aD Brinta WCNC AIN 22183 Reprnwh Vcle Researching factors that influence successful commercialisation of Non timber forest products 565 Researching factors that influence successful commercialisation of Non timber forest products (NTFPs). Investigacién hacia factores de influencia en terminus de_ lograr comercialisacion exitosa de productos forestales no maderables (PFNMs). Marshall, E.'", Schreckenberg K.”, Newton, A.C.°, Bojanic, A.’ 'Forest Programme, United Nations Environment Programme -World Conservation Monitoring Centre (UNEP-WCMC), 219 Huntingdon Road, Cambridge, CB3 ODL, United Kingdom, Tel: +44 1223 277314, Fax: +44 1223 277138, e-mail: elaine.marshall@unep- weme.org; ‘corresponding author Overseas Development Institute (ODI), 111 Westminster Bridge Road, London, SE1 7JD, e- mail: k.schreckenberg@odi.org.uk *Head of Forest Programme, UNEP-WCMC, e-mail: adrian.newton@unep-wemce.org *Vice Minister of Agriculture, Livestock and Fisheries, Avenida Camacho 1471, La Paz, Bolivia, e-mail: a_bojanic@hotmail.com Abstract The commercialisation of NTFPs is not consistently successful in alleviating poverty by providing benefits to producers, processors and traders. In order to determine the characteristics associated with success in terms of NIFP commercialisation, this project will evaluate the opportunities and constraints to commercialisation of NIFPs at the community and household level, though comparative analysis of case studies. In addition, market structure will be analysed for selected NTFPs, to identify interventions necessary for successful commercialisation. Gender issues and community perceptions of success will receive particular attention. The selection of two countries, Bolivia and Mexico, that differ in social and cultural structures will enable comparative analysis of the factors influencing NIFP commercialisation, thereby permitting implications for other countries in the region to be drawn. Resumen La comercicalizacion de PFNMs no siempre contribuye efectivamente a aliviar la pobreza atravez de los benficios que brinda a los productores, comercialzadores y procesadores. Para determinar las caracteristicas asociadas con el éxito en la comercializacion de estos productos, este proyecto evalua las oportunidades y restricciones a nivel de las comunidades recolectoras y de los hogares involucrados mediante estudios de caso. Adicionalmente se analizan las estrucuturas de mercado de productos selecccionados, y se identifica los tipos de intervenciones que se requieren para hacer proyectos exitosos. Aspectos de genero y las percepciones de las comunidades son debidamente analizadas. El hecho de haber seleccionado a Bolivia y a Mexico permitira analizar estos factores bajo condiciones socio-culturales diferentes, y por lo tanto se deribaran las implicaciones para otros paises 0 regiones con condicones relacionadas. Bussmann, R.W. & Lange, S. — Conservacion de Biodiversidad en los Andes y la Amazonia 566 Marshall, E., K. Schreckenberg, A.C. Newton & A. Bojanic Research project objectives and collaborators This 3 year research project (November 2000 - October 2003), funded by the Forestry Research Programme of the UK Department for International Development, will explore the relationship between poverty, gender and successful commercialisation of NTFPs. It will provide an important understanding of how domestic markets function and identify the type of information necessary to provide the basis for designing market interventions, which result in increasing benefits to rural communities. NTFPs differ in a number of characteristics including yield, perishability, value, and seasonality of availability etc. In addition, the local communities harvesting these resources differ in social structures (including gender influence), culture, degree of marginalisation, as does access to capital resources. A comparative analysis of different NIFPs, considering such variables can therefore enable key criteria for successful commercialisation to be identified. The main collaborators on this project are the UNEP World Conservation Monitoring Centre and the Overseas Development Institute in the UK: Grupo de Estudios Ambientales, Grupo Mesofilo, Methodus Consultora, SEMARNAP and PROCY MAF in Mexico; Universidad Nur, Care-Bolivia and the Super Intendencia Forestal in Bolivia; and Fauna & Flora International in Nicaragua. The role of NITFPs in promoting forest resource conservation and poverty alleviation Non-timber forest