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 % 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

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?

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

EnterpriseCountryReason for selection EcoProducts South AfricaIndividual entrepreneur who established an extensive community based network of raw material suppliers. Young business, organic certification, unique product. IIala Weavers South AfricaFamily business with an extensive network of community producers. Well established 30 year old export business. Fordoun Spa South AfricaUnique combination of a well developed commercial business with community linkages. Use of indigenous knowledge as investment capital. Heiveld Cooperative South AfricaYoung cooperative established out of a need to improve the conditions of local producers. Focus on organic and fair trade certification. TCT Industrias Florestais LDA MozambiqueWell established family owned forestry, sawmilling and furniture manufacturing business based on the sustainable management of a timber concession area. MEL de MOZAMBIQUEMozambiqueProducers cooperative established by Government and NGOs. Community lodges – HELVETAS/LUPA  Tinti Gala Community Lodge  Covane Community Lodge  Madjadjane Community Lodge MozambiqueCommunity 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: BDT/Kg Dry bark: BDT/Kg Tabu powder: BDT/Kg

NTFP income

NTFP and forest dependence

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 IncomeStewardshipIntegrity

Potential advantages/benefits: Production cost savings $12,000-$25,000/acreCarrying cost

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 ( mean, mix, max) –Growing period (early vs. average yrs to harvest) –Production costs (fixed and variable) –Yields (per 1,000 m 2 and per root)

Scientific nameTrade name Trade volume (lb/yr/dry): Actaea racemosablack 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 ** MeanMinMax ** * ** * 15,261** * ** * ** * ** * 4,610* * 32,030** * * = seed** = transplant Black cohosh Blue cohosh False unicorn root Wild yam Goldenseal American ginseng Poke Bloodroot

SeedHistoric pricesTransplants Break even prices: American ginseng EH Early harvest NSC No stock costs NAC No annual costs

SeedHistoric pricesTransplants Break even prices: black cohosh EH Early harvest NSC No stock costs NAC No annual costs

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