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TCP/LAO/3002(A) Marketing System Development for Non-Wood Forest Products
EEffffeeccttiivvee PPoolliiccyy,, LLaaww aanndd RReegguullaattiioonnss ffoorr SSuussttaaiinnaabbllee DDeevveellooppmmeenntt
aanndd MMaarrkkeettiinngg ooff NNoonn--wwoooodd FFoorreesstt PPrroodduuccttss
Report on the Second Consultancy Mission
By
C.Chandrasekharan International Expert in Forest Policy and Legislation
Food and Agriculture Organisation of the United Nations Vientiane, October 2005
i
i
Table of Contents
ABBREVIATIONS AND ACRONYMS viii
STATISTICAL PROFILE OF LAO PDR xii
EXECUTIVE SUMMARY xiv
1. INTRODUCTION .......................................................................................................1
The Project ..........................................................................................................................1
Scope of a Marketing System.........................................................................................2
The Consultancy on Forest Policy and Legislation .........................................................2
TOR for the Consultancy ...........................................................................................2
Concepts linked to marketing system for NWFPS ..............................................................3
Markets .........................................................................................................................4
Marketing ......................................................................................................................5
Marketing Factors ......................................................................................................6
Marketing Stages .......................................................................................................6
Market Players and Channels .....................................................................................6
Role of Middlemen ................................................................................................7
Marketing Channels ...............................................................................................7
Marketing of Non-Wood Forest Products ...................................................................8
Market Information ....................................................................................................9
Market Infrastructure .................................................................................................9
Institutional Support ..................................................................................................9
Trade ........................................................................................................................... 10
Impact of Globalization ........................................................................................... 10
Competitiveness ................................................................................................... 10
Sustainability and Sustainable Development ................................................................ 11
Sustainable Forest Management ............................................................................... 12
Production and Productivity ......................................................................................... 13
Products ................................................................................................................... 13
Produces .................................................................................................................. 14
Product Classification .............................................................................................. 14
Productivity ............................................................................................................. 14
Value Addition ........................................................................................................ 14
Rent and Rent Capture ................................................................................................. 15
Policy and Policy Instruments ...................................................................................... 15
Policy ...................................................................................................................... 15
Policy Instruments ................................................................................................... 16
Rules.................................................................................................................... 18
Regulations .......................................................................................................... 19
Supplimentary Instructions................................................................................... 20
Other Important Legal Instruments ....................................................................... 20
Governance .............................................................................................................. 21
ii
2. Forestry Situation in Lao PDR .................................................................................. 22
The Country Profile .......................................................................................................... 22
Macro-Economic Situation .......................................................................................... 23
Important Economic Sectors .................................................................................... 24
Agriculture ........................................................................................................... 24
Forestry ............................................................................................................... 25
Industry ............................................................................................................... 25
Tourism ............................................................................................................... 25
The Financial Sector ............................................................................................ 25
Income and Trade Balance ....................................................................................... 26
Political Division and Decentralization ........................................................................ 26
Forestry Situation .............................................................................................................. 28
Extent and Condition of Forest Resource ..................................................................... 28
Forest types ............................................................................................................. 28
Forest Plantations .................................................................................................... 28
Plantations for Future ........................................................................................... 29
Dynamics of Forest Resource Change .......................................................................... 30
Deforestation ........................................................................................................... 30
Forest Degradation................................................................................................... 31
Forest Management ..................................................................................................... 31
Management Objectives ........................................................................................... 32
Management Activities ............................................................................................ 32
Stabilisation of Shifting Cultivation ..................................................................... 32
Crop Production ................................................................................................... 33
Village Forest Management ................................................................................. 33
Community Forestry ............................................................................................ 34
Forest Production ................................................................................................. 34
Management Plans and Planning .............................................................................. 35
Forest Resource Utilization .......................................................................................... 36
Forest Production ..................................................................................................... 36
Forest-Based Processing and Value Addition ........................................................... 37
Forest Products Trade .............................................................................................. 39
Protection and Conservation ........................................................................................ 40
Protected Area Management .................................................................................... 40
Institutions and Instruments ......................................................................................... 42
Sectoral Objectives .................................................................................................. 42
Legal Framework for Forestry Sector ....................................................................... 43
The Forestry Law of 1996 .................................................................................... 44
Implementing Rules and Regulations ................................................................... 46
Weaknesses in the Legal Framework ................................................................... 47
Public Forest Administration.................................................................................... 49
Plans and Programmes ............................................................................................. 51
Forest Revenue ........................................................................................................ 53
Support Services ...................................................................................................... 53
Human Resource Development ............................................................................ 53
Forestry Research ................................................................................................ 54
iii
Eorestry Extension ............................................................................................... 55
Marketing Support ............................................................................................... 58
Lao National Chamber of Commerce and Industry ........................................... 58
Co-Ordination of Forestry activities ......................................................................... 59
Sectoral Constraints ..................................................................................................... 59
Benefits not backed by Investments ......................................................................... 61
International Assistance Projects .................................................................................. 62
Forestry Situation in the Project Area .......................................................................... 63
Luang Prabang Province .......................................................................................... 63
Xien Ngeun District ............................................................................................. 64
Long Leuad Village ......................................................................................... 64
3. NON-WOOD FOREST PRODUCTS IN LAO PDR ................................................ 66
Global Situation ................................................................................................................. 66 Need for a Clear Definition .......................................................................................... 68
Product Boundary .................................................................................................... 68
Source Boundary ..................................................................................................... 68
NWFPs and Agro-Forestry ...................................................................................... 69
Need for an Appropriate Classification ........................................................................ 69
Role of Domestication ................................................................................................. 70
Complexity of Technology .......................................................................................... 71
Harvesting ............................................................................................................... 71
Post-Harvest Treatments .......................................................................................... 72
Value-Added Processing .............................................................................................. 73
Markets and Marketing ................................................................................................ 74
NWFPs of LAO PDR .......................................................................................................... 75 Goals of the NWFP Sub-Sector................................................................................... 76
Production and Trade ................................................................................................... 78
Processing ............................................................................................................... 80
Trade in NWFPs ...................................................................................................... 81
The Quotas .......................................................................................................... 83
NWFP Resource Management ..................................................................................... 87
Management Technology ......................................................................................... 88
Investment ................................................................................................................... 89
External Assistance Projects .................................................................................... 90
Constraints for NWFP Development ............................................................................ 90
Future of NWFPs in Lao PDR ..................................................................................... 92
NWFPs Under Forestry Strategy, 2020 .................................................................... 93
Situation and Role of NWFPs in Project Sites .............................................................. 94
A System for NWFP Development and Marketing .......................................................... 95
4. POLICY AND INSTITUIONAL ARRANGEMENTS FOR NWFPs ..................... 97
Situation in Lao PDR ........................................................................................................ 97 Need for a Formal Policy ............................................................................................. 97
Strategic Objectives for NWFPS .............................................................................. 98
Hierarchy of Legal Instruments .................................................................................... 98
iv
Situation of Legal Frame Work for NWFPs ............................................................. 98
Tyranny of Quotas ................................................................................................. 100
Customary Use Rights ........................................................................................... 102
Organizational System ............................................................................................... 102
Weaknesses of PFA ............................................................................................... 104
Inadequacy of Research Efforts.............................................................................. 104
Lack of Extension Facilities ................................................................................... 105
Trade and Investment ............................................................................................. 105
Innovative cases of NWFP development in Lao PDR .................................................... 106 Lao Farmers products and batieng product ................................................................. 106
Self Help Groups ....................................................................................................... 107
Independent Authority to Manage the Plantation Sector ............................................. 107
Analysis of NWFP Situation in Selected Countries. ....................................................... 107 Bangladesh ................................................................................................................ 109
Homestead Forests ................................................................................................. 109
Importance of Non-wood Forest Products .............................................................. 109
Constraints for NWFP Development .................................................................. 110
Role of NGOs ........................................................................................................ 111
India .......................................................................................................................... 113
The Forest Policy ................................................................................................... 113
Joint Forest Management ................................................................................... 113
NTFPS in India ...................................................................................................... 114
Constraints for Development of NWFPs ............................................................ 115
Institutional Models ............................................................................................... 115
Amul Model....................................................................................................... 115
Madhya Pradesh State Minor Forest Produce (Trade and Development) Co-
operative Federation. .......................................................................................... 118
The Girijan Co-operative Corporation of Andhra Pradesh State ......................... 120
The Tribal Co-operative Marketing Development Federation of India Ltd.......... 120
Co-operatives of Different Kinds ....................................................................... 121
The Agro-forestry Federation of Maharashtra State. ....................................... 121
Self Help Groups............................................................................................ 121
Commodity Boards ............................................................................................ 122
Forest Development Corporations ...................................................................... 122
Public-Private Partnerships ................................................................................ 123
Company – Farmer Partnerships ........................................................................ 124
Other Cases ........................................................................................................ 125
Public Limited Company ................................................................................ 126
e-Choupal Initiative ........................................................................................ 126
Others individual efforts ................................................................................. 126
Indonesia ................................................................................................................... 127
Policy Guidelines ................................................................................................... 127
Important Non-Wood Forest Products .................................................................... 128
Institutional Models ............................................................................................... 129
NWFP Concessions ........................................................................................... 129
NWFP Activities of Perum Perhutani ................................................................. 129
v
Production of Kayuputih Oil .......................................................................... 130
Silk Production .............................................................................................. 130
Bee-keeping ................................................................................................... 130
Production of Gum Rosin and Turpentine ...................................................... 130
Nucleus Rattan Furniture Factory ....................................................................... 131
Manufacture of Traditional Medicines ............................................................... 131
Republic of Korea ..................................................................................................... 132
Village Forestry Associations under Saemaul Undung ........................................... 132
Malaysia .................................................................................................................... 133
Policy Aspects ....................................................................................................... 134
Important Non-wood Forest Products ..................................................................... 135
Nepal ......................................................................................................................... 135
Some Policy Aspects ............................................................................................. 135
Important Non-Wood Forest Products .................................................................... 135
The Herbs Production and Processing Company ................................................ 137
Papua New Guinea .................................................................................................... 137
Some Policy aspects............................................................................................... 138
Important Non-wood Forest Products ..................................................................... 139
Philippines ................................................................................................................. 139
Some Policy Aspects ............................................................................................. 140
Community-Based Forest Management ................................................................. 140
Important Non-Wood Forest Products .................................................................... 142
Self Help Groups ................................................................................................... 142
Vietnam ..................................................................................................................... 142
Policy Changes ...................................................................................................... 143
Important Non-wood Forest Products ..................................................................... 145
Some Project Models ............................................................................................. 146
SNV – North Central Vietnam Income and Employment Generation Project...... 146
Extension and Training Support for Forestry and Agriculture in the Uplands. .... 147
Other Experiences ..................................................................................................... 148
The Shea Project of Uganda ................................................................................... 148
Integrated Agro-forestry in China .......................................................................... 148
The Lessons ............................................................................................................... 148
Resource-related .................................................................................................... 149
Production-related.................................................................................................. 150
Processing-related .................................................................................................. 151
Market –related ...................................................................................................... 151
Related to Socio-Economics .................................................................................. 152
Environment–related .............................................................................................. 154
Science and Technology-related ............................................................................. 154
Information–related ............................................................................................... 155
Policy-realted ......................................................................................................... 155
Related to Plans and Programmes .......................................................................... 156
Related to Institutions ............................................................................................ 157
To round up…. ...................................................................................................... 159
An Indicative Framework for a Policy on NWFPS in LAO PDR ................................... 159
vi
Components of Policy Framework ............................................................................. 159
Organisations for Policy Implementation ................................................................... 161
Governance Agencies ............................................................................................ 161
Development/Enterprise Agencies ......................................................................... 161
Innovative Arrangements ....................................................................................... 162
The Enterprise Concept ............................................................................................. 163
A Federated Co-operative Enterprise System for NWFPS ...................................... 163
Development of a Formal Policy ................................................................................ 166
5. RECOMMENDATIONS AND CONCLUSIONS .................................................. 169
Recommendations ........................................................................................................... 169
Conclusions ...................................................................................................................... 171
BIBLIOGRAPY .............................................................................................................. 172
vii
Appendices
1 Terms of Reference: International Expert in Forest Policy and
Legislation
178
2 List of Some of the Better Known Species in Lao PDR Providing
Non-wood Forest Products
180
3 Extract of Section 2.5 NTFP Management from the Report on Legal
Framework of Forestry Sector, for Forestry Strategy 2020 in Lao
PDR, by Todd Sigaty (2003)
182
4 An Annotated Outline for a National Policy for Non-Wood Forest
Products for Lao PDR
186
List of Tables
Table 1 Land Allocation for Different Uses in Lao PDR, 1995-2002 24
Table 2 Production and Consumption of Wood Products, 2003 37
Table 3 Wood Products Trade, 2003 39
Table 4 NWFP Exports, 1995-96 to 2004-2005 82
Table 5 Some details of NWFP Quota in Lao PDR for 2004-2005 84
List of Figures
Figure 1 Organizational Chart of the Ministry of Agriculture and Forestry 52
Figure 2 Organisational Structure of the National Agriculture and Forestry
Research Institute
55
Figure 3 The organization structure of the National Agriculture and Forestry
Extension Service
57
Figure 4 Linkages Involved in Quota Administration 85
Figure 5 Diagrammatic Illustration of a System for NWFP Development and
Marketing
96
Figure 6 Amul Model Replication 117
Figure 7 Graphical Representation of Organisational Re-structuring for
NWFP/Forestry Development
168
List of Boxes
Box 1 Grameen Bank of Bangladesh 112
viii
ABBREVIATIONS AND ACRONYMS
ADB Asian Development Bank
ANSAB Asia Network for Sustainable Agriculture and Bio-resources
APB Agriculture Promotion Bank
ASEAN Association of South East Asian Nations
BFL Basic Forestry Law (of Indonesia)
BRAC Banglades Rural Advancement Committee
BTC Belgian Technical Cooperation
C&I Criteria and Indicators
CBD Convention on Biological Diversity
CCD Convention to Combat Desertification
CIFOR Centre for International Forestry Research
CIRDAP Centre on Integrated Rural Development for Asia and the Pacific
CITES Convention on International Trade in Endangered Species
CPC (Provisional) Central Product Classification
CRMF Community Resource Management Framework
cum Cubic Meter
DAFO District Agriculture and Forestry Office
DCU District MFP Co-operative Union ( of MP-MFP-CFL)
DENR Department of Environment and Natural Resources (of Philippines)
DoF Department of Forestry
EU European Union
FAO Food and Agriculture Organisation of the United Nations
FAOR FAO Representative
FCCC Framework Convention on Climate Change
FDC Forest Development Corporation
FDI Foreign Direct Investment
FINNIDA Finnish International Development Agency
FMU Forest Management Unit
FRA Forest Resource Assessment
FRC Forest Research Centre
FS 2020 Forestry Strategy 2020
FYP Five Year Plan
GCMMF Gujarat Co-operative Milk Marketing Federation
GDP Gross Domestic Product
GIS Geographic Information System
GMS Greater Mekong Sub-Region
GoL Government of Lao PDR
GTZ German Agency for Technical Co-operation
Ha/ha Hectare
ix
HDI Human Development Index
HRD Human Resources Development
HS Harmonised Commodity Description and Coding System
ICIMOD International Centre for Integrated Mountain Development
ICRAF International Centre for Research in Agro-forestry
IDRC International Development Research Centre, Canada
INBAR International Network for Bamboo and Rattan
IRR Implementing Rules and Regulations
ISIC International Standard Industrial Classification
IT Information Technolgoy
ITC International Trade Centre
ITC-PSPU Paperboard and Speciality Paper Unit of ITC (Indian Tobacoo
Company), India.
IUCN International Union for Conservation of Nature
JFM Joint Forest Management
JICA Japanese International Co-operation Agency
km Kilometer
Lao PDR Lao Peoples Democratic Republic
LDC Least Developed Country
LNCCI Lao National Chamber of Commerce and Industry
LGU Local Government Unit
m Meter(s)
MA&D Market Analysis and Development
MAF Ministry of Agriculture and Forestry
MFP Minor Forest Produce
MIH Ministry of Industry and Handicrafts
MIS Market Information System/Management Information System
MNCs Multi-National Corporations
MOA Memorandum of Association
MP Madhya Predesh State of India
MP-MFP-CFL The Madhya Pradesh Minor Forest Produce Co-operative Federation
Limited, India.
NAFES National Agriculture and Forestry Extension Services
NAFRI National Agriculture and Forestry Research Institute
NBCA National Bio-diversity Conservation Area
NC National Consultant
NGO Non-Governmental Organisation
NMIS NWFP Marketing Information Service
NPC National Project Co-ordinator
NPD National Project Director
NTFP Non-Timber Forest Product
x
NWFP Non-wood Forest Product
ODA Official Development Assistance
PA Protected Area
PAFO Provincial Agriculture and Forestry Office
PCCS Primary Collectors Co-operative Society (of MP-MFP-CFL)
PFA Public Forest Administration (also Production Forest Area)
PFO Provincial Forestry Office
PM Prime Minister
PNG Papua New Guinea
PO People‟s Organisation
PPP Purchasing Power Party
PRA Participatory Rural Appraisal
R&D Research and Development
SFD State Forest Department
SFM Sustainable Forest Management
SHG Self Help Group
SIDA Swedish International Development Agency
SITC Standard International Trade Classification
SME Small and Medium Enterprise
SNA System of National Accounts
SNV Netherlands Development Organisation
SOE State-Owned Enterprises
STC Swiss Association of Technical Co-operation
SUFORD Sustainable Forestry and Rural Development Project
t Tonnes (metric tones)
TCP Technical Cooperation Programme of FAO
TDRs Tradable Development Rights
TFAP Tropical Forestry Action Plan
TOR Terms of Reference
TP Timber Permit
TRIFED The Tribal Co-operative Marketing Development Federation (of India)
UN United Nations
UNCED United Nations Conference on Environment and Development
UNDP United Nations Development Programme
UNESCO United Nations Educational, Scientific and Cultural Organisation
UNFF United Nations Forum on Forests
US $ United States Dollar
USA United States of America
US AID United States Agency for International Development
VAT Value Added Tax
VFA Village Forestry Association (of Republic of Korea)
xi
VFI Village Focus International
VMG Village Marketing Group
WB World Bank
WCED World Commission on Enviroment and Development
WHO World Health Organisation
WRI World Resources Institute
WTO World Trade Organisation
WWF World Wide Fund of Nature and Nature Conservation
xii
STATISTICAL PROFILE OF LAO PDR
Area 23.1 million hectares
Terrain Mainly (about 70%) mountainous (except
Mekong river flood plain)
Rainfall 1,500 – 3,000mm/yr
Main river systems Mekong river
Political division
Number of provinces 18
Number of districts 142
Number of villages 10,912
Number of households 849,330
Number of agricultural holdings 662,000
Length of roads 14,000 Km (of which 80% are not asphalted )
Land use (as percentage of total)
Area under permanent crops 10%
Area under forest cover 54%
Fallow/degraded/not under use/other uses 37%
Forest area
Area under forest over (2000) 12.6 million ha
Natural forest area (2000) 12.5 million ha
Area of forest plantation (2000) 54,000 ha
Volume of forest biomass (2000) 391 million tonnes
Annual forest cover change 1990 to 2000 – 53,000 ha/year (annual loss 0.4%)
Forest area per capita 2.4 Ha
Forest area by vegetational types
Evergreen 30%
Moist deciduous 50%
Dry deciduous 15%
Others 5%
According to one report, total arable area in Lao PDR is only 877,000 ha (3.8% of the total land area)
xiii
Socio-economic information
Population 2003 5.7 million
Population density 25 per/sq.km
Rural population 2003 79.3%
Population dependent on agriculture 80% to 85%
Average GDP per capita, 2003 (estimated) US$ 361
GDP share of forestry (estimated) Various estimates ranging from 8% to 10%.
Forest products consumption
Total wood production (2003) 6.3 million cum
Total wood consumption (2003) 6.2 million cum
Industrial wood production (2003) 0.4 million cum
Fuelwood consumption (2003) 5.9 million cum
Fuelwood as percentage of total energy use
(estimate)
80%
Per capita fuel wood consumption 1.04 cum
Note on sources of statistical information
No reliability is attributed to the statistical details given in this report. Sources are various: published and
unpublished reports, meeting documents and information provided during interviews; details provided differ
considerably. Since none of the sources consulted had comprehensive information covering all aspects, it was
necessary to use information provided by different sources in the report, depending on the context, for purposes
of illustration and to indicate rough orders of magnitude. No attempt could be made to reconcile the differences
in statistical information for want of time. Such reconciling was also not essential for purposes of this
Consultancy. The sources have been listed under Bibliography.
xiv
EXECUTIVE SUMMARY
Defined as “goods of biological origin other than wood, as well as services derived
from forests and allied land uses”, NWFPs cover a wide range: food, fodder, fibre, fertilizer,
flosses, organic construction materials, non-wood lingo-cellulosic products, natural dyes,
tannin, gums, resins, latex and other exudates, waxes, essential oils, spices, edible oils,
medicinal extracts, phyto-chemicals, aroma-chemicals, decorative articles, cocoons, cage
birds, culinary herbs, horns, bones, pelts, plumes, hide and skin as well as services such as
eco-tourism and environemtnal conservation. The emphasis of this report, however, is on
material goods.
There are certain characteristics, which set the NWFPs apart from wood products.
As a broad group NWFPs exhibit a high degree of heterogeneity in their
source, production systems and utilization.
It is multi-dimentsional (i.e., social, economic, environmental, cultural and
ethical) in scope.
These produces are derived from a variety of sources – plants (palms, grasses,
herbs, shrubs, trees) animals (insects, birds, reptiles, large animals) and
microorganisms. Different parts of a plant or animal often provide different
products, simultaneously and/or at different times. Also, similar products can
be obtained from different sources.
NWFPs are used at subsistence, local use and commercial levels.
NWFPs exhibit considerable variation in their use. Some of them are
consumed immediately on harvest (e.g. fruits, fodder, wild meat) or after
primary processing (e.g. edible nuts, bamboo products). Some others go
through a series of downstream processing or refinements to meet the market
specifications and standards, adding value to the product all along the way.
These produces vary in their habitat and management requirements.
Under natural conditions, NWFPs can be managed along with wood in an
intergrated manner, thus increasing overall productivity. NWFPs can be
sustainably harvested without causing damage to the eco-system, and they
are, therefore, environmentally friendly. Unlike wood, NWFPs can be
harvested continuously or more frequently. Many NWFPs are available from
timber species; harvesting of wood and non-wood products, in such cases, is
not mutually exclusive and needs to be carried out with great care.
Being capable of providing all the basic needs of local communities, these
represent a complete resource base.
xv
Some 80% of the population in the developing world depend on NWFPs for their
primary health and nutritional need. As raw materials, NWFPs support village level artisanry,
craft activity and processing enterprises such as those of rattan and bamboo furniture,
essential oils, resins and pharmaceuticals. Some NWFPs are internationally traded and used
in flood flavourings, perfumes, medicines and confectionary.
A large number of NWFP appear as ingredients of varying proportion in a large
number of items of our everyday use such as medicines, perfumes, sun tan lotions, nail
polish, mouth wash, hair conditioners, cosmetic products, detergents, shaving creams, tooth
pastes, stress relievers, cheese, chewing gum, soft drinks, peanut butter, breakfast cereals,
golf balls, paints, corrosion inhibitors, insecticides, fungicides and a host of others.
With extensive deforestation and forest degradation resulting from various causes,
and the government-owned forests being kept out-of-bounds and reserved for conservation
purposes, in several countries, the natural sources of NWFPs have shrunken, and growing of
domesticated and genetically improved NWFPs in private farm lands is becoming more
common.
Because of their special attributes and environmental friendliness, sustainability of
forestry in the future will depend more and more on NWFPs. However, very little attention
has been given to NWFPs so far, in spite of their importance and potentials. This, in one way
or another is related to the characteristics of the produces. NWFPs as a group are extremely
heterogeneous, requiring a mix of different skills, technology and research support in their
management. Resources of these produces are often dispersed and vary considerably in their
concentration. Knowledge on NWFPs to a significant extent is local, empirical and often
linked to local culture. This makes information gathering or exchange more difficult.
Overlapping of their uses and sources adds to the complexity of managing and utilizing the
NWPFs, causing added difficulty for their development.
NWFPs have, however, re-emerged in many countries from relative obscurity, and
their development has gained some momentum due to: increasing awareness about their
importance, the new market preference for natural products, concern about the conservation
of forests and their bio-diversity, realization that many NWFPs give more income for forest
owners compared to income from timber species, and their potential as sources of new food
and medicines.
It has, therefore, become necessary especially in respect of commercially important
NWFPs to have a marketing-orientation rather than simple production - orientation. Simple
production-orientation have the effect of creating increased supply, thus reducing price and
profitability. A successful marketing-orientation for NWFPs on the other hand, should
increase demand and value, thus allowing more of the products to enter the market, without
reducing the overall price of the concerned commodities.
An enhancing aspect of the market-orientation is value-addition through down-stream
processing.
xvi
Generally, however, establishment of sophisticated, down stream, value-added
processing in most developing countries is constrained by lack of capital, technology and
skills, market, and research support. Thus, in most developing country situations, harvested
produces reach the market, local or foreign, either after some intermediate processing in the
form of cleaning and grading or after primary (or early stage) processing.
The success of NWFPs in the market would depend on certain imperatives:
productivity and sustainable production; appropriate cultural practices; waste-free harvesting;
value-added processing and consistency in product quality. Commercialization of NWFPs is
more than a strategy for poverty alleviation; it is a strategy for growth.
Market, as an institution, is expected to ensure economic efficiency, providing
necessary means to maximize the value of products and to distribute the benefits equitably
among the participants. National economy and income are influenced by the market. A
market is considered as fair and moving towards perfection, if its functioning is characterized
by full knowledge and free competition, and not vitiated by monopolistic/oligopolistic
tendencies.
Marketing of NWFPs is one of the most challenging undertaking because of their
number, versatility, dissimilarities, end-use variations, and resource richness. Markets range
from simple, local level village fairs to most sophisticated industrial and niche markets in
numerous end-use sectors. Some of the attributes of NWFP production such as: small size,
product diversity, seasonal production, labour intensive technology and accessibility to low-
income group of the community have both advantages and disadvantages. While these are
advantageous on the production side, some of them are disadvantageous on the marketing
side. To circumvent the disadvantages, market-oriented production of NWFPs can be taken
up as co-operative ventures. Globalisation of commerce (further supported by green-
consumerism) has opened up new opportunities for NWFPs. The response form the
producers/collectors to market demand for NWFPs will be influenced by: how the returns
from it compare with other income-generating activities, the capability of the producers, and
the availability of primary inputs. Access to credit facilities and markets will influence the
type of activities, species and technology adopted.
A rational and effective policy on NWFPs, supported by adequate instruments (i.e.
laws, rules and regulations) and organizational support for enforcement of policy objectives
and implementation of policy measures, is vital in this connection.
Policies represent the principles that govern actions, directed towards given ends. A
forest policy has been defined as principles regarding the use of a nation‟s forests, which it is
felt, will contribute to the achievement of some of the national objectives. On the same basis,
a NWFP policy can be defined as principles regarding the use of a nation‟s NWFP resources,
which it is felt will contribute to the achievement of some of the national objectives.
In spite of the new favourable trend, however, the NWFP sub-sector has not attracted
sufficient (and in some cases, any) policy attention. As a result of this neglect, the sector is
variously constrained, and these constraints lead to further neglect. These constraints fall
under various categories – technological, physical, socio-economic, environmental,
xvii
infrastructural and institutional. These constrains have been elaborated in the report. And,
globalization has brought to the forefront the need for developing competitiveness in the
arena of NWFPs.
Therefore, the importance of having a specific policy for NWFPs (with supportive
instrumentation), taking into consideration the special attributes and potentials of this sub-
sector of the forestry sector, needs to be further re-emphasised.
NWFPs are a major natural resource of Lao PDR. These include: food products,
spices, condiments, food additives, sweetners, gums, oils, oleoresins, fibers, plaiting
materials, medicinal and aromatic plants, animals and animal products and others. It has been
claimed that the estimated value of NWFPs produced in Lao PDR, annually, is worth
US$216 million, of which US$184 million accounts for local use. Some of the more
important NWFPs of Lao PDR are: cardamom, cinnamomum and cassia, Sa paper from
paper mulberry, yang oil, dammar, agar, bamboo, rattan, benzoin, galanga, annato, lac,
ginseng and medicinal plants.
Harvest/production of NWFPs is based on annual quota granted (allocated) to
registered companies by the Government. In this regard, the provincial and district level
traders play a prominent role. The system, in practice, is not based on any scientific
assessment of sustainable harvest, and has several deficiencies.
Value-added processing of NWFPs in Lao PDR, for final consumption and/or for
export, is limited. Wherever processing has been attempted, the units, in most cases, are
small and inadequate in technology and efficiency. Performance of the NWFP sector, overall,
is poor.
The reasons for this poor performance are several: falling availability of raw material
sources, inadequate technology and skills, lack of product and process research, existence of
illegal activities, lack of adequate knowledge and information, institutional weaknesses etc.
Most important of all constraints is the lack of a clear policy for NWFPs and
weaknesses of (and gaps in) the laws, rules and regulations. There is need to strengthen all
relevant aspects.
In spite of official statements in favour of NWFPs and their important socio-
economic contributions, very little attention has so far been given to NWFPs in Lao PDR.
They are not being managed scientifically. Current situation in Lao PDR is exemplified by: a
lack of basic information; inadequate resource development, management and conservation;
lack of adequate integration of management of wood and non-wood products; deforestation
and land degradation; wasteful and inappropriate harvesting practices; lack of incentives for
introducing and implementing sound technology; hurdles in the development of organized
people‟s participation and entrepreneurship; unscientific and uncontrolled system of NWFP
collection and the influence of exploitative middlemen; lack of market orientation, supply
fluctuations and inadequate adherence to quality; lack of competitiveness in the international
market due to weaknesses in the chain of NWFP management and utilization; inadequate
processing and storage technology and facilities; inadequate research, lack of appropriate
xviii
extension facilities, and lack of facilities for skill development and training in areas related to
NWFPs; lack of adequate investment, an appropriate policy and strategy for development of
NWFPs; and inadequacy of institutional support.
There are, however, few bright spots of institutional innovations (e.g. establishment
of village level marketing groups) in support of NWFP development, mostly initiated and
facilitated through donor-assisted projects.
In order to learn lessons on market-oriented NWFP development, interesting
experiences of several countries of Asia were examined, along with some of the interesting
initiatives of Lao PDR. The lessons have been discussed in the text, categorizing them as:
resource-related, production-related, market-related, related to socio-economics,
environment-related, science and technology-related, information-related, policy-related,
related to plans and programmes, and related to institutions. These lesson have clearly
indicated the need for several strategic measures to remove the constraints and to develop
NWFPs as a competitive and efficient sector. Some of the important lessons are given below:
It is vital to assess and enhance: information and knowledge; market and trade
situation; sustainability of NWFP enterprises.
Treat market as the prime factor; achieve and maintain competitiveness.
Institutional and policy support is equally important as technology and
management. Policies should create conditions conducive for development of
NWFPs.
Unpredictable price movement affects the NWFPs. Processing and value addition,
if competently undertaken, can support market stability.
R&D and human resource development are important for supporting NWFP
development.
Also: start with products already in the market; organize for strength in numbers;
diversify products for economic advantages; introduce domestication and
commercialization; improve harvesting techniques; control grades and quality;
capture reasonable share of value-addition.
Bestow scientific efforts to continuously enhance technology and reduce
bureaucratic control.
Access to funds/credit and extension services is very important.
It rationally carried out, NWFP development can reduce or remove conflicts of
interest in forest utilization.
Without economic viability (return on investment), NWFPs cannot achieve its
other objectives (of household welfare and poverty alleviation).
xix
In a nutshell, for NWFPs to succeed at the market, it should meet the criteria of
efficiency/effectiveness, productivity, value-addition, competitiveness and market
satisfaction, in the new environment of global sourcing of merchandise and e-commerce.
Collaboration at Greater Mekong Sub-Regional or ASEAN Regional levels will help
considerably.
In the actual implementation of policy-directed, market-oriented NWFP development,
several activities will have to be taken-up simultaneously and executed by stages. Therefore,
for effectiveness, the various strategic proposals for market-oriented NWFP development are
to be addressed in its immediate, short, medium and long-term aspects.
Corresponding to the time periods mentioned, four development phases/stages are
proposed, total duration of which may be kept flexible, but is not be exceed 20 years – (i)
initiation/design phase (immediate term); (ii) transition/testing phase (short term); (iii)
consolidation phase (medium term) and (iv) towards „auto-expansion‟ or steady-state phase
(long term). Length of the phases may, as appropriate, vary between 3 to 6 years.
The strategic actions to be taken are related to: land capability classification;
agronomic improvement; human resource development and capacity building; research
support to develop competitiveness; primary and down stream processing and value addition;
subsidiary income earning opportunities; producer partnerships/co-operatives for increased
bargaining strength; access to information and extension; funding and financing; marketing
facilitation; and institutional reforms. Each of these areas/aspects are to be progressively
enhanced by phases/stages. A solid scientific base and constant upgradation of technology
through continued research, supported by innovative ideas and approaches, are essential to
ensure sustainability of NWFPs as a dynamic system.
To conclude: subsistence-orientation of NWFPs is no longer an important policy goal.
New emphasis is on market-orientation.
Strategic measures to establish, expand and manage sustainable market-oriented
NWFP development involve several inter-related steps: resource creation and enhancement;
research and technology development; efficiency and capacity building; increasing
productivity; quality improvement; harvest/post-harvest technology; value-added processing;
improved market access; accessing updated information on prices and market changes;
critical mass for effective operation; access to funds; and dynamic/strategic planning.
Failure to adopt market-orientation (and market requirements of quality and quantity),
will result in failure of NWFP enterprises, inspite of their other favourable attributes such as
environmental friendliness. Productivity, efficiency and competitiveness through constant
innovation are the key to ensure success, resulting in an outward spiral of growth.
xx
xxi
1
1. INTRODUCTION
THE PROJECT
The FAO-TCP project: Marketing System Development for Non-Wood Forest
Products in Lao PDR was taken up for implementation in August/September, 2004.
The development objective of the project is to assist the Government of Lao PDR in
reducing rural poverty and promoting sustainable use and management of forest resources
through the development of appropriate marketing system for the non-wood forest products.
Two related specific objectives are to:
establish a model for the development of marketing system(s) for priority
NWFPs, adopting appropriate approaches; and
promote income generation in rural areas through sustainable management of
NWFP resources and strengthening of NWFP marketing.
The focus of the project is on improving marketing systems and market information
services, as well as to address issues such as obsolete legislation and regulations and the
limited country capacity to support NWFP producers, traders and industries.
The Forest Research Center of the National Agriculture and Forestry Research
Institute (NAFRI) under the Ministry of Agriculture and Forestry is the implementing agency
of the project.
Field level activities of the project, with particular emphasis on demonstration and
capacity building at local level have been taken up in 6 villages in 3 different districts falling
in 3 different provinces.
Laung Prabang Province – Xien Ngeun District – (1) Ban Long Leuad, (2) Ban
Houay Hia
Savannakhet Province – Phin District – (1) Ban Nathong, (2) Ban Alouay Kham
Noy
Champasak Province – Pathoumpone District – (1) Ban Lak 29 (2) Ban Heua
Kheua.
The propose is to develop marketing systems for priority NWFPs, through a market
analysis and development approach, which will enable local communities to identify
potential products and develop markets that will promote income generation through
strengthening the capacity of stakeholders for marketing and sustainable management of
NWFP resources.
2
The two specific objectives mentioned above are designed to be achieved through six
outputs involving 24 different activities. An important output is “model approach for NWFP
market development”, which aims to build a model for NWFP market development
supported by: improved market information service and legislation (including legislated
policy), and also to develop an indicative agenda for promoting a sustainable marketing
system for NWFPs in Lao PDR. Activities in this regard include a critical review of the
NWFP–related rules, regulations and their enforcement, and provision of advisory guidance
to the GoL to update/enhance them.
Scope of a Marketing System
As the title of the project indicates, the focus is on developing a marketing system for
NWFPs. The key word is system. A system refers to a methodical and comprehensive
arrangement (or organization) of things, which work together or are strongly linked,
employing principles of system science. A system involves a series (or number) of inputs,
which passes through a series (or number) of processes (procedures) in systematic stages and
steps, resulting in the production of a series (or number) of outputs. The stages and steps are
influenced (regulated) by institutional arrangements and instruments (e.g. policy, laws, rules)
in force. A perfect system would represent an optimum situation.
The Consultancy on Forest Policy and Legislation
The project activity (consultancy) relating to forest policy and legislation represents
the wider and long term dimension of the project, since the scope of the (national) forest
policy and legislation goes beyond the filed sites (six villages) covered and the envisaged life
of the project. It covers all NWFPs found in Lao PDR and not only those prioritised in the
project sites. It takes national concerns and long-term scenarios into consideration. It further
considers the global nature of the markets, the influence of globalization of trade (and of
WTO), and the need for being competitive in the national and international market. It
highlights the role of trade in development including the need for increasing rent capture,
value addition and retained value.
TOR for the Consultancy
The Terms of Reference of the international expert/consultant in forest policy and
legislation is essentially of advisory nature, i.e. to provide technical inputs and guidance to
the work of the National Working Group on NWFP-related policy and regulations and to the
work of the National Forest Policy and Legislation Expert. This part of the work has been
completed during the first mission (see Mission Report, Chandrasekharan, 2005).
3
The task specified in the TOR for the second (present) mission (at home station of the
consultant) is to conduct a study on the existing forestry policy and regulations on NWFP
production and marketing, including quota systems and import taxes in the sub region.
As suggested by the project authorities, the scope of the study has been expanded to
include an evaluation of the NWFP sub sector in Lao PDR and to indicate how the lessons
learned from elsewhere can be made use of, to improve the NWFP sub-sector.
The present report is the overcome of the second mission of the International
Expert/Consultant in forest policy and legislation.
The report has been divided into five sections. In addition to the background and
purpose of the project, the introductory section deals with the important concepts related to
sustainable management and marketing of NWFPs. The second section provides a brief
analysis of the overall forestry situation in Lao PDR. The third section discusses,
specifically, the situation and potential of NWFP management and marketing in Lao PDR.
This is followed by a section dealing with policy, policy instructions, and institutions, to
support NWFP development. The fifth and final section contains recommendations and
conclusions.
[A disclaimer : The statistical information available are of low reliability and lack
consistency. Statistics on forest area, stocking, forest production, trade etc vary depending
on their sources. There is multiplicity of statistics, often arbitrary, related to the various
aspects of forestry. Inconsistent numbers can be found in different reports, and often in
different sections of the same report. For example, there are nine different sources for trade
statistics in Lao PDR and they often provide different figures. Therefore, the quantitative
figures/numbers appearing in this report do not claim any accuracy and serve only to present
broad orders of magnitude and to make comparisons. Also, aggregation of information,
analysis, conclusions and suggestions contained here, therefore, have used some amount of
subjective judgment].
CONCEPTS LINKED TO MARKETING SYSTEM FOR NWFPS
Some aspects of the conceptual foundation of “Marketing Systems Development for
NWFPs” are dealt with in this introductory section, to serve as a background for the
forthcoming discussions. These cover: market, marketing and associated aspects;
sustainability and sustainable management of forest resources; production/products and
productivity; value addition; rent and rent capture; institutions, institutional instruments and
governance. There are, often, no “single sentence definitions” for these concepts, and may
require some amount of explanations and elaborations.
4
Markets
Markets are potential outlets for products. A market is created whenever potential
sellers of a good or service are brought (directly or indirectly) into contact with potential
buyers and a means of exchange (in form of money or barter) is available. Exchange
agreements are reached through the operations of the laws of supply and demand. A market
is normally qualified by location, size, nature of products, end uses, nature of transactions,
customer needs and preferences etc. It is thus possible to distinguish, inter alia, the
following.
Based on nature of transaction : Monitised, barter (exchange)
Based on the nature of product : Market for goods; market for services
Based on location : Local, national, international
(export/import); rural and urban
Based on size/turn over : Large, medium, small
Based on the quantity and nature of
distribution
: Bulk, wholesale, retail
Based on commodities/services
involved
: General, specialized (fish, fruits, cattle,
meat, spices, live birds, furniture,
garments), green, niche
Based on who utilizes the products : Consumer marketing; industrial
marketing
Based on nature of market control : Free, monopoly, monopsony,
oligopoly, oligospony
Others based on identifying
characteristics
: Illegal market (smugglers market,
thieves market); promotional market
(exhibitions) etc.
The process of exchange in its simplest form takes place in village markets, between
the producers and final consumers (e.g. fodder, food items, other items of basic needs).
Products entering national markets are durable; semi processed or processed goods of
comparatively higher value (e.g. nuts, spices, factory products). To enter the international
market it is necessary to know the markets outside the country of production, and to develop
capability to supply large orders of specified quality within tight time schedules.
The concept of market as a „place‟ is getting blurred with the emergence of e-
markets, mail order markets, market for services, carbon market etc.
Markets result from production. Managing the source of raw-material production,
harvesting of produces, processing and marketing of products for intermediate and or final
consumption form a compct set of activities. These activities are closely related, having
intimate forward and backward linkages. Growth of market is linked to economic growth
and vice versa.
5
Markets are influenced by a number of factors: quality and technical standards,
health and safety regulations, certification requirements, tariff and non-tariff regulations etc.
A basic requirement of market includes sustainable and regular product availability
in stable and consistent quality (and in adequate quantity). Market for some products which
are not linked to essential daily needs or are not required to feed a processing industry may
not be affected much by irregular supply, but their contribution to development will however
be limited.
Market as an institution is expected to ensure economic efficiency, providing a means
to maximize the value of products, and distribute the value equitably among the participants.
National economy and income are influenced by the market. A market is considered as fair
and moving towards perfection if its functioning is characterized by full knowledge and free
competition, and not vitiated by monopolistic/oligopolistic tendencies.
Supply and demand are influenced by product price and vice versa. Interaction of
these vital market forces (supply, price and demand) finds equilibrium in a competitive
market, defined by their elasticities. While certain essential items of every day use (food,
fuel) are price inelastic (or of low elasticity), most products exhibit considerable elasticities.
In general, price signals the level of scarcity, unless distorted by market deficiencies and
flaws.
There are non-market/non-priced values as well as unpaid (social) costs linked to the
natural produces, which adds to the social benefit and social cost of the natural resource base
(e.g. forest resource). Policies relating to these externalities (e.g. restrictions on forest
product harvesting for bio-diversity conservation) can affect product supply and hence their
price and demand.
Probably the most important factor in sustaining a market is the price level of
products, which should be remunerative to the producer and equitable to the consumer.
However, this aspect is often distorted in respect of rural based production (agriculture and
forestry), where the traders and middlemen seem to have a tendency to maximize windfall as
long as the opportunity lasts. There is need to improve the economic benefits and incentives
to the (local) producers, if supply are to be stabilized in terms of quantity and quality.
Weaknesses of the market reflect the deficiencies of the marketing system. Market
failure is a situation in which economic efficiency has not been achieved through
imperfections in the market mechanism. One aspect which gives strong indication about the
need and the possibility of rationalizing and improving efficiency of the marketing system is
the vast difference between the price paid to the local producer and that obtained for it in the
market.
Marketing
Marketing is the process of creating markets through several related steps. It is the
two way process by which the space between the producer and the consumer is bridged, such
that produce flows from rural areas (production centers) to market centers; money and
6
market information flows back. While market is an entity, marketing is a service – in fact, a
series of services involved in producing and moving a product in demand from the point of
production to the point of consumption.
Marketing is thus, basically a technology which is at the disposal of producers to:
identify market opportunities in the form of market needs and wants; analyze competition;
develop appropriate approaches to reach the markets and to make profit. It uses a mixture of
basic factors by which the needs and wants of the customers in the markets are satisfied.
Marketing operates in an environment, which is created by economic, social, cultural,
technological, political, regulatory, legal, institutional and infrastructural factors, all of which
are beyond the control of the individual marketing operators. It involves the functions of
product planning, production, promotion, sales, distribution and product research – to meet
the needs and interests of the consumers and to ensure reasonable earnings form the service.
Marketing Factors
The factors by which markets are characterized (including their strengths and
weaknesses) are several, and, among others, they include: size, scope and nature; products
and prices; marketing approaches and practices; stages in marketing; marketing players;
market channels and chain; infrastructure; market information and research; institutions and
institutional support; and impacts of globalization.
Marketing Stages
Often, the marketing activities/approaches are taken up by stages and sub-stages,
defined by the specificity of activities and the players and places involved. Marketing stages
of most forestry and agricultural products can be divided into: harvesting, marketing of raw
produce, processing and marketing of semi-processed or finished industrial or consumer
products. In respect of sophisticated products such as medicines, beauty care products, aroma
chemicals, food additives, flavours and nuts for candy bars etc., the first two stages (until the
raw produce reaches the industrial user) are mainly carried out in the producing/developing
countries with less developed marketing organizations, while the latter stages are carried out
in the consuming, industrialized countries with modern marketing organizations (involving
different activities such as cleaning, grading, quality testing, storing, packaging etc., within
each stage). The industrial processing stage is highly complex and sophisticated for
transforming the semi-processed product into valuable consumable items, appropriate to the
needs of the end users.
Market Players and Channels
Each of the marketing stages has its main and subsidiary players. The players
involved in marketing of NWFPs are: individual NWFP collectors or producers; harvesting
contractors; local trades (merchants); local middle men; district level buying organizations;
main wholesalers (agents of exporting companies, national level brokerage firms, exporters);
and individual customers. In situations where the market chain is long (in fact, except where
the producer directly sells the produces/products in the local market), the producers and
consumers hardly ever meet. For example, marketing of essential oil for flavour and
7
fragrance industries is dominated by few multinationals who procure essential oil from
developing countries through brokers (brokerage firms) and relies on them to ensure quality
of supply.
Role of Middlemen
Individual producers are often at a disadvantage in selling the produces locally
through middlemen. As a group, the producers can control larger markets; and if organized,
they can do away with middlemen at various levels.
The role of middlemen is not always exploitative or dishonest. In several cases they
carry out essential services, which are otherwise missing – they serve as informal financing
source, they take part of the risk load, and also provide market information to the producer.
Marketing Channels
The role of the market players are variously linked by a chain of co-operative (and
competitive) actions, following appropriate channels for specific products and services. As
an example, the simple process of marketing grass brooms often goes through a short chain:
Broom grass
collector.
Broom grass trader Middlemen Broom
producer
Market
In a complex situation it may look somewhat as follows:
Gaps in the chain are promptly taken over by middlemen. Final consumption takes
place after a great many number of successive loops in the production product market
chain. Although primary producers are influenced by all the repetitive loops, they usually
manage only the first loop. It is essential to know well enough the whole chain (as well as
the particular role and importance of the raw produce concerned in the final product) to
claim, and justify getting, a “fair” share of the total wealth created between the extraction of
the raw produce and the sale of the final consumer products. The need for an appropriate
marketing information system thus becomes vital.
SE
VE
RA
L
PR
OD
UC
ER
S
MA
NY
CO
NS
UM
ER
S
Local buyer, middle
men or collection
centre
Assembling
market or
provincial traders
Processing Whole salers
Retailers
Transport
8
Marketing of Non-Wood Forest Products
Marketing of NWFPs is one of the most challenging undertaking because of their
number, versatility, dissimilarities, end use variations, and resource richness. Markets range
from simple, local level village fairs to most sophisticated industrial niche markets in
numerous end use sectors. Some of the attributes of NWFP production are: small size,
product diversity, seasonal production, labour intensive technology and accessibility to low-
income group of the community. While these are advantageous on the production side, some
of them are disadvantageous on the marketing side. To circumvent that, market-oriented
approaches have to be taken up as co-operative ventures. Globalization of commerce (further
supported by green consumerism) has opened up new opportunities for NWFPs.
The diversity and special attributes of NWFPs and their markets mean that practically
all possible approaches/practices of marketing are needed, linked with, and influencing, the
physical activities involved (e.g. haulage, sorting/grading by quality standards, packaging for
storage and shelf life, display etc.). The type of products, infrastructure and institutions
influence the decision on the marketing approaches to be used. Among others, these include:
Market-led approaches (involving analysis of market situation and outlook);
supply driven approaches (involving promotion).
Industrial marketing (of raw material, e.g. for pulp and paper and
pharmaceuticals); consumer marketing; processed marketing.
Money-based exchange; barter (this customary sharing/exchange system exists
still at local levels).
Direct marketing (by producer); through intermediaries (middleman).
Immediate sale (to avoid deterioration); delayed sale (for advantages); long
storage (to manipulate supply and supported by market stabilization funds,
storage facilities such as controlled conditions and refrigeration).
Negotiated contract sale (under different specifics e.g. as standing crop where
purchaser/agent take responsibility for harvest, transport, storage etc); auction
(competitive bidding).
Spot sale; advance sale (futures market as hedge against changes in price e.g. of
raw materials).
Individual marketing; co-operative (pooled) marketing (for bargaining power);
contracted (commission) marketing.
As it is, where it is (e.g. harvest site; primary processed); with guarantee for
quantity and quality of supplies.
The marketing approaches should suit the production systems and production
opportunities.
9
Market Information
Marketing is essentially a “software based” function where knowledge and
information are important ingredients along with attitudes, skills and capability of those who
are involved in the market development. Market operations are based on information about
current and potential markets, means of accessing the markets, competition and business
environment. Efficient marketing relies on a well functioning market information service
that provides necessary quantitative and qualitative information regularly, reliably, timely
and at the lowest possible cost. For orderly, efficient and equitable functioning of markets,
and to facilitate healthy competition, information relating to: product demand, end-uses and
situation in the end use sectors (such as pharmaceuticals), alternative supply sources,
distribution channels, market related institutions, product specification and quality, safety
and hygienic requirements, packaging specifications, consumer preferences and concerns,
price levels and supply/demand outlook, is vital. Lack of information results in market
distortions. Marketing studies and research are relevant in this regard.
The specific market information which the producers are looking for are: price of
products, price differences linked to quality, whole sale and retail margins, reasons causing
price differences, packaging specifications, preferred marketing channels, terms of payments,
promotion opportunities, mandatory regulations, transaction costs etc. The consumers look
for information on the quantity and quality of supply, alternative supply sources, production
costs, supply channels etc. Free flow of information and transfer of technology will
contribute to strengthening the market.
Market Infrastructure
Infrastructural facilities are another important factor contributing to the success of
marketing efforts. These cover services and facilities relating to: harvesting tools and
technique; post-harvest treatment; transport and storage; protection against damages; quality
testing; packaging etc.
Institutional Support
Institutional support for marketing is provided basically at two levels. At the highest
level, it comes in the form of government policy measures and regulations governing their
implementation. At the operational level, institutional support consists of the various co-
operative arrangements among producers, standarization organizations, product and quality
monitoring and control institutions, research institutes, extension and human resource
development services, banking and credit services, marketing information services, transport
and communication networks etc.
Regulations for grading and standards exist in many countries for traded products.
General quality standards for internationally traded products are established by the
International Organization for Standards. Quality and safety/sanitary regulations, including
packaging standards established by Food and Drug Administrations and Consumer Protection
Groups of importing countries are, often, rigid in respect of items such as medicinal extracts,
10
phytochemicals, food colorants and additives. Inability to meet the standards would normally
lead to loss of market.
Where export is involved, it is governed by foreign trade policy – which is a
combination of foreign exchange policy, import/export policy and international relations
through which trade negotiations are conducted.
Regulations in most cases, however, are weak in ensuring an “environmentally
honest” price for the products based on biological resources, for the environmental benefits
they provide (i.e. global and country-specific externalities).
Trade
The terms marketing and trade are often used interchangeably. Trade, in its limited
sense, is the act of exchange of products for money or other products i.e. the transaction.
Apart from the agreement relating to price, trade transactions are influenced by policies,
regulations, legal restrictions, controls and standards. International trade, particularly, is
affected by tariff and non-tariff barriers, quality specifications, terms of importation and
exportation and exchange mechanicms.
For the intents and purposes, market is the seat of trade in time and space. It is the
actual trade, which brings in revenue (and foreign exchange earnings), and as such it is an
integral part of economic development. Trade is often influenced by “supply push” and/or
“demand pull”.
Impact of Globalization
Globalization is defined as the process of economic integration of the entire world
through the removal of barriers to free trade and capital mobility, as well as through diffusion
of knowledge and information (thus considerably reducing the transaction cost). Technology
is both driven by and is a driver of globalization. Globalization manifests in intensified
competition among firms, to dominate the market.
Competitiveness
Competitiveness is primarily a firm-level concept and is linked to productivity. A
firm is competitive if it can produce products and services of superior quality and at lower
cost than its domestic and international competitors.
Competitiveness, defined as a firm‟s ability to survive under competition, is the
essence of a well functioning market system; and being competitive implies succeeding in an
environment where firms try to stay ahead of each other by reducing prices, by increasing
the quality of their products.
A firm‟s competitiveness is a function of factors such as:
i Its own resources (human capital, physical capital and level of technology).
11
ii Its market power.
iii Its behaviour towards rivals and other economic agents.
iv Its capacity to adapt to changing circumstances.
v Its capacity to create new products and new markets.
vi Its institutional environment, largely provided by the government, including
physical infrastructure and the quality of government policies.
Firms become more competitive by competing, and slowly and patiently learning how
to do business better. They accomplish this by both striving to enhance their entrepreneurial
and technological capabilities, defined as the ability to use/generate/change and add to the
pool of the industrial arts, and by taking risks. The steps involved in the path towards
competitiveness are: investment technological progress increase in labour productivity
improvements in technical and allocative efficiency.
Since a critical mass is of importance for enhancing competitiveness, resources of
small sized firms (farms) can be pooled to improve their competitiveness.
The State can (and should) promote competitiveness and competitive marketing
through such activities as: creation of export processing zones; establishing industrial clusters
with common infrastructure facilities; negotiations with MNCs and attracting FDI; adopting
technology upgrading activities/strategies; enhancing country capability and ensuring
availability of skilled man power as a dynamic competitive force; establishing appropriate
regulatory instruments; synergizing company-community partnerships; and promoting global
value chains (e.g. internationalization of manufacturing processes in which several countries
participate in the different stages).
Sustainability and Sustainable Development
Sustainability, as is used here, reflects the general sense of the term as in both the
Brundtland Report (WCED/UN, 1987) and Agenda 21 (UNCED, 1993). In the context of
current development, a World Bank paper states that a primary goal of sustainable
development is to achieve a reasonable and equitably distributed level of economic well-
being, that can be perpetuated continually for many human generations. It requires that the
allocation of resources to meet the needs of present generation should not prejudice the
interests of future generations. Current activities may be qualified as sustainable if they do
not reduce the productive potential of the asset base and the set of opportunities open to
future generations. Sustainability subsumes productivity (growth) and equity (World Bank
1992).
Development has physical, environmental, economic, social, cultural and other
processes. These processes influence each other. Physical development that is poorly
conceived, planned and implemented causes many of today's severe environmental problems,
affecting soil, water, flora and fauna, bio-diversity and the integrity of eco-systems, vital for
human welfare and security. Though sustainable development is based on dynamic
12
interaction among the production, the natural and the social systems, planners have tended to
focus on the production system as an easy and practical entry point. It is assumed that natural
and social systems will adjust to a changing production system; however, this does not
always happen. Only appropriate interaction among ecology, economics and sociology will
lead to harmonious development.
From a policy point of view, sustainability is not an option; it is an imperative.
Sustainable development, the central theme of UNCED Agenda 21, underline the need to
link growth to environmental quality and conservation. Without sustainability, environmental
deterioration and economic decline will be feeding on each other, leading to social decay and
political upheaval. Development of all aspects or sectors of the economy should be carried
out in a sustainable fashion; development of one should not result in sacrificing the
sustainability of another.
Development in the past, for example, caused land use changes leading to
deforestation. Expansion of agriculture/pasture and infrastructure resulted in forest clearance.
Also forests were cleared to generate funds for investment in other sectors. Sustainable
management of renewable natural resources should inherently be based on using income or
interest, and not consuming capital. The rate of harvest of living resources should not exceed
rates of regeneration. It also implies maintenance, rational use and enhancement of the
natural resource base that underpins ecological resilience and economic growth. An
important aspect of sustainable development is the search for economic activities that are
either consistent with ecological health and quality of life or at least are done in ways that
minimise the harmful side effects of economic development.
Ecologically, sustainability has two attributes in addition to equating harvest to
regeneration: (I) sustain adaptability and capacity for renewal of plants, animals, soils and
waters; and (ii) maintain biological diversity. It also implies understanding the irreplaceable
and unknown values of wild plants and animals and the utility of watershed forests and
wetlands. However, there is no market mechanism to value them adequately.
Sustainable Forest Management
Forest management refers to the application of business methods (emphasising on
efficiency and accountability) and technical forestry principles to the operation of a forest
property; and sustainable forest management involves processes essential to achieve
sustainable forestry development.
