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  • Strengthening producer organizations is key to making finance inclusive and effective

Strengthening producer organizations is key to making finance inclusive and effective

Biofuel plantations in the Miombo woodlands, Zambia. Photo by J. Walker/CIFOR
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Duncan Macqueen. ©Macqueen/IIED

As part of the “Innovative finance for sustainable landscapes” interview series, the International Institute for Environment and Development’s (IIED) Forest Team Leader Duncan Macqueen spoke with Tropenbos International’s Nick Pasiecznik on increasing finance and investment in sustainable forestry and farming for smallholders.

“The challenge is to build strong producer organizations and change the perceptions of risk, return and transaction costs,” Macqueen said. This highlights direct support for strengthening membership, management and business as a strategy to develop bankable businesses with investment returns that are attractive to potential financiers. This will, in turn, improve livelihoods and provide an incentive for sustainable forest management.

Among Macqueen’s most recent publications is Access to finance for forest and farm producer organisations (FFPOs).

How do you define ‘inclusive finance’ and why is it important?

Inclusive finance ensures that local forest and farm producers are collectively involved in generating incomes, saving and making investments that improve their livelihoods. Importantly, it is not primarily about individuals, but about producer organizations that include women, landless people and ethnic minorities.

In developing countries, microfinance is rarely at a scale that can lift people out of poverty. Microfinance does, however, help to build individual capacities to understand and manage larger finance. To be transformative for forests and livelihoods, producers must be organized. Producer organizations are essential. They increase the economic scale and technological efficiency of transactions, and the credibility with which investments to upgrade transactions can be managed.

International finance rarely reaches forest and farm producers because financial institutions perceive the risk-to-return ratios and transaction costs to be too high. The challenge is to build strong producer organizations and change the perceptions of all involved.

A training course for women enterprise groups in Belize: “something we should be doing more of”. ©Macqueen/IIED

What are the underlying reasons for the underfinancing of locally controlled agricultural and forest business?

Underfinancing comes down to a lack of a well-directed ‘enabling investment’, i.e. financial support that does not require a financial return. For small businesses to attract ‘asset investment’ which does require a financial return, enabling investments must secure tenure, develop technical production skills, enhance market access and business know-how, and strengthen producer organizations. Building up these four areas makes such businesses ‘bankable’.

There is also a finance gap between micro-finance and large-scale finance. Microfinance is often available. The sums are small, the periods short, the returns fairly predictable (with a high ratio of working-to-fixed capital), and interest rates can be raised to cover high transaction costs. But microfinance rarely stretches to mid-level investments allowing growth. Large-scale finance is also available, but commercial banks rarely address the small needs of producer organizations because of perceptions on returns, risks and costs.

Read more: Background note on FTA financial innovations for sustainable landscapes interviews

What are we not doing right, or not doing well enough, or not doing at all?

Producer organizations must be strengthened. This includes the leadership, management structure and staff skills required to manage savings transparently. Local producers need to organize safe ways of managing savings. Whether to invest in better technology or to repay loans for investment – saving is the key common need. Once saving patterns are established, producer organizations can build up capital, to invest, use as collateral, or to offer financial services for members.

Better forest business incubation is needed to build financial management capacities within organizations that are inclusive of marginal groups. This is already routine in business incubation, but many for-profit services struggle to cover costs in remote forest landscapes. Unless donors can subsidize such costs, their reach is unlikely to extend beyond urban centers. A more innovative solution is to develop business incubation services within umbrella (or ‘apex-level’) producer organizations to aggregate, process and market products and services from their members.

More financial de-risking is required for external investors. There are five immediate priorities: link producer groups with conventional finance through face-to-face meetings or social media technologies; form partnerships to develop loan appraisals for proposals to banks; find ways of developing collateral acceptable to banks (such as standing tree volume); offer guarantees based on social and environmental commitments to offset perceptions of risk; and help banks redesign financial products to meet producers’ capabilities.

Value chain analysis of elephant foot yam with an association of farmers in northeast Myanmar. ©Macqueen/IIED

How is your organization addressing inclusive finance, and what are your experiences and key lessons?

IIED is shaping more inclusive finance within its entire program. Its Natural Resources Group has helped FAO, IUCN and Agricord design a financing mechanism to support producer organizations through the Forest and Farm Facility (FFF). The first phase included 947 producer groups across 10 countries, with 262 businesses helped to add value or diversify products, and 158 examples of new access to finance.

Direct grants to producer organizations require gender equality and inclusion in membership, leadership and representation. Support includes market analysis and development training, learning exchanges, business fairs and trade shows, links to policy platforms, direct brokering of finance with value chain partners and banks, toolkits for risk management and forest business incubation.

