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Linking smallholders to existing wood value chains for sustainable supply

An aerial view of a river catchment area in Sondu Basin, Kenya. Photo by P. Sheperd/CIFOR
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Continuing a series of interviews on inclusive landscape finance, Tevis Howard, founding director of Komaza, shares his insights with Bas Louman of Tropenbos International.

Tevis Howard of Komaza. Photo by Komaza

Komaza, founded in 2006, is a vertically integrated forestry company that is involved in forest production from tree nurseries, tree cultivation, harvesting and processing, to selling to domestic and international customers. The company is based in Kifili, Kenya.

Different from other forestry companies in Africa, which produce timber in large plantations, its production is based on thousands of small woodlots in partnership with as many smallholder farmers.

This fits into the production model in Kenya well, where more than 50 percent of the wood supply comes from such farmers.

By aggregating the wood production of these small farmers, Komaza has been able to link them to the traditional wood value chain.

Tevis Howard gives us some insights into the challenges and opportunities he faced in seeking finance during the 13 years since the foundation of the company.

What does ‘inclusiveness’ mean to you?

Inclusiveness seems to be more of an academic issue and can mean many things, at all segments of the value chain, from production to consumption. What counts is that products are useful and accessible to everybody, whether they be financial products, material inputs for tree production or the final products of the wood value chain. Partnerships should be mutually beneficial and include people in transactions or agreements because it is valuable to do so, and not just because it is politically correct.

In our case, partnering with smallholders is a clear business strategy which allows us to reach scale while reducing risks and costs. At the same time, farmers have low risk, significantly increase their assets, and have an expectation of additional future income. Our experience is that partnerships as a whole have created greater benefits for all than could have otherwise been achieved.

Read also: Moving towards a more integrated view on finance and impact

What are the structural barriers to financing smallholders and small- and medium-sized enterprises (SMEs)?

I think you need to address this question at two different levels: first there is Komaza itself, which started up as an SME, although it has now grown to a full-sized company. Secondly, you need to look at the smallholders who grow the trees.

For Komaza there were four big challenges: the first three, to attract the right staff, choose the right farmers to work with and find the buyers, were straightforward challenges that most businesses have. Staff need to be motivated, farmers need to be willing to plant and maintain the plantations, and the customers need to be willing to buy at the offered quality-price relation.

Komaza organizes farmer training programs to ensure quality planting and tree management. Photo by Komaza

Finding the finance to support operations, however, was another matter. The biggest challenge we had was to find investors that were prepared to take the risk to invest in our operations. This went beyond developing the right business models. It required investors to be familiar with the region and interested in investing in early stages of the business. Then we had to convince them that it was worth investing in this asset class, that we were able to manage the risks, and that our model had reduced costs in comparison to traditional tree plantation models.

At the level of the smallholders, the main barriers to becoming involved in tree planting relate to adequate knowledge on tree planting as a business, the costs and availability of inputs for tree plantations, and the requirements for obtaining loans.

How have you addressed these barriers, and what have you learnt from this?

Initially, we aimed at obtaining grant money from social enterprises seeking impact. Using this to build up our model, we were able to obtain convertible loans and equity investments, blending development with commercial money. Financiers invested in Komaza, helping it to grow its assets in trees and a range of different SME processing facilities.

Komaza farmers. Photo by Komaza

After 11 years of building the enterprise, we now have a company with thousands of partners, together worth more than 20 million USD and with expertise across the forest value chain. Much of the work was through personal contacts, establishing trust between Komaza and the potential financiers and between Komaza and partners throughout the forest value chain. In addition, we developed a people-centered company, which helps motivate both farmers and staff to work together in a cost-effective manner while at the same time operating within a corporate structure that is credible to investors.

With respect to the barriers of the farmers, we have been able to come to agreements where they provide land and labor, and we provide technical assistance – the required inputs for tree farming. This helps us to keep costs down (in conventional plantations labor costs may be more than half of total costs) while they invest in the plantation without getting into debt, converting their labor into assets (trees). Once trees have reached the appropriate size, we harvest, transport and sell the trees, sharing the benefits of the sales with the farmers.

Subsistence farmers may find it difficult to obtain documentation that they own their land or other assets, which they would need, for example, to obtain commercial loans. In order to become a partner of our company, we require that their ownership is recognized by neighbors, chiefs and community leaders. This has the added advantage of lowering the risk of land right conflicts.

Finally, we make sure that the area planted with trees is in addition to the area needed for subsistence farming, to ensure that their food provision is not endangered by the wood production. In some cases, farmers also produce food in between the trees during the first years of the plantation.

Read also: Financial products should be adjusted to better meet needs of community forest enterprises

What suggestions do you have to scale up this type of inclusive business model?

We have been able to scale up due to a number of factors: a realistic corporate structure; a human-centered approach, where we discuss with farmers their problems and how our partnership could address some of these; building motivated expertise across the forest value chain; and building relations of trust with farmers, staff, processors, buyers and financiers. This has taken more than 10 years. We have now come to a stage where, with the help of grants, and later blended finance, we have shown the business case and have attracted commercial equity and debt investments in our firm.

Eucalyptus and Melia farms. Photo by Komaza

Only the private sector can invest sufficient amounts in order to reach the scale necessary to create a wood supply from sustainable sources that is able to meet demand. For that reason, we are in the process of creating our Smallholder Forestry Vehicle. Through this vehicle we hope to contribute to filling the gap between financiers that want to invest in sustainable projects but cannot find viable proposals, and the farmers that want to change to more sustainable forms of production but cannot find the finance.

