interest in a product and its ability to Overcoming barriers manage the natural problems. Thus Pescadito has abandoned pita because, unlike the indigenous community of Arroyo, it did not have the traditional knowledge to minimize damage to its pita plantations when they were ravaged by a fungal disease. Community-based management of maguey and soyate palm has benefited from indigenous knowledge of the resource. As described in Chapter 4, many NTFPs are considered particularly useful by poor people because they combine well with traditional livelihood strategies. In 32 per cent of the case study communities, a traditional link between the producers and the consumers is an important factor in maintaining the value chain. Internal and external organization The case studies illustrate that social organization plays an important role in determining the overall impact of NTFP commercialization on households and communities. Organization can exist within a single community or include several communities - as in the mushroom case. The existence of some degree of organization can have an important impact on: D quality or diversification of the product; D overcoming large distances to the point of sale; Dability to provide more consistent quantities of the product; D promotion of the product, e.g. attendance at fairs; PD power to negotiate with other actors in the value chain. Organization is not only important at the producer level. For example, in the case of pita, the organization of leather embroiderers has played a key role in creating a brand name and thus guaranteeing a market share for the producers. However, the existence of a community-based producers’ organization can have additional benefits through contributing funds to community projects, as in the case of the mushroom-drying facility. In four of the product cases (Table 10.1), there is no established community organization related to the sale of the product. These cases include products that are sold with minimal processing and/or direct access of the producer to the consumer. In the other six cases, there is either an Organization in existence or under development. The most common initial activity for community-based organizations is to ensure product supply is of adequate quantity and quality to meet trader requirements. This is particularly important where transport links are inadequate. Depending on the main constraints faced by the community, organ- izations then engage in resource management and/or processing, as well as in improving relationships with traders. Sellers’ organizations are less frequent and exist only in Arroyo, where 20 out of 22 pita sellers are members of UPIS-L, and in La Esperanza for mezcal. Table 10.1 gives an overview of the importance of external organizations - predominantly NGOs but also private entrepreneurs - in providing support to communities, often beginning with helping to establish or strengthen organization within the community. The ability of a community to organize itself to take action in favour of NTFP commercialization is influenced by a number of factors, including social cohesion [affected by ethnic and religious make-up], the existence of community organizations dealing with non-NTFP issues and the presence of charismatic individuals able to motivate people to action. Where the resource is predominantly harvested from private land, the organization is more likely to take the form of a cooperative of individual members, as in the pita case, whereas collectively owned resources lead to the development of communal organizations. CONCLUSIONS: ACCESSING NTFP VALUE CHAINS Lack of knowledge is the most significant barrier to further NTFP sales for all case study products. NTFP value chains are very vulnerable to market concentration in the hands of one person or organization because of distance to information sources and the generally low education levels of the collectors. Market information is particularly important for breaking into new markets, as Is indicated by the prevalence of influential entrepreneurs from outside the community in many of the cases, and for maintaining Selling plaited strips of palm in the local market, Guerrero, Mexico. Lack of access to market information on trends in product price, quality and quantity is one of the biggest challenges facing small-scale producers, processors and traders. 113 Commercialization of non-timber forest products Table 10.1 Role of internal and external organizations relating to NTFP trade in the case study communities organization Organic cocoa Incipient organization, based on existing education committees. German bilateral aid helped establish cocoa value chain through support to regional chocolate factory. At community level, CARE Bolivia provided technical support - improved cocoa bean fermentation technology and cross- pollination of domesticated plants — and organizational support. Natural rubber No organization. products CARE Bolivia provided technical support to reduce perishability of latex and to find alternatives to ammonia. Incense and copal _—_No organization. CARE Bolivia initiated domestication trials. Jipi japa palm Many weavers are associates of Rural Art. Surutu women excluded due to ethnicity, but organize informally to market hats. There is a regional organization, but Topiltepec palm weavers do not belong to it. Two new regional organizations: (i) bottling and commercialization enterprise; (ii) association for the certification of sustainable production, quality of mezcal and equity along the chain. Community allocates collection permits and provides training in harvesting methods. ~ Community enterprise manages drying facility and relationship between producers and fresh mushrooms exporter. Association