FFF is also now reviewing how to improve access to finance and install forest business incubation capacity into apex-level organizations. We have learnt that direct support for strengthening membership, management and business is highly effective. Bankable businesses emerge with investment returns that are attractive to potential financiers, improving livelihoods and providing an incentive for sustainable forest management. This also creates a pipeline for investible businesses for financiers that will attract future investment. A focus on grants, concessional loans or patient equity for locally controlled forest cooperatives results in inclusive cooperatives, but a focus on debt finance for large corporates leads only to local people being treated as cheap labor.

Read also: Making landscape finance more inclusive

What examples do you have of successful or promising ‘model’ approaches or innovations?

Promising innovations come less from inclusive access to finance, but from inclusive distribution of finance. This is a question of business model design, often found in businesses with democratic decision-making where members who live with the consequences of their business decisions, balance economic, social and environmental trade-offs.

An IIED-led analysis of 50 case studies of democratic business models from 24 countries showed six clear innovations. Democratic oversight bodies governing environmental and cultural stewardship improve the natural environment. Negotiated benefit distribution and financial vigilance mechanisms improve material wealth. Networked links to markets and decision-making improve social connectedness. Processes for conflict resolution and justice improve peace and security. Processes of entrepreneurial training and empowerment for both men and women improve human capacity development. Branding that reinforces local visions of prosperity improves a sense of community purpose.

In Nicaragua for example, FFF-mediated finance for the Mayaring women’s cooperative led to the development of 15 new productss using ‘tuno’ (Castilla tunu) bark cloth for vegetables. This led to a 35 percent rise in household incomes and a forest landscape restoration project using the species.

What is your vision on how best to increase finance and investment in sustainable forestry and farming?

My vision is to tailor different financing approaches to different producer organization types. For example, finance could be directed to indigenous peoples’ organizations in natural forests for territorial delimitation and protection; community forest organizations at the forest edge for making sustainable forest management work in collectively controlled natural forests; forest and farm businesses in planted forest ‘mosaics’ for improved social organization alongside asset investments in production; and peri-urban and urban forest product-processing businesses to increase productivity. Financing could be primarily grant finance to indigenous peoples, grants and blended/concessional finance for community forest enterprises, a mix of leasing, trade chain finance and commercial debt finance and guarantees for producer organizations, and more conventional debt finance for peri-urban groups There is no simple rule – everything depends on the circumstances of the group.

Catalyzing multitiered organizations is part of this vision. This includes first-tier local producer organizations selling products and services; second-tier regional organizations aggregating products, adding value through processing, marketing and providing business incubation services to members; and third-tier national federations lobbying governments for more enabling policies. Evidence suggests that strengthening producer organizations is effective in poverty reduction, and improving governance, forest landscape restoration and delivery of the Sustainable Development Goals.

By Nick Pasiecznik, Tropenbos International.

This interview has also been published on the Tropenbos International website.


Duncan Macqueen is a principal researcher in IIED’s Natural Resources Group. IIED is a “policy and action research organization promoting sustainable development and linking local priorities to global challenges”. His research focuses on the success factors for locally controlled forest enterprises, and he has published widely on the subject. We invited Duncan to express his views on inclusive finance, based on his 25 years of experience of working with smallholder groups and communities to strengthen their capacities to run forest-based businesses and access markets and finance. He and his team have worked closely with FAO and the World Bank, among others. His publications include Prioritising Support for Locally Controlled Forest Enterprises and Financing forest-related enterprises: Lessons from the Forest Investment Program: IIED Briefing.

This article was produced by Tropenbos International and the Center for International Forestry Research (CIFOR) as part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA). FTA is the world’s largest research for development program to enhance the role of forests, trees and agroforestry in sustainable development and food security and to address climate change. CIFOR leads FTA in partnership with Bioversity International, CATIE, CIRAD, INBAR, ICRAF and TBI. FTA’s work is supported by the CGIAR Trust Fund.

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  • Strengthening producer organizations is key to making finance inclusive and effective

Strengthening producer organizations is key to making finance inclusive and effective

Aerial view of a transition forest area in Bokito, Cameroon. Photo by M. Edliadi/CIFOR
Posted by

FTA COMMUNICATIONS TEAM

Duncan Macqueen. ©Macqueen/IIED

As part of the “Innovative finance for sustainable landscapes” interview series, the International Institute for Environment and Development’s (IIED) Forest Team Leader Duncan Macqueen spoke with Tropenbos International’s Nick Pasiecznik on increasing finance and investment in sustainable forestry and farming for smallholders.

“The challenge is to build strong producer organizations and change the perceptions of risk, return and transaction costs,” Macqueen said. This highlights direct support for strengthening membership, management and business as a strategy to develop bankable businesses with investment returns that are attractive to potential financiers. This will, in turn, improve livelihoods and provide an incentive for sustainable forest management.