Forests form the main body of the terrestrial ecological system and a complete
resource base. Within the broad framework of sustainable development, SFM should ensure
that values derived from forests meet present day needs, while ensuring that the forests
maintain a quantity and quality that contributes to long-term development needs. This
implies the need to consistently improve the productivity and contribution of forests such that
future generations can continue to receive benefits of forest goods and services at least equal
to those of the present generation. This scenario is compatible with the concept of sustainable
development and the UNCED-adopted Forest Principles. As re-iterated by UNFF,
sustainable forest management calls for managing the sector along a reasonable and steady
growth path. A rational and balanced combination of different functions of forests -
production, protection, conservation and provision of environmental amenities - is essential
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to ensure sustainability of forests. It needs to incorporate large plants, animals, micro-flora
and fauna, water and soil, as well as traditional knowledge and heritage. The concept is
holistic and the task is multi-disciplinary in nature. Its horizon is infinite; it has very high
positive externalities such as soil protection and carbon sequestration.
As highlighted by FAO (1993), SFM involves planning the production of wood and
non-wood products for commercial purposes, as well as meeting local needs; it includes
protection, or setting aside areas to be managed as plant or wildlife reserves, for recreational
or environmental purposes; it ensures that conversion of forestlands for agriculture and other
uses is done in properly planned and controlled way; it covers the regeneration of wastelands
and degraded forests and establishment of forest plantations; it promotes integration of trees
in farming landscape and agro-forestry. In short, SFM is specific and practical action for
translating the concept of sustainability into reality in forestry. This calls for the use of forest,
goods and services at levels that do not change the environment (including elimination of
wasteful consumption), and within the regeneration capacity of forest estate. Sustainability is
to be ensured at the national level as well as at the forest management unit level. In the
present day context, the scope of SFM must be widened to incorporate both tangible and
intangible values; and both these values should be optimized, rather than maximizing just one
of them.
The multiple benefits, economic and ecological, of forests can be optimized by
limiting the use to within sustainable productivity (i.e. remaining within production
possibility curve). By providing increased technological and other inputs, it is possible to
increase the sustainable production potential (i.e. pushing production possibility curve to a
higher level). Instead of increasing production, an alternative is to reduce use. This can be
achieved by forgoing consumption, increasing efficiency of processing to improve
input/output ratio and by using substitutes. Sustainability, as is clear, is linked to
productivity.
Production and Productivity
Production is understood as a physical process, carried out by institutional units that
use labour and assets, to transform inputs of goods and services into output of other goods
and services. Incomes are generated continuously by production and it is the basis of national
income. The defined boundary of production determines the amount of value added (by the
transformation process), included in GDP.
Products
Products refer to things, substances and/or articles produced by a process. They arc
outputs of goods and services resulting from the input of resources or factors of production
used to produce them. The term 'product' is often used to refer to a manufactured good.
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Produces
The term produce(s)1 is used to refer to the things grown on land (and water) – for
example: forest produce and farm produce, which are simply collected or harvested
(including post-harvest treatments), as distinct from product(s) which are manufactured.
Product Classification
The word “class” refers to a group of things having the same or similar
characteristics; and “classification” is assignment to, or arrangement by, hierarchical classes
(e.g. category, division, group, class of products). Product classes are based on: raw or base
material involved, stage of production and degree of processing, physical profiles, related
economic activities, intended use of product etc. Purpose of product classification (as in the
case of other systems of classification, e.g. relating to land use, non-produced assets or
resources) is to compile and collate quantitative and qualitative information for analysis and
use, in designing future (development) actions. Product classification at the national level
needs to be consistent with international classification(s), to facilitate international
comparison and trade.
Productivity
Productivity is an expression or measure of relationship between input(s) and
output(s). Emphasis in production should be on productivity gains through refined/improved
technological inputs, and efficiency in the use of raw material (and/or land), labour and
capital inputs. Production decisions need to be linked to, and consistent with, the market
situation.
Value Addition
Value added is the difference between total revenue of a firm and the cost of bought-
in raw materials, services and components. It, thus, measures the value, which the firm has
added to these bought-in materials and components by it‟s process of production.2
NWFPs are capable of high value-addition along value chain involving resource
management harvest/collection dressing/cleaning storage transport primary
processing secondary processing downstream processing packaging wholesale
and retain marketing.
Investment in value addition is generally a commitment to locally process the raw
material, and to improve technology and marketing arrangements.
1 Some glossaries of forest terms use “minor forest produce” or “non-wood forest produce” for harvested or
collected non-wood forest goods.
2 The value added, often, attracts a tax known as value added tax (VAT). VAT is applied at each point of
exchange of goods and services from primary production to final consumption. It is levied on the difference
between the sale price of goods and services (outputs) and the cost of goods and services (inputs) bought-in
for use in its production.
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Rent and Rent Capture
Rent is the income accruing to the owner, for the services of a durable good such as a
piece of land and forest, and other types of property. It is the difference between the return
made by a factor of production and the return necessary to keep the factor in its current
occupation. To put it in another way, rent is the surplus available after all factors of
production have secured the minimum return needed to keep them engaged in the activity in
question. Government policies are, often, instrumental in creating or diminishing rents and
in deciding who gets them. In a situation of perfect competition, no rents are made by any
factor, because changes in supply changes the price of inputs to the level just necessary to
keep them engaged. Capacity to capture increased share of rent is often taken as an indicator
of increased efficiency on the part of “factor” owners.
Policy and Policy Instruments
The term policy generally refers to the principles that govern actions directed towards
given ends. It defines agreed upon or settled course(s) adopted and followed by governments
and institutions. These courses (of action) are normally selected from among alternatives and
in the light of given or assumed conditions, to guide and determine present and future
decisions. At the national level, policy embraces general goals and acceptable measures, and
strategies to achieve the goals. While the policies reflect the long-term objectives, they are
subject to modifications based on the dynamics of policy environment. Formal policy
enunciation is to be undertaken as a political process, to ensure its acceptability by those who
will be affected by the implementation of the policy.
Policy
There are different types of policies following a hierarchy – national policies,
regional policies, sectoral policies. Various policy levels are to be closely linked and free
from conflicts. While broad national policies tend to be in the nature of manifestos, the
sectoral/sub-sectoral policies are normally more detailed and of a portfolio type.
A formal policy normally comprises of:
Policy imperatives (non-negotiable): e.g. sustainability; environmental and
biodiversity conservation; gender mainstreaming; equity considerations;
respect for traditional rights.
Principles and considerations: e.g. need for transparency, accountability and
people‟s participation; need to ensure efficiency and competiiveness; need to
enhance information base; need to adopt international classification of
products; need to have adequate management guidelines/techniques for
specific groups of produces (such as medicinal plants, gums, resins, essential
oils); need to control bio-piracy; need to promote productivity; need to
undertake institutional reforms etc.
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Policy objectives: influenced by the desired/preferred outlook scenario and
derived from the imperatives, principles and considerations.
Policy focus: indication of priorities.
Policy measures: e.g. resource appraisal; resource conservation,
management and enhancement; collection and/or production; domestication
and cultivation; harvesting; processing; value addition; trade; rent capture
and value retention (as appropriate).
Stretegic elements: involvement of community/private sector; producers
associations; autonomous/decentralized institutions of adequate scale;
product standardization and certification; eco-labelling; coding/registration
of brands; research and development; human resource development and
capacity building; fund mobilization; value-chain investment; development
of business/enterprise management skills etc.
A national forest policy specifies certain principles regarding the use of the national
forest resources, which it is felt will contribute to the achievement of some of the national
objectives. The premise is that national forest policy should deal with forestlands including
all biomass resources, the utilisation of wastelands and degraded lands, and trees growing in
other non-forest lands. In the forestry sector, its policy provides a basis for legislation,
regulations, plans and programmes. It defines the contributions of the sector to national
development and welfare. It profoundly influences the way in which organisations and
individuals manage and utilise their forest/tree resources.
Forestry has evolved into a web of inter-related activities that goes far beyond the
limits of forestland, and it affects the welfare of every one economically and ecologically. A
serious concern is how forest can be managed to retain their essential roles as part of natural
resource systems, while maintaining their capacity for supporting people. Development is a
major consideration in today's society and forest policies should serve as agents and
facilitators of change. Thus, a national forest policy is now seen as a formal and
comprehensive statement, which provides a conceptual frame work, and clear objectives, for
forestry development as well as orientation for the choice and execution of forestry
programmes and related activities. It sets standards for decision-making and discourages acts
of expediency. Policy development, implementation and evaluation are more or less a
continuous process and closely related to the corporate planning process.
Policy Instruments
As earlier indicated, policy instruments include laws, rules, regulations and
organizations (to enforce the laws, rules and regulations).
Laws
Law is an instrument of policy. Laws are the main tools with which policies are
implemented. Laws can be punitive and negative in their connotation, prescribing what
should not be done and specifying punishments for doing what is prohibited. They can also
be facilitating, enabling and encouraging with a positive connotation, prescribing what
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should be done and also suggesting rewards and incentives. In fact, laws can have both these
characteristics on a rational balance, to suit the situation at hand.
A viable and efficient legal system is very important for effective implementation of
policies, and achievement of policy objectives. Laws, as a policy instrument defines the
power of the State and the nature and scope of sectoral institutions.
The legal system covers the legislated/enabling laws, and related rules and
regulations, along with the relevant institutional and judicial system. The legal system of a
country is the creation of its Constitution, into which the various sectors of the economy are
designed to fit. Accordingly, the various sectors will have their own system of legislation,
which is expected to be properly co-ordinated with the other component systems.
Between legislative enactment (laws) and implementation, the system involves a
hierarchy of rules, regulations, supplementary instruments, prescriptions/provisions, orders
and records. There are, in most cases, clear guidelines for making of the laws, rules,
regulations and decisions.
The Constitution of the country is the source of all laws. The Constitution specifies
the national goals and objectives, the fundamental principles of State policy (and
fundamental rights), and the basis for making laws. It also provides, among others, for the
system of legislature and judiciary, financial procedures, auditing and accounting, executive
branches of government and implementing agencies, national planning agency etc. In
addition there are, in most countries, clear guidelines for the making of laws, rules,
regulations and decisions.
The laws are made, depending on the circumstances and the constitutional provisions,
as enactments of the parliament/legislative body, as ordinances, or in some cases as decrees.
The laws normally include enabling provisions to make rules and regulations to
implement/enforce them. The power to make detailed rules and regulations are delegated, for
example, to the Minister or Head of Departments. In some cases/countries, laws and rules
often are legislated as a package. In some other cases, Basic Laws are enunciated as covering
both policy and related legislation. (Generally, legislation consists of the aggregation of laws
enacted by the legislative authorities of a country over time, plus the common law and
customary law, which have accumulated respectively through judicial or traditional practice.
These laws help to ensure that the population acts itself in accordance with the body of rules
and requirements contained in them).
Forest laws provide the legal instruments, which are necessary to put into effect the
objectives of a forest policy. It permits the translation of the objectives of a policy into
specific legal provisions affecting the use of forests, forestlands and wild lands, and the way
these resources enter into the life and development of communities, regions and nations.
Since policy objectives change and evolve over time, new laws must be enacted or older ones
revised or abrogated, to be consistent with these changes.
Forest laws as a means of contributing towards the achievement of policy objectives
affects both governmental agencies and the general public. In regard to governmental
agencies, legislation stipulates the responsibilities and actions, which the agency and its
personnel are instructed to carry out, and explicitly or implicitly, the limits of their authority.
Forest legislation is directed towards the public in different ways:
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a. By establishing laws, with sanctions for violations; prohibiting, limiting,
requiring or regulating actions relative to the exploitation, utilization,
transport and marketing of the goods and services derived from the forest.
b. By encouraging certain actions usually involving a reward or gain on the part
of the user or observer of the law. The gain mostly may be economic through
tax relief or financial subsidies for such activities as tree planting, timber
stand improvement and carrying out research.
c. At times the absence of legislation will also contribute to the achievement of
an objective. For example, if the intent of forest policy is to allow the export
of forest products in any form, then the absence of a restrictive legislation on
transport and/or exports will be conducive to achieving this objective. If there
is a prospect of economic gain or profit for the actions of the people, which
are in accord with policy objectives, this incentive may be sufficient such that
that no legislation is required.
Forest laws contribute to the achievement of policy objectives by regulating: (1) the
relations between persons (with respect to natural resources); (2) the relations between the
government and users of the resource, (3) the relations between persons and resources in
establishing how the former use the latter, and (4) the internal activity of the government in
relation to publicly owned resources.
With regard to forests and forestlands, forest laws recognize two broad classes of
tenure: private holdings (individuals, communal ownerships, corporations, private
institutions, etc.) and some form of public ownership (i.e. government, municipal, etc.).
Compatibility of forest laws with general land laws of the country should be ensured.
In the case of forestry, wildlife and environment (as well as other sectors having
global implications), there are several international declarations, manifestos, and
conventions, which have been signed and ratified by national governments. These also
assume significance similar to laws, for example: CITES, CBD.
Rules
Rules are directives concerning methods and procedures for implementing and
observing a law or an established custom. The laws are normally elaborated (or broken
down) into sets of rules or codes to be followed (e.g. civil service rules, financial rules,
contract rules, game rules, grazing rules etc.).
Rules elaborate the procedures for implementing the provisions of law(s). Often the
term (rule) encompasses the law(s) forming the basis of the rules as well as the related
instructions, frame works and guidelines. The rules can be formal or informal. The rules are
the product of behavioural tradition or of the political and legal construction of the State (e.g.
rules regulating customary rights; rules relating to tenure; rules relating to natural resource
extraction). Rules have descriptive and prescriptive components. Rules have assumptive (e.g.
implied “normal” conditions of growth, management, institutional capability, infrastructure
and facilities) and pro-active (legal intervention) aspects. Rules specify privileges and
obligations and provide for incentives and penalties.
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At the governance level, rules form the interface between the public and the
mechanism of policy implementation on the part of the government.
Rules are, thus, creations of the power of institutions; they are less likely to be
capricious, nor possibly avaricious, if and when they are a creation of a large community of
institutions, weaving a wide array of interests and public concerns.
In virtually all formal rules issued by the Government, the descriptive aspects include
what laws the rules are based upon, the policies conveyed or inunciated in the rules, the
publics that the rules are intended to govern and the related requirements.
Rules do not only describe; a basic intention of rules is to prescribe the procedures of
conduct for a given situation or condition or when certain events occur – for example, the
user of a resource while enjoying certain benefits is also reposed with certain obligations for
its use and care. Rules invariably contain certain assumptions about their objects and
subjects. Assumptions (e.g. level of people‟s income, capability) become the basis for the
pro-action being intended by the rules.
Rules or codes, enabled by law, have legal standing and validity. But some others do
not, if they are not so enabled. In several cases, there are no rules of proper or adequate legal
standing, for example, pertaining to technical operations in forestry such as seed collection,
raising of nursery stock, felling of trees, and collection of NWFPs and genetic materials.
Rules can often become weak, because they may suffer either structural or
formulation defects. Structural defects are evident where:
the rule is enforced in situations where other forms of rule provide conflicting
stipulations on the same matter it addresses;
there are inconsistencies between descriptive and prescriptive elements of the
rule;
the assumptions of the rule are not supportive of its intended actions (e.g. on
availability of vital information, required skills etc);
neither the incentives nor disincentives stipulated in the rules are sufficient, either
to arouse compliance or to defuse defiance to it.
Formulation defects are found in inadequate vocabulary, grammatical mistakes, legal
imprecision (due to careless use of terminologies), unnecessary compliance requirements
(such as unnecessary documentation) etc.
Rules should help to elicit transparency, accountability and participatory process.
In most cases, the rules are kept updated (incorporating changes, amendments etc) as
codes applicable to a Sector or Department. Some of the rules/codes cut across all sectors in
their legal influences and impacts - e.g. Penal Code, Civil and Criminal Procedure Codes.
Regulations
To facilitate application, the enactment of laws should be followed by careful
preparation of subsidiary, more detailed and specific regulations. It is often difficult to make
a clear distinction between rules and regulations. However, in normal contexts, regulations
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are used to mean the steps and procedures involved in enforcing rules, and to make sure that
it works. For example, hunting rules will have regulations related to seasons, size of animals,
claim on trophies etc. The regulations prescribe/control the successive bureaucratic steps
involving applications, appropriate forms, plans, agreements/legal commitments, entries in
registers and so on. These are, in several cases, presented along with related interpretations in
the form of reference manuals (e.g. personnel regulations, financial regulations, timber
harvest regulations, purchase/procurement regulations). In countries where forest concessions
are awarded to private individuals, there are detailed regulations regarding the preparation,
approval and implementation of Working Plans, including obligations to local communities,
their rights and privileges etc. Within the framework of laws and rules, regulations may
undergo changes, and in many countries, some of the powers for amending/modifying the
regulations are delegated to lower levels of administration for facilitating speedy actions and
decisions.
Supplimentary Instructions
Then, there are the supplementary instructions; and irrespective of the bureaucratic
levels from which they are issued, they take various forms – executive orders, guidelines for
maintaining records, interpretations/explanations, special directions, information bulletins,
standing orders, temporary exemptions to rules/regulations, circulars, notifications,
memoranda and so on. Workings of lower units of operation/administration are guided to a
considerable extent by these instructions. These tend to change frequently and supersede
older instructions. Keeping these updated is a major task, which is often neglected.
These instructions, however, invoke the main laws, rules and regulations and are
issued by authorized persons. As such, they form part of the legal system. They often
involve a number of registers/records/maps serving as evidence regarding boundaries, areas,
occupations, dates, values etc. Ensuring that the rules, regulations and instructions are
carried out properly to the benefit of the people is almost impossible in a centralized system.
Also, decentralized systems can work only if supported by capacity building, adequate
preparation and a suitable incentive system.
Other Important Legal Instruments
In the legal system, there are instruments/documents which cut across the hierarchy
of laws, rules and regulations, representing legal decisions, deeds, orders, agreements etc.
covering contracts, leases, land transfers, establishment of new units of production/service,
and/or personnel matters. These may range from a service (say, appointment) order to a
settlement (say, of stewardship certificate) order. Importance of complete recording and safe
storage of these documents cannot be over emphasized. Since these documents are based on
the rules and regulations existing at the time of their issue/preparation, they are important
legal documents. Some of these are also notified in government gazette(s) or publications, as
a formal requirement.
Autonomous bodies (e.g. Boards, Authorities), co-operative societies/associations and
their federations are legally established, based on instruments varying from Bills passed by
legislative bodies to memoranda of associations, and relevant regulations. These, as well as
21
the strategic planning documents the approved by the appropriate authority can also be
considered as part of the legal instrumentation.
Governance
Governance relates to the manner of governing and involves exercise of authority by
the government through appropriate means (and agencies) to enforce policy, to ensure rule of
law and to conduct the affairs of the State. Models of organizational (agency) structure,
depending on circumstances vary considerability – centralized structure, decentralized and
federated structure, socialized structure, co-operative structure and combinations of these.
The general institutional infrastructure of a country, largely provided by the
government, affects how firms develop entrepreneurial and technological capabilities.
Therefore, a development strategy requires a working partnership between the State and the
“market”. A general area of responsibility for the State in this regard and particularly to
ensure an “economy of national competitiveness” is to establish a basic legal frame work,
which encompasses: (i) the rule of law, (ii) public administration, (iii) laws regarding
contracts and the regulatory structure affecting the key sectors, and (iv) intellectual property
rights.
Appropriateness of an institution involved in governance is gauged by
Legitimacy: e.g. correct agency to exercise a mandate.
Public trust: confidence of the constituents in the institution.
Credibility: confidence of the constituents on the ability of the institution to
execute the mandate.
An appropriate institution is characterized by transparency, accountability and
participatory processes – to ensure rule-based decisions and to support development.
Natural resource governance has to balance sustainability of the resource (aspects
linked to environment and development) and efficiency/productivity (aspects related to trade
and development). In respect of NWFPs, in many countries, several departments, boards,
corporations, federations etc. are involved in their governance, without really governing
them.
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2. FORESTRY SITUATION IN LAO PDR
THE COUNTRY PROFILE
Lao PDR, with an area of 230,800 sq. km, is a land-locked country, bounded by
Thailand and Myanmar in the west, China in the north, Vietnam in the east and Cambodia in
the south. All of Lao PDR is within the tropics, between latitudes 14o N and 23
o N, and
longitudes 100o E and 108
o E. Rivers and mountains dominate the topography and their
interaction accounts for most of the country‟s geographic variation. All rivers and tributaries
west of the Annamite Chain drain into the Mekong river. Those to the east of the Annamites
eventually flows into the gulf of Tonkin, off the coast of Vietnam.
The Mekong river valley and its fertile flood plains form the country‟s primary
agricultural zones, including virtually all of the country‟s wet rice lands. The Mekong and its
tributaries are also an important source of fish.
Mountain and plateau cover well over 70% of the country. Running about half the
length of Lao PDR, parallel to the course of Mekong river, is a rugged mountain range,
known as the Annamite chain.
The estimated population of Lao PDR in 2003 was 5.7 million (population density 25
per sq.km), with the population projected to reach 8.5 million by 2025 (Population Reference
Bureau, 2003). Population of Lao PDR is comprised of some 230 different ethnic groups
from 4 ethno-linguistic families. Traditionally, they are divided into four groups, roughly
according to the altitude at which they live. Their land use/tenure system is complicated.
The highland and mid-land people of Lao PDR practice shifting agriculture, whereas lowland
people follow a stable form of agriculture.
According to the UN Human Development Report, 2001, Lao PDR is a “low human
development” country with a Human Development Index3 of 0.476 (its rank being 133 out of
173 countries surveyed), with 26.3% of the population earning below US$1 per day at 1993
PPP4.
3 Human Development Index (HDI) measures the overall achievements in a country, in three basic dimensions
of human development – longevity, knowledge, and a decent standard of living.
4 Those living under nationally defined poverty line was 46.1%.
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Macro-Economic Situation
It is anachronistic that Lao PDR, a country blessed by nature and well endowed with
natural resources, and having only a relatively small population, is also one of the poorest in
the world.
Lao PDR has predominantly a rural society with about 85% of the population
depending on agriculture, fishery and forestry for their livelihood.
Because of the extended struggle for political freedom and the resulting instability,
Lao PDR was left behind in the “development race”, compared to other countries in the
region.
During the last 30 years, Lao PDR has seen several shifts in the policy and
approaches to economic development. Between 1975 and 1980 all private enterprises and
property were nationalized and collectivized, and private ownership was abolished. During
1981-85, though collectivization was encouraged, private sector was tolerated. In 1985, about
half of Lao farmers were organised into over 3,000 agricultural collectives that covered half
of the country's agricultural lands. Nationalization, collectivization and creation of state
enterprises continued till 1986. After the 4th General Party Congress in 1986, the Government
initiated wide-ranging economic reforms called "new economic management mechanism"
which promoted market mechanism in the place of administrative controls. The new
economic mechanism promoted open market; provided autonomy for enterprises; and
encouraged management efficiency. The State was no longer to directly intervene with
production, and government's primary role was defined as macro-management, monitoring
and evaluation and developing appropriate legislative framework. Private land ownerships
became legal.
Along with the transition of the country from a centrally-planned to a market-oriented
economy in the later part of the 1980s, there has been corresponding shift from
administrative to participatory approaches (such as "focal site" approach) to solve the
problems in the land using sectors.
The "focal site" approach is an area-based livelihood systems approach to
decentralized rural development, in which interventions are tailored to the area's specific
needs. Such an area-based approach is geared toward promoting locally owned 'centers for
change and learning'. The main goal is to increase food and commodity production, to create
employment opportunities, and develop the conditions for improved living standards. The
success of the "focal site" approach is dependent not only on an enabling policy framework,
but also on the way the Districts and Local Institutions are empowered, human resources are
developed, and capacities are built for public management and participatory community
development.
The Nation‟s development is guided by the policy and programmes covered in the
major documents such as the Five Year National Socio-Economic Development Plans, the
government's Strategic Vision for the Agriculture Sector and so on. Currently Lao PDR is in
the process of implementing the 7th
Five Year National Socio-Economic Development Plan,
which incorporates the millennium development goals such as: reducing poverty, supporting
livelihood and enterprise development, reversing environmental degradation, ensuring access
24
to safe water etc. The national goals are aimed to be achieved within a National Poverty
Eradication Framework, with access to appropriate land use (agriculture, forestry)5, markets
(infrastructure, information), social services, human resource development, financial
resources and facilities for grass-roots initiatives.
Land-use Planning and Land Allocation Programme of Lao PDR has been going on
since the mid-1990s. Between 1995 and 2002, an area of 8,129,374 ha has been allocated6 to
379,290 households in 6,188 villages as given below (see Table-1).
Table 1 – Land Allocation for Different Uses in Lao PDR, 1995-2002
Land-use Area (ha)
Paddy crop 285,303
Commercial crops 431
Forest plantations 59,429
Pastures 21,951
Forestland 6,712,911
Other uses 1,048,349
Total 8,129,374
Reports, however, indicate that landuse planning and land allocation has been
inconsistent and ineffective, because the process has been more prescriptive than
participatory and there were flaws in the way the process was being conducted.
Important Economic Sectors
A brief account of the important economic sectors are given below:
Agriculture
Around 10% of the land area of Lao PDR is considered suitable for agriculture.
Cultivation in effect is carried out according to a dual pattern – one for the lowlands and one
for the highlands. Important lowland crops are wet rice, corn, wheat, cotton, tobacco, peanut,
soyabean, fruits and vegetables. Highland crops include dry rice, tobacco, tea, coffee and
maize. Inspite of the Government's efforts to eradicate opium cultivation, in remains a
lucrative business in the highlands. The Lao Government has been trying to discourage the
practice of shifting cultivation by the highland communities, but the practice seems to persist.
5 Emphasis of land-use includes, among others, reduction of shifting cultivation, elimination of opium
cultivation, land and forest allocation, livelihood systems (agricultural production supported by small scale
irrigation, agro-forestry, handicrafts, commercial tree crops, NWFPs, fishery and animal husbandry), and
integration of tree and non-tree crops.
6 Some 13% of the Country‟s land area is reported to be under shifting cultivation
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The agriculture sector is estimated to account for about 52% of the GDP.
Forestry
Since considerable area in Lao PDR is still under forests, forest products (timber and
non-timber forest products) are economically important, and form a major source of foreign
exchange earnings (more on this will be dealt with, later).
Industry
Industrial development in Lao PDR is a comparatively recent occurrence; it is
currently a fast growing sector with construction, power generation and garments playing a
key role. Others in this growing sector include: hotels and restaurants; motor cycle
manufacturing; furniture; mineral water and soft drinks; cement and bricks; cigarettes;
handicrafts; NWFP processing; mining and fish processing. The sector is predominantly
comprised of small and medium size units. It is constrained by inadequate technology and
skills, and low quality of production.
Tourism
Tourism plays an important role as a substantial source of income; and it has the
potential to be a large earner of foreign exchange. The total tourist arrivals in Lao PDR in
2004 was 105,513 of which 30.3% was from Asia-Pacific region, 51.8% from Europe, 11.0%
from North America and 6.9% from other regions. With increasing investment in
infrastructure development, tourism sector is expected to register a fast growth.
The Financial Sector
Lao PDR has been dependent on foreign aid since 1950s. However, the amounts and
sources varied greatly over the intervening years. The quantum of foreign aid (both multi-
lateral and bi-lateral) has increased since 1980, making up as much as 80% of the national
budget in certain years. State investments as at the end of May 2005 included 1,143 projects
worth 504.4 billion kips, of which 68.7 billion kps were sourced domestically and 435.7
billion kips from abroad7 (report in Vientiane Times, 30 Mary 2005).
In 1987, the Government relaxed restrictions on private enterprise. Also, Lao PDR
now has a liberal foreign investment regulation, even though there appears to have several
problems in practice. Among the important foreign investors by nationality are: Thailand,
Republic of Korea, USA, Japan, Australia, Malaysia etc.
Lao PDR is a country with relatively low production cost. However, relatively low
production cost cannot make up for the high procedural, logistic and transport costs faced by
industry. Also the multitude of middlemen, brokers and agents seems to add to the
transaction costs. Thus, the level of competitiveness of Lao industry remains weak.
7 1 US$ = 10,700 Kips
26
Over all, the financial sector reform has emerged as a priority for the government and
it is in the process of undertaking these reforms with the support of ADB, IMF and the World
Bank.
Income and Trade Balance
GDP per capita of Lao PDR in 2003 was US$ 361. Considering the country‟s natural
resource endowment and potential for growth, some observers attribute the current situation
of low productivity partly to people‟s lack of economic discipline and preference for leisure.
Due to higher imports, particularly of capital goods, the position of balance of trade,
in Lao PDR, is negative. Trade deficit during the period January to May 2005 has been
reported as US$ 127.8 million.
Electricity (from the hydro-electric projects), garments, wood and other forest
products and gypsum are the leading items of exports. An important source of foreign
exchange for Lao PDR is the remittance made by Lao labour employed in Thailand and
elsewhere (estimated at about US $ 100 million per year)8. Some 300,000 Lao Citizens are
estimated to be working in Thailand alone.
Borders of Lao PDR with China, Thailand and Vietnam are somewhat porous and
there seems to exist a tolerance for free (illegal) trade across the borders9. There is need to
substantially improve the situation, considering the impending accession of Lao PDR as a
member of the Asian Free Trade Agreement, and the standards to be achieved to meet the
WTO requirements. In this regard, ITC is providing support to the Lao Trade Center (the
erstwhile Export Promotion Department).
Political Division and Decentralization
Administratively, Lao PDR has been divided into 18 provinces, 142 districts, and
10,912 villages. Since all the natural resources (forests, minerals etc.) are state property,
these administrative units are responsible for their management and governance.
Lao PDR, conceptually, follows a decentralized system of administration.
Decentralization refers to the transfer of political, fiscal and administrative powers from the
central to the peripheral entities, on the basis of a political-administrative and territorial
hierarchy. It is a political action that strives to ensure inter-locational equity in the
distribution of development and sharing of resources.
This official power transfer can take two main forms. The administrative
decentralization, also known as deconcentration, refers to a transfer of power to lower level
authorities of central government, or to other local authorities, who are upwardly accountable
8 Compared to US$50 million a year from export of garments.
9 Some estimates suggest that there are some 80,000 unauthorised traders overseeing the illegal trade activities
across Lao-China border.
27
to the Central Government (Ribot 2002). In contrast, the political or democratic
decentralization refers to the transfer of authority to representative and downwardly
accountable actors, such as elected local governments.
Decentralisation in Lao PDR is aligned with a 2000 directive that redefined central-
local relationships – with provinces as strategic planning units; districts as planning and
budgetary units; and villages as implementation units.
Centre takes care of overall strategy, resource allocation, and providing policy and
regulatory framework. National legal frame work of the different sectors provide guidance
for the functioning of decentralized units at the provincial, district and village levels. The
lower levels look up to the succeeding higher levels for support and assistance including
technical inputs and funds.
There is, often, a sharing of powers (delegation of authority) between province and
districts. For example in respect of industrial units, the districts are empowered to register
handicraft units and those workshops using engines of below 5 HP capacity. Those above
that limit are registered by the provincial authority.
In Lao PDR, the broad frame work of decentralized management of resources is the
provision for devolution of responsibility for planning and implementation of rural
development and management of agriculture and forest lands to provincial, district and
village authorities, with required advisory and technical assistance by concerned central
agencies. The District Administration is considered as pivotal to the system.
In respect of forestry, organizational responsibility for public forest administration
follows a decentralized system. At the national/central level, MAF is responsible for policy
implementation and regulations, as well as for research and development. Role of the central
department of forestry in respect of many matters regarding administration is only to provide
guidance and advice. Central support services in forestry are channeled through NAFRI and
NAFES.
At the provincial and district levels, PAFO and DAFO respectively are responsible
for public forest administration. Decisions on forest administration and management are
made by the provincial governor (on advice of PAFO). The province advises the districts on
the various decisions for appropriate action and implementation. Village level workers (with
guidance of DAFO and PAFO) interact with farmers and farmer groups, and provide
guidance in forestry matters.
There are, however, several flaws and weaknesses in the functioning of the system. In
fact, decentralization in Lao PDR is still evolving and are guided by decrees, rules and
executive orders. A formal and comprehensive decentralization law is yet to be legislated.
The involvement of different institutions (of different sectors) at all levels, in forestry
matters have often lead to conflict of interest affecting governance. The need for co-
ordination among sectors and levels is high. Moreover, effectiveness of forestry
organizations is generally poor, due to lack of adequate skills, experience, development
discipline and orientation, funds, facilities, infrastructure, and people‟s participation. At the
decentralized level, the overall situation is worse. There is also the issue of critical size
required (particularly for districts and villages), for self-sustainable development.
28
At a cross-sectoral level the UNDP‟s Governance and Public Reforms Project is
addressing some of the critical institutional weaknesses.
FORESTRY SITUATION
In comparison with its neighbours, Lao PDR is endowed with valuable and
ecologically unique forests, which are not only a vital economic resource, but also provide
essential contributions to the livelihood of the rural population. Some 80% of the population
relies heavily on the forests for timber, fuel, medicines and spiritual protection.
Extent and Condition of Forest Resource
According to the Global Forest Resources Assessment 2000, an area of 125,610 sq.
km, representing about 54% of the land area of Lao PDR (125,070 sq.km of natural forest
and 540 sq.km of plantation forest), is under forest cover10
, giving a per capita share of 2.4
ha (FAO 2001, 2005). Lao PDR has more forest per capita than most other developing
countries. Distribution of the forest is uneven, with commercially valuable forests occuring
in central and southern parts of the country. Forests of Lao PDR is owned by the State.
Forest types
99.5% of the forests of Lao PDR are natural tropical forests, categorized as evergreen
forests (30%), moist deciduous forests (50%), dry deciduous forests (15%) and others (5%)
(Kingsada, 1998). Forest are also differently classified as wet evergreen forests, monsoon
forests, mixed deciduous forests, dry evergreen forests and dry Dipterocarp forests11
. Parts
of Annamite Chain are covered by tropical montane evergreen forests, while tropical pine
forests can be found in the Nakai Plateau and Sekong areas to the south.
There are more than 150 utility trees occurring in the forests of Lao PDR. 30 to 50
species are commercially valuable (Dipterocarps, teak, Pterocarpus species and others).
Forest Plantations
The first forest plantation raised in Lao PDR was in 1975, mainly as “species trials”.
Species raised included Eucalyptus spp., Acacia spp., teak, Melia azadirachta, Alstonia
10 Forest as defined in Global Forest Resources Assessment 2000 refers to land with a tree canopy cover of
more than 10%, and an area of more than 0.5 ha.
11 Yet another categorization based on ecological zonation is: rain forest (25%), moist forest (25%); dry forest
(35%); montane forest (14%) and others (1%) (FAO 2001).
29
scholaris, Styrax spp., Pterocarpus macrocarpus, Sacrocephalus spp., Bixa orellana and
others.
According to Global Forest Resources Assessment 2000 (FAO, 2001), reported area
of forest plantation in Lao PDR is 54,000 ha.
Acacias - 5,000 ha
Eucalyptus spp. - 8,000 ha
Teak - 14,000 ha
Other broad leaved spp. - 27,000 ha
Due to various reasons, it was not possible so far, for Lao PDR to pursue a consistent
effort for raising high value forest plantations. Recently, high priority has been accorded to
establishment of plantations, in order to enhance the forest resource base; and during the last
few years, there have been considerable increase in plantation area. In Luang Prabang
province alone, the area of teak plantation as in 2005 was reported to be 15,340 ha. Both
private and public sectors have contributed to the expansion of plantations. Some of the
plantings, particularly of teak, took place with funds provided to farmers by industrialists in
Thailand, on the basis of buy-back arrangements.
Tree planting increased from some 1,500 ha/year in early 1990s to about 17,000
ha/year in 2000s, with support under the ADB loan project. Commercial species such as teak
are being increasingly planted.
Small holders constitute the largest tree-growing group; but on average have smaller
plantations (1.8 ha). They account for 30% of the total area planned under the ADB loan
project.
A large number of species, both exotic and indigenous, are used for planting
depending on the purpose for which they are raised.
So far, contribution of plantation wood to total wood supply has been negligible.
Growth and yield studies relating to forest plantation in Lao PDR are scanty. Available
information is based on random observations than on scientifically designed studies. Such
information, however, indicate that the growth and quality of planted trees is very low, when
compared with international standards.
Poor performance of plantations in most situations is the cumulative effect of several
contributory factors, in addition to the pilferage – i.e., poor site selection, lack of soil studies,
inadequate technology, inappropriate species, lack of species/site matching, inadequate
attention regarding seed quality and provenance, poor protection (against fire, pests and
diseases, pilferage), inadequate tending and maintenance, and deficiencies of management.
Plantations for Future
Forest plantations, being an intensive investment-oriented activity is often designated
as industrial forestry, for producing industrial raw material (saw logs, ply logs, pulpwood,
chip wood), construction timber, and fuel wood. A unit area of forest plantation can
substitute for a natural forest 20 or more times its size in terms of growth and yield of wood
(or other products), though not in terms of its environmental attributes such as conservation
30
of biodiversity. Some of the advantages of industrial plantations are the uniform quality of
product, amenability for manipulating growth and other properties though genetic
improvement, relative low cost of harvesting, economy of scale and so on. They can be
grown as pure crop or mixed crop, for single product or multiple products. Because of its
high-input/high-output potential forest plantations often are the practical answer to meet the
increasing demand for forest products.
Future of production forestry, whether for wood or non-wood products, will to a
significant extend depend on plantation forestry. Since profitability (viability) of such
ventures depends on productivity, it is necessary that priority attention is given to improving
productivity of plantations.
Considering the importance of forest plantations for meeting the future production
(and protection) needs, and the enormous increase expected in this activity during the coming
years, the whole area of plantation technology (covering soils and sites, seeds, nursery,
planting stock, plantation silviculture, pests and diseases, tending and maintenance) will have
to be dealt with as a high priority. Particular emphasis will have to be given to management
packages. Related research would include: high-input/high-output combinations; multiple-
use/multiple product plantations (e.g. resin + timber; fruit + spices + timber; wood + rattan);
complementary roles of indigenous and exotic species; scattered tree silviculture; ecological
zoning for plantation planning; and economics of plantations.
Dynamics of Forest Resource Change
The forests of Lao PDR, one of the major natural resources of the country, has been
devastated in the past 35 to 40 years, partly as a result of civil unrest and partly because of
other pressures. Much of the country‟s once rich forest resources and forestlands are in
degraded and depleted condition.
Deforestation
In the 1940s, Lao PDR had more than 17 million ha (74% of land area) under forest.
According to Global Forest Resources Assessment, 2000 (FAO, 2001), the estimated forest
area (having a crown cover of 10% or over) in 2000 was 12.56 million ha, compared to
13.09 million ha in 1990 - indicating an annual deforestation rate of 53,000 ha (0.4%) during
1990-200012
.
Excessive and illegal logging, planned and unplanned land use changes, forest fires,
and inadequate protection measures have been the major causes leading to continuous loss of
forests.
12 Another (Lao-Swedish ?) study conducted in 2002 indicted that forest which has more than 20% canopy
density, cover only 41.5% of the land area (or 9.83 million ha) of Lao PDR, compared to 47% in 1992 and
70% in mid –1960s (MAF, 2005).
31
Forest Degradation
A less conspicuous, but equally serious aspect of the dynamics of forest resource
change is forest degradation – caused by unscientific uses, grazing, fire, slash-and-burn
agriculture and management deficiencies, which gradually leads to the disappearance of
forests. Due to non-observance of silvicultural and other prescriptions, lack of scientific
forest management and rehabilitation, and uncontrolled (legal and illegal) selective logging,
several areas have become degraded. These degraded forests are of low economic value.
Forest degradation is manifested in the form of low stocking, damages to (and declining
quality and commercial value of) the residual growing stock, imbalance in the distribution of
species and size/age classes, falling growth and productivity, lack of under growth, loss of
wildlife and plant habitats, soil erosion and so on.
In Lao PDR, much of the remaining forest is in a highly degraded condition. The
estimated volume of growing stock of wood in 2000 was only 29 cum/ha compared to
128cum/ha in 1990. The corresponding estimated quantity of above ground biomass in 2000
was 31t/ha, down from 193t/ha in 1990 (FAO, 2001). Fall in the growing stock often
suggests drastic loss of NWFP resources.
There is at present growing concern over the adverse social, economic, and
environmental impacts of these trends. Moreover, deforestation and forest degradation affects
most severely the poorest segments of Lao society, and particularly women and ethnic groups
whose livelihoods are more closely dependent on the health of the nations forests.
Forest Management
In the earlier section, we discussed the dynamics of forest resource change in Lao
PDR and the extent of deforestation and forest degradation that have taken place in the recent
past. The discussion also indicated the serious inadequacies of forest management.
Over the years, several activities have been proposed to reverse the negative trends of
the past in forest management. These include: forest land allocation to local communities
and other resource managers; strengthening systematic forest plantation development;
development of national village forestry strategy; and development and piloting of
sustainable forest management systems.
Overall, the strategy proposed is intended to achieve forest management through
rehabilitation, protection, conservation, enhancement of productivity and expansion of forest
resources, in collaboration with local people, private sector and NGOs. Accordingly, there
has been a change, recently, in the emphasis from large scale production forestry towards
people-oriented community forestry.
However, most of the proposals are yet to materialize.
32
Management Objectives
The prime objective of forest management, as has often been reported, is to ensure
and support environmentally sound and sustainable development, including improvement of
productivity and biodiversity conservation. One of the specific objectives in this regard is
stabilization of shifting cultivation by phases and resettlement of shifting cultivators in the
uplands of Lao PDR.
Management Activities
Forest and land allocation programme covering community forestry, agro-forestry
and JFM type approaches; production-oriented forestry; forest protection and biodiversity
conservation with peoples participation; plantation forestry with participation of private
sector and village community; and management of village forests have all been proposed as
forest management interventions. The above categorization and the system of management to
be followed for each of the categories, for achieving the management objectives, area
afflicted by confusion and lack of action.
During the Mission to Lao PDR during May/June, 2005, the author could not get
consistent information regarding considerations for categorization, activities undertaken, type
of areas involved, production figures and so on. Information obtained during meetings at
various levels were often contradictory.
Stabilisation of Shifting Cultivation
With the objectives of stabilising shifting cultivation, poverty reduction, improving
economic (income generating) benefits, promoting protection and rehabilitation of natural
resources, activities are planned under different programme titles (e.g. land and forest
allocation programme, village forestry and community forestry), which more or less mean (or
aim to achieve) the same thing.
The strategy dealing with shifting cultivation stabilization, as given in official
documents includes the following:
Land use zoning based on slope and land capability.
Sedentarization of agriculture in sloping lands through farming system
diversification and agro-forestry development.
Enhanced access to markets through feeder road construction and delivery of
market information.
Rural savings mobilization and credit grants, and
Land allocation and land use occupancy entitlement.
Land and forest allocation and village re-location and consolidation have been used as
the main stabilization mechanisms for shifting cultivation and for enhancing cash crop
production and forest conservation. Land allocation activities began in the early 1990‟s and
were consolidated into a National Programme under PM‟s Decree No
3/1996. A specific
decree on allocation of land and forestland for tree plantation and forest protection (PM‟s
33
Decree No 186/1994) enabled allocation of land for these purposes. MAF instruction N
o
822/1996 has set the general principles, specific targets, implementation procedures, types of
land to be allocated within villages and eligibility for land and forest allocation. The Land
Law (No
1/1997, Arts 17 and 21) provides the framework for areas of land to be allocated.
Accordingly, up to 25 ha can be allocated for agriculture and forestry to each labour unit
available in an organization, or to individuals.
Crop Production
Degraded forestland has been allocated to farmers and individual households for crop
production, grazing and tree planting through the land and forest allocation progrmme, under
which they are entitled entirely for the produces grown.
Temporary land use certificates are signed for a period of 3 years, after which long-
term use rights would be given if the allocated land has been developed satisfactorily,
according to the agreed objectives.
Rotational upland cultivation on allocated plots or within agreed areas, without
encroachment upon new forest areas, is an accepted alternative, although sedentary
cultivation on upland or sloping areas using improved, conservation-oriented farming
methods is preferred. Promotion of non-rice crops, fruit and commercial trees, cattle, and
fishponds potentially provide alternative sources of food and income for affected
populations.
Since 1990, significant reductions in the area involved and the number of families
practicing shifting cultivation have been reported. From 249,000 ha and 210,000 families in
1990, figures dropped to 110,000 ha and 99,000 families in 2001. The current targets are to
eliminate 70% of the area under shifting cultivation by 2005 and to eradicate it completely by
2010. Five provinces in the north of the country (Luang Prabang, Oudomxay, Huaphanh,
Phongsaly and Luang Namtha) are the focuses for these programme, each being given an
annual reduction target. No statistics exist, however, on the permanent occupations and
livelihoods of farmers who have abandoned shifting cultivation, although some reported
successes are promoted as models.
Village Forest Management
Inspite of the Government‟s past and on-going efforts, the legal frame work
concerning village land use and forest management has not been adequately clear. The
relevant legislation includes the Forestry Law of 1996, MAF Instruction 822/1996 and MAF
Regulation 535/2001 on village forest management. Village boundaries, including forest
boundaries, are to be officially drawn with acknowledgement from neighbouring villages,
through the Land and Forest Allocation process. Village forest is classified into several types
(i.e. production use, protection, rehabilitation) and rules on the use of each are agreed upon
with villagers‟ full participation. Villagers are allowed to collect and sell NWFPs and harvest
timber for domestic use. They may be allocated land for tree planting and regeneration, and
ownership of the resulting trees is guaranteed upon registration. Land tax may also be
waived on tree plantations under certain conditions. This is expected to help expansion of
agro-forestry and plantation forestry by small farmers rather than by large companies.
34
Information on the implementation and achievements of village forest management is
scarce.
Community Forestry
The term community forestry is seen used rather loosely. Often it is used
synonymously with “village forestry” and “participatory forest management”, undertaken as
a means of poverty alleviation. The objective of the existing community forestry sites
appears to be to protect what few forest that remains, and to rehabilitate the degraded ones.
The “use” of these forests is limited to the collection of NWFPs and fuelwood. Community
forestry is considered as suitable to be extended to areas where NWFPs are an important
source of income.
As of 2003, community forestry in Lao PDR occupied 150,000 ha of forest,
approximately 1.3% of the total forest cover. By the end of 2001-02 fiscal year, some 6,200
villages, more than half of all villages including those in urban areas, had partaken in the
allocation exercise, receiving on average just above one thousand hectares of village forest
each. In addition, about 380,000 households, about 60% of agriculture households, have
been allocated land. It is reported that shortages of funds, equipment and technical staff are
the main causes of both delay in program implementation and its inadequate effectiveness.
Forest Production
It has been reported that some 35,000 ha of forest are annually covered under
different categories of wood harvesting activities. However, the details about the sources of
forest products and the system(s) adopted in their management is ambiguous.
Production forest is known to include “village use forests”, wherein NWFP collection
and felling of trees for bona fide domestic uses are allowed. Without a clear legal basis for
boundary location and management planning, the production forests, with the exception of a
few in Savannakhet and Khammouane provinces are not under systematic management.
Also, there is hardly any reliable information available.
Lao PDR had made a commitment to initiate SFM, in 1992. However, wood (as well
as non-wood) production is still based on provincial quota allocations, which is ad-hoc in
nature. Additional quota is also often allowed for extracting timber from dead and wind
blown trees, which often leads to illegal and over extraction.
To encourage sound and appropriate logging, a National Code for Timber Harvesting
Practice was developed in 1997; but it has hardly ever been followed.
Once the anticipated system of production forest management has been fully
established based on the principle of SFM, and management plans are in place, the ad hoc
logging and provincial allocation system may cease, as all harvesting will then be (hopefully)
on the basis of scientifically established annual allowable harvest. Log harvesting and sales
will be conducted for each production forest area by concerned local organizations. The
transition between the two systems will be gradual; and, challenging decisions may have to
be made to ensure that the transition progresses smoothly. It is underlined that there is need
for a policy to improve overall productivity in the production forests by developing non-
wood and service benefits of forests (in addition to wood), and by promoting integrated
35
forest management. Research on alternative interventions to ensure socio-economic benefits
of forest will help proper and balanced decisions.
Management Plans and Planning
Even though the GoL has committed to adopt sustainable forest management, there
has been undue delay in designing and conducting component activities of SFM such as
resource inventory/assessment, demarcation of forest management units, establishing criteria
and indicators for SFM, preparation and implementation of forest management plans etc.
Lao PDR had carried out a forest resource assessment in the 1980, and again a
reconnaissance survey in 1992. While there has been a considerable change in the forest
resource position, no detailed (and national level) assessment has since been made.
There are no reliable figures on annual increment of growth in natural forests (and
plantations), for estimating annul accountable cut. The figures in use are conjectural in
nature and not based on continuous inventory. There is need to undertake scientifically
designed growth and yield studies to support management planning.
It is claimed that the production forests have been (or are to be) divided into FMUs
for management planning, and that for the purpose of production control, each of the FMUs
are to be divided into 50 annual compartments. It was also suggested that if an FMU falls in
more than on district, it is to be sub-divided into sub-FMUs – one sub-FMU in each of the
districts involved. No clear and consistent account could be obtained about the extent to
which this work (including field demarcation of FMUs and preparation of management plans
for the FMUs) has progressed.
While broad management prescriptions are provided only for production forests, they
are not adequately supported by well thought-out criteria and indicators. Trials are now
being taken up on criteria and indicators for SFM in Savannakhet and Khammouane
provinces. It is known that scientific forest management prescriptions are being developed
and tested for the four provinces included under the World Bank/Finnida Project on
sustainable forestry and rural development (SUFORD). It was not clear whether any
comprehensive and currently valid/applicable plans exist, outside those under SUFORD. It is
expected, however, that appropriate and science–based management plans will be prepared
for all FMUs in due course. At present the situation is somewhat unsettled.
Inspite of the stipulations contained in different documents, in the absence of their
implementation, forest management remains weak; and forest resource of the country is not
managed/used efficiently and sustainably.
Overall, the standard of forest management is not adequate or satisfactory. The
situation is exacerbated by the lack of co-ordination among the large number of national and
local (decentralized) level agencies (dealing with agriculture, forestry, environment, finance,
planning, processing, trade, science and technology etc).
36
Forest Resource Utilization
Forest resource utilization covers direct (e.g. wood and non-wood products) and
indirect (e.g. tourism, soil and water conservation) uses. Indirect uses are often externalities
– i.e. out of the scope of market mechanism. Harvesting of forest produces is the first stage
in forest utilization: and, due to technological and managerial inadequacies, harvesting
operations in Lao PDR results in considerable wastage of usable materials. Available data on
forest harvest is also incomplete and inconsistent.
In the year 2003, reported production of round wood in Lao PDR was 6,305,000 cum,
of which 5,913,000 cum, representing 94%, accounted for fuelwood (FAO, 2005). While
there has been an increase of about 36% in total wood production in 2003 compared to 1991,
industrial utilization had in fact fallen indicating that the increased wood supply was
consumed as fuel wood, supporting subsistence instead of value-addition.
NWFPs are very important to the rural economy. Inspite of their importance to vast
sections of society, and their economic potential, information on these are scarce,
inconsistent and incomplete. More discussion on NWFPs is available in a later section of this
report.
Forest Production
In the past, under the centralized economy, State Forest Enterprises were managing
forest production. In 1970s, there were several Forest Enterprises, each having an average
allotted area of 200,000 to 300,000 ha of production forest. As of 1986/87, the situation with
regard to production forestry was as follows:
Central government operated 9 logging companies, 6 saw mills, one plywood mill
and 2 parquet factories.
Provincial governments operated 17 logging companies, 70 saw mills, 6 parquet
factories and 8 integrated processing units.
Private sector operated 16 sawmills and 2 integrated processing plants.
In the changed policy environment, state-run wood utilization/processing units were
sold or leased to foreign/private companies. There was also provision to lease them to
workers‟ co-operatives (collectives) or to establish joint ventures of state and private sectors.
With the change-over from centralized to market economy, the approach to forest
utilization and enterprises has changed in Lao PDR, and the State Forest Enterprises have
been dissolved. Forest produces, wood and NWFPs, are now disposed off either by quota
allocation, negotiation/bargaining or by competitive bids. The decision regarding whether the
produces are to be disposed off through establishment of quota or through competitive bids is
made by the Government, based on specific circumstances.
Quota is the yearly planned/allowed harvest in a specified area. In the absence of
technical inventory and management information, the annual quota is fixed arbitrarily,
relying on rough/casual estimates provided by forestry staff. Currently, quota system is in
vogue only for a few categories of wood and NWFPs.
37
The standard system for the sale of logs is through negotiation/bargaining, although
bidding at second landing has also been practiced in some cases. For the latter (i.e. bidding),
concerned Ministries co-ordinate with relevant local authorities to arrange bidding
procedures on the basis of information provided by the Provincial Forestry Office. Bid
winners negotiate and sign a sale contract with the Provincial, Municipal or Special Zone
Commerce Division, make a down payment for the logs to the Provincial Finance Divisions
and also sign an afforestation contract with PAFO and pay the re-afforestation fee. Studies
have shown, however, that the bidding system is inappropriate under the prevailing
conditions, with limited number of buyers. Therefore, negotiation/bargaining remains as the
preferred system.
Harvesting of saw logs and veneer logs has, however, been controlled – reducing it
from 734,000 cum in 1999 to 260,000 cum in 2003 (and an estimated 150,000 cum in 2004).
Government has now decreed that logs and NWFPs be sold on annual basis to processing
plants through competitive and transparent methods to secure better prices and maximize
revenues. Log sale decisions will be made by the Provincial Log Sales Working Group
under the guidance of the Provincial, Municipal or Special Zone Governor. Gross revenues
from log sale will be utilized for: (i). remittance to the national budget, (ii). contribution to
the forest development fund, (iii). defraying forest operating costs, and (iv). funding local
development including village development activities.
Furthermore, PM‟s order no.18/2002 stipulates that the wood processing companies
have to invest on raising their own plantations, in order to secure supply of raw material in
the future.
Forest-Based Processing and Value Addition
Forest-based processing sector in Lao PDR makes important contributions in terms of
income and employment generation. The government policy has been to promote forest-
based processing domestically, by linking processing and harvesting and by promoting
export of processed products. These objectives are far from being achieved.
The main wood-based processing activity in Lao PDR is saw milling. There are over
100 registered saw mills in the formal sector with a total production capacity of about
500,000 cum, and many more small saw mills and pitsaw operations outside the formal
sector. There are also two plywood mills with a combined capacity of about 100,000 cum.
The larger factories are mainly located in the southern provinces and often have integrated
operations including saw milling, drying and re-manufacture. Actual production of these two
products is far below the capacity (see Table 2).
Table 2 - Production and Consumption of Wood Products, 2003
Product Production Import Export Consumption
Round wood(cum) 6,305,000 - 63,000 6,243,000
Sawnwood (cum) 182,000 - 131,000 51,000
Wood-based panels (cum) 13,000 1,000 5,000 9,000
Paper and paperboard (t) - 3,000 3,000
38
Sawnwood production registered a fall of 39% compared to the 1991 production (and
66% compared to 1995 production), while wood based panel production showed an increase
of 30% compared to 1991 production (but a drastic fall of about 850% compared to 1996
production and 285% compared to 1999 production).
Ownership of wood processing factories is now dominated by the private sector
although there are a few joint ventures with state-owned companies. There are no large
corporations that exercise significant control in the wood-processing sector. The wood-
processing sector has recently formed the Wood Producers Group to exchange information
on trade issues and organize training courses. This group could also organize marketing
initiatives to avoid domination by the trades and buyers from neighbouring countries.
To establish wood processing facilities in Lao PDR, a local investor must obtain an
Enterprise Registration Licence from the Ministry of Trade, a tax license from the Tax
Department of the Ministry of Finance and an operating license from MAF and/or MIH. In
addition, foreign investors must obtain a foreign investment license from the Foreign
Investment Monitoring Comittee. Regulations require the wood-processing factories to
obtain operation permits annually.
Pursuant to the Forestry Law of 1996, Art 22, and MAF Regulation 261, wood
processing is an activity to be authorised by MAF. Specifically, MAF governs the
registration and licensing of wood processing factories as well as any transfer or change in
factory ownership. PAFOs are required to register all machinery and authorize and monitor
the import and use of wood and NWFPs for factories. DAFOs are mandated to monitor and
inspect factories based on relevant legislation/rules and to submit reports to MAF.
As already noted, forest-based industries are generally operating below capacity, due
to a variety of factors. While there is scope for improvement in all cases, in respect of saw
milling industry the conversion factor (i.e. output per unit input of raw material) is very low
due to inefficiency of equipment and operations and lack of trained manpower. While
wastages (residues) in logging and processing are high, there are no viable measures for
waste utilization. Integrated operations can help to improve the situation.
Downstream processing for value-addition is still relatively limited comprising
mainly of parquet production for export and furniture manufacturing, mainly for domestic
use. Apart from added income and retained value, development of secondary processing will
help to generate employment and to promote a technological skill base.
One of the attempts on the part of the Government has been to down size and upgrade
the forest industry sector, through selection of processing units meeting certain criteria, such
as: producing semi-finished or finished products; using high technology and having high
productivity; demonstrating superior environmental protection, safety and welfare; having
appropriate management; and having a good record of law abidance. On this basis, in 2002,
the Government proposed closure of 26 out of about 130 saw mills and 169 out of 918
furniture factories, and ordered them to cease operation.