For replication of this type of investment in other areas, we suggest that rather than starting from scratch, it will be important to seek partners that already have the experience, have a network of trustworthy relations, and are motivated to work with trees in the area.

One of the major issues in the forestry sector in Africa is unsustainable production. Scaling up sustainable wood production may not be feasible if at the same time national governments do not take measures to reduce wood from unsustainable sources. One way of doing this would be to raise taxes on wood from unsustainable sources.

By Bas Louman, Tropenbos International.

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

This article was produced by Tropenbos International (TBI) 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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More dialogue needed between farmers, forest enterprises and finance providers

A market in the village of Minwoho, Lekié, Center Region, Cameroon. Photo by O. Girard/CIFOR
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As part of this new interview series on inclusive landscape finance, Tropenbos International’s Nick Pasiecznik spoke to Noemi Perez, an inclusive finance and investment specialist, with extensive experience with key issues gained from work in both the private and public sectors.

Noemi began her career sourcing timber for one of the largest door manufacturers in the world, Puertas Montealban, rising to general manager.

After seeing how the corporate sector could support and promote sustainable finance for small-scale forest enterprises, she applied her experience to roles in the World Wildlife Fund (WWF) in Costa Rica and the Forest Stewardship Council (FSC) in Mexico.

She then cofounded the international, non-profit Finance Alliance for Sustainable Trade (FAST) in Montreal, Canada, in 2008, where she worked until April 2018. At FAST, she worked mainly with public funds seeking to match small- and medium-sized forest enterprises (SMEs) to private investors. Noemi is currently a freelance consultant.

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

What are the underlying reasons for underfinancing of small-scale agricultural and forest businesses?

The most basic problem is lack of literacy – not only financial literacy, but also basic literacy. How can we expect farmers or rural entrepreneurs to be able to access finance if many can’t even read or count? Even among those that can, there is a lack of understanding of business fundamentals, when what is needed is business acumen, as a prerequisite for good decision making, including finance.

Thus, there is a serious and urgent need for basic education and business education. For example, in 2010, at an investment conference I attended, rural SMEs were invited to present their cases, but it was clear that some were not even differentiating between sales and profit.

Another constraint is that farmers often sell perishable agricultural produce, and do not have facilities to store goods while waiting for a better price. This makes them even more vulnerable: they have to sell at any price, or they run the risk of losing everything. The lack of strong producer organizations makes it very hard for individual smallholders to be bankable.

On the other hand, financial service providers are not willing to take risks in sectors where they have not previously invested. They may not have sufficient knowledge or information on how to manage risk in rural small-scale agricultural and forest business settings.

Even institutions that claim to invest in forestry or agriculture, often say things like “we invest in agriculture, but we don’t invest in that country”, or “we don’t invest in that sector” without even looking at the specific business cases.

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

Where are the farmers? We need to inform financial service providers and bring them together with farmers. I have been to more than a hundred meetings and conferences on agriculture, forestry investment and similar initiatives, and there is hardly ever a farmer present, or not more than a single token representative. This is not right. We need to create situations where farmers can sit down and tell financial service providers face to face what it is that they need.

At the same time, the financial sector needs to explain their own needs and constraints clearly to farmers. Then they can sit down together and discuss how to manage the risks.

Financial institutions need to understand small-scale agricultural and forest business needs. Adapting and creating specific products and services based on their needs is key, particularly medium- and long-term access to finance.

They also need to know how value chains work, be in contact with different links in the chain, understand market requirements and make strategic alliances. They need to better understand smallholder production cycles, needs, products and markets, and that it is usual and acceptable to rely on local markets and not only on export markets.

On the other hand, farmers must understand the requirements of financial institutions, their restrictions, and that they need certainty that they will get their money back, to satisfy their own investors. Financial institutions must also make clear to farmers why they charge X or Y percent interest, and where this money goes, as often, rural, agricultural SMEs do not even understand why interest is charged!

In addition, one important thing we can do is to look more closely at successful small-scale agricultural and forest businesses in developed countries – how do they work and what makes them successful, what subsidies exist and what types of finance do they have access to?

In developed countries, many small-scale agricultural and forest businesses make a decent income. Even though they have their own struggles, they live well. It would be useful to compare similar types and sizes of smallholder enterprises in developed and developing countries, how they are organized and how they operate.

Read also: Catalyzing partnerships for reforestation of degraded land

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

Good examples of inclusive finance tend to occur where the true realities of farmers are well understood, such as the impacts of seasonality of production, for example. These success stories have almost always resulted from situations where farmers and financial institutions have sat together and talked and rural, agriculture smallholders have repaid. There are excellent examples from banks that have specialized in agriculture, such as the Netherland’s Rabobank, or France’s Credit Agricole. There are also socially oriented lenders such as Alterfin, the Commodities Fund of Kenya, Pear Capital,  Root Capital, Oikocredit,  ResponsAbility, Triodos Investment Management, Bankaool, and Shared Interest.

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

My vision is that every individual should have the right to access financial resources to improve their livelihood if they can demonstrate they have a viable business and produced positive social and environmental impacts. But how? First, we must promote greater dialogue between small-scale enterprises and financial service providers, as I have explained.

This also highlights and connects to those small-scale agricultural and forest businesses that already have a secure market and long-term relationships that could immediately back up a loan. Next, we need to better understand current markets and take these into account – and not any potential future (e.g. export) markets that might take 5–10 years to materialize.

Finally, we need to provide similar conditions for small-scale agricultural and forest businesses in developing countries as are offered to those in developed countries, including the needed levels of education from basic financial literacy to business acumen.