provides training in product design, buys specific products at guaranteed prices, holds some of the women’s earnings in a rotating fund and provides health care benefits. NGO Sanzekan Tinemi set up regional programme in 1990 to make soyate palm trade more equitable, e.g. by controlling stock movement. Collaborates with Fair-Trade Holland, but has failed to raise producer prices and handles only 3-5 per cent of the local production. NGO GEA carries out basic research and has developed a sustainable management plan for the resource. NGO GEA carries out basic research on sustainable resource management, supports participatory land use planning by the community and has supported the forming of both regional organizations. Interventions by NGO Methodus in the dried mushroom market and a private company in the matsutake market. Both provided processing infrastructure, access to funds and transport, handling and marketing skills, and generally reduced ‘distance’ between consumers and collectors. Pita fibre Producer association negotiates prices, assures quality and quantity and provides training, credit, plants for domestication and fibre for processing. Some producers would still prefer option of selling to several traders. NGO Methodus facilitated communication - e.g. by providing a telephone — between producers and buyers, provided technical support for domestication and supported activities of the pita cooperative, including accessing government funds. _ Camedora palm One community organized producers to combine Y supplies to attract traders. External trader is key to existence of value chain. SEMARNAT supported studies to obtain collection permits and training for domestication. Tepejilote palm No organization. market share [e.g. through innovation). Provision of market information is one of the most important means of opening up the field to more entrepreneurs and greater competition. External actors - both the private sector and NGOs - also play an essential role in enabling producers to act upon information, for example through technical training to improve resource management and product quality, support for the establishment of producer and/or processor organizations and provision of credit for those activities that require advance investment. Access to credit is particularly important for traders wanting to invest more seriously in NTFP commercialization, which, with a few exceptions, only provides profits if large volumes are traded. General improvements in market, transport and communications infrastructure would facilitate commercialization of many products, including NTFPs. Improved education would similarly increase the ability of people to enter into some chains, and have a great impact on people's ability to advance within value chains. This 114 needs to be combined with capacity building in basic business skills and entrepreneurship. Constraints imposed by poor infrastructure and education can be overcome, however, through producer-level organization and the promotion of links between producers and enterprises further along the value chain. CHAPTER HIGHLIGHTS dD Lack of market information, together with the capacity to act upon it, is the key barrier to entry into NTFP trade. » Good organization contributes to improved product quality and quantity, more cost-effective transportation and increased negotiating ability. » Access to credit enables people to improve their NTFP-based income generation. 11. Research conclusions Comparing case studies to determine factors influencing success of NIFP commercialization Kathrin Schreckenberg, Jonathan Rushton, Fabrice Edouard, Dirk Willem te Velde, Elaine Marshall, Adrian Newton and Alan Bojanic The aim of this chapter is to highlight the main ways in which the project's findings and analyses advance current understanding of NTFP commercialization [as outlined in Chapter 1). The chapter begins by summarizing the conclusions of the study in relation to the project's research hypotheses, reflecting on the different components of successful NTFP commercialization. Elements of particular interest are the resilience of producer and trader groups in the face of change, the way these groups collaborate to succeed, and the importance of intermediaries in making markets accessible. The chapter then reviews the project's analytical framework, which enables comparison of the factors determining successful commercialization of different NTFPs, and illustrates its use in assessing the impact of different policy interventions. Finally the chapter reviews lessons learned by the project in relation to research methods for investigating NTFP commercialization. The conclusions presented here are based on investigation of 10 different products from 18 communities in marginalized areas of Bolivia and Mexico. The cases varied with respect to length of marketing chain {from products traded to the neighbouring community to those exported internationally], source of the product [from wild harvested to cultivated), level of processing and involvement of entrepreneurs and NGOs. In spite of this diversity, the cases shared certain aspects of their socio- economic and cultural context and concerned products that are traded outside communities, often to urban markets, with mostly stable or rising levels of demand. These similarities facilitated the identification of specific findings and trends that applied across many or all of the cases. However, conclusions should not be taken to apply to the great many NTFP cases in other parts of the developing world that concern low-value products, that serve local rural demand and have stagnant or declining markets. WHAT IS SUCCESSFUL NTFP COMMERCIALIZATION? As outlined in Chapter 4, the CEPFOR project