products (NTFPs) are biological resources derived from both natural and managed forests and other wooded areas (Peters, 1996). NTFPs are an important tool in addressing poverty issues for marginalised, forest dependant communities, by contributing to livelihood outcomes, including food security, health and well being, and income (FAO, 1995; Falconer, 1997). In many parts of the world these resources are critical, especially for the rural poor and women, and may provide them with the only source of personal income (Rodda, 1993; Falconer, 1997). It is the socially most marginalised people who are the main actors in NTFP extraction (Ros-Tonen, 1999). Despite this, the contribution of women, especially from indigenous populations, to rural development in Latin America, remains largely undervalued and understudied. Interest in NTFPs has grown with increasing awareness of tropical forest deforestation and increasing recognition of the need to add value to forest resources, in order to compete with other land uses. Through the holistic management of NTFPs, an attempt is made to maintain and sustain the resource and its users; contribute to sustainable development; conserve forests and biodiversity, and to promote non-traditional enterprises to improve local economies and diversify the economic base of the rural poor (Falconer, 1997). There are at least five distinctive features of forest product conservation and development initiatives which were identified as needing further research to promote successful NTFP commercialisation, from a CIFOR meeting sponsored by the NTFP network (adapted from Wollenberg and Ingles, 1998): - Forest products are often managed under sensitive and complex social arrangements, or with multiple management objectives. Bussmann, R.W. & Lange, S. — Conservation of Biodiversity in the Andes and the Amazon Researching factors that influence successful commercialisation of Non timber forest products 567 - Forest products usually involve strategies based on multiple products, therefore the costs of collecting the information can be high relative to the benefits gained - Forest products are often collected in remote areas requiring high transport costs, and production and collection can be irregular. - There is often a lack of formal skills in business, ecological and impact social assessment. - The ecology, management and demand for many forest products is poorly understood, and many forest products have not been well studied or documented. Constraints to successful commercialisation Within the scope of this research project, we have chosen to define commercialisation as an exchange of money resulting from the sale of a product outside the community of origin. Although NTFP commercialisation has been widely promoted by development organisations, success of such initiatives has been highly variable. Existing research suggests that the main constraints to successful NTFP development are related to limited access to the following types of capital asset by small-scale poor farmers and landless poor families (especially women): - natural: secure tenure or usufruct rights over land and resources (Clay, 1992; Richards, 1993; Ruiz-Perez and Byron, 1999); - human: labour constraints (especially time spent away from home by women), awareness of the commercialisation potential of some products, knowledge about processing and storage, and market information and marketing know-how (Southeimer, 1991; Falconer, 1997; Tommich, 1998; Banana, 1998); - financial: to invest in improved physical capital (FAO, 1991; ILO, 1995; Verheij and Reindeers, 1998); - physical: market access (especially transport), inputs for new processing/ storage techniques (Dixon, 1991; Clay, 1992; Paddock, 1992, Falconer, 1997; Fontana, 1998; van Dick, 1998; Tommich, 1998); - social: negotiating power (especially for female producers with respect to male market intermediaries), and willingness to collaborate in order to secure improved marketing outcomes (Amold and Ruiz Perez, 1999; Marshall and Newton, 2000); Available evidence indicates that information pertaining to marketing processes and structures is one of the most significant constraints to successful development of NTFP activities as part of livelihood strategies (Tommich, 1998; Ruiz-Perez and Byron, 1999). Research project case studies We are collaboratively undertaking research with the following partners in Bolivia and Mexico, in case study communities where NTFPs are already commercialised