Democratising forest business: a compendium of successful locally controlled forest business organisations

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Macqueen, D.
Bolin, A.
Greijmans, M.
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Forests are mostly inhabited by approximately 1.3 billion rights holders. We all depend onthem indirectly. Forests therefore have to cater to the multiple needs for local goods (access to income, food, clean water, wood energy, construction materials, fertile soils, medicinal and cosmetic products, and recreation) and global goods (climate change mitigation, biodiversity conservation, hydrological and mineral cycles). It is a tall order because many of these needs compete with one another. Plus, the needs are growing all the time. Reconciling competing needs is best handled democratically. Because of this, installing good forest governance has been much in vogue within recent sustainable development approaches. But a blind eye has been turned to the business models that directly impact forest landscapes. Many of these serve one single economic need – income – to the detriment of other local or global goods. Typically this is not good locally. Increasingly it is not good globally. Alternative, more democratic, business models are needed. Business models in which local people, living with the consequences of their decisions, reconcile competing needs from forest landscapes in businesses they control. Only then will the pursuit of income be subservient to other local and global goods. Is the imperative for democratic and locally controlled forest business far-fetched? Representatives of indigenous peoples, community forestry and family forestry think not. They have united behind an agenda of 'investing in locally controlled forestry' (ILCF). Furthermore, increasingly comprehensive bodies of scientific evidence point to better impacts on both forests and people of locally controlled forests – in comparison with government-controlled or private-sector alternatives. What is much more of a challenge, however, is to understand how the democratisation of locally controlled forest business can be made to work economically. With local control comes a significant business challenge – how to reconcile the multiple perspectives of local forest-family smallholders, communities and indigenous peoples into coherent and viable business value propositions? At its core, this is an organisational challenge. Because of that, the focus of this book is primarily on the organisational ownership and management structures of forest business. The introductory Chapter 1 describes the reasons why organisation is so critical for ILCF at a range of levels, from local to international. The main purpose of this book, however, is to present 19 case studies from 14 developing countries that show how local people have been democratising forest business. By this is meant the process of asserting collective local control through ownership and management arrangements so that the integrated needs of families, communities and indigenous peoples remain central to the business operation. An attempt was made by the Forest and Farm Facility (FFF) and Forest Connect alliance (programmes that led this work) to choose 'successful' case studies. But success, beyond the survival of the business, is difficult to define and is always a work in progress. The reason is that more democratic business models are invariably assessed differently against the multiple different objectives of their members. Instead of a fixation on the metrics of success, each case study is structured in five sections: the enabling environment, the business model, the ownership structure, how challenges were overcome, and critical success factors. The books ends with a set of conclusions drawn from analysis of the full set of 19 case studies – which are essentially a set of lessons of what makes for success. At this headline level, some statements are blindingly obvious – others perhaps less so. But there is much in the detail that can only be gleaned from a careful reading of the case studies themselves. Not every case study exemplified all of these conclusions (which shows that businesses can survive without getting everything right!). But most case studies did provide explicit examples in support of these conclusions (ordered under the corresponding sections in which the case studies were presented in Box 1.1). It is hopedthat such lessons will assist serious development efforts to scale-up the organisation of locally controlled forest business – both for the local and the global public good. Main conclusions from the analysis of the case studies in this book: The enabling environment a. An enabling policy environment that gives local people secure commercial forest tenure can trigger or scale-up viable and sustainable business models The business models b. Strong local origins and member-based ownership give resilience c. Support for capacity development is enhanced if it includes training in financial administration alongside technical support appropriate to scale d. Investing in market research underpins evolution towards better and also more diversified business e. Finding ways to differentiate products or services in the market is critical for continued success f. Reinvesting some profit towards upgrading the offer to customers helps long-term business prospects g. Establishing second-tier organisations that aggregate products and provide services to first-tier producer organisations provides a longer-term growth trajectory The ownership structures h. Clarity over the organisational structure and roles and responsibilities within it increases business efficiency i. Financial oversight mechanisms assure accountability and help avoid financial abuses that frequently lead to business failure j. Maintaining staff mobility and leadership turnover can help to spread capacity within the business and improve long-term sustainability How challenges were overcome k. A broad vision within which the pursuit of profit plays a supporting role helps maintain cohesion in a group business l. Finding creative ways to secure finance for investment and cash flow is often essential to success Key success factors m. Seeking out and taking advantage of partnerships and networking opportunities is crucial to opening up new business opportunities n. Maintaining a strong commitment to staff development and production or service quality wins and keeps customers

Subject Keywords
Forests, Certification
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Alternative Strategy
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Burkina Faso
Lao People's Democratic Republic
Viet Nam
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