39
Forest Products Trade
Lao PDR is a net exporter of wood products. Total value of forest-based imports in
2003 has been valued at US$ 1.55 million, against an export valued at US$ 62.68 million.
Export earning essentially comes from sawnwood, value of which increased from US$ 32.8
million in 1991 to 52.75 million in 2003 (see Table 3).
Table 3 - Wood Products Trade, 2003
(000 units)
Product Import Export
Quantity Value US $ Quantity Value US $
Roundwood (cum) - - 63 8,955
Sawnwood (cum) - - 131 52,745
Wood-based panel
products (cum) 1 - 5 977
Paper and paper board (t) 3 1,545 - -
Total - 1,545 - 62,677
Sourc: FAO (2005)
In order to promote export of semi-finished and finished products the Government
ordered a ban on export of logs and a reduction in sawn timber export by PM Orders No
11/1999, 10/2000 and 15/2001. In PM order No 18/2002 export of sawn timber is also banned
to restrict export of roughly processed sawn timber or „square logs‟. These orders are yet to
be effectively implemented. However, export does take place, including logs of Pinus
merkusii.
The wood-processing industry of Lao PDR has difficulty to compete against
established facilities in neighbouring countries when international parity prices are paid for
logs. Therefore, export of secondary or finished products is limited. Instead, these
neighbouring countries process logs and sawn wood from Lao PDR and export final products
to lucrative markets in Japan, Europe and North America. Foreigners with direct market
access do own some of the sawmills; however, a number of producers use the services of
Thali timber traders to sell their products, and do not therefore have much knowledge about
prices or market dynamics. Also, no one really knows how much teak and other hardwoods
are being smuggled out.
According to estimates, the export of timber and other forest products (including
NWFPs) accounts for about 34% of the export earnings of Lao PDR. (The forestry sector, on
the whole, it is claimed, accounts for about 8 to 10% of the per capita GDP of the country).
The current situation of wood supply and wood use brings up certain efficiency
issues, and the need to improve the situation.
40
Protection and Conservation
Deforestation and other forms of misuse of forests have negatively affected soil and
water conservation. The Forest Law of 1996 has provided a framework for all aspects of
forestry, including a basis for zonation of areas into “strictly protected” and “control use”
zones. High elevation forests are to be protected as watersheds. There are also regulations
regarding conservation of soil and water, which are not being strictly enforced.
Management of natural biodiversity conservation areas are still rudimentary, without
boundaries and management plans. Resource depletion continues even in protected areas.
Protected Area Management
Environmental protection is key to socio-economic development; little action was
taken by the Government in relation to the environment until recently.
Forests of Lao PDR are rich in bio-diversity. But, as a result of deforestation and
forest degradation several species of flora and fauna are facing danger of extinction; and,
current efforts at conservation of bio-diversity and environmental protection are insufficient,
even considering that the ecology of Lao PDR is less subject to threats compared to most
other countries in Asia. There is need for quantitative and qualitative improvement of
protected areas and to improve the effectiveness of their management. Intellectual property
rights relevant to the use of forest resources, e.g. ethno-botany and ethno-pharmacology, are
an aspect related to conservation, requiring attention.
The conservation of ecosystems, species diversity and genetic variability, as well
protection of wildlife in Lao PDR is based on a National Bio-diversity Conservation Area
Programme (NBCA).
Of the 1,325 species in Lao PDR, listed under 7 species groups, 85 are now
endangered. Three among these endangered species are country-endemic, of which two are
forest-occurring. Of the forest-occurring endemic endangered species, one is a tree.
Bio-diversity conservation efforts are of recent origin in Lao PDR. In 1986, the
Department of Forestry established the Centre for Protected Areas and Watershed
Management. Besides the initiatives in the forestry sector, a Science, Technology and
Environmental Organization was established in 1993 under the Prime Minister‟s office.
Legal framework for protected area management has also been strengthened.
Lao PDR is a signatory to most international agreements relating to environmen;
ASEAN Agreement on the Conservation of Nature and Natural Resources of 1985;
Convention of the World Cultural and Natural Heritage of 1972; Convention on Biodiversity
Conservation of 1992; Convention on International Trade in Endangered Species of Flora
and Fauna (CITES) of 1973; Kyoto Protocol 1997; Ramsar Convention on Wetlands of
International Importance of 1971; UN Convention to Combat the Desertification 1994; UN
Framework Convention on Climate Change of 1992; Vienna Convention for the Protection of
the Ozone Layer of 1985.
41
In 1993, the Lao Government conferred legal protection upon 17 national biodiversity
conservation areas (NBCAs), for a total of 24,600 sq.km. So far, Government of Lao PDR
has established 20 national protected areas covering about 30,000 sq. km or 12.5% of the
country‟s land area; and, several PAs have been established by Provincial governments.
There are 57 provincial and 114 District Protected Areas. All the Protected Areas together
cover about 21% of the country. There are plans to expand the area of PAs.
The objective of the NBCA programme is to protect natural areas for conservation of
flora and fauna, maintenance of ecological stability and watershed functions, and to preserve
historically, aesthetically, culturally or scientifically valuable sites. Programme objectives
should, wherever possible, be achieved through local, participatory management benefiting
NBCA residents.
The designation of an area for inclusion in the NBCA programme may impact on
villagers‟ access to forest, and more generally on their livelihoods. Villages involved in
NBCAs are classed into one of the following four types:
Enclave villages, whose production forests fall entirely within the NBCA
boundary;
Straddle villages that may be outside the NBCA, but some or most of its
production forest are within it;
Adjacent villages whose production forest borders, but does not impinge on, the
NBCA; and
External villages whose activities have an impact on the NBCA.
Details of protected areas by ecological zones of the country indicate that there is no
balance in its coverage. They do not have scientifically prepared management plans, and
suffer from insufficient protection, hunting and poaching, and peripheral encroachments.
Conservation regulations are not properly enforced. Traditional trade in endangered
wildlife and wildlife products across the boarder to China, Vietnam and Thailand is
continuing at an increasing scale. Illegal timber felling and the smuggling of wildlife species
would decrease, if all officials involved were held responsible and accountable for their
actions.
The challenges facing the natural resources of Lao PDR are the internal pressures of
economic growth and the external pressures of the more populated and more affluent
neighbours – China, Thailand and Vietnam, who exploit the resources of Lao PDR, as much
as possible. Overall, there is need to improve the effectiveness of protected area
management.
42
Institutions and Instruments13
Normally, sectoral policies decide the type of institutions and institutional
instruments required to achieve the policy goals. Sectoral policy, thus, guides the
functioning, growth and development of the sector.
No „legislated‟, formal policy exists for the forestry sector in Lao PDR. Policy
prescriptions tend to come in the form of occasional statements, objectives of plans and
programme, declarations at national events and so on. These tend to vary in their emphasis
(priority) and also in the content, which causes interpretational differences and confusion.
Sectoral Objectives
One document (Chanhsamone, 2005) mentions the following as policy
areas/principles, requiring continued efforts.
Enhancing village-based natural resource management for poverty alleviation;
Introducing reliable systems for harvest determination;
Controlling unsustainable harvest and export of NTFPs, and promoting sustainable
participatory management and processing of NTFPs;
Improving the performance of the wood industry by measures including: bringing
processing capacity into closer accord with sustainable timber supply and
producing more finished products;
Promoting tree planting and management by clearly targeting owners and markets,
and developing investment schemes to strengthen the wood supply base;
Preventing encroachment, unauthorized activities and biodiversity degradation
through solid law enforcement, capacity building and assisted participation of
villagers in forest management;
Formulating a national land use policy and introducing land use planning both at
macro and field level;
Completing and improving the forestry related legal framework, clearly defining
different stakeholder‟s responsibilities and providing sound criteria for, and
transparency in, decision-making;
Improving sector efficiency and strengthening international competitiveness
through greater market-orientation;
Completing decentralization process (or bottom up planning) and implementation
system and capacity building, especially at local level;
Maximizing benefit generation and allocation through innovative mechanisms;
Mobilizing effective international co-operation.
13 Regarding this aspect, please also see section 4 : Policy and Institutional Arrangements for NWFPs.
43
It has to be noted that most of the above are either action proposals or strategic
measures.
Recently, the draft Forestry Strategy 2020 has indicated the following as objectives,
which is in the form of long-term policy objectives:
To maintain a healthy and extensive forest cover, as an integral part of rural
livelihood support system including stable water supply and mitigation of
natural disasters;
To generate a stream of forest produces for domestic processing and
consumption, and many of them for eventual export, thereby generating
adequate household incomes and contributing to country‟s foreign exchange
reserves;
To preserve the existence of many species and unique habitats, which are
threatened with extinction.
The real forest policy intention and design of related actions (irrespective of whether
it is legislated or not) appears to be to: re-orient the forestry sector to a market economy with
emphasis to prevent forest degradation; use the forest resource efficiently; develop
institutions and human resource; stabilize shifting agriculture; and develop forest industry.
Strategic interventions in that regard include: creation of lead co-ordination bodies for
harmonizing planning, development and extension; streamline the use of local resources and
foreign aid; enhance R & D activities; develop sustainable upland landuse and management
practices; undertake appropriate technological interventions; and establish a strong
management information base. Along this line, the government brought out a National
Village Forestry Strategy in 1997, which was also meant to rationalize the swidden-based
livelihood system.
Legal Framework for Forestry Sector
Laws, rules and regulations for achieving the forestry sector objectives (issued from
time to time) are several, having long, medium or short-term relevance. In the absence of a
stable sectoral policy, which is approved by the legislature, the sectoral objectives and related
instruments tend to be changing continuously. This causes confusion on the part of the public
and the implementing agencies.
The most important legal instrument relating to forestry in Lao PDR is the Forestry
Law of 1996, complemented in certain aspects by the Land Law of 1997, Environmental
Protection Law of 1997 and Processing Industry Law of 1999.
For the purpose of implementing the various policy-type stipulations and the Forestry
Law, several decrees, orders, rules, regulations, memoranda etc. have been issued by the
Government at various levels from time to time, some superceding and others overlapping
with the previous ones; yet others are in conflict with the other existing rules and regulations.
Lao PDR has gone through a series of changes in national policies and related laws,
rules and regulations, following its political independence. From 1975 through to the early
1990s, several legislative measures were introduced in the forestry sector.
44
The first comprehensive forest legislation of 1975 was considered as a good
document, having appropriate provisions; but implementation was limited.
It was in the 1980s that PM No.16 decreed strengthening of tree harvest control, by
introducing a 2-tier logging system (to be practiced by State Owned Enterprises for export,
and provincial companies for domestic use). In 1986, the New Economic Mechanism and the
shift towards a state-lead market oriented economy, caused corresponding changes in
forestry.
In 1989, the Council of Ministers issued two decrees. 117 on management and use of
forest and forestlands and 118 on control and management of aquatic animals, wildlife,
hunting and fishing. Decree 117 provided for allocating 2 to 5 ha of forest and forestland to
each household, and 100 to 500 ha to each village. Households were allowed to inherit or
transfer the allocated forestland. The decree PM No.67 of 1991 declared a nation wide
logging ban and ordered proper management of forests. In 1993, decree PM No.164 was
introduced for establishing national conservation forests. Another decree in the same year,
P.M.No.169 of 1993 on management and use of forest and forestland provided for forest
management contracts – i.e. collective forest management contract (between districts and
villages); family forest management contract (between districts and households); and
afforestation business contract.
This decree (PM 169/1993) replaced decree 117/89. Further, in 1994, a new decree,
PM 186 on delineation and allocation of land and forest for tree planting and protection was
issued, provisions of which was later incorporated into the Forestry Law of 1996 (01/NA),
replacing both PM 169 of 1993 and PM 186 of 1994.
Decentralization of administration has provided a new dimension to the
implementation of legislative provisions pertaining to the forestry sector. All laws, rules
(decrees) and regulations and all major decisions touching on national policy level issues, are
initiated at the national level and disseminated to provinces, districts and villages. The
decentralized units can take some decisions pertaining to local issues and matters, based on
powers delegated14
.
The Forestry Law of 1996
The scope and coverage of Forestry Law, 1996 inter-alia, include: forest land use
allocation (and taxation); development and management of tree plantations; management of
conservation and protection forest; wood processing factories; NWFP management; village
use and rights in forest management and management of production management (Sigaty,
2003).
Forest categories described in the Forestry Law of 1996 include: production forest;
protection forest (watersheds), conservation forest (NBCAs); regeneration forest; degraded
forest; forestlands designated for defence and security purposes; and forest areas designated
for scientific research. While production forest and the special purpose forests (for defence,
security, research) are allocated for national level control, protection and conservation forests
14
Legislation relevant to forests in Lao PDR exists on atleast five levels: national, provincial, district, village
and military. Province, district and village can enact legislation, which gives effect to, or strengthens national
laws, as well as create legislation in fields not covered at the national level.
45
are assigned/allocated for management to provincial, district and village levels, and
regeneration forest is allocated to village level. The Law supports development of forest
plantations by allocating degraded forestland to households as well as to private sector and
by exempting land tax. A National Land Management and Forest Land Allocation Steering
Committee was set up in July, 1996.
The Forestry Law of 1996 is the main and governing document concerning
conservation of wildlife, including control of hunting, capture, transport, import, export etc.
of wildlife.
The Forestry Law of 1996 has provisions dealing with: investment in wood
processing factories, permits for their establishment and management, trade in processed
products and so on. Both MAF and MIH have authority to regulate wood processing
factories. Establishment of wood processing factories also require: Enterprise Registration
Licence from Ministry of Trade; a tax certificate from Ministry of Finance; and operation
licence from MAF and MIH. There are conflicts and vagueness in these provisions.
With regard to production forest, MAF is responsible for co-ordination with all
relevant sectors. Provincial Agriculture and Forestry Offices (PAFOs) are responsible for the
implementation of instructions for sustainable management of production forest areas under
their jurisdiction, and to guide and monitor implementation. District Agriculture and
Forestry offices (DAFOs) are responsible for the organization of the implementation of
production forest management plans. The actual management activities itself are carried out
jointly by the Forest Management Units (FMUs) and Village Forest Organizations (VFOs),
including inventory and planning, harvesting and sales. Sales will take place with the
participation of all concerned parties, including VFOs. Revenues from sales will be used for
common purposes (remittance to national budget, forest development fund, forest operations‟
cost, local development fund).
Regarding harvesting of timber and other forest produce, the Forestry Law states that
the harvest of timber and other forest produces can proceed only in surveyed and inventoried
production forest areas for which there is a forest management plan. Pre-logging surveys are
required and logging operations must aim at a sustainable yield on the basis of a logging
rotation system. The harvesting of other forest produces such as mushrooms, roots, tubers,
shoots, leaves, flowers, bark, resins and gum must be carried out according to specific
regulations issued by concerned agencies.
Laws covering disciplinary action are contained in articles 69 to 73 of Forestry Law,
1996. Disciplinary action, however, appears inappropriate for illegal activities and violations
of legal provisions.
The Penal Code of Lao PDR (1989) specifies penalties for violations of decrees and
instructions, e.g. for hunting and fishing violations, illegal exploitation of natural resources,
illegal trade in commodities belonging to the State, including wildlife and aquatic fauna, and
violations of tax regulations (IUCN, 2002).
Since 2000, responsibility for all harvesting/logging plans and their implementation
has been given to the provinces. In 2001, the MAF issued regulations for village forest
management; and in 2002, another decree P.M.No.59 was issued on sustainable management
of production forest.
46
Implementing Rules and Regulations
There is an array of rules and regulations in support of enforcing/implementing
Forestry Law, 1996. Apart from the Law itself, there are some 50 implementing
rules/regulations relating to forest management, conservation, harvesting, processing, trade,
taxes/charges etc. Most of these are administrative instructions or rules of limited scope and
coverage.
Some of the important ones are:
Establishment of National Biodiversity Conservation Areas, PM Decree
164/1993.
MAF instructions for implementing forestland allocation, 1996.
Customary rights and use of forest resources, MAF order 54/1996.
Customary use of forest resources, MAF order 377/1996.
National code of timber harvesting practices, 1997.
MAF order 1848/199915
for planting or payment of compensation for NWFP
harvest.
Harvesting of wood and NWFPs, MAF Regulation 221/2000.
Management and use of the fund from fees for harvest of natural trees and
NWFPs, Ministry of Finance order 111/2000.
Management of forest and forestry operations, PM order 10/2000.
Management of NBCAs and wildlife, MAF Regulation 524/2001.
Management of village forests, MAF Regulation 535/2001.
Management of forest and forestry business, PM order 15/2001.
Sustainable management of production forest areas, PM decree 59/2002.
Apart from legislation directly related to the forestry sector, laws and rules of other
sectors/departments (such as industry and handicrafts, trade, finance and taxes, health,
environment, science, biodiversity and culture) exert influence on the sector, to varying
degrees. If not adequacy co-ordinated and harmonized, these influences may not be
beneficial, and may even be injurious, to the forestry sector.
Lao PDR is a signatory to a number of international conventions and agreements,
such as:
Agreement on the sustainable development of the Mekong River Basin (1995);
ASEAN agreement on the Conservation of Nature and Natural Resources of
1985;
15
The order applies to both timber and NWFPs. For example, for each tonne of rattan harvested 10 trees must
be planted or 6 US$/tonne paid, and for one tonne of oleo-resin (black resin of Dipterocarpus spp) harvested
50 trees must be planted or 10 US$ / tonne paid.
47
Convention of the World Cultural and Natural Heritage of 1972;
Convention of Biodiversity Conservation (CBD) of 1992;
Convention on International Trade in Endangered Species of Flora and Fauna
(CITES) of 1973;
Kyoto Protocol 1997;
Ramsar Convention on Wetlands of International Importance of 1971;
UN Convention to Combat Desertification of 1994;
UN Frame work Convention on Climate Change of 1992;
Vienna Convention for the Protection of the Ozone Layer of 1985.
This has placed considerable responsibility on the country for enforcing the
provisions contained in these international legal instruments.
Weaknesses in the Legal Framework
There are several weaknesses in the legal framework for forestry in Lao PDR. While
some of these weaknesses are common to most sectors of the economy, others are specific to
forestry. These weaknesses can be categorized as intrinsic deficiencies, implementational
deficiencies, and external influences.
The intrinsic deficiencies are reflected in the following:
Inappropriateness or ineffectiveness of the legal provisions to achieve the stated
objectives, such as poverty alleviation in rural areas
Lack of clarity (vagueness, ambiguity) in the legal provisions leading to widely
differing interpretations. The lack of skills in drafting legal documents leads to
poor formulation of laws and rules. (Lao PDR is known to have only about 40
qualified lawyers)
Lack of clear definition of terms have worsened the confusion. Villagers are
unable to understand the difference between conservation forest, core areas,
corridors etc., in regulating collection of NWFPs. The provision for traditional
use of forest produces to cover “economic necessity” has often lead to
unauthorized commercial collection for earning income
Gaps and incompleteness in coverage (e.g. lack of appropriate penalty clauses for
violations; lack of provisions regarding targeted funding, gender mainstreaming
and market facilitation; lack of safety provisions in forestry and forest industry
regulations) is a major weakness. In the absence of appropriate legal provisions, if
some one is caught in the process of transporting materials illegally, he is made to
pay only the normal taxes and charges due with no additional penalty. In the
absence of stringent penalty, rules are not treated with respect; smuggling and
bio-piracy are known to continue unabated
Inconsistency, conflicts and contradictions within the legal framework of forestry
(as well as in the laws, rules and regulations of the related/interacting sectors) is
48
another important weakness. Several authors has dealt with this aspect (IUCN
2002, Sigaty 2003, Chanhsamone 2005). As an example: article 25 of the
Forestry Law, 1996 requires that “the harvest of timber and other forest produce
can proceed only in surveyed and inventoried production forest areas for which
there is a forest management plan. In reality, however, forest management is
based on “management plans” only in some project areas; and there are a number
of technical issues which lack regulation – such as scope of management plan;
responsibility for approving plans, monitoring the implementation of plan etc.
Also other regulations such as PM order 15/2001 (management of forest and
forest business) does not even require the development of a management plan or
the estimation of allowable cut
Moreover, the legal framework for forestry in Lao PDR suffers from inadequate
development orientation and concern for sustainability, poor support for private
sector, incongruity with several related rules and overall difficulty in enforcement
Apart from the inadequacies of the legal instruments due to their structural and
formulation deficiencies, there are inadequacies and lapses in enforcing these instruments.
Often, laws and rules are simply ignored. Arrangements for disseminating information about
the currently valid legal instruments, regarding their scope and coverage, appropriate
interpretation (including exceptions, limitations) etc. to the concerned functionaries and to
the people are highly inadequate (Sigaty, 2003; Chandrasekharan, 2005).
Implementational deficiencies are evident in several situations:
Legal instruments are not adequately and properly disseminated, such that the
repealed (invalid) rules are often followed, even after new rules have replaced
them. Although the Forestry Law, 1996 expressly replaced PM Decree 169/1993
(management and use of forest and forest lands), many local authorities still
implement the provisions of PM 169/1993
Inadequate understanding about the scope and purpose of the legal instruments on
the part of staff (and other stakeholders) at the decentralized levels. The laws and
rules are disseminated top-down through the Government system of regional
seminars, and the copies of documents concerned are, often, not made available to
the implementing staff. There is also lack of detailed instructions and guidelines
Failure to implement the legal instructions due to various real and imaginary
reasons; and lack of transparency in implementation is common. Provisions of
the available rules are often not property implemented (e.g. ad hoc quota system
continues, instead of scientifically calculated annual allowable harvest/collection)
There is inadequacy of staff and other organizational support for enforcing
laws/rules/regulations
Lack of compliance on the part of concerned persons is common, either because
of ignorance or because non-compliance (or involving in illegal activities) provide
them more benefits
49
Lack of adequate monitoring, in the name of decentralization, is another
implementational deficiency. So is the lack of adequate implementation of
international legal commitments and obligations
The existing legal documentation (of rules, orders etc) are not kept updated, nor
are they available/accessible in one volume (or in one place) – such that one is at a
loss to know what rules apply to particular situations.
Problems of law enforcement are found mostly related to harvesting and utilization of
timber and NWFPs. In spite of the government‟s efforts to regulate forest resource use, there
have been cases of unauthorized harvesting, utilization and trade of forest products at various
levels.
Weak enforcement of laws and regulations has led, in many cases, to logging in
production forests not in accordance with the targets set in the respective management plans;
to excessive cutting by those who have been allocated a logging quota/permit; to cutting
outside the boundaries to which the logging plans are bound; and/or to excessive or
inappropriate extraction of NWFPs. Similarly, weak enforcement of laws and regulations
has permitted, or not detected, cases of illegal harvests, even in conservation and protection
forests.
External influences (such as interference from other sectors, influence of
policies/laws/rules of other sectors acting contrary to the interest of the forestry sector, lack
of inter-sectoral co-ordination etc) are yet another weakness to be addressed.
Further-more, the legal instrument are deficient in measures to address the new trends
of globalization and free trade, product certification, carbon trade, e-commerce etc. – all of
which emphasise the need for sustainable efficiency and competitiveness.
Even though some of the above issues were already brought out boldly by Sigaty
(2003), there has not been any significant follow-up.
Sigaty (2003) analysed the legal frame work in the forestry sector of Lao PDR under
seven heads: forest land use, planning and allocation; development and management of tree
plantations; management of conservation and protection forests; wood processing factories;
NWFP management; village use and rights in forest management; and management of
production forest. Under each, the author discussed the background on legal framework,
relevant legislation, major legal issues with summarized findings on the existing legal frame
work, and recommendations for improving the frame work. An extract, of Section 2.5 -
NTFP Management, from Sigaty‟s (2003) report is given in Appendix 3.
Public Forest Administration
Evoluation of forestry organizations (which covers enforcement and service agencies,
as well as those involed in forest management and conservation) in Lao PDR is linked to the
political and related structural chances in the country (including recent decentralization). In
order to re-orient the forestry sector to be capable of meeting the needs of market economy,
the Government has shifted from predominantly administrative/authoritative approaches to
participatory approaches. Most forestry enterprises under the centralized planning system
50
(prior to 1990s) were managed by State Enterprises; whereas, the new approach encourages
and promotes private enterprises.
Currently, the affairs of the forestry sector are handled by the Ministry of Agriculture
and Forestry at the centre and by the Provincial Agriculture and Forestry Offices (PAFOs)
and District Agriculture and Forestry Offices (DAFOs) at the provincial and district levels,
respectively. Within MAF the Department of Forestry is responsible for all activities relating
to forestry.
MAF, PAFO and DAFO have separate unit/staff to deal with forestry matters. Out of
a total staff of over 2,000 in MAF, forestry staff accounts for about 25%.
The Government supported research is under the control of MAF. All research
activities falling under the purview of MAF are overseen by National Agriculture and
Forestry Research Institute (NAFRI). Extension activities relating to agriculture and forestry
are handled by the National Agriculture and Forestry Extension Service (NAFES). (The
organizational chart of MAF is given in Figure 1).
While the Department of Forestry within MAF is the prime agency in the
country concerned with public forest administration, there are many other
agencies/offices responsible for specific aspects of forestry:
Quota system is the responsibility of the Prime Minister Office, Ministry of
Agriculture and Forestry, Ministry of Commerce, Ministry of Finance
Land Management is the responsibility of Prime Minister Office, Ministry of
Finance and Ministry of Agriculture and Forestry
Timber and NWFP factories management is under the responsibility of the
Ministry of Industry and Handicrafts, Ministry of Agriculture and Forestry,
Science Technology and Environment Agency
Land tax is the responsibility of the Prime Minister Office‟s and Ministry of
Finance
Natural resources tax is the responsibility of the Ministry of Finance
International Co-operation is co-ordinated by the Ministry of Foreign Affairs,
Science Technology and Environment Agency, and relevant Ministries
Conservation is under the Prime Minister‟s Office and Ministry of Agriculture
and Forestry
Medicinal plants development (including research and propagation) is the
responsibility of Ministry of Health and MAF
All decrees of individual ministries are to be cleared by the Ministry of Justice
and approved by the Prime Minister (and in some cases reported to the National
Assembly).
The Department of Forestry develops guidelines and instructions to be followed by
the decentralized levels. The purpose is to avoid concentration of power at the center.
51
At all the levels, however, there is a multiplicity of agencies (or their decentralized
units) involved in controlling forestry activities. These, apart from agencies related to
agriculture and forestry, include those of finance, commerce, trade and handicrafts, science
and technology, environment and so on.
Due to the influence of various factors, there have been serious inadequacies in the
functioning of the different organizations involved in forestry; transparency and
accountability have been sidelined and illegal activities have tended to persist, negatively
affecting the rule of law.
Plans and Programmes
An important strategic measure to achieve sectoral objectives is to develop and
implement action plans and programmes.
Forestry activities have been covered under the Five Year Plans of the Government.
The current Five Year Plan, which has just been completed (in the financial year 2004-05)
was the 6th
; and the 7th
plan is due to start in the financial year 2005-06. The 7th Party
Congress in 2001 set the development targets for 2005, 2010 and 2020, and these were
endorsed by the National Assembly. Specific long term plans such as the Forestry Master
Plan prepared in 1991 and the Environmental Action Plan prepared in 1993 were expected to
guide and provide inputs for the development of the forestry sector.
The Forestry Master Plan had emphasized the need for programmes on: forest
inventory, forest classification and delineation, forest (including watershed) conservation,
silviculture, human resource development and capacity building, stabilization of shifting
cultivation, research support and peoples participation.
The programmes/activities included in the five year plans, funds made available for
forestry and the actual implementation of programmes were often not in consonance with the
sectoral objectives and priorities proposed in the long term forestry (master) plan. Targeted
funding for forestry development is not available (and the national environment fund is small
and limited in scope).
In this context, the new Forestry Strategy 2020 (MAF 2005), prepared with the
assistance of a group of donors, is relevant. For achieving a set of targets by the year 2020,
the new forestry strategy presents a set of objectives for forestry development, specifies
priority areas, suggests programmes and actions, identifies responsible agency and main
stakeholders for each proposed action and provides guidelines for monitoring and evaluation
of programme implementation.
The priority areas of Forestry Strategy 2020 are: land and forest use; production
forests; non-wood forest products; tree plantation development; harvest/logging plan and
royalties; wood processing and value addition; biodiversity conservation; protection forests
and watershed management; and village land and forest management for poverty eradication.
52
Department of Livestock and
Department of Forestry
Technical line Departments
General Administrative
and Overall Supervision
Minister
Board of Science and Technology
(Board Secretary)
Vice-Minister Vice-Minister
Functional Set-up of MAF
Permanent Secretary Office Department of Personnel Department of Planning Department of Inspection
Overall Policy and Strategy formulation, Planning, Monitoring and Evaluation (M&E), Resource Allocation and Regulation, HRD
Overall Planning, Monitoring and Evaluation, Resource Management and Regulation , HRD
Department of Agriculture Department of Irrigation Department of Meteorology and Hydrology
Villages
Village Workers, Farmers/Groups of
Farmers'/Farmers Organisations at intra-village
and/or village levels
MAF Technical Implementing Institutions
Technical Supervision, Subsectoral Planning/Programming, M&E and Training
Figure 1 - Organizational Chart of the Ministry of Agriculture and Forestry (As of January 2005)
National Agriculture & Forestry Extension Service
National Agriculture & Forestry
Research Institute
District Agriculture and
Forestry Offices (142)
Provincial Agriculture and
Forestry Divisions (18)
Provincial Authority
District and Village Authority
53
The Forestry Strategy 2020 incorporates 16 programmes, 45 areas or activity groups
and 144 actions. The programmes, representing the component aspects of forestry
development in Lao PDR are the following: land and forest use; production forest; non wood
forest products; tree plantation development; harvest/logging plans and royalties; wood
processing industry; biodiversity conservation; protection forests and watershed
management; village land and forest management; legal frame work and implementation; law
enforcement and governance; institutional strengthening and human resources development;
research and extension; gender; funding and allocation; international co-operation.
Forest Revenue
As noted, inadequacy of funds has been one of the major factors causing under
achievement of plan targets. The revenue-generating capacity of sustainable forest
management (SFM) has not been tapped properly.
The main sources of forest revenue in Lao PDR are the auction bids for forest
products, the forest charges (taxes and development cess totaling to about 5% of the assessed
product value), penalties for forest offences, registration charges and annual taxes on certain
private plantations and so on. The charges and penalties mostly accrue to the Central
Government (except for penalties, where 30% of it is kept for providing incentives locally),
who in turn distributes it based on the norms in force.
An issue here is the lack of effective efforts to capture the rent due to the resource
owners. It is considered by many that bulk of the rent goes to the private business, as
windfall.
Support Services
Under the overall scheme of institutional development, three aspects to be specially
flagged are the critical roles of: skill development and capacity building, forestry research
and technology, and extension service.
Support to the forestry sector in the form of human resource development and
capacity building, research, and extension services are generally weak.
Human Resource Development
Institutions providing facilities for forestry education and training in Lao PDR are the
following:
Faculty of Forestry at the National University of Laos.
Faculty of Forestry at the Southern University in Pakse, Champasak.
Souphannavong University of Luang Prabang (there is no faculty of forestry at
this university; but forestry related courses are offered by other faculties).
Forestry School in Bolikhamsai province (under the MAF).
Northern Training School for Agriculture and Forestry in Luana Prabang, having a
sub-centre in Xieng Ngeun (formerly the Forestry College, under the MAF).
54
Southern Agriculture and Forestry School in Pakse, Champasak (under the MAF).
Agriculture and Forestry Training Center, Savannakhet (under the MAF).
Agriculture and Forestry Training School, Vientiane (under the Education
Department).
Forestry Research
Research unravels new scientific knowledge, isolates/identifies factors leading to
problems and how to address them. Technology converts research findings and theoretical
solutions into tools and techniques suitable for practical application. Technological
innovation and development is a strategically important dimension of forestry development
and it is to be made possible by research.
Forestry in Lao PDR critically needs research support to: improve productivity;
reduce losses and wastage; maximize utilization; improve quality and value of products;
sustainably manage forest resources; improve conservation of genetic resources and wildlife;
develop NWFPs; and diversify products. Research support is also essential for carrying out
basic surveys and studies (e.g. on biodiversity, land sustainability, inventory and bio-
prospecting), for providing basic technical data (e.g. growth and yield under different
management intensities) and for documenting and validating indigenous knowledge. Further,
research input is essential for producing and supplying improved and certified seeds and
improved planting stock, in-situ and ex-situ conservation of genetic resources, and for
transfer of technology to the users.
Forest policy, forest economics and marketing are other important areas requiring
research support. Economic research relating to costs, output, financial yield, rent and
externalities are of great relevance for providing management prescriptions.
Organized research in agriculture and forestry is rather new in Lao PDR. NAFRI was
established only in 1999. NAFRI is comprised of research centers, dealing with specific
disciplines/sub sectors (Figure 2).
According to NAFRI‟s research strategic vision, its research priorities focus on the
following:
Agriculture: rice varieties, maize hybrid, legumes species, integrated plant
protection and improved productivities.
Horticulture and vegetables: fruit trees and garden, post-harvest activites and
processing.
Livestock: food, animal health and management.
Fishery: indigenous fish species, fishing, basin management and wetlands
management.
Forestry: indigenous fast growing species, seed sources management, Para rubber,
NWFPs (inventory, domestication, harvesting, processing, marketing and
networking), agro-forestry, forest certification.
55
Management of natural resources: land and water management and other natural
resources.
Forestry research activities of NAFRI are the responsibility of Forestry Research
Centre (FRC). Within forestry the priority areas include indigenous fast growing species,
seed sources management, Para rubber and NWFPs.
FRC is almost the sole facility available in Lao PDR for forestry research. FRC also
has the mandate to co-ordinate and monitor forestry research activities in the country. FRC is
comprised of four units, i.e., Silviculture, NWFPs, Information and Administration. This
institution suffers from inadequacy of funds, trained personal and research facilities.
Figure 2 - Organisational Structure of the National Agriculture and Forestry Research
Institute
Some limited amount of research specifically on ecology and plant morphology is
also being undertaken by the Botany and Forestry Faculties of the National University of
Laos.
Eorestry Extension
Extension service can be provided to farmers and communities in different ways.
Forestry extension has traditionally been a weak area, due to various reasons. Demonstration
of research results and dissemination of research information are very relevant, but often
overlooked, aspects of forestry research. Research has little value if its results cannot be
Information Management, Policy and Strategy Planning Division
Administration, Planning, Finance and Cooperation
Division
Research Management Division
Coffee Research and Experimental
Center
Forest Inventory
and Planning
Center
Forestry Research
Center
Livestock Research
Center
Horticulture and Vegetable
Research
Center
Soil Survey and Land
Classification Center
Agriculture Research
Center
Living Aquatic Resource
Research Center
Northern Agriculture and
Forestry Research
center
Agriculture and Forestry Machinery Applied Research
Project
National Agriculture and Forestry Research Institute
Ministry of Agriculture and Forestry
56
applied in practice. Extension of research results and a two-way transfer of information are
important in that regard.
National Agriculture and Forestry Extension Service (NAFES) under the MAF,
provides an extension niche for groups of villages and is engaged in disseminating research
results and technology to the farmers.
NAFES is a young institution, established in 2001. It is comprised of 3 sections, 5
centres and 2 projects at the national level, with agriculture and forestry extension services at
the provincial and district levels, directly serving the villages. For the organizational
structure of NAFES, see Figure 3.
Responsibility of NAFES as mandated include:
Knowledge management in agriculture and forestry (based on knowledge
acquired through technology transfer and through research activities in the
country).
Dissemination of information and knowledge to the farmer.
Establishment of technical norms and encouraging farmers (and private sector) to
adopt such norms.
Supply of quality agricultural inputs (seeds, fertilizer).
Teaching farmers about the need for fund management.
Providing marketing support.
Establishment of agricultural extension niches for groups of villages.
Extension administration.
NAFES is actively promoting community involvement in extension service through
forming a cluster of 5 to 7 villages into a group – e.g. rice farmers group; horticulture group;
water utilization group.
Forestry extension in Lao PDR is included under the mandate of NAFES. While
NAFES has a Forest Plantation and Re-afforestation Extension Centre, its role in the field of
forestry is limited. NAFES provide extension services only for teak, agar, rubber, mulberry
and cardamom, planted by villagers in private lands/home-steads.
Even though all the village areas are included in the mandate of NAFES, it is NAFRI
which looks after technical aspects of managing village forests. And, it is DoF, which looks
after extension needs of protected areas. Also, extension with regard to medicinal plants is
not with NAFES, but with the Institute of Medicinal Plants. Further, the national chamber of
commerce helps in marketing of products through their product groups/associations based on
membership.
57
Figure 3 - The organization structure of the National Agriculture and Forestry Extension Service
Ministry of Agriculture and Forestry
National Agriculture and Forestry Extension Service
Administration and Personnel Section
Planning and Co-operation Section
Technical Section
1. Personnel Unit 2. Administration Unit
3. Inventory Unit 4. Finance Unit 5. International
1. Planning Unit 2. Statistics Unit
3. Economic, Marketing, Savings and Community Development Fund Unit 4. Co-operation Unit 5. Legislation Unit
1. Training Unit 2. Agriculture and Irrigation Machinery Unit 3. Dissemination and Publication Unit
Integrated Agriculture and
Forestry Development
Project
Shifting Cultivation and Stabilization Extension Center
Provincial Agriculture and Forestry Extension Service
District Agriculture and Forestry Extension Service
Village
Livestock and Fishery Extension Center
Soil and Crop Extension Center
Irrigation Extension Center
Forest Plantation and Reafforestation Extension
Center
Rural Development of Target
Area Project
58
Marketing Support
There are no effective arrangements to support marketing of forest products. Lao
National Chamber of Commerce and Industry (LNCCI) is stil a young, and can grow into a
strong institution capable of actively promoting trade and investment.
Lao National Chamber of Commerce and Industry
Chambers of Commerce and Industry, in countries, are normally registered societies
or associations of producing and trading institutions; they are involved in promoting and
safeguarding the interests of their members – thus, also helping to expand trade/markets and
investment in the country.
The Lao National Chamber of Commerce and Industry has existed since 1989. It
received formal recognition only much later. PM decree No.125/2003 (dated 24th July 2003)
on the organisation and activities of LNCCI defined its roles, functions, authority, structure
etc. LNCCI started its full-fledged functioning only since 2004.
Articles of association of LNCCI defines categories of membership, criteria and
qualification, registration, management, assembly, board of management, the committees etc.
Membership in LNCCI is voluntary – there is an initial fee of US$20 to join, and thereafter
US$ 10 per year as annual membership fee.
LNCCI is directed by a board (Executive Committee) of 15 elected members,
representing different business and industries. Currently its membership is 685. LNCCI is a
member of NCCIs of France, Germany, Denmark, India and also of ASEAN Chamber of
Commerce and Industry. They essentially exchange views and information and carryout
joint projects for export promotion.
LNCCI has several groups/associations relating to different specific trades:
Lao handicraft association (mostly of silk, silver, rattan, bamboo, ceramics, hand
made paper, wood).
Lao textile and garment industry association.
Lao agricultural products processing group.
Furniture (design) and interior decoration group.
Lao manufacturing industry group (brewery, soft drinks, tobacco, sugar, paper
cartons, cement, plastics, stone ware).
Lao pharmaceutical and medicine group
Lao wood and wood products export group
Lao travel business association
Transport association
Subsidiary to the LNCCI, every province has a Council of Commerce.
59
LNCCI has the authority to issue certificate of origin for the products manufactured
in Lao PDR as well as to issue registration on National Brands. LNCCI is expected to carry
out export promotion activities, conduct trade fairs and provide loan financing. Currently, it
is designing a strategy for promoting export of medicinal plants.
Overall, however, LNCCI is still a weak institution with limited capacity for
providing services to its members. There are only 12 regular staff members, all on
secondment from the Ministry of Commerce. There are no specialists (lawyers, finance
experts) in the staff.
Co-Ordination of Forestry activities
With a large number of agencies (such as DoF, NAFRI and NAFEs under MAF;
Department of Traditional Medicine and Traditional Medicine Research Centre; Department
of Trade; Department of Industry and Handicrafts; Department of Taxes and others),
involved in public forest administration and delivery of support services, and without a clear
lead agency to take professional leadership, there is lack of adequate co-ordination,
resulting in conflicts; and leading to unsustainable forest management.
Sectoral Constraints
Constraints are seen in all aspects of forestry – technological and scientific (related to
management and measurement), environmental, informational, economic, infrastructural and
institutional.
Inadequate and inappropriate technology in forest production and protection/
conservation, lack of attention to pre-conditions and preparatory actions, and lack of
adequate research support (e.g. for domestication and genetic improvement of species, for
improving productivity of forest plantations, for rationalizing shifting cultivation), among
others, reflect the technological weaknesses in the sector.
Management calls for assessments and measurements, and actions to promote
progressive improvements and to prevent resource deterioration. Absence of correct
measurement and details of forest area under different categories of management
(production, protection, conservation) and administrative control (national, provincial,
district, village), lack of updated inventory of forest resource, continuing forest degradation
and frequent occurrence of forest fires, inter alia, are suggestive of the severity of
weaknesses in forest management.
Apart from several species having suffered extinction, many others in the wild are
under threat, in varying degrees. Still, adequate efforts are lacking to address the situation
effectively, and loss of forest cover continues unabated. There is serious dearth of forest
information – statistical and non-statistical, covering the dynamics of forest resource change
and the different aspects of forest management and utilization. Available information, often,
are inconsistent and of low reliability. Moreover, there is no adequate system of gathering
and disseminating new and updated information. Further, there has not been any
60
recognizable flow of practical information on improved technology, from central institutions
(particularly forest research institutions) to provinces, districts and villages (Thomas, 2004).
The situation of forestry information affects the effectiveness of forestry planning and
implementation.
The overall economic situation, particularly poverty, remains a constraint affecting
the forestry sector, as the remaining forests are subjected to increasing pressure for practicing
subsistence agriculture. Inadequacy of necessary infrastructure, low level of investment in
forest-based processing and value addition, poor level of capability/skills and technology
relating to forestry etc. can, to some extent be attributed to the impacts of poverty.
On the institutional front, weaknesses are seen in all its components. First of all,
there is no formal legislated forest policy, which is consistent and comprehensive, and thus
there is inadequate policy coverage for the sector. In the absence of a formal forest policy,
laws and rules serve the twin functions of providing development guidelines as well as
enforcement mechanisms; and these, often, lead to conflict of interest.
The legal profile of the forestry sector is somewhat skewed, with uncertainties,
inconsistencies, conflicts, contradictions and other flaws. Generally, the legal mechanisms
suffer from structural and other weaknesses. Even those mechanisms which are argueably
rational and legally appropriate have failed to be implemented adequately, due to several
problems which among others include: inadequacy of trained staff, weakness of enforcement
institutions; unnecessary bureaucracy; wide spread corruption; lack of co-ordination among
related sectors; inadequacy of financial resources; inadequate understanding between the
local community and the bureaucracy and so on. Lack of clarity about traditional rights vs
village enterprise activities in forestry, unclear and unscientific nature of the quota system16
for forest products and the deficiencies in its implementation and so on are reflective of the
need to strengthen the legal instruments relating to forestry.
Inadequacies of organizational units of public forest administration in terms of
transparency and accountability leads to delays and flaws in implementing the declared
programmes (e.g. land allocation, stabilizing shifting cultivation, NWFP development and
value-added processing) and prevalence of illegal activities (illegal logging and illegal trade
in forest products).
Procedures for obtaining official approvals are protracted and cumbersome. In the
operation of the quota system, some eleven institutional units are involved; and the emphasis
is on tax/revenue collection rather than on scientific management of forest resources.
Plans are often, unrealistic “wish lists” as they are not based on realities of the
situation; they lack action, as they are not supported by funds, facilities and manpower.
Funding/budget constraint is particularly serious.
Lack of adequate boundary demarcation of the various management categories of
forests in the field is a serious deficiency (a programme in that regard is known to be delayed
due to lack of funds). Record keeping on forest areas/resources (providing clear tabulation of
area by compartments, forest management categories, FMUs, administrative controls etc., as
delineated in the field, and showing changes as they take place) has also not been taken
16
The establishment and allotment of arbitrary quotas for forest produces are against the spirit of scientific
forest management, and principles of free and fair trade.
61
seriously. Inadequate preparation and capacity for effectively undertaking decentralized
functions have added a new dimension to the constraints.
All constraints, in a way, are symptoms or results of institutional inadequacies.
Technological weaknesses, declining resources and productivity, insufficient capability for
planning/implementing SFM, inadequate involvement of primary stake holders or
beneficiaries, and market failure – all these result, primarily due to institutional weaknesses.
Apart from the territorial space (comparatively sizeable land area per capita) available, Lao
PDR also needs social, economic, ecological and scientific space for ensuring growth and
development.
Benefits not backed by Investments
Forests of Lao PDR have contributed to the socio-economic status of the country, and
serve as a source of Government revenue as well as additional income and employment for
the people. Recently attempts have been initiated to convert forests with high aesthetic value
into tourist and recreation areas, as a new avenue for development.
Some 80% of the population of Lao PDR relies heavily on the forest for timber, food,
fuel, fibre, shelter, medicines, condiments and spiritual protection. In rural areas, forests
provide one of the few available economic activities and NWFPs often provide more than
half of a family‟s total income.
According to Forestry Strategy 2020 (MAF 2005), forests contribute some 10% of the
GDP and 15-20% of the non-agricultural GDP of Lao PDR. They also account for some 34%
of total export earnings17
. Forest royalties now provide some 11% of total tax revenue, down
from some 20% in the mid 1990s. In terms of energy consumption, wood energy including
charcoal and fuel wood is the dominant source of energy for cooking, even in the capital city
of Vientiane, and in highland areas it also provides necessary heating.
The multifarious benefits of forests enjoyed by the society (both direct and indirect,
such as income, employment, subsistence, basic needs), by and large, are through accessing
the resource (legally or otherwise) and not by actively and adequately participating in
developing and enhancing the resource as an organized enterprise. In the absence of adequate
investment to create or enhance forest capital and resource base, the benefits are mostly
mined, not appropriately managed, thus leading to capital consumption and resource
deterioration. It is in this regard that the establishment of a Forest Development Fund as
proposed in Forestry Strategy 2020 (MAF 2005) becomes very relevant.
Capital is essential for all development. Rural residents are short of capital and
unfamiliar with market economics. They are in real need of Government support. Capital
loans (not grants) with low interest repayments is an incentive, but not easy to obtain.
Mobilization of funds (through all appropriate means, particularly improved rent capture
strategy, and promoting the role of lending institutions, foreign investment, venture capital
etc.) is an important strategy in this regard.
17
Log production alone contributes 3.2% of GDP; and wood products alone contribute some 20 to 25% to the
total export earnings.
62
Since the decentralized levels of administration are to take increasing responsibility
for development and investment programmes, there is need to establish and strengthen
capability at those levels. There is also the need to enhance the participatory approaches (and
the benefits therefrom) to ensure a harmonious environment for decentralized forest
management.
International Assistance Projects
Donor funded international assistance projects (both bilateral and multilateral) have
helped the forestry sector in Lao PDR, by providing guidelines and frameworks and catalytic
support for SFM, including support for human resource development, capacity building, field
research and pilot demonstration. Lao PDR has received such support, in the form of loan
and grant projects from a large number of sources: ADB, World Bank, Sweden, Japan,
England, IDRC Canada, Australia, GTZ, FAO, ITC, IUCN, SNV and others.
The ADB has been involved in the forestry sector of Lao PDR for the last several
years. The ongoing loan project on industrial tree plantation involves there institutional
categories, involved in raising pulpwood plantations of Eucalyptus spp. for export (to
Thailand): i.e. small holder family groups; local companies/enterprises; international
companies/joint ventures. Loans to the enterprises are underwritten by the Agriculture
Promotion Bank. The second phase of the project, to be known as “Lao Plantation Sector
Project” and to be initiated soon, will be implemented by the proposed “Lao Plantation
Authority” managed by a Governing Board.
In addition, the ADB is assisting the forestry sector of Lao PDR through a technical
assistance project, financed by the Poverty Reduction Co-operation Fund, for “Poverty
Reduction in Upland Communities through Improved Community and Industrial Forestry”.
The World Bank has also been present, intermittently in the forestry sector of Lao
PDR. The forest management and conservation project (FORMACOP) was implemented
during 1993-97 with a view to lay the foundation for sustainable forest management and
conservation. The ongoing World Bank Project (2003-2006) with participation of FINNIDA
for “Sustainable Forestry and Rural Development” (SUFORD), continues with the same
group of activities taken up under the earlier project: i.e. research and development,
sustainable forest management and forest/biodiversity conservation, involving management
planning, establishment of permanent sample plots, preparation of volume tables, capacity
building, development of NWFPs etc.
Sweden provided support during 1997-2000 for conducting a forestry sector pilot
study to promote sustainable forest harvest through appropriate scientific management. The
ongoing Lao-Swedish project on upland development through community development
follows up on the above pilot study.
Another ongoing noteworthy project is of JICA, on forest management and
community support. Others include FAO support for marketing system development for
NWFPs, ITC support for developing national export strategy, and IDRC (Canada) support for
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development of bamboo and rattan. Lao PDR has also received support from regional
projects on forestry research and code of practice for forest harvesting.
Forestry Situation in the Project Area
As already noted the „project area‟ is comprised of six villages distributed in three
districts falling in three different provinces. The consultant was able to visit only one site,
Long Leuad village in Xien Ngeun district of Laung Prabang province. A brief account of the
situation in the site visited will be in order to obtain a sense of the situation and capabilities at
the decentralized levels.
Luang Prabang Province
Luang Prabang is the northern most province of Lao PDR and has common boarders
with Thailand, Myanmar, China and Vietnam. In the past, Luang Prabang was somewhat cut
off from major markets due to a lack of reliable surface transport, and therefore, it developed
a small, fragile and largely insular economy of local production and servicing, resting on a
traditional subsistence foundation. With a new highway linking Laung Prabang with
Vientiane and Thailand (and another, soon to be completed, linking Laung Prabang with
Chinese border), the situation is fast changing. Luang Prabang is becoming a relay point in
China-Laos-Thailand commerce.
Luang Prabang city is the capital of Luang Prabang province. Following the inclusion
of the city to UNESCO‟s World heritage list in 1995, the future of Luang Prabang will be
bright as a tourist destination.
Luang Prabang has 11 districts and several sub-districts. The districts are divided into
villages, the lowest level entity among decentralized levels. Economy of Luang Prabang is
agriculture oriented with few commercial crops like sugar cane. Industrial processing sector
is small comprising of cement, concrete mouldings, electricity, sugar, handicrafts (such as
hand-made paper, wood carvings, silk) etc.
Being a mountainous province, most of Luang Prabang is covered by forest, but
heavily subjected to shifting cultivation, fires, cross-border smuggling and qualitative
degradation. The province is still a source of valuable timber, and hosts several carpentry
shops and few furniture factories, engaged in production for export.
During the last several years, small-scale plantings of teak has taken place in the
northern provinces, as part of a timber (forest) farming programme. Luang Prabang already
has some 15,340 ha of teak plantations raised under this programme. These are expected to
be managed on a 30-year rotation; but plantings were lumped and erratic, and did not follow
a normal age gradation. Since they were not subjected to proper tendings/thinnings, quality is
also poor. Through ingenious management interventions, quality of the plantations can be
enhanced.
In Luang Prabang province, NWFPs are an important source of income for the
villagers, as well as a source of revenue for the local Governments. Cardamom,
64
cinnamomum, benzoin, broom grass, bamboo, rattan and mulberry bark are some of the
important NWFPs, which have an export market. Since some non-wood produces (e.g.
rattan) can be grown along with timber trees (e.g. teak), the prospect/potential for their
integrated production and processing (e.g. furniture) deserves to be seriously explored and
pursued18
.
All the Central Departments have decentralized counterpart organizations at the
provincial level, under the overall jurisdiction of the provincial Governor. The Provincial
Agriculture and Forestry Office (with separate forestry unit and staff) deals with all matters
related to technical aspects of forestry. The provincial offices/departments involved in sale of
forest produces, collection of taxes, planning etc. include among others: commerce, finance,
industry and handicrafts, planning and environment.
The provincial offices have the responsibility to guide and support the district level
functionaries, as appropriate and necessary.
Overall, the capacity (and the facilities available) at the provincial level is highly
inadequate.
Xien Ngeun District
Xien Ngeun is one of the 11 districts of Laung Prabang province. The main economic
activity of the district is agriculture, including forestry. Overall productivity is low. In 2004,
total revenue of the District was 672 million kip (about US$ 65,000), of which close to 20%
was accounted for by agriculture, mostly contribution of forestry. (NWFPs alone contributed
8%). There are no industries in the district except for few furniture shops.
NWFPs are of considerable importance to the district. It supports subsistence and
provides income to villagers. Rattan, bamboo, paper mulberry bark, broom grass, Bohemeria
malabarica and cinnamom are the main NWFPs.
There are some 2,500 ha of tree plantations in the district (of which about 2,000 ha
teak 110 ha paper mulberry and 164 ha of broom grass). The plantations are poorly
maintained.
Forestry in the district is the responsibility of district agriculture and forestry office
(DAFO), headed by a Director. There are limited numbers of deputies in charge of different
specific subject areas. The facilities (and personnel) available at DAFO is highly inadequate,
record keeping is dismally poor and capacity is low - compared to the pivotal role assigned to
districts under decentralization.
District finance office is in charge of collection of all taxes, including tax on forest
produces.
Long Leuad Village
Long Leuad village within Xien Ngeun District of Luang Prabang province has a
population of only 231, distributed in 43 households (number of females only 93). Their sole
means of livelihood is farming. There is no industrial activity in the village.
18
There are several such potential combinations of wood and NWFPs.
65
The land/forest resources available to the village are: 54 ha of agricultural land, 42 ha
of village forest, 5.5 ha of paper mulberry plantation and 1 ha of home garden. The resources
are not jointly managed. Individual families manage their respective share (property).
Major items of produces grown/harvested/collected for sale at local market or to
traders/middlemen are essentially NWFPs (i.e. paper mulberry for bark, bamboo shoots,
broom grass, bohemeria bark, bitter bamboo, sugar palm, medicinal herbs), banana and some
teak poles. Food crops grown in the village are adequate only to meet the requirements for 6
months and the rest are imported.
NWFPs account for about 50% of the village income. With an average per capita
income of less than US$ 1 per day, the entire village lives below poverty line19
.
The village infrastructure is minimal. No facilities are available for post harvest
storage. The villagers have no access to credit other than what is provided by traders. They
have no access to market information. They have no idea as to what for the produces they sell
to the traders are used and where (except the general understanding that some of it goes to
China or Thailand). Also villagers (including the chief and deputy chief) have no clear
knowledge of the laws, rules and regulations. They are not aware of technical prescriptions
regarding village forest resource management or guiding harvest operations.
At the village level, committees have been formed to look after woman‟s welfare,
development etc. Also selected individuals have been assigned responsibility for forestry
activities, for maintaining statistical information etc. without any form of training (or access
to technical handouts). They have no means of action, to perform their responsibility.
The situation of villages in Lao PDR (based on the situation of Long Leuad) raises
several issues, inter alia, relating to: concept and purpose of decentralization of the sectoral
activities; viable village size for meaningful delivery of development (including
infrastructure and facilities, economic enterprises); need for adequate preparation and
capacity building for effective decentralization; and need for informed participation.
19
The estimated total income of the village is US$ 55,440 which is equal to US $ 20 per month per person.
66
3. NON-WOOD FOREST PRODUCTS IN LAO PDR
GLOBAL SITUATION
The NWFPs are of legendary importance as the earliest traded products and earliest
amongst those to be domesticated, leading to the agricultural revolution. However, along the
way, the NWFPs lost their primacy to timber, during colonial expansion and industrial
revolution (and later to synthetic products); and they became collectively known as Minor
Forest Produces (MFPs) whose existence was incidental to the management and utilization of
the timber resource (and not as a natural resource of great value in its own right).
The emerging concern for bio-diversity conservation, bans on timber extraction to
control deforestation, and green consumerism (and interest in organic products) provided a
revival of interest in, and a new life for, NWFPs. Still, it has not been easy to reverse the
trend, to get NWFPs back to their old glory. So, after some 30-40 years of the so-called
revival of interest, the situation is full of nagging issues in the whole chain of resource
management to marketing of NWFPs.
NWFPs are eco-friendly products that consist of biological goods and services other
than wood, derived from forests and allied land uses. The use of NWFPs is as old as human
existence and with few exceptions, NWFPs remain a local interest. In recent years, however,
NWFPs have attracted considerable global interest, due to the increasing recognition that
NWFPs can provide important community needs for improved rural livelihood. NWFPs also
contribute to household food security and nutrition; help to generate additional employment
and income; offer opportunities for processing enterprises; contribute to foreign exchange
earnings; and support biodiversity conservation and other environmental objectives. Green
consumerism has helped spur market interest in NWFPs.
As a broad group, NWFPs exhibit a high degree of heterogeneity in their sources,
production system, characteristics, and utilization. These products, of both plant and animal
origin, fall under a large number of product groups, each of which includes a considerable
variety of components. Product groups include: edible products, fodder, fiber and flosses,
gums and resins, medicinal extracts, spices, phytochemicals, agro-chemicals, aroma
chemicals, alcohol, enzymes, sweeteners, flavours and fragrances, organic acids, bio-control
and chemotherapeutic agents, essential and fatty oils, bio-diesel, dyes and colorants, culinary
herbs, ornamental products, horns, bones, pelts and plumes. They also include services such
as grazing and recreation experiences.