By Nick Pasiecznik, Tropenbos International.

This interview has also been published on Tropenbos International’s website.

Please note that the photos used here are for illustrative purposes and do not refer directly to FAST activities.

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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Gender equality in agricultural development starts with understanding complexity

A farmer collects cobat fruit in Sorobouly village near Boromo, Burkina Faso. Photo by O. Girard/CIFOR
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A villager shows palm nut fruit in Jambi province, Indonesia. Photo: T. Saputro/CIFOR

When Professor Katherine Gibson opened the Seeds of Change conference in Canberra last week, she asked the more than 200 participants to consider whether we are sowing the right seeds of change for achieving gender equality in agricultural development.

“Can the world’s rural areas be places where we can generate dignified agricultural livelihoods, where there’s material well-being, where there’s gender equity and sustainable environmental interactions?” she inquired.

Her questions were prompted by a series of graphs, known as ‘the great acceleration’, that show the world’s economic overdevelopment and its detrimental impacts on the environment. However, Gibson was quick to point out that the great acceleration has also brought about benefits, with some of the most prominent being increased education for women and slowed population growth.

“We really need to see the complexity here,” Gibson explained in a subsequent interview, referencing these contradictory results of recent development. Development and its gendered impacts are complex matters – a realization that permeated discussions during the three-day conference.

Convened by the Australian Centre for International Agricultural Research (ACIAR), the CGIAR Collaborative Platform for Gender Research and the University of Canberra, the Seeds of Change conference brought together researchers and practitioners from around the globe. The CGIAR Research Program on Forests, Trees and Agroforestry (FTA) contributed to the deliberations with three presenters showcasing studies that emphasize the importance of understanding complex gender relations for designing successful policies and interventions.

Read also: Women improve food security through land-restoration technology in Kenya

Villagers pose for a photograph in Jambi province, Indonesia. Photo by T. Saputro/CIFOR

Examining evidence

Kartika Sari Juniwaty, lecturer at the University of Indonesia’s Faculty of Economics and Business and research associate at the Centre for International Forestry Research (CIFOR), presented initial research findings that highlight why challenging generally accepted beliefs about women and agriculture is a good starting point.

“There is an underlying belief that feminization of agriculture happens in this one way – that men are leaving the sector and women are taking over. But in reality, it is much more complicated than that,” Juniwaty said.

Examining 20 years of longitudinal data, collected from more than 7,000 households in Indonesia since 1993, Juniwaty has found that while fewer and fewer people are employed in agriculture, men are not leaving the sector at a faster rate than women. This differs from the situation elsewhere, such as in some parts of South Asia, where men are migrating out of villages and leaving the agricultural sector. In addition, families seem to have left and reentered the agriculture sector many times during the 20-year period, raising questions about what drives such decisions.

Juniwaty stressed that policies and interventions must be informed by on-the-ground realities to be successful. Improved understanding of gendered transformations may better inform the design of policies, such as the Indonesian government’s social forestry program, which gives communities rights to sustainably use forests to boost their livelihoods and incomes.

“We might think that a program can be more beneficial for women if they are given more opportunity to participate,” explained Juniwaty. “But to design appropriate initiatives to encourage women’s participation in the program, improve their well-being, and avoid unintended negative consequences, we need to better understand women’s roles and contribution in the agricultural sector, including forestry.”

Moving forward with her research, Juniwaty hopes to tease out more information about why different households leave or reenter the agriculture sector. Rather than looking only at gender, examining different characteristics of household members – such as their age and education levels – may provide more information on what drives labor force movements in Indonesia. This is particularly relevant during a time when growing mechanization and investments might eventually lead more people to leave the sector.

Read also: Thinking of tomorrow: Women essential to successful forest and land restoration in Africa

Gender considerations essential for restoration

Two other scientists presenting FTA research at the conference highlighted the need to consider gender relations when designing, implementing and monitoring restoration initiatives in forested landscapes.

Mary Crossland, a PhD student from Bangor University, working with World Agroforestry (ICRAF), spoke of a study in the drylands of eastern Kenya, where farmers are testing the use of planting basins under a restoration project led by ICRAF. Her preliminary findings suggest that women often dig these basins without the help of men whereas other land preparation practices, such as plowing, are usually shared by men and women.

A farmer spreads organic fertilizer to her rubber seedling on her farm in Jambi province, Indonesia. Photo by T. Saputro/CIFOR

“Whether this indicates a shift in labor and a risk for women in terms of increased workload or an opportunity in terms of increased autonomy to carry out activities that previously required men’s participation is something we hope to explore more in our future work,” said Crossland.

Along the same lines, Markus Ihalainen, a research officer working with CIFOR, examined how women and men have participated in, and benefited from, four different restoration initiatives, also in Kenya. He found that while many restoration activities rely heavily on women’s labor, women tend to lack secure access to many long-term benefits.

Together, these two studies point out why gender equality is critical to successful restoration initiatives. Without ensuring that the benefits of restoration outweigh the costs for both women and men, local support can quickly dwindle. Following this, restoration targets, and the livelihood benefits they are meant to achieve, may not be reached.

Read also: Picks and spades can triple farmers’ yields in Kenyan drylands

Staying focused

FTA is committed to tackling the complexities of gender in agriculture head on by prioritizing research, such as that presented above, which sheds light on how inequalities among women and men may prevent women from contributing to, and benefiting from, restoration and other environmental transformations.

Reversing the environmental degradation caused by the great acceleration described by Gibson is both urgent and essential. Only when degradation trends are overturned will healthy landscapes and forests be able to underpin food production and equitable, sustainable livelihoods.