Among Macqueen’s most recent publications is Access to finance for forest and farm producer organisations (FFPOs).

How do you define ‘inclusive finance’ and why is it important?

Inclusive finance ensures that local forest and farm producers are collectively involved in generating incomes, saving and making investments that improve their livelihoods. Importantly, it is not primarily about individuals, but about producer organizations that include women, landless people and ethnic minorities.

In developing countries, microfinance is rarely at a scale that can lift people out of poverty. Microfinance does, however, help to build individual capacities to understand and manage larger finance. To be transformative for forests and livelihoods, producers must be organized. Producer organizations are essential. They increase the economic scale and technological efficiency of transactions, and the credibility with which investments to upgrade transactions can be managed.

International finance rarely reaches forest and farm producers because financial institutions perceive the risk-to-return ratios and transaction costs to be too high. The challenge is to build strong producer organizations and change the perceptions of all involved.

A training course for women enterprise groups in Belize: “something we should be doing more of”. ©Macqueen/IIED

What are the underlying reasons for the underfinancing of locally controlled agricultural and forest business?

Underfinancing comes down to a lack of a well-directed ‘enabling investment’, i.e. financial support that does not require a financial return. For small businesses to attract ‘asset investment’ which does require a financial return, enabling investments must secure tenure, develop technical production skills, enhance market access and business know-how, and strengthen producer organizations. Building up these four areas makes such businesses ‘bankable’.

There is also a finance gap between micro-finance and large-scale finance. Microfinance is often available. The sums are small, the periods short, the returns fairly predictable (with a high ratio of working-to-fixed capital), and interest rates can be raised to cover high transaction costs. But microfinance rarely stretches to mid-level investments allowing growth. Large-scale finance is also available, but commercial banks rarely address the small needs of producer organizations because of perceptions on returns, risks and costs.

Read more: Background note on FTA financial innovations for sustainable landscapes interviews

What are we not doing right, or not doing well enough, or not doing at all?

Producer organizations must be strengthened. This includes the leadership, management structure and staff skills required to manage savings transparently. Local producers need to organize safe ways of managing savings. Whether to invest in better technology or to repay loans for investment – saving is the key common need. Once saving patterns are established, producer organizations can build up capital, to invest, use as collateral, or to offer financial services for members.

Better forest business incubation is needed to build financial management capacities within organizations that are inclusive of marginal groups. This is already routine in business incubation, but many for-profit services struggle to cover costs in remote forest landscapes. Unless donors can subsidize such costs, their reach is unlikely to extend beyond urban centers. A more innovative solution is to develop business incubation services within umbrella (or ‘apex-level’) producer organizations to aggregate, process and market products and services from their members.

More financial de-risking is required for external investors. There are five immediate priorities: link producer groups with conventional finance through face-to-face meetings or social media technologies; form partnerships to develop loan appraisals for proposals to banks; find ways of developing collateral acceptable to banks (such as standing tree volume); offer guarantees based on social and environmental commitments to offset perceptions of risk; and help banks redesign financial products to meet producers’ capabilities.

Value chain analysis of elephant foot yam with an association of farmers in northeast Myanmar. ©Macqueen/IIED

How is your organization addressing inclusive finance, and what are your experiences and key lessons?

IIED is shaping more inclusive finance within its entire program. Its Natural Resources Group has helped FAO, IUCN and Agricord design a financing mechanism to support producer organizations through the Forest and Farm Facility (FFF). The first phase included 947 producer groups across 10 countries, with 262 businesses helped to add value or diversify products, and 158 examples of new access to finance.

Direct grants to producer organizations require gender equality and inclusion in membership, leadership and representation. Support includes market analysis and development training, learning exchanges, business fairs and trade shows, links to policy platforms, direct brokering of finance with value chain partners and banks, toolkits for risk management and forest business incubation.

FFF is also now reviewing how to improve access to finance and install forest business incubation capacity into apex-level organizations. We have learnt that direct support for strengthening membership, management and business is highly effective. Bankable businesses emerge with investment returns that are attractive to potential financiers, improving livelihoods and providing an incentive for sustainable forest management. This also creates a pipeline for investible businesses for financiers that will attract future investment. A focus on grants, concessional loans or patient equity for locally controlled forest cooperatives results in inclusive cooperatives, but a focus on debt finance for large corporates leads only to local people being treated as cheap labor.

Read also: Making landscape finance more inclusive

What examples do you have of successful or promising ‘model’ approaches or innovations?

Promising innovations come less from inclusive access to finance, but from inclusive distribution of finance. This is a question of business model design, often found in businesses with democratic decision-making where members who live with the consequences of their business decisions, balance economic, social and environmental trade-offs.