These products are derived from a variety of sources – plants (palms, grasses, herbs,
shrubs, trees) and animals (insects, birds, reptiles, large animals). Different parts of a plant or
animal often provide different products, simultaneously and at different times. Even the
celebrated teak trees provide NWFPs – e.g. pigments used to dye silk from the juvenile
leaves and some chemical extracts from its wood. NWFPs are utilized at the subsistence,
67
local use and commercial levels. Some of these products are sold in bulk; others reach
specific niches.
Each major geographical/agro-ecological region is bestowed with a wide range of
species providing useful NWFPs, some of which though quite important locality, are seldom
known outside that region.
In subsistence and rural economies, the role and contributions of NWFPs are crucial
as sources of food, fodder, fibre, fertilizers, herbal potions, construction materials and
cosmetic and cultural products. Some 80% of the population in the developing world depend
on NWFPs for their primary health and nutritional need. As raw materials, NWFPs support
village-level artisanry, craft activity and processing enterprises such as those of rattan and
bamboo furniture, essential oils, resin and pharmaceuticals. Some NWFPs are internationally
traded and used in food flavourings, perfumes, medicines and confectionary. A large number
of items of our every day use, such as insecticides and fungicides, medicines, perfumes,
suntan lotions, dental creams, deodorants, nail polish, mouth wash, hair conditioners,
toiletries, cheese, chewing gun, ice cream, soft drinks, juice drinks, peanut butter, breakfast
cereals, bakery products, canned fish, dairy deserts, food colourants, flavourings, fancy bags,
decorative buttons, chess pieces, golf balls, paints, inks and varnishes, corrosion inhibitors,
industrial solvents and a host of others, contain varying proportion of NWFPs.
Under natural conditions, NWFPs can be managed along with wood in an integrated
manner thus increasing the overall productivity of forests. Their proper management can
support conservation of genetic wealth and variability. Often non-wood products can be
harvested without cutting down trees or plants, while some can be grown as pure or mixed
crops under agro-forestry systems. A number of silvicultural/technical operations related to
NWFPs involve different and often higher levels of skills, as well as high investments. For
example, inventory of NWFP resources is very different from an inventory of wood
resources due to heterogeneity of sources and produces, and differences in their distribution
pattern. It involves bio-prospecting of unexplored flora and fauna for the treasure of
biochemicals. Similarly, harvesting of NWFPs is different from wood harvest in terms of use
of tools and technology and involves more elaborate pre-harvest preparations and post
harvest treatments. Because of the variety, markets for NWFPs show corresponding
variation, from local level bartering to specialized international niche marketing.
Enhancement of NWFP production and processing involves aspects related to land
use planning, improvement of production/cropping technology, pre-harvest and harvesting
operations, post-harvest treatments including storage and transportation, product
development and value added processing etc. Emphasis here should be on productivity gains
through refined/improved technological inputs. Efficiency in the use of raw material, labour
and capital inputs and technology are the main means to achieve better performance in
producing increased volumes of higher quality products, at lower costs. There is also need to
achieve uniform and consistent quality of production to avoid market-capture by substitute
products.
68
Need for a Clear Definition
A clear definition for NWFPs is still evolving. The International Expert Consultation
in Non-Wood Forest Products held in Yogyakarta, Indonesia, 17-27 January, 1995 defined
NWFPs as consisting of “goods of biological origin other than wood, as well as services,
derived from forests and allied land uses”20
. Subsequently FAO has re-defined NWFPs as
“goods of biological origin other than wood, derived from forests, other wooded land and
trees outside forest”. These definitions lack adequate clarity about the product boundary and
the source boundary. For example, according to the above definitions, mango and jack fruit
(also produces of other integrated fruit tree systems) are NWFPs. Mango and Jack are fruits
of trees, which have been traditionally treated as cultivated tree crops providing agricultural
produces. Rubber is another similar example.
There are several other definitions for NWFPs with somewhat different product
boundaries and resource boundaries.
Product Boundary
An ambiguity and confusion regarding the scope of NWFPs is the lack of clear
understanding about its boundary. Can composite manufactured products, wherein raw or
primary non-wood produce is only one of the component ingredients be considered as
NWFPs ?. While the attributable share of NWFPs in such composite products (e.g.
confectionary; cosmetics, golf balls, chewing gum, patent medicines) can be estimated to
assess or indicate the role and importance of NWFPs, they cannot be considered as NWFPs.
On the other hand, some of the harvested produces (such as culinary herbs, wild fruits, fronds
and flowers, palm hearts, roots and bark), primary products (such as edible nuts, wild honey,
galanicals, essential oils and spices), and also some secondary products (such as traditional
herbal medicines, rattan and bamboo furniture) where the basic ingredients (except for
labour, energy, packaging etc) are wholly derived from non wood resource or where the
share of other ingredients is insignificant, are to be considered as NWFPs. For example, hand
made paper using non-wood forest fibres is an NWFP, where as specialty paper made of
chemical pulp of the same raw material, mixed with high quality wood pulp and other
quality-enhancing materials such as sizing is not an NWFP.
Source Boundary
It has been difficult to establish a clear and universally acceptable definition, because
a number of non-wood goods (such as gums, dyes, non-wood fibers, nuts, fruits, spices,
medicinal and aromatic plants) are also obtained from cultivated non-forest sources. These
are, most often, reported as agricultural or horticultural produces, even though estimates
indicate that major part of the NWFP production is sourced from forests. There is need for a
clearer (re)source boundary.
20 An economic good is any physical object, natural or man-made or services rendered, which could command a
price in the market.
69
Several of the produces considered as NWFPs are obtained from a combination of
different sources – both wild (wilderness areas, managed natural forests, natural secondary
forests, waste lands) and domestic (monoculture plantations on NWFPs such as of bamboo,
rattan and cinnamomum; mixed plantations of timber and NWFP species; and agro-forestry
plots) sources.
NWFPs and Agro-Forestry
A common approach to create/enhance NWFP resource is under agro-forestry
systems, along with agriculture, horticulture and forest/tree crops. While wild plants can, and
often do, form a component of agro-forestry, in majority of cases domesticated species are
used, because of higher productivity and ease of management.
The range of agro-forestry combinations are highly varied and interesting: fuelwood
and tobacco; rubber and rattan; timber trees, bamboo with tropical fruits and spices; poplar
with sugar cane and millet; mulberry along farm bunds; Eucalyptus spp. and cardamom;
shrimp and NWFPs in mangroves; cattle under coconut etc. Fruit and medicinal tree farming
(Emblica officinalis, Achras sapota, Punicia granatum) mixed with valuable tree species like
teak and Gmelina arborea has helped to put comparatively dry and otherwise unproductive
land to profitable use, in some parts of India. The scope for crop combinations is limitless.
The role of NWFPs in many indigenous agro-forestry systems, and the potential role
of agro-forestry as an approach to NTFP development have been identified and recognized.
Agro-forestry and NWFPs are interesting areas which, somewhat, had a history of co-
evolution. Considering that agro-forestry places a strong emphasis on small holder, low
input, multiple output systems and many of the trees and other species that produce NWFPs
are amenable to integrated management, agro-forestry as a land use approach and NWFPs as
an output are closely integrated.
Most of the available reports describe systems where NWFP-yielding plants are
grown in association with commercial tree crops. These reports identify a number of
localized, under-exploited tree species that produce NWFPs in a variety of ecosystems and
outline the potential for their improvement through domestication and agro-forestry; some
reports also deal with the soil-improving potential of some such species.
Need for an Appropriate Classification
Accounting of NWFPs is extremely weak; and a classification system for NWFPs
(consistent with other existing systems) is not available in most cases. NWFPs mostly form
part of an informal sector and information about their production and trade are not properly
compiled21
. The existing system(s) of produce/product classification include several items of
NWFPs. But products from non-forest sources are the ones reported (in most cases) under
these items for national and international statistical compilations. In some cases, undefined
21 Improvements in the classifiction and accounting of NWFPs have to take place within an improved system
for forestry as a whole.
70
items of NWFPs are included (if at all) under the catchall category of products “not
elsewhere classified or specified”.
For the purpose of management and marketing, a rational grouping and classification
of NWFPs is essential. The heterogeneity of NWFPs demands such a classification. The
purpose is to differentiate characteristics and to collect/collate quantitative and qualitative
information for analysis and for designing future action. Product classification takes into
consideration the source, raw material involved, stage of production and degree of
processing, physical profiles, intended use etc. For a scientific and comprehensive treatment,
NWFPs will have to be separately classified, consistent with the existing product
classifications22
.
Role of Domestication
Plants (and animals) providing NWFPs of commercial value are increasingly being
domesticated and cultivated. Domestication of wild plants, involving their genetic
improvement, and growing them under intensive cultivation practices is considered as a
means of improving efficiency in production. Oil palm, rubber, cashew, coffee, cocoa,
cardamom, pepper, mangostein, durian, rambuttan and litchi are but a few of the many wild
forest plants that have been largely replaced by production from cultivated sources, both
under monoculture plantations and under agro-forestry systems. It has been the experience
that once a product achieves commercial importance, its supply from wild sources tends to be
replaced by cultivated sources, with a view to bring production, quality and cost under
control.
Domestication and conservation of genetic resources are two issues that need to be
considered jointly. Characteristically, domestication for monoculture leads to substantial
decline of wild populations. Agro forestry offers a very good opportunity for avoiding such a
danger and for maintaining genetic variability.
In the history of plant domestication, annual crops vastly outnumber tree crops. We
are now becoming more conscious of the importance of domesticating trees. Several tree
crops have been domesticated to varying extent and are being commercially exploited – e.g.
oil palm (Elaeis guianeensis), and rubber (Hevea brasiliensis), both supported strongly by
commercial plantation industries. The domestication process involves several stages of
organized scientific steps – characterization, germplasm exploration, vegetative propagation,
genetic selection, and incorporation into a sustainable land-use system. Also, semi-
domesticated forest species can be integrated very well into agro-forestry systems, and thus
could be genetically conserved.
Since tree domestication by breeding is a long and slow process, vegetative
propagation and clonal selection that have been developed for tropical trees are particularly
promising techniques. In some instances these techniques are already in practice. All tree
22
Such as: International Standard Industrial Classification (ISIC); Standard International Trade Classification
(SITC); Harmonised Commodity Description and Coding System (HS); Provisional Central Product
Classification (CPC); and System of National Accounts (SNA).
71
domestication efforts are linked to economic needs (demand) for the products of such plants
and offer a tool for ensuring steady and environmentally sustainable supply.
Complexity of Technology
The complexity of NWFPs as a product group of biological origin provides them with
a variety of characteristics and a commensurate range of uses, supporting a range of
situations from rural subsistence and poverty alleviation to economic development through
high level of value addition in downstream processing and meeting the needs of bulk and
niche markets.
Many of the non-wood primary (and intermediate) products can be used for value-
added downstream processing, producing consumer items. Apart from added income and
retained value, development of downstream processing will also help to provide employment
and to develop a technological skill base.
NWFPs are also amenable to integrated, multiple use management, thus capable of
enhancing land use, biodiversity conservation and environmental protection.
While the technology involved in NWFP extraction for subsistence (and direct,
unprocessed use) is rather simple and primitive, sophisticated/integrated NWFP resource
management and utilization of biochemical active ingredients are very complex, demanding
high-level technology.
NWFPs being derived from different parts of (and different types of) plants (and
animals), have varying requirements for their resource management (including resource
inventory, resource creation/cultivation), harvesting, post-harvest treatments, processing
possibilities and marketing needs. Because of the high heterogeneity of the NWFP resource
base, there is considerable variation in the way in which the non-wood forest produces are
managed, harvested and utilized. Even the same category of NWFP resource, often, has
several varieties (for example, bamboo resource comprising of varieties which are thorny and
non-thorny, clump forming and non-clump forming, edible and non-edible, hollow and
solid), requiring different approaches/technology for their inventory, management, harvesting
and utilization.
Harvesting
A product‟s journey to market starts with its harvest. And, quality of the different
non-wood products depend on how (properly) they are harvested. The harvesting tools and
techniques vary considerably for various NWFPs. Harvesting often does not involve a whole
tree or plant, but only parts thereof. It varies from collection of nuts and leaves to tapping of
latex, harvesting of palm heats, extraction of medicinal plants and plant materials, extraction
of wax and collection of tubers. Timing (season, time of the day) and technique of harvesting
vary for mature and tender (immature) parts – fruits, leaves, shoots. Ripe fruits are hand
picked or collected using nets (picking bags) and poles and/or “polythene tunnels”. Some of
the medicinal herbs are collected only at night. Roots are harvested by digging 15 to 20cm
72
away and by levering the root. Exudates are to be tapped into small containers and
transferred to field containers. Unskilled, untrained or inexperienced labour can spoil or
damage the product.
Highly modern harvest techniques are impractical, unless quantity involved is large,
trained manpower exists and appropriate infrastructure is available (e.g. cooling chambers,
uninterrupted supply of electricity etc.).
Assessments of the impact of harvesting on biodiversity should proceed before
launching into large scale harvesting and utilization of NWFPs.
An important action to improve the efficiency and quality of harvesting is to reduce
and utilize the harvest waste. However, it becomes impractical, where individual production
units are small – unless they join together as co-operatives or collectives, based on mutual
agreement.
Post-Harvest Treatments
Perishability of harvested produces is relative, and some amount of harvest losses and
degradation do happen for all produces – depending on the post-harvest care given. Post
harvest action before supplying the produces at the intermediate or final markets, can be
broadly categorized as: treatment to avoid deterioration, storage, packaging and transport.
Different treatments are given to different produces to avoid or reduce the degradation,
deterioration or losses caused while storing and transporting:
The storage life and recommended storage condition (of shade, moisture, light,
surface hardness) vary for different categories of NWFPs. Ventilation is important in all
cases to allow air circulation and to avoid moisture and vermin. However, humid shady
conditions are required for roots and tubers for evaporative cooling; saw dust and straw is
used in cases of some fruits to avoid skin damage; some spices are to be kept spread over
ventilated trays. Mixing of different produces in the same storage room is to be avoided, as
odours and gases given off can cause degradation. Storage, often, reduces quality and self-
life. Therefore, storage period should be reduced to the minimum.
Packaging to avoid damages during transport (due to vibration), and packaging to
improve presentation and shelf-appearance are somewhat different. While the first one is a
post-harvest treatment, the second one is a marketing requirement. Some of the NWFPs
cannot stand multiple stacking and require appropriate packaging to prevent
compression/impact damages and bruises. Some fruits require individual wrapping.
Appropriate medium should be used – e.g. straw, bubble paper, corrugating medium, wooden
or plastic trays.
Transport by open or containerized trucks, trains or boats involving loading and
unloading is expensive. This is particularly so where perishable goods are to be sent through
refrigerated (or temperature controlled) trucks or vessels. Most of the NWFP collectors are
unable to afford the cost of long distance transportation to the market, and to use appropriate
loading and unloading equipment (e.g. forklifts, conveyors). They are obliged to dispose off
the produces at the local (or nearby) market to which the produces can be send using local
transportation (e.g. bullock cart or hand cart), or sell at site to the middlemen/traders.
73
Through a co-operative arrangement, transport space can be shared, thus facilitating
improved market access.
Value-Added Processing
The vastly different NWFPs present equally different, simple to complex, possibilities
of value added (primary and downstream) processing. Fruits can be processed into jams,
jelleys and juices for urban consumption. Bamboo and rattan can be processed into mats,
baskets, furniture etc.
Aromatic plants are the source of essential oils. Steam distillation is the widely used
technique in the extraction of essential oils. In this process, steam is passed through the plant
material whereby the constituents that are volatile are carried along with the steam. Though
the process sounds simple in theory, the actual commercial process for greater efficiency and
quality varies widely, depending on the characteristics of the raw material and the final
product. Production of some expensive essential oils from certain flowers takes place through
a process called enfleurage. Expression and solvent extraction are other methods of
extraction.
Essential oils can be further processed into aroma chemicals, enriched oils and
absolutes. The international market for essential oils is dominated by a few countries. Some
of these countries import oils from developing countries and export them after refinement or
blending. The market is quite competitive and protected. Hence, the developing countries
have to adopt strong market strategies for promotion of down- stream products. Most
developing countries stop at the primary level of essential oil production for want of
necessary skills and technology, and market access.
Medicinal plants enjoy both national and international market, as raw material for
producing medicinal preparations. Some 4,000 to 6,000 botanicals are of commercial
importance, globally.
About 80% of the world population still depends on medicinal plants for their health
care. Medicines prepared using traditional methods are still used by the practicing healers in
the developing countries. Hence, there is a demand for these traditional medicines, which are
prepared using widely growing plant species. Around 20% of the drugs in modem
pharmacopoeias are also plant derived, either as pure phytopharmaceuticals extracted from
plants or as synthetic derivatives of them. Although the raw materials for the production of
phytopharmaceuticals have been produced by cultivation of selected varieties of plants, most
of those used for traditional medicines are being collected from the forests. In fact, this had in
certain instances lead to threats of extinction of some valuable species. As a result,
domestication and cultivation of medicinal plants have been initiated. In order to encourage
cultivation, there should be a market guarantee. This could be better achieved by introducing
small-scale processing units for the production of traditional medicines. While in some cases
medicinal plants could be sustainably harvested form forests for small scale processing,
systematic cultivation has to be introduced to meet the demands for medicines at the national
level.
74
The medicines for domestic use prepared in the traditional manner involve simple
methods such as hot or cold water extraction, expression of juice after crushing, powdering
of dried material, formulation of powder into pastes via such a vehicle as water, oil or honey,
and even fermentation after adding a sugar source.
The value of medicinal plants is a source of income and foreign exchange for
developing countries depending on the use of those plants as raw material in the
pharmaceutical industry. These raw materials are used to:
Isolate pure active compounds (phtyopharmaceuticals) for formulation into drugs;
Isolate intermediates for the production of semi-synthetic drugs;
Prepare standardized galenicals (extracts, powders, tinctures).
If one is to produce known pure phytopharmaceuticals used in modern medicine,
more processing stages and more sophisticated machinery are required. In order to achieve
economy of scale, it requires large amount of raw material and heavy investment.
Most of these processes and formulations are patent protected. Even transferring
technology through contractual arrangements, on payment, will not be of much help, unless
there is a large local demand for these drugs. Export production involves complicated legal
requirements governing registration, quality specifications, packaging etc. Therefore, most
developing countries, by their own, have not been able to obtain value added benefits from
their medicinal plant resource. Several joint venture models of collaboration with resource
owners in developing countries and pharmaceutical companies in developed countries are
now in operation.
Certain plants are rich sources of intermediates used in the production of drugs. The
primary processing of the plants or parts of plants containing the intermediates could be
carried out in the country of origin thus retaining some value of the resource material. For
example diosgenin (from Dioscoria sp) and hecogenin (from sisal) used in the production of
steroids can be commercially produced in the countries of origin where there are steady
supplies of sufficient raw materials.
Generally, however, establishment of sophisticated, down stream, value added
processing of NWFPs in most developing countries is constrained by lack of capital,
technology and skills, market, and research support. Thus, in most developing country
situations, harvested products reach the market, local or foreign, either after some
intermediate processing in the form of cleaning and grading or after primary (or early stage)
processing.
Markets and Marketing
NWFPs comprise such varied groups of products that meet the needs of all kind of
end users involving different stages and channels of marketing. NWFPs are consumed by
people of varying economic levels. Consumption can be in raw, semi-processed or multistage
processed form.
75
Production, harvesting/processing and marketing of products for intermediate and/or
final consumption form a compact set of activities. It is necessary especially in respect of
commercially important products to have a market-orientation emphasizing on efficiency of
production, consistency of quality, reliability of supply etc.
Marketing can help crate better linkages among resource management, processing
and end-use. Marketing provides a set of tools with which people can create economic value
for the resource and products made of it. Proper marketing also assists in a better distribution
of the economic value created, among the participants. Marketing is vital not only to the
medium and large-scale industrial enterprises but it also helps small farming communities to
start and sustain profitable enterprises.
Resource owners and entrepreneurs often concentrate on producing something: then
start looking for markets for the products which may not, in several cases, be the one the
market is looking for, or willing to accept. As against this production-oriented approach, a
market-oriented approach has to identify and solve problems related to market (and
marketing) factors such as: products and production, price, promotion, distribution channels,
people and procedures, and institutions (and instruments).
An efficient market information system is vital for effective marketing of products. In
respects of NWFPs, this is lacking in most developing countries. Macro/global information
available can help to some extent.23
NWFPS OF LAO PDR
Wild plants and animals (e.g. insects, small and large animals, birds and reptiles) of
Lao PDR provide a wide range of useful products. People depend on NWFPs for food and
traditional medicine. NWFPs support rural subsistence as well as trade development, and
provide cash income. These NWFPs include: food products (nuts, fruits, mushroom, bush
meat); spices and condiments; food additives; sweeteners; gums (food and non food);
oleoresins; latex, industrial oils; essential oils; tanning materials; natural pigments; fibers;
plaiting materials (bamboo, rattan, palm leaves); insecticides; flavours and fragrances;
medicinal and aromatic plants; decorative items; insect products (lac, honey, bees wax);
animals and animal products (horns, bones, plumes); and others.
It has been claimed that the estimated value of NWFPs produced in Lao PDR
annually is equivalent to US$ 216 million, of which US$ 184 million accounts for local use.
Foppes and Ketphah (2000) estimate the annual value of NWFPs used per rural house hold
to be US$ 320 (of which 44% is the value of subsistence use and 56% earning as cash
23 Market News Service of ITC (International Trade Centre) provides details of demand/supply situation of
some NWFPs – such as medicinal and aromatic herbs and extracts, with indicative prices. The Market News
Service prepares and disseminates reports weekly for fresh tropical and off-season fruits, vegetables and cut
flowers; fortnightly for tropical ornamental young plants; monthly for pharmaceutical starting materials,
essential drugs and spices, and quarterly for fruit juices, medicinal plants and extracts.
76
income). NWFPs are estimated to contribute 46% of the rural household economy. These
figures are rough estimates and may not add-up.
Vidal (1960) had identified some 1,600 plant species in Laos, of which some 1,000
are medicinal and aromatic plants. 120 of them are orchids. There are about 30 species of
rattan and several species of bamboo. Some of the plant species, which are less important (or
of no importance) in Laos are often valued species in other countries, as sources of NWFPs;
this indicates the need for exchange of information (and also the potential for trade). [A list
of some of the better-known species (trees, palms, shrubs, perennial herbs, grasses),
providing NWFPs is given in Appendix 2].
Goals of the NWFP Sub-Sector
The broad goals of the NWFP sub sector of Lao PDR as seen expressed in various
documents are, to:
develop viable alternatives to shifting cultivation;
support poverty alleviation and alternative livelihoods for rural communities;
increase income from NWFP based industry and trade; and
ensure sustainable management of NWFP resource.
Growing and harvesting/collection of NWFPs are an important component of the
programme to rationalize shifting cultivation, particularly in the uplands. Also, NWFPs are
seen as a key means to address the poverty issue. NWFPs‟ contribution to the cash income of
the community is as high as 75% in some forest areas (Foppes & Ketphanh, 2000; IUCN
2002). However, while sustaining of the NWFP resource is professed to be the prime
objective (and other objectives are to be achieved consistent with sustainability of the NWFP
resource), not much care is seen bestowed to achieve that important objective.
Out of a large number of NWFP species found in Lao PDR, only few are in common
use – both for subsistence and commerce (including the few valuable niche species). Some of
the more important NWFPs of Lao PDR are: cardamom (Amomum spp.)24
, cinnamomum and
cassia 25
, sa paper from paper mulberry 26
, yang oil 27
, dammar 28
, agar (Aquilaria
24 Amomum species are herbs growing under forest cover, whose seeds are used as a spice. It is also cultivated
in some parts. Even though there are over 10 different species of Amomum, the main species in use is
Amomum villosum.
25 True cinnamomum and cassia spices are the prepared, dried bark of the trees belonging to the genus
Cinnamomum. Apart from food flavouring, cinnamomum powder and oil are also used in producing
fragrance and medicines.
26 „Hand-made paper‟ is produced as a cottage level industry from the bark of Broussonetia paperifera.
27 Yang oil is the oleoresin extracted from yang (Dipterocarpus alatus) tree, and is used in high quality
varnishes and in perfume production.
77
crassna)29
,bamboo 30
, rattan 31
, benzoin 32
, galanga 33
, annato 34
, lac 35
, ginseng 36
and
medicinal plants 37
.
Yet others of importance include: mushrooms, insect larva, broom grass
(Thysanolaema maxima), sisiet bark (Pentace burmanica), paukmauk (Boehmeria
malabarica), phoebe spp., berberine (Coscinium fenestratum), malva nut (Scaphum
macropodium), Pandanus spp., pepper (Piper spp.), sugar palm (Arenga spp.), Rauwolfia
serpentina, makkhene (Zanthoxylum limonella), and Alpina spp., FRC/NAFRI (2002) has
short listed some 50 species as important with potential for NWFP development.
The priorities of different products provided in different reports vary indicating that in
some parts of the country certain NWFPs are more important than in other parts. Similarly,
the comparative importance of NWFPs for household use and for earning cash income also
vary. In a study covering 28 villages, distributed in 3 provinces, an IUCN study assessed
bamboo shoots as heading the list in terms of importance for house hold economies
(contributing 13%), while cardamom ranked first in terms of capacity to earn cash income
(contributing 9.5%). The perceived importance of NWFPs varies for upland and low land
28 Damar is the hard resin obtained from several tree species of Dipterocarpaceae family, mainly from Shorea
obtusa.
29 Agar is the fungal infection in the heartwood of Aquilaria crassna. The unique infested portion of wood
contains a concentrated amount of oleoresin of commercial value and it is made use of for production of
incense, perfumes and certain traditional medicines.
30 Bamboo is a versatile resource with multiple uses – from food (edible shoots) to use as raw material for
industrial products (e.g.pulp, ply wood). There are a number of bamboo species in Lao PDR falling under
different genera, with different morphology and culm characteristics.
31 Rattans or canes (Calamus spp.) are the stem of climbing palms forming a characteristic component of many
forest types. It is a very important NWFP used extensively for making a whole range of furniture, plaited
materials (mats, baskets) and handicrafts. Bulk of rattan production comes from natural forests; and the rest
from plantations.
32 Benzoin, produced from Styrax tonkinensis is used as incense and in medicinal preparations.
33 Galanga is the root of Alpinia officinarum, a herbaceous plant, which is used as a ginger like spice; and also
in local medicine.
34 Annato is a reddish-orange colourant called Bixin, derived from the seeds of Bixa orellana, and is widely
used in food dyes and polishes.
35 Lac is a resinous secretion obtained from the body of a hemipterous insect, Laccifera lacca. Naturally
occurring resin is collected from baraches of host trees in the forest. A more common practice, however, is
the deliberate inoculation of host trees, either wild or more frequently cultivated. Stick lac is the crude
product (encrustation) obtained directly from the trees, from which shellac can be extracted.
36 Ginseng, the extract from the roots of Panax spp. are extensively used as a general well being drug to
improve health and resistance.
37 The number of medicinal plants in use are large. Some 30 medicinal plants are commonly collected and used
in traditional medicinal preparations of Lao PDR. Details of trade in medicinal plants are difficult to collect,
since there is considerable amount of informal trade across the boarder with neighbouring countries.
78
villages and among north, central and southern regions of the country, due to variations in
ecology and species distribution.
Because of their rarity, leading to high price, some of the niche forestry products (e.g.
fragrances like agar38
and spices like cinnamomum and pepper) had attracted high prices in
special niche markets. In cases where these species were domesticated and their cultivation
expanded (or where synthetic substitutes have been developed), prices had tended to fall.
This is a risk, which is to be guarded against 39
.
Production and Trade
As a measure to compensate for the fall in the timber revenue, due to ban on timber
fellings in order to control deforestation, NWFPs have become an important source of forest
revenue in recent years. As we have seen, with its overwhelming biodiversity, the forests of
Lao PDR can contribute to the development of food and health product industries and those
producing insecticides, flavours and fragrances, cosmetic products, fiber products, honey and
bees wax, lac products, dyes and colorants, and many others.
Considering the vital need to support rural livelihood, NWFPs cannot exclusively be
devoted for revenue earning commercial production. Based on its prime purpose,
collection/production of NWFPs can be broadly categorized as: for local subsistence (and
traditional) uses; for domestic market; for local/domestic (value added) processing; and for
export market. No statistical information is available on total production by categories, to
know how these various categories are balanced. Products for subsistence use are outside the
market, and therefore not accounted. Even the production for market, both domestic and
export, are not fully and adequally recorded or accounted, due to prevalence of illegal
activities (particularly illegal cross border trade).
Several NWFPs in Lao PDR are comparatively important to meet the international
and national market demand – e.g. benzoin (Styrax tonkinensis), cardamomum (Amomum
spp.), broom grass (Thysanolaema maxima), Paukmauk (Boehmeria malabarica), bark of
38
Agar wood (Aquilaria crassna) is a CITES listed species, which had been (and is being) studied for ensuring
their survival in nature, by IUCN and TRAFFIC. Agar has a highly specific niche market in the Gulf Arab
Countries where the market is controlled by a single trading house. High price of the produce led to illegal trade in a big way, and serious fall in the natural stock of the species. There is also a view that its value is
over-rated; future market (at the present high price) is uncertain; natural formation of scented wood needs a
long time horizon (about 50 years for about 3 kg of scented wood of acceptable quality from a tree); and
technology of inducing fungal attack and artificial formation of scented wood is imperfect and often, a
gamble. It is this “mystery” of agar formation, which helped it to gain the status as a valuable niche product.
Once the technology for producing agar in large quantity by raising plantations of Aquilaria spp. is available
in the public domain, its attraction as a niche product will somewhat be reduced.
39 To illustrate several countries have taken up pepper (Piper nigrum) production, with improved agronomic
practices; and in the recent past price of pepper in global market has fallen, and as a result its price in local
market has correspondingly fallen. In such situations, farmers will have no long-term guarantee of price
stability in the market.
79
paper mulberry (Broussonetia paperifera), Bamboo, Rattan, Medicinal plants and natural
dyes. Figures on commercial exploitation seen in different reports vary considerably.
Value of commercial exploitation of NWFPs during 1998-2001 reported in Annual
Reports of DoF, as quoted in IUCN (2002) in US dollar equivalent is as follows:
1998 : US $ 310,011
1999 : US $ 215,668
2000 : US $ 16,445,413
2001 : US $ 14,057,836
Current commercial collection, in terms of quantity per year, of some of the important
NWFPs are:
Broom grass (Thysanolaema maxima) : 200 tonnes/year
Sugar palm fruit (Arenga westerhouttii) : 600 tonnes/year
Paper mulberry bark (Broussonetia paperifera) : 500 tonnes/year
Benzoin (Styrax tonkinensis) : 50 tonnes/year
Paukmauk (Boehmeria malabarica) : 700 tonnes/year
Agar (Aquilaria crassna) : 20 tonnes/year
Bitter bamboo (Indosasa chinensis) : 200 tonnes/year
Cardamom (Amomum spp.) : 500 tonnes/year
(Source: NAFRI, 2005)
The reported quantity of NWFP extraction does not give any idea of resource
depletion – particularly of the wild natural resource of NWFPs. Bulk of the NWFPs are
collected/harvested in the wild. Over-harvesting is too common. There are no codes of
practice for harvesting the different categories of NWFP resources (e.g. palm heart, bamboo
culms, bark, roots/tubers, fruits, exeudates). The villagers collecting NWFPs for traders are
not provided with appropriate tools or funds to acquire tools. Frequent price fluctuations also
cause disinterest among producers; and neither the traders nor the collectors have any interest
to conduct efficient and waste-free harvest.
There are a number of species listed as “threatened with extinction” by CITES, for
Lao PDR. In the family Orchidaceae, there are six species of genera Paphiopedilum, so
threatened. As a measure to protect the rare and threatened species, the Government has
prohibited collection of the bark of bong tree (Nutabhoebe umbelliflora) for incense sticks.
Tapping of yang oil from Dipterocarpus spp. is also restricted in some cases. Still, illegal
collection is known to be going on.
As a group, medicinal plants seem to be affected more than the other species.
According to a decree endorsed by the Prime Minister in September 2003, medicinal plants
are categorized into three groups, based on abundance;.Group I consist of rare and
80
endangered medicinal plant species, exploitation of which is to be certified by the Ministry of
Health.
The supply base of medicinal plants is largely the wild sources. For some medicinal
plants sanction of quota is required from the Department of Agriculture and Forests.
Domestication and cultivation of medicinal plants is limited. In very few cases, there are
plantations being raised by private companies and farmers – of such species as Styrax
tonkinensis (benzoin), Aquilaria crassna (agar) and Artemesia spp. Paper mulberry is a
pioneer species; in Lao PDR, it is cultivated in Sayaboury province as a cash crop, while in
Luang Prabang province naturally occurring paper mulberry is harvested from fallow lands.
(Bark of paper mulberry is mostly bought by Thai entrepreneurs; it is processed into paper in
Thailand and exported to Japan and Korea).
Processing
Experience elsewhere has demonstrated that the scope and amenability of NWFPs for
downstream value added processing is remarkable. This potential, however is not adequately
explored and exploited in Lao PDR. Except for few items of NWFPs, others are exported
without further processing – intermediate, final or downstream. There are several constraints
leading to his situation, which are linked to the lack of adequate country capacity.
Wherever processing happens, it mostly goes upto the intermediate or primary level,
involving cleaning, drying, grading etc. For example, harvested cardamom fruits are sun
dried, rub cleaned, smoke dried, graded and packaged for export. No processing is done to
produce essential oil and oleo-resin used in medicinal preparations. Similarly, medicinal
plants or parts thereof are converted into powders and extracts (galanicals) for export.
In the few stages of processing of NWFPs for final consumption and/or for export,
the operations are carried out essentially on a small scale. These include: rattan workshops
producing furniture; bamboo units producing baskets, mats and furniture; handicrafts
utilizing sa paper, silk etc; incense factories; resin distillation plants; berberin processing
plants; essential oil distillation units; traditional herbal medicine workshops etc. Details about
these (number of units and their distribution, product range, source of raw material, capacity
and so on) are not available. In several cases, product quality is low requiring further
refinement or refinishing in importing countries. Production, in terms of quantity, fluctuates.
While some companies obtain quota for collecting required raw material, many of the
small scale NWFP processing units operate outside quota rules, tax rules and official
monitoring. Many of the Lao traditional medicine production units collect plant materials
from natural forests by paying only collection charges (wages) to the villagers.
While the private sector is the prime source of investment in small scale NWFP
processing, the larger units are run by the Government. Thus, five medicine (drug)
manufacturing factories (including the one of Lao-Vietnam Joint Venture) were under
Government control. One of these has been closed for lack of raw material and another is
operating with imported raw material.
The reasons for the low performance in the NWFP processing sector in Lao PDR are
several: falling availability of raw material resources; inadequate technology; lack of product
and process research; inadequate skills; lack of industrial extension service; inadequate
81
infrastructure and institutional support. There is need to strengthen all relevant aspects.
There is also need to progressively move up from producing low value products of transitory
nature (e.g.broom grass) to high value products such as aroma chemicals, agro-chemicals,
flavours and fragrances, bio-diesel, industrial ingredients and value-added downstream
products.
Trade in NWFPs
NWFPs are included within the top 10 of the export development priorities of Lao
PDR – ahead of tourism, coffee and some other well-known sectors. Inspite of it, the sector
is afflicted by lack of adequate statistical information on production and use, including trade.
Data on NWFP trade, in the context of the total use (customary local bona fide use
commercial extraction for domestic use, and for export) of the produces is important for
designing a programe for development of NWFPs. Sadly, no clear or consistent data is
available by products, by formal and informal trade, by sources and destinations etc. Local
bona fide consumption and traditional uses are currently outside the formal institutional
system; and, within the NWFP-sector, the capacity for monitoring and record keeping is also
low. Apart from this institutional weakness, there are several other reasons for the state of
affairs, in the NWFP sector, including the existence of corrupt/illegal practices.
Commercial uses and trade in NWFPs can be categorized as formal (legal) and
informal (mostly illegal). While informal uses (including illegal cross border trade) by their
very nature fall outside the system of statistical records, even on the formal uses (including
trade) statistical information is incomplete and inconsistent. Different sources provide
different figures.
Illegal activities related to trade are of different kinds – harvesting outside allotted
areas, extraction in excess of allocated quota, collection and export of banned items of
NWFPs (e.g. dammar, natural agar), showing local illegal collection as imported material for
processing, using of fudged documents and so on.
On formal NWFP trade, there are several different sources providing statistical
information (on quantity, quality, value etc), based on their role in the procedures involved –
e.g. Department of Commerce, Department of Forestry, Department of Finance, Department t
of Customs and so on.
Figures on NWFP exports provided by the Ministry of Commerce for the years 1995-
96 to 2004-2005 are given in Table 4.
If the above is compared with production figures provided by DoF, mentioned earlier
in this report, one can see serious inconsistency40
.
40
Reports seen on production and export of NWFPs for different years vary considerably, in terms value,
volume and/or percentage of the total. Ingles (1998) reports the 1996 NWFP export, valued at US$ 4.3
million to be equivalent to 2.5% of the total exports. Another report mentions the average annual value of
NWFP export during 1995-1999 to be US$ 5,183,000 (IUCN, 2002). Trade in wildlife is not included in the
statistics of NWFP trade. Wildlife trade in Lao PDR is claimed to be substantial, with an estimated value in
the year 2000 of some US $ 11.8 million, at Chinese whole sale prices (IUCN 2002).
82
Moreover, there are considerable annual fluctuations in the quantity and value of
different products traded, and in the average price. Cardamom (along with medicinal and
aromatic plants) account for about half of all NWFP exports, followed by resins. Recently,
there has been a decline in the export value of a number of non-wood forest products.
Table 4 - NWFP Exports, 1995-96 to 2004-2005 (Value in US$)
Year Total Export NWFP Export Percentage of
NWFP Export
1995-96 247,127,337 2,278,960 0.9
1996-97 217,454,036 3,638,891 1.7
1997-98 251,054,235 3,160,271 1.3
1998-99 271,059,676 2,548,709 0.9
1999-2000 323,974,602 4,163,165 1.3
2000-01 324,885,835 6,617,544 2.0
2001-02 322,618,759 11,298,003 3.5
2002-03 352,624,287 5,722,813 1.6
2003-04 374,320,000 3,368,684 0.9
2004-05
(Planned)
420,000,000 6,300,000 1.5
Source: Statics/Planning Division, Ministry of Commerce
The policy of GoL is to promote export of processed, finished or semi-processed
products, rather than raw materials. By Prime Minister‟s order No.10 of 2000 and No.15 of
2000, export of unprocessed NWFPs has been banned. There are also restrictions on the
export of unprocessed rattan and bamboo. Inspite of it, raw materials with minimum
treatment such as drying, bundling, grading etc. are known to be exported for further
processing in neighbouring countries. NWFP exports from Lao PDR is dominated by raw or
semi processed products; share of processed products in the export of NWFPs is
comparatively low. None of the raw produces go through high level of value addition. For
example, bamboo as a raw material can be processed into panel products, parquet, moulded
materials, pulp and paper, rayon fiber, cellophane etc. Lao has a considerable quantity of
bamboo, which can be sustainably managed for industrial development. However, bamboo
processing taking place in Lao PDR before export is confined to making such products as
split bamboo, mats, baskets, cheap furniture, and handicrafts.
Also, one often hears the comment that there is much more illegal export of NWFPs
taking place in Lao PDR, than legal export.
83
While the main domestic markets for NWFPs in Lao PDR are the concerned
provincial capitals and the capital city of Vientiane, much of the commercial harvest of
NWFPs is exported to China, Thailand and Vietnam; some of it also goes to Japan, Korea,
India, Europe and North America. The main products/produces exported to the neighbouring
countries, among others, include: medicinal plants, broom grass, mulberry bark, sugar palm,
dragon blood (chandai), dammar, sa paper, pauk-mauk (Boehmeria malabarica) and
handicrafts. Medicinal plants are generally in chipped, dried and/or powdered form. There
is also a small export market for the traditional herbal medicines of Lao PDR, in countries
where people of Lao origin live.
According to Phongphachanh (2005) some 10 medicinal plants (Orthosiphon
stamineus, Styrax tonkinensis, Coscinium usitatum, Amomum ovoideum, Kaempferia
parviflora, Dracaena cambodiana, Cinnamomum cassia, Sterculia lychnophora, Centella
asiatica and Strychnos nuxvomica) were or are being exported41
.
Lao PDR is a land locked country, with active land routes to Thailand, China and Vietnam,
and a long land border which is porous. And, NWFPs being of low bulk, the scope for
smuggling and illegal trade is enormous. As already noted, the trade chain, often does not
include processing. A number of NWFPs follow a chain of harvester/producer small
scale trader trader in district capital trader in provincial and national capitals trader
and consumer in importing countries. The rural communities often, are not properly linked to
the business sector.
The Quotas
Quota allocation and role of trading companies are central to trade and marketing of
NWFPs in Lao PDR. A valid quota, contract and various permits/letters are required for
legally exporting NWFPs from one district to another district, province or country.
Quotas are set annually by a PM Decree for exploitation and transportation of a
product out of a district or province. Quota is specified by product and provinces.
(Consumption for bonafide local/traditional uses are not covered by quota and are allowed by
customary use rights recognized by the Government). Quota is supposed to be subject to a
quantitative limit, based on annual allowable harvest. Results of NWFP surveys are to be
submitted, annually, as part of this process (but, often, not done or done property). Provinces
and districts intimate the annual quotas to be approved by the Ministry of Agriculture and
Forestry. Quotas are, often, fixed arbitrarily. And, not all NWFPs are covered by quota.
Quota (for harvesting a produce or group of produces) is set annually, based on
requests from registered trading companies for produces/products, assessment of trader‟s
41
The same author provides another list of 26 species with potential for export, some of which are in extensive
use in other Asian countries and where improved varieties of some of these species are being planted. The
species are: Alstonia scholaris, Smilax glabra, Terminalia nigrovenulosa, Homolomena aromatica, Amorphophalus companulatus, Curcuma domestica, Aegle marmelos, Stephania rotunda, Streptocaulon
extensum, Curcuma xanthorizae, Adenosma indianum, Eleutherine subaphylla, Morinda tinctoria, Passiflora
foetida, Butea superba, Tinuspora crispa, Andrpgraphis paniculata, Morus acidosa, Emblica officinalis,
Catharanthus roseus, Artemesia annua, Brucea sumatrana, Codonopsis javanica, Polygonum multiflorum,
Coix lacrymajobi, Osbeckia chinensis.
84
capacity to handle a certain amount of the product/produce requested for, and an assessment
(often not done) of the capacity of the forest to produce.
The process of granting quota work as follows. A (registered) company or individual,
trading in NWFPs, makes a bid to the district or provincial administration (generally of
forestry and commerce). The bidder requests approval to buy a specific amount/volume of
specified products, depending on quantities needed, and expected availability of them in the
area. The provincial Government then puts up the request to the Central Government. Then
the process of resource assessment should take place regarding quantity, price, extraction
methods etc. by provincial officials. Based on assessment of each quota request, and
recommendation by the PAFO and the MAF, quotas are set annually by a decree of the Prime
Minister for exploitation and transportation of a product out of a district or a province or the
country. Quota is set for every year separately; and every quota setting involves a PM
decree. Quotas are assigned not just for provinces as a whole, but for specific areas, even
specifying villages. The track record of the company is also a consideration for granting
quota (IUCN 2002).
Details of NWFP quota awarded during the past years is not readily available. Some
information obtained from an internal document of the project is given in Table-5.
Table 5 - Some details of NWFP Quota in Lao PDR for 2004-2005
NWFP Quota 2004-05 Price per kg. at
farm gate (Kips)
Pauk mauk (Boehmeria malabarica) 950 t 3,500-6,500
Cardamom (Amomum spp.) 1,015 t 8,000-30,000
Kheam (Thysanolaena maxima) 1,415 t 1,500-2,000
Po Sa (Broussonetia papyrifera) 1,075 t 2,000-2,500
Bitter bamboo (Indosasa sinica) 1,630 t 2,000
Rattan (Calamus spp.) 1,455,000 numbers 1,500
Pauk Bong (Phoebe powenebsis) 1,450 t 2,500
Ginger (Zingiber officinale) 110 t 2,000
Orchids (different species) Not indicated
Duk Dua (Amorphophallus
campanulatus)
5,000
Sugar palm (Arenga spp.) 3,275 t 2,000
Agar (Aquilaria crassna) 47 t Not indicated.
Source: Department of Forestry, 2004.
Note: It was seen reported that quota was provided for some medicinal plants such as: Styrax
tonkinensis, Coscinium usitatum, Dracean cambodiaa and Sterculia lychnophora.
85
Generally, trading of NWFPs is subject to the same rules and regulations as applied to
timber products.
The quotas set by PM decree are distributed (as per formal request) to registered
companies in the provinces, drawing up a contract agreement. Thereupon, the companies
contact district level traders for organizing harvest/collection by employing villagers.
The traders, once they receive advice regarding assignment of quota, contract the
villagers for collecting the materials (after duly agreeing on collection charges). The product
is received from villages, and transported either for direct sale elsewhere (including export)
or for processing before resale. At each point of sale and at the various places of
declarations/inspections along the route of transportation, export or resale, the trader pays
various taxes and/or service charges according to regulations of the Departments of Forestry,
Commerce, Finance etc. These charges include: royalties (paid to provincial forestry office);
provincial export charges (paid to provincial finance department); and National Export Tax
(paid to Customs Department). For paying taxes, contract agreements are drawn up (on the
strength of the quota) between the Provincial Trade Office and the companies, which include
indicative export price, tax rates, quantity/quality etc. Accordingly, the traders obtain official
documents required for exportation.
In some cases, there are additional voluntary or mandatory fees, such as: village
development contribution (fees), district export fee, service charges for finance, commerce
and trade departments etc.
Taxes and charges are collected for each consignment; and there are some 10
Government institutions involved in the process. “One gate” system of checking along the
transport route (to check the permit for quota collection, tax receipts, nature/quality/value of
the consignment etc) is meant to control movement of illegal materials.
The institutional linkages involved in operating the NWFP quota system is complex,
linking the forest resource to the market through: village level collectors middle men
buyer (local trader) trading company processing units export/market. The
Government agencies at various levels are involved in the whole process (see Figure 4)
Figure 4 - Linkages Involved in Quota Administration
Village
Administration
Central Government
Administration
Trade/Buyer
District
Administration
Provincial
Administration
86
As per the available information, NWFP exports from Lao PDR do not face any
serious non-tariff restrictions (like quality specifications, technical standards, health and
safety regulations, and certification) in the countries to which these items are exported, since
most of them are meant for further processing.
The system is afflicted by weaknesses and loopholes. Some traders like the quota
system as it provides them considerable benefits. Others complain that it is cumbersome and
time consuming, making it difficult to take advantage of the international demand, which
requires products to be supplied following a strict time schedule.
Quota allotment (though qualified as “yearly planned harvest”) is not based on proper
resource assessment, and sustainable resource management. Quota is based generally on last
year‟s collection with arbitrary adjustments, influenced by demand pressure, often with
concurrence of the local “economic group” at the provincial level. Since no resource
assessment/inventory is involved, quota is unrelated to sustainability. The system has not
helped to control illegal trade (or illegal traders), and consequently it has not been effective
in controlling resource depletion, thus exacerbating the problem.
The quota holders (who have agents and sub-agents at district and village levels) are
generally powerful and privileged, with political influence. They are financially supported by
foreign buyers42
. The traders and trading companies are not “entrepreneurs”, and do not seem
to have any commitment to any particular sector (like NWFPs). They deal with several
products. Some of the NWFP traders met with by the author deal with products other than
NWFPs – e.g. rice, maize, soyabean. Share of NWFPs in their business is 50 to 60%. Forest
resource depletion does not seem to bother them.
Therefore, the question whether the quota system, as is now being practiced will help
poverty alleviation and support development remains a serious issue.
Globalization, deregulation and economic liberalization have led to increased exports
since 1990s, to larger number of destinations. The decentralization of administration also saw
changes in the nature of trade, prominence of different groups, methods used and so on43
.
There is need to improve the policy, strategy and system of production and marketing of
NWFPs in Lao PDR, both for domestic market and for export, in order to ensure efficiency
and sustainability. Because, Lao PDR is land locked, success of its policy depends partly on
the neighbouring countries‟ policies. It is hoped that with the establishment of the ASEAN
Free Trade Zone, things will change for the better.
42 There are also a large number of unregistered traders (national and foreign) operating in Lao PDR, who tend
to operate outside legal channels.
43 Even the methods of smuggling have changed and illegal activities have become more complex and
ingenious.
87
NWFP Resource Management
The purpose of NWFP resource management is to sustainably produce (consistent
with principles of conservation) one or more non-wood forest products, (such as natural
colorants, fibers, gums/resins, medicinal and aromatic plants, spices, etc. for direct
consumption or for processing into value-added goods), depending on management needs
and circumstances, either exclusively or integrated with wood production. NWFP resources
can be found naturally in well-stocked and closed forests, degraded forests and wastelands;
they can be created44
in plantations, farms, home gardens and agro-forestry plots.
Under natural forest systems, sustainability of wood and non-wood resources are
inter-lined. While NWFPs in Lao PDR are produced/collected almost exclusively from
natural forest, about 70% of it are obtained from open/secondary/degraded forests. Because
of the descriptive nature of most literature dealing with NWFPs and agro-forestry, it is
difficult to make a quantitative assessment of the extent of NWFPs incorporated into agro-
forestry. Creation of NWFP plantations is a recent development, and if properly managed
their productivity can be improved considerably. There is, thus, several strategic options for
NWFP resource development.
Forest (and NWFP) resource management, irrespective of their nature, whether
natural or man-made, basically requires: resource inventory to generate/update information
on quantity, quality, nature and distribution of the resource; management actions based on
silvicultural needs and characteristics of the resource (or resource components – i.e., trees,
palms, herbs, grasses, mushrooms); growth and yield studies to assess the annual allowable
harvest; harvesting regulations and codes; and upkeep and protection of the resource from
injurious agents. The exact nature of the different operations and their sequence is dictated
by the type of resource and purpose of management.
While periodical inventory of the resource is essentially meant to decide on “where,
how and how much” of sustainable production, the nature of inventory operations will vary
for different product types – e.g. medicinal and aromatic plants, natural fibers, gums and
resins, bamboo and mushrooms. Inventorying for the full range of uses derivable from
NWFP resources calls for detailed bio-prospecting. However, in respect of most NWFPs
valid methods of assessment are yet to be developed.
In Lao PDR, resource information on NWFPs is badly lacking. No systematic
national survey of NWFPs has taken place, nor has a resource inventory (mapping) system or
mechanism been established for carrying out periodical assessments, including
environmental impacts of NWFP utilization. Some information on bamboo and rattan was
collected through an IDRC project during 1993-94. Recently there has been an experimental
ad hoc initiative to map the occurrence of plants used in traditional medicine, in few selected
districts.
A major constraint in this regard is that adequate funds and skilled manpower to carry
out resource inventory are not available. Knowledge about species of plants (the silviculture
of plants providing NWFPs, and their main uses) and products is also very limited.
Management of natural forests of varying ecology and quality (from well stocked to
44 NWFP resource can be created under monoculture and polyculture (mixed) systems.
88
degraded forests under rehabilitation) are complex. Some cases of degradation are beyond
natural rehabilitation (e.g. through effective protection), and would need to be rehabilitated
using expensive inputs (e.g. land preparation) and raising artificial plantations. In other
cases, harvest control and silvicultural measures will help an ecological progression.
While some of the erstwhile NWFPs have been successfully domesticated as
agricultural and horticultural crops, others are amenable for domestication, through intensive
research inputs and genetic improvement. Yet others can prosper in semi-wild conditions, in
forest clearings and wastelands. Still, several of the valuable NWFPs thrive better only under
the wild natural forest conditions. Low impact harvest and sustainable utilization of the
NWFP resources present a serious technical and management challenge.
In the absence of adequate management, over harvesting of selected species results,
leading to depletion of stock (and even extinction) of such species. Collection of NWFPs (in
natural forests, particularly), impacts greatly on biodiversity. Present levels of NWFP
extraction in Lao PDR is leading to severe depletion of some species and over-all
degradation of forests. However, C&I for sustainably managing the resources of several of
the NWFPs (which often has to be integrated with wood production or timber management)
have not yet been developed. It has been reported that illegal extraction of NWFPs takes
place (inspite of regulations) even in protected areas, including the national biodiversity
conservation areas. There is need for clear policy (supported by effective policy instruments)
in these regards.
Domesticated NWFPs, currently being raised in plantations, home gardens and agro-
forestry plots of varying sizes and scales include trees palms, herbs, grasses, orchids etc. –
such as agar (Aquilaria crassna), Artermesia sp., bamboo, broom grass, cardamom,
cinnamomum, paper mulberry (Broussonetia papyrifera), Persea kursii, rattan, Sterculia
lychnophora etc. Potential for domestication of NWFPs is still very large.
Private sector is getting interested in artificially growing NWFP species; and, the
need for genetic improvement for better productivity (in terms of quantity and quality) along
with improved agronomic practices is acutely being felt. There is also need for arrangements
to supply improved planting materials to the farmers. These call for adequate backing of
appropriate research and extension. Availability of degraded forest land for raising
plantations can favour domestication and cultivation of NWFPs. There is also scope to
carryout under-planting and inter-planting of NWFP species (e.g. rattan, medicinal plants)
along with plantations of timber species like teak (Tectona grandis).
Management Technology
As already indicated there is need to develop and disseminate technical packages for
specific NWFPs (e.g. bamboo, rattan, spices) regarding raising of planting materials,
planting, tending, harvesting, post-harvest treatments, etc., specifying modifications required
for farm and forest conditions.
No such technology package has been developed in Lao PDR. Villagers harvest the
“quota species” (and also others) for selling them to traders, using age old practices and
primitive equipment. District forest staffs are supposed to train the villagers on harvesting
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methods, but they themselves are not adequately equipped. Enormous amount of research
input is required to enhance the situation in the NWFP sector.
The present situation of the NWFP sector in Lao PDR is marked by serious
management deficiencies, reflected in: gnawing gap between management principles and
practices; absence of boundary delineation for areas from where NWFPs are to be collected;
lack of a clear assessment of the resource to be managed (involving inventory/bio-
prospecting); lack of science based approach in operating the quota system; lack of
management plans for NWFPs; illegal and excessive harvesting of commercial produces,
even from conservation areas; inadequate technological sophistication and capability; lack of
adequate research support; and deforestation and forest degradation leading to declining
availability of NWFPs.
There is need to chart a clear path for NWFP development supported by a firm and
consistent policy and policy instruments. This will help to attract more investment into the
sector, which currently is low.
Investment
Money spent on creation and/or enhancement of capital are known as investment,
whereas expenditure on routine maintenance or for providing of routine services (e.g. product
harvesting) is known as working cost. Use of existing capital for other purposes and for
consumption is a form of disinvestment.
Investment in the NWFP sector would include: enhancing of the natural resource of
NWFPs, creation of new NWFP resource through artificial plantations (domestication and
cultivation), establishment of processing facilities, developing of needed infrastructure etc.
No clear and complete information (quantitative and qualitative) is available on the
investment situation in the NWFP sector. While the sector has suffered disinvestments in the
form of deforestation and excessive and wasteful extraction, investment in the form of new
plantations has been limited. Some large scale plantations of agar (Aquicaria crassna),
benzoin (Styrax tonkinensis) and Artemesia spp. are known to have been raised by private
investors; otherwise, planting is done mostly in home gardens and agro-forestry patches.
Species planted in home gardens include: bamboo, rattan, cardamom, cinnamomum,
Boehmeria malabarica, Thysanolaena maxima, Broussonetia papyrifera, Indosasa sinica,
Bixa orellana and others. Some companies from Thailand are known to be supporting
farmers in Lao PDR to raise NWFP yielding plants in their farms, on condition that they
would sell back the produces to the company.
Investment in processing depends on adequate and transparent information, research
support/quality, local capability, and consistency of supply (of raw material); existing
processing units are mostly old and small. New investments have been slow to come by.
Much more needs to be done in terms of investment, to improve the sector.
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External Assistance Projects
Projects with external assistance can provide direct investment support (e.g. loan
projects supported by World Bank, and Asian Development Bank) and/or technical support
to serve as a catalyst for attracting added investment. There are a number of projects in
which NWFPs are a component; and there are other (mostly small) projects, which are
directly related to NWFPs. Apart from the World Bank and Asian Development Bank
projects, there are other project supported by FAO, SIDA, BTC, ITC, IUCN, IDRC, WHO,
SNV, CIRDAP, VFI and others which deal with different aspects of NWFPs directly or
indirectly. Overall 61 projects have been listed as dealing with different aspects of NWFPs;
most of them are small (very small) with narrow objectives; some are components of larger
forestry or land development projects; many do not exhibit “staying power” in the absence of
local “ownership”. (There is inadequate appreciation that the role of technical assistance
projects is essentially catalytic). Impact of the assistance projects very considerably,
influenced by several factors.
