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  • FTA Highlight No. 10 – Sustainable Value Chains, Finance and Investment in Forestry and Tree Commodities

FTA Highlight No. 10 – Sustainable Value Chains, Finance and Investment in Forestry and Tree Commodities


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Analysis shows that between 2012 and 2019 the estimated volume of global trade in key forest commodities (oil palm, soy, cocoa, rubber, coffee and timber) has grown significantly. This production growth has put increasing pressure on forests, across landscapes in the tropics and subtropics of Latin America, sub-Saharan Africa and Southeast Asia, leading to multiple environmental challenges linked to losses in forest cover and biodiversity.

The growth in the trade of commodities also presents social challenges, including threats to local food and nutrition security and tenure rights and to the livelihoods of Indigenous Peoples and local communities.

For a decade FTA’s research has focused on supporting transitions to more sustainable and inclusive value chains, finance and business models for these commodities in order to meet growing global demands for food, feed and fibre from sustainable sources.

Download the volume! [PDF]
Within the context of the new series of highlights from 2011 to 2021, the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) is now publishing the volume on Sustainable Value Chains, Finance and Investment in Forestry and Tree Commodities.

Annually, billions of dollars flow into rural landscapes worldwide. However, many investments fail to address a number of important goals of the inhabitants of these landscapes. FTA’s research links the impacts of global trade and investments to state- and market-driven responses in order to address their socio-environmental impacts from the subnational to the global level.

FTA has worked to address these themes over 10 years, providing critical results and improvements. FTA’s Flagship Program 3 on value chains and business models addresses three main themes:

  • which policy arrangements have the most potential for enhancing sustainability and social inclusivity in the value chain?
  • what support is needed to involve smallholders and SMEs in ways that are economically viable, socially inclusive and environmentally sustainable?
  • what mechanisms could promote more widespread adoption of responsible finance that improves sustainability and supports smallholders’ access to finance?

FTA’s efforts in the forestry sector and with tropical commodities such as coffee, cocoa and bananas have been at the forefront of certification and sustainability initiatives. In Indonesia extensive engagement with national and provincial authorities supported smallholders to meet the new challenge of timber legality accreditation through collective action.

Extensive FTA research has also contributed to improved policies and practices that support environmentally conscious and socially inclusive palm oil value chains. FTA researchers have also analyzed Fairtrade coffee value chains and their gendered dimensions.

Efforts increasingly aim to de-link deforestation from supply chains and to achieve zero deforestation. FTA research has shown, however, that commitments to zero deforestation should not be considered in isolation from the wider processes of forest degradation.

The growth in the trade of agricultural commodities is also linked to rising carbon emissions. FTA’s work over the past decade also helps to achieve broader objectives of low-emissions development and climate change mitigation and adaptation in production landscapes.

Private initiatives implemented at the supply chain level alone are insufficient — public and private arrangements that involve supply chains and landscape goals are needed. FTA research has used the Landscape Assessment of Financial Flows to assess how private-sector investments can contribute to income generation and resilient landscapes.

Landscape analysis of financial flows, Gunung Tarak landscape, Indonesia

The complexity of the governance of supply chains in the palm oil sector has led to multiple approaches to implement sustainability initiatives that also relate to how supply chains are structured. Numerous publications produced by FTA contributed to putting the domestic timber sector on the political agenda of many producer countries and the European Commission.

During the past decade, the emphasis of FTA analyses has shifted to embracing different types of suppliers — from smallholders to large-scale loggers and farmers. FTA research on value chains focuses on the inclusion of smallholders and small and medium enterprises (SMEs) at the landscape scale. Public-private initiatives are also engaging with processes for reform.

Future strategic initiatives will need to strengthen partner capacities in developing countries to co-design and deliver evidence-based solutions to address supply chain and investment constraints.

Download the report to find out how future initiatives can build on FTA results and work in ways that ensure sustainable and inclusive value chains and support climate change mitigation and adaptation in production landscapes.