to some extent, and with varying degrees of success, and as an activity, represent one of the most important income generating options available. MEXICO - Grupo de Estudios Ambientales, State of Guerrero - Brahea dulcis (Palma soyote) & Agave cupreata Maguey); Bussmann, R.W. & Lange, S. — Conservacion de Biodiversidad en los Andes y la Amazonia 568 Marshall, E., K. Schreckenberg, A.C. Newton & A. Bojanic - Grupo Mesofilo, State of Oaxaca - Chamaedorea tepejilote & Chamaedorea elegans, C. concolor, C. Oblongata; - Methodus consultora, State of Oaxaca - Tricholoma magnivelare (White mushroom, Boletus edulis (Boletus) and Amonita coesarea (Yellow mushroom), & Aechaemia magdalaneae, Pita. BOLIVIA - CARE project Ambor6, Department of Santa Cruz: Carludovica Palmata (Jipi Japa palm) - CARE project Madidi, Department of La Paz: Theobroma sp (Wild cocoa); - CARE project Mima, Department of La Paz: Himenaea sp Estirax ovatus, & Microcarpus frondosus (inscence) & Goma silvestre (natural rubber). Defining “success” in successful commercialisation During workshops held earlier in 2001, in both Bolivia and Mexico, participants drawn from the conservation, development and research communities within each country, were invited to consider and define the main constraints to successful NTFP commercialisation faced by communities in these regions. However, we decided first of all to take an innovative approach to considering the factors which influence successful commercialisation of NTFPs, and using a combination of literature sources and participant experience in both Bolivia and Mexico, we collectively defined a variety of different ways in which success may be defined. Participants were then asked to rank how successful NIFP commercialisation had been for their case study communities. Table 1 illustrates the 18 definitions of success with their mean rank, and in descending order, the overall measures of success considered most frequently achieved (combined results from Bolivia and Mexico). We can see that participants from both countries considered that the NTFP commercialisation projects with which they had had contact had been most successful in terms of increasing income to the community, improving the economic status of women within communities, strengthening local culture, and improving the conservation of forest resources. We may therefore conclude from these results, that the commercialisation of NTFPs has the potential to provide a diverse set of benefits to local communities and their natural resources. However, we can also see that participants did not consider NIFP commercialisation to have been successful in improving social justice, in terms of increasing transparency and equitable gains distribution, nor in strengthening NTFP markets. This outcome further substantiates research findings that the most common reason for such failures, is a widespread lack of information within communities about local, national and international markets, and in particular, the structure and function of marketing networks. The fact that some communities benefit from successful commercialisation, may in part be explained by the existence of more equitable and transparent trading conditions, and the increased ability to be able to exert market power. The aim of this project, therefore, is to help small-scale producers to supply markets more successfully, by provision of practical tools for market analysis and product development. Bussmann, R.W. & Lange, S. — Conservation of Biodiversity in the Andes and the Amazon Researching factors that influence successful commercialisation of Non timber forest products 569 Factors influencing success throughout the marketing chain Following on from defining success, we used the workshops to consider the stages of commercialisation for a NTFP, and the limiting factors which constrained this process, at various steps in the network. We reached consensus on the structure of the chain, likely to be common to most NTFPs, and it included the following distinct phases: - Production - Collection - Processing - Storage - Transport - Marketing (promotion of product) - Sale Tables 2 and 3 illustrate the collective workshop evaluations of the factors influencing success throughout the commercialisation network, and which factors were most limiting in Bolivia and Mexico respectively. Table 4 clearly illustrates a trend between both Bolivia and Mexico in terms of the importance and location of limiting factors