It is the general finding, based on experiences elsewhere, that “stand-alone” projects
on NWFPs may tend to perform better than NWFP components included in the rural
development, forestry and other land use related projects.
Constraints for NWFP Development
Despite being of immense importance to development, the NWFP sub-sector is not
being fully supported or guided; and, the current scope and level of support to the sub-sector
is insufficient to achieve many of the Government‟s objectives, especially those related to
promoting NWFP-based industry and monitoring of biological conservation. The NWFP
sub-sector suffer from general neglect, low priority and inadequate awareness about their
importance on the part of people and the politicians.
NWFPs in Lao PDR are impacted by all the general constraints suffered by other
sectors – i.e., poverty, illiteracy and overall socio-economic under-development. In addition,
they suffer from a number of constraints, which are specific to them. There are constraints,
which are resource-related, product/production-related, market-related, technology-related,
information-related, infrastructure-related and institutions-related.
The resource related constraints, inter-alia include: continuing deforestation and
forest degradation (and, resulting environmental degradation and erosion of biodiversity);
lack of updated forest (and NWFP) resource inventory and bio-prospecting; lack of
information on resource and resource productivity; unclear tenure over NWFPs; inadequate
protection of NWFP resources; and inadequate resource access due to physical/landscape
limitations.
Product/production-related constraints, among others are: wasteful/destructive
harvesting, harvest (quota) unrelated to sustainable potentials, inadequate facilities for post-
harvest treatment, fluctuation in supplies, weaknesses/inadequacies in production technology,
inadequate quality of produces/products, and lack of value-added processing and product
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refinement, (including inadequate understanding about the chain of product refinement and
downstream processing).
Market related constraints, inter-alia, include inadequate market access and lack of
stable market system for NWFPs, inadequate market information45
, lack of free competition,
existence of illegal trade causing market distortion, price fluctuations caused by market
instability etc. Market price does not, often, reflect the replacement cost of the resource
used, nor does it reflect the environmental costs associated with forest degradation.
Efficiency and productivity are functions of technology. Technology-related
constraints include inadequate technological capability; lack of codes of technological
practices; inadequate technology generation and technology transfer relating to resource
management, domestication, genetic improvement for productivity gains, harvesting,
processing, value chain development etc; and inadequacy of supporting research46
.
Information system involves collection of information, provision of information
services, information management, dissemination of information to target users etc.
Inadequacies of information system (whether free or fee based) affect all aspects of NWFP
management. It also blunts conservation consciousness. Information-related constraints,
among others, are: inconsistency of statistical and non-statistical information, inadequacy of
technical information, lack of credible market information and weaknesses in dissemination
of available information. Apart from the inadequacies of information and knowledge, the
tendency to romaticise NWFPs through anecdotal information makes their management more
difficult. There is need to update and disseminate information on: NWFP resource
endowment and management, growth and yield, harvesting, post-harvest treatments,
processing technologies, government policies, marketing arrangements, nature of demand
and product prices.
There is a substantial volume of literature dealing with the different aspects of
NWFPs on a general and conceptual level, as well as with specific situations. With reference
to NWFPs in Lao PDR also, there are several recent reports: discussing their importance and
situation; analyzing the major constraints; identifying the potentials and providing proposals
for revamping the sub sector. Considering the heterogeneity of NWFPs and the complex
nature of issues involved in their management and conservation, the information available in
these reports are sketchy.
Management/development of NWFPs requires infrastructural facilities, including
roads, buildings, storage and processing facilities, training and research institutions, market
45 Available trade information are about completed events, which itself is often confusing and incomplete
(different trade statistics in Lao PDR give different figures); demand abroad for an unused resource is often
relevant – e.g. fruits of Emblica officianlis, and roots of Gmelina arborea are in demad in South Asia,
whereas they are not collected in Loas. Currently, there are no mechanisms to obtain such information.
46 This inadequacy is seen in: lack of meaningful research in NWFPs, both basic and applied; lack of research
network to access experiences of countries in the region; and inadequacy of meaningful research activities on
domestication, plant introduction, genetic improvement, improved agronomic practices, inter-planting of
NWFP species in timber plantations, integrating NWFPs in agro-forestry and home gardens (and stabilizing
shifting cultivation); identifying new active ingredients from plants (and insects) and refining known
ingredients; and development of new (consumer) products etc.
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infrastructure, display and demonstration facilities etc. There is serious inadequacy in this
regard in Lao PDR.
Institutional constraints are often the root cause of other constraints. Institutional
constraints range from: lack of a comprehensive policy on NWFPs leading to inadequate
priority, insufficiency of budget (investment funds) and inappropriateness of institutional
instruments and mission; tenurial insecurity; weaknesses of laws and rules; inadequate
enforcement of existing policy/laws/rules; weaknesses in implementing/enforcing quota
system (which is dominated by trader/middle men), leading to illegal activities; inadequacies
in the organizational structure, particularly at the decentralized levels; fragmentation of
institutional responsibilities; lack of skills and capabilities in the area of NWFPs (e.g. lack of
appropriate courses/curriculum on NWFPs in forestry education and training); inadequate
extension facilities; weaknesses of research institutions; inadequacies of governance and lack
of transparency in decision making; lack of credit facilities; lack of appropriate classification
and standards for NWFPs; lack of a clearly structured marketing system linking (sustainably)
managed NWFP resource to a competitive market which ensures fair price; inadequate book
keeping; and lack of a forest resource accounting system which incorporates NWFPs.
Overall, there is wide gap between de jure commitment and de facto action/performance.
Against the number of constraints mentioned, the NWFP sector of Lao PDR still
retains some important strengths such as: existence of relatively substantial resource of
NWFPs; availability of suitable land to establish plantations of NWFPs; intention to establish
and promote village level democratic decentralization; new efforts at developing vital
infrastructure facilities; initiatives for developing country capability; existence of markets for
products from Lao PDR in the neighbouring countries etc. It will be possible to build on
these strengths, to develop a strong NWFP sector, provided adequate priority is accorded to
the sector supported by a perspective plan, funds, man power and political commitment.
Experts have found that Lao PDR has considerable opportunity to build a strong NWFP sub
sector as a basis for sustainable economic development (Saxena, 2004).
Future of NWFPs in Lao PDR
The future of NWFPs in Lao PDR would depend on the extent to which the NWFP
resources are sustainably managed and utilized for value-added processing and increasing
income generation. Potentials in that regard are enormous and can be tapped by well-
planned and progressive phases by developing and acquiring/innovating technologies.
Already there are: herbal enterprises processing medicinal plants into indigenous medicine;
plant based skin care products; rattan processing plants producing furniture, mats and
decorative products; units producing essential oils; bamboo processing units producing
furniture, curtains, mats, basket ware and hats. There is potential to produce bamboo parquet
(floor tiles), bamboo veneers and bamboo mat boards, aroma chemicals and cosmetics and a
host of other valuable products for export. Thus the prospect of developing NWFPs appears
to be significant.
This, in turn, calls for.
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Resource conservation, creation, management and enhancement, involving
domestication, genetic improvement, integrated cropping systems and
improved agronomical/silvicultural practices (e.g. interplanting/under planting
of NWFP species with timber species like teak).
Survey and analysis of potential marketing opportunities for selected NWFPs,
to establish an economic base; identifying potential (processed) products, and
promoting “brands” for capturing added value. (There is need to update the
priority products, based on changing market outlook).
Establishing, by progressive stages, sophisticated processing facilities.
Development of market chain infrastructure and technologies; value chain
investment.
Controlling of quality standards and processes.
Investment on research and human resource development.
Establishing a system for information feed back.
These measures should be consistent with bio-diversity conservation.
NWFPs Under Forestry Strategy, 2020
Out of the 144 priority actions included in FS 2020 (MAF, 2005) 10 are on NWFPs.
These fall under three specific areas:
Improving basic conditions for NWFP development (sound policy, plans,
programmes, information).
Improving harvesting and marketing for NWFP development (plans, royalty,
processing, transportation).
Capacity building (institutional strengthening, reinforcing R & D and extension).
FS 2020 also provides an annexe on the topics for most critical studies proposed on
NWFPs (for filling critical gaps), covering the role of NWFPs for:
rural development (involving inventory, domestication, access and use rights,
processing, indigenous knowledge);
biodiversity and resource base (involving resource mapping, testing for
ingredients, ecological effects, herbarium);
national development and product development (involving trade, product
development, processing etc);
information and data base (covering resource base, species details of distribution
and availability, processing, trade, international market etc).
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Situation and Role of NWFPs in Project Sites
Details of the survey carried out in the project sites (six villages falling in the three
provinces of Luang Prabang, Savannakhet and Champasak) are contained in the project
progress reports, providing an account of the nature of NWFP resources, potential products
and products in demand, role of business associations, main markets, trade directions, prices,
details of external (assistance projects) interventions and so on. The reports also discuss the
potential role of village marketing groups. Specific information related to most of the
products is, however, unavailable.
The project team has identified 14 products (product groups) as important in the
project area47
. These are: rattan (Korthalsia and Calamus spp.) bamboo cane/culms, bamboo
shoot and mushrooms (several species) in Savannakhet and Champasak; cardamom
(Amomum villosum) dammar resin (Shorea obtusa) and Pandanus fiber in Savannakhet;
berberine (Coscinium fenestratum) and malva nut (Scaphium macropodium) in Champasak;
and broom grass (Thysanoloema latifolia), paper mulberry bark (Broussonetia papyrifera),
bitter bamboo (Indosasa sinica), insect larva and shell lac in Luang Prabang.
A PRA (Participatory Rural Appraisal) conducted in the six villages forming the
project field sites, has highlighted several common issues and concerns:
Resource depletion of commercial NWFPs (rattan, bamboo, kheua hem, malva
nuts); over harvesting.
Prices are often too low and unstable for commercial NWFPs (handicraft
products, dammar resin).
Price is controlled by the trader, and often villagers cannot sell to another trader.
The demand for NWFPs is often fluctuating.
Not enough raw material (bamboo, rattan) available for handicraft industry;
villagers have to go far for collecting the raw material.
Low quality of the raw materials.
Other than rattan handicraft and drying of berberine and po sa, there is no
processing – no skills and no equipments; lack of designs in developing handicraft
business.
Villagers complain that they do not receive enough support from the authorities
for management and marketing of NWFPs.
47
The village level exercises have short listed 16 NWFPs for the phase 2 of MA & D, each of the six villages
short-listing 2 to 6 products. Long Leuad village in Luang Prabang short–listed mulberry, broom grass, bitter
bamboo, bamboo shoot and insect larva, while Houay Hia village in the same province found mulberry,
broom grass, and stick lac as potential products for enterprise development and marketing. KM 29 village (Ban Lak.29) in Champasak identified rattan, bamboo shoot, mushroom, and fish for the phase 2 of the MA
& D process. KM 62 village (Ban Heua Kheua) in Champasak preferred bamboo and rattan (4 species).
Similarly, Nathong village in Savannakhet short listed rattan, bamboo shoot, cardamom, mushroom and Taey,
while Alouay Kham Noy village in the same district came up with bamboo shoot, bamboo cane, mushroom,
and Kisi in the short listing process.
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It was also found in the PRA that 60% of the NWFPs collected are used for food and
subsistence use; in areas close to the provincial towers, more of NWFPs are put to
commercial uses. During a visit to Lao Textile Natural Dyes in Luang Prabang, the author
observed that natural plant dyes are used to color silk48
.
A SYSTEM FOR NWFP DEVELOPMENT AND MARKETING
As mentioned in the introductory section, a system involves a series or number of
inputs, resulting in or producing a series or number of outputs, passing through a series or
number of processes or procedures, in systematic stages or steps. A systems model for
NWFP production and marketing will have a number of component elements (with their own
sub-systems), going through several loops representing stages, roles of players, institutional
arrangements etc.
Establishment of a well-functioning system for NWFP development and marketing is
crucial for improving the competitiveness of the sub-sector. It will facilitate harmonious
functioning of the various input/output stages and the processes and procedures involved.
Such a system should consider: the situation of the NWFP resource; claims made on the
resource; harvesting and post-harvest technology; processing; uses and markets of resulting
products; the chain of events and arrangements, and players involved between raw resource
and product market; changes in factors influencing (the outlook for) supply and demand and
son on.
These considerations and related steps are to be approached in a systematic manner,
through: the implementation (and enforcement) of institutional instruments in the form of
policies, plans, strategies, laws, rules, regulations, instruments, guidelines and frameworks
(covering the technical, administrative, environmental and socio-economic aspects, as well as
the macro and micro situations); and, effective/efficient organizations enforcing these
instruments.
A diagrammatic illustration of such a system, indicating the linkages of component
elements is given in Figure 5.
As can be noted, managing/growing of non-wood forest resources, their harvesting
and processing, and marketing of products for intermediate and/or final consumption, form a
closely related set of activities, having intimate forward and backward linkages. Also, the
supply and demand are mutually influencing in a situation of full knowledge and free
competition. A systems model, as the one given above, can be simulated for different
48 Plant materials used to give different colours are:
Pink: rind of mangostein fruit (Garcenia mangostina)
Red / Purple: stick lac, wood of Caesalpinia sappan Yellow: root of berberin (Coscinium finestratum)
Orange: seed of annato (Bixa orellana)
Greyish black: fruit of ebony (Diospyros mollis)
Pinkish grey: leaf of teak (Tectona grandis)
Grey: tuber of Dioscorea bulbifera
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assumptions about the component elements. If nothing is done to change the current level of
elements, current rate of deforestation and forest degradation is likely to continue, with their
deleterious impacts.
Success of a system for NWFP development and marketing depends on: effective
measures for improving productivity and sustainable production, appropriate cultural
practices, waste-free harvesting, value-added processing, consistency of product quality and
(above all) effective policy and institutions of governance.
Figure 5 - Diagrammatic Illustration of a System for NWFP Development and
Marketing
(Note: Linkage of each input-output stages are influenced by policy and policy instruments – which, among
other things, also influence the technology).
NWFP
resource
Resource creation /
enhancement
Subsistence consumption
Resource
Assessment
Commercial use
Post harvest treatment
(refrigeration) and
transportation
Fin
al co
nsu
mp
tion
(Mark
et)
Primary processing
Further processing
Consumption (Market)
Consumption (Market)
NWFP resource
managers/
producers Information flow Information flow
Harvest
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4. POLICY AND INSTITUIONAL ARRANGEMENTS FOR NWFPS
SITUATION IN LAO PDR
The concepts and linkages of policy and policy instruments relating to a sector at the
national level, as well as the overall institutional situation in the forestry sector of Lao PDR
have been dealt with in earlier sections.
The institutional aspects of a sector or sub sector, crucial for enabling development,
generally cover several inter-related areas: policy, legislation, organizational structure
(including decentralization of powers and responsibilities), human resources development
and research. Policy refers to the principles and courses that govern actions directed towards
given ends. Legislation is an important instrument to facilitate implementation of the policy.
Organizational structure defines the agencies/organizations for translating the policy
directions into action on the one hand and the authority for enforcing legislation on the other.
Quality and impact of policy implementation is influenced by the type (in terms of education,
training, specialization, attitudes etc) of human resource employed. Research on all aspects
of the sector or sub-sector is an essential need to keep up the sectoral dynamism and to
support sectoral development. Institutional improvement has to be effected as a package,
with each of the aspects receiving commensurate attention. Normally, the priority accorded
to a sector or sub-sector is reflected in the related policy and institutional arrangements.
Need for a Formal Policy
As we have already noted, there is no separate (free standing), formal, legislated
policy for the forestry sector (and hence for the NWFP sub sector) in Lao PDR. What is
normally referred to as forest (and NWFP) policy provisions are the statements in Party
Congresses (and such other occasions), and indicative objectives given in plan/programme
documents (e.g. to increase rural income and employment; to reduce or alleviate poverty; to
empower local communities, particularly women etc.). These are, often, not consistent and
tend to change in content, spirit, style of formulation and emphasis; these are not linked to:
specified sectoral imperatives, general and specific principles (e.g. decentralization,
sustainable management), expected (measurable) outcome in the medium and long term and
a comprehensive set of policy measures and strategies.
Policies lead to development/investment within the framework of a long term plan
(which is suitably phased into short and medium term plans), strategically supported and
facilitated by enforcement of legislative and regulatory instruments and development of
capacity and competitiveness.
In the absence of a clear and consistent long term policy, sectoral priorities tend to
change to suit the whims of changing political situation and administrations. The forestry
(and NWFP) sector of Lao PDR, through the changes in political environment and public
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administration has followed different short-term approaches (referred to as policies, but
without following appropriate technical and legislative processes required for policy
formulation), resulting in changing priorities, lack of adequate funding and protection, and
resulting resource depletion.
While the year 2005 witnessed the close of the 5th Socio-Economic Development
Plan period (2001-05), actual implementation of programmes/activities were, often, not
related to the objectives specified in terms of environmental conservation and development.
The draft National Forestry Strategy 2020, which proposes a series of activities and actions
to be implemented under different areas of forestry has emphasized the need for a clear and
consistent policy to support their effective implementation.
Strategic Objectives for NWFPS
From the objectives expressed in the various NWFP programmes and projects of the
GoL, the current “policy” intent appears to be:
To increase income from NWFP based industry and trade, through product
improvement and marketing.
To provide alternative livelihoods to shifting cultivators through NWFP
developments.
To provide incentives to local communities to conserve forests by increasing the
social and economic benefits accrued to them from sustainable NWFP use; and,
To ensure the long-term availability of NWFPs by developing systems of
sustainable use.
Hierarchy of Legal Instruments
Hierarchy of legal instruments consist of laws, rulres, regulations and supporting
instruments. Role and scope of these have been discussed under „concepts‟ in section 1 of
this report.
Situation of Legal Frame Work for NWFPs
As there is no specific policy on NWFPs, so there is no specific (and exclusive)
legislation, strategy, plan or programme on NWFPs. NWFPs “piggy back” on timber. Since
there is no specific legislation covering collection, use and management of NWFPs, the sub-
sector is left unregulated or is governed by legislation relating to production forestry or
customary use. The law applicable to NWFPs is the Forestry Law of 1996.
Provisions of Forestry Law 1996 relate mostly to timber (wood and wood products),
and those articles, which relate directly to NWFPs are vague and ambiguous. Provisions
related to NWFPs in the Forestry Law, 1996, stipulates inter-alia that:
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DAFO and village authorities should develop resource use plans, including for
NWFPs;
NWFP collection shall be done in accordance with regulations issued by
relevant authority.
Households collecting NWFPs shall comply with village regulations endorsed
by DAFO.
NWFP collection is regulated/restricted within protection forest – but, may
still be carried out.
In respect of NWFP management, the Forestry Law recognizes a distinction between
customary use and commercial use; rights for customary use by village community are
allowed. Also, village authorities shall enact legally binding rules to govern implementation
of provisions of the law, and regulate the use and management of forest resources within
village boundaries.
There are also provisions in the law, regarding the harvesting seasons for certain
NWFPs; the requirements of harvesting permits and plans; conditions under which
harvesting is prohibited; monitoring system and penalties etc. It is assumed that these
guidelines apply to production forests only.
The following types of exploitation are prohibited according to MAF regulation.
Where exploitation and harvesting of forest produce cause complete damage.
Exploitation of bamboo under three years of age or cutting of all bamboo stems in
a stand.
Exploitation of rattan by cutting all stems in a stand.
The provisions relating to NWFPs found in Forestry Law 1996 are those related to
customary rights on NWFPs and their commercial harvesting and trading (and conditions
there of, including taxes and charges). There is a lack of adequate implementing regulations,
even for the limited provisions included in Forestry Law, 1996. What is available,
essentially, is relating to harvesting and trade. Out of the 50 implementing rules and
regulations (for implementing the Forestry Law 1996), there are only 8 concerned with non-
wood aspects (of which 3 are on wildlife, one on biodiversity, one on rattan/bamboo and
agarwood products, one on natural resource for medicine, one on harvesting of NWFPs and
one on establishing bio-diversity areas). There are 23 items of IRR dealing with timber (and
also applicable to NWFPs by inference or express mention). The remaining 19 are
essentially concerned with timber (wood products) or management/administration of forest as
a natural resource.
In 2001, village forest provisions were consolidated, and NWFP collection for sale
was allowed under approved management plans; A 2002 decree allows villagers a role in
managing production forest under “village contracts” with districts.
The 4th
party congress (1986) had recommended that MAF issue a comprehensive
regulation on management of valuable NWFPs, but specific legislation is yet to be issued for
this sub sector. NWFP management continues to be regulated by various (timber) production
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forestry and customary use legislation. By and large, in the law, rules and regulations,
NWFPs are dealt with only as a component of “forest products” without a separate identity.
Therefore, all the deficiencies listed for the legislative frame work of forestry, (see
section 2 of this report) affects NWFPs as well (e.g. vagueness, gaps in coverage, inadequate
implementation, illegal activities), with some deficiencies being far more serious.
There is excellent opportunity to initiate a national programme on NWFP
development. But this would call for clarifications of the provisions of Forestry Law 1996.
With regard to NWFPs, the law allows that harvesting can proceed in surveyed and
inventoried production forest areas for which there is a management plan, and stipulates that
harvesting must be carried out according to specific regulations issued by concerned
agencies. Such formal interaction between district and provincial authorities and local
villagers has been highly limited and has taken place only under the auspices of particular
projects. Also, Forestry Law, 1996 allows discretionary exceptions to NWFP harvesting
regulations (if any), where such harvesting is considered “traditional usage” and out of
“economic necessity”. Interpretation of these terms makes NWFPs extremely vulnerable to
the manipulations by powerful interest groups (Saxena, 2004).
In the overall legal frame work for forestry, several aspects of NWFPs are not
covered (causing gaps) – e.g. inventory, product classification, MIS, domestication, intensive
cultivation, productivity, marketing/processing, penal provisions, monitoring, capacity
building, research and development etc. No comprehensive technical regulations and
guidelines have yet been developed for NWFPs.
Even the available provisions have not been implemented effectively. Ban on export
of unprocessed rattan and on collection of yang (Dipterocarpus spp.) has been ineffective.
Illegal trade in NWFPs seems to prosper. Even the customary, informal collection reaches
the stream of illegal export, since such illegal activities provide considerable economic
benefit.
The net result of the situation has been the depletion and degradation of the NWFP
and biodiversity resource of the country.
Tyranny of Quotas
Quota is a generic word, meaning allocated or allowed share, a fixed quantity that can
be collected, supplied or used. In international trade, it means the quantitative limit placed
on the importation or exportation of a commodity. The purpose here is to protect the market
for a commodity; and protection afforded by quotas is more certain than can be obtained by
raising import tariffs. The term can also apply to quantitative restrictions on production,
which are normally set by cartels.
In Lao PDR quota for forest produce extraction is imposed, supposedly to avoid over-
exploitation of forest resources – a means of quantitative control, to ensure a scientifically
established, planned and sustainable harvest. In fact, almost all countries have adopted the
concept of sustainable harvest of forest produce (e.g. annual allowable cut in respect of
wood). Only difference is that in Lao PDR, the term quota or quota system is used presently
in a somewhat different connotation. The difference has more to do with the mechanism of
setting collection/harvest quota and in administering the system. It is a system dominated by
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traders, with involvement of several Government departments. Villagers are employed in
collection/harvesting, for which they are compensated.
Quotas are granted by provinces and districts. In the absence of quota, collection of
any forest product (e.g. rattan), for any use other than for “traditional purposes” becomes
illegal. But, illegal collections do take place routinely and are traded under different guises.
For removing the produce, it is necessary to obtain various permits, paying royalty
and different taxes and charges as fixed by forest service, finance department, customs
department etc. Compliance to regulations are checked at check points along the transport
routes and at the borders, which are manned by the staff of finance, tax, commerce, drug
control and other departments.
Regarding collection of forest produces, the DoF provides guidelines, and training on
sustainable forest management, to the staff at the provincial and district levels.
Several weaknesses have been reported for the quota system.
The system is arbitrary; assessment of the resource does not follow any
scientific principles or methods; operational system of quota collection is also
confusing and non-transparent.
It is a trader-dominated system, where there is no resource management, only
extraction of the produce. Over-exploitation appears to be the rule, combined
with under reporting.
Existence of illegal trade (even of rare, threatened and endangered species)
under the cover of quota and fudging of documents (e.g. showing non- quota
collection as imports) has also been reported.
Non-quota extraction and activities under Village Land Use Plans can cause
conflicts and lead to excessive extraction.
Villagers are not consulted in the quota system process.
No appeal progress is available to stakeholders affected by quota setting
decisions.
Several observers have noted that the quota system: distorts the market and
industry structure; creates incentives for corruption; and results in economic
losses (and resource losses) through inefficient production and sub-optimal
pricing (IUCN, 2002).
There is no adequate system in place for monitoring the collection of produces
covered by quota.
There has been several suggestions to improve the quota system including delegation
of “harvesting quota granting” to villages (IUCN 2002). There is need to substitute the
current quota system by a simpler system of institutional arrangement supported by proper
assessment of the forest resource base, a scientifically prepared harvesting/management plan
(for management units) and adequate monitoring.
(More discussion on quota for harvesting/collecting NWFPs can be found in Section
3 on Non-Wood Forest Products in Lao PDR).
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Customary Use Rights
Customary/traditional rights, practices, uses and related rules have great influence on
the NWFPs.
Custom is the result of practice and use that is constant, repeated, for one generation
or more, widespread throughout a group and viewed as having created a right amongst the
group. An individual, a household or a group can hold customary rights. Villagers are exempt
from paying natural resource tax for subsistence use of products.
The customary use of forest, forestland and forest produces has been practiced for a
long period and is recognisd by society and/or law. Customary use includes the collection of
non-prohibited wood for fences and fuel: the collection of other forest produces, hunting and
fishing of non-prohibited species for household consumption; and other uses following
custom. Customary use should not damage forest or forest resources or affect the rights or
benefits of other individuals or organizations. The customary use of forest, forest land and
forest produce must be in accordance with village regulations on forest and forest land,
which the village authority has determined, consistent with the special circumstances of the
village in each stage of its development. Customary rights do include the sale of non-
restricted NWFPs for commercial purposes. To that effect, village level associations have to
be formed and this associations will sign management contracts with PAFO. Villagers may
enforce rights against third parties and enter into contracts (village agreements) with them
(IUCN 2002). Customary rights also include traditional ownership rights over specific types
of trees, spirit forests and hunting taboos. The nature of customary rights is elaborated in
MAF regulation 54/1996 regarding village forestry.
MAF order 377 of 1996 stipulates that PAFO and DAFO have the mandate to ensure
compliance of all parties and that “uses in conflict with customary rights should be limited
(i.e.slash and burn, forest fire and fish traps)”. These provisions attempt to attain a balance
between protecting natural resources and providing opportunities for villagers to exercise
their traditional practices. Further, as per MAF regulation 524 of 2001, harvesting of
NWFPs is prohibited within NBCAs except for customary use by villagers within forest
resource use zones as long as harvesting is sustainable and within the permitted season. Non-
customary uses in NBCAs without authorization are prohibited.
Organizational System
The organizational system provides an orderly structure of related components that
channel efforts of people towards pre-determined objectives. Accordingly, the component
organizations and systems are to be characterized by well-defined missions, conventions and
procedures. The component organizations/systems include public administration, enterprises
and investment activities, R & D institutions, education and training institutions, information
system and planning system, among others.
Organizations in a sector consist of those representing public (government), private,
corporate, co-operative, group and other interests. Government agencies are normally
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concerned with public administration and regulation of sectoral activities. Organizations of
other interests are mainly concerned with enterprise aspects. However, government agencies
are sometimes given the mandate to undertake enterprise functions for various reasons,
namely: the private sector does not exist or does not have the capability; enterprise activities
are not attractive to the private sector due to low profit; there are non-market values and/or
social service roles which others may not respect; and, it is considered necessary to provide
models, by operating in competition with private sector for improving overall efficiency of
the sector. But, in most situations, the system of government agencies have not been able to
carry out the enterprise functions efficiently because of the in-built inability in the system to
take speedy decisions, to take risks, to innovate, to use discretion and trust, and to operate in
a business environment. Enterprises require administrative, managerial, professional and
financial freedom in its functioning. It is therefore appropriate to separate enterprise
function from the authority function of the Government.
Models of public administration depending on the political situation and other factors
vary considerably – centralized public administrative structure, decentralized and federated
structure, participatory structure, socialized structure, co-operative structure and
combinations of these. The first two are, however, the most common ones.
A vital function of a governance or public administration agency is to monitor sector
performance with regard to achievement of desired or defined goals, and facilitate better
performance through improved institutional and legislative measures. This is particularly
important in respect of agencies reposed with the responsibility to protect and develop the
natural assets of the nation. The potency of institutions/agencies to enforce their mandates
rests on their ability to overcome certain issues and inadequacies relating to governance.
An approach to improve an institutions capability for governance is through
decentralization of functions, responsibilities, and decision powers.
The purpose of decentralization is to deconcentrate and distribute decision powers
and functional responsibilities, along with the means and capacity for functioning, from
power centre to the periphery (or from a large center to a number of small centers, from
higher level to lower levels), so as to be able to involve people meaningfully and effectively
in the governance process.
For developing democratic decentralization, there is need for considerable efforts for
institutional strengthening at the decentralized levels, in terms of capacity (skills, funds,
facilities, infrastructure etc). Decentralised mandates, without adequate preparation, can stifle
the local organization.
Poor performance of several sectors are often caused not due to lack of policies, laws,
rules and regulations; it is primarily due to deliberate non-implementation of policy and
related instruments by the organizations which were meant to enforce them. Often the
organizations assume the role as creators of policy, rather than creations of policy.
Organizational failure or ineffectiveness also can occur due to inappropriate mission/vision,
poor salary and facilities for the staff, bureaucratic mindset, inadequate transparency and so
on. These can be corrected only through drastic institutional reforms.
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Weaknesses of PFA
As we have seen from the foregoing sections, the organizational system in the
forestry sector of Lao PDR is very weak.
With Regard to NWFPs, apart from structural and other deficiencies inherent in
several organizations, the main issue is that there are no proper dedicated arrangements for
overseeing management/conservation of NWFPs, within the PFA at all levels; and no co-
ordination of scattered NWFP activities take place.
There is no specific agency (governance organziation) to deal with NWFPs; and no
special/separate NWFP units/divisions in MoF or in NAFES. NAFRI only has a section on
NWFPs within FRC (without an adequate institutional mission or policy vision or client
participation). Overall, there is severe lack of funds, facilities, expertise/capability. NWFPs
suffer from institutional neglect.
Inadequacy of Research Efforts
Forestry Research Center has a separate section on NWFP. In the NWFP field, the
current research priorities are the following:
NWFP taxonomic studies and botanical surveys.
Domestication/agro-forestry systems/reforestation/restoration.
Sustainable harvesting regime.
NWFP based forest management.
Ethno botany, specimen collections.
NWFP marketing and processing.
Regulatory frame works.
Socio-economic research including impact of NWFP use.
Forestry research suffers from lack of adequate funds, facilities and trained
manpower; this inadequacy is felt more in the NWFP-related activities.
While research efforts on the priority areas are scanty due to lack of funds, facilities
and manpower, the FS 2020 includes an indicative list of expanded priorities for NWFP
research.
Resource inventory and information.
Chemical prospecting of wild flora and fauna.
Domestication.
Propagation and cultivation practices.
Silvicultural management of NWFP resources.
Harvesting of NWFPs.
Pre and post harvest treatments.
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Storage, intermediate processing.
Pharmacological and toxicological studies.
Value added processing and quality control.
Product and market development for NWFPs.
Management of forest service benefits.
Agro-forestry combinations for different land types.
Productivity studies.
Major efforts (involving sizeable investment) are needed to enhance the science and
technology content of forestry, and particularly of NWFPs. Also changes are required in
planning and management of forestry research and development with a view to involve users
of research. A more rigorous approach to preparation and implementation of research work
plans is needed in order to raise the status of forestry related research, to increase its
relevance to real life problems and to influence forestry policies. There should be clear
prioritization; and research planning should be goal-oriented to be cost effective and relevant
to the problem.
Lack of client participation in problem identification and research planning, lack of a
national forestry research master plan, absence of task orientation and inadequacies in
policies relating to research personnel are some of other constraints affecting forestry
research, which calls for concerted attention.
Impact of research depends on the extent to which its results help to solve problems.
This in turn depends on the goal-orientation and focus of research activities, and the
thoroughness with which it is pursued.
Lack of Extension Facilities
The NWFP sub-sector in Lao PDR does not have the benefit of any extension facility.
This is a serious constraint.
Support services for forestry (and also for NWFPs) in Lao PDR is still evolving.
Often the facilities for service delivery established during the implementation of donor-
assisted projects disappear once the project is terminated. There is need to ensure that
development of basic capabilities is not thwarted by shortsighted approaches and lack of long
term vision.
Trade and Investment
Organisations capable of supporting trade and investment in the NWFP sector are yet
to develop. Lao National Chamber of Commerce and Industry has the potential to develop
into such an organization. LNCCI has some members who are large-scale growers of NWFP-
yielding plants; there are also groups/associations within LNCCI dealing with NWFPs. Once
NWFP sub-sector is formally organized, it can avail the beneficial services of LNCCI.
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Private investors are present both in NWFP resource development and NWFP
processing areas. Details of private investment in NWFP resource sector (e.g. private Styrax
and agar plantations and related tenure arrangements, resource utilization etc.) are not
available.
INNOVATIVE CASES OF NWFP DEVELOPMENT IN LAO PDR
Inspite of the general distressing situation of NWFPs in Lao PDR, there are rays of
hope and avenues of optimism seen in a number of innovative cases, which shows
considerable propensity to succeed.
Lao Farmers products and batieng product
These closely linked private companies are fair trade enterprises of Lao PDR,
cooperating with European fair trade network, involving fair trade organizations of France,
Belgium, Germany and Switzerland. These companies collect a large number of farm
produces for processing and sale as quality products, mostly to France and other European
countries. The products include jams, juices, dried fruits, honey and wine. The companies
are owned by some 50 share holders. There are also several farmers among the shareholders.
Some 15,000 farmers from several provinces are involved in supplying agricultural
produces, from whom the produces are purchased through credit co-operatives. There are 8
such credit co-operatives. The raw produces are collected from farmers on the basis of
contracts, for which prices are fixed periodically. The Company(ies) provides quality control
and technology. There are no penalties imposed for breach of contract or malpractices (e.g.
adding stones in supplies of tamarind fruits); and such instances seldom occur.
There are three factories under the Company(ies) to produce jams, juices, slices, fruit
pastes, fruit drinks etc.; and another producing wines.
Earlier the Company had tried to encourage the farmers to process, and to supply
processed products ready for sale. The quality of products being low (unsuitable for export),
buying of processed products from farmers was stopped. Presently, the Company (ies) only
buy raw agricultural produces from farmers. The system of contract production of primary
produces and buy back arrangement has worked reasonably well. The company (ies) also
contribute to improving the economic conditions of farmers through providing training in
commercially growing fish and animals (apart from agricultural crops).
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Self Help Groups
Several self help groups (SHGs) have come up in various parts of Lao PDR (such as
cardamom group, rattan group, honey group, bitter bamboo group, mushroom group),
essentially for joint marketing of products. The scope of the functions and duties of these
groups do vary.
In some rare cases, village marketing groups undertake to market several products,
produced locally. Nam Pheng marketing group for sustainably harvesting and marketing
bitter bamboo and cardamom is an example (IUCN, 2002). Households sell produces to the
marketing group, to avoid middlemen and to obtain better price. There is also provision for
arranging short-term loans and developing social infrastructure.
Efforts are ongoing for institutionalizing some of the village marketing groups to
become capable of developing and implementing action plans for NWFP production,
collection and trade.
Independent Authority to Manage the Plantation Sector
The Lao/ADB Forest Plantation Project (which is about to be completed), had
provided loans to private persons/groups and farmers, and the loan was distributed through
the Agricultural Promotion Bank. The upcoming new phase of the project, to be known as
the Lao Plantation Sector Project (with an outlay of US$ 10 million), has defined a different
implementation system, by establishing an autonomous plantation body, designated as Lao
Plantation Authority. The plantation authority will be managed by a Board, with a CEO
recruited from outside the bureaucracy, for carrying out the decisions of the Board. The
Authority will be run as a corporate institution, without interference/pressure from the
government agencies – in providing technical assistance, loan distribution, pricing,
marketing etc.
Success and progress (through necessary dynamic changes) of these initiatives into
self-propelling ventures and models for replication depend on wide spread awareness and
commitment.
ANALYSIS OF NWFP SITUATION IN SELECTED COUNTRIES49
.
In order to address the rampant deforestation and environmental deterioration, a
number of countries in the Asia-Pacific region, over the past 15 years, have completely or
partially banned logging in natural forests. It is easy to order a ban of logging, but very
49 The countries selected are: Bangladesh, India, Indonesia, Korea (Republic of), Malaysia, Nepal, Papua New
Guinea, Philippines and Vietnam.
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difficult to protect forests, unless there are other alternate forms of regular benefits that can
be derived.
With new and renewed emphasis on environmental conservation, NWFPs have
recently emerged as eco-friendly products, because their harvest tend to result in much less
damage to the forest ecosystem, compared to logging. NWFPs can also be domesticated and
grown commercially. Management of NWFPs sustainably will probably decide, the
sustainability of forestry in the future. In the Asia region, the Asia Network for Sustainable
Agriculture and Bio-technology (ANSAB), a regional NGO (which is primarily involved in
research, technical assistance and professional interaction in the area of biodiversity
conservation and NWFPs), has established a special component network to promote the
sustainable development, use and management of NWFPs.
In a number of countries there have been experiments with interesting institutional
models for managing NWFPs, involving Government, private and co-operative sectors.
Between production and consumption of NWFPs, lies a long chain – of crop raising,
harvesting, transportation, storage, processing, grading, preserving, packaging and retailing.
Often, the organization of the various stages and the way they are linked show considerable
differences, depending on the overall institutional systems prevailing in different (country)
situations, with differing socio-economic and environmental impacts. In certain situations,
certain institutional arrangements are more capable of obtaining better results. In this section,
several such cases from different countries are reviewed with a view to draw some relevant
lessons useful for developing NWFPs. Some general observations about experiences from
elsewhere have also been included.
It is underlined that the review is generally based on cases which offer useful lessons,
and not on any elaborate analysis of the country‟s NWFP sector, reflecting the totality of the
situation.
The countries in the Asian region exhibit both similarities and dissimilarities, in terms
of forest resource endowment, forest management systems, status of technology, level of
utilization of NWFPs, rights and privileges allowed to tribal population, institutional
arrangements and so on. The focus of the review of experiences in the selected countries is
on different institutional arrangements, which inter-alia include the following:
Programmes under government initiative and control.
Commodity Boards (for specific commodities).
Co-operatives, cluster of co-operatives and co-operative federations.
Institutional partnerships (company–farmer partnerships; Government–private
sector partnerships).
Initiatives and assistance of NGOs.
Private enterprises.
Pubic limited companies.
State owned enterprises.
Initiatives under donor-supported projects.
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Bangladesh
Bangladesh has a depleted forest, both in terms of area and quality. Total forest area
of Bangladesh is 1.3 million ha (Representing 10.2 % of land area) and 47% of it is
accounted for by artificially raised forest plantations. The density of growing stock in the
forest is also poor – with 23 cum/ha of growing stock of wood and 39 t/ha of biomass volume
(FAO, 2005). Homestead forests, in which a sizeable share is accounted by NWFPs (such as
bamboo, murta, medicinal plants, dye yielding plants, mulberry etc), supply a major share
(above 70%) of the country‟s requirement of wood and NWFPs.
Homestead Forests
In Bangladesh, homestead forests are the dominating feature in the village landscape.
Some 10 million households, in some 85,650 villages, annually supply about 5 million cum
of wood (about one million cum of logs and about 4 million cum of fuel wood) and 0.53
million air dry metric tons of bamboo. Supported by strong tradition and conventional
wisdom, these homesteads grow trees and other crops under an intensive and efficient system
of agro-forestry, combining multipurpose trees, food and forage plants, bamboo, palms,
medicinal plants, spices and so on. The homestead forests support a mixed subsistence-cum-
cash crops household economy. Various trees, shrubs, bushes and herbs, in a multi-tiered
structure, perfectly occupying the available space from the ground to about 20 meters high,
surround each house. Animals, including cows, goats, chickens and duck, feed freely among
the plants. A fishpond and beehives are often a common feature of the gardens. This system,
developed over centuries as a result of long term adaptation of cultural techniques to local
ecological conditions, has in many cases, reached a noticeable degree of natural balance.
And today, homestead forests are the most important source of wood, bamboo and other non-
wood forest produces in the country. In spite of their importance, the homestead forests do
not get the attention it deserves in terms of research and extension support, credit facilities,
utilization and marketing facilities.
Importance of Non-wood Forest Products
Like other tropical countries, there is a wide range of NWFPs in Bangladesh. They
fall under:
a. food (honey, spices, fruits, mushroom, tender shoots, palm juices and
molasses, meat, fish, prawn);
b. forage (leaf, pods);
c. fibre (shoot, bark, floss);
d. oils (essential oils, fatty oils);
e. tans, dyes and extractives;
f. gums, resins, oleo-resins, other exudates;
g. drugs and medicines;
h. multipurpose products such as bamboo, rattan/palms and grasses;
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i. animal products (such as bees wax, horns and bones, skin and hide, lac
and silk worm); and
j. miscellaneous items such as ornamental plants, stones etc.
Medicinal plants, bamboo (of various genera and species, mainly Bambusa spp and
Dendrocalamus spp)50
, rattan (species of Daemonorops and Calamus), murtha
(Schumannianthus dichotoma), hogla (Typha elephantina), sungrass (Imperata spp.), golpatta
(leaf of Nypa fruticans), hantal (Phoenix palidosa), catecheu (from the heart wood of Acacia
catecheu), lac, honey and beeswax are the more important NWFPs of Bangladesh. Reliable
statistics of the resource base and annual production of most items of NWFPs are not
available. In some cases, annual production is expressed in approximate value and on some
others even such information is not available.
As in the case of wood resource, homestead forests are an important source of
NWFPs. In most cases they account for a higher share, compared to government forests.
Being owned by a large number of homesteads, the NWFP resource of homestead forests
does not receive the benefit of appropriate technology. There are no extension services,
covering NWFPs. In the government forests, there are no detailed management prescriptions
for NWFPs. Some are disposed off through auctions and others through permits. While
there are harvesting regulations for some NWFPs (such as bamboo, golpatta and murta), they
are not strictly followed. For most others such as rattan, medicinal plants, hantal, hogla,
honey etc., there are no detailed prescriptions, rules or regulations.
NWFPs contribute significantly to the Bangladesh economy directly or indirectly.
They provide employment to over 550,000 people annually, a significant proportion of which
lasts throughout the year or at least during the agricultural off-season. Women play a
significant role since they form a large part of the labour employed, either in cottage
industries or at home.
Despite this position, all of the products would benefit from planned systematic
development and scientific management. The principal beneficiaries of these programmes are
the poorer of the rural population. Many of the programmes integrate well with tree
plantation programmes on public or private land.
While there are processing units based on NWFPs (rattan, lac, medicinal plants etc),
they all suffer from uncertain supply of raw material; and many of them, often, depend on
imported raw material. Local supply has dwindled due to improper, destructive and over and
premature harvesting. However, Bangladesh has conditions for their development and
growth, with attendant socio-economic benefits, if properly organized and managed.
Constraints for NWFP Development
NWFP development in Bangladesh is affected by several hurdles:
50
Along with forest encroachments and deforestation, bamboo resource of Bangladesh has been depleted, in
the government forests. The system of harvesting bamboo by private contractors, through annual auction
sales or permits further contributed to the depletion both in quality and stocking.
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Indiscriminate and over-exploitative harvesting of the resources plus absence of a
programme to replenish and sustain the production are resulting in inadequate
supply of raw materials and quickly depleting resources.
There is lack of policies, rules and regulations applicable to the growing and
harvesting of NWFPs. There are harvesting rules for golpatta, bamboo and murta,
but except for golpatta, these rules are not strictly followed in the field. For other
NWFPs like rattan, medicinal plants, hantal, hogla, honey and beeswax, fish and
shellfish, there are no rules and regulations.
Funds for the development and management of NWFPs are meager. The royalty
or revenue generated from the exploitation of NWFPs is not used to improve the
resources.
There has been little attempt to integrate NWFPs into the plantations; yet many
NWFPs can be inter or under-planted with appropriately spaced trees. No attempt
has been made to adopt an integrated management system, which recognizes the
importance of non-wood products, maintains and promotes the integrity,
productivity, and sustainability of the ecosystem, while providing for the basic
needs of the poor.
There is no cell or unit in the Forest Department, which is specifically responsible
for the development and management of NWFPs. Research and development
efforts pertaining to NWFPs are quite scattered, unorganized and not well co-
ordinated. There is a lack of co-ordination and institutional linkages at local and
national levels and confusion as to what agency is responsible for each NWFP.
Competent, knowledgeable and well-trained staff for the development,
management, processing, utilization and marketing of NWFPs are lacking.
Role of NGOs
The bright spot in the institutional scene of NWFPs in Bangladesh is the role played
by NGOs. They represent some of the successful institutional models. The Government
policy to encourage the involvement of NGOs in development activities have indirectly
helped participatory development of forestry and NWFPs.
Bangladesh is one of the few countries where NGOs are involved actively and
committedly in development activities. The NGOs in Bangladesh have been able to form
groups (for different kinds of activities), with a total membership of over a million.
The largest NGO in Bangladesh, the Bangladesh Rural Advancement Committee
(BRAC) has organized groups with a total membership of about 600,000, of whom 65% are
women. It provides credit and training for income and employment generation and provides
marketing arrangements. BRAC operates an annual budget of about US$30 million and has
some 4,600 full-time employees. Even though BRAC‟s social forestry programme is of
comparatively recent origin, it has developed an elaborate system of management.
There are about 100 NGOs in Bangladesh engaged in forestry („social‟, community,
and homestead), and related promotional activities. NGOs like BRAC, Proshika, Manobik
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Unnayan Kendra, Rangpur–Dinajpur Rehabilitation Service (RDRS), Gono Shahajjo
Sangstga (GSS), Gono Unnayan Prochesta (GUP), Swanirvar Bangladesh, Poush and
Association for Social Advancement (ASA) have successful programmes of forestry. Their
point of departure is to organize landless and small farmers into groups, for collective or
individual action, including tree planting, small scale forestry and growing/harvesting of
NWFPs.
Achievements of NGOs of Bangladesh in involving people in forestry has so far been
impressive, especially in forming/organsing regional groups and planning and implementing
tree planting projects as income earning enterprises. It is said that some 25,000 small groups
are involved in social forestry. Apart from raising of nurseries, agro-forestry plots and
plantations, NGOs have raised over 3,000 kilometres of strip plantations along road sides.
BRAC‟s programme in forestry is illustrative of the scope of NGO involvement.
BRAC has a fairly large forestry programme. The forestry activities are carried out
mostly in leased private lands and road margins (some 2500 kms). BRAC‟s main NWFP
activity is silkworm rearing. The BRAC sericulture programme is specially addressed to
BRAC‟s landless women groups. Mulberry raising is carried out in homesteads, road side
plantations, and agro-forestry plots. The programme integrates mulberry growing with
silkworm rearing, cocoon production, silk reeling and spinning – thus, promoting
development rather than subsistence. BRAC also supports a participatory horticulture
programme, to raise mango, jack, tamarind etc.
The participatory programmes of the NGOs in Bangladesh (including those on
NWFPs) are supported by Grameen Bank. Grameen Bank is a unique autonomous institution
and a non-governmental initiative, which supports entrepreneurship among the poor in the
society, by providing micro-credit.
Box 1 - Grameen Bank of Bangladesh
GRAMEEN BANK OF BANGLADESH IS A NON-GOVERNMENTAL INITIATIVE TO
PROVIDE MICRO-CREDIT TO RURAL PEOPLE. STARTED IN 1976 ON A VERY SMALL SCALE, GRAMEEN BANK HAS ATTRACTED MORE THAN 2 MILLION CUSTOMERS; AND
ITS LENDING PHILOSOPHY HAS SPREAD TO MORE THAN 50 COUNTRIES. AN
OVERWHELMING MAJORITY, ABOUT 90% OF GRAMEEN BANK‟S BORROWERS ARE WOMEN; AND THE BANK MAKES LOANS TO PEOPLE WITH NO COLLATERAL OR
CREDIT–RATING. INSPITE OF IT, 98% OF THE LOANS GET REPAID. EXPENSES ON
SERVICING ARE MINIMAL.
GRAMMEN BANK HAS A STAFF OF 12,600 WHO VISIT 36,000 OF BANGLADESH‟S 68,000 VILLAGES EACH WEEK TO MEET THEIR 2.1 MILLION CUSTOMERS. THE BANK
LOANS ABOUT US$ 400 TO 500 MILLION WITH AN AVERAGE LOAN SIZE OF US $ 150.
Moreover, several of the foreign assistance projects work in partnership with grass-
roots NGOs designated as “Primary Contact Partners”.
Considering the important role NWFPs can play in stabilizing rural economy and
support national development, increased efforts for their accelerated development will
benefit the country.
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India
Forests area of India is 64.1 million ha (representing 21.6% of the land area), of
which more than half (32.6 million ha) is plantation forest. Quality of forest in terms of
growing stock has deteriorated – growing stock of wood being 43 cum/ha; and biomass
volume 73 tonnes/ha.
The Forest Policy
In view of the need to restore ecological balance, to conserve biological diversity, to
maintain environmental stability, and to protect and rehabilitate the remaining natural forests,
logging in the natural forests have been banned in several parts of India. The 1988 National
Forest Policy of India lays special stress on: maintenance of environmental stability and
restoration of ecological balance; conservation of the Country‟s natural heritage and
biological diversity; improved soil and water conservation; increasing forest cover through
massive afforestation and social forestry programmes; providing the basic needs of the rural
and tribal population; increasing forest productivity; improving efficiency of forest product
(both wood and non-wood) utilization; and creating a massive people‟s movement with the
involvement of women to achieve these objectives and to minimize the pressure on existing
forests. The policy also states that India‟s industrial wood needs would be met increasingly
from farm forests. The role of NWFPs in providing sustenance to tribal population and
generating employment and income was specially recognized.
The Forest (Conservation) Act had already been enacted in 1980 with a view to
checking indiscriminate diversion of forestland for non-forestry purposes. Under this Act,
approval from Central Government is required before any forestland is diverted for non-
forestry purposes. Moreover, the transfer is allowed only with the provision that
compensatory plantations in an equivalent area of non-forestland, or double the area in
degraded forestland, are raised.
Joint Forest Management
Following the National Forest Policy of 1988, the Government of India also issued a
circular in 1990 for promoting Joint Forest Management.
Initiated informally in the early 1970s to enlist the participation of local people in
forest rehabilitation efforts, JFM has become the flagship programme of India in peoples
participation. JFM is a forest management strategy by which the Government (represented
by the Forest Department) and a village community enter into partnership agreements to
jointly protect and manage forest land adjoining villages and to share responsibilities and
benefits. JFM has spread throughout the country, bringing under its fold around 14 million
ha of forestland. There are around 63,000 JFM Committees in 27 States, engaged in
protection and regeneration of degraded forests, in return for certain usufructs and other
direct and indirect benefits. A major complaint against JFM was that it covers only the
protection and maintenance of degraded forests. In January, 2000, the Government of India
issued a new Circular, which envisages extension of JFM to better stocked forests also.
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Additionally, it provides for mandatory (50%) involvement of women in JFM activities, and
membership (33%) in Executive Committees.
As a result of the new policy, a large number of tree farming and agro forestry
enterprises have sprung up all over the country and they are performing an important role as
suppliers of forest raw material as well as of market products. With logging restrictions,
many of the forest-based processing units are now in the grip of raw material shortages.
Many industrial units are relying on private non-forest sources. Import of logs and wood
products has been liberalized. The wood scarcity situation has provided an impetus for
development of farm forestry, homestead forestry, agro-forestry and trees outside forests.
Several industrial units are also promoting out-grower tree farms. Currently about 50% of
the wood supply in the country is received from non-forest sources. Of the rest, a
considerable portion is accounted for by imports and the balance obtained from public
forests, mainly forest plantations.
With a view to promote the policy of democratic decentralization, the 73rd
Constitutional Amendment of 1992 has assigned forestry functions to Gram Sabhas and
Panchayats51
, including conservation management and sustainable development of forest.
Furthermore, by the 74th
Constitutional Amendment of 1996, the ownership of minor forest
products in Schedule 5 Areas under the Panchayat Extension of Schedule Areas Act of 1996
has been transferred to the local Gram Sabha/Panchayats in nine states having sizeable tribal
population.
NTFPS in India
NWFPs play an important role in India and they are at least as important as wood
products. Some 7,000 plants are being used in India‟s indigenous medicine. Nearly 3,000
plant species are known to have food/food additive/nutritional values; some 250 species yield
essential oil; and some 100 species yield tans/dyes.
The value of direct contribution of NWFPs in India has been estimated to be about
US$ 27 billion, compared to only about US$ 17 billion for wood products. Integral value of
the NWFPs including their service contributions will be much larger (UN-CSD/IPF, 1996).
In India, NWFPs account for about 50% of total forest revenue to the Government and some
70% of forest-based export earning.
Nearly four hundred million people living in and around the forests in India depend
on NWFPs for their sustenance and supplemental income. NWFPs provide as much as 50%
of the income to about 30% of the rural people.
Some 50 million tribal people in India depend on NWFPs for meeting their
subsistenance consumption and income needs. NWFPs provide 60% of their food and
medicinal needs and as much as 60% of their income.
The important NWFPs of India include bamboo, rattan, beedi leaf, gums and resins,
oil seeds, essential oils, fibers, flosses, lac and medicinal plants. During late 1990s, annual
production of bamboo amounted to about 4.7 million tonnes. Some 25% of the overall fiber
furnish of paper industry is bamboo pulp. India‟s US$ 30 million perfume market is fast
51 Village councils or village assemblies
115
growing, creating demand for natural fragrances. A number of industries based on NWFPs
have been developed in India. Proudct leaders include cosmestics, flavours and fragrances,
essential oils, rosin and turpentine, bio-diesel, beedi, tannin, katha and cutch, and
cane/bamboo furniture. In terms of export trade, the performance of NWFPs is significant.
The main items of export are edible products, crude drugs and medicinal products, spices,
essential oils, gums and resins. Markets for NWFPs has improved considerably. Some 25
products are of major significance.
Constraints for Development of NWFPs
A correct assessment of the total resource of NWFPs in India has not been made so
far. Assessing the potential and actual production of NWFPs is very difficult, as vast
quantities are extracted and used/traded locally. No scientific management system exists for
exploitation and marketing of NWFPs. NWFP sector in India also faces other constraints:
resource information linked to the products is sorely lacking; know-how and technology are
inadequate on almost all aspects of NWFP development; utilization practices are wasteful;
and some of the required special skills are not available. Observations indicate that
unscientific practices of NWFP collection are threatening the resource base and the bio-
diversity.
As can be expected, the institutional models for NWFP management/development are
influenced by policy and laws relating to: tenure, resource access, access to credit/investment
funds, human resource capability, market situation and so on. The proposed Scheduled
Tribes (Recognition of Rights) Bill 2005, once passed, is likely to result in changes in the
structural elements and linkages of several institutions dealing with NWFPs.
Institutional Models
Depending on the specificity of circumstances, these institutions can be formal or
informal, private or public, state promoted or self-initiated, centralized or decentralized,
autonomous or bureaucratic, and participatory or authoritarian. They, accordingly, take
different forms: informal groups or associations, self help groups, formal co-operative
societies and co-operative federations, state-owned enterprises, private companies,
autonomous boards and different forms of partnership arrangements (public-private,
company-farmer etc).
Some form of co-operative arrangement (or some elements of it) is the pre-dominant
characteristics of several of the NWFP–related institutional models in India, with the aim to:
pool resources, increase marketing strength, enhance bargaining power, avoid or eliminate
middlemen, conserve resource and enhance overall benefit.
Amul Model
AMUL (Derived from Anand Milk Marketing Union Ltd.) of Gujarat State of India is
now an icon and a glittering brand (Taste of India) of dairy products. The model of milk
(and milk product) marketing co-operative/unions established all over the country is now
known as Amul models.
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AMUL in fact is the forerunner of all co-operative production and marketing models
adopted in India, in various other fields - e.g. sugar, fish, fiber and other consumer products,
where production involves a large number of people, and large quantities are involved. It
may be noted that the basic produces involved (milk, sugar cane, fish etc) have a
perishability factor, which is not conducive to competitive manoeuvering; and co-operation
can provide strength and power to the producer.
Even though, as a product, milk is very different from NWFPs (particularly in terms
of its daily bulk demand and lack of adequate substitutes), the Amul concept provides
interesting lessons for addressing issues relating to NWFPs.
The Amul journey was started and the concept founded in 1946, to stop exploitation
of milk producers at the hands of middlemen. It began with two village societies and 247
liters of milk. Later, in 1946, the Kaira District Co-operative Milk Producers Union was
registered. The co-operative union identified Bombay city as the market for liquid milk, and
there was rapid increase in milk procurement.
The Gujarat Co-operative Milk Marketing Federation (GCMMF), at the State level
was formed in 1973, and Amul brand was actively promoted. This developed fast into an
ideal co-operative venture, with members involved in controlling milk production,
procurement, processing and marketing.