Published volumes until today include:

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FTA Highlights Series Launched at GLF Climate/COP26


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Keynote speakers presented on 6 of FTA’s core work domains and how 10 years of research have translated into concrete impact

The first year of the U.N. Decade of Ecosystem Restoration also marks the completion of a 10-year cycle for the CGIAR Research Program on Forests, Trees and Agroforestry (FTA). To celebrate, FTA announced its new series, “FTA Highlights of a Decade, 2011-2021,” during a side event of GLF Climate: Forests, food, finance – Frontiers of Change. The webinar spotlighted FTA’s past achievements and underlined the critical importance of FTA’s research for the future.

“We are very pleased to present our results from the last 10 years, showing the impact that research can have,” said Robert Nasi, Co-Director General of the Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF). “Our work shows that forests, trees and agroforestry can contribute to climate change mitigation and adaptation, livelihoods and biodiversity.”

DOWNLOAD FINAL AGENDA

Scientists at the digital event on Nov. 5 presented emblematic examples from six of the 18 volumes in the highlights series, which was officially launched the week after. FTA’s work has helped frame current agenda items as outlined in the U.N. Food Systems Summit (UNFSS), by the Convention on Biological Diversity (CBD), the International Year of Fruits and Vegetables (IYFV) and most importantly the 2021 United Nations Climate Change Conference (COP26), which was concomitant to our webinar.

The full event can be replayed here:

 

Now, at the close of FTA’s decadal studies, the fruits from this labour are becoming clear. Six keynote speakers opened the conference with highlights on:

  1. Seed genetic diversity: ICRAF senior scientist and FTA Flagship 1 Leader, Ramni Jamnadass, spoke on the importance of diverse seeds for effective tree planting projects and landscape restoration, reminding the audience that “a mighty tree starts from a seed. If you put garbage in, you get garbage out.” Such diversity is particularly important to fit the needs of smallholders and support adaptation to climate change.
    Volume to be released
  2. Trees on farms (TonF): Over the past decade, FTA engaged in numerous agroforestry initiatives to improve livelihoods and the environment. Eduardo Somarriba, the FTA focal point from CATIE, presented a relevant case from Honduras, where “living tree fences” are used to pen livestock and encourage rotational grazing. Scaling up these fences created with trees could improve the ecosystem and livelihoods for farmers who could use the trees’ resources for additional income generation while contributing to climate change mitigation.
    Volume to be released
  3. REDD+: FTA has conducted comparative research in more than 22 countries with the intent of providing evidence-based knowledge and tools for countries to better measure and monitor their greenhouse gas (GHG) emissions. These programs “allow country partners to develop efficient, equitable and effective policies and practices,” said CIFOR senior scientist and FTA-Flagship-5 Leader, Christopher Martius.
    Volume 11 available here!
  4. Value chains: Scaling up sustainable value chains and certification schemes can create new problems for smallholders if they do not have equitable access to resources, noted Bas Louman, the FTA focal point from Tropenbos International (TBI). To better understand these relationships, “we propose a systems approach linking landscapes to value chains and not looking just at landscapes or value chains,” he said.
    Volume 10 available here!
  5. Gender and social inclusion: Successful landscape initiatives must also work for women, said Marlène Elias, the FTA Gender focal point from the Alliance of Bioversity and CIAT. Over the last decade, FTA’s work has had incredible impact, proving that effective and sustainable landscape management can support social inclusion. “The innovations that we propose aim to lift the barriers in forestry and agroforestry landscapes,” said Elias, so that women, Indigenous Peoples and other minority groups have equitable access to resources, assets, income and decision-making power.
    Volume 15 available here!
  6. Forest Landscape Restoration (FLR): CIFOR senior scientist, Manuel Guariguata, acknowledged that FLR is about more than just tree planting. Rather than being a goal, FLR is a means to achieve many goals that optimize ecosystem functions along the forest transition curve. Landscape restoration also implies multistakeholder collaboration at every stage. These understandings are summarized in the six principles of FLR.
    Volume 4 available here!