Achieving this goal requires accounting for complex gender relations in policies, interventions and decision-making processes – getting gender relations right is a key ingredient in any plan to successfully achieve sustainable development outcomes.

By Marianne Gadeberg, communications specialist.

This work is 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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Gender equality in agricultural development starts with understanding complexity

12 April, 2019
Cattle drink from a reservoir, often the last water point during the hottest and driest months of the year, in Zorro village, Burkina Faso. Photo by O. Girard/CIFOR
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A farmer collects cobat fruit in Sorobouly village near Boromo, Burkina Faso. Photo by O. Girard/CIFOR

When Professor Katherine Gibson opened the Seeds of Change conference in Canberra last week, she asked the more than 200 participants to consider whether we are sowing the right seeds of change for achieving gender equality in agricultural development.

“Can the world’s rural areas be places where we can generate dignified agricultural livelihoods, where there’s material well-being, where there’s gender equity and sustainable environmental interactions?” she inquired.

Her questions were prompted by a series of graphs, known as ‘the great acceleration’, that show the world’s economic overdevelopment and its detrimental impacts on the environment. However, Gibson was quick to point out that the great acceleration has also brought about benefits, with some of the most prominent being increased education for women and slowed population growth.

“We really need to see the complexity here,” Gibson explained in a subsequent interview, referencing these contradictory results of recent development. Development and its gendered impacts are complex matters – a realization that permeated discussions during the three-day conference.

Convened by the Australian Centre for International Agricultural Research (ACIAR), the CGIAR Collaborative Platform for Gender Research and the University of Canberra, the Seeds of Change conference brought together researchers and practitioners from around the globe. The CGIAR Research Program on Forests, Trees and Agroforestry (FTA) contributed to the deliberations with three presenters showcasing studies that emphasize the importance of understanding complex gender relations for designing successful policies and interventions.

Read also: Women improve food security through land-restoration technology in Kenya

Villagers pose for a photograph in Jambi province, Indonesia. Photo by T. Saputro/CIFOR

Examining evidence

Kartika Sari Juniwaty, lecturer at the University of Indonesia’s Faculty of Economics and Business and research associate at the Centre for International Forestry Research (CIFOR), presented initial research findings that highlight why challenging generally accepted beliefs about women and agriculture is a good starting point.

“There is an underlying belief that feminization of agriculture happens in this one way – that men are leaving the sector and women are taking over. But in reality, it is much more complicated than that,” Juniwaty said.

Examining 20 years of longitudinal data, collected from more than 7,000 households in Indonesia since 1993, Juniwaty has found that while fewer and fewer people are employed in agriculture, men are not leaving the sector at a faster rate than women. This differs from the situation elsewhere, such as in some parts of South Asia, where men are migrating out of villages and leaving the agricultural sector. In addition, families seem to have left and reentered the agriculture sector many times during the 20-year period, raising questions about what drives such decisions.

Juniwaty stressed that policies and interventions must be informed by on-the-ground realities to be successful. Improved understanding of gendered transformations may better inform the design of policies, such as the Indonesian government’s social forestry program, which gives communities rights to sustainably use forests to boost their livelihoods and incomes.

“We might think that a program can be more beneficial for women if they are given more opportunity to participate,” explained Juniwaty. “But to design appropriate initiatives to encourage women’s participation in the program, improve their well-being, and avoid unintended negative consequences, we need to better understand women’s roles and contribution in the agricultural sector, including forestry.”

Moving forward with her research, Juniwaty hopes to tease out more information about why different households leave or reenter the agriculture sector. Rather than looking only at gender, examining different characteristics of household members – such as their age and education levels – may provide more information on what drives labor force movements in Indonesia. This is particularly relevant during a time when growing mechanization and investments might eventually lead more people to leave the sector.

Read also: Thinking of tomorrow: Women essential to successful forest and land restoration in Africa

Gender considerations essential for restoration

Two other scientists presenting FTA research at the conference highlighted the need to consider gender relations when designing, implementing and monitoring restoration initiatives in forested landscapes.

Mary Crossland, a PhD student from Bangor University, working with World Agroforestry (ICRAF), spoke of a study in the drylands of eastern Kenya, where farmers are testing the use of planting basins under a restoration project led by ICRAF. Her preliminary findings suggest that women often dig these basins without the help of men whereas other land preparation practices, such as plowing, are usually shared by men and women.

A villager shows a palm nut fruit in Jambi province, Indonesia. Photo by T. Saputro/CIFOR

“Whether this indicates a shift in labor and a risk for women in terms of increased workload or an opportunity in terms of increased autonomy to carry out activities that previously required men’s participation is something we hope to explore more in our future work,” said Crossland.

Along the same lines, Markus Ihalainen, a research officer working with CIFOR, examined how women and men have participated in, and benefited from, four different restoration initiatives, also in Kenya. He found that while many restoration activities rely heavily on women’s labor, women tend to lack secure access to many long-term benefits.

Together, these two studies point out why gender equality is critical to successful restoration initiatives. Without ensuring that the benefits of restoration outweigh the costs for both women and men, local support can quickly dwindle. Following this, restoration targets, and the livelihood benefits they are meant to achieve, may not be reached.

Read also: Picks and spades can triple farmers’ yields in Kenyan drylands

Staying focused

FTA is committed to tackling the complexities of gender in agriculture head on by prioritizing research, such as that presented above, which sheds light on how inequalities among women and men may prevent women from contributing to, and benefiting from, restoration and other environmental transformations.