GCMMF registered to steady continuing growth, marked by achievements as follows:
Creation of a comprehensive model approach.
Milk production enhancement programmes.
Animal health and veterinary services.
Cattle feed manufacturing and marketing.
Milk collection systems at village level.
Milk processing through latest technology.
Creation of nation wide marketing network.
Brand building.
Mobilization of financial resources.
Linkage between producers and consumers.
Member education and involvement.
In house research facilities.
Democratic set up at grassroots level.
GCMMF currently has a membership of 2.3 million. Today, GCMMF is India‟s
largest food products manufacturing organization. It exports condensed milk, milk powder,
cheese, butter, chocolate etc. It handles about 8 million litre of milk per day; it owns 24 dairy
plants; it operates 50 sales offices with 3,000 (plus) whole sale dealers and 500,000 (plus)
retailers.
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Amul model of GCMMF has adopted a three-tier structure:
Village dairy co-operative society : Responsible for milk procurement.
District milk unions : Milk processing.
State federation (apex body) : Production and marketing of milk products.
Amul model has been replicated in various states of India through the National Dairy
Development Board (see Figure 6).
The factors behind the resounding success of GCMMF are the following:
Dedicated and visionary leadership.
Professional management and leadership.
Management without external influence.
Genuine democratic control.
Forward and backward integration.
Brand building.
Mounting of successful marketing strategy and development of marketing
channels.
Member centrality.
The Amul philosophy is: serve the interest of milk producers provide; quality milk
products to consumers. Strict practice of this philosophy paved Amul‟s path to success.
Figure 6 - Amul Model Replication
In Gujarat Market In India
GCMMF State Milk Federation 22 State Federations
12 District Unions District Milk Unions 176 District Unions
11,000 Village Co-
operative Societies
Village Dairy Co-operative Societies >100,000 Village Societies
2.3 million members Member producers >11 million members
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Madhya Pradesh State Minor Forest Produce (Trade and Development) Co-operative
Federation.
This is a State sponsored co-operative institution, solely dedicated to NWFPs. It has
taken some lessons from the Amul model; but miss some of its vital characteristics,
particularly the effective involvement of the members.
The Madhya Pradesh State Minor Forest Produce (Trade and Development) Co-
operative Federation Ltd. (MP-MFP-CFL), an autonomous body, was established in 1984. It
is the responsible and regulatory authority for resource management, harvesting, trading and
development of NWFPs in Madhya Pradesh state, one of the 35 States and Union Territories
in India. Its jurisdiction covers mostly the deciduous tropical forests of the State. The prime
product falling under the purview of the co-operative is tendu/beedi leaves (leaves of the tree,
Diospyros melanoxylon52
).
The prime purpose of the Co-operative is: to save the MFP collectors from the
clutches of middle men; to ensure fair wages and benefits to the collectors; to rationalize
marketing of products; to empower the community in managing their own affairs through
appropriate institutional arrangements; and to ensure that the resources are sustainably
managed and protected.
The establishment of the Co-operative was prompted by the Constitutional
Amendments 73 and 74, which provided for transfer of ownership of NWFPs to Gram
Sabhas/Panchayats (village councils) in States having sizable tribal population, and the
policy of the Madhya Pradesh State Government to promote the development of the
backward and tribal communities.
Following a pyramidal structure, the Co-operative is comprised of 1 ,947 Primary
Societies (with a total membership of 5 million MFP gatherers) in which all the NWFP
collecting families are members, formed into 58 District MFP Co-operative Unions and a
National Apex Body. The extent of forests falling under the purview of the Co-operative is
about 8.6 million ha; and the Federation, at various levels in its structure, employs about
50,000 people. The rights and privileges of the members of the primary societies, their
responsibilities in terms of managing the resources and delivering the products at the
collection centers, payment of wages and sharing of benefits equitably, the functions and
roles of the higher level bodies in the hierarchy, have all been specified in the Memorandum
of Association of MP-MFP-CFL. Participation of primary societies in the functioning of
MP-MFP-CFL is ensured through adequate and appropriate representation in the higher level
bodies.
The Primary MFP Collector's Co-operative Society (PCCS), forms the bottom tier.
Any tendu/beedi leaf plucker, who is an adult and a normal/ permanent resident of the area
can become a member of the PCCS by paying a membership fee. Such a co-operative society
could spatially cover one village or more, depending upon their population and nearness to
the forests. For the management of PCCS, a 15-member "Management Committee" which
includes a nominated Forest Department official (who is also designated as the nodal officer),
is to be formed. The Management Committee in turn elects a President and a Vice-President.
52 The leaves are used to wrap (roll) tobacco, for making beedis or Indian cigarettes
119
The District MFP Co-operative Union (DCU) is the mid-tier in the 3-tier structure.
DCUs have a 16-member committee, of which 10 are elected by the primary collectors and 6
are nominated members. The latter category includes the Divisional Forest Officer as the ex-
officio Managing Director of the DCU and the President of the District Cooperative Bank as
another ex-officio member. DCUs provide help and guidance to the PCCS in the collection
and trade of NWFPs and ensure that all the prescribed tasks are carried out properly.
The MP-MFP-CFL is the State level apex body of the cooperative structure. The
Board of Directors has 18 members of whom 9 are elected and 3 (Principal Secretaries of
Government Departments of Forest, Finance and Co-operatives) are State Government
nominees. Six are ex-officio members, one of whom is a Forest Officer serving as Managing
Director of the Federation. The MP-MFP-CFL has the primary role of formulating trade and
development related policies for MFPs, and to provide overall direction and guidance.
In the MP State, tendu patta (leaves of Diospyros melanoxylon), sal seeds, harra
(fruits of Terminalia chebula) and gums are nationalized produces, directly falling under the
purview of the Cooperative, whereas the other NWFPs being non- nationalized can be
collected and traded freely. The first NWFP, which was brought under the State monopoly,
as early as in 1964, was tendu leaves, solely because of its very high revenue earning
potential for the State government.
Beedi (Diospyros melanoxylon) leaves, constitute an NWFP of considerable
economic importance, with an estimated 350,000 tonnes of leaves, worth about US$ 200
million, collected annually throughout the forests of India. Madhya Pradesh is the largest
beedi leaf producing State (41% of total production).
Harvesting is conducted manually during the tendu season, spanning a month and half
to two months (April-May) in the hot summer. Generally, collection starts in the last week of
April and ends before the pre-monsoon showers (first week of June), even though the peak
harvest season lasts for less than a month. The actual period of harvest may vary between
locality to locality.
Leaves are generally plucked in the early morning at sunrise and continues for about
5-6 hours before the sun gets too hot. The process essentially consists of four closely related
steps (i). walking to and from the tendu growing areas (ii). plucking of leaves (iii). sorting
and typing the leaves in small bundles of 50 leaves, popularly known as „pudas‟, and (iv).
delivery of the bundles at the collection centers, or „phads‟. The collectors (members of the
primary society) are paid immediately for the quantity delivered. They are also responsible
for looking after tendu trees and ensuring their protection.
The collected beedi leaves are sold periodically in auction sales and the profit gets
ploughed back for enhancing the welfare and development (infrastructure, health, education,
technology etc) of the community who are also the members of the primary co-operative
society.
Apart from beedi leaves, some of the PCCS are also involved in producing other
nationalized NWFPs such as sal (Shorea robusta) seeds, gums, harra (Terminalia chebula),
and medicinal plants. In addition to the nationalized NWFPs, a number of important and
valuable non-nationalised produces like aonla (Emblica officinalis), chironji (Buchanania
lanzan), mahua (Madhuca latifolia), chirota (Cassia tora), neem seed (Azadirachta indica),
120
mahul (Bauhinia vahlii) leaves, honey, tamarind (Tamarindus indica), etc. are also found in
the forests of Madhya Pradesh. Non-beedi produces, however, account for only 10% of total
NWFP production.
The establishment of the Co-operative has helped greatly to enhance the welfare of
the community involved in NWFP collection, in terms of added employment and income,
insurance coverage, social amenities and so on. The highlights of MP-MFP-CFL are the
following.
Organisation of primary producers of NWFPs within a strong federated co-
operative structure.
Rationalization of NWFP marketing to ensure remunerative prices.
Equitable distribution of benefits to the members of the primary co-operatives.
Sustainable management of NWFP production.
Extension and technology support within the co-operative system.
Wide spread participation of rural families and community empowerment.
The Girijan Co-operative Corporation of Andhra Pradesh State
The autonomous Girijan Co-operative Corporation of Andhra Pradesh State is another
co-operative institution established with government sponsorship, exclusively for the benefit
of hill tribes and to promote their participation. One of the aims of the Corporation is to free
the hill community from the exploitation by lowland entrepreneurs and traders, through
supporting agricultural activities, obtaining remunerative prices for NWFPs collected and
distributing essential commodities at affordable prices.
The Corporation operates in 16 out of the 23 districts of Andhra Pradesh State. The
members (hill tribe families) produce 25 items, including several NWFPs (such as gums,
bamboo, beedi leaves, tamarind), and are also involved in planting/regenerating 10 species.
The Corporation owns several small processing units (to process agricultural
produces and NWFPs), and market the products nationally under the brand name “Girijan”.
The Corporation also provides credit and extension services.
The Tribal Co-operative Marketing Development Federation of India Ltd.
The Tribal Co-operative Marketing Development Federation of India Ltd. (TRIFED)
is a national level federation, established as an autonomous body by the Government of
India. TRIFED is a national network for the procurement, processing and marketing of forest
and agricultural (and agro-forestry) produces from tribal areas. It has some 5,000 single
window service centers (SWSCs) in traditional tribal markets in the rural areas of the
country. These centers serve the tribal communities by procuring their forest and agricultural
produces at support prices, and act as primary agencies for the sale of essential commodities
and other consumer goods to the members, and for extending consumer and agricultural
credit. This effort is supplemented by a chain of warehouses and refrigerated storage
facilities located strategically in various parts of the country. TRIFED also operates a
marketing information system which mainly serves the agricultural sector, but also covers
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some NWFPs. The system collects price information from the domestic and export markets
and disseminates it to the member co-operatives in a mimeographed publication, fortnightly.
Co-operatives of Different Kinds
Unlike the case of MP-MFP-CFL, which is a government initiative, there are several
types of co-operative societies established through people‟s initiatives (for
production/collection of products, capacity building, providing financial support and
marketing linkages, avoiding middlemen etc). They operate as individual societies with a
limited area of operation or are clustered or federated for gaining strength.
The Agro-forestry Federation of Maharashtra State.
The Agro-Forestry Federation of Maharashtra State, headquartered in Nasik, consists
of 25 district-level tree growers co-operatives. It provides marketing and technical support to
its member co-operatives and individual farmers, mainly in the marketing of Eucalyptus
wood and seeds of Jatropha curcas (for bio-diesel)
The Nasik Tree Growers Co-operative Society already gives its members a rate of
return, 30 to 40% higher than what they could get individually in the market. Other benefits
that members gain through collective organization include:
advice on demand and supply conditions at the district, regional, and national
levels;
lower transportation costs through combined loads;
technical advice on harvest timing and methods;
greater responsiveness to changes in regulations;
economies of scale for storage of produce at optimum locations;
collective bargaining, and cash advance during periods of storage.
[On similar lines there are co-operatives in the other states of India. The Gujarat
Agro-forestry Association and Eucalyptus Growers Co-operatives arrange for marketing of
the produces through their own sales outlet. Part of the output are processed into sawn
materials].
Self Help Groups
Self Help Groups (SHGs) are an effective arrangement for production and marketing
of products of a particular/specialized nature. SHGs are normally a cluster of individuals or
families. As institutions SHGs are below village co-operatives. An example of the SHG
activity relating to NWFPs is the cluster of farmers growing aonla (Emblica officianalis),
grouped together for the purpose of marketing aonla fruits, which are in great demand in
local, Indian markets for making ayurvedic53
tonics and pickles.
53 Relating to Ayurveda, the Indian System of Medicine
122
Many SHGs are also supported by NGOs. The Peermade Development Society in
Kerala State, for example is a local NGO involved in improving the economic situation of the
local farmers and SHGs through technical, marketing and other support. The Society exports
several products (particularly organic products), thus helping the economic progress of the
local farmers and SHGs.
The Peermade Development Society undertakes some 24 different production
activities including cultivation, collection and processing of several NWFPs (e.g. production
of edible and non-edible oils, fruit processing and preservation, apiculture, rattan and
bamboo works, manufacturing herbal tea, collection and processing of medicinal plants).
The members are paid for the work or produces. A portion of the profit is distributed by way
of dividends or bonuses.
Commodity Boards
A number of specific commodity boards have been established in India (for coffee,
tea, rubber, spices, silk and recently for medicinal herbs), as autonomous bodies, under the
auspices of the respective Ministries of the National Government, to provide support to the
growers of the specific commodities.
The Spices Board of India, which is under the Ministry of Commerce supports Indian
spices industry by providing services such as marketing information, technology, product
development and policy advice. The National Medicinal Plants Board (Herbal Board) has
funded some 800 medicinal plants project, for enhancing the resource of medicinal plants in
the country.
Forest Development Corporations
These are state-owned enterprises. Pursuant on recommendations of the National
Commission on Agriculture (NCA), in 1976, Forest Development Corporations (FDCs) were
formed in almost all states of India as public, autonomous, semi-independent entities. The
responsibility of the development corporations was to convert existing miscellaneous forests
of low economic value into high value forests to help meet the wood requirements of the
forest industries and local people. However, following the National Forest Policy of 1988,
the work of FDCs have been shifted to carry out rehabilitation of wastelands, as clear-felling
of low value natural forests was no longer permissible. Run by State Forest Department
(SFD) staff and a Board of Directors consisting of government officials, FDCs rarely
benefited from a corporate management system. Being run by officers of SFDs on
deputation, FDCs follow systems and rules of the SFDs. The autonomy and financial
freedom granted did not make any difference for almost all FDCs. They were unable to
function like commercial institutions. In addition, most FDC funds are from government
sources, despite the original intention to rely on institutional finance. This was because
interest rates for institutional loans are too high for raising forest plantations in degraded
areas, since they are slow growing and of low productivity.
Some FDCs have taken up a wide array of diverse and dissimilar activities to improve
their return on investment, including control over marketing of NWFPs. Some states have
also established separate Government–owned corporate bodies for development of
pulpwood, NWFPs and wood processing industries (e.g. Kerala Bamboo Corporation, Bihar
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Lac Board). With very few exceptions, these public sector entrepreneurial efforts have been
failures, resulting in great loss of funds and other resources. These failures are in part due to
inefficient management. Unlike private business enterprises these public sector
entrepreneurial efforts have not been able to attain efficiency in the use of capital, labour and
raw materials because of, amongst other things, over-employment, fixed-cost labour, low
product prices fixed by Government and employee fringe benefits unrelated to productivity.
There are a number of comparatively large private companies manufacturing products
utilizing non-wood forest produces (e.g. those producing pulp utilizing bamboo, reeds and
grass; those utilizing herbs and plant materials to produce medicines), which obtain their raw
material from open markets, from private contractors or as government allotments (a form of
quota) from the State Forests. In the Orissa state, the state government has granted
monopoly rights for collection of 29 NWFPs to a private company54
.
Public-Private Partnerships
There are hardly and joint (public-private) sector companies in the strict sense,
involved in forestry in India, where investments are shared. There are few cases where
Government or quasi-Governmental institutions have established factories to utilize raw
materials grown/produced by people, farmers and farmer/labour corporatives.
In the southern state of Kerala in India, co-operatives of rubber farmers (small
holders) supply rubber latex and rubber wood to a quasi government company „RUBCO‟
which specializes in making rubber mattresses and rubber-wood furniture. Benefits of the
value addition is shared with the farmers. Similarly, raw material for production of bamboo-
mat-plywood and indigenous medicines are mostly supplied by farmers.
The main public-private partnership in India is in Joint Forest Management (JFM).
JFM is a forest management strategy by which the Government (represented by the State
Forest Department) and a village community enter into an agreement to jointly protect and
manage forest land adjoining villagers and to share responsibilities and benefits. Under JFM,
participatory forest management on a usufruct-sharing basis occurs by enlisting people‟s
involvement in the development of fuelwood, fodder, small timber and NWFPs. Various
institutional structures such as village forest protection/management/development
committees are constituted for protection and rehabilitation of degraded forests. Generally,
all village households are members of the committees. Exact constitution of the committees
and nature of duties, privilege, rights and benefits differ from State to State. There are some
63,000 JFM committees in 27 states, engaged in protection/management of forests in return
for certain usufructs (NWFPs).
The Government of India Circular of June 1990, which, in way, formalizes and
endorses the JFM, has highlighted the need and specified the process for involving village
communities and voluntary agencies in the protection and development of degraded forests.
To ensure community participation state governments have been advised to enlist the
communication and extension expertise of local NGOs to serve as interfaces between the
SFD and communities. The guidelines also describe the benefit sharing arrangement, which
54 In India, most States have interfered with the free market economy of NWFPs.
124
is intended to enable village communities to develop a stake in the protection and
development of the degraded forests.
Increasing coverage of forests under JFM is likely to open up new vistas for co-
operative management; and harvesting of higher and concentrated yield of NTFPs would
offer opportunities for forest based processing. But this would depend on further
improvement and refinement of the system and availability of credit/investment funds,
extension and other facilities.
Many issues relating to JFM are still not clear and these need to be addressed fairly
and comprehensively.
Company – Farmer Partnerships55
The National Forest Policy of India has directed that, as far as possible, forest
industries should meet their raw material requirements from plantations grown in
collaboration with farmers and local community. To improve the raw material situation and
to ensure sustained supply, a number of companies (particularly pulp and paper companies)
took up initiatives and tried out various approaches to form partnerships with farmers.
An interesting example is the out grower farms of clonal pulpwood trees sponsored
by the ITCs Paperboard and Specially Paper Division (ITC-PSPD)56
, in Bhadrachalam,
Andhra Pradesh, India. When the raw material supply from government forests was
suddenly discontinued, following a policy change, the company was compelled to find
alternative sources. After trying out different arrangements such as spot purchase of
pulpwood from available sources (which were not sustainable), free distribution of seedlings
to farmers to encourage tree planting, and organizing bank loans to farmers for initiating
pulpwood plantations, with none of them producing desirable results, the company had to
find other alternatives attractive to the farmers. Accordingly, ITC-PSPD focused efforts on
research to develop better clones of pulpwood species (Eucalyptus), and on commercial sale
of high yielding clonal seedlings to the farmers (with a guarantee to buy back the pulpwood),
as an incentive to induce land use change in favour of agro-forestry.
The research and development programme of the company started in 1989. Based on
performance of individual clones in the field trials, promising, fast growing and disease-
resistant clones of Eucalyptus tereticornis and E.camaldulensis were identified. 37 of them
are categorized as most important commercial clones based on their productivity, disease
55 One of the earliest cases of company–farmer partnership was initiated around the late 1960s and early 1970s
in the Philippines, as the “small holder tree farms” for supplying pulpwood to Paper Industries Corporation of
the Philippines (PICOP). This has faced problems recently due to disputes between company management
and the government on a number of issues.
56 ITC (Indian Tobacco company) is one of India's largest private sector companies. It is a multi-business
corporation with business segments covering fast moving consumer goods, hotels, agri-business, information
technology and paperboards, specialty papers and packaging. ITC Paperboard and Specially Paper Division (ITC-PSPD) operates an integrated pulp and paper mill located at Sarapaka, near Bhadrachalam, in the
Khammam district of Andhra Pradesh state. The mill, established in 1979, currently has an installed capacity
of 65,000 metric tons of pulp and 182,500 metric tons of paper and paperboards per year. Present requirement
of cellulose raw material of ITC-PSPD is about 400,000 tpa, which will gorw to 800,000 tpa, with increase in
its production capacity and product range.
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resistance capability and adaptability to problematic sites. Clonal planting stock of the most
promising "Bhadrachalam clones" were released to farmers form 1992 onwards. Field tested,
proven, superior genotypes are multiplied for planting through vegetative propagation under
controlled environment in green houses.
The company is currently supplying 11 different Eucalyptus clones (called
Bhadrrachalam clones) on a commercial basis to farmers and offers a buy-back guarantee of
pulpwood at an agreed price. Upto 1999-2000, the company had sold over 7.2 million clonal
seedlings of Eucalyptus. The company is in the process of implementing a core area
development programme, to intensively promote tree farms in areas falling within a radius of
150 km surrounding the mill, offering additional incentives to farmers. This will help to
reduce the cost of transportation of the bulky raw material.
At the end of 2002, the number of farmers participating, in the clonal tree planting
programme of ITC-PSPD following agro-forestry practices was 6,372, covering an area of
10,200 ha; and the number is steadily increasing. Currently, about 40% of the pulpwood
requirement of the company is being met from clonal agro-forest farms. The company
expects that its entire pulpwood requirement can be supplied by the clonal agro-forestry
farms by 2007, assuming an area of 35,000 ha under clonal trees in the core pulpwood supply
area.
The clonal trees are disease resistant and self-prunning, with large clear bole.
Survival rate is as high as 95%. Experience has shown that the mean annual increment
(MAI) of clonal plantations of Eucalyptus spp range between 20 and 58 cum per ha per year;
and the farmers are able to earn a considerably high net profit. Since the tree farms are raised
under a system of agro-forestry, additional income is earned from the harvest of the
agricultural crop such as turmeric, chilli, cut flowers, vegetables, fruits and NWFPs.
The salient aspect of this case, thus, are: the increasing reliance of the company on
private agro-forest farmers with whom it enters into a bipartite agreement (purchase
contract); the company selling the requisite quantity of clonal seedlings and providing free
technical extension service to the farmers; and farmers on their part selling the wood
exclusively to the company at the prevailing market price.
Other Cases
WIMCO, a safely match manufacturing company in India, has entered into
contractual arrangements with farmers and farmers' associations for supplying poplar wood.
Fenny, a beverage made out of cashew apples (which requires removal of astringency) are
manufactured, in Goa, India based on supplies obtained from cashew farmers. A number of
medicine manufacturing companies in India are having similar commercial arrangements
with farmers for supplying medicinal plants on a regular basis. Cases of similar
collaboration between the processing companies and farmers who provide raw material (out-
growers) are also found in other countries, e.g. South Africa and Philippines.
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Public Limited Company
Gram Mooligai57
company is a public limited company run by people, with support of
an NGO, the Foundation for Revitalization of Local Health Traditions (FRLHT). The
company shareholders are NWFP cultivators and collectors, SHGs, farmer groups etc. 70%
of the company shares are owned by people, 10% by NGOs and 20% by other investors.
e-Choupal Initiative
e-choupal is a private initiative of Indian Tobacco Company (ITC), one of the large
multi-business corporations of India. Choupals, a meeting place in rural India, were targeted
by ITC as the point of entry into the rural households for dealing in farm and rural
production.
In a scenario where rural India is severely hampered by the absence of effective “last
mile” connectivity, there is very little engagement with organized business, thereby
excluding the rural population from effectively participating in the benefits of economic
growth. It would take the perseverance of a pioneer to engage in building capacity at the
grassroots as a means for securing sustainable growth. ITC made such a strategic choice
even though it meant a prolonged period of investment with an equally long gestation. ITC
leveraged the power of the internet to empower the small and marginal farmer with a host of
services related to know how, best practices, timely and relevant weather information,
transparent discovery of prices and much more. Such customized knowledge is intended to
progressively raise farm productivity and incomes by linking the Indian farmer with markets,
both domestic and international. The ITC e-Choupal also acts as an alternative-making
channel, creating enhanced competition among buyers, to the benefit of the farmers.
The strategy of e-Choupal initiative is: go to the smallest farmer; educate him in the
best farming technology; inform him of the daily weather conditions, and price movements in
the market; make available to him the best seeds, pesticides and fertilizers at the most
competitive prices; and, when the crop is ready help him find the best buyer – all of this by
effectively using "Information Technology". To guide and assist in this process, one of the
educated persons among the villagers will be selected as the representative (Sanchalak or
Pratinidhi) and there will be a co-ordinator (Samyojak) for a group of villages. While this
initiative is still on a pilot scale, it appears to have the potential to transform the villages and
village activities, including agro-forestry.
Despite implementation challenges, this initiative now comprises about 5,200
installations covering nearly 31,000 villages and serving over 3 million farmers.
Others individual efforts
In addition, there are other private, individual (often, un co-ordinated) efforts, some
of which do survive beyond all expectations because they help to fill in a need or are
innovative. An example is the leaf plates made in India out of the leaves of a number of tree
species. These cheap throwaway plates are in demand for serving food in street restaurants,
rail and bus stations, schools etc.
57 Gram Mooligai in Kannada language means village medicine.
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Indonesia
Indonesia is one of the few countries with a sizeable endowment of forest resources,
with an area of 105 million ha under forest cover (representing 58% of the land area), of
which close to 10 million ha are plantations. The forests are entirely owned by the State.
Indonesia's rich forests contain the world's greatest biodiversity. Forest resource use
provides a livelihood to about 6 million families, and forest related employment accounts for
5.4 percent of the total work force. Indonesia is now a major world producer and exporter of
forest products.
In achieving an output worth about US $ 20 million annually, through timber
production and processing, within a short period, Indonesia had to incur disproportionately
heavy environmental and social cost. This imbalance in costs and benefits is manifested in
the form of critical constraints threatening the sustainability of forestry.
Indonesia's forest resources have suffered serious depletion in the recent years. Its
net annual forest cover loss during the 1990s was 1.3 million ha, accounting for an annual
deforestation rate of 1.2%. The remaining natural forests suffer serious degradation due to a
multitude of factors such as excessive logging, illegal activities, forest fires etc. Between
1990 and 2000 stock of woody biomass drastically fell from 203 t/ha to 136t/ha and wood
volume from 179 cum/ha to 79 cum/ha. WRI (1999) estimates that by the turn of the
century, Indonesia has lost 72% of its original forest cover and 54% of the remaining forests
are threatened.
As a major exporter of wood products (sawn timber, plywood, other panels,
furniture), emphasis of forest management in Indonesia is on timber production, through long
terms forest concessions to the private sector.
Policy Guidelines
The Basic Forestry Law of Indonesia (BFL of 1999 which replaced the BFL of 1967)
is the primary source of authority and guidance for all forest regulations and forest
administration. It deals with definitions, planning, administration, management, production,
concession agreements, conservation and security of forests, and timber estates. BFL
provides the basic legal framework and supporting regulations for all important activities –
e.g. harvesting and managing of production forests.
The concession system as is now practiced in the natural forests of Indonesia was
introduced around 1970. The system was intended to make concessionaires primarily
responsible for the proper utilization and management of natural production forests on a
sustainable basis. A recent count indicated that there are some 644 concessions (of various
categories) relevant to forestry (408 logging concessions; 176 industrial timber estate
concessions; 24 reptile (crocodile) trading concessions; 18 coral concessions; 10 NWFP
concessions and 8 recreation concessions).
Indonesia has established a system of timber certification, through Lembaga
Ecolabel Indonesia (LEI) or Indonesian Ecolabel Institute. Established in 1993, LEI has
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developed C&I for the auditing of forest management in logging concessions, and
ecolabelling of products from these concessions.
Important Non-Wood Forest Products
There is a wide range of NWFPs produced in Indonesia – rattan, bamboo, Nipa
fronds, sago (Metoxylon sagu) starch, tengkawang nuts (Shorea spp.), dammar and copal,
gums, resins, tannins, kayuputih (Melaleuca leucocephala) oil, sandal wood oil, medicinal
plants, honey, raw silk and so on.
Rattan is the most commercially (and economically) important NWFP in Indonesia.
It is estimated that 80% of the world‟s rattan potential is owned by Indonesia, with some 600
species (of genera Calamus, Daemonorops, Korthalsia); but only a limited number of
species are known to have been commercially utilized. The major commercial species are
Calamus manau (manau), C.caesius (Sega), C.trachycoleus (irit), C.irops (tohiti), and
C.scipionum (semambu). Before the 1988 ban on exports of unprocessed rattan, Indonesia
supplied 80 to 90% of world demand for raw rattan. Now rattan is being cultivated as a crop
by communities living near forest areas. Rattan is also being raised in industrial plantations,
under government programmes.
Bamboos are another group of economically important species. They fall under some
11 genera (Bambusa, Dendrocalamus, Gigantochloa, Schizostachyum, etc). Totally there are
some 35 species. Several products, ranging from bamboo shoots for food to lawn furniture,
are derived from bamboo.
The exeudates (dammer, copal, pine resin and other resins) are obtained from a
variety of plant species (e.g. Dipterocarpus spp. Agathis spp., Pinus merkusii, Balanocarpus
spp., Hopea spp., Shorea spp.). Pine resin is particularly important; rosin and turpentine
having diverse industrial uses are derived from it.
There are about 14 species of sago producing Metoxylon. Some of them are widely
cultivated by farmers. Sago has a ready market as food and also has industrial uses.
Thengkawang nuts of species Shorea stenoptera, S.pinanga, and S.gysbertsiana used
to be in great demand for chocolate manufacture; this demand has considerably fallen in
recent years. As oil bearing seeds, tengkawang continues to be in reasonable demand.
NWFPs in Indonesia have received very little attention so far. They have
considerable economic potential; but their management need to be organized in a scientific
manner, and market for NWFPs needs to be actively promoted.
In respect of processing of rattan, there has been progress, since processed rattan has
a sizeable export market. The Government of Indonesia has also established a center for
training workers of rattan and bamboo based industries.
Indonesia regulates the harvesting and collection of rattan through the issue of
licences. But the regulations are not adequately enforced nor compliance monitored. In the
absence of a proper inventory of rattan resources, there is no understanding about the
sustainable allowable harvest. Over-harvest and harvest wastages are common.
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In respect of non-wood forest products other than rattan, the possibilities of
enhancing employment in growing, gathering and local processing appears to be
considerable. But the laws and regulations pertaining to the right for collection and use of
NWFPs are unclear. Part of the ambiguity arises due to the tendancy to use the generic term
of "forest products" and not to separate the components (as logs, rattan, bamboo, gums,
resins etc) or the end-use of the produce collected (e.g. direct consumption, processing,
export etc.)
The community rights to collect forest produces from forests are officially
acknowledged, but it is known to be mis-used by unscrupulous elements. The issue of
traditional rights to collect NTFPs needs to be clarified and resolved.
There are no adequate/realistic estimation of the overall economic contributions of
NWFPs in Indonesia. A guessitimate is that is accounts for about a quarter of the total
contribution of the forestry sector.
Institutional Models
The main types of institutional arrangements for NWFP, management found in
Indonesia are:
NWFP concessions (HPH – Forest Products Collection Rights).
State Owned Enterprise (Perum Perhutani) involving local communities on a regular
basis for raw material supply.
"Nuclear" approach where a "nodal" rattan processing unit from private sector takes
care of 100 or more small rattan processing units.
Private companies manufacturing traditional medicines collaborating with farmers for
raw material procurement based on contract-like agreements.
NWFP Concessions
NWFP concessions are awarded under Hak Pemungutan Hasil Hutan (HPHH) –
concession rights (exploitation licence) for collection of forest produces. This arrangement is
common for all forest produces, both wood and non-wood. The companies holding
concession rights for NWFP collection only carryout the harvest/collection, and no scientific
management operations are conducted. Even the harvesting regulations are vague, leading to
considerable wastages.
NWFP Activities of Perum Perhutani
The NWFP activities of Perum Perhutani, an autonomous state-owned forestry
enterprise, is part of its "prosperity approach". Some of the NWFP activites of Perum
Perhutani are the following:
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Production of Kayuputih Oil
Kayuputih oil is extracted from the leaves of Melaleuca leucadendrom (cayuput), for
use as a local medicine. Perum Perhutani has established 12 distillation plants on Java for oil
extraction from its 9,000 ha of Melaleuca plantations. The distillation plants have a total
intake capacity of 32,000 tonnes of cayuput leaf per year. Perum Perhutani collects part of
the leaf input from its own Melaleuca plantations and the rest are supplied by farmers.
Perum Perhutani works with farmers and encourages them to grow Melaleuca trees
through agro-forsetry. Farmers receive credit (loan) for seed purchases, subsidized fertilizer
inputs, contract wage for their labour, and livestock for additional income. Perum Perhutani
contracts the farmers to manage the trees in company plantations for three years, renewable
year by year, during which period they can grow annual crops between the trees. The
farmers are also entitled to the usufructs from fruit trees grown interspersed and along the
boundaries of forest plantations. Fruit trees include Mangifera (mango), guava, and annona.
These are marktted locally.
For leaf harvests, Perum Perhutani has entered into contracts with over 300 farmers.
Melaleuca is coppiced at a height of 110 cm when it is about four years old; the leaves are
stripped from branches of over 1 cm in diameter, and bagged for transport to the distillation
plant, for which farmers are paid the amount agreed.
Silk Production
Perum Perhutani started its sericulture programme in 1974. It now manages seven
mulberry plantations. Species grown in plantations are Morus alba, M.multicaulis and
M.cathayana. Sericulture activities involve raising of plantations, rearing of silk worms in
“rearing houses” and producing cocoons, reeling and raw silk production. As in the case of
its kayuputih oil production, Perum Perhutani involves local farmers in raising mulberry
plantations, and in silworm rearing.
Bee-keeping
The National Bee-keeping Center of Perum Perhutani in Bogor has 3 bee-keeping
units. Activities focus on beekeeper training, honeybee culture, and bee forage. The plants
grown for honey pollen are Ceiba pentandra (kapok) and Calliandra callothyrsis
(calliandra).
Perum Perhutani has been providing loans for co-operative bee-keeping ventures for
more than 20 years. Loans are relatively small, but has helped the farmers to be free from
middlemen.
Production of Gum Rosin and Turpentine
Perum perhutani produces gum rosin and turpetine from Pinus merkusii and Agathis
lauranthifolia.
The KPH Kedu Selatan plantations of Perum Perhutani has 125,000 ha of pines and
44,700 ha of Agathis; these plantations provide resin to the nearby distillation facility, to
produce gum rosin and turpentine.
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About 8,000 local residents are involved in resin tapping, and 6,000 farmers are
engaged in “taungya” farming in replanted areas, extending over an area of about 6,800 ha.
Pine and Agathis trees are managed for multiple uses – i.e. providing timber and resin.
Tapping begins when the trees (pine or Agathis) reach 11 years of age, or a minimum
diameter of 15 cm. Tappers work ten days per month, supplementing their farm income.
Various tapping methods have been tried, including the “rill” method and the Chinese
“falling” method. Of these, the rill method appears better. For timber, Agathis trees are
harvested at the age of 40 years, and pine trees at the age of 25.
Both the turpentine and gum rosin are forwarded to the Perum Perhutani office in
Semarang for storage and marketing. Ninety percent of the turpentine is exported. Seventy
percent of the gum rosin is also exported, mostly to Japan, South Korea, India, Taiwan,
Thailand, and several European countries. The other 30 percent of the gum rosin is sold to
end-user industries in Indonesia for use in paper sizing, cosmetics, paints, emulsifier for
synthetic rubber and varnishes.
Nucleus Rattan Furniture Factory
Following the ban of unprocessed rattan export in 1988, Indonesia‟s rattan furniture
industry has grown. Product marketing and quality control were problems experienced by
the infant industry. To overcome these problems the government supported the “nucleus”
approach, whereby a “nodal” unit took care of 100 or more small units which could be either
households or group of households. One such case is mentioned below:
PT Wirasindo Santakarya, a private company in Java was established in 1991 as one
such nucleus or node for production and export of rattan furniture. The company obtains
export-purchase orders, commissions village groups to fill the orders, and supplies them at
least 50 percent of the raw materials, which come mostly from the islands of Sulawesi and
Kalimantan. The company also supervises product quality control, and arranges export
through trade associations in Jakarta, and also directly to destinations based on arrangements
with foreign agents. Products are shipped FOB. Payment to the workers is based on
numbers of units produced and their complexity/quality.
Manufacture of Traditional Medicines
Manufacture of traditional medicines has been growing in Indonesia over the past 30
years, with the number of companies increasing from 176 in 1976 to over 400 by the end of
1990s. The industry cites an annual income of US$400 million, mostly from domestic sales.
Exports amount to US$15 million. The companies market more than 100 products, in the
groups of traditional medicine, phytopharmica, food and beverages, and cosmetics. Exports
of products go to Taiwan, Singapore, Malaysia, and Saudi Arabia. Occasional shipments
also go to Europe.
The main product of traditional medicine, called jamu, come from the roots, tubers,
stems, bark, leaves, flowers and fruits of more than 120 species, such as Pluchea indica
(bluntas), Tinospora crispa (brotowali), Graptophyllum pictum (daun wungu), Zingiber
officinale (jahe), and Nigella sativa (jintan).
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The company‟s supply of raw material comes from farmer‟s fields and gardens, and
from collections of wild plants from the forest, in roughly equal parts. Cultivation includes
both monocropping and intercropping systems. Farmers growing medicinal plants for the
company receive a fixed price for their crop. The price is set, with a contract-like agreement,
when the farmers start planting to supply materials to a company.
Several of the companies maintain small gardens for research purposes where
important and endangered species are also grown.
Republic of Korea
An often-cited, successful example of the organization of forest co-operatives is the
Village Forestry Association System of the Republic of Korea. It is a system with a
comprehensive programme for the improvement of community life that includes several
aspects of forestry – timber and fuelwood production, reforestation, forest protection,
NWFPs, processing and marketing. The reforestation carried out by Village Forestry
Associations (VFAs) in the republic of Korea represents one of the most successful examples
of collective action by groups of forest product users working with the support of the State.
During the 1970s and early 1980s, about 643,000 ha of denuded land was replanted under the
programme. The programme is also notable for the range and extent of prior planning and
preparation that accompanied it, and because it dealt with private rather than public land.
The village forestry programme was initiated by the government in response to
growing shortages of fuelwood, and mounting problems of erosion, flooding and downstream
damage to agriculture, as hillsides were stripped bare in the past by harvesting for fuel and
timber.
Village Forestry Associations under Saemaul Undung
A considerable share of Korea's forest-related activities are accounted for by agro-
forests. Over 70% of the country's forests are privately owned. While large forest estates are
managed as independent private enterprises, the small ones are managed as part of the system
of Village Forestry Associations.
The case of forestry development in Korea is one of village level co-operation in
achieving community goals with regard to forestry, under Saemaul Undung (the new
community movement started in 1970). In 1973, Korea embarked on an ambitious
programme of National Forestry Development, which has carried out by the system of
Village Forestry Associations. The System, which covers the whole country, consists of a
hierarchy of forestry associations. They are: Village Forestry Association (VFA) at the
lowest level, Forestry Association Union at the Gun or county level and National Federation
of Forestry Association Unions at the National level, having provincial branches and some
functional departments. There were over 21,000 Village Forestry Associations. The system
has been acclaimed as a unique success in participatory forest management. The
government initiative to encourage and support the system was built upon a tradition of
forestry cooperatives. The rationale for establishing this co-operative network was that a non-
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governmental organization would be more effective than a government agency in mobilizing
villagers to cooperate. The Office of Forestry, which was relocated to the Ministry of Home
Affairs to give it access to local government resources and powers, provided technical back-
stopping and funding. New legislation and regulations required that forestry should be the
main land use on lands with a slope of more than 36 degrees, and empowered the Office of
Forestry to require landowners unable to reforest lands falling under this law to make that
land available to VFAs to reforest on a cost-sharing basis.
Heads of all households in a village were members of the VFA. VFA activities
benefited from subsidized credit, but members had to contribute their labour (with benefits
being allocated proportionately). The technical packages introduced were strongly oriented
towards short-term results and income generation, with planting of fruit and timber species as
well as fuelwood, and an array of commercial activities (e.g. contracting nursery activities to
village groups, employment in government‟s watershed protection works, and production and
marketing of mushrooms and other non-wood products). A significant feature of the
programme was its holistic nature.
Some of the factors which stand out as significant to the success of the system are:
land availability (ownership and access to land); flexible organizations; broad-based and
rational approach; blending top-down and bottom-up planning and administration; emphasis
on short-term income increase and other incentives; adequate stress on the importance of
research and appropriate technology; government/leadership commitment and strong
logistical support; assured financial resources and access to it at the rural level; strong laws
and their enforcement; peer group pressure to prevent malpractices; and tradition of village
co-operation.
Further strengthening of the system took place in the 1980s, by converting the Village
Forestry Associations (which are made up of forest owners and villages, organized by the
Government) into self-propelling co-operatives of homogenous membership. It was
suggested that such a change improves efficiency through systematically improved use of
forests, establishment of forest labour units, enlargement of forest fund and a stronger forest
sector driven by private/peoples initiatives (Yoo, 1991).
Forestry development in the Republic of Korea went through phases of: start-up, self-
help, independent competition, firm establishment. It took from 1973 to 1986, through trials
and constant improvement to have the path clear and ready. The core of all Saemaul Undung
movement, from an ideological plane are: diligence, self-help and virtue of co-operation – a
spirit which was instilled “in the minds and bodies”, as an essential element of kyes or mutual
help associations.
Malaysia
With the forests covering about 59% of its land area, forestry in Malaysia is an
important economic sector. In the process of development, however, land transfers and land
use changes continue to take place. Malaysia's net annual forest loss during the 1990s was
237,000 ha, representing an annual deforestation rate of 1.2%. The remaining natural forest
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still carry a reasonable growing stock, even though there has been some qualitative
degradation. The forestry growing stock, which stood at 214 cum/ha in 1990 fell to 119
cum/ha in 2000. The corresponding fall in the stock of above ground biomass was from 261
t/ha in 1990 to 205 t/ha in 2000 (FAO 2001).
Policy Aspects
Under the Federal Constitution of Malaysia, land is defined as a State matter. Each
State is empowered to enact laws on forestry and to formulate forest policy, independently.
The executive authority of the Federal Government only extends to the provision of advice
and technical assistance to the States, the maintenance of experimental and demonstration
stations, training and the conduct of research. The National Forestry Council (NFC)
established in 1971 serves as a forum for the Federal and State Governments to discuss and
resolve common problems and issues relating to forestry policy, administration and
management. The National Forestry Policy (NFP) of Malaysia was approved by the NFC in
1978, and endorsed by the National Government. The NFP was revised in 1992 to take
cognizance of current global concern for the conservation of biological diversity, sustainable
utilisation of genetic resources and participation of local communities in forestry. The NFP
has committed: to dedicate, as permanent forest, sufficient extent of land strategically located
throughout the country in accordance with the concept of rational land use; to manage the
permanent forests in accordance with the principles of sound forest management; and to
promote efficient harvesting and utilization of forest products and development of forest
industries.
Malaysia has the reputation as one of the few countries where sustainable forest
management is strictly practiced. The national forestry and supporting laws, rules and
regulations are conducive in that regard.
The issues of timber certification and SFM practices are constant concerns. Forest
management in Malaysia has become mutli-faceted in nature, which gives consideration for
its environmental roles including conservation of biological diversity, protection of
endangered species, carbon sequestration and simultaneous production of several socially
desirable outputs, encompassing water, NWFPs and recreational and protection benefits.
Since 1994, Malaysia has made considerable efforts in formulating the Malaysian
Criteria and Indicators for Sustainable Forest Management (MC&l). The National
Committee on C & I has formulated a total of 92 activities to operationalise its 5 Criteria and
27 Indicators at the National level, covering forest resource base, continuity of flow of forest
products, level of environmental control, socio-economic effects and institutional framework.
At the FMU level, which is defined as an individual State, the National Committee has
formulated a total of 84 activities to operationalise the 6 Criteria and 23 Indicators. It also
feeds into the activities of the Malaysian Timber Certification Council.
Overall, Malaysia‟s forest resources are reasonably well managed. Malaysia
continues its focus unabated on several important aspects of SFM such as: demarcation of
Permanent Forest Estate (PFE), detailed inventory and bio-prospecting for planning multiple
(total) use forestry, balancing of resource management and utilization, providing clarity in
institutional roles and responsibilities, resolving conflicts among stakeholders, a clear policy
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and strategy regarding plantation forests, and research support for policy development and
refinement.
Important Non-wood Forest Products
Malaysia has given adequate priority to the development of NWFPs and forest-based
recreation. The important NWFPs of Malaysia includes rattan, bamboo, medicinal and
aromatic plants, gums and resins, birds nest, orchids, fronds of Nypa fruticans, ferns (like
Agrostichum aureum) and so on. Rattan furniture is an important item of export.
Like in other economic sectors, utilization of NWFPs in Malaysia is a private sector
enterprise, performing under government rules and regulations, which are strictly enforced to
ensure the integrity of the resource.
However, considering the comparatively low population, and high level of economic
prosperity, Malaysia‟s emphasis for NWFPs of natural origin is on biodiversity conservation
than on reaping economic benefits.
Nepal
Forests of Nepal cover an area of 3.9 million ha (representing 27.3% of the land area),
of which only 133,000 ha are plantation forests. Growing stock in terms of wood volume is
100 cum/ha; biomass volume is 109 t/ha.
Some Policy Aspects
The national forest of Nepal are categorized as government managed forests,
protected forests, community forests, leased forests and religious forests. Of these
categories, community forests are of particular relevance in relation to NWFPs.
Community forests are those parts of the national forests that are managed by the
community themselves, through forest user groups. All accessible forests are handed over
to users to the extent they are able and willing to manage. It is the responsibility of the forest
user groups to protect, manage and utilize these forests. Measures were taken in this regard
by the Government in the form of Forest Act, 1993 and Forest Regulations 1995, for
empowering the local communities.
Important Non-Wood Forest Products
The significant NWFPs in Nepal can be categorized into: medicinal and aromatic
plants; lokta and sabai grass for paper making; pine for resin; bamboo for construction and
other uses; rattan for furniture; katha as spice, colouring and tanning material. Some of the
important NWFPs of Nepal are: Swertia chiraita, Picrorhiza scrophulariflora, Nardostachys
grandiflora, Aconitum spicatum, Cordyceps sinensis, Dactylorhiza hatagirea, Zanthoxylum
armatum, Rubia manjith, Dioscoria deltoids and Rauwolfia serpentina.
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The majority of NWFP's fall into two contrasting groups: high value products from
high altitudes, and low value products from lower altitudes. Roots of Picrorhiza
scrophulariflora, the entire plant of Swertia chiraita, the rhizomes of Nardostachys
grandiflora and Aconitum spicatum fall under the high value group of products whereas the
bark and leaves of Cinnamomum tamala, fruits of Sapindus mukorossi, roots of Asparagus
racemosus and the bark, fruit and seeds of Zanthoxylum armatum fall under the low value
products.
NWFP's, in general, are collected from the forestland; hence the forestry and land
rights legislation and policies of the Government have a direct bearing upon this activity. As
all the forest products from the Government managed forests are the property of the
Government, the collections and trade of all NWPF's are subject to procedures laid down by
the Forest Act and associated regulations under which permission should be obtained for
collection and commercial use of these products.
The majority of NWFP collection in Nepal occurs in high altitudes and remote
Himalayan regions. The primary collectors are the rural poor and they lack knowledge
regarding the plant‟s habitat, cultivation and harvesting techniques. Ministry of Forests and
Soil Conservation is the government authority to administer the Forest Act. Under the
provision of the Act the ministry imposes restrictions on NWFPs for export collection and
transportation. Even though the Government has restricted the export of some NWFP's
without processing, substantial amount of these products appear to be illegally exported to
India in raw form.
The following three species have been totally banned for collection, use, sale and
distribution, movement and export: Dactylorhiza hatagirea (Panch Aule), Juglans regia
(Okhar bokra) and Picrorhiza scrophulariflora (Kutki). On the recommendation of the
Department of Plant Resources or the Herbs Production and Processing Company Limited
and the pre-approval of the Department of Forests, the following nine items can be processed
in the country for export: Nardostachys grandiflora (Jatamasi); Rauwolfia serpentina
(Sarpagandha); Cinnamomum glausescens (Sugandhakokila); Valeriana Wallichii
(Sugandhawala); Parmelia spp. (Jhyau); Abies spectabilis (Talis patra); Taxus baccara
(Lauth salla); Rock exudate (Silajeet); Cordyceps sinensis (Yarsha gumba); (other than that,
their use is banned).
The cutting, movement and export of the following tree species for commercial
purposes have also been banned: Michdia champaca. Micheiia kisopa. Acacia catechu,
Shorea robusta, Bombax ceiba. Pterocarpus marsupium. Dalbergia latifolia, and Juglans
regia.
The development of NWFP is one of the priority programmes of the Government. A
special program of promoting NWFPs in 25 hill districts of the country, to alleviate the rural
poverty, has recently been introduced.
There is a potential for processing some of the NWFP within the country but the
amount of processed NWFPs is insignificant in comparison to the total raw NWFPs exported
from Nepal. The bulk of the "value added" actually occurs in the major Indian cities.
Existing information is extremely scanty regarding: the status of the resource base,
the probable impact of harvesting/collection practices, and area-specific sustainable
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harvesting. This information is extremely important for charting a strategy for the
development of NWFPs.
Most forestry oriented national NGOs and international NGOs are being involved in
the development of NWFPs in the country. Research on medicinal and aromatic plants in the
country has so far been focused on use, amount marketed, marketing chains and market
mechanisms. Some recent works concentrate on inventories and estimates of growth rates
and rotational harvesting.
One of the viable options for sustainable harvesting and management of these
resources should be through promoting participatory approaches. There are many ways of
doing this through co-operatives, collectors' societies, share-holding companies and forming
a net working system of collection and marketing (Amatya and Shrestha, 2002)
The Herbs Production and Processing Company
The Herbs Production and Processing Co. had its origin as an activity of the
Department of Medicinal Plants (now known as Department of Plant Resources). Later, the
Herb Production and Processing Co. was created as an autonomous entity, in 1981, to take
over the commercial activities related to manufacturing of medicines, including cultivation,
training, extension and development.
At present, primary production (of essential oils, medicinal extracts) is carried out
based on some 10 plant species which are cultivated by farmers (about 95 percent), and
others collected in the wild (only about 5 percent). The Company is capable of exporting
products like lichen resinoid (from the tree moss Parmelia tinctorum), Sugandha kokila oil
(from berries of Cinnamomum cecidodaphne), tagetes oil (from the overground flowering
parts of Tagetes glandulifera), Jatamansi oil (from rhizomes of Nardostachys jatamansi) and
Palmarosa oil (from whole plant of Cymbopogon martinii), as well as some crude drugs to
the neighbouring countries. Most of the production is consumed internally by local
pharmaceutical factories, soap industry, manufacturing units of toothpaste and after-shave
lotions etc.
The company has a factory in Kathmandu valley for processing of medicinal extracts
and high value essential oils. It also has processing and production units in every one of its
farms. These include 4 central processing units utilizing resources form surrounding areas,
and 21 subsidiary collections and processing units. Of these 21 subsidiary units 19 are owned
by the company but managed by farmers on contract and two are entirely owned and
managed by farmers. Some 600 families are involved in the cultivation and processing
business, as satellite units of the company. In addition, there are also few independent
farmers co-operatives engaged in growing and processing of medicinal plants.
Papua New Guinea
Forests of Papua New Guinea (PNG) extents over an area of 30.6 million ha,
representing 67.6% of the country‟s land area. Average annual forest cover loss during
1990-2000 has been 111,300 ha representing an annual deforestation rate of 0.4%. There has
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also been serious qualitative degradation – current (of year 2000) growing stock of wood
being 34 cum/ha and biomass volume 58 t/ha, compared to the respective figures of 168
cum/ha and 191 t/ha in 1990.
Local villages in the rural areas are expanding their shifting cultivation practices to
portions of natural forest, including those subject to „selective logging‟ and those which have
been opened by the construction of new roads and estates development. Also a large area of
natural forest is being damaged in varying degrees by selective logging, mostly through
creaming of prime timber species. This comes about as a result of the absence of consistent
and standard silvicultural techniques for natural forests.
PNG is one of a major exporters of tropical round logs in the region. Out of its total
wood harvest, about 20% is exported in round form; 64% is used as fuelwood and only 16%
goes for any form of processing.
Land ownership in PNG is vested with the customary land owners who comprise a
large share of the rural population; and virtually all forest land is owned by clans or tribal
groups under customary law. The constitutionally-guaranteed customary land ownership is
the key policy domain influencing forest use. 97% of PNG‟s land is customarily held as
communal or clan commons, according to local custom. Traditionally, customary owners
never considered their land as property but as a domain for survival of land-group members,
past, present, and future. All kinds of social, spiritual, ecological, epistemological and
subsistence values are inherent in such land.
Some Policy aspects
Governments of PNG, in the past, followed a policy of using the Nation's natural
resources, of which timber is one of the few that is renewable, to bring development to the
rural sector. For this to happen, however, the Government must first acquire or purchase
timber rights from the customary owners, on the basis of Forest Management Agreements
(FMAs). Under the FMA approach, the PNG Forest Authority secures commitment of
resource owners to follow recommended forest management practices, while simultaneously
offering investors access to the forest for a minimum period of 35 years. Implementation
involves the State issuing a Timber Permit (TP) under which it manages the forest on behalf
of the customary owners for the duration of FMA. Management roles of the State can be
implemented through a developer, including harvest and construction of infrastructure. FMA
also would set out the returns due to the land owner. To date, about 10 million ha of forests
have been acquired for commercial logging through FMA, of which 6.9 million are
considered suitable for sustained yield management. The acquired areas are normally
allocated to foreign developers with financial capabilities.
Prior to the promulgation of the 1991 National Forest Policy and Legislation, timber
rights were acquired by a process referred to as Timber Rights Purchase (TRP). The rights
acquired under this system were only for the harvesting of merchantable timber and did not
transfer to the State or concessionaires the rights to manage the forest. The New Forest
Policy had as its objectives: (i) management and protection of the nation's forest resources as
a renewable natural asset; and (ii) utilisation of the nation's forest resources to achieve
economic growth, employment creation, greater Papua New Guinean participation in
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industry, and increased viable onshore processing. It confirmed the intention to proceed with
the acquisition of forest resources (under FMA), and their long-term management.
The sale of the timber rights (and not the land) by customary owners, in return for a
resource rent based on stumpage value is a normal acquisition undertaking between the State
and the customary owners. This includes a package of social, economic and infrastructure
benefits as well.
Land owner companies: The land owner company (LOC) concept was developed as
part of the 1979 National Forest Policy in order to increase national participation in the
forestry sector. Many of the LOCs have been issued with TPs, to develop their own forest
resources. Whilst the concept is good, the practical reality has been different. Most of the
LOCs have been plagued by mismanagement, corruption, and in-fighting between different
landowner factions. The result has been that most LOCs have become alienated from the
people that they were supposed to represent. LOCs, as licence holders, "contract" foreign
companies to conduct logging. Two basic deficiencies pointed out are:
lack of adequate education and human resource capability of the land-owning
communities;
lack of clear definition and delineation of rights/ownerships over the natural
resources, including land use planning, land survey and land settlement.
PNG Forest Authority: PNG Forest Authority was created in 1992 to replace the
erstwhile system of forest administration. It has been established as a statutory corporation
with regulatory and administrative responsibility for the management of the forestry sector
throughout the country. The Authority consists of a National Forest Board (NFB) and
National Forest Service (NFS). The Board operates through a system of Specialist Advisory
Committees and Provincial Forest Management Committees, and is serviced by the National
Forest Service.
Important Non-wood Forest Products
PNG is rich in non-wood forest resources, both flora and fauna. PNG had established
an export trade in crocodile skins. Butterflies, live birds, eagle wood, sandalwood, rattan,
medicinal herbs and bush meat are important NWFPs supporting local subsistence.
NWFPs are not regarded as a significant source of income or foreign exchange
earnings in PNG. There have been no organized efforts for managing NWFPs, nor do
logging concessionaires take any interest to utilize NWFPs found within their concession
area. There are a number of initiatives now being put into place to survey the NWFP
resources and to document the information generated.
Philippines
Forest area of Philippines is about 5.8 million ha, accounting for 19.4% of land area.
Of the total forest area, about 753,000 ha are plantation forests. Annual deforestation rate of
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Philippines continues to be high at 1.4%. Wood volume of growing stock is 66 cum/ha and
biomass volume 114 t/ha.
Some Policy Aspects
The lynchpin of forest policy in Philippines remains to be the Presidential Decree
(PD) 705 (Revised Forestry Reforms Code) of 1975, as amended by PDs 865, 1559 and
1775, Executive Orders (EOs) 273 and 277 and Republic Act (RA) 7161 (cancellation/non-
renewal of Timber Licence Agreements). The Code is divided into four key chapters on:
organization and jurisdiction; classification and surveys of land; utilization and management
of forests; incentives, offences and penalties.
The policy implementation strategy as propounded in PD 705 are based on:
management of productive forests; reforestation; stabilization of upland communities; and
protection of critical watersheds.
As can be noted, PD 705 was drawn up when the major thrust of Philippines forestry
was towards massive commercial exploitation of the vast state-owned natural forests by large
corporations. Now that the focus has shifted towards people-oriented, small-scale,
community-based forest management, covering man-made forests, NWFPs as well as the
(meager) remaining natural forests, PD 705 has become some what obsolete. The strategies
also have failed for lack of proper application.