The introduction to the series, as well as the volumes on tree biodiversity conservation, wild meat and monitoring & evaluation are also available. More will be published in the coming weeks.

Following these interventions, the audience was asked which types of forest and tree-based innovations were most important for the future. The poll results showed that 45.7% of respondents felt more should be done to improve social inclusion (including poverty eradication) through forest and tree-based initiatives.

Next, a panel of stakeholders at the national and international level discussed how FTA’s decade of research could light the way forward. The distinguished line-up included Malanding Jaiteh, advisor to the Minister of Environment of The Gambia. “Much of what we are trying to do [in The Gambia] is to raise people’s livelihood systems by promoting the development of natural-resource-based enterprises,” said Jaiteh. He explained that the Ministry needs expert knowledge about tree diversity and seed quality to implement projects that are socioeconomically feasible and sustainable. Research from FTA scientists helps fill these gaps.

Li Yanxia, FTA-management-team member from the International Bamboo and Rattan Organization (INBAR), further highlighted three unique benefits that INBAR has received from the organization’s partnership with FTA: its unique focus on development, its capacity-building support and its platform for knowledge exchange. The Head of Embrapa Forestry, Brazil, Erich Schaitza, similarly shared how FTA facilitates his organization’s work. “FTA’s goals match very much with ours,” he said. “Working with them is a good opportunity to have our voices heard and to learn from other countries in the network.”

Natural rubber-producing countries also stand to benefit from FTA’s knowledge. “We have worked very closely with FTA since June 2020 to study how we can adapt natural rubber plantations to climate change,” said Salvatore Pinizzotto, the Secretary General for the International Rubber Study Group (IRSG).

The partnership will also be hosting its final event, “10 Years of FTA Research for People and the Planet,” on Dec. 9. Join us!

FINAL EVENT REGISTRATION

SPEAKER PRESENTATIONS

  1. Rober Nasi opening speech
  2. Effective Tree Seed Systems – Ramni Jamnadass & Lars Gaudal
  3. Trees on Farms (TonF) for livelihoods and the environment – Eduardo Somarriba, Arlene López-Sampson, Norvin Sepúlveda, Edwin Garcia, Fergus Sinclair
  4. REDD+: fighting climate change with forest science Assessing ten years of REDD+ research – Christopher Martius (CIFOR) Amy Duchelle (CIFOR, FAO)
  5. Gender and social inclusion – Marlène Elias
  6. Forest and Landscape Restoration – Manuel R. Guariguata

BROWSE ALL THE FTA HIGHLIGHTS

Visit the main portal here

  1. Introduction: Ten Years of Forests, Trees and Agroforestry Research in Partnership for Sustainable Development
  2. Tree Seed and Seedling Systems for Resilience and Productivity (COMING SOON!)
  3. Conservation of Tree Biodiversity and Sustainable Forest Management
  4. Forest and Landscape Restoration
  5. Food Security and Nutrition
  6. Wild Meat
  7. Trees on Farms to Improve Livelihoods and the Environment (COMING SOON!)
  8. Biomass, Bioenergy and Biomaterials (COMING SOON!)
  9. Improving Rural Livelihoods Through Supporting Local Innovation at Scale (COMING SOON!)
  10. Sustainable Value Chains, Finance and Investment in Forestry and Tree Commodities
  11. REDD+: Combating Climate Change with Forest Science
  12. Adaptation to Climate Change, with Forests, Trees and Agroforestry (COMING SOON!)
  13. Multi-Functional Landscapes for Sustainable Development (COMING SOON!)
  14. Governing Forests, Trees and Agroforestry Landscapes for Delivering on the SDGs (COMING SOON!)
  15. Advancing Gender Equality and Social Inclusion
  16. Capacity Development (COMING SOON!)
  17. Monitoring, Evaluation, Learning and Impact Assessment
  18. The Way Forward (COMING SOON!)

This article was written by Daniella Silva.