An IIED-led analysis of 50 case studies of democratic business models from 24 countries showed six clear innovations. Democratic oversight bodies governing environmental and cultural stewardship improve the natural environment. Negotiated benefit distribution and financial vigilance mechanisms improve material wealth. Networked links to markets and decision-making improve social connectedness. Processes for conflict resolution and justice improve peace and security. Processes of entrepreneurial training and empowerment for both men and women improve human capacity development. Branding that reinforces local visions of prosperity improves a sense of community purpose.

In Nicaragua for example, FFF-mediated finance for the Mayaring women’s cooperative led to the development of 15 new productss using ‘tuno’ (Castilla tunu) bark cloth for vegetables. This led to a 35 percent rise in household incomes and a forest landscape restoration project using the species.

What is your vision on how best to increase finance and investment in sustainable forestry and farming?

My vision is to tailor different financing approaches to different producer organization types. For example, finance could be directed to indigenous peoples’ organizations in natural forests for territorial delimitation and protection; community forest organizations at the forest edge for making sustainable forest management work in collectively controlled natural forests; forest and farm businesses in planted forest ‘mosaics’ for improved social organization alongside asset investments in production; and peri-urban and urban forest product-processing businesses to increase productivity. Financing could be primarily grant finance to indigenous peoples, grants and blended/concessional finance for community forest enterprises, a mix of leasing, trade chain finance and commercial debt finance and guarantees for producer organizations, and more conventional debt finance for peri-urban groups There is no simple rule – everything depends on the circumstances of the group.

Catalyzing multitiered organizations is part of this vision. This includes first-tier local producer organizations selling products and services; second-tier regional organizations aggregating products, adding value through processing, marketing and providing business incubation services to members; and third-tier national federations lobbying governments for more enabling policies. Evidence suggests that strengthening producer organizations is effective in poverty reduction, and improving governance, forest landscape restoration and delivery of the Sustainable Development Goals.

Read as PDF: Strengthening producer organizations is key to making finance inclusive and effective

By Nick Pasiecznik, Tropenbos International.


Duncan Macqueen is a principal researcher in IIED’s Natural Resources Group. IIED is a “policy and action research organization promoting sustainable development and linking local priorities to global challenges”. His research focuses on the success factors for locally controlled forest enterprises, and he has published widely on the subject. We invited Duncan to express his views on inclusive finance, based on his 25 years of experience of working with smallholder groups and communities to strengthen their capacities to run forest-based businesses and access markets and finance. He and his team have worked closely with FAO and the World Bank, among others. His publications include Prioritising Support for Locally Controlled Forest Enterprises and Financing forest-related enterprises: Lessons from the Forest Investment Program: IIED Briefing.

This article was produced by Tropenbos International and the Center for International Forestry Research (CIFOR) as part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA). FTA is the world’s largest research for development program to enhance the role of forests, trees and agroforestry in sustainable development and food security and to address climate change. CIFOR leads FTA in partnership with Bioversity International, CATIE, CIRAD, INBAR, ICRAF and TBI. FTA’s work is supported by the CGIAR Trust Fund.

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  • FTA researchers set to highlight seeds, REDD+ and inclusive finance at landscapes forum

FTA researchers set to highlight seeds, REDD+ and inclusive finance at landscapes forum

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Clouds pass over Ribangkadeng village in West Kalimantan, Indonesia. Photo by Nanang Sujana/CIFOR

The CGIAR Research Program on Forests, Trees and Agroforestry (FTA) and its partner institutions are set to make a strong showing at the Global Landscapes Forum (GLF) Bonn on Dec. 1-2, 2018.

This year’s GLF Bonn will be key in drawing out the next steps toward hitting global sustainability targets, with many participants expected at the World Conference Center in Germany, in addition to a worldwide audience online.

Of numerous discussion forums, FTA is hosting a session on the delivery of quality and diverse planting material as a major constraint for restoration, organized by Bioversity International in collaboration with the World Agroforestry Centre (ICRAF).

FTA Director Vincent Gitz will provide the opening to the session, ahead of a range of speakers including FTA Flagship 1 leader Ramni Jamnadass, as well as FTA’s Christopher Kettle, Marius Ekeu and Lars Graudal, and representatives of numerous key organizations. Additional details are available in the session flyer.

The program is also cohosting a session from the Center for International Forestry Research (CIFOR) titled REDD+ at 10: What we’ve learned and where we go next. Looking back at 10 years of REDD+ research, the session will ask how REDD+ has evolved, and where it stands now.