The organization in charge of forest administration in Philippines is the Department
of Environment and Natural Resources (DENR), with its functional units at headquarters in
Manila and line agencies at lower levels. In an attempt towards decentralization and better
performance, DENR has already devolved some of its conservation, management, and
protection functions to local government units (LGUs), and reassigned some 1,000 staff
members to capacitate local authorities, duly spelling out the procedures for the LGUs
execution of devolved forest management functions.
There have been several initiatives since 1986 with regard to democratic
decentralization and devolution of authority to LGUs. The Local Government Code (RA
7140 of 1991) has granted LGUs greater fiscal and political autonomy, thereby expanding
their capacity to participate in national development efforts. It has brought to the fore the
critical role of LGUs in the management of forest and watersheds. In general, the Code has
tasked LGUs to adopt measures that will “protect the environment and impose appropriate
penalties for acts which endanger the environment”. More specifically, the code gives
responsibility to the appropriate levels of LGUs for providing basic services and facilities to
their respective constituencies, which include the protection of forest resources, among
others.
Community-Based Forest Management
In tune with the philosophy of decentralization and participatory approaches to
development, a new programme of community based forest management (CBFM)
was adopted as the national strategy for management and sustainable development of
forest resources, pursuant to a 1995 Presidential Executive Order. The CBFM
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integrated and unified all the erstwhile people-oriented forestry activities, namely
integrated social forestry programme, community forestry programme, coastal
environmental programme and recognition of ancestral rights. Unlike the previous
programmes, which granted tenure over denuded and/or degraded forests, CBFM
extends tenure and use rights over well stocked forests as well.
The CBFM is based on community organization and the issuance of tenurial
instruments, which like other instruments for use of public land are for a duration of not
exceeding 25 years, renewable for an additional 25 years.
The CBFM programme implementation goes through four successive stages:
Preparatory stage: This stage covers site selection, survey, mapping, information
gethering.
Formation of people‟s organization (PO): This stage involves organizing the
community; preparing the community resource management framework (CRMF)
covering a period of 25 years; site approval and awarding of CBFM agreement
and forest land management agreement.
Planning stage: Within the CRMF, prepare detailed annual work plan, and
resources utilization plan (which on approval becomes the resource utilization
permit) and obtain environmental compliance certificate (requiring environmental
impact assessment).
Implementation stage: Implement the plan, monitor and evaluate plan
implementation.
DENR and the LGUs are responsible to: identity potential CBFM sites, map the sites,
plan forest land uses with communities, and endorse and issue CBFM agreements; organize
and prepare the communities for CBFM; provide technical assistance and skills/training for
CBFM communities; and monitor progress and environmental impact of CBFM activities.
By administrative fiat, the collaboration between POs and NGOs has been set up for
their natural strengthening and capacity building. Some of the national NGOs involved in
forestry in Philippines, among others, are Tanggol Kalikasan, Philippines Association for
Inter Cultural Development (PAFID), HARIBON and Environmental Science for Social
Change.
POs for CBFM are mostly multipurpose co-operative societies registered with the
Philippine Co-operative Development Authority. Non-cooperative CBFM associations are
required to register with the Securities and Exchange Commission or with the Bureau of
Rural Workers in the Department of Labour and Employment. A CBFM association may
comprise several sitios or even barangays58
and may fall within the boundaries of more than
one province or even regions. This causes problems in administrative co-ordination.
While the CBFM institutions (Councils, Associations) are amenable for a federated
structure, it is not a requirement. Federated structure is voluntary. There is a National
Federation of CBFM associations, which does not yet play any effective role.
58 Equivalent of villages
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Important Non-Wood Forest Products
There are a number of NWFPs, which can support value-added processing, mainly at
the rural level. NWFP based activities in Philippines are mostly at the small scale and cottage
levels. Those in use include bamboo, rattan, wild fruits, meat, deer horns, pelts, resin, tannin,
essential oil, flavours and fragrances, medicinal and aromatic plants, honey etc. No reliable
figures of production and trade in NWFPs are available.
Rattan is given special consideration due to its importance as an export earner, as well
as its importance to rural people. Rattan furniture accounts for about 30% of export earnings
of forest industry.
Knowledge about the availability, growth, distribution, characteristics, and uses of
NWFPs are scanty. NWFPs are the basis of the concept of integrated and sustainable
management of forest resources. Inventory of resources, bio-chemical prospecting,
domestication and progration, harvesting and utilization, and processing and trade of NWFPs
are complex operations requiring specific skills.
Most NWFP activities are private efforts. POs are yet to get involved in a big and
organized manner.
Self Help Groups
Self-help groups or community initiatives often happen, prompted by changes in their
situation. For example, the Kalahan Education Foundation of northern Luzon in Philippines,
founded in 1973, was motivated by the legal rights given to them over their ancestral forest
lands, to protect their watersheds and obtain a good livelihood from the land. The community
decided to make the needed cash from forest produce, rather than converting the land to
agriculture. Accordingly, the Foundation selected two wild forest fruits to develop into three
products: jelly, jam and butter. From that start, they have developed 15 recipes of preserves
of wild and cultivated fruits. With the help of the Asian Institute of Management, the
Foundation identified markets in Manila, and preferences for packaging, container size, and
volume. Their product line now includes jellies made from a small grape-like fruit, as well as
others from ginger, tamarind and passion fruit.
In other cases, NWFP development has come about as a result of new project
activities - government initiated or donor supported. Survival of these activities beyond the
termination of the project is dependent on several factors, particularly sustained access to
market.
Vietnam
Forest area of Vietnam is about 9.8 million ha, accounting for 30.2% of land area. Of
the total forest area, the share of forest plantations is 1.7 million ha. During 1990-2000, there
has been a positive change in forest area at an annual rate of 0.5%. There has, however, been
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degradation in terms of stock volume – current wood volume being 38 cum/ha and biomass
volume 66 t/ha.
Policy Changes
Until the early 1990s, Vietnamese Forest Policy was based on direct State
involvement in the management, exploitation, processing, and distribution of the country's
forest resources in order to achieve their rational utilization. The transformation of social
structures and resource use also included massive programmes of resettlement and
sedentarization. Between the late 1960s and early 90s, Vietnam resettled around 5 million
people from lowland provinces into the uplands. The programmes were designed to increase
cultivation and to exploit the natural resources in areas seen as under-utilized. The Fixed
Cultivation and Sedentarization Programme had the objective of providing swidden farmers
with permanent settlements, either in the same area or in more fertile, more accessible, non-
catchment areas at lower attitudes. By 1990, the programme included 1.9 million highland
people. In addition, the State Forest and Agricultural Enterprises were required to play
important roles as initiators of regional development.
In accordance with political directives, the forestry sector has shifted its focus from
exploiting forestry resources for immediate benefit towards a management strategy that will
increase resources and promote agro-forestry. There has also been a shift from State control
towards social forestry. Under this new strategy, many different sectors are to participate in
the economic development of forestry.
The State currently guides the harvest of forest produces for the market economy.
Special emphasis is given to improving household earnings from forestry. Farm forestry is
supported by the State Forest Enterprises and the creation of forest gardens has been
accelerated.
The 1986 policy of Doi Moi (renovation), which established a multi-sectoral economy
operated by market mechanism, had interesting impacts on forestry through redefining the
system of responsibility for forest management, and promoting involvement of people in
raising trees. Policy of Doi Moi is now applied for allocation of forestland under leases for a
period of between 20 to 50 years to enterprises, individual households and co-operatives. Doi
Moi covers three policy components influencing forestry: decollectivisation, long term leases
of forest land to farmers, and market mechanism for disposing-off surplus production.
In 1991, the Tropical Forestry Action Plan, the Forest Resources Protection and
Development Act, and the first National Forest Policy introduced a new framework for forest
management. The new policies designated private households to replace State Forest
Enterprises as the new responsible units for forest management, following the lead of
agricultural reforms that had transferred land management from collectives to private
households during the 1980s. With appropriate guidance from the State, local people became
stewards of the forest.
The National Forest Policy 1991 has the following major objectives.
Protect and manage the country's present and future forest resources.
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Increase forest product yields and improve harvesting, transport, processing
and marketing systems.
Increase people's participation in forestry.
Contribute to improved living conditions and income generation of rural and
mountain people.
In this regard the strategies adopted include: enhance the effectiveness of forest
management; stabilize the environmental contributions of forest; optimize the contribution of
forest products to the economy, and develop institutions at the national level.
In the process of enforcing the Law on Forest Protection and Development, (and
supporting, monitoring and evaluating the implementation of major programmes and
projects), the State provides grants for creating watershed and special-use forests, seed
orchards, and forests yielding large logs with a rotation of more than 20 years. The State also
provides loans at subsidized interest rates for managing production forests with rotations of
less than 20 years.
Following the National Forest Policy 1991, the 1993 Land Law gave local inhabitants
extensive use rights over agricultural and forestlands. The law stipulates that long-term
usufruct rights should, for most lands, be issued to non-State entities, including individual
households, groups of households, and organizations. The use rights include permission to
exchange, transfer, lease, mortgage, and pass on land for inheritance.
A decree issued in 1994 specifies that use rights granted for forestland should extend
over a period of 50 years, with the proviso that households use it for agro-forestry. The
management of forest zoned for production purposes has generally followed a farm-
household model. Farm house-holds receive long-term rights for barren land and land with
planted forest located outside critical watershed areas. A decree passed in January 1995
empowered local forest administrators to contract former state forest enterprise employees
and farmers to protect State forests. The contracts include detailed regulations regarding the
use of allotted land.
Not only have protection contracts become the most common means of involving
local people in forest management in the highlands, but the government has also instituted a
set of related policies to enforce the contracts. Logging bans, heavy fines, and the expanding
powers of enforcement agencies have facilitated state control to ensure integrity of the forest
resources.
Despite new government policies and programs to re-allocate land and guide resource
use according to state priorities, communities continue to play a major role in decision
making at the local level.
In Vietnam, direct responsibility for day to day control and management of forests
has been assigned to the provincial and district administrations, with the Central Ministry of
Agriculture and Rural Development (MARD) providing administrative and financial control,
technical guidance and specialized support services. Some 400 State Forest Enterprises are
involved in silvicultural activities, harvesting, processing and marketing. The enterprises can
undertake the work involved directly or sub-contract it to the local people or enter into joint
venture arrangements with private forestry companies.
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At the provincial level Department of Agriculture and Rural Development (DARD) is
responsible for public forest administration. People's Committees or authorized DARDs
manage SFEs, companies and joint ventures attached to it. At the district level, People's
Committees are responsible for the remaining enterprises and provides support to private
forests, farms and households.
Important Non-wood Forest Products
Some of the important NWFPs of Vietnam are: agar (infected heartwood of
Aquilaria crassna, bamboo (of several species), benzoin (incense from Styrax tonkinensis),
cardamom (fruits of Amomum spp.), cinnamomum and cassia (dried bark of Cinnamomum
spp), lac (resinous secretion of insect Laccifer lacca), rattan (stem of climbing palm of
Calamus spp), and large number of medicinal plants.
Details are lacking on processing industries based on NWFPs. Several of them are,
however, known to exist providing employment and income to a large number of people,
such as: the herbal enterprises processing medicinal plants into indigenous medicine; plant-
based skincare and cosmetic products; rattan processing plants producing furniture, mats and
decorative products; units producing essential oils; pine resin processing into rosin and
turpentine; bamboo processing units producing furniture, curtains, mats, basketware and hats.
Vietnam produces bamboo parquet (floor tiles) for export, and there is potential to produce
bamboo veneers and bamboo mat boards. Thus the prospect of developing NWFPs appears to
be significant, and this is an area where the country has comparative advantage. It is seen
reported that there are some 340 handicraft production villages and over 700 bamboo
production villages distributed across the country.
As early as in 1976, to support harvesting, processing and trade of NWFPs including
those from agro-forests, the Special Forest Products Exploitation company was set up, to
manage, protect, farm, exploit, buy and process the products, for domestic and foreign
markets. In 1990 three National Production Services and Export Import Forest Corporations
were setup in North, Central and Southern provinces, to provide a better network in dealing
with wood and non-wood products. There are also other subsidiary agencies/ enterprises for
export of bamboo and rattan articles and essential oils; and for trade in wood and wood
products. However, functioning of these organizations are not adequately effective, lacking
in research support, skilled and trained manpower and incentives. Currently, Vietnam‟s
NWFP enterprises are mainly small and medium ones with loose co-operation, but of
inadequate competitiveness; so, they are, often, weak in marketing their products.
With its overwhelming biodiversity, the country's forests can support the
development of food and health product industries and those producing insecticides, flavours
and fragrances, cosmetic products, fiber products, honey and bees wax, lac products, dyes
and colorants, and many others.
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Some Project Models
SNV – North Central Vietnam Income and Employment Generation Project
SNV is involved in implementing the project supported by the Government of
Netherlands in Thua Thien Hue Province and Quang Tri Province. The project has two
components.
(i). Training for income generation with the objectives of improving income earning
capacity of poor rural women and strengthening of District Women's Unions. The
main activities under this component are: group formation; identification and
selection of income generating activities; technical and marketing training; business
training and business plans; and linking to local banks. Women are given training in
cattle management and milk production; mushroom growing; flower production;
production of conical hats and handicrafts. There is no credit scheme in this activity;
only the training is subsidized.
(ii) Rural Enterprise Promotion, with the objectives of developing a functioning market
for business development services and strengthening enabling environment (i.e.
Business Associations). The main activities under this component are: market
research, training, product development, marketing, linking/promotion,
establishing/strengthening business associations and awareness raising. This
programme component is based on the belief that private, competitive markets
ultimately define the supply and demand for business services.
Lack of access to capital is a general constraint. Therefore, local banks are involved
with the process from the beginning, in order to guarantee a smooth linkage with existing and
available credit lines, to finance the identified income generating activities. To stimulate the
supply of business development services, the programme teams up with a number of partners
and providers in the selected service markets (e.g. Provincial People's Committee; Phu
Luong Mushroom Co-operatives59
; Vietnam Co-operativeAlliance for Small and Medium
Enterprises).
Some of the significant results of the project are the following:
a) Web-based marketing services: a local private company has developed a web-based
marketing training and hosting package meant to open up a whole new spectrum of
possibilities (from conducting a web-based promotion campaign, publishing a
website, running online advertisement to direct e-mail marketing) for the exclusive
benefit of the micro and small enterprises, which actually represent a dominant
economic force in North Central Vietnam. So far, the modular package has found its
way to more than 100 client enterprises.
b) Mushroom Full-Package Services: a complete extension service package from the
initial training to the final market-linkages has been developed in co-operation with
59 The "Phu Luong Approach" works for small-scale commercial production of Linh Chi (Ganoderma lucidum),
oyster mushroom (Pleurotus ostreatus), abalone (Pleurotus cystidiosus), earwood (Auricularia auricula) and
straw mushroom (Volvariella volvacea). Service components included in the package are: preliminary
training, installation of household production unit, input supply, monitoring and quality control, and market
linkage and information.
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the Phu Luong Co-operative. A total of more than 200 family-based production units
are being serviced by the Co-operative.
c) Rattan and Bamboo Technology Transfer: through the Business Development Service
(BDS) provider “Co-operative Alliance for Small and Medium Enterprises”, several
co-operatives active in the field of rattan and bamboo production, were singled out as
“excellence extension centers” for the introduction and further extension of new
technologies and new product designs (including the provision of direct market
linkages to producers at household level), thus restoring and strengthening the
economic viability of the traditional knitted rattan and bamboo trade in both Thua
Thien Hue Province and Quang Tri Province.
Extension and Training Support for Forestry and Agriculture in the Uplands.
The project on extension and training support for forestry and agriculture in the
uplands (ETSP) is supported by the Swiss Agency for Development and Co-operation
(SDC), and designed specifically for the uplands areas of Vietnam.
The upland areas of Vietnam are characterized by: diversity and complexity of
farming systems and environmental conditions; limited availability of extension technologies
(unlike in low lands); loose extension network; low incomes of househols leading to limited
capacity for investment (for quality agricultural inputs, diversification, improved crop
husbandry etc.); communication and transportation problems; weak agricultural input
systems; limited access to market and market information; hetreogeneity of ethnic cultures,
traditions, languages; and low level of education. These present serious challenges to forestry
and agricultural extension. Accordingly, ETSP focuses on 3 areas of interventions: poverty
reduction; sustainable natural resources management; and capacity building.
The geographic coverage of the project includes Hoa Binh, Thua Thien Hue and Dak
Lak Provinces. Activities concentrated on two selected communes in two different districts
in each of the above three provinces, where the project collaborates with several partners –
agriculture, forestry, animal husbandry, extension, planning and development and co-
operation departments as well as with farmers union and women‟s union.
The overall goal of the project is to provide cost-effective, demand-driven systems of
extension and training to upland farmers and service providers for enhanced sustainable
resources management and improved household livelihoods.
Towards that end, project activities have been designed to include the following :
i At the commune/district level: commune and village development planning;
development of need based extension and training packages; testing of cost-
effective and participatory extension approaches; development of quality
standards for extension and training of service providers; support to market
analysis and development, including marketing opportunity assessment for
different products; impact monitoring and assessment; and local networking.
[The networks are intended to promote forestry and agriculture and involve
the farmer/producer, consumer (processing industry), technological support
agency and appropriate government authority. An example is the
development of bamboo for shoot production in farmers‟ land, through
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farmer-processor partnership. The bamboo shoot processing company contact
the farmers with extension and seedlings and the farmer pay for these
services. The company guarantees buy back upto 10 years. The processed
shoots are exported. The “Bamboo Shoots Model” can be applied to other
products].
ii At the national level: improvement of coordination between research,
extension, education and training; networking in Vietnam and in the Region;
policy dialogue; and dissemination of Learner Centered Teaching Methods,
Participatory Curriculum Development and Participatory Technology
Development approaches.
Other Experiences
The Shea Project of Uganda
The shea project for local conservation and development began in 1995 with pilot
funding from USAID. Under the project, more than 2,000 members of Community-Based
Rural Women‟s Group have formed the North Uganda Shea Processors Association
(NUSPA), which currently sells several tones of pharmaceutical grade shea butter (an
NWFP) to cosmetic formulators and private companies in USA, Europe and Japan. It is also
used in confectionary industry (Masters et al, 2004). Shea butter is a vegetable fat extracted
from the nut of the shea tree (Vitellaria pardoxa).
Integrated Agro-forestry in China
In China, the socialist market economy initiated in 1993 follows an open market
system. Under this, scope of decentralization has been widened to include people, families,
private sector, co-operatives and civil society organizations. Production under planned
commodity economy is based partly on a decentralized system of production responsibility
given to households and village groups on contract. They grow orchard trees, timber trees,
economic crops like tea oil, tung oil, nut trees, bamboo grooves etc. as an integrated agro-
forestry system. Under this system remuneration is linked to output.
The Lessons
Analysis of the situation and trend in NWFP management/development, as well as
country experiences and cases, give several interesting insights and lessons as to why some
NWFP initiatives succeed, while others fail to take off. These lesions can provide broad
guidance, while designing policy, plans and programmes for NWFP development. Since
they cover a wide spectrum, the lessons to be learned are grouped by the aspects they cover:
resource-related; production-related; processing-related; market-related; related to socio-
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economics; environment-related; science and technology-related; information-related; related
to plans and programmes; and related to institutions.
Resource-related
Some of the interesting attributes of NWFP resources are: that some of them are
amenable for daily collection/harvest; the produces have multiple uses; some of them
are amenable for commercial cultivation. Among the challenging aspects of the
produces are that: they represent a heterogeneous mix; are of low value if not
processed; collection is often linked to local culture; domesticated NWFPs are still
very few; and, there is no credible/reliable inventory of NWFP resources in most
cases; for several species no proper method of inventory has been developed.
There is need to develop appropriate inventory/assessment methods for NWFPs since
they are very different from the methods in use for wood resource, due heterogeneity
of produces, and differences in their distribution pattern. Inventory (including bio-
prospecting of active chemical ingredients in plants, micro-organisms, etc.) of
NWFPs is complicated, and requires special skills; it is time consuming, and
expensive. Only very few countries have embarked on such an initiative. These
investigations for fibre, phytochemicals, aromatics, gums, resins etc., have to
consider the nature and extent of distribution of specific plant resource, their density
of occurrence, their potential yield/supply from wild sources, and their suitability to
be grown under multi-species environment.
NWFPs can play a major role to ensure sustainable forestry through multiple-use
management. Under natural conditions NWFPs could be, and should be, managed
along with wood in an integrated manner thus increasing the overall productivity of
forests. This can also support conservation of biological diversity. Resource
ownership/tenure influences the nature and quality of resource management and
utlization. Overall trend in respect of many NWFP resources is towards depletion;
management of the NWFP resources now face colliding trends of fall in sources and
rise in demand.
Domestication of NWFP species is one of the alternatives for minimizing the impact
of increasing demand. The objective of natural resource conservation and protection
of bio-diversity can be served atleast partially by cultivation of species.
Development of NWFPs in agro forestry system has the advantage of diversifying
the economic base and enhancing the supply of products for household use, as well
as for markets.
Harvesting of NWFPs from wild and cultivated sources (e.g. rattan, mushrooms,
palm heart, pine resin, lichen, aromatic leaves) requires differing pre-harvest
preparation, tools and techniques, and different post-harvest treatments. Ongoing
harvesting methods are often wasteful, and needs to be considerably improved.
NWFPs tend to emerge as more important in countries which have high density of
population and suffered more deforestation (e.g. Bengladesh, India, Nepal, Vietnam),
compared to these which have lower density of population and more forest / timber
resources (e.g. Indonesia, Malaysia, PNG), probably because of unfounded bias,
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resulting from lack of adequate skills and knowledge for sustainably managing
NWFPs.
As economies grow, NWFPs shift from a supply driven to a demand driven (quality
based) mode of management.
Production-related
NWFPs being a heterogeneous group, an individual component produce (e.g. fruits,
fibers, gums) will have considerable differences in terms of perishability/storability,
harvesting requirements, post harvest treatments etc. Therefore, joint production of
dissimilar produces will add to the complexity of management.
Most NWFPs of Lao PDR are also found in several other countries; and they face
competition in the world market. Therefore, the important need is to achieve and
increase competitiveness in terms of quality, cost and consistency of supply, through
ensuring efficiency and enhanced productivity.
Produces which are daily needs of consumers and needed in large quantities, with
limited availability of substitutes (like milk in the Amul model) tend to do well in
bulk markets. Pepper, cinnamomum, cardamom, honey, sago and beedi qualify as
daily used products; but, they face high level of competition from substitutes
(compared to milk or sugar). Quality products of rattan and bamboo are in good
demand, and there is need to maintain consistent quality for sustaining demand.
These aspects need consideration in production decisions.
Niche products (of exclusive quality, for example organic essential oil for aroma
therapy) are unique, and highly quality specific; relaxation of vigil for ensuring
quality can cause an enterprise to fail.
While artificial cropping of produces like cardamom, mushroom, honey and
cinnamomum individually is less demanding, it is possible to adopt mixed/integrated
farming of two or more compatible produces with considerable advantage.
Value addition, through processing of the primary produces and using improved
technology, gives more benefit in terms of increased income and employment. Also,
value-added processing helps to reduce perishability and increase shelf life of
products.
The system of allotting arbitrary production quotas, instead of fixing scientifically
established annual sustainable harvest as is done in Lao PDR, is not an accepted
practice elsewhere (in other countries), eventhough quotas are prescribed to control
foreign trade. System of NWFP extraction based on arbitrarily (mostly based on
trader's request) established annual quotas is not scientific nor conducive to
sustainable resource management.
In respect of export-oriented production, it is necessary to know the needs of specific
markets, including product specifications and the standards required, before deciding
to embark on it. Although adding value locally is important, attempting to produce
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end-user commodities without adequate preparation or studies will be risky. Before
launching on actual production, pilot trials are necessary.
The vital ingredients for success of production ventures are: the correct perception
about the existing and potential (changing) markets; and, organizing the production system
(including its institutional components) to be in tune with the market trend.
Processing-related
NWFPs involve a wide range of primary and down-stream processing. Primary and
downstream processing of NWFP adds value to the product, provides local
employment and helps to retain value in the country of origin. Such processing
entails a range of technologies and equipment.
Market-oriented production often goes through several levels of processing. The
higher the level of processing carried out at or near the source, the more the product
value can be retained locally. Local production offers the prospect for improving
local employment, income and livelihood. More of an NWFPs value can be captured
by producers through local processing/semi-processing.
With regard to those goods processed with modern technology in comparatively
larger establishments, because most of the products are meant to be exported, there is
heavy stress on quality and on reliability of supply. However, due to the lack of
technology, skilled manpower, management expertise, capital for investment,
marketing information and mechanisms, coupled with inadequate information on
resource availability, such processing mostly takes places in the consuming countries;
and exports are generally confined to primary products.
NWFPs of subsistence nature are characterized by traditional technologies in
production, processing and utilization, largely based on local know-how. Market
development has transformed a number of subsistence products to traded goods with
substantial investment on improved technologies for production, processing and
marketing. Organized (raw material) production, especially through cultivation,
emerges when supply from natural sources is inadequate or declining. Most raw
produces pass through phases of collection, depletion and cultivation.
Market –related
Successful outcome to any development effort on NWFPs is dependent upon there
being a demand for the product, and uptake by the private sector at the processing,
marketing and consuming levels, as well as on the producers capacity to reach that
market. Market needs to be treated as the prime sector.
Because of the variety of NWFPs, ranging from fruits and food to aroma chemicals
and phyto-pharmaceuticals, the markets for them show corresponding variation –
being bartered, and traded in rural subsistence economies, local village markets, large
city (national) markets and international markets. Some products are sold in bulk
(e.g. edible nuts, resin) and others reach specific niches (special types of honey,
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aroma chemicals). Some non-wood products are not traded, but only collected and
consumed.
For developing NWFPs, scientific screening is important, to identify those with
potential to develop into mainstream products. In the absence of it, proportional
efforts are dispersed over too many NWFPs, many of which may not have an
acceptable commercial future. Screening would call for assessment/analysis of
information and available indigenous knowledge, product based inventory and
evaluation of potential, product development and promotion.
Success in market is the ultimate test of an enterprise, of any nature. Marketing is
essentially a software function, where knowledge and information are important
ingredients. The role of marketing is to help create better linkages among resource
management, processing and end-use.
Most failures of NWFP programmes result from inattention to markets. With
increasing pressure on forest resources, well informed NWFP marketing strategies
could be crucial for maintaining the resource. Producers need better information on
the nature and volume of existing NWFP trade, markets and product standards. More
rational and transparent market transactions throughout the production/market chain
are needed for producers to receive a more equitable share of the product value.
In respect of items such as medicinal extracts, phytochemicals, food colourants and
additives, essential oils and fragrances, market requirements such as quality
specifications, sanitary regulations, packaging standards (along with lack of adequate
knowledge about consumer preferences and competing products) often become non-
tarrif barriers, essentially denying some countries access to international markets.
There is no way of coping with this situation except through improving efficiency and
production standards.
An emerging green-consumerism is evident in the use of NWFPs. For various
reasons, however, there has been an erosion of the international market share of
NWFPs over the years. Prices have generally fallen, considerably in some cases.
Apart from inadequate promotion, inadequate quality of products and competition
from synthetic substitutes are often the cause of this trend.
If NWFPs are to compete on the international market, they will be subjected to
unpredictable price movements that accompany this market. This is also true for
smaller domestic markets. Therefore, careful consideration must be placed on the
markets and market stability, if investment is to be encouraged in NWFPs and in
processing of these produces.
A proper „brand‟ name, imaginatively coined, and linked to the specific nature of the
produce/product(s) and/or its origin/source, can help.
Related to Socio-Economics
NWFPs play an important role in alleviating poverty and supporting community
welfare. Often, poverty is central to the problem of un-development and under-
development, and there is urgency in solving this problem. NWFP development
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needs to be designed with this problem in view. NWFPs provide opportunities for
employment and income, and have comparative advantage to support development
in backward areas. Millions of people living in the vicinity of forests in the
developing countries are highly dependent on NWFPs for food, nutrition, health,
shelter, fiber, fertilizers, fodder, cosmetics and cultural products. They support
village-level artisanry and craft activities and provide raw materials for local
processing industries. The benefits are relatively more important for poorer
households and disadvantaged groups.
At the national level, it will be difficult to separate the issues of environmental
degradation and poverty alleviation. Also, poor people faced with marginal
conditions of environment have no choice but to go for immediate economic
benefits at the expense of the long-run sustainability of their livelihoods. This
trend, if left uncorrected, could result, in the break-down of the environmental and
social systems. Planned management of the resources (e.g. NWFPs) for non-
destructive uses is very important in this connection.
Resource management/development through community involvement requires a
strong catalyst and support for: ensuring organized approach, application of
appropriate technology, efficient arrangements for marketing of products (and
services), improvement of community skills and leadership development.
Committed and accountable leadership is important in guiding the community to
work towards common goals.
In respect of self help groups at the community level there is need to have
homogeneity, with members having similar background and culture, to avoid
tensions (e.g. between those of low-land and up-land origin). Tenure security,
availability of credit, and equitable distribution of benefits, among others are
important ingredients for success of SHGs dealing with NWFPs.
It is necessary to ensure that the primary producer receives remunerative prices for
the products, without compromising on the principle of social empowerment.
Providing a meaningful rule to women (and gender mainstreaming) in NWFP
development adds to the chances of success of the venture. Also, tribal and cultural
communities can provide the benefit of their traditional knowledge about NWFPs.
Large private enterprises/corporations, as far as possible, prefer to have captive raw
material resource from a single source (e.g. forest concessions). In situations of low
forest cover and resource limitation, the compulsions of the situation and the policy
dictates force the private entrerpreneurs to forge partnerships with farmers and local
community.
NWFP-processing enterprises are scale neutral, to some extent, and is amenable to
operations in small, medium and large scales. Size of operations are decided by
several factors (resource availability, market, technology and skill base, available
funds). Wherever, sophisticated technology is involved, however, the size of
operations tends to be bigger.
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There is no resource accounting system in respect of NWFPs. NWFPs do not find a
place in most systems of national accounts. Most of the quantitative information
seen in reports/documents are essentially educated guesses. The situation is not
helpful for NWFP development.
Environment–related
The environmental dimension of NWFPs are related to its amenability for sustainable
management; contribution of NWFP resources to biological diversity; resource
sustainability in NWFPs‟ transition from subsistence to market economy; improved
valuation of environmental functions of NWFPs in environmental impact
assessments; and the impacts of over-exploitation. Measures to reduce adverse
environmental impacts include reducing wastes in processing industries and
promotion of service benefits such as eco-tourism. Given the trend of undervaluing
forest resources and products, it is important to understand the real value of NWFPs
and find ways for framing economic aims within a context of environmental integrity.
Unscientific practices and over-harvesting of NWFPs can cause drastically injurious
impacts. In the absence of repeated and properly designed inventories, there are no
adequate assessments of such impacts.
Science and Technology-related
The poor situation of NWFPs in mot countries is partly attributable to inadequate
technology and lack of research support. There is a tremendous need for research
into all aspects of the technology. Such research should cover, among other things:
enhancing knowledge about the NWFP resource; methods of inventory for different
NWFPs; gathering scientific data on the nature of the products; prospecting,
screening, evaluating and classifying plant species; techniques of domestication and
cultivation, including aspects of monoculture and agro-forestry; on-farm
experimentation; species introduction trials; plant breeding and genetic improvement;
improving of agronomic practices; improving harvesting methods and practices to
reduce wastages and damages and to increase yield; adaptation of imported
technology; improvements in processing, packaging and distribution of products; and
product diversification including improvement of quality. Research–extension
linkages and dissemination of research information are vital.
Development of NWFP-based industry depends on how far the various products
succeed in the market place. Therefore, to be effective, research institutions need,
among other things, competent scientists, support staff and research managers; the
ability to conduct continuous strategic evaluation of market conditions and
opportunities, as it relates to research; opportunities to be autonomous and self-
financing; and means to interact directly with producers and users and hence
influence production and marketing.
There is considerable indigenous knowledge on the NWFPs, most of which are not
documented. While some efforts on bringing to light the traditional wisdom and
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information on ethno-botany and ethno-medicine are being made, there is need to do
much more on a systematic basis.
The need for continually updating the technology relating to NWFPs through research
and innovation; the importance of new technology in raising productivity; the need to
intensity the application of existing research and traditional knowledge are all clearly
evident.
A feasible complementary action to the strengthening of local research and
technological capability is to transfer/acquire improved technology from outside.
Developing countries are often prevented access to new technology due to patents and
protection of intellectual property rights. Arrangements such as the INBio-Merck
agreement for bio prospecting in Costa Rica are innovative in this regard. It provided
for the transfer of important technology from Merck to Costa Rica and building of
scientific and technical capacity in the country.
Information–related
There is paucity of information on all aspects of NWFPs; increasing information flow
require action at all levels.
NWFP management needs different mix of skills, technology and knowledge base.
No NWFP–related enterprise activities can be undertaken without relevant
information and knowledge; without a system to update information and knowledge,
there will be no progress. There is need to generate/acquire and disseminate new
knowledge and information.
Available knowledge on NWFPs to a significant extent is local, empirical and often
linked to local culture. This makes information gathering or exchange more difficult.
There is also overlapping of uses and sources, where the same product can be
produced from different non-wood raw materials or the same non-wood raw materials
can provide different products. This adds to the complexity of the situation. Some
valuable and useful information on NWFPs, developed/collected over decades during
the colonial period were housed in some institutions of U.K, the Netherlands, and
France.
Considering the vital importance of market information to primary producers of
NWFPs, there is a strong need for a local market intelligence system to support local
primary producers.
Policy-realted
In most countries, no policy specifically governs the management, harvesting
processing and marketing of NWFPs. In most forest policies NWFPs get, at best, a
mention in passing; clear objectives and targets are not laid down, nor are strategies
for development outlined. This lacuna leads to the lack of appropriate plans,
programmes and projects related to NWFPs, and inadequacy of investment. Because
of this, there is hardly any emphasis on developing and maintaining a data base on
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NWFPs. There have been initiatives to improve the situation, but a lot more needs to
be done, and urgenty.
At a general level, it has been identified that land tenure, extension and research
support, marketing and pricing situation, and credit availability among others are the
key policy issues. Moreover, government policies should create conducive
environment for development of NWFPs.
The issue of un-reporting and under-reporting of the contributions of NWFPs in the
National Accounts has serious implications relating to assignment of priority and
investment funds; and this needs to be taken into consideration in the policy.
There is need for a policy provision on prices and rents of non-wood products and
services to signal their value and scarce nature in relation to demand.
Important policy aspect pertains to the rights of countries over the value of
information on biological and chemical diversity of forests. There is need to protect
the right over the information (for example, resulting from chemical and biological
prospecting), as is the case of other intellectual properties. Sovereign rights over
biodiversity have been recognized internationally by the 1992 Convention on Bio-
diversity. Wrongful patenting of biological products by developed countries is a
problem facing the developing world.
External policies (e.g. trade policies, land use policies, subsidy/incentive policies) and
influences can profoundly affect the NWFP options, favourably or unfavourably. This
points to the need for policy rationalization and harmonization.
The need for a specific NWFP policy is not to establish a dichotomy; but to recognize
their extreme specificities and to help insightful action to integrate it into the overall
system of forest management. It is stressed that wood and non-wood is not and
should not signify any sort of dichotomy of interests, but are complementary
components of an integrated whole.
Related to Plans and Programmes
In most countries, as in the case of policy, there are also no long-term plans,
specific for NWFPs development – with well defined/designed phases,
programmes, sub-programmes, projects, targets, funding mechanism, other
logistical details, implementation and monitoring mechanism and so on.
There is, accordingly, a need for a detailed (master) plan for NWFP development.
While proposing programmes and activities by phases, the plan needs to address the
major issues affecting the NWFP sector: institutional and policy neglect; lack of
adequate information and knowledge; inadequacies in the management and
conservation of NWFP resources; lack of appreciation about the dynamics of eco-
systems and their inter-linkages with social, cultural and economic systems;
existence of a large informal sector; lack of focus on programmes and development
action in NWFPs; inadequate investment in research and development; impact of
trade policies on NWFP development; loss of traditional knowledge on NWFPs;
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wrongful patenting of traditional products; and need for a clear and rational
approach to development of NWFPs through appropriate institutional mechanisms.
Related to Institutions
The institutional system covers instruments for facilitating implementation of policy
or policy-like provisions (in the form of laws, rules and regulations) and
organizational arrangements for enforcing the instruments (at central and
decentralized levels). The organizational arrangements include the governance
organizations (carrying out authority function) and enterprise organisations (carrying
out production/development functions comprised of private sector, co-operative
sector, community and non-governmental organizations).
Overall objective of institutional arrangements is to facilitate development within the
framework of valid laws, rules and regulations. Policies and politics of the country
have influence over the nature and structure of the institutors.
There are no specific or separate institutional arrangements or instruments
specifically designed for NWFPs. Often, one or two persons or a unit within a large
sectoral organization are designated to “look after” NWFPs.
Rules and regulations developed for forests and forest products are applied to
NWFPs, often inappropriately. In view of the heterogeneity of NWFPs, it is difficult
to frame common rules and regulations for all NWFPs; and disaggregated component
products or end use groups will have to be treated separately.
There are several gaps, loopholes, inconsistencies and other defects in the existing
local frameworks. One is often not sure as to what laws, rules and regulations are
current and in force. As a start, a compendium of all current and valid laws, rules and
regulations can be put together to serve as a manual of legal instruments, applicable
to NWFPs.
A sectoral governance organization is essential and irreplaceable, for providing policy
guidance, enforcing legal instruments, and for facilitating sectoral development. – in a
transparent and accountable manner. Their mission is vital. However, without
appropriate checks and balances the tendency in most cases is to over-regulate.
The enterprise organizations are of different types: government entities (e.g. State-
owned enterprises), autonomous bodies (e.g. boards, foundations, authorities),
participatory organizations (e.g. co-operatives, SHGs), collaborative arrangements
(e.g. company–farmer partnerships), and, NGOs (sponsoring and/or participating in
enterprises).
A general lesson learned from the experience in many countries, where government is
involved in enterprises, is that bureaucratic efforts without stakeholder
consultation/involvement tend to become corrupt, destructive of people‟s resources
and environmentally degrading. It has been the observation in several cases that
Government run trading operations tend to be overstaffed and not competitive. There
is also a need to promote transparency, which will curb the corruption that plagues
the economic sectors in several developing countries.
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While producers co-operatives are expected to address the issues affecting the
producers, in several cases they exhibit serious deficiencies: lack of leadership, lack
of group homogeneity, lack of planning; and lack of commitment for action leading to
dishonesty and indifference on the part of those who run the co-operatives. These in
turn affect their efficiency and competitiveness.
One cannot be expected to invest (whether money or labour) without a reasonable
prospect of an acceptable return and/or other forms of incentives.
Enterprises tend to be more efficient if undertaken by an autonomous, professionally
managed body.
Local organizations with an area-based, integrated and multi-disciplinary structure are
likely to be successful in the development process. In such cases, the organizational
components tend to be well balanced and mutually linked into an integrated system.
Local organizations may encompass vertical connections, thus gaining linkages to
levels of organization above village, community, upto and including national
institutions.
People can profoundly influence as well as frustrate development. Broad-based,
willing and organized participation encompassing local groups of women, indigenous
communities and private sector is an essential means of strengthening institutional
structure for developing NWFPs.
While instituting new institutional arrangements or modifying the existing ones, there
is need to evaluate the available/possible alternatives, for their sustainability or
appropriateness to the specific situation and environment. The chosen alternative
needs to be tested before being installed.
In most aspects of NWFP management, what is being applied to wood cannot
straight-away be adopted for use. Moreover, what is applicable to one NWFP may
not be suitable for another. Thus, development of NWFPs calls for diverse skills and
multi-disciplinary approach involving agronomics, biology, ecology, entomology,
mycology, ethnobotony, farming systems, food technology, nutrition, fibre
technology, phytochemistry, polymer chemistry, plant genetics, rural sociology and
other disciplines, hither-to not included in forestry. Skill needs should be property
assessed for developing necessary human resources and capabilities.
Success of programmes for development of NWFPs ultimately hinge on real
commitment to addressing entrenched institutional blind spots. This requires greater
awareness of issues on the part of policy makers, to gain policy and legislative
support. Institutional support for NWFP activities needs better co-ordination and
emphasis on research, technology transfer, human resource development, and
improved information systems. It is also necessary to ensure more flexible credit
services for producers, support for local producer‟s organizations, and local
participation in NWFP development.
Innovative adoption of information technology and electronic media has made it
possible to revolutionise the working of institutions for speed, efficiently and
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outreach. Process of NWFP development can be accelerated by exposing the NWFP
producers to modern techniques.
While the emphasis is on institutional reforms, obstacles to reforms are great and
status quo has enormous staying power.
To round up….
For an enterprise striving to accomplish NWFP development, the “Amul
philosophy” is very relevant: serve the interest of the producers; provide quality
products to the consumers. The lesson in a nutshell is that for NWFP to succeed at
the market, it should meet the criteria of efficiency/effectiveness, productivity, value-
addition, competitiveness and market satisfaction, in the new environment of global
sourcing for merchandise (globalization), e-tailing and e-commerce.
AN INDICATIVE FRAMEWORK FOR A POLICY ON NWFPS IN LAO PDR
We have seen that there is no formal/legislated policy for the NWFP sub sector, nor
for the entire forestry sector, in Lao PDR. And, whatever is handed out periodically as policy
decisions are inconsistent and inadequate. This situation has lead to the neglect and
depletion of NWFPs as an important natural resource. Inspite of their importance and
potentials for supporting economic development, social welfare and environmental
conservation, very little attention has been given to NWFPs in Lao PDR. The NWFP agenda
has been fragmented and weak for too long. Most of the past policy-like statements has
turned out to be undelivered promises. The high heterogeneity of NWFPs are often blamed
as an insurmountable hurdle for developing this resource. Their future cannot be assured on
the basis of pious hopes or claims about their value and importance.
Even though, there is a very large number of produces, with widely varying
characteristics, falling under the umbrella of NWFPs, in any one locality or management unit
there will only be a manageable number of them with commercial or economic value,
because of climatic, social, cultural and other factors. Therefore, attention needs to be
focused on those priority species. Realistically planned (and phased) action, which can make
most impact are called for, requiring strong policy support.
Components of Policy Framework
As already noted, the term policy refers to the principles that govern action, directed
towards given ends, including relevant strategies. Apart from the general and specific
objectives the policies should contain a clear definition of its scope and directions regarding
policy measures to be taken to achieve the objectives – such as those relating to strategic
plans, legal rights and arrangements, incentives, tenurial rights, investment, involvement of
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private sector, role of formal and informal sectors, community participation, evaluation of
social and environmental values, development of skills, health and safety considerations,
access to information, controls and regulations related to production and marketing
authorizations and streamlined support from public administration. Policy provides
guidelines regarding phasing of development, type of technology, scale aspects, when and
how to move from research to development action etc.
It is not the intention here to provide a Policy for NWFPs of Lao PDR, but only to
provide a reference framework for the purpose, if and when the need or occasion arises.
The framework discussed is indicative rather than specific and comprehensive. The
analysis in the earlier sections have identified the need among others, for: controlling
deforestation, introducing scientific and sustainable management of NWFP and forest
resources; practicing appropriate, integrated land use for improving overall sustainable
biological productivity; reducing wastages in harvesting and processing of NWFPs;
controlling illegal harvest and trade of NWFPs; rationally restructuring NWFP-based
industry as an economic undertaking and improving their economic efficiency; establishing a
system of forest resources accounting incorporating NWFPs; strengthening/intensifying
forestry, forest products and NWFP research; arresting ecological degradation and erosion of
biodiversity; rehabilitating wildlife and wildlife habitat; improving essential infrastructure for
NWFP development; meaningfully involving people, private sector and NGOs in the
development of NWFP (and forestry) sector; appropriately restructuring the institutions to be
capable of serving as effective agents for promoting sectoral growth; improving, qualitatively
and quantitatively, human resource for NWFPs (and forestry) development, in terms of
training and education facilities, incentives etc.; ensuring multi-disciplinary approach and
inter-sectoral co-ordination relating to NWFP matters, and promoting rural empowerment
and gender mainstreaming.
In view of the above, and the added need to establish and enhance competitiveness
for NWFPs in the global free market, it is necessary that an adequate National Policy for
NWFPs, or for forestry with a distinct sub-policy for NWFPs, be framed in the appropriate
legal format. For sectoral stability and to ensure consistency of development activities, it is
necessary that the policy be framed with a long-term (say 20 years) perspective.
Policy formulation has developed into a science, involving policy research (distinct
from research policy) and analytical studies. A detailed sectoral/sub sectoral policy will
normally follow an outline containing, among others, the following:
Preamble
Policy imperatives
Policy principles
Definitions
Policy objectives
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Policy measures60
Implementation arrangements
A detailed annotation of the above outline is given in Appendix 4.
Organisations for Policy Implementation
At the policy level, there is need for a clear distinction between functions that only
the government should and could perform (including policy and strategic planning, creating
an appropriate regulatory frame work and monitoring sector performance), and that which
can more effectively be delegated or contracted.
Governance Agencies
The importance of sector governance and public administration through the
government machinery can not be overemphasized. The role of the Government should, be
to facilitate and properly guide development through provision of policy incentives (rather
than adversarial enforcement), and keeping those involved in undesirable activities in check.
PFAs with or without direct responsibility for forestry enterprises in the Asia Pacific
Region follow different arrangements: independent ministry of forestry; ministry of
environment and forests; forestry services within ministry/department of agriculture or
primary industry; autonomous forestry authority reporting to minister of forests, forest
ministry/department/service for PFA (with separate and autonomous commissions,
corporations and/or co-operatives managing forestry enterprises/development operations);
and forestry under a large department or ministry with responsibility for forestry submerged
within a 3rd
or 4th level unit/section/bureau.
In such cases where forestry (NWFPs along with it) is merged with other
economic/service sectors like natural resources or environment, it often does not received the
deserving priority due to various biases and influencing factors.
Development/Enterprise Agencies
While the FPAs in many countries monopolize the management of the sector (forests
being State property) with administrative and budgetary controls (and powers delegated
according to bureaucratic status and order), there has been interesting and positive changes in
others – such as autonomous forestry boards, forestry commissions with stake-holder
representation, forest foundations, forest co-operative federations, partnerships (e.g. public-
private partnerships; company-farmer sponsorships, other relatively autonomous non-
60 Covering all relevant aspects of NWFPs – i.e. ownership and tenure, resource assessment / inventory,
resource management, resource utilization, trade and marketing, research and development, institutional
arrangement, infrastructure and information need etc.
162
hierarchal and decentralized entities having strong ties with client groups). and privatization
of forestry.
The autonomous participatory institutions are covered by their Memorandum of
Association and their own rules and regulatory mechanisms, regarding their functioning.
Thus, the organizations involved in development (enterprise) activities fall under both
participatory and non-participatory categories.
Innovative Arrangements
Accordingly, we can envisage arrangements for NWFP (and forestry) development
variously:
Primacy of government institutions which guides and controls farmers activities and
involvement.
Primacy of private sector (privately owned companies, corporations).
Primacy of small farmers and collective (co-operative) institutions, with minimal
role (e.g. facilitation and policy guidance) for government; but employing
professional management.
Autonomous or semi-autonomous entities (e.g. boards, corporations) with
representation of stakeholders, for management of specific (e.g. NWFP) activities,
and which incorporate participatory institutional entities.
In this first alternative, the government is to promulgate and enforce policy, laws,
rules and regulations and provide R & D, HRD and extension services (and also to undertake
production and marketing activities directly or through state owned companies or job
contracts). In this case institutional strengthening is to be approached through improving
capability of the public administration and ensuring good governance.
In the second alternative the private sector undertakes production and marketing,
under relevant rules and regulations of the Government.
In the third alternative the co-operative institutions take the responsibility for
performing all the above-indicated functions, with the Government only providing guidance.
The fourth alternative is where forestry (and NWFP) activities take place mostly in
government lands allocated for that purpose and where an autonomous body comprising of
representatives of government, NWFP collectors/farmers, financial institutions and other
stake holders directly undertakes to implement all the relevant activities and functions.
[It is also possible to see arrangements which are a combination of the above – e.g. in
the form of specific missions or networks involved in specific functions or activities].
163
The Enterprise Concept
Enterprise is a neutral term meaning one or more units/firms under common
ownership or control; and it could be under public, private, co-operative or joint sectors – but
clearly separate from the authority function of the government.
The enterprise concept provides the NWFP (and forestry) sector with the flexibility
required for innovative arrangements. In several countries, the flexibility sought by forestry
(and NWFP) enterprises has been achieved through establishment of national forestry boards,
forestry commissions and forestry foundations, which have been able in many cases to attract
foreign collaboration. Efficiency being central to the functioning of enterprises, they will be
characterized by a high input/high output technology, giving a higher incremental
capital/output ratio.
Critical mass is, often, important in ensuring efficiency of the enterprises.
In a system of NWFP and/or forestry enterprises, private sector will be able to play an
important role. Also, forming of groups of small producers, rural women, forest dwellers and
local participatory organizations, and making them partners in development enterprises, will
help lay a sound basis for enhancing private sector partnership and involvement in the future.
The concept of the enterprise system for NWFPs (an forestry) in Lao PDR will serve
to achieve economic, environmental and social objectives in a properly balanced manner.
The economic activities of the enterprises will be solely guided by an efficiency criteria.
They (the enterprises) can undertake the environmental and social responsibilities, assigned
to it, without in any way compromising the efficiency of its economic activities. The
NWFP/forestry enterprises do not distinguish their economic activities as „social‟ and
„economic‟ (i.e production).
Joint ventures with involvement of NGOs, co-operatives, women‟s groups, local
membership organizations, groups of farmers and homestead owners can help to consolidate
raw material base, rational distribution of processing facilities and improved marketing
arrangements. The possibilities of such co-operation are enormous. A large institutional or
corporate resource or processing facility can form the nucleus to which the resources of local
people, communities and co-operatives can be added on, and developed jointly (for example,
under the “nucleus-plasma” concept). Such arrangement will allow full enjoyment of
benefits by participants.
It is essential to provide full fledged (functional and financial) autonomy and
flexibility to the system of enterprises; the enterprises should promote the private and co-
operative sectors, and organized people‟s participation. This arrangement will promote
efficiency, accountability and professionalism.
A Federated Co-operative Enterprise System for NWFPS
A proposal for an alternative structure, “autonomous federated co-operative enterprise
system” for Lao PDR is provided here for consideration. In view of the important need to
participate the villagers/farmers in the process of NWFP (and forestry) development, and
other constitutional mandates to alleviate poverty and to make the decentralized units the
164
focus of development (as well as in recognition of the government ownership and tenure
system relating to the forests in the country), an appropriate institutional system for
developing NWFPs/forestry appears to be one of the autonomous, federated enterprises.
It can be structured with a 3 or 4 tier set up, with each level having its own elected
cum nominated board of directors, employing staff of required skills and professional
experience, functioning autonomously, and conducting NWFP/forestry related activities
(including growing, managing, harvesting, marketing/processing), following national policies
and regulations and adequately guided by the higher levels in the enterprise system. While,
the autonomous enterprise system, and its component units, can potentially be structured in
alternative ways, it is important to ensure their internal consistency and appropriate linkages.
Some illustrative suggestions are given.
First tier: The primary NWFP/forestry co-operatives form the first tier, providing the
basic management unit. The network of the primary units can be enlarged by providing the
option to small/medium forest based private entrepreneurs to become members on specific
terms and conditions. The primary units can engage in production, harvesting and delivering
the produces to a collection center managed by a higher level of the co-operative federation,
or process it locally, or supply to private processing plants etc. as approved by the
management (and concurred by the higher level in the federation). For managing the NWFP
(and forest) resources, these primary units will employ adequate number of technical and
administrative staff. These primary units can also be made to pay (contributing to the public
revenue) taxes/charges/rents or profit share, as appropriate, to the government through the
apex body of the federation.
The government land to be assigned to the primary units should go through a lease
assignment (for forest settlement) process to avoid future conflicts and claims. All disputes
on boundaries, ownerships etc. should be resolved through consultation, considering the need
to keep a defined portion of the public land under forest, sustainably managed and utilized in
due regard for equity and justice.
It is also necessary to go through a process of deregulating forestry (and removing
legal anomalies such as timber transit restrictions) to the extent possible and appropriate, to
help avoid hindrances to development and progress.
Second tier: The second tier will be a federation of several primary units based on a
rational criteria (e.g. administrative/geographic territory; number of primary units; viability
to perform higher order functions like technical/extension support, equipment hiring,
collection and marketing of products, credit arrangements, handling of legal issues such as
agreements with private and public sectors, undertaking processing activities, and if
necessary, organizing research and training, conducting studies etc.)
Third tier: The need for a third tier depends on the number of primary and secondary
units to be serviced/supported, complexity of operations/activities and other relevant factors.
(It is desirable to avoid unnecessary tiers to avoid/reduce overheads).
The apex body: The apex body will be the office of the national (or provincial)
federation of co-operative enterprises. The apex body will provide directions and policy
guidance for the enterprise system and undertake responsibility for legal advice, planning
support, information and statistical system, international affairs, mobilization of funds,
165
negotiations with Government and funding institutions, resolution of disputes, export/import
operations and so on.
The apex body can be established/designated as a Board, Foundation, Trust,
Federation or Commission.
The board of directors/commissioners/trustees of the national federation/foundation/
board/commission/trust or apex body may be constituted initially by the government,
representing all relevant interests. There should be a chairman and a chief executive
(executive director). Advisory committees on specific aspects may support the national apex
body. It will have its own secretariat and specialized divisions to handle such matters as
internal policies and missions, planning and programming, finance and credit, human
resource development, research, technology development, legal services, public relation, co-
ordination, community welfare, conservation, trade, general administration and monitoring
and evaluation, covering the overall requirement of the system.
Each component enterprises will be covered by appropriate legal instruments (by-
laws, regulations, controls), defined structural linkages with units under its control, detailed
statement of missions/functions/mandate, financing mechanisms and jurisdictional
demarcations. Its activities will be covered by feasibility studies, and by perspective,
medium-term, and annual plans and programmes.
Through a rational and pragmatic approach to enterprise management and promoting
wide-based participation, it will be possible to attract reliable investors, and to apportion the
investment burden. A “national fund” can be set up to provide credit to small-scale operators.
Additional requirement of capital (apart from government allocations for specific activities)
will have to be mobilized initially, through grants, loans and other arrangements and
collaboration with banking institutions.
While promotion of the NWFP/forestry enterprises can be achieved in a number of
different ways, the responsibility for overseeing the implementation of forest policy and
administration of the forests (including collection of rents and taxes) – ie. “the watchdog
function”, should rest with the “authority”.
A system as explained above, with appropriate modifications can function smoothly
within the purview of the national forest policy, national forest laws and national forest
programme (see Figure 7).
If the concept of separating authority and enterprise functions and the need to
establish an autonomous forestry enterprise system to support sustainable NWFP (and
forest) development is considered relevant, it is then suggested that a high power expert
committee may be appointed to study the situation in detail and to make specific proposals.
It is emphasized here that the suggestion for structural changes in the forestry sector
organizations has not been adequately comprehensive and that it is only illustrative or
indicative of possibilities or potentials. There is also need to hold intensive
consultations/discussions, based on a position paper, regarding the potential alternatives and
their implications. The proposals to be discussed can be made accessible through
internet/website.
And, if the proposal (with modifications found necessary) is agreed to, it would
require a period of transition of about 10 years, for training, model testing and pilot
166
demonstration, etc. and it will be necessary to programme the transition process suitably, in a
phased manner.
It is expected that international assistance will be forthcoming for such an effort for
good governance in forestry.
A detailed annotation of the above outline is given in Appendix 4.
Development of a Formal Policy
Forest (and NWFP) sector policy development and implementation are, and will
remain, the responsibility of the Government. But, the variety of interest involved must be
recognized, the involvement of all major actors must be legitimized, and their commitments
solicited.
Forest policy development is a process which follows a cycle of: evaluation and
analysis; articulation; formation; formulation; instrumentation; implementation; further
evaluation/analysis etc. What is provided here (see Appendix 4) is only a discussion of a
forest policy framework, for illustration and reference.
The purpose of articulation is to involve those who are affected by the policy in
discussions and to obtain their views and opinions on the one hand and to provide them
clarifications and elaborations on the other. Policy will tend to be less subject to criticism if
it is the product of agreement of a large number of people and institutions.
A distinction is drawn between policy formation and its formulation. The formation
of policy is based on inputs from a relatively large number of people – stakeholders and
interested persons. Its formulation, on the other hand, is essentially a political statement from
the Government. There are some cases where forest policies have been issued under an
executive order of the agency responsible for forestry, without necessarily being underwritten
by the Government/Parliament. The strongest argument in favour of a formal forest policy is
that it represents a political commitment. A legislated policy goes with the assurance that
initiatives will continue to be imperivous to leadership changes. Once legislated, it can be
changed/amended only through going over the entire legislative process, thus serving as a
check to avoid arbitrary changes by the executive machinery. While rules and procedures for
day-to-day administration can change, the underlying policies and principles should not,
without legislative approval.
The whole system of policy development and review/revision process calls for a
strong and continued political will and commitment. Equally essential and important is the
professional leadership to facilitiate and guide the process.