This article was produced by 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 ICRAF, the Alliance of Bioversity International and CIAT, CATIE, CIRAD, INBAR and TBI. FTA’s work is supported by the CGIAR Trust Fund.

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  • Finding effective ways to ensure sustainable supplies of forest-risk commodities

Finding effective ways to ensure sustainable supplies of forest-risk commodities


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Shea nut processing in Burkina Faso. Photo by Ollivier Girard/CIFOR
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Cross-sectoral jurisdictional approaches offer promise  

The increased consumption and production of a range of raw material and commodities, so-called “Forest-risk commodities” such as palm oil, soy, cocoa, coffee, rubber, timber and beef, contributes significantly to global tropical deforestation and forest degradation.

As both global and domestic demand grows for such commodities, they constitute one of the biggest threats to forests, leading to tree and vegetation removal – often due to burning – biodiversity loss and the release of greenhouse gases into the atmosphere. Often their cultivation through large industrial-scale estates can also pose threats to the livelihoods of Indigenous Peoples and local communities.

How to secure the sustainable production and consumption of such commodities, without impinging on forests, is therefore a key challenge for public and private actors. But acting on commodities and value chains to reduce deforestation is complex because of several factors.

First, value chains can be very long or complex, making the link between production and consumption very distant. Second, the way production chains, logistics and markets are organized make products difficult to trace, making attribution and accountability difficult. Third, how these value chains operate within landscapes is often not controlled either at the value chain or the landscape level. How public and private actors can effectively work together in landscapes and along value chains is key to solving these problems.

Cable system to transport oil palm harvest in San Martin, Peru. Photo by Juan Carlos Huayllapuma/CIFOR

Expansion of trade in forest-risk commodities led to increased pressure from civil society organizations, consumers, international banks and shareholders of consumer goods companies to develop and implement a diverse array of instruments and tools to promote sustainable or deforestation-free sourcing, and as a way to reduce their exposure to reputational, financial and regulatory risks. Multi-stakeholder platforms and commodity roundtables also emerged, in response to criticisms of government failures.

FTA’s new Working Paper  “Reviewing initiatives to promote sustainable supply chains” focuses on on forest-risk commodities [PDF]
Researchers at the Center for International Forestry Research (CIFOR), France’s International Cooperation Center in Agricultural Research for Development (CIRAD) and the World Wildlife Fund for Nature (WWF) through the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) have conducted a comprehensive review of initiatives to promote sustainability including recent “hybrid” initiatives that involve governments at the national or subnational levels to create a better enabling environment for the private sector.

The multiplication of sustainability initiatives has also been driven by the growing complexity and diversity of conditions under which agri-food and timber supply chains operate. Private sector actors increasingly define and monitor their own sustainability performance by using certification standards or by developing their own procedures and criteria.

More recently, a discernible shift from supply-chain-based or sectoral approaches toward landscape or jurisdictional approaches has been seen as a way to meet sustainability goals. However, the growing complexity of policy regimes results in ambiguities and can lead to trade-offs between gains and losses. The findings of the FTA review suggest that many aspects of complex policy regimes are not yet well understood by policymakers, scientists or the public.

Amongst the supply-chain based and sector-based approaches, Voluntary Sustainability Standards (VSS), are market-driven mechanisms introduced to ensure that social economic and environmental sustainability issues are addressed in the production, processing and trade of agricultural and forestry commodities.

“Although VSS have been widely adopted, they have come under greater scrutiny in recent years and are often associated with high transaction costs (usually transferred to the end-consumers), the need to meet increasingly complex sustainability and legality standards, the exclusion of smallholders, the frequent lack of any premium for certified products and weaknesses in compliance,” said Andrew Wardell, a principal scientist with CIFOR.

The scientific evidence on the economic, environmental and social outcomes of tropical forest certification is encouraging although regional differences do occur. Take, for example, the Forest Stewardship Council (FSC), which since the early 1990s ensures that the chain of custody for production, transformation and sales of timber complies to specific voluntary, third-party audited standards, including covering sustainable forest management and avoiding deforestation.

