Socioeconomic factors in non timber forest product (NTFP)

management Mike Jacobson

Penn State

Rural poor

•“Non timber forest products mobilized to bridge regular gaps in income or need, and when there is a catastrophic downturn in household economies”

Emery 1998

• 56% of rural involved in some informal activity

• E.g., Firewood, maple syrup, other forest products

Non-timber forest products (NTFPs)

• Non-timber forest products are not defined by what they are, but rather by what they are not.

• Very diverse group of products – Also referred to as:

• Nontraditional, secondary, minor, non-wood, specialty

• USDA Forest service term = special forest products

• Natural products – untapped markets

Ginseng

Ginseng

NTFP characteristics• Relatively low yield and returns for hard work• Substitution and competition• Short-term trends or fads,

– but often require long-term resource investment – Most NTFPs are only present in small volumes and

therefore unlikely to attract market investment • The informal, invisible trade

• Poverty trap or stepping stone?

Integration into cash economy (%)

1007550250

Pro

duct

con

trib

utio

n in

to h

ouse

hold

inco

me

(%)

22

21

8

57

56

53

28

25

20

34

38

48

50

47

37

46

45

19

1817

16

36

7

41

11

3

40

15

30

105

32

55

5451

39

13

6

1

52

27

9

31

2

61

35

14

6059 4

24

23

49

58

44

12

43

42

2926

33

100

75

50

25

0

R2 = 0.861 y=e0.0439x

Coping

Integrated

Supplementary

Household strategy

Specialised_Cultivated

Specialised_Natural

Integration into cash economy (%)

1007550250

Pro

duct

con

trib

utio

n in

to h

ouse

hold

inco

me

(%)

22

21

8

57

56

53

28

25

20

34

38

48

50

47

37

46

45

19

1817

16

36

7

41

11

3

40

15

30

105

32

55

5451

39

13

6

1

52

27

9

31

2

61

35

14

6059 4

24

23

49

58

44

12

43

42

2926

33

100

75

50

25

0

R2 = 0.861 y=e0.0439x

Coping

Integrated

Supplementary

Household strategy

Specialised_Cultivated

Specialised_Natural

Coping

Integrated

Supplementary

Household strategy

Specialised_Cultivated

Specialised_Natural

Marula beer

Woodcraft

Fruit juices and jams

Thesis

• Instead of ignoring the informal sector, one needs to develop appropriate measures to help them move forward, become more ‘commercial’ – the enabling environment– Political-legal framework– Local rules, traditions, customs– Livelihood/diversification/poverty reduction

Paradoxes to commercialization

• Conditions for commercialization are not met in poor areas

• Process of commercialization may have an anti-poor bias

• Intensification may have negative biodiversity implications

• But small-scale producers need– technical assistance– access to information, technology, credit– institutions

Enterprise Country Reason for selection

EcoProductswww.ecoproducts.co.za

South Africa Individual entrepreneur who established an extensive community based network of raw material suppliers. Young business, organic certification, unique product.

IIala Weaverswww.ilala.co.za

South Africa Family business with an extensive network of community producers. Well established 30 year old export business.

Fordoun Spawww.fordoun.com

South Africa Unique combination of a well developed commercial business with community linkages. Use of indigenous knowledge as investment capital.

Heiveld Cooperativewww.heiveld.co.za

South Africa Young cooperative established out of a need to improve the conditions of local producers. Focus on organic and fair trade certification.

TCT Industrias Florestais LDAwww.dalmann.com

Mozambique

Well established family owned forestry, sawmilling and furniture manufacturing business based on the sustainable management of a timber concession area.

MEL de MOZAMBIQUE Mozambique

Producers cooperative established by Government and NGOs.

Community lodges – HELVETAS/LUPATinti Gala Community Lodge Covane Community Lodge Madjadjane Community Lodge

Mozambique

Community based enterprises established by NGOs with the objective to conserve the environment.

Success and factors

• Strong entrepreneur

• Community partners

• Geographic location

• Product

Common risks and reasons for failure

• Substitute products• Nature• Wrong people• Business establishment• Breakdown in relationships• Logistics

– Transport and manufacturing– Location

• Capital• Market

Bangladesh: Chittagong Hill Tracts

Prices along market supply chain: Case Study of Menda bark

Raw bark: 7- 12 BDT/KgDry bark: 25- 32 BDT/Kg

Tabu powder: 32- 52 BDT/Kg

0 50 100 150

Mean time spent by HH to collect NTFPs (Hour/ year)

Wild vegetable

Bamboo shoot

Bamboo

Broom grass

Menda bark

Medicinal plant

NTFP income

% of total annual HH income

28%

1%

3%20%9%

37%

0%

2%

Total raw forestincomeProcessed forestproducts incomeFish income

Wage Income

Business income

Agricultural income

Livestock income

Other income

NTFP and forest dependence

02468

1012141618

1 2 3 4 5

Income quintiles

Rel

ative

NTFP

inco

me

(%)

05

101520253035

1 2 3 4 5

Income quintile (poor to rich)

Relat

ive

fore

st in

com

e (%

)

Stakeholders’ income from NTFPs: Case Study of medicinal plants

“Forest farming” in Pennsylvania

Lentinula edodes

Shiitake

As many 50 eastern North America forest plants traded annually in medicinal markets

Rural income form NTFPs

• “The extra income I speak of brings Christmas to the mountains – keeps the children in school, buys medicine, buys food, pays bills and taxes.”