Reversing the environmental degradation caused by the great acceleration described by Gibson is both urgent and essential. Only when degradation trends are overturned will healthy landscapes and forests be able to underpin food production and equitable, sustainable livelihoods.

Achieving this goal requires accounting for complex gender relations in policies, interventions and decision-making processes – getting gender relations right is a key ingredient in any plan to successfully achieve sustainable development outcomes.

By Marianne Gadeberg, communications specialist.

This work is 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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  • Silviculture techniques help farmers improve incomes, develop more productive agricultural systems

Silviculture techniques help farmers improve incomes, develop more productive agricultural systems

Staff measure timber volume in a demonstration plot in Gunung Kidul. Photo by Riyandoko/ICRAF
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Staff measure timber volume in a demonstration plot in Gunung Kidul. Photo by Riyandoko/ICRAF

Two new studies reveal the importance of silviculture for increasing farmers’ incomes in Java and East Nusa Tenggara, Indonesia.

Planting timber in agricultural systems is a common practice in Indonesia. Farmers often cultivate timber together with other crops to diversify and increase their incomes. Timber acts as a savings bank, only being harvested when large funds are needed. To ensure the best growth of timber, experts recommend that farmers practise silvicultural techniques, which, despite the numerous benefits, are still not widely adopted.

In Gunung Kidul in the province of Yogyakarta and in Sumbawa and South-central Timor in East Nusa Tenggara province, researchers in the Developing and Promoting Market-based Agroforestry Options and Integrated Landscape Management for Smallholder Forestry in Indonesia project explored the factors that encouraged farmers to adopt silvicultural techniques.

Their findings have been published in Agroforestry Systems: Adoption of silvicultural practices in smallholder timber and NTFPs production systems in Indonesia. The project is funded by the Australian Centre for International Agricultural Research and is linked to the CGIAR Research Program on Forests, Trees and Agroforestry (FTA).

“At the research sites, timber and non-timber forest products contributed significantly to the economy,” said Gerhard Manurung, research leader and agroforestry scientist with the World Agroforestry Centre (ICRAF) in Indonesia. “We found that the most important factors affecting whether farmers would use silvicultural techniques or not were ease of access to the knowledge found in forestry extension services and farmers’ groups, how well they understood government policies on timber and non-timber forest products [NTFPs], the number of land parcels held by each farmer, and the number of tree and other species that the farmer managed.”

He pointed out that most available research on silvicultural practices was usually done in the context of natural forests, whereas this study offered a fresh perspective because it focused on agroforestry systems, or trees on farms.

Silviculture helps farmers develop more productive systems and reap greater benefits. For example, pruning leads to knot-free timber, which attracts premium prices; thinning young trees so that the remaining trees do not have as much competition for light and nutrients generates the highest percentage of heartwood volume, meaning bigger trees for harvest and more timber to sell; and intercropping teak with nitrogen-fixing shrubs helps to increase the trees’ diameter while at the same time improving soil conditions, which facilitates faster and stronger growth and bigger trees.

A staff member prunes a teak tree. Photo by Riyandoko/ICRAF

Timber and NTFPs contributed more than 60 percent to household incomes at the three sites, which was greater than that from agricultural and plantation crops, yet the adoption of silviculture remained low. The researchers found that a lack of resources and access to information stopped farmers from adopting better practices. In Sumbawa and South-central Timor, when there was more access to forestry extension services and farmers’ groups where knowledge was exchanged, the likelihood of farmers adopting better silvicultural practices rose 2–4 times.

The researchers recommended that policymakers, researchers and extension providers should collaborate more robustly, using approaches that put farmers’ livelihoods at the forefront. Research and training should incorporate participatory techniques, which are renowned for their success in fostering problem-solving skills and speeding learning. Additionally, government research centres should provide on-farm support, such as demonstration plots, that allowed farmers to observe changes brought about by improved techniques.

In terms of policies, the researchers proposed that governments encourage intensification of smallholders’ tree products through intercropping, which escalates the rate of adoption. Regulations on the sale of tree products should be simplified and information provided about grading and pricing mechanisms.

The other study, The significance of planted teak for smallholder farmers, focused on Gunung Kidul, where teak is a valuable investment and an important part of cultural heritage. When grown together with other commercial crops, teak agroforestry systems in Gunung Kidul contributed 40 percent of household income.

Typically, teak produced by smallholders has a diameter of 30 centimeters, which is considered suboptimal by the industries in Jepara in Central Java that produce much of the nation’s teak furniture. Thinning trees helps to improve the size and quality of those that remain but often farmers are unwilling to thin because they fear they will lose income. Also, most farmers use wildlings, sourced from forests or natural regrowth on farms, instead of high-quality seedlings or seeds produced in nurseries. Wildlings typically do not grow as well as those produced by skilled nursery operators.

In Indonesia, the value chain for teak consists of smallholders, local traders, wholesalers and processors. Farmers typically sell logs at prices based on information from other farmers. There is a general lack of knowledge about market prices and grading systems, resulting in sales often below market value. Because traders bear the major risk in the transaction, they lower their offers to farmers so as to cover the cost of the risk.

Echoing Manurung and team’s findings, the researchers recommended the use of on-farm trials as a way of stimulating farmers’ interest in improvements. Further, silviculture needed to be aligned with farmers’ needs for short-, medium- and long-term income. For example, by thinning trees farmers could plant short-rotation tree species, which could be harvested in 5–8 years, in between the teak.

The researchers also urged the development of win-win partnerships between farmers and industry, with governments providing incentives and simplifying timber regulations. Information about price and quality needed to be widely disseminated along with silvicultural extension programs. Research centres and industries could provide access to high-quality seeds and seedlings.