FTA Flagship 5 leader Christopher Martius, who is also team leader of climate change, energy and low-carbon development at CIFOR, will moderate the session, in which CIFOR’s Anne Larson and Arild Angelsen will speak. The GLF will also see the launch of a related book, Transforming REDD+: Lessons and new directions, in the Landscapes Action Pavilion Networking Area.

Another discussion forum of note is Looking at the past to shape the Landscape Approach of the future, organized by CIFOR, the International Climate Initiative (IKI) and FTA, which will bring together a diverse set of panelists experienced in implementing integrated landscape approaches in various contexts.

A major feature of GLF is its schedule of side events, including Territorial development – managing landscapes for the rural future cohosted by Agricultural Research for Development (CIRAD), and Bamboo for restoration and economic development organized by the International Bamboo and Rattan Organisation (INBAR).

The program will have a presence at the event’s pavilions, including the Inclusive Finance and Business Engagement Pavilion where a highlight session titled Making responsible investments work: Bridging the gap between global investors and local end users is set to take place, looking at success factors for inclusive and responsible businesses, which are at the core of both climate finance and responsible investments, as well as financial mechanisms that can adequately address the needs of such businesses.

Visit the Tropenbos International (TBI) and CIFOR booths to find FTA resources and to speak with FTA experts.


For the full details of FTA’s involvement in GLF, please check the event webpage.

Tune into the GLF livestream on Dec. 1-2, from 9am-7.30pm in Bonn, Germany.

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  • CGIAR Research Program on Forests, Trees and Agroforestry (FTA) Annual Report 2017

CGIAR Research Program on Forests, Trees and Agroforestry (FTA) Annual Report 2017

case_studies
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The CGIAR Research Program on Forests, Trees and Agroforestry (FTA) contributes to 9 Sustainable Development Goals (SDGs), to all CGIAR Intermediate Development Outcomes (IDOs) and to 31 sub-IDOs with different levels of investment. With efforts targeted respectively at 29%, 33%, 38% across System Level Outcomes (SLOs) 1, 2 and 3, FTA balanced its work across four main production systems (natural forests, plantations, pastures and cropping systems with trees) dealing with a number of globally traded and/or locally important tree-crop commodities (timber, oil palm, rubber, coffee, cocoa, coconut, wood fuel, fruits, etc.), that form the basis for the livelihoods of hundreds of millions of smallholders. These commodities also represent an important share of the land area, including 13 million km2 of forests and 9.5 million km2 of agricultural lands (45% of the total agricultural area with >10% tree cover). Progress towards IDOs in 2017 resulted from FTA work on technical innovations and tools, as well as on value chains, and institutional and policy processes. These innovations were taken up and diffused by different actors and along value chains, and all were suited to their particular context. As 2017 is the first year of FTA’s six-year program, progress towards SLOs was aimed at the upstream level; in some cases there was already progress towards downstream uptake.

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  • Informal, traditional and semiformal property rights should be fully acknowledged, panel agrees 

Informal, traditional and semiformal property rights should be fully acknowledged, panel agrees 

A father and child are pictures in a garden in Colombia. Photo by Augusto Riveros/TBI
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FTA COMMUNICATIONS TEAM

A father and child are pictured in a garden in Colombia. Photo by Augusto Riveros

LANDac, the Netherlands Academy on Land Governance for Equitable and Sustainable Development, held its annual international conference on June 28-29 in Utrecht, the Netherlands.

Titled “Land governance and (im)mobility”, the conference explored the nexus between land acquisition, displacement and migration.

On the second day of the event, the wide range of parallel sessions included “‘Good Enough Tenure’ in Sustainable Forest and Land Management”, organized by Tropenbos International (TBI), in collaboration with the universities of Wageningen, Freiburg, Campinas and Kyoto, Kadaster Internationaal, the Center for International Forestry Research (CIFOR) and the CGIAR Research Program on Forests, Trees and Agroforestry (FTA).

The session discussed the practical implications of the increasing evidence from research and experiences in different parts of the world on the value and scope of so-called ‘good enough tenure’ arrangements for international and national policymakers and investors.

The main message that emerged from the panel session was that all players need to think beyond formal land regularization to provide enabling conditions for smallholders to secure property rights and incentives for investment.

A lack of formally recognized land and resource property has always been a constraint for small-scale farmers and forest communities. Mainstream land governance focusses largely on tenure regularization as a means to provide security. Smallholders without such formal tenure tend to be excluded from external funding streams, because banks, other private investors, governmental agencies and even some donors often require land titles as collateral to mitigate the risk of default from failed investment.

As a result, these actors have not been able to deal effectively with the mobility and the complex local reality, including the local needs and opportunities that exist in rural and forest areas in tropical countries.

