Open Knowledge (FSC OK)

The controversy about the benefits of certification to timber producers has centered on the �market premium� and �market access� arguments. Some studies claim evidence that consumers are willing to pay a market premium between 2% and 30% for sustainably produced, certified timber products. Others doubt or flatly deny this notion. Most of these studies are based on willingness-to-pay surveys of consumer demand leaving aside the crucial question whether or not the producers of certified logs, which bear the costs of forest certification, obtain a financial reward for their efforts. The paper contributes quantitative evidence to the on-going debate. Time series of prices of certified and uncertified logs (2000 to 2004) provided by three forest management units from Sabah, Malaysia, were examined in a comparative analysis (ANOVA) of 6 species groups. The results suggest that forest management certification achieves a market premium for certified logs. In particular high quality hardwoods (e.g. Selangan Batu, Keruing) destined for the export market fetch a price premium of 27% to 56%. Lower quality timbers (e.g. Kapur, Seraya) also fetch a price premium, however the difference is less pronounced (2% to 30%).