By Enggar Paramita, originally published at ICRAF’s Agroforestry World. 

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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Lack of knowledge may impede economic potential

14 December, 2017
Interviewing farmers in Southcentral Timor. Photo by Purnomo Sumardamto/ICRAF
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FTA COMMUNICATIONS TEAM
Interviewing farmers in Southcentral Timor. Photo by Purnomo Sumardamto/ICRAF

Farmers in Java and Nusa Tenggara, Indonesia lack information on teak cultivation and non-timber forest products, leaving them with inadequate skills to improve their livelihoods.

Aside from irrigated rice, horticulture and plantation crops, both timber and non-timber forest products are also sources of income for farmers in many areas in Indonesia. For example, in Gunungkidul, Yogyakarta, 12 percent of household incomes derive from teak while in West Nusa Tenggara Province, the local government named honey as a flagship product with more than 12,000 households harvesting honey and farming bees. However, to optimize production, farming practices require knowledge, which is not always easy to obtain.

A study by researchers in the Developing and Promoting Market-based Agroforestry Options and Integrated Landscape Management for Smallholder Forestry in Indonesia (Kanoppi 2) project, supported by the Australian Centre for International Agricultural Research and the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), found that available forestry extension (agricultural advice) services are limited owing to insufficient human resources, learning material and budget. Conducted in 2013 and 2015, the research focused on three districts: Gunungkidul in Yogyakarta; Sumbawa in West Nusa Tenggara; and Timor Tengah Selatan in East Nusa Tenggara. Using a mix of data collection techniques, insights from 500 farmers, extension agents, and extension agency representatives were mined to assess conditions and develop options for intervention.

The research team found only 28 percent of interviewed farmers had received extension advice. This was because the number of extension agents was low compared with the number of villages that they served.  In some cases, these agents handled more than one village, sometimes located in secluded areas, making it challenging to do their job. There was a lack of regeneration, too, with the average age of extension agents being 45 years-old. One of the respondents mentioned that age was a contributing factor that limited agents from working because of decreased physical ability.

Group discussion with farmers in Gunungkidul. Photo by Riyandoko/ICRAF

The extension services in Indonesia have been through major changes, especially, with the passing of Law No. 16/2006, which shifted the authority to conduct extension programs to sub-districts, away from the national level. Subjects that were previously handled by different ministries and departments are now managed under a body called Extension Agency. The law also requires agents to be ‘polyvalent’ or able to provide assistance on various topics ranging from agriculture through fisheries to forestry. In reality, extension agents are generally fluent in only one specialized topic, hence, the polyvalent demand has added another load to agents’ many burdens.

Underlying these challenges, the research team found that budget was a key issue. Wagimin, the extension coordinator at the Agriculture, Fisheries and Forestry Extension Agency in Karangmojo sub-district in Gunungkidul said the operational budget per month for each extension worker was a mere IDR 112,000 (≈ USD 8.20), which was far from enough. In Sumbawa, the annual budget tended to decrease because the extension program was not prioritized by the local government.

A similar situation occurred in Timor Tengah Selatan, where the budget submitted for regional funding was rarely approved. Because it was not prioritized, the dissemination of forestry information remained limited. What farmers mostly received focused on cultivation, nursery and conservation with no marketing and policy aspects. Additionally, there was no forestry extension material being produced, which further hindered farmers’ learning ability.

The research recommended that forestry extension programs should not rely on government alone. In the study areas, non-governmental organizations and private companies were providing extension programs, thus, collaboration should be established in order to increase reach and provide better quality advice. Moreover, voluntary forestry extension agents drawn from the community, who are available in the areas, should be engaged in government programs. Cooperation with research institutions also needs to be fostered so that farmers have access to up-to-date material.

To follow up on the research recommendations, the project held a workshop to help farmers develop work plans and collaborated with the local Extension Agency, other partners and private bodies to conduct training that included voluntary extension agents and leading farmers. For example, in Gunungkidul, farmers were taught how to cultivate and preserve bamboo while farmers in Timor Tengah Selatan were trained in making natural colouring from indigo. Visits to bee farms and a bee research village were also arranged for farmers in Sumbawa to learn how to gain additional income from honey.

Kanoppi 2 aims to improve farmers’ livelihoods through better landscape-scale management, with particular attention on maximizing the adoption of enhanced practices and value chains for timber and non-timber forest products.

By Enggar Paramita and Robert Finlayson, originally published at ICRAF’s Agroforestry News.

This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry. ICRAF The World Agroforestry Centre is one of the 15 members of the CGIAR, a global partnership for a food-secure future. We thank all donors who support research in development through their contributions to the CGIAR Fund.

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  • Lack of knowledge may impede economic potential

Lack of knowledge may impede economic potential

Interviewing farmers in Southcentral Timor. Photo by Purnomo Sumardamto/ICRAF
Posted by

FTA COMMUNICATIONS TEAM
Interviewing farmers in Southcentral Timor. Photo by Purnomo Sumardamto/ICRAF

Farmers in Java and Nusa Tenggara, Indonesia lack information on teak cultivation and non-timber forest products, leaving them with inadequate skills to improve their livelihoods.

Aside from irrigated rice, horticulture and plantation crops, both timber and non-timber forest products are also sources of income for farmers in many areas in Indonesia. For example, in Gunungkidul, Yogyakarta, 12 percent of household incomes derive from teak while in West Nusa Tenggara Province, the local government named honey as a flagship product with more than 12,000 households harvesting honey and farming bees. However, to optimize production, farming practices require knowledge, which is not always easy to obtain.