167
Figure 7- Graphical Representation of Organisational Re-structuring for NWFP/Forestry Development
Note: Under the enterprise system forestland still remains government/public property; and enterprise pays charges/levies to the Government based on agreed terms. Enterprise can also undertake activities on contract for both private and public sector (e.g. protected area and watershed management)
Authority (PFA)
Government Policy and Facilitation
NWFP/Forestry Enterprise (Autonomous National NWFP/Forestry Board)
(Apex Body)
3rd Tier 3rd Tier 3rd Tier
2
nd
Tier
2
nd
Tier
2
nd
Tier
2
nd
Tier
2
nd
Tier
2
nd
Tier
2
nd
Tier
2
nd
Tier
2
nd
Tier
Remarks
Apex Body: Direction, policy, legal responsibility, international relations, foreign
assistance, negotiations with government and banks, exports/Imports, arrange to collect and remit taxes due to Government, HRD, overall planning support, monitoring and oversight. Responsible for smooth, efficient, profitable and autonomous functioning of the enterprise system.
Third Tier: A federation of second tier enterprises. (Optional, depends on need). Support lower units in terms of
financing/refinancing; legal support; contract arrangements and assignment of tasks: processing and marketing; linkup with banks; training/research aspects; conflict resolution
Second Tier: A federation of primary units at the district or defined levels. Supports primary units with expertise (eg. planning), extension, heavy equipments on hire, utilization/marketing of produce, credit facilities, micro financing, company-community partnerships, processing.
First Tier: Primary units/co-operative societies involved in production (wood, non-wood, agro-forestry) management; land owning and operationally autonomous. Supported technically, financially and otherwise by higher level federations.
FIRST TIER – PRIMARY UNITS
DEC
ENT
RALI
SED
U N
I T S
168
A NWFP (and forest) policy should be dynamic; it should not and cannot, stay the
same over any long period of time. Accordingly, it is important that a NWFP (and forest)
policy is periodically evaluated to determine whether it should be maintained, modified or
changed altogether. There should also be a formal mechanism for regular revision of the
policy in the light of new circumstances or availability of new information.
169
5. RECOMMENDATIONS AND CONCLUSIONS
RECOMMENDATIONS
Wood and non-wood resources co-exist in the forests (as also wildlife and
biodiversity); as such, their fortunes are interlinked, though at the product level they exhibit
distinct characteristics. In the domesticated situation, plants producing wood and non-wood
produces are mostly grown separately; but several of them can be grown together. In view of
these characteristics, the policies and the legal framework relating to wood and NWFPs will
have some distinct aspects as well as some common aspects. Therefore, policies and legal
instruments relating to wood and non-wood produces can be brought under a common
umbrella of forest policy and legislation, with specific/identifiable sections dealing with the
distinct aspects of wood and NWFPs. Alternatively, separate policy and legal frame work
can be developed for NWFPs (as is done in several instances for wildlife and biodiversity), in
which case some amount of overlap/interface is unavoidable. The recommendations given
below may be read with the specificity and commonality of these forest produces in mind.
Compile a hand book of valid laws, rules, regulations, guidelines etc.
applicable/relevant to the NWFP sub sector (or to the forestry sector, with specific
reference to the NWFP sub-sector); analyse them for conflicts, contradictions,
overlaps, gaps and weaknesses with a view to improving and regularly upgrading
them; keep the hand book current by incorporating changes and deleting those
which are no longer valid.
Formulate/establish a NWFP policy (which may incorporate the definition and
classification of the NWFPs of Lao PDR, consistent with international
classifications), either as free-standing policy or as an identifiable/specific
component of National Forest Policy (which also needs to be newly formulated).
Develop/formulate/establish technical prescriptions covering all aspects (e.g.
inventory, management, harvesting, processing, safety aspects, marketing etc.)
for the different categories of NWFPs or for specific NWFPs as appropriate.
Develop/establish and operate a statistical and non-statistical information system,
covering resource information, management information and market information
to generate and provide updated and reliable information for effective planning
and implementation activities.
Institute a comprehensive system of forest management planning, incorporating a
major component on NWFP planning.
Substitute the ongoing arbitrary quota system for NWFPs by the scientific
concept of annual allowable (sustainable) harvest, based on growth and yield
170
studies and adjusting for conservation "set aparts" and obligations to meet
traditional rights and subsistence needs.
Appropriately reform the institutions dealing with NWFPs, to be capable of
focusing on solving problems, structuring them properly with emphasis on their
development facilitation role, and to be pro-active rather than re-active.
Emphasize on a strategy of strengthened research capability and human resource
development, in the area of forestry in general and NWFPs in particular, for
enhancing technology and productivity as appropriate to the different categories
of NWFPs.
Collaborate in NWFP research activities and information sharing with countries
having similar ecological conditions, particularly at the regional/sub regional
level; participate in relevant activities of CIFOR; tap the capability available in
university faculties to support NWFP research; promote client participation in
problem identification and field research activities.
Establish adequate extension facilities to promote NWFPs.
Identify, on a continuing basis, new NWFP species and their potential uses; adopt
domestication of NWFP species wherever feasible, with genetically improved
varieties.
Enhance productivity, yield and value of products through enhanced technology,
downstream processing and developing new value-added products.
Mobilize venture capital for product research, for developing new products and
for promoting such products.
Establish and promote an efficient and waste free harvesting system.
Promote value-chain investment, and enhance rent capture and retained value.
Give special consideration to NWFP-based small-scale enterprises, to support off-
farm income.
Encourage and promote, wherever (and as far as) possible, integrated
production/development of wood and non-wood products, for benefiting from
their complementarity.
Address issues of market access and development for increasing number of
NWFPs, utilizing new information technology and promotional measures such as
investment/information brochures, trade fairs etc.
Promote establishment of autonomous producers‟ groups and associations for
specific NWFPs, or for several of them, grouping/combining villages (and
existing small-medium enterprises) as appropriate for viability and advantages of
scale, and establishing a federated structure of associations as feasible – e.g.
autonomous body(ies) for development, management, production, processing and
marketing of NWFPs. Incorporate other forms of participatory entities such as
partnerships and small scale private operations in the purview of the federated
structure.
171
Remove gender constraints in NWFP related activities.
Arrange for farmers (family units) to have access to credit, through appropriate
funding arrangements (e.g. development banks, rural banks, revolving funds,
targeted NWFP funds under the auspices of producer associations etc.); encourage
the local traders to become investors/entrepreneurs and to participate in the
activities of the producer groups (or autonomous bodies), and not to remain as a
separate competing institution.
Develop/improve capacities (skills), efficiency and productivity all along the
entire NWFP market chain.
Develop and effectively operate a systems model of marketing development for
NWFPs in Lao PDR (which necessarily should cover all vital aspects such as
resource management, production and processing), with component sub-systems.
With such an operational system, the impacts/implications of changes (actual or
desired) in the value/intensity/quality/quantity of component elements (e.g. new
research findings, new markets, new products, price changes etc.) can be assessed
and modifications/re-adjustments effected as necessary or appropriate.
Develop a master plan (a long term perspective plan) for NWFP development,
consistent with the overall forestry development plan or strategy, defining definite
phases (for immediate term, short term, medium term, and long term) and
activities by phases, thus providing an agenda for NWFP development.
CONCLUSIONS
NWFPs form an important natural resource, which is capable of supporting poverty
alleviation and socio-economic development, along with biodiversity conservation.
However, without a realistic policy and its effective implementation through supporting laws,
rules and regulations and involvement of genuine stakeholders in its management, the NWFP
resources would tend to be depleted through careless overexploitation and other
unsustainable practices.
For a long time, NWFPs have remained as a group of minor products. With
increasing deforestation, emphasis accorded to bio-diversity conservation and ban on timber
felling, NWFPs have re-emerged with some prominence. While, this in many cases was as a
survival strategy, the NWFPs have proved to be capable of supplying the demand for
industrial raw material and consumer products. Inspite of it, NWFPs have suffered from the
lack of a clear policy, legal framework and institutional support. As a result, NWFPs are
constrained by inadequate technology, low productivity, lack of competitiveness, poor
facilities for value-added processing, inadequate emphasis on market, and lack of market
information. Actions required to improve the situation of NWFPs cover all relevant aspects
involving technology, socio-economics, trade and development, environment, institutions
and investment.
172
Subsistence-orientation of NWFPs is no longer an important policy goal. New
emphasis is on market-orientation. Failure to adopt market-orientation, and to satisfy market
requirements of quality and quantity, will result in failure of NWFP enterprises, inspite of
their favourable attributes such as environmental friendliness. Market-orientation for NWFPs
calls for several important attributes: improved technology, development support institutions,
professional management, updated knowledge and information system, primary and
downstream processing, adequate financing and free market access. Productivity, efficiency
and competitiveness through constant innovation are the key to ensure success of NWFPs in
the market place.
Success in marketing and obtaining of fair price for products involve: access to
market information; market research and analysis; availability of specialized services;
product promotion; value-added exports; co-operation of producers for greater strength in
dealing with traders; group marketing directly to consumers; training in marketing of
NWFPs; and co-ordination among related agencies and activities. Trade promotion activities
focusing on NWFPs at the national level, and establishment of fair trade practices, can
considerably help for obtaining fair prices for the products. Market-orientation consistent
with economic efficiency will result in an outward spiral of growth, at an increasing scale.
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178
Appendix 1
Terms of Reference
International Expert in Forest Policy and Legislation
The total service period during the four project phases is two months
Under the general supervision of the FAO Representative, the technical supervision of the Development Law Service (LEGN) and the Forestry Development Group of the Regional Office for
Asia and the Pacific (RAPO) and in close collaboration with the National Project Director (NPD), the
other project consultants and counterparts, the consultant is required to perform the following tasks:
First mission during Phase 2 (month 3 – 9)
Review and amend the study carried out by the national forest policy and legislation expert
on existing forestry policy and regulations, forestry legislation and code of forest practices on
NWFP production and marketing, including quota systems and import taxes in Lao PDR;
Provide technical input to the work of the national working group which will review NWFP-
related policy and regulations;
Prepare recommendations to improve NWFP-related legal framework and regulations;
Assist the NWFP marketing specialists in developing a model for NWFP marketing;
Provide technical assistance for the implementation of the project, specifically on legal
issues;
Provide guidance to the work of the national forest policy and legislation expert.
Main results expected: mission report, including recommendations to improve the
NWFP related legal framework.
Duty Station: Vientiane, Lao PDR (with field trips).
Duration: one month
Second mission during Phase 3 (month 10 – 22)
Conduct a study on the existing forestry policy and regulations on NWFP production and
marketing, including quota systems and import taxes in the sub-region.
Main results expected: report on the issue.
Duty station: home station
Duration: 0.5 month
Third mission during Phase 4 (month 23 – 24)
Provide comments to the proposed changes and adjustments to existing NWFP-related
legislation, elaborated by the national forest policy and legislation expert;
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Participate in the final workshop in Vientiane and present and discuss the main results and
recommendations;
Provide technical assistance to the GoL in implementing the recommendations presented by
the working group
Main results expected: written version of paper presented at the national workshop
available.
Duty station: Vientiane, Lao PDR (with field trips)
Duration: 0.5 month
Qualification required: lawyer, forester or closely related discipline with second
expertise in national legislation on natural resources. Expertise
in forestry and forest policy desirable.
Language: English. Knowledge of Lao or Thai language is preferable but
not a required.
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Appendix 2
List of Some of the Better Known Species in Lao PDR Providing Non-wood Forest Products
Name of species
Acacia catacheu
Adenosma tinctoria
Aegle marmelos
Agathis damara
Aglaia spp.
Aglaonema mopestum
Aleurites montana
Alpinia blepharocalyx
Alpinia galanga
Alpinia officinarum
Alstonia scholaris
Amomum ovoiduem.
Amomum villosum
Amorphophalus companulatus
Andrographis paniculata
Andropogon citratus
Anisum verum
Aquilaria crassna
Areca catechu
Arenga saccharifera
Arenga westerhouttii
Artemesia annua
Artocarpus integrifolia
Arundinaria spp.
Baccaurea ramiflora
Bambusa spp.
Barringtonia acutangula
Bixa orellana
Boehmeria malabarica
Borassus flabellifer
Broussonetia papyrifera
Brucea sumatrana
Buchanania glabla
Butea superba
Caesalpinia sappan
Calamus spp.
Calophyllum spp.
Caryota urens
Castanopsis indica
Catharanthus roseus
Ceiba pendandra
Centella asiatica
Cephalo stachyum spp.
Chrysanthimum spp.
Cinnamomum camphora
Cinnamomum cassia
Cinnamomum verum
Clitoria hanceana
Codonopsis javanica
Coix lacrymajobi
Combretum spp.
Coscinium fenestratum
Coscinium usitatum
Crotolaria spp.
Curcuma xanthorizae
Curiuma domestica
Dendrocalamus spp.
Desmodium spp.
Dioscorea bulbifera
Diospyros mollis
Dipterocarpus alatus
Dipterocarpus spp.
Dracaena cambodiana
Dracaena loureiri
Emblica officinalis
Eugenia spp.
Ficus spp.
Gigantochloa albociliata
Gmelina arborea
Homolomena aromatica
Hydnocarpus kurzii
Hypericum japonicum
Imperata cylindrica
Indigofera spp.
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Indosasa chinensis (1. sinica)
Jatropa curcas
Kaempferia parviflora
Korthasia laciniosa
Mallotus philippinensis
Melia azadirachta
Metoxylon spp.
Morinda citrifolia
Morus acidosa
Morus alba
Myristica fragrans
Ocimum sanctum
Orthosiphun stamineus
Osbeckia chinensis
Oxytenanthera spp.
Palaquium spp.
Panax spp.
Pandanus fibrosus
Pandanus spp.
Passiflora foetida
Pentace burmanica
Phoebe spp.
Pinus kesiya
Pinus merkusii
Piper longum
Piper ribersoides
Polygonum multiflorum
Rauwolfia serpentina
Sapindus spp.
Scaphium macropodium
Schizostachyum blumei
Shorea obtusa
Shorea siamensis
Smilax glabra
Solanum torvum
Spondias mangifera
Stephania rotunda
Sterculia lychnophora
Streptocaulon extensum
Strychnos nuxvomica
Styrax tonkinensis
Tamarindus indica
Tectona grandis
Terminalia chebula
Terminalia nigrovenulosa
Thysanoloema latifolia
Thysanoloema maxima
Tinospora crispa
Zanthoxylum limonella
Zizyphus spp.
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Appendix 3
Extract of Section 2.5 NTFP Management from the Report on Legal Framework of Forestry
Sector, for Forestry Strategy 2020 in Lao PDR, by Todd Sigaty (2003)
2.5 NTFP MANAGEMENT
This section reviews the legislation relevant to NTFP Management in Lao PDR
2.5.1 Background on Policy and Legal Framework on NTFP Management
In Lao PDR, NTFPs have been estimated to be worth over $300 per year for rural village households comprising over 50% of subsistence livelihood and as high as 75% of village cash income
in forest areas (Foppes and Ketphanh, 2000). The initial forestry legislation, CoM Order 74 (1979),
recognized NTFP collection as customary use consistent with forestry instructions, but required all NTFP sales to be made to state forest enterprises (now abolished) with payment of restoration fee to
the GOL. The 4th
Party Congress (1986) recommended that MAF issue a regulation on management
of valuable NTFPs, but specific legislation has yet to be issued for this sub-sector as NTFP
management continues to be regulated by various production forestry and customary use legislation.
2.5.2 Legislation Relevant to NTFP Management
The Forestry Law, Article 25, states that the use of NTFPs shall be conducted according to
specific legislation issued by the relevant authority. MAF has yet to issue a regulation on NTFP management despite being one of the most important sources of economic trade and village
livelihood throughout the country. The result of having no specific legislation for this sub-sector
means that NTFP use and management either go unregulated or get managed pursuant to legislation on production forestry (FL, Articles 25-29; PM Decree 59; PM Orders 10 and 15; MAF Reg 221) or
customary use by villages (FL, Art 30; MAF Reg 535, Art 7; MAF Orders 54 and 377). In some
cases, local authorities and villages adopt rules to manage and monitor NTFP use in their jurisdiction
but national guidelines for this procedure do not exit. PM Decree 164 and MAF Regulation 524 regulate the use of NTFPs within NPAs.
2.5.3 Major issues Regarding the Legal Framework for NTFP Management
There needs to be a definitive legal definition and categories for NTFPs. MAF Regulation 221, Article 2 defines NTFPs as products available in the natural forest, such as stems, climbers,
roots, fruit, flowers, leaves, shoots, bark, seeds, oil, resin, gum, mushrooms, honey, etc. It further
categorizes NTFPs as seasonal (flowers, fruits, bamboo, shoots, mushrooms etc) and non-seasonal
(bamboo, rattan, resin, bark, roots etc). These examples help, but legislation should provide criteria to establish a list national and local lists of protected NTFPs to guide preparation of local rules and
management plans.
Forestry officials responsible for drafting and implementing legislation on NTFP management have a general lack of access to available data on NTFPs and do not collaborate with the
various institutions that possess the limited information that exists. PM Order 15, Article 8 requires
MAF to coordinate with the Ministry of Commerce and Ministry of Finance to conduct studies and take measures to promote and establish NTFP plantations and processing factories at the provincial
level. However, management of NTFPs should be expanded beyond ministries and the four levels of
forest management organizations (Forestry Law, Article 59) to include the research institutions, local
authorities and communities with adequate knowledge to regulate the local use of NTFPs.
Access to NTFP collection is closed to those with legally recognized customary rights within
a village boundary or those with permits for production forest areas under an approved management
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plan. NTFP regulation can be placed into two categories:1) Customary use by villages; and 2)
Commercial use by individuals and organizations. Customary includes the collection, sale and use of forest products by an individual or group with a root in custom over a long period of time recognized
by society or law used in a sustainable manner for housing, fences, firewood, food, medicine, etc (FL,
Art. 30; MAF Reg. 535, Art. 2; MAF Orders 54, 377). Customary use is governed by national
legislation and local rules (FL Art.63) that place limits on the time (seasons), place (core zones of a NPA) and method (not harmful to the forest) that NTFPs may be collected, used and sold. Customary
use includes the sale of NTFPs under a plan authorized by DAFO and District Governor (MAF Reg.
535, Art.7,8; Order 54, Art.6). Commercial use of NTFPs is currently regulated under the same system for the harvest of timber limited to areas designated for production under an approved
management plan (FL, Art.25; PM Decree 59, Art. 9; MAF Reg 221, Art 7). To qualify for bidding
on the quota an NTFP survey must be completed by June 6th
and sent to MAF by July 7th (PM Order
15, Art.1)61
. MAF Reg.221, Articles 8, 19-24 outlines the system for NTFP collection and timber
harvest. These requirements should be reviewed and possibly tailored to fit NTFP based on the
amount to be harvested. The current system contains burdensome requirements such as a business
license, tax registration, criminal clearance, timber contract, surveys, permits issued by PAFO, management and annual operation plans in addition to payment of planting fees for those NTFPs
listed in MAF Order 1848. Rather than relying on PM Order 15 and MAF Regulation 221, it appears
that MAF must define a new system for NTFP sales to comply with the requirement under PM Decree 59 (2002), Article 11 that all NTFP sales be made to processing plants under competitive
prices based on market-oriented, transparent methods to receive the highest prices.
NTFP Collections is prohibited:
Within core prohibition zones is a NPA and corridor zones connecting NPAs (FL Art. 42;
PM Decree 164, Art. 4; MAF Reg 524, Art 10);
during the closed season for rattan, eaglewood, bamboo, resin, roots and vines from 31
May to 31 October as adjusted by each province (PM Order 15, Art. 2);
by methods that destroy forest, trees, bark, bamboo less than 3 years old, rattan stems or
that uses fire or chemicals to extract resin, oil (MAF Reg 221, Art. 22).
Customary use should include the collection of NTFPs in all forest zones within a village boundary, although limited in protection and conservation forest. MAF Reg 535, Art. 2 clearly
permits NTFP use in a production forest zone, but Articles 7 and 8 also permit villagers to collect
NTFPs, even for commercial purposes, in natural forest within the village boundary. Village forest management agreements should permit limited collection in village protection and conservation
zones. Limited use needs to be defined in local rules based on the specific situation, but may include
collection of non-protected NTFPs that can be gathered in a sustainable method with little or no
impact on the management objectives for these zones. (MFA Reg 221, Article 2,22). The prohibition in Article 41 of the Forestry Law against collection of protected NTFPs is not a total ban of all
species.
NTFP guidelines should be incorporated into management plans (NPA, production forest areas, VFMA) upon consultation with stakeholders with customary and commercial user rights.
NTFPs may be imported and exported pursuant to regulations and approval by the GOL (FL, Art. 29;
PM Order 15, Art. 6, 7), but eaglewood and rattan may only be exported as semi-finished and finished products. This requirement is strongly promoted, but not mandatory, for export all other NTFPs (PM
Order 15, Art. 6).
61 The need to have quotas for NTFPs and timber set by the NA as part of the socio-economic development plan
is under review as part of adoption of MAF Regulation on National Production Forest to be issued in 2003.
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Findings for the Legal Framework for NTFP Management
There is no specific legislation covering NTFP collection, use and management forcing
this sub-sector to be either unregulated or governed by production forestry or customary use legislation.
MAF Reg. 221, Art. 2 provides a definition for seasonal and non-seasonal forest
products, but does not provide criteria to adequately define or categorize NTFPs.
MAF should publish a list of protected NTFPs along with criteria and a procedure to
update the list on a regular basis and provide deference to local authorities to publish
specific list.
Access to NTFPs is closed to those with rights under customary use or an authorized
permit.
Customary use of NTFPs includes the collection, use and sale of NTFPs in all natural
forest within village boundaries according to a VFMA (FL.30, MAF Order 54 and 377)
and a plan and local rules approved by DAFO and the District Governor (MAF 535, Art. 7).
NTFP harvest for commercial use shall only occur in designated production forest areas
under an approved management plan regulated by quota, permits, fees and other
requirements (FL: PM 59; PM 15; PM 18; MAF 221)
Planting fess apply to the commercial use of NTFPs listed in MAF order 1848.
NTFP collection is prohibited in NPA core zones, corridor zones, and for some species
during the closed season (PM 164; MAF 524).
NTFP use is limited in protection forest areas and protection and conservation forest
zones within village boundaries (FL 41, 42; PM 164; MAF 524; MAF 535)
Eaglewood and rattan may only be exported as semi-finished and finished products (PM
15).
There is general lack of access to adequate data on NTFP by the officials who are
drafting and implementing forestry legislation and policy.
Recommendations for the Legal Framework for NTFP Management
MAF should issue a regulation on NTFP collection, use, sale and management to provide
national guidelines that can be adapted in local rules and management plans,
A list of protected NTFPs should be published based on a set criteria that can be updated
and tailored by local authorities and villages based on local management and sustainability.
Customary use should include access and limited collections within protection forest
areas and protection and conservation forest zones within village boundaries.
Specific legislation is needed to regulate the commercial use of NTFPs rather than using
the same system as timber production. NTFP sales would need to comply with reform on sales as stated in PM Decree 59, Art. 11.
Management plans for national production forest areas, protected areas and other forest
areas should reference the use of NTFPs.
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MAF should collaborate with other customs and tax officials on the regulation of import,
export and duties for NTFPs since the Forestry Law, Art. 29 defers to other legislation.
MAF should ensure that information on NTFP management is available and should
utilize the new SNV post at the National University to assist on the national program for NTFP management.
186
Appendix 4
An Annotated Outline for a National Policy for Non-Wood Forest Products for Lao PDR
I. Preamble
[Preamble provides a brief background and rationale for the contents of the policy
and helps to view it in the right perspective].
II. Imperatives
Imperatives are based on the vision and values cherished by the Nation. Being
absolute and non-negotiable requirement, imperatives form the bedrock of the policy. Most common imperatives established in some countries include sustainability, efficiency, people‟s
participation, poverty alleviation etc.
Sustainability: The important functions of forests in protecting soil, water, wildlife and bio-diversity are vital for the welfare of the present and future generations. Sustainability of
forest and NWFP resource is essential to prevent environmental deterioration and economic
decline and to safeguard ecological processes. It involves a definite notion of respect for the
interests of our descendants.
Ecologically, sustainability has two attributes in addition to equalling harvest to
regeneration: i.e., sustain adaptability and capacity for renewal of plants, animals, soils and
waters; and maintain biological diversity, the variety of life in all its forms. It also implies the understanding of the irreplaceable and unknown values of wild plants and animals, and of
the utility of watershed forests and wetlands. However, there is no market mechanism to
value them adequately.
Efficiency: Efficiency is generally measured as the ratio of output to input – in terms of materials, services, time, costs, benefits, and satisfaction, in any comparable unit of measure.
It is difficult to have a precise measure of efficiency, but it is a strong tool for decision-
making and evaluation. Investments in NWFP production should be competitive and capable of earning higher returns, compared to other alternatives.
Participation: Participation of people is both an objective and a means of development. It is
crucial in charting the course of forestry development in the right direction, and in ensuring its sustainability.
Other imperatives can be added or substituted for the above – e.g. gender
mainstreaming; poverty alleviation; respect for customary rights. The imperatives should be
kept in balance with one another, by optimizing all of them rather than maximizing any one of them.
III. Principles
Principles are those considerations, which influence the policy development. The
Forest Principles adopted at the United Nations Conference on Environment and
Development (Rio de Janeiro, 3-14 June 1992) had stressed that forestry-related issues and
opportunities (which includes NWFPs) should be examined in a holistic and balanced manner
This can be considered either for a free standing formal policy on NWFPs or for a component sub-policy on
NWFPs within a National Policy for the entire forestry sector.
187
within the overall context of environment and development, taking into consideration the
multiple functions and uses of forests as well as the potential for development that sustainable forest management can offer. In view of the above, and based on the fundamental principles
enshrined in the Constitution, as well as those enunciated in the major national policies
related to social welfare, economic development, technology development and environmental
conservation, the principles guiding the NWFP policy (and the national forest policy) should be based on the need for:
Integrated approach to landuse;
Maintaining ecological processes and balance;
Conservation and management of biological resources;
Recognizing the importance of bio-technology;
Recognizing the option and existence value of forests;
Satisfying the needs of people for forest goods and services;
Recognizing rights of traditional communities;
Supporting national food security;
Providing additional employment and income;
Biodiversity inventories and information management;
Defining and retaining intellectual property rights on NWFPs based discoveries and
traditional knowledge;
Increased welfare and socio-economic equity;
Social consultation and balancing of interests;
Supporting private sector and co-operatives;
Facilitating participation of women in development;
Promoting collective self-reliance of rural communities;
Ensuring planned approach to development;
Improvement of technology;
Promoting rural industrialization and development;
Intensive and integrated management of production forests;
Ensuring adequate returns on investments in forestry;
Appropriate tenurial arrangements providing incentives for sustainable management
of forests;
Ensuring autonomy and efficiency of forestry enterprises;
Promoting private and co-operative sectors;
Institutional improvements;
Incorporating environmental costs and benefits into market forces and mechanisms;
Inter-sectoral co-ordination;
Increased availability of financial resource;
General and specific guidelines for sustainable management of NWFPs;
Better information and scientific research;
188
Capacity building (including human resource development) for policy
implementation; and
International co-operation.
As they are part of the policy, only principles of vital importance need to be listed.
IV. Definitions
The proper use of terms conveying specific concepts requires that they be defined adequately. Since definitions serve to specify the scope and coverage of the terms in the
context involved, different definitions are likely depending on the purpose for which, or the
situation wherein, they have been made. The importance of clear, consistent and generally acceptable definitions cannot be over-stated.
All important terms are, accordingly, to be defined, including the term “non-wood
forest products” and “ non-timber forest products”. It is possible to adopt one of the existing definitions of the terms involved, or develop a definition which is more appropriate for the
purpose.
In respect of NWFPs, being the subject/focus of the policy we are discussing, it is
necessary to provide a classification, since there are a large number of NWFPs. Care should be taken to see that the classification is “consistent” with the existing and internationally
accepted product classifications. Classification of NWFPs can be made on different criteria:
Part of the plant (and nature of fauna) from which the produce is derived –
e.g. whole plant, root, shoot, leaf, bud, fruit, bark etc., as well as inspects/bugs, small and large animals.
Nature of the produce – e.g. edible products, fodder, exeudates, dyes and
colourants, sweeteners, fibers, flosses, medicinal product etc.
Category of uses – e.g. subsistence consumption, traditional uses, market
consumption etc.
Products of different categories may need some specific policy measures.
V. Objectives
Objectives are what the policy is designed to achieve. The principal aim of NWFP (and forestry) policy is to ensure ecologically sound and sustainable development of the
resources (which is renewable), and to support economic development through balanced and
appropriate measures of resource expansion, conservation, management and utilization, with
all their backward and forward linkages and involving people in all stages of development. It is important that a rational balance between the ecological and economic roles of NWFPs
(and forestry) is established.
Long Term Goal
The long-term goal of policy on NWFPs (and forestry) should be to substantially
enhance the contribution of NWFPs (and forestry) to the Country‟s ecology and economy.
This long-term goal is to be more explicitly defined by specific categories of objectives and related policy measures. Depending in the nature and scope of policy
measures, the situation relating to supply and demand for products, efficiency of
management, rate of deforestation, effectiveness of conservation, flow of investment funds
189
etc can change. Thus, achievement of policy objectives depends on how effectively the
policy measures are adopted and implemented.
Specific Objectives
An indicative list of specific objectives that should govern the NWFP (and forestry)
policy are given below:
To effectively conserve, rehabilitate, replenish, expand, enhance, develop and
manage the NWFP (and forest) resources of the country, as a renewable national
asset, to meet the vital needs of the people for these goods and services, now and in
the future; also, to meet the demands of export market.
To protect the NWFP (and forest) resource (all forest lands generally and
watersheds particularly), against degradation by deforestation, soil erosion, shifting
cultivation, land slides, floods, fire, grazing, and other natural and anthropogenic
causes, and to enhance their beneficial roles and functions.
To protect wild flora and fauna, conserve ecosystems, preserve bio-diversity,
maintain essential ecological processes, and improve the environmental services of forests through maintenance, and where necessary restoration, of ecological balance
and rational management, and use of NWFP (and forest) resources.
To enhance the productivity of NWFPs (and other forest produces) in terms of
quantity and quality through appropriate technical and management interventions; and also to obtain enhanced value for the produces through quality enhancement
and marketing strategies.
To promote and support domestication (as farms and plantations) of NWFPs for
increased productivity, and indirectly to conserve the natural biodiversity resources.
To promote efficient and waste-free harvesting, processing, and utilization of
NWFPs (and other forest produces) in order to obtain increased net
benefit/profit/rent or return on investment; to promote NWFP (and forest) based
economic growth and export earnings (though increased exports or import
substitution) of the country.
To achieve, for NWFPs, a change from:
lower value to higher value production (involving phasing out
weaknesses and phasing-in strengths);
subsistence –orientation to profitable market-oriented production;
fixity of static traditions to flexibility of dynamic progress, for
improving competitiveness;
competition (among small and medium producers in the same area) to
collaborating partnerships.
These changes will facilitate increased access to markets.
To provide increased socio-economic benefits to the people of the country by
contributing to: the basic needs of families, poverty alleviation, employment creation,
income generation and better living conditions, and accelerated agricultural and rural development.
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To obtain improved and remunerative (fair price) market access through enhanced
competitiveness.
To develop and support a net work of appropriate and suitably linked institutions at
different levels, consisting of public, private, corporate and co-operative sectors involved in NWFP (and forestry) development, each with its specific institutional
policy (vision) and mission, legal instruments and financing mechanisms suitably
updated and modified on a continuing basis, and together capable of addressing the
present and emerging issues and challenges in a smooth and co-ordinated manner.
To facilitate human resource development for NWFP (and forestry) development in
qualitative and quantitative terms, including education, training and improvement of
skills and capabilities.
To promote and support goal-oreinted research on NWFPs (and forestry), and to
improve research capabilities through adequate training, appropriate institutional restructuring and provision adequate incentives.
To introduce new and modern technology to continuously upgrade the sector.
To establish an effective system of extension for disseminating new and improved
technology, research information and knowledge for the benefit of farmers and rural
community; for arranging delivery of improved planting materials and other inputs; and for creating public awareness about the roles and contributions of NWFPs (and
forestry).
To establish an adequate and effective mechanism of co-ordiantion with other sectors
of economy having influence on NWFPs (and forestry), and also with international
agencies and institutions concerned.
To enhance the knowledge and information base of NWFPs (and forestry), including
acquisition and generation of new knowledge and information, and to disseminate
them widely.
To institute and institutionalize a system for: regularly reviewing and updating the
NWFP (and forest) resource situation in the country; assessing the need for changes in policies and priorities; and reporting the results periodically to the appropriate
national/government body.
VI. Policy Measures
Policy measures represent action areas and they are linked to the objectives. While
one measure may address more than one objective, often several measures may be required to
address one objective. Implementation of policy measures may call for specific strategic elements (e.g. human resource development, involvement of private sector, trade
negotiations, new legislation, regulatory measures, enabling provisions for the executive
branch to develop enforcement mechanisms and so on), as appropriate.
VI-1 Ownership
Ownership and tenurial rights over resources (NWFPs, forests and lands) should be
made very clear, to avoid legal complications. NWFPs grow, or are grown, in government-owned and controlled land, public waste land, private land, community land etc. Often,
government exercise control or right over certain specified produce (e.g. sandal wood in some
countries) found in private lands, thus restricting the rights of the private sector. Also, in
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some cases, forests owned by government are managed and utilized by corporate, private
and/or co-operative sectors under various types of instruments. In these varying situations, tenural security is very important as a policy incentive to facilitate investment and
entrepreneurial commitment.
This is an area requiring appropriate legislation and legal instruments, covering all
aspects (including penalties for violations), for effective implementation.
Also ownership aspects are linked to other policy aspects, particularly relating to
organizational structure; and these linkages also needs to be made explicit and transparent.
Availability of related skills, training facilities and information are relevant strategic elements.
VI-2 Resource Inventory
In a general sense resource inventory is an accounting and/or assessment of NWFP (and forest) assets; in its technical sense it covers not only the details/measurement of area
and stocking, but also the scientifically estimated growth and yield by specified categories
such as gums, resins, fibers, phyto-chemicals aroma chemicals, etc. (since NWFPs are a heterogenous group). In a situation of technological limitations, inventory can be based on a
sample survey, if adequate for the purpose in hand. Also, the NWFPs in the management
area can be classified as: those in current use, those with medium term prospect, those with less likely prospect and others. (This could be based on local knowledge or research findings
on new products, or new uses for old products).
In a scientifically advanced stage, it may be possible to estimate the yield of active
ingredients (e.g. Azadirachtin from Melia azadirachta, Trimyristin from Myristica fragrans). But, due to lack of appropriate inventory methodology, in some countries, even the most
common of the NWFP resources such as rattan and bamboo have not been fully assessed. In
respect of resource surveys there is also need to consider the market for the product, both current and future.
Thus, inventory of NWFP resources has two important aspects: physical inventory of
flora and fauna and their chemical prospecting for active ingredients such as alkaloids, steroids and saponin. Only a small percentage of flora and fauna has been examined for
chemical, and particularly pharmaceutical activity. There is urgent need for comprehensive
inventory of NWFP resources to be undertaken on a well planned and phased manner.
Inventory (including bio-prospecting for active chemical ingredients of plants, micro-organisms, etc) of NWFPs is complicated, requires special skills, and is time consuming and
expensive. Only very few countries have embarked on such an initiative. These
investigations for fibre, phytochemicals, aromatics, gums, resins, etc. have to consider: the nature and extent of distribution of specific plant resource; their density of occurrence; their
potential yield from wild sources under different treatments; their suitability to be grown
under multi-species environment (e.g. enrichment planting under natural forest cover and
agro-forestry) or under monoculture. Inventory should also include fauna. Traditional knowledge and ethno-biology can contribute to provide indications on how to proceed for
developing NWFPs.
Key questions that such investigations should address include: what NWFP resources are available in the management area? What are their ecological, biological and chemical
characteristics? What products can they produce? How abundant are they, including their
regeneration? What are the social and cultural values associated with their use?
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Inventories help to understand the real situation of resource base (e.g. which of the
produces are commercial and available for sustainable production), and to prioritise produces/species for production and conservation.
Some of the strategic interventions required are: land use/capability classification;
acquisition/enhancement of knowledge and technology; collaboration with corporate sector
(e.g. with pharmaceutical companies in respect of bio-prospecting)*;
promulgation/strengthening of laws on contracts, negotiations etc.
This policy measure has close linkages with marketing, research and development,
human resources and skill development, and institutional arrangements.
VI-3 Resource Management
NWFP (and forest) resource management, among others involves protection of the
resource (from fire and other injurious agents), enhancement of quality and productivity, continuous tending, control of illegal activities and bio-diversity conservation. [The only way
to save biodiversity in a country facing growing developmental pressures is to find non-
destructive ways of using it].
Some of the strategic interventions in this regard are: ensuring integrity of
management units, enhancement of technology, research support, prevention/control of
illegal activities (by use of appropriate legal instruments/penalties, and also by use of “social-fencing”), fire protection, involvement of stakeholders and management planning.
Since NWFP (and forest) resource management is central to the policy, it has
linkages with all other policy measures.
VI-4 Domistication
Domestication of plant species (involving several stages/steps such as: identifying
species suitable for domestication, plant introduction trials and selection of suitable species, genetic improvement, planting stock development, developing improved agronomic practices
and technology for intensive cropping), is a means of ensuring controlled production and
economic success. In that sense, domestication is both a policy and a strategy. It serves to
expand the resource base and indirectly to safeguard the wild NWFP resource available in natural forests. Efficiency is a prime consideration in artificially raising NWFP resources.
Some of the strategic elements to be underlined with regard to this policy measure
are: site selection based on appropriate criteria, species–site matching, identification of seed sources and seed certification, management planning, R & D for improving technology,
attracting investment funds, legal protection and incentives for investment in domestication
activities, autonomous organizations, infrastructure development etc.
This aspect of NWFP development has clear linkages with market and institutional arrangements (e.g. credit availability, legal protection, taxes and charges, governance etc.)
It may be noted that under the current level of knowledge and technology, many of
the NWFP species are not (yet) amenable for domestication, economically and ecologically.
* Activities of the National Institute of Biodiversity (INBIo) of Costa Rica, in collaboration with Merck & Co, a
pharmaceutical giant, for chemical prospecting in the forests for developing drugs, is a case in point. Other
countries and other pharmaceutical companies have embared on similar ventures. “Biodiversity to work for
society” calls for sophisticated technology for biodiversity prospecting, bio-diversity inventory, biodiversity
information management and biodiversity information dissemination.
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VI-5 Harvesting of Produces
Harvesting (and collecting) of NWFPs (and other forest produces) happens in the
interface between resource management and resource utilization. The harvesting system
(including: scientific assessment of harvestable quantity and maturity for
harvesting/collecting; institutional arrangements; tools and techniques; pre and post-harvest treatments as a measure of increasing the value of harvested produce) has strong influence on
the condition of the crop and yield in the succeeding cycle, whether annual or periodical.
Special technical/harvesting prescriptions are required for crops or plants producing different types of produces – leaf, bark, roots, stumps, shoots, flowers, fruits etc. (and also for
harvesting whole plants/herbs, mushrooms and ferns).
Problems of law enforcement and governance in forestry are mostly related to
harvesting and utilization of forest produces including NWFPs. Violations of technical and legal prescriptions occur because of the avarice of the perpetrators. Illegal harvest is often
linked to powerful chains.
Strategies involved for ensuring better harvesting practices are: improvement of tools and techniques; low impact harvesting; enforcement of legal instruments for ensuring
sustained harvest, and to prevent wasteful harvest; measures to control illegal harvest;
stringent penalties.
Harvesting has linkages to resource management, marketing and trade, research and
technological innovations, capacity building and other institutional arrangements.
VI-6 Processing and Value Addition
Processing of harvested produces adds to their value, adds to their storability and
shelf life, enhance their quality for consumption, and support trade on a wider scale, apart
from providing increased employment and income earning potential. The more the producers (and countries) move up in the value chain processing, the more will be the benefits
accruable, through product refinement. While benefits from primary production may be
accounted for by comparative advantages provided by locality factors, the benefits from
value-chain processing depends mostly on competitive advantages developed through conscious efforts and planning. In planning for industrial development based on NWFPs (or
other forest produces), it is prudent that the level of processing (primary, secondary and
further downstream) and sale of operations (cottage, small, medium and large) be so designed as to obtain maximum social and economic benefits (value addition). The proportion of the
different scales, categories and sophistication of processing in a country is a function of
development; the sophisticated and larger units tend to displace the traditional and smaller
units, with economic progress.
The strategies to be used in enhancing processing and value addition, among others,
include: acquisition of technology, human resource development, generation of competitive
advantages, enhanced research inputs, collaboration with enterprises in advanced countries, availability of credit, product diversification, creation of appropriate business environment,
and investment friendly rules and regulations.
Processing has linkages with: resource management, harvesting, research and technology development, trade and marketing and institutional arrangements.
VI-7 Marketing and Trade
Trade is a prime avenue for economic development; market and marketing are dominant factors in this regard. Success or, other wise, of a production venture is decided in
the market. The factors deciding the performance and competitiveness, in the market are:
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product demand, product quality, packaging and presentation, price, product consistency,
consistency of supply schedule, competition from better and cheaper substitutes, and so on. These in turn are influenced by: cost of production, distance and cost to reach the product to
the market, transport and storage facilities (e.g. refrigerated vehicles) available etc.
Apart from the above, trade (particularly international trade) is also affected by other
factors such as tariff and non tariff$ regulations, import/export quota restrictions, taxes and
charges, foreign exchange regulations and so on.
There are, however, several factors, which distorts trade and market, such as:
existence of illegal practices including illegal trade and unhealthy interference of middlemen.
Appropriate marketing arrangements (e.g. marketing co-operatives, trade agreements,
cartels, e-trade) are vital. Information on several related aspects are crucial to improve
market access. Product development and enhancement should go on continuously as part of product promotion, apart from brand endorsements, trade fairs, business meets, and other
promotional efforts.
There is need for a policy provision on prices and rents on NWFPs ( and other forest
goods and services), to signal their value and scarce nature in relation to demand. Provision is also essential to protect intellectual property rights relating to traditional knowledge on
flora and fauna and to the sovereign right over the value of information on biological and
chemical diversity.
Overall, there is need to reduce/eliminate the unnecessary (weak) links in the chain
from the production unit to the market. Producers associations/groups if properly organized
can effectively undertake marketing activities (including processing); there is strength in numbers, even informal grouping of producers (or net works) can help; use of venture capital
helps to support product development; certification, eco-labeling etc. will support market
confidence; and government‟s facilitation role and commitment is crucial.
Market outlook studies are important for designing strategies for future. The prospect for sale of carbon credits, afforestation certificates and other forms of
internationally tradable instruments under CDM (Clean Development Mechanism) of the
Kyoto Protocol should be assessed and suitably pursued.
The strategies involved in marketing and trade development, among others, are:
measures to build market confidence; market research; market information system; research
support; certification system; product diversification; elimination of unnecessary middlemen
and enhanced producer-consumer contacts; institutional support; and legal and regulatory instruments.
Marketing and trade aspects are linked to production and processing, research and
technology, institutional arrangements and regulatory measures.
VI-8 Research
NWFPs and research in forestry are both neglected areas. This double neglect is
evident in the decreasing priority for NWFP research. There is hardly any need to further stress the importance of research (covering basic, applied and strategic research) and
technology development for enhancing productivity and competitiveness in the area of
NWFPs (and forestry), and for supporting sectoral growth. Research and technology
$ Non tariff trade restrictions include: quality and technical stands; health and safety regulations; certifications
for organic production, fair trade, origin, chain of custody etc.
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development are an area of unlimited scope to create and maintain a competitive edge in the
market.
The situation of research on NWFPs (and forestry) in Lao PDR is very weak,
characterized by lack of funds, facilities, skills and manpower.
There is a need to promote research and technology development relating to the
different aspects of NWFPs such as resource development, propagation, domestication of species, conservation measures, environmentally sound harvesting, post harvest treatments,
product development, processing, marketing and trade. It is necessary, however, to avoid
unnecessary repetitions and to use limited funds effectively. Farmers participation in research activities can enhance the applicability of research results.
The emphasis should be for objective oriented research. Research objectives should
feed into the development objectives of the sector, which in turn should be closely linked, to the country‟s development objectives.
Once the weaknesses and inadequacies afflicting NWFPs (and forestry) research are
removed, the existing institutions (with due modifications and strengthening) can progress
towards self-reliance and excellence.
Strategic interventions required for strengthening research, among others, include:
provision of targeted funding and improved facilities; improved skills and human resources;
institutional autonomy; technology transfer; collaboration with countries of excellence; networking with universities and private initiatives in NWFP research; client participation.
Since research is essential on all aspects of NWFP (and forestry) development,
research linkages exist with all the aspects. Institutional and policy support is prime, in strengthening NWFP (and forestry) research and technology development.
VI-9 Instituional Arrangements
Sectoral policy itself is apart of (or rather at the apex of) the institutional arrangements of the sector. It is the guiding instrument, and mother of all legal instruments,
pertaining to the sector. Specific components of institutional arrangements, among others,
are:
Legal instruments (laws, rules and regulations).
Information system (statistical and non statistical).
Planning and programming.
Funding/financing.
Human resource development.
Extension and outreach
People‟s participation.
Monitoring and evaluation.
Resource accounting.
Co-orientation and conflict resolution.
Organizational system.
Legal Instruments
Legal instruments comprise a system of laws, rules and regulations, touching on
every aspects of the sector – ranging from resource management and protection, resource
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accessibility and tenure, utilization and trade, and monitoring and evaluation to royalties and
charges, peoples participation, incentives, operational safety, powers and functions of sectoral organizations, control of illegal activities, protected species, intellectual property rights, pair
wages, financing and so on.
Laws, rules and regulations are meant to be strictly enforced, without fear or favour.
Also, all rules and regulations are to be widely made available (and published), so that all concerned are fully aware of their implications.
Some of the sectoral interface activities are also influenced/controlled by laws of
other sectors/agencies – dealing in trade, price stabilization, land use, investment, environmental conservation, taxation, criminal offences, co-operatives and autonomous
societies etc. etc. It is necessary to prepare and release a comprehensive compendium (or
handbook) of all laws, rules and regulations of the sector (with their legal interpretations by courts of law, where relevant), providing cross-references to the laws, rules and regulations of
other related sectors/agencies which affect NWFPs (and forestry).
In addition to the formal legal instruments, there are the technical manuals/codes (e.g.
harvesting codes for different species), which are implemented through provisions the contractual and other in legal agreements; as such they have a semi-legal status.
Overall the legal framework relating to NWFPs (and forestry) in Lao PDR is
extremely weak. There is need to review them for their adequacy with reference to the policy objectives to be achieved, and to modify/strengthen them suitably.
Information System
NWFP (and forestry) sector development needs to be based on reliable information relating to resource endowment, technology, market, price, competition, infrastructure and so
on. The information required are of both of statistical and non statistical nature including
maps, observations etc. These are necessary to support studies on sectoral outlook and are vital for planning.
Information system includes several components – namely, information sources,
information services, information management, dissemination mechanisms, target users and feed back mechanisms.
Information technology (IT) has advanced considerably; and IT-based innovations
are revolutionising the way the business is conducted.
Lack of adequate and reliable information is a major deficiency of the NWFP (and forestry) sector of Lao PDR. This deficiency is to be addressed on a priority basis, availing
the new and developing information technology, to the extent possible. There is also a need to
change the wrong perception that forests which do not produce timber are of no value.
Planning and Programming System
Planning (and the plans) can be broadly categorized as strategic (e.g. master plans,
perspective plans, long term plans) and operational (e.g. management plans, working plans, action plans, short term plans).
Plans and programmes help to translate the policy objectives in an organized,
efficient and balanced manner. Planning is highly demanding on data; and quality of planning depends on analysis of issues based on correct information and scientific data.
Research feeds into the process of planning (and decision making) through providing
technical/scientific information and technological outlook, thus helping to develop a
structured programme of action.
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Lack of reliable information and consistent data is a serious inadequacy affecting the
quality of planning in Lao PDR. It has been noted in several instances that the existing statistical information are weak and incomplete and lack consistency. This needs urgently to
be corrected.
Strategic plans are developed based on analysis of outlook and scenarios – specifying
objectives, outputs, phased activities (structured programmes), requirement for funds/facilities and human resource, role of stake-holders, criteria for monitoring and
evaluation etc. Strategic planning is not likely to succeed without strong support from the top
levels of administration. Strengthening/modification needed in the organizational system would depend on the institutional importance assigned to strategic planning and the level of
its integration with sectoral decision process. But, often, it is seen that strategic planning is
treated as a cosmetic, but low priority, requirement. Why? Because there are in many cases, other interests which compromise the genuine professional/scientific and efficiency
considerations.
Operational planning provides prescriptions, schedules and other pertinent directions
for implementing components of strategic plans – either by programmes, projects, subjects or activities, or by geographic units. In respect of NWFPs (and forestry), a management unit is
defined by geographic area. Because of ecological interactions between different land
types/classes, the concept of “landscape planning” is of great relevance to NWFPs and forestry.
A proper system of planning and programming does not exist for NWFPs (and
forestry) in Lao PDR. This is another essential area where priority attention is warranted.
Funding and Financing
Funds and finances are required to fuel the engine of development.
Financing/funding for NWFP (and forestry) development can come from several sources: forest revenue, taxes and charges, private investment (including foreign direct investment),
loans and savings, revolving funds, special targeted funding arrangements and so on. To
support regular flow of funds, and financial autonomy, several countries have developed innovate mechanisms such as forest funds, private ledger account and special revolving
funds.
In supporting local private sector or corporate sector investment, commercial and
other banks can play a crucial role. Support for the large number of small investors, whose sources of funds are their limited personal savings and loans from friends and relatives (and
middlemen), rarely comes from any formal credit facilities. In some countries, micro-credit
facilities have been developed. The credit administration should have the capacity to see that the investment does not end up as failures.
There is need to establish a sound system of fund mobilization and utilization for
supporting development of NWFPs (and forestry).
Human Resoruce Development
Development of capable and competent human resource is a vitally important
strategy measure in all sectors. Human resource management/development involves development of capability and skills (education and training), recruitment standards, job
analysis, workload analysis, skill need analysis and so on. Along with core competency,
development discipline is also important.
In the NWFP (and forestry) sector of Lao PDR, capacity is weak or lacking in a number of specific areas – e.g. plant chemistry, bio-prospecting, designing of resource
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survey, conservation management, plant genetics, process technology, international trade,
law, economics and planning and soon. A new policy for NWFPs (and forestry) has to address this aspect seriously.
Extension and Outreach
Apart from delivering technology and other inputs (seeds, fertilizers) to farmers/communities, the knowledge and insight to be achieved through a comprehensive
system of extension and information dissemination can help attitudinal changes, awareness
creation, aspiration building, and efficiency in production. Farmers need to know where, what for, and how the produces (e.g. cinnamomum bark, cardamom) produced and supplied
by them are used; and the increase in the value of the raw produces along the route to the
final market.
Important action components in this regard are: assessment of information needs; discussions; design of extension programme and testing; demonstration of good practices and
their potentials; cross site visits; dissemination of price and market information, and
information about potential opportunities. Training and seminars on concepts, use of information technology, reference to information materials/bulletins, and contact with
relevant international agencies are all part of accessing information and updating knowledge.
Needs of extension for NWFP development are complex; and existing facilities in Lao PDR are extremely inadequate.
People‟s Participation
People‟s participation (in development activities) generally refers to involvement of the people in planning, decision making, implementing and benefit sharing. Importance of
people‟s participation in NWFP (and forestry) development has been highlighted in several
studies. While people‟s participation as a concept has been generally accepted, it has been variously interpreted with reference to its scope; and, there are several institutional
constraints in implementing it effectively. Because of its importance, people‟s participation is
often made a policy imperative in many cases.
Monitoring and Evaluation
This is an aspect which is talked about a lot, as vitally important to ensure better
performance, but rarely carried out. This should, therefore, find a place as a „policy prescription‟.
Resource Accounting
Lack of a NWFP (and forest) resource accounting system, as part of the System of National Accounts has resulted in a lack of awareness about the valuable contributions of the
sector, and the failure of the sector to get the priority it deserves. A clear awareness about the
value of NWFP (and forest) benefits and establishing a system for forest resource accounting
will, to some extent, help to improve the situation.
Co-ordination and Conflict Resolution
Conflict of interest between and among the producers, processors, traders and government officials at the national, provincial, district and village levels (as well as between
these levels) tend to arise often. Problems may also arise because of lack of inter-sectoral co-
ordination.
Major conflicts between forest bureaucracy (dealing with NWFPs) and the public result mostly from the difference in interpreting the policies and rules. Also, conflicts arise
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from conflicting policies of other sectors or aspects (including cross-sectoral aspects).
Collaboration and co-ordination with other sectoral institutions and stake holders will help to reduce such conflicts and to avoid flash points of confrontation.
Co-operation with international agencies active in the country, and co-ordination of
their activities in the field of NWFPs (and forestry) is another dimension of this institutional
function.
Organizational System
Organizations are meant to be the creations of policy, for implementing the provisions of the policy. The type/nature of organizations are often adjusted to the nature of
ownership (private, public, mixed), management responsibility (private, public,
community/co-operative) and tenurial arrangements (e.g. short medium or long term leases).
Organizational structure, accordingly vary depending on the ownership of forest resources and other relevant factors.
A structured organizational system is the crucial means of implementing policy
mandates and enforcing related laws, rules and regulations.
Policy changes, often, result in restructuring of the sectoral organizations (public and
private, small and large, traditional and modern); and the nature of restructuring is to be based
on a keen consideration of the situation and the nature and severity of deficiencies to be addressed.
Organizational structure is the rational arrangement of different functional units
(agencies, establishments) in an integrated, and co-ordinated manner. The component units
of the system may be public, private or co-operative, performing enforcement (authority) and development (enterprise) functions.
A general principle accepted in several countries is that the public administration
should perform its mandate and mission of enforcing the national policies and regulations and facilitate sustainable development. The responsibility for organizing, implementing and
managing production and development activities should be entrusted to autonomous
enterprises.
Forestry (and NWFP) sector organizations need to be re-structured by separating its
authority functions and enterprise functions. The functional incompatibility of forest sectoral
organizations limits the effectiveness of public forest administrations (PFAs) in implementing
current responsibilities as well as adjusting to institutional reforms required. Because this dual role is, often, the root cause of many of the problems facing the forestry (and NWFP)
sector, there is need to separate them. Experience has proven, throughout the world, that
administrative bureaucracies are not the appropriate institutions to develop and manage enterprises. There are lessons to be learned from that experience. Along with the incongruity
of being in charge of both authority and enterprise functions, the PFA is, most often,
characterized by: top-down command structure, inadequate delegation of decision powers,
emphasis on process than promptness, cumbersome procedures and irrational contracts; and administrative expediencies overshadowing professional proprieties. Government agencies
not only have their rules and regulations but their own culture. And, culture needed to run an
enterprise profitably and efficiently is very different from those seen in law enforcing bureaucracy.
For effectiveness, the authority enforcing regulations to achieve policy goals should
be strict and rigid, and may often tend to the process-oriented; and the enterprise should be autonomous, innovative, accountable, transparent and flexible to meet the ever-changing
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situations, and above all result-oriented. Both cannot be run efficiently under the same set of
rules and guidelines. The importance of this functional separation has now been better understood.
VII. Policy Implementation
While the findings and considerations can be neatly grouped or categorized, in actual implementation of NWFP (and forestry) development, several activities will have to be taken
up simultaneously and executed by stages. Therefore, for rational development, the various
strategic proposals for enhancing market-oriented NWFP (and forestry) development are to be addressed in its immediate, short, medium and long term aspects.
Corresponding to the time ranges mentioned, four development phases/stages can be
definded, total duration of which may be kept flexible, but is not to exceed 20 years – (i)
initiation/design phase (immediate term); (ii) transition/testing phase (short term); (iii) consolidation phase (medium term) and (iv) „towards auto-expansion‟ or steady state phase
(long term). Length of the phases may, as appropriate, vary between 3 to 6 years. Each of
the phases will involve several inter-linked activities, to be defined in a perspective planning document.
In the design phase (immediate term), it is necessary to define the actions during the
following phases in the form of a long term plan, apart from immediate actions for awareness raising, capacity building, improving technology and agronomic practices, initiating
important research programmes, rationalizing laws and regulations, establishing partnerships
and collaborative arrangements, initiating institutional restructuring etc. It is necessary to
involve the stakeholders in preparing the long term plan. A task force of qualified exports may be given the responsibility to formulate the plan.
VIII. Reporting
The effectiveness of policy implementation is to be closely monitored, and reported
to the highest legislative authority (National Assembly or Parliament) in the country.
Accordingly, the “state of NWFP (and forest) resource in the country and its utilization be
appraised periodically; it be made mandatory that a detailed forest resource planning document be submitted to the highest legislative body by the appropriate authority, at a
regular interval of 8 or 10 years. Along with that, the long term perspective plan for forestry
(national forest programme or national forest strategy) can be updated and extended for a further period of 20 years.
The strategic elements to translate the above into action involve:
Collection, collation and analysis of relevant data and information.
Forest cover monitoring and evaluation.
Policy evaluation from the point of view of resource sustainability.
