Macroeconomic, political- legal and institutional frameworks of small and medium forest enterprises: The Case of Mexico Camille Antinori

Community Forestry Enterprises: Subset of Forest SMEs 22% of forest in developing countries Maybe 80% of Mexican forests In Mexico, organization at “community” level Collective action over multiple benefits CFEs (and SMEs) engage resource with significant public and private benefits

Differing Perspectives Important, prevalent but under-invested CP v. private v. public property Forest stewards v. productive orgs. Community- v. market-oriented decisions Democratic v. decentralized v. community

Questions in Talk Meaning of “CFE” for Mexico and beyond? –To analyze meaning, I will look at structure and process of governance over the activities in question How emerged in Mexico and who benefits? –Look at primary data from field projects How integrated into policy and markets? –Overview of data and reports

Linkages GLOBAL STATE REGIONAL COMMUNITY

Mexican Forestry Sector: Tenancy over Forest

Mexican CFE In Mexico, “community” has a specific legal meaning: The ejidos and comunidades of the agrarian reform

How did CFEs emerge? Post-revolutionary laws gave rights over forests to agrarian communities. Community governance structure was in place and eventually acquired authority over forests.

Pre-existing factors conditioning further vertical integration Institutional capital to organize Size and quality of resource Past skills and experience

Typical Organizational Form

Monitors: General Assembly Advisory council Auditors NGOs Government Managers: STF CBC Gerentes NGOs Government Owners: Community members Structure of a Productive Organization

Monitors Managers Owners Decisionmaking Process Patterns of influence? Do they meet? Give reports? Share information? Enforce rules?

Who Benefits from CFE? Depends on: Governance structure and process Opportunities for voice and exit (Hirschman 1970) Market demand Precise estimate awaits incidence study, SAM, value chain analysis (e.g. Taylor and Adelman (1996), Ribot)

Flow of Revenues: Oaxaca

State Policies Emphasize public goods and HK Less on physical or working capital VI achieved with little credit or subsidies Rely on own funds or arrangements with private firms

Source of Funds

Programs PRONARE: reforestation PROCYMAF: institutional capacity, technical assistance PRODEFOR: About 6500 projects funded, about 4000 of those for management, mainly thinnings, fire prevention, and management plans PSAH: ecosystem services outside of forestry sector

Back to Governance: Legal Institutions Communal v. private v. public property Agrarian law ambiguous re forests Creation of legal shares to forest Outside ownership of shares possible Potential for risk sharing Not implemented Unclear rules

Regional Institutions and Unions Motivation: political, services, market power Achieving power and scale? Need to balance interests of members Oaxaca13 of 44 (random) Michoacan6 of 13 (random) Durango8 of 11 (incomplete random)

Global Market Link between international demand and local supply? Possible shift in demand from international to domestic after peso devaluation 1994 Some export Still learning to compete on global scale. Need quality of product and service

Emigration Logger: maybe $30/day in Mexico + repartos + public goods Ag worker: about $100/day in US Average of 24 communities surveyed is that 50% of village population receive remesas. 12 said that remesas were ½ or a little more than ½ of families’ yearly income.

Concluding Remarks: CFE as Local Institution Mexico had property rights and process in place. Path dependency? Difficult to recreate without radical movement. Study of control and ownership could suggest other configurations and mechanisms for local stakeholders to participate and benefit from management of that resource. Need more theoretical frameworks for collective action and accountability

Concluding Remarks: CFE as Productive Organization “Community” in structure and process. Organization affects benefit distribution. Linkages exist at all levels. Redefinition of property affects wealth. Tradeoffs?

Thank you Gracias