• “I remember well that my fathers income was quite modest and we supplemented same with trapping during the winter months and harvesting as much as a pound of dried ginseng per season, which value of $60.00 was a great boost to our economic situation.

• “Ginseng when I was a kid was ¼ of our living. All day digging was generally 8 to 10 lbs green.

Aug 2008: ¼ lb. root from PA (124

grams)

Potential advantages/benefits:Societal & ecological

Income Stewardship Integrity

Potential advantages/benefits:

Production cost savings

$12,000-$25,000/acreCarrying cost

Average price of American ginseng (Panax quinquefolius) root

(1968- 2003)

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

$450.00

$500.00

1968

1974

1976

1978

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

Ave

rage

pri

ce p

aid t

o co

llec

tor/

grow

er Wild/ Wild-simulated

Woods-cult ivated

Field-grown

Collector/grower

Local buyer or “country dealer”

Regional consolidators

Bulk distributorManufacturer

General market network for North American forest botanicals

Consumer

Profit potential of 8 forest crop candidates

• Discounted cash flow and sensitivity analyses – Discount rate (4%, 6%, 8%)– Propagation method (seed vs. transplant)– Prices (1990-2005 mean, mix, max)– Growing period (early vs. average yrs to harvest)– Production costs (fixed and variable)– Yields (per 1,000 m2 and per root)

Scientific name Trade nameTrade volume (lb/yr/dry): 1997-2005

Actaea racemosa black cohosh

Caulophyllum thalictroides

Chamaelirium luteum

Dioscorea villosa

Hydrastis canadensis

Panax quinquefolius

Phytolacca americana

Sanguinaria canadensis

blue cohosh

false unicorn root

wild yam

goldenseal

American ginseng

poke

bloodroot

Botanicals

Net Present Value ($US, 4% discount rate)

Species

Price received

<12,731>**

Mean Min Max

<12,888>** <12,485>**

<15,609>**

<14,137>*

<12,971>**

<10,518>*

15,261**

<7,782>*

<13,441>*

<15,662>**

<15,454>*

<15,495>**

<12,720>*

<13,044>** <12,810>**

<12,084>* <8,423>*

4,610*

<7,816>*

<14,234>*

32,030**

<7,707>*

<12,632>*

* = seed ** = transplant

Black cohosh

Blue cohosh

False unicorn root

Wild yam

Goldenseal

American ginseng

Poke

Bloodroot

$384

$577

$196$154

$194 $209$165 $152

$110

$51

$253

$57$53

$0

$100

$200

$300

$400

$500

$600

$700

MEAN

MIN

MAX

6 yr

EH (4)

NSCNAC

EH, NSC, N

AC4

yr

EH (3)

NSCNAC

EH, NSC, N

AC

Pri

ce

($

US

/lb/d

ry w

t)

SeedHistoric prices Transplants

Break even prices: American ginseng

EH Early harvestNSC No stock costs NAC No annual costs

$2 $3

$77

$57

$76$69

$60$56

$39

$25$26$28

$1$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

MEAN

MIN

MAX

6 yr

EH (4)

NSCNAC

EH, NSC, N

AC4

yr

EH (3)

NSCNAC

EH, NSC, N

AC

Pri

ce

($

US

/lb/d

ry w

t)

SeedHistoric prices Transplants

Break even prices: black cohoshEH Early harvestNSC No stock costs NAC No annual costs

Break even prices- woods cultivated

$20

$54

$168

$241

$14

$58

$2 $8 $1 $1

$170

$18

$0

$50

$100

$150

$200

$250

$300

Black

cohosh

Bloodroot Goldenseal Mayapple Burdock Ginseng

Current price Break even price

Yield increases would help economics for certain species (e.g. Goldenseal) but…..

Common themes

• Neglected sector • Need recognition (political will and legislation reform)– Recognize complexity– Minimize regulatory barriers

• Lack of technical assistance/education– Regional service centers– Build on what is there– Livelihoods vs. enterprises (not just profit)

• Facilitate effective intervention– Organizations and markets – Service oriented client based approach– Diversification– Harvesters in management decisions

• communication channels• Way of life/tradition/culture

• non-monetary benefits