A study by researchers in the Developing and Promoting Market-based Agroforestry Options and Integrated Landscape Management for Smallholder Forestry in Indonesia (Kanoppi 2) project, supported by the Australian Centre for International Agricultural Research and the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), found that available forestry extension (agricultural advice) services are limited owing to insufficient human resources, learning material and budget. Conducted in 2013 and 2015, the research focused on three districts: Gunungkidul in Yogyakarta; Sumbawa in West Nusa Tenggara; and Timor Tengah Selatan in East Nusa Tenggara. Using a mix of data collection techniques, insights from 500 farmers, extension agents, and extension agency representatives were mined to assess conditions and develop options for intervention.

The research team found only 28 percent of interviewed farmers had received extension advice. This was because the number of extension agents was low compared with the number of villages that they served.  In some cases, these agents handled more than one village, sometimes located in secluded areas, making it challenging to do their job. There was a lack of regeneration, too, with the average age of extension agents being 45 years-old. One of the respondents mentioned that age was a contributing factor that limited agents from working because of decreased physical ability.

Group discussion with farmers in Gunungkidul. Photo by Riyandoko/ICRAF

The extension services in Indonesia have been through major changes, especially, with the passing of Law No. 16/2006, which shifted the authority to conduct extension programs to sub-districts, away from the national level. Subjects that were previously handled by different ministries and departments are now managed under a body called Extension Agency. The law also requires agents to be ‘polyvalent’ or able to provide assistance on various topics ranging from agriculture through fisheries to forestry. In reality, extension agents are generally fluent in only one specialized topic, hence, the polyvalent demand has added another load to agents’ many burdens.

Underlying these challenges, the research team found that budget was a key issue. Wagimin, the extension coordinator at the Agriculture, Fisheries and Forestry Extension Agency in Karangmojo sub-district in Gunungkidul said the operational budget per month for each extension worker was a mere IDR 112,000 (≈ USD 8.20), which was far from enough. In Sumbawa, the annual budget tended to decrease because the extension program was not prioritized by the local government.

A similar situation occurred in Timor Tengah Selatan, where the budget submitted for regional funding was rarely approved. Because it was not prioritized, the dissemination of forestry information remained limited. What farmers mostly received focused on cultivation, nursery and conservation with no marketing and policy aspects. Additionally, there was no forestry extension material being produced, which further hindered farmers’ learning ability.

The research recommended that forestry extension programs should not rely on government alone. In the study areas, non-governmental organizations and private companies were providing extension programs, thus, collaboration should be established in order to increase reach and provide better quality advice. Moreover, voluntary forestry extension agents drawn from the community, who are available in the areas, should be engaged in government programs. Cooperation with research institutions also needs to be fostered so that farmers have access to up-to-date material.

To follow up on the research recommendations, the project held a workshop to help farmers develop work plans and collaborated with the local Extension Agency, other partners and private bodies to conduct training that included voluntary extension agents and leading farmers. For example, in Gunungkidul, farmers were taught how to cultivate and preserve bamboo while farmers in Timor Tengah Selatan were trained in making natural colouring from indigo. Visits to bee farms and a bee research village were also arranged for farmers in Sumbawa to learn how to gain additional income from honey.

Kanoppi 2 aims to improve farmers’ livelihoods through better landscape-scale management, with particular attention on maximizing the adoption of enhanced practices and value chains for timber and non-timber forest products.

By Enggar Paramita and Robert Finlayson, originally published at ICRAF’s Agroforestry News.

This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry. ICRAF The World Agroforestry Centre is one of the 15 members of the CGIAR, a global partnership for a food-secure future. We thank all donors who support research in development through their contributions to the CGIAR Fund.

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  • Sustainable development of Cameroon's palm oil

Sustainable development of Cameroon’s palm oil

07 August, 2017
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Cameroon’s tropical climate provides the perfect conditions for growing oil palm. The high-yield crop is liked by industrial farmers and smallholders, but some are concerned that vast plantations could undermine food security and prevent local families from getting the food they need.

Originally published by CIFOR.

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  • Smallholder farmers in REDD+ sites: The cost of missed opportunities

Smallholder farmers in REDD+ sites: The cost of missed opportunities

A man from Pangkalan Limus village collects wood from the surrounding forest in West Java, Indonesia. Photo by A. Erlangga/CIFOR
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A man from Pangkalan Limus village collects wood from the surrounding forest in West Java, Indonesia. Photo by A. Erlangga/CIFOR

Paying farmers not to clear forests could be more effective – if we had a better idea of how much income they really lose.

It is clear that REDD+ has changed from what was first envisaged. First formulated in 2005 as part of the United Nations Framework Convention on Climate Change, the approach attracted high hopes for slowing down climate change by reducing emissions from deforestation and degradation. An integral part of the approach that was originally conceived included direct payments to forest users for not deforesting or degrading forests.

This has not turned out to have been as central to REDD+ implementation as initially expected. There is still, however, broad consensus that the global beneficiaries of climate change mitigation should provide benefits greater than the burdens faced by local forest users who are asked to conserve forest.

A new paper by CGIAR Research Program for Forests, Trees and Agroforestry (FTA) scientist Dr. Amy Ickowitz of the Center for International Forestry Research (CIFOR) and colleagues Erin Sills and Claudio de Sassi shows just how much smallholder farmers in a variety of REDD+ sites would actually lose if they were to stop all deforesting and degrading activities, and were not compensated. The paper also outlines how these costs vary between the richest and poorest farmers.