The four panelists – Marieke van der Zon of Wageningen University, Kyoto University and TBI; Peter Cronkleton of CIFOR; Bastian Reydon of Universidade Estadual de Campinas’ Land Governance Group; and Benno Pokorny of University Freiburg – provided hands-on examples from Latin America, providing evidence that there is a variety of formal, informal and semiformal tenure situations and arrangements in these areas.

In many cases these informal, traditional and semiformal property rights are considered good enough for social and economic development and for conservation, as they are respected, upheld and protected by strong local institutions. These good-enough tenure right arrangements should be fully acknowledged as a valuable “local institutional capital” for making trustful and secure arrangements between local smallholders and external actors to engage, to invest and collaborate on a reciprocal basis.

They must therefore play a much more prominent starting point in promoting sustainable, inclusive and equitable development, with the panelists emphasizing the need to understand the local specificity of arrangements, advocating a “fit-for-purpose and place” approach.

Read the panelists’ abstracts: 

View the presentations from the session:

Adapted from the article first published by Tropenbos International. 

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  • Informal, traditional and semiformal property rights should be fully acknowledged, panel agrees 

Informal, traditional and semiformal property rights should be fully acknowledged, panel agrees 

A father and child are pictures in a garden in Colombia. Photo by Augusto Riveros/TBI
Posted by

FTA COMMUNICATIONS TEAM

A father and child are pictured in a garden in Colombia. Photo by Augusto Riveros

LANDac, the Netherlands Academy on Land Governance for Equitable and Sustainable Development, held its annual international conference on June 28-29 in Utrecht, the Netherlands.

Titled “Land governance and (im)mobility”, the conference explored the nexus between land acquisition, displacement and migration.

On the second day of the event, the wide range of parallel sessions included “‘Good Enough Tenure’ in Sustainable Forest and Land Management”, organized by Tropenbos International (TBI), in collaboration with the universities of Wageningen, Freiburg, Campinas and Kyoto, Kadaster Internationaal, the Center for International Forestry Research (CIFOR) and the CGIAR Research Program on Forests, Trees and Agroforestry (FTA).

The session discussed the practical implications of the increasing evidence from research and experiences in different parts of the world on the value and scope of so-called ‘good enough tenure’ arrangements for international and national policymakers and investors.

The main message that emerged from the panel session was that all players need to think beyond formal land regularization to provide enabling conditions for smallholders to secure property rights and incentives for investment.

A lack of formally recognized land and resource property has always been a constraint for small-scale farmers and forest communities. Mainstream land governance focusses largely on tenure regularization as a means to provide security. Smallholders without such formal tenure tend to be excluded from external funding streams, because banks, other private investors, governmental agencies and even some donors often require land titles as collateral to mitigate the risk of default from failed investment.

As a result, these actors have not been able to deal effectively with the mobility and the complex local reality, including the local needs and opportunities that exist in rural and forest areas in tropical countries.

The four panelists – Marieke van der Zon of Wageningen University, Kyoto University and TBI; Peter Cronkleton of CIFOR; Bastian Reydon of Universidade Estadual de Campinas’ Land Governance Group; and Benno Pokorny of University Freiburg – provided hands-on examples from Latin America, providing evidence that there is a variety of formal, informal and semiformal tenure situations and arrangements in these areas.

In many cases these informal, traditional and semiformal property rights are considered good enough for social and economic development and for conservation, as they are respected, upheld and protected by strong local institutions. These good-enough tenure right arrangements should be fully acknowledged as a valuable “local institutional capital” for making trustful and secure arrangements between local smallholders and external actors to engage, to invest and collaborate on a reciprocal basis.

They must therefore play a much more prominent starting point in promoting sustainable, inclusive and equitable development, with the panelists emphasizing the need to understand the local specificity of arrangements, advocating a “fit-for-purpose and place” approach.

Read the panelists’ abstracts: 

View the presentations from the session:

Adapted from the article first published by Tropenbos International. 

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  • Good investments in agriculture and forestry can benefit smallholders and landscapes

Good investments in agriculture and forestry can benefit smallholders and landscapes

The finance pavilion stands beside the indigenous people's pavilion at the GLF Bonn 2017. Photo by Pilar Valbuena/GLF
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FTA COMMUNICATIONS TEAM

With companies increasingly being seen as key partners in scaling-up efforts to achieve sustainable landscapes, a growing number of private actors are moving from ‘do no harm’ to a ‘do good’ approach.

In light of this, Tropenbos International (TBI) – along with the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), the Netherlands Development Organization (SNV), Finance Alliance for Sustainable Trade (FAST) and the Forests and Farm Facility – organized a well-attended panel discussion titled “Inclusive Finance and Business Models – Actions for Upscaling” at the recent Global Landscapes Forum (GLF) in Bonn, Germany.