“There is no doubt that the FSC has achieved a great deal of progress, but it’s not an unqualified success,” said Marie-Gabrielle Piketty, a researcher with CIRAD and a joint author on a review of FSC in Brazil. “Like most sustainability standards, it faces the classic dilemma of balancing stringency needed to ensure the sustainability of FSC-certified forest management, while becoming more inclusive.”

As a result, new public and private commitments have emerged to reduce deforestation and include initiatives based on either sectoral approaches with a focus on supply-side interventions, or mixed supply-chain and territorial approaches at the jurisdictional level. Government-led regulations can guide the private sector to ensure greater third-party accountability and reduce reputational risk.

Timber processing in Yaoundé – Cameroon. Photo by Ollivier Girard/CIFOR

Similarly, environmental non-governmental organisations (NGOs) are increasingly engaged as intermediaries to help companies address social and environmental risks in the supply chain, and to support sub-national governments in meeting their sustainability commitments.

“We need greater transparency to ensure that companies aren’t just paying lip service to environmental sustainability initiatives, but that they can substantiate claims that deforestation has been reduced,” Wardell said.

FTA’s brief on FLEGT-like approaches for West and Central Africa Cocoa’s sustainability [PDF]
To this end, the Accountability Framework initiative (Afi) developed a global disclosure system which aims to stimulate ethical supply chains by tracking progress toward eliminating deforestation and other forms of ecosystem conversion from corporate supply chains. Uptake and compliance challenges remain and Afi released a baseline for 2020 in an effort to improve disclosure for deforestation-free supply chains.

Some state-led interventions can be effective. For example, the European Union Forest Law Enforcement Governance and Trade action plan (FLEGT), restricts imports of unsustainably produced and illegal timber. The European Commission is currently exploring ways to enforce a Due Diligence based regulation for other forest-risk commodities. Nevertheless, the New York Declaration on Forests (NYDF), a voluntary public-private commitment to halve deforestation by 2020 will be missed and meeting its 2030 target of ending deforestation will require an unprecedented reduction in the rate of annual forest loss, according to a recent assessment.

Seeking solutions

Jurisdictional approaches, which align governments, businesses, non-governmental organizations, social organizations and local stakeholders in specific areas around common interests in land-use governance, are now often considered to have the most potential. They can ensure and provide incentives for sustainability compliance across a whole geographic area, a key issue which value-chains or sector-based approaches fail to address, or often only partially address given the existence of spatial leakage (when some areas in a landscape are not compliant) or sectoral leakage (when some value chains in a landscape are not covered by a sustainability scheme). Some of these initiatives have been developed around the notion of enhancing regulatory frameworks and enforcement, while others constitute partnerships for improving the uptake of good practices for a specific commodity within wider land-use planning and service provisions schemes. Others involve de-risking schemes for financial actors when they invest in forest-risk landscapes or constitute wider partnerships to advance sustainability at the jurisdictional level.

Soy beans, Santa Cuz, Bolivia. Photo by Neil Palmer / CIAT

“Some corporate actors are actively developing place-based solutions not only as a risk management strategy to delink their supply chains from deforestation, but also to benefit from longer term investments in the sustainability of the landscapes or jurisdictions on which their sourcing depends,” said Pablo Pacheco, global forests lead scientist at WWF.

“We shouldn’t focus only on the negative consequences associated with the expansion of forest-risk commodities, but also contribute to the development of a more positive agenda, which supports livelihoods and local people’s rights, protects nature and restores forests in addition to slowing deforestation,” he added.

“Trying to bring together disparate people to achieve common goals isn’t easy because supply chains and jurisdictional governments have different priorities,” Wardell said.

“Several teams – and some through FTA – have started to better highlight some possible impact pathways and shortcomings of jurisdictional approaches, but empirical knowledge remains incomplete,” Piketty said. “Lessons from existing case studies need to be systematized.”

“There’s a clear need to better understand how interactions between state regulations and non-state sustainability initiatives can combine supply chain management and jurisdictional approaches to stimulate wider uptake of improved practices by smallholders,” Wardell said.

