Community-based Forest Enterprises in Tropical Forest Countries: Their Status and Potential in Tropical Countries
Report to the ITTO / November 1, 2006
Augusta Molnar, Megan Liddle, Carina Bracer, Arvind Khare, Andy White, and Justin Bull
Forest Trends/Rights and Resources Group
With Contributions from
FAO, RECOFTC, IUCN, FPCD, EMPA, CCMSS, IBENS, CATIE, and Forest Action-Nepal
EXECUTIVE SUMMARY
Small and medium scale enterprises, including those owned by communities, are widely known to comprise the bulk of forest industry globally. Approximately 30 million of the 47 million permanent jobs in the forest industry are found in informal, small enterprises, most of which have less than 20 employees (Poschen 2001). While statistics for the forest sector are generally not complete for the tropical producer countries, surveys of specific countries and regions and information from other sources confirm that small and medium scale enterprises are the main component of forest industry in these countries as well (FAO 2005, WRI et al. 2005). Small and medium scale enterprises make up 96 percent of all enterprises in Brazil and 20 percent of GDP and the bulk of Brazilian forest sector operations (May et al. 2003). They comprise 95 percent of all forestry enterprise activity in India (Saigal and Bose 2003) accounting for 500,000 jobs of which only 150,000 are in the formal sector. The Food and Agriculture Organization of the United Nations (FAO) estimates that the contribution of forestry to employment is more than double that in global statistics when the small scale, community and informal sectors are included. This is not only a developing country phenomenon; SMEs provide more than 50% of the wood harvested in the EU countries and the United States, and generate a majority of the employment in processing and contracting (UNECE/FAO 2000). Like all forest enterprises, CFEs have a mixed record, with numerous cases of failures as well as successes, but it is only in a few countries that favorable conditions have been in place over a sufficiently long timeframe, to assess their development or viability over time. This scoping identifies some shared trends for the emergence and development of CFEs in a range of different tropical countries that indicate a high level of promise overall.