in the commercialisation network. It may be interpreted from these results that there exists a research need to address commercialisation obstacles in marketing and sale sectors. The current project has therefore been designed to directly meet the needs identified at the workshops, and our research hypotheses designed to reflect these priority research areas. The work programme we have collaboratively developed to answer our research hypotheses, places an emphasis on two research foci: A. The impact of NIFP commercialisation on different groups of participants in the commercialisation process (both within communities and along the market chain) as well as on the environment (Hypotheses 1-4). B. The understanding the different types of market structure that exist for NITFPs and, in conjunction with the earlier hypotheses, their relative impact on participants (Hypothesis 5-6). Research hypotheses and foci 1. Changes in trade in NTFPs have a greater impact on the poorest producers, processors and traders. 2. Changes in trade in NTFPs have a greater impact on women’s livelihoods. 3. Increase in the volume of NTFP trade leads to forest overexploitation and/or domestication. 4. Changes in the volume of NTFP trade lead to reduced rights/access to the resource for the poorest producers. 5. The successful commercialisation of an NTFP depends critically on the existence of an accessible market, potential demand, and the access by producers, processors and traders to market information. Bussmann, R.W. & Lange, S. — Conservacion de Biodiversidad en los Andes y la Amazonia 570 Marshall, E., K. Schreckenberg, A.C. Newton & A. Boyanic 6. The number of demanders and suppliers, the exertion of market power, barriers to entry, and the degree of vertical and horizontal integration determine how competitively poor producers, processors and traders can participate in NTFP commercialisation. SOCIO-ECONOMIC IMPACT FOCUS We are currently underway with our first stage of socio economic research which aims to assess the impact of commercialisation on communities. This entails the collection of contextual information on each case study community. We have jointly developed a framework by which research collaborators will generate (through the implementation of participative research tools), comparable information about communities on the following areas: geography; history; infrastructure; social structure; land use; income and expenditure; labour resources; the NTFP resource itself; trade; and impact of changes in commercialisation. This information will be collaboratively analysed in a project workshop, and then used to refine a semi structured survey tool which will be implemented as the second stage of socio economic research, in the same case study communities, but at the household level. The methodology has been designed to generate information that will facilitate further understanding of the patterns and trends in NTFP use, income generation, and factors which contribute to success or failure, and how these differ between and within communities, with a specific focus on gender and differing levels of poverty. This data will then be in part cross checked, and related to the information generated in the marketing component of the research. MARKET ANALYSIS FOCUS We have also collaboratively developed a marketing research methodology which will be implemented along all the known marketing chains for selected case study NTFPs. There exists a lack of quantitative information pertaining to marketing networks, and a need to document the process of commercialisation throughout the chain, or network. This methodology includes the following steps: - Identifying the chain; - Describing the principle and secondary actors; - Analysis of demand; - Validation of the Homma model (growth curves exhibited by natural resources in relation to their management and use and the potential consequential phases of domestication and product substitution); - Property and resource access rights; - Processing; - Actual and potential demand; - Cost benefit analysis (CBA) and product valuation at each marketing stage; - Social informal institutions and transaction costs; - The role of the public sector; - Analysis of market structure; - Final analysis of factors influencing success and failure. Research project outputs Following the implementation of this research plan, the research project aims to deliver the following outputs: Bussmann, R.W. & Lange, S. — Conservation