identified many different definitions of what constitutes successful NTFP commercialization. One of the project's main con- clusions is that: Table 11.1 How does NTFP commercialization contribute to achieving the Millennium Development Goals? Goal 1. Eradicate extreme poverty and hunger Goal 2. Achieve universal primary education Goal 3. Promote gender equality and empower women Goal 4. Reduce child mortality Goal 5. Improve _ maternal health Goal 6. Combat HIV/AIDS, malaria and other diseases Goal 7. Ensure environmental sustainability Goal 8. Develop a global partnership for development NTFP subsistence activities can directly reduce hunger, while NTFP commercialization activities contribute to household incomes, thus enabling families to buy food and, in a few cases, save enough to engage in other activities that will enable them to escape poverty outright. "The timing of much NTFP income Is critical for enabling households to pay school fees and for books. Those activities that involve women play an important role in raising their status within their households and communities by providing them with an independent source of income. The impact of NTFP commercialization on Goals 4, 5 and 6 is likely to be indirect. In the case of Goals — 4 and 5, the accrual of income to women from NTFP commercialization can lead to a higher level of expenditure on children’s and women’s health. Organization into groups gives women the a opportunity to share experiences in the area of health and, in some cases, provides access to minor credits that can help women maintain their own and their children’s health. NTFP commercialization can lead to overexploitation of the resource base, but can also be associated with improved management of the natural resource and/or small-scale domestication, which could reduce pressure on natural resources. The impacts of NTFP commercialization on this goal are marginal. However, global NTFP commercialization can benefit from the development of an open, rule-based, predictable and non-discriminatory trading and financial system [Target 12]. Expansion of NTFP commercialization activities with greater recognition of the environmental services rendered could provide decent employment for _ young people in rural areas (Target 16) PD There is a need to engage directly with commu- nities, and other stakeholders in the NTFP value chain, to jointly identify criteria of success and discuss the trade-offs that might be needed between them. 115 Elaine Marshall Commercialization of non-timber forest products Can NTFPs provide a sustainable pathway out of rural poverty for future generations? A few definitions dealt with success at a pre- dominantly national level, e.g. through increased taxation or national status. Ways in which NTFP commercialization can contribute to achieving the Millennium Development Goals [MDGs] at national level are outlined in Table 11.1. All other definitions can be related directly to the project's six research hypotheses, as summarized below: Hyp 1: Successful NTFP commercialization has a positive impact on poverty reduction for the poorest producers, processors and traders The CEPFOR project confirms much of what was already known about the attractiveness of NTFP activities for poor people. These are frequently the only cash-generating activity available in a community or provide an important seasonal income. All the CEPFOR case study communities are considered to be poor in their national classification systems, and one-third of NTFP households interviewed stated they were unable to meet their basic needs. Within this generally poor context, however, the CEPFOR data contradict the belief that NTFP activities are the sole preserve of the very poor. Activities that require even small levels of investment, such as to finance collecting expeditions or small-scale domestication, are predomi- nantly carried out by people in higher livelihood status 116 groups. Even in cases where NTFP actors are predomi- nantly found in one livelihood status group, at least some are also found in other groups. In terms of their contribution to poverty reduction, NTFP activities in the CEPFOR case studies were: DB never poverty traps; Dsometimes safety nets: this is particularly true when assessed over a multi-year time frame, e.g. with increased pita domestication making up for declining coffee prices; D always gap fillers: depending on the product and community, the gap filled may range from 7 to 95 per cent of a household’s annual cash income; Dsometimes stepping stones to a non-poor life: none of the case study products provides a guaranteed stepping stone out of poverty for all actors in the value chain. Within just over half of the case studies, however, there are at least a few people who manage to use the activity to accumulate savings and move out of poverty. While grouping NTFP activities into three broad categories of coping, diversified and specialized strategies (Ruiz Pérez et al. 2004) is helpful for understanding the general role of NTFPs in rural economies, the CEPFOR findings suggest that there is as much difference in household success within individual activities as there is between activities. Broad categorization should not hide the fact that individual capabilities are important in determining the level of added value that a household can achieve from a given activity. Particularly important is the volume of product traded, and this, in turn, depends both on a household's access to the resource (see below} and its access to labour — both in terms of numbers and skills - for the NTFP activity versus other alternative income- generating activities available in the area. Hyp 2: Successful NTFP commercialization has a positive impact on