ON THE CHEAP?

Using data from CIFOR’s Global Comparative Study on REDD+ (GCS REDD+), taken from a number of sites across six tropical countries, the new paper shows that initial estimates of how much smallholder farmers should be compensated for their losses from foregoing deforesting and degrading activities were underestimated.

That led to a mindset in which policymakers and donors thought they could reduce emissions “very cheaply,” according to Ickowitz.

In some cases, this is true. But in many others, it is not. This mindset does not adequately take into account the fact that costs vary widely, even within the same community.

The study separated costs by income group to show how the opportunity costs of deforestation and degradation differ between the richest and poorest members of the communities. As it turns out, these differences can be very large indeed.

Making payments based on more accurate opportunity cost estimates would make REDD+ programs more equitable and likely more effective, says Ickowitz.

She adds that the research shows how a system of flat payments — per hectare, or per household — could be a “pro-poor” approach, as lower-income households have lower average opportunity costs compared to richer farmers in all study sites considered across all six countries.

DEFINING OPPORTUNITY COSTS

So what exactly is an ‘opportunity cost’?

Simply put, it is the income a forest-user loses after complying with REDD+ restrictions on his or her land. If a farmer used to clear trees and grow crops on that land, the opportunity cost is the value of the production he or she has had to give up.

Based on household data and estimates of carbon stocks from six tropical countries, Ickowitz and her team found that opportunity costs per ton of carbon for most of the smallholders in the study exceed current market prices on the voluntary carbon market.

In the early days of REDD+ thinking, estimates of smallholder opportunity cost were much lower than they turned out to be. At the same time, carbon market prices did not rise to the level that many had anticipated.

“One of our main findings is that despite many concerns that REDD+ would mostly hurt poor farmers, if payments were made to farmers based on average community opportunity costs, they would most benefit the poorer farmers in our sample,” says Ickowitz.

But even if carbon prices were to rise to a level that would be able to fully cover average opportunity costs of forest users, there would still be distributional considerations.

A flat payment system could increase transparency, reduce transactions costs, and benefit the lowest income households. But under this type of system, forest-users with higher incomes would not be fully compensated unless payments were set at higher-than-average costs – thus they would either opt out, or lose out from participating in REDD+.

If compensation costs were set at higher-than-average rates to attract the higher income households, costs would substantially increase.

A smallholders farm is seen in Acre, Brazil. Photo by K. Evans/CIFOR

GLOBAL BENEFITS 

On the other hand, the opportunity costs to smallholders in all but one of the sites sampled were less than the social cost of carbon as estimated by an Interagency Working Group of the US federal government.

Therefore, reducing deforestation by smallholders and consequent carbon emissions “would generate net global benefits,” Ickowitz and her colleagues conclude.

But the research also makes clear just how serious an economic loss REDD+ restrictions can impose on small farmers if they are not compensated adequately.

“This, to me, is the real significance of having real numbers from real people across many different places,” says Ickowitz.

And because it is so hard to conduct detailed household surveys at all locations where REDD+ will be implemented, the wide range of sites sampled across the tropics increases the value of the data.

While REDD+ may have evolved into a different type of mechanism than originally conceived, ultimately, it is still about getting forest users to change their behavior.

The research brings us back to looking at what is required to compensate smallholder forest users fairly if they are asked to change their activities. Without equitable compensation, forest-users are not likely to cooperate. This means getting compensation right may well be one of the many issues REDD+ needs to overcome to fulfill its objectives at meaningful scale.

By Andrew North, originally published at CIFOR’s Forests News. 

For more information on this topic, please contact Amy Ickowitz at [email protected].

This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry. We would like to thank all donors who support this work through their contributions to the CGIAR Fund.

This research was supported by Norwegian Agency for Development Cooperation (Norad), the Australian Department of Foreign Affairs and Trade (DFAT), the European Commission (EC), the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB), the United Kingdom Department for International Development (UKAID). 

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  • Estate Crops More Attractive than Community Forests in West Kalimantan, Indonesia

Estate Crops More Attractive than Community Forests in West Kalimantan, Indonesia

13 February, 2017
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Authors: Langston, J.D.; Riggs, R.A.; Sururi, Y.; Sunderland, T.C.H.; Munawir, M.

Smallholder farmers and indigenous communities must cope with the opportunities and threats presented by rapidly spreading estate crops in the frontier of the agricultural market economy. Smallholder communities are subject to considerable speculation by outsiders, yet large-scale agriculture presents tradeoffs that they must navigate. We initiated a study in Sintang, West Kalimantan in 2012 and have returned annually for the last four years, building the baselines for a longer-term landscape approach to reconciling conservation and development tradeoffs in situ. Here, the stakeholders are heterogeneous, yet the land cover of the landscape is on a trajectory towards homogenous mono-cropping systems, primarily either palm oil or rubber. In one village on the frontier of the agricultural market economy, natural forests remain managed by the indigenous and local community but economics further intrude on forest use decisions. Conservation values are declining and the future of the forest is uncertain. As such, the community is ultimately attracted to more economically attractive uses of the land for local development oil palm or rubber mono-crop farms. We identify poverty as a threat to community-managed conservation success in the face of economic pressures to convert forest to intensive agriculture. We provide evidence that lucrative alternatives will challenge community-managed forests when prosperity seems achievable. To alleviate this trend, we identify formalized traditional management and landscape governance solutions to nurture a more sustainable landscape transition.

Publication Year: 2017

ISSN: 2073-445X

Source: Land 6(1): 12

DOI: 10.3390/land6010012

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