of Biodiversity in the Andes and the Amazon Researching factors that influence successful commercialisation of Non timber forest products 571 a methodology for comparative analysis of the factors influencing success of NTFP commercialisation a decision-support tool (manual) for local communities, developed and tested with their participation, for successfully developing NTFP resources a decision-support tool (Expert System) for use by decision-makers to evaluate the potential for successful NIFP commercialisation. The community manual, or set of guidelines will be designed to enable marginalised communities to evaluate the market potential of locally and regionally important NTFPs, and to develop suitable marketing strategies for these. The manual will be piloted in selected communities in Mexico, Bolivia, and in Central America. Following the closure of the project, it will be disseminated at a project maturation workshop (expected to be held in Nicaragua) in the form of a published manual, and consequently via the internet. References Arnold, J.E.M. and M. Ruiz Perez. 1999. The Role of Non-timber Forest Products in Conservation and Development, pp17 - 42, in E Wollenberg & A Ingles (eds.), Incomes from the forest: Methods for the development and conservation of forest products for local communities. CIFOR / IUCN. Banana, A.Y. 1998. Non Timber forest products marketing: field testing of the marketing information system methodology. In: Domestication and commercialisation of non- timber forest products in agroforestry systems. Non-Wood Forest Products 9. Food and Agriculture Organization of the United Nations. Clay, J.W. 1992. Some general principles and strategies for developing markets in North America and Europe for non timber forest products: Lessons from Cultural Survival Enterprises, 1989-1990. Adv. Econ. Bot. Dick, J. F.W. van. 1998. An assessment of non timber forest product resources for the development of sustainable commercial extraction, in CARPE (ed). The non wocd forest products of Central Africa: current research issues and prospects for conservation and development. Proceedings of an international expert meeting on non wood forest products in Central Africa, Limbe, Cameroon. Dixon A., H. Rodifi & L. Silverman 1991. From Forest to Market: A feasibility study of selected NTFPs from Borneo for the U.S. market. Falconer, J. 1997. Developing Research Frames for Non-Timber Forest Products: experience from Ghana. Pages 143 - 160 in M. Ruiz Pérez, & J.E.M. Amold (eds.), Current Issues in Non-timber Forest Products Research. Centre for International Forestry Research, Bogor, Indonesia. Falconer, J. 1992. Non-Timber Forest Products in Southern Ghana: A Summary Report. ODA Forestry Series Number 2, ODA, London. FAO (Food and Agriculture Organisation of the United Nations). 1995. Non Wood Forest Products for rural income and sustainable forestry. NWFPs 7, FAO, Rome. FAO. 1991. Chapter 3: Restoring the Balance: Women and Forest Resources. Pages 67 - 90, in Southeimer, S. Women and the Environment: a reader. Crisis and Development in the third world, Earthscan. Fontana, M., S. Joekes & R. Masika 1998. Global trade expansion and liberalisation: gender issues and impacts, BRIDGE Report No. 42, IDS, Sussex. Commissioned by DFID. Bussmann, R.W. & Lange, S. — Conservacion de Biodiversidad en los Andes y la Amazonia 572 Marshall, E., K. Schreckenberg, A.C. Newton & A. Boyanic International Labour Office 1995. Gender, Poverty and Employment; Turning Capabilities into Entitlements, Geneva. Marshall, E. (ed). 2001a & 2001b. Taller de comercialisazion de productos forestales no maderables (PFNM): factores de éxito y fracasoso. Workshop proceedings, Mexico and Bolivia. Cambridge, UK: UNEP-WCMC. Marshall, E. & A. C. Newton, 1999. In press: Non-timber forest products in the community of El Terrero, Sierra de Manantlan Biosphere Reserve, Mexico: is their use sustainable? Journal of Economic Botany. Paddock, C. 1992. Marketing of Non Timber Forest Products in Western Amazonia: general observations and research priorities. Pp 43-50 in D.C. Nepstad and S. Schwartzman (eds.), Advances in Economic Botany 9. The New York Botanical Garden. Peters, C.M. 1996. The ecology and management of non timber forest resources. World Bank Technical Paper 322. Washington, D.C., USA. Richards, E.M. 1993. The potential of Non Timber Forest Products in sustainable natural forest management in Amazonia. Commonwealth Forestry Review Vol 72. Rodda, A, 