women’s livelihoods Most but not all the case study NTFP activities involve women. However, even in the case study value chains dominated by women, there were some tasks - particularly collection and transport - that required collaboration with men. Several cases were considered successful by house- holds precisely because they involved both men and women - and sometimes children - in different aspects of the activity, making use of their varying labour availability and skills. Of all the tasks associated with NTFP value chains, women are most active in processing. The CEPFOR data confirm that NTFP processing activities are much like other activities in the rural non-farm economy that are often attractive to women because of their low skill requirements, small scale, low capital requirements and the fact that they are seasonal and combinable with domestic roles ({Haggblade et al. 2002). The key issues for women were the following: DB Although returns to labour were always lower for women’s NTFP activities than local wage rates, where these existed for women, women never- theless valued the opportunity to earn a cash income and the increased status this accorded them within their households and communities. Bb The main constraint on greater involvement of women in more profitable parts of the value chain is their traditional domestic duties, which restrict their movement from home. Hyp 3: Successful NTFP commercialization does not have a negative impact on the resource The CEPFOR case studies suggest that in 75 per cent of cases, NTFP commercialization initially has a negative impact on the resource. In 35 per cent of the case study communities, there was evidence of collectors shifting their harvesting activities to new, usually more distant, areas. Nevertheless, the local resource had only been exhausted in three communities, and this was caused not by over- exploitation but rather by shifts to alternative land uses Research conclusions lagriculture) or disease of the plant. As overexploitation becomes evident, two responses appear to dominate. As predicted by Homma [1992], one of these is domestication, the other being improved management of the wild resource. The key issues on resource use were: Db For those species that can easily be domesticated and in areas where people have access to individual plots of land, small-scale domestication is widespread, occurring in 35 per cent of the communities facing resource depletion. b Where products are primarily collected from communal land, and/or domestication is more difficult, improved management of the wild resource takes place - recorded in 20 per cent of the communities in which there was evidence of depletion. b Only 11 per cent of cases have neither resource management plans nor domestication in place. BThe case studies illustrate that NGOs have been essential in supporting and sometimes initiating the move to domestication and/or improved communal management, with technical information to carry out resource inventories and monitoring, and with organizational capacity building to spread understanding and ensure implementation of management plans, better harvesting methods and benefit-sharing schemes. Din several of the cases, an increased focus on NTFP production - whether as a domesticated understorey agroforestry crop or as a managed forest resource —- is providing new inceniives to conserve the forest. bDAs yet, there is no financial recognition of environmental services being rendered, e.g. in the form of price premiums for sustainably managed or organic production. Hyp 4: Successful NTFP commercialization does not have a negative impact on rights/access to natural resources for poor producers The CEPFOR case studies confirm the concern in the literature that as soon as a resource has commercial value, there is a real risk that the poor become disadvantaged. The key findings for this hypothesis were: Dd Poor communities are unable to meet the permit requirements for legal commercialization of NTFPs and are therefore unable to benefit from the advantages of trading in the formal sector. ) Within communities, poor individuals and families are less able to participate in domestication activities because they lack the necessary land and capital. There is no evidence that this decreases 117 GEA Commercialization of non-timber forest products Re-thatching a roof with the versatile soyate palm in the community of Topiltepec, Guerrero, Mexico. their access to what remains of the wild resource, but it can reduce their opportunity to participate in NTFP commercialization on an equal footing with people who have access to a cultivated - and therefore more reliable and often better-quality - resource. Dd The poorest are less likely to be disadvantaged with respect to participation in NTFP commercialization when communities initiate improved management of the communal resource to which all have equal access. b External support can play an important role in ensuring that the poorest are not disadvantaged, e.g. by providing training for harvesting, ensuring transparent decision-making practices, or pro- viding support for communities to meet permit requirements. Hyp 5: Successful NTFP value chains function in an equitable, transparent and sustainable manner One of CEPFOR's key achievements is its contribution to an improved understanding of NTFP value chains. Two findings stand out as being particularly important: 118 1. The important role of intermediaries: making markets accessible In all case studies, physical access to a market was difficult and, with the exception of the very shortest value chains, information about consumer demand was almost non- existent. Intermediaries were found to play a critical role in facilitating