Held in the Finance Pavilion, where FTA and TBI also shared a booth showcasing their work and research, around 40 participants came together to hear from five panelists, share ideas about what a do-good approach means in practice, and consider how it can be scaled up.

Watch: Inclusive Finance and Business Models – Actions for Upscaling

In opening the discussion, TBI Director René Boot said: “There’s a growing need for companies and for investors to basically upgrade their corporate social and environmental responsibility policy. We think it is time to move from ‘do no harm’ to ‘do good’.”

Boot pointed out that in order to make that step, it is important to know how to build businesses that are both profitable and can contribute to livelihoods, secure land rights, and make use of the entrepreneurial qualities of smallholders and small and medium enterprises. “Do we have enough information, do we have enough examples, to scale up?” he asked.

Attendees peruse the materials available at the finance pavilion. Photo by Pilar Valbuena/GLF

The first speaker, Herman Savenije of TBI, presented the findings of a working paper titled Improving the positive impacts of investments on smallholder livelihoods and the landscapes they live in, a joint effort from the Dutch Development Bank (FMO), TBI, Dutch organization for development HIVOS and the Royal Tropical Institute (KIT).

The report “developed some key points for the do-good approach for investment and business,” Savenije explained. The points in the report were divided into three categories: recognizing rights; active engagement; and “think landscapes” – which is also an overarching focus of the GLF. An increasing number of business cases show that the approach is feasible, but requires thinking, acting and partnering beyond a business-as-usual approach, he added.

Savenije suggested that mainstream investments and businesses often ignore and underestimate land governance, land rights and livelihoods issues, but failing to properly address the issues could lead to business and reputational risks. “So strengthening the position of smallholders and communities within value chains, within landscapes, makes business sense,” he said.

Carina van der Laan of SNV then discussed access to finance for smallholders in oil palm plantations in Indonesia, while Marcelo Cardozo of the Bolivian forest producer organization MINGA provided perspectives from indigenous producers on accessing finance for integrated territorial management, Francesca Nugnes shared FAST’s experiences in supporting small- and medium-scale enterprises on building workable, sustainable business models, and Paul Hol of Sustainable Forestry Investments (SFI) discussed investments in tree plantations in Ghana and Tanzania.

Aspects of the session echoed a discussion organized by TBI in September, which showed that a growing number of investors want to have a greater positive impact on people’s rights and livelihoods in areas where they do business.

Read more: Getting down to business: Seminar promotes shift toward inclusive investment

The finance pavilion stands beside the indigenous people’s pavilion at the GLF Bonn 2017. Photo by Pilar Valbuena/GLF

Following the panel discussion at GLF, TBI and FTA produced a report outlining its outcomes.

“In the context of agricultural and forestry production, a do-good approach means that commercial investments simultaneously improve the environmental integrity of the landscape and the livelihoods of the people living there, while making a profit,” the report read.

“This requires long-term thinking and investments, including investing in stakeholder engagement and building relationships. Initially, this may result in higher opportunity costs, which makes such investments risky for the private sector. How then can a do-good approach be operationalized on the ground?”

Finding ways to operationalize this approach should be one of the main goals of related research – to advance understanding not only on which business models have greater potential for sustainability and social inclusion, but also on the most effective ways for financial institutions to support scaling-up efforts – which is embraced by FTA’s work on innovative finance, said Pablo Pacheco, a Center for International Forestry Research (CIFOR) scientist leading the work.

Those involved are convinced about the need to team up to reach scale. The success of a do-good approach, thus, is considered to be largely dependent on collaboration and connections. The panel discussion was another step forward in contributing to these efforts.

Read more:

By Hannah Maddison-Harris, FTA Communication and Editorial Coordinator


This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.

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  • Why good policies and public funding (only) won’t change the world

Why good policies and public funding (only) won’t change the world

Photo by G. Smith/CIAT
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FTA COMMUNICATIONS TEAM

Photo by G. Smith/CIAT

We have been cutting trees to plant food crops since the beginning of time. Forest cover loss is a major contributor to climate change – the biggest challenge of our times. So, we won’t save the world without saving forests.

However, while the connection between forests and climate is very well recognized, agriculture is an elephant in the room at climate talks and a rare bird at discussions about forestry.

International deforestation curbing policy infrastructure is well developed. It includes the New York Declaration on Forests, the Bonn Challenge, Initiative 20×20, AFR100 and now also the UN Strategic Plan on Forests 2017-2030, just to mention a few of its components.

These are all great, but throwing billions at conservation and afforestation won’t work without making agriculture sustainable and zero-deforestation.

“Foresters must get out of the woods and focus more on deforestation drivers!” invokes Hans Hoogeveen, Ambassador to the FAO of the Netherlands, at the “Forests, trees and agroforestry for food security and nutrition and the SDGs” side event during the 44th session of the Committee on World Food Security.