1993, Women and world development series. Ros-Tonen, M.A.F. 1999. NTFP research in the Tropenbos programme. In seminar proceedings: NTFP research in the Tropenbos programme: results and perspectives. Ruiz-Perez, M. & N.A. Byron, 1999. Methodology to Analyse Divergent Case Studies of Non Timber Forest Products and their Development Potential. (CIFOR). Forest Science, Vol 45, No 1. Southeimer S, 1991 (ed). Women and the Environment. a reader. Crisis and Development in the third world, Earthscan. Tommich, T.P. 1998. Markets, policies and institutions in NTFP trade: nothing is perfect. In: Domestication and commercialisation of non-timber forest products in agroforestry systems Non-Wood Forest Products 9 Food and Agriculture Organization of the United Nations. Verheij, B. & M.A.Reindeers 1997. The status of the extraction and marketing of timber and non timber forest products by Amerindians in the Guyanese context. Bos newsletter 16(1): 15-22. Wollenberg, E., and A. Ingles 1998. (Eds) Incomes from the forest. Methods for the development and conservation of forest products for local communities. CIFOR; IUCN. Bussmann, R.W. & Lange, S. — Conservation of Biodiversity in the Andes and the Amazon Researching factors that influence successful commercialisation of Non timber forest products 573 Table 1. Definitions of success. | Success rank 1 least & 4 most successful Definitions of success Original Mexico Bolivia origin of Work shop | Work shop lt definition results results Increasing family income within the | Literature 3.21 Bl community Le Improving the economic status of | Literature 3.05 3.18 | women within communities | | Strengthening local culture Literature 3.22 3 Improving the conservation of forest | Literature 3.37 2.8 ar resources Improving local capacity "iigetans | Improving the control and ownership | Literature of forest resources within the 3.26 2.87 3.26 2.8 references community Pe Improving consumer well being | Literature 3.07 2.9 (Mexico 5 blanks) Increasing the proportion — of | Literature 2.84 BS)i\ community members with paid work Strengthening community | Mexico 3.05 2.61 organization Improving well being - education, | Mexico | 2.88 2.69 | health, diet etc, within communities | Improving the economic status of the | Mexico 2.55 2.8 oorest members of the community Improving social justice - | Mexico 2.54 2.76 transparency and equitable distribution (Mexico 6 blanks) IL Strengthening markets Mexico 2.89 2.14 Increased ability to meet consumer | Bolivia | 2.78 governments Increasing value added locally Bolivia al | 2.73 Increasing income generated to | Bolivia 2.71 businesses Increasing income generated to | Bolivia Pe) norms Ability to adhere to international | Bolivia | Source: Marshall, E. (ed). (2001a) and (2001b). Bussmann, R.W. & Lange, S. — Conservacion de Biodiversidad en los Andes y la Amazonia 574 Table 2. Key factors limiting success in Bolivia. Marshall, E., K. Schreckenberg, A.C. Newton & A. Bojanic COMMERCIALISATION STAGE | LIMITING FACTOR Processing = Lack of adequate technical support » Lack of access to information and exchange of commercialisation experiences | Transport « Large distances to point of sale = Lack of infrastructure Marketing * Demand = Lack of community / marketing group organization » Lack of management capacity (deemed the most limiting factor of all) * Lack of access to marketing information Sale *Product price *Lack of appropriate technical support *Lack of community / selling group organisation Table 3: Key factors limiting success in Mexico. COMMERCIALISATION LIMITING FACTOR STAGE Marketing Lack of information | All stages Lack of financial instruments 4 | Transport Lack of infrastructure All stages Lack of community organisation Sale Low product price Bussmann, R.W. & Lange, S. — Conservation of Biodiversity in the Andes and the Amazon Researching factors that influence successful commercialisation of Non timber forest products 575 Table 4; The importance of constraining factors throughout the commercialisation network. IMPORTANCE OF | CONSTRAINING FACTOR COMMERCIALISATION BOLIVIA MEXICO | STAGE Marketing __ #4% aad | Sale KK RK Processing r oie eet Transport | eae iy Production oy nt Collecting / Harvesting seat | Storage __ a Bussmann, R.W. & Lange, S. — Conservacion de Biodiversidad en los Andes y la Amazonia 576 Marshall, E., K. Schreckenberg, A.C. Newton & A. Bojanic Bussmann, R.W. & Lange, S. — Conservation of Biodiversity in the Andes and the Amazon