market access in the 10 case study value chains that moved products to national or international consumers. In seven of these cases, power was concen- trated in the hands of a single intermediary or a small group of intermediaries. Their key contribution entails identifying a market niche, providing contacts to con- sumers or retailers and informing suppliers about the quality standards required to meet consumer demand. This mirrors recent work on global value chains in Africa, which highlights the role of lead firms in value chains as providers of information about quality to their suppliers (Gibbon and Ponte 2005). In four of the seven intermediary- dominated cases, the intermediary also assists suppliers — with training and financial support — to achieve consistent quantities of the desired-quality products. The project found little evidence of outright exploitation often depicted in the literature, such as debt peonage. Rather, in line with Neumann and Hirsch (2000), it is clear that the assumption that intermediaries procure excessive profits is challenged when market costs are taken into account. Producers are least likely to be dissatisfied when price-setting is reasonably transparent and/or they have strong social ties to traders. No single governance structure dominates in the case studies, and governance may vary at different points along a single value chain as well as change over time. This reflects the dynamic nature of the case study value chains and the ability of key actors to adapt the chains to changing circumstances. 2. Resilience and adaptability of producer and trader groups In line with much of the literature about the boom-and-bust nature of some NTFP trade, the project found that the sustainability of NTFP value chains is vulnerable to a number of external shocks at both the supply and demand ends of the chain. Nevertheless, the project also revealed a great capacity of producers and traders to deal with risk and vulnerability, and overcome key constraints to NTFP commercialization, through a combination of the following: bBetter resource management [as discussed above} to provide more consistent quantities and qualities of the product. This enables producers to attract traders to their communities more easily. bd Product innovation to produce completely new products as well as variations on existing ones. Some value chains service highly specialized niches that appear to be less vulnerable to substitution. Such innovation may be carried out by producers, sometimes along with intermediary traders. D Marketing innovation to reduce transaction costs by establishing different marketing routes for existing or modified products. This may include traders selling a portfolio of products to defray fixed storage and transport costs by spreading them over several products, processors initiating schemes to brand or certify products, and various actors in the chain forming associations {see below] both horizontal and vertical. Hyp 6: Successful NTFP value chains allow for easy access by poor producers, processors and traders Poor producers, processors and traders are heavily disadvantaged by their lack of access to information - particularly when consumers are located at a distance from producers - and their generally low levels of education. Access to necessary information can be achieved by collaboration, either through vertical alliances with external entrepreneurs [as highlighted above) and/or through producer or processor-level organization. This collaboration is a key factor in assuring the resilience and adaptability of the case study value chains outlined above. Much of the literature - and indeed many project interventions - emphasizes the potential of horizontal integration of producers or processors into associations or cooperatives. The CEPFOR project found several such cases from small informal associations of sellers to large formal cooperatives with paid officers. Within communities, the resource tenure determines whether organization takes the form of a cooperative for privately owned resources or a communal organization for collectively owned resources. The key findings from this hypothesis were: Bb Poor producers, processors and traders cannot easily advance within NTFP value chains. Bb The single most important barrier to entry into NTFP value chains is lack of market information. D Organization can help to overcome lack of infor- mation and a number of other barriers to entry, such as inadequate transport and communica- tions infrastructure. DB Links between producers and enterprises further along the value chain can help to counteract the generally low education levels amongst producers, and bring the necessary business skills and entrepreneurship into the value chain. Db Associations may also be a means of ensuring access to credit. Although credit is not an insur- mountable barrier, several activities require Research conclusions advance investment. Traders’ profits are related to the volume of product traded, which is often determined by their access to credit. COMPARING NTFP CASE STUDIES: A MODELLING APPROACH As outlined in Chapter 1, NTFP research in the past has tended to focus on individual case studies. One of the key achievements of the CEPFOR project has been the development of an analytical framework that allows for comparison between case studies taking into account both quantitative and qualitative data. The preceding section highlights the many different facets of successful NTFP commercialization. Based on analysis of the project's data, a list of factors contributing to successful NTFP com- mercialization was derived. As described in Chapter 2, this factor list was scored for each of the project case studies, by referring to all the information collected using the different research methods. Those factors that did not differentiate between the cases, i.e. had the same scores for all cases, were discarded as not being relevant for this particular group of cases. The remaining 66 factors were grouped into five clusters according to the five types of capital assets of the sustainable livelihoods framework and used to build a probabilistic model based on a Bayesian belief network (BBN). A jipi japa weaver concentrates on starting a hat. Candelaria, i Bi bi a i ANA Bolivia. 