Click here to read the full story on the CFS website, by #CFS44 Social Reporter Ekaterina Bessonova.

As part of the live coverage during CFS44, this post covers the Forests, trees and agroforestry for food security and nutrition and the SDGs side event.

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  • Getting down to business: Seminar promotes shift toward inclusive investment

Getting down to business: Seminar promotes shift toward inclusive investment

Carpenter Hervé Bougar makes a living from doors and furniture in Yaoundé, Cameroon. Photo by O. Girard/CIFOR
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FTA COMMUNICATIONS TEAM

Tropenbos International Director Rene Boot speaks during the seminar on inclusive investments and business models. Photo by Nguyen Phuong Ha/Tropenbos International

A growing number of investors want to have a greater positive impact on people’s rights and livelihoods in areas where they do business. 

Tropenbos International (TBI), one of the CGIAR Research Program on Forests, Trees and Agroforestry’s (FTA) partner institutions, held on Sept. 14 a workshop titled Towards inclusive investment and business models for improved land governance and livelihoods: Are we on the right track? in Ede, the Netherlands.

Part of a broader series of annual seminars on sustainable forest management in the tropics, the event brought together finance, business, land use and development experts to address how to work with smallholders and learn from existing business cases.

Amid cases in which large-scale agricultural investments have damaged local livelihoods and ignored biodiversity and traditions, international organizations have established guidelines to help mitigate the adverse effects of investments. However, a growing number of businesses and investors want to exceed such guidelines, aiming for a positive impact on local communities’ livelihoods and tenure rights through their investments.

Carpenter Hervé Bougar earns a living from making doors and furniture in Yaoundé, Cameroon. Photo by O. Girard/CIFOR

“A growing number of investors aspire to make the transition from ‘doing no harm’ toward ‘doing good’,” TBI director René Boot said in opening the seminar. “The positive news is that this can be done.”

The discussions not only raised awareness on the importance of moving from the do-no-harm to the do-good approach in investing in smallholder land management, but also provided evidence of the feasibility and scaling-up opportunities from such an approach.

Participants shared experiences on best practices and made recommendations on strategies, mechanisms and follow-up actions to enhance investment in inclusive business models that improve the livelihoods, land security and entrepreneurial potential of smallholders.

Read more: Attention to detail is necessary for zero deforestation intentions to succeed, say scientists

Furthermore, the seminar contributed to the improvement of a working paper titled “Improving the positive impacts of investments on smallholder livelihoods and the landscapes they live in.”

Discussions on the paper covered ways for investors to improve the positive benefits of their investments, namely recognizing rights, effectively engaging, and the need to “think landscape.”

The findings of the seminar indicated that by recognizing local practices, as well as working with local communities, investors can benefit from greater local support. The findings also stated that understanding on a landscape scale could lead to production diversification and improved local food security.

The seminar, which was organized by TBI and other organizations working in the Netherlands, can be seen as a precursor to future work that TBI will carry out as part of FTA’s research theme on sustainable value chains and investments to support forest conservation and equitable development.

Timber is piled outside a building as part of the Kanoppi Project in Yogyakarta, Indonesia. Photo by A. Erlangga/CIFOR

Key scientists intend to build upon the body of work under FTA in order to make explicit the connections between responsible financing schemes and the development of inclusive business models, as part of the conditions needed to support more sustainable landscapes.

“The approach undertaken by TBI constitutes a key piece in building financing schemes that can contribute more positively to business models that work for the environment and smallholders, supporting broader agendas on sustainability and inclusivity,” said FTA Flagship 3 leader Pablo Pacheco.

“The research on value chains and finance in FTA will continue building in these innovative approaches,” he added.

Read more: Sustainable value chains and investments

“At TBI, we see the report and the seminar – and all the preliminary work – as an important contribution to FTA research and engagement work, in advancing the agenda for it, and on which to base further collaborative activities, particularly in the field of inclusive business and finance,” said TBI program coordinator Herman Savenije.

“We see this topic of inclusive finance and business as an important one in which we can learn a lot by actively engaging with those worlds. In the Netherlands I feel the thinking in the finance and business worlds on inclusiveness has advanced somewhat, though still with some frontrunners, and we have started building networks with them,” he added.

The day of presentations from nine speakers yielded numerous insights and ideas – including that scaling up is easier if one can show clear profits; that there is a clear ‘missing middle’ between small and large investments; and that transparency is vital – many of which are contained in the summary report.

Evidently, research on investments for improved land governance and livelihoods, which will be built upon by TBI and other institutions as part of FTA, is indeed on the right track.

By Hannah Maddison-Harris, FTA Editorial and Communication Coordinator


This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.


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