119 Fausto Lopez Commercialization of non-timber forest products In the model, the five factors that were most frequently found to limit NTFP commercialization among the case studies investigated were: D inequitable exertion of market power along the value chain; Da product price that does not vary in response to changing costs of production; D low development of brand identity; Black of an organization that links producers or processors to buyers; PD poor harvesting methods leading to adverse effects on NTFP quality. Not all factors are equally amenable to policy- or project-level interventions. The CEPFOR decision support tool, based on the BBN, allows users to explore the potential impacts of different policy scenarios on house- holds and communities, as illustrated in Box 11.1. This modelling exercise indicates that a specific intervention can have contrasting effects on the commercialization of different NTFPs, depending not only on the characteristics of the product, but also on the socio-economic context within which commercialization is taking place. Effective interventions depend upon understanding the factors limiting NTFP commercialization in each specific case, and the degree to which these factors are under the control of different actors in the NTFP value chain. Consideration of the impact of policy interventions on the availability of different assets accessible to local communities, according to the livelihood framework adopted here, can provide valuable insights into the likely impact of such interventions on livelihoods. APPROACHES TO ANALYSING THE IMPACTS OF NTFP COMMERCIALIZATION AND ENGAGING THE POOR IN VALUE CHAINS: LESSONS LEARNED The purpose of this concluding section is to provide a brief overview of the key methodological issues that the CEPFOR project found to be important in carrying out research into NTFP commercialization. Many well- meaning policy interventions inadvertently create greater barriers to entry into the NTFP commercialization sector (Vosti et al. 1997]. In order to ensure that unintended negative impacts of policies are minimized in favour of positive impacts, decision-makers could benefit from an in-depth understanding of how NTFP value chains function and their importance to different actors. The experience of the CEPFOR project suggests that an effective research approach should include: Dinvolvement of an interdisciplinary team and methods to ensure understanding of all aspects of the value chain, from the status and manage- 120 Box 11.1 Exploring different policy scenarios using the CEPFOR decision support tool (CDST) The CDST can be used to evaluate the potential impact of different policy interventions on livelihoods. As an illustration, three different interventions are considered here: 1. Provide credit for community-level NTFP-based enterprises. 2. Improve rural transport and communications infrastructure. 3. Promote better management of the communal natural resource. According to the DFID sustainable livelihood frame- work, the potential impacts of these interventions can be visualized by considering the availability to local communities of the different capital assets that influence the success of NTFP commercialization. The radar diagrams illustrate how different inter- ventions can have contrasting effects on different capital assets, taking the examples of mushrooms (Cuajimoloyas), maguey (La Esperanza) and jipi japa (Surutu). In each diagram, the five spokes represent the five capitals (natural, physical, social, human and financial). The values along the spokes represent the availability of individual assets as inferred by the CDST model from data for the three case studies. The area within the pentagon represents the overall availability of the combined assets for engaging in successful NTFP commercialization. Intervention 1 can be seen to have generally increased financial capital assets, while it had little effect on natural capital. In contrast, intervention 3 had a pronounced impact on the availability of natural capital. Impacts also differed between NTFP case studies. Impacts were generally more pronounced for jipi japa than for the other case studies shown here, reflecting the relatively low availability of capital assets at the outset in this case study. These results highlight the value of the BBN as a decision support tool, enabling the potential impacts of different policy interventions to be evaluated for each individual case. Where availability of assets is relatively high, such as human and social capital in the case of mushrooms in Cuajimoloyas, the impacts of any intervention on these assets are likely to be relatively slight. However, in cases where specific assets are severely lacking, targeted policy interventions can have pronounced impacts, increasing the probability of NTFP commercialization being successful. In the three case studies illustrated in the diagrams, the lack of natural capital assets is striking, and therefore policy interventions aimed at improving management of natural resources are likely to have greater impact than the other policy options shown. Research conclusions Policy intervention scenarios: radar diagrams illustrating the availability of different assets for commercialization Policy intervention scenario 1. Provide credit 2. Improve rural transport 3. Promote better for community-level and communications management of the NTFP-based enterprise infrastructure communal natural resource Abbreviations for capital asset types: N, natural; P, physical; S, social; H, human; F, financial 121 Elaine Marshall Commercialization of non-timber forest products ment of the resource to enterprise economics, governance and equity issues between different actors along the chain and national policy interventions. DA combination of work at the source [in the community) and along the value chain [to attempt to capture all the actors and understand their motivation/incentives), and, where possible, at the consumer level. The collection of accurate and complete data becomes increasingly difficult moving away from the product source, where NGOs can help to build mutual trust, towards the consumer, where trusted entry points are fewer. Dd The use of enterprise budgets and calculation of returns to labour. These two tools are very useful to gain an in-depth understanding of the costs and benefits involved in NTFP commercialization activities, including hidden costs, impacts of subsidies or grants and so on. » Graphical representation, and where possible some quantification, of the value chains to identify key organizations and actors. Initial representations benefit from further discussion, and where neces- sary data collection and clarifications. » Participatory approaches to defining success [e.g. environmental, financial, social) according to the perspectives of different stakeholders, and a framework for identifying trade-offs between stakeholders’ objectives. Db Participatory research with NGOs and communities to increase the likelihood of joint ownership of results, and of future joint action to take advantage of opportunities and overcome constraints. A thorough presentation of considered research methods is provided in the Methods manual, on the CD- ROM and on the project website. The manual has learned from, and improves upon, the methods used during the CEPFOR project. It provides the user with tools to assess and analyse the factors identified by CEPFOR as critical in influencing successful NTFP commercialization. They can be adapted for local conditions, and their intention is to provide a methodological framework for undertaking community, household and market chain research. Looking across Madidi National Park towards the incense and copal groves. ‘Y= 122 12. Policy options Increasing opportunities for successful NTFP commercialization Kathrin Schreckenberg, Jonathan Rushton, Fabrice Edouard, Dirk Willem te Velde, Elaine Marshall, Adrian Newton and Alan Bojanic A new day dawns on the banks of the river Beni. Carmen del Emero, Bolivia. The CEPFOR project highlights the fact that NTFP commercialization activities can, in some circumstances, contribute to rural poverty reduction. Without the proper regulation and support, however, they can also lead to overexploitation of the natural resource. There is justification, therefore, for well-targeted interventions to optimize the benefits of NTFP commercialization and reduce the risks of any negative impacts. As outlined in Chapter 8, there are few policies, laws or institutions designed specifically to promote NTFP commercialization. Like the rural non-farm economy within which they are embedded, NTFP activities are complex and straddle the regulatory and promotional responsibility of multiple central government ministries [Haggblade et al. 2002). The wide geographic spread of some NTFP value chains from far-flung producers to consumers, who may be located in other regions or countries, further complicates the achievement of a coherent set of interventions in favour of NTFP commercialization activities. In addition, interventions in this sector may be initiated by government, at various levels, as well as by NGOs and the private sector, with the latter two intervening predominantly in specific communities or value chains. This chapter presents options for interventions based on those that the CEPFOR project found to be helpful for, or a constraint to, commercialization. They are split into government-level interventions in the form of policy change and public investment, and interventions at community level, which may be implemented by government, NGOs or the private sector. Key areas of intervention are summarized in Table 12.1. More detailed country-specific options for Mexico and Bolivia respectively are provided in policy briefs on the 123 Elaine Marshall Commercialization of non-timber forest products International development policies » High investment Poverty Infrastructure Land tenure Environment Education is » Low investment Dd Low tax returns » High tax return Dd Stimulates » Can deter economic economic transactions transactions National government policies 4 | D Infrastructure policy: D Business policy Community policies Transport system _— D Food standards policy Communications system D Tax policy » Education policy » Export policy » Land tenure policy Dd Environment policy Land and resource access and management % Informal sector ee) ; Formal/informal sector Formal sector D Transport : f » Mixture of transaction D Business regulations » Communications — costs of formal and » Food safety regulations _D Information informal sectors » Tax system Db Landaccess » Entry costs of moving D Market entry costs et ve from the informal to formal sector i Product : EE ‘ ——— Processors i Money <<, oe Product Collectors phigpots : Mone Product Producers Product J | Product x Traders ——<—<=—— Consumers or money or money —— Processors Money Money =