“As well, determining how to evaluate impact is a key challenge, due to the many variables that come into play, thus research and science will continue to have an important role to play,” he added.

This article was written by Julie Mollins.

This article was produced by 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 ICRAF, the Alliance of Bioversity International and CIAT, CATIE, CIRAD, INBAR and TBI. FTA’s work is supported by the CGIAR Trust Fund.

 

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  • New website showcases Forests, Trees and Agroforestry topics from the FTA 2020 Science Conference

New website showcases Forests, Trees and Agroforestry topics from the FTA 2020 Science Conference


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Are you looking for some of the key latest research findings, keynotes, videos regarding trees, forests and agroforestry contributions to sustainable development? Go to the newly launched web-portal of the groundbreaking FTA Science Conference 2020 by the CGIAR Research Program on Forests, Trees and Agroforestry (FTA).

The fully digital conference, titled Forest, trees and agroforestry science for transformational change, ran from 14 to 25 September 2020 and drew more than 520 participants from 69 countries around the world. It featured close to 200 interventions from scientists involved in the FTA program spread over 10 days and 26 different sessions. It included keynote speeches, controversial panel debates on “hot topics”, and technical presentations and posters.

FTA 2020 Science Conference Book of Abstracts now available in PDF

The conference put an emphasis on collaborative research between FTA and the broader community, as 60% of the presentations were between FTA’s seven managing partners (CIFOR, ICRAF, The Alliance of Bioversity and CIAT, CATIE, CIRAD, INBAR and TBI) as well as the many national partners. The 179 abstracts accepted for the event are now made available in a book on the new web-portal, with more coming next, such as selected videos.

The conference was organized around six key technical themes that are pathways for transformational change:

  1. Inclusive value chains, finance and investments
  2. Towards resilient and diverse landscapes and food systems
  3. Transforming livelihoods through agroecological approaches with trees
  4. Nature-based solutions to address the climate crisis
  5. Inclusive governance for sustainable landscapes
  6. Designing, implementing and evaluating research for development impact

Three plenary sessions allowed for overall framing, linking-up across themes, stock-taking of discussions. The conference featured two sessions addressing “Hot & Controversial” issues, be it in science, in development, or in the media:

  • Competing understandings of the restoration problem and solutions
  • Systemic approaches in a ‘silver bullets’ world.

Restoration has emerged in the last decade as a key global political objective and debates on the topic are intense. The “Hot & Controversial” session used a variety of techniques, including role-playing, quick polls and devil’s advocacy, to highlight and debate some of the most disputed points, allowing to discuss strengths and shortcomings of the argumentations behind, and to debunk myths.

An innovative “Green” Dragons’ Den event was organized for the second “Hot & Controversial” session, to trial five innovations coming from the program. These were defended by their authors in quick elevator pitches, trying to convince the Green philanthropist dragons to invest a “virtual” sum of three million USD. The audience was also called to a virtual crowdfunding exercise. The session was a “live learning” event, for scientists to get better at telling convincing stories on often very complex issues and tools, to best sell their results, as well as understand needs, objectives, and ways of thinking of investors.

***

It was the second time FTA organized a global virtual conference, after the first one held in March 2017 on “cool insights for a hot world”, that gathered 200 participants over two days.

For the 2020 conference, technical developments, including live (“synchronous”) online collaborative tools such as Mural, virtual poster rooms, live polling, role-playing sessions, and the experience of FTA’s events team, allowed for a lively and smoothness event, marking probably a new era for large scale scientific conferencing.

Participation from within the program was double the size of what it would have been if held in-person, and several high-level stakeholders could join for engagement sessions, for which otherwise they may not have been able to travel for a full week. Also, with 3 hours of “air time” per day, it left participants still with time for their other activities, while allowing participation from scientists in time zones situated 15 hours apart, from Vancouver to Hobart.

As a follow-up, the FTA is now organizing a series of “Science to Action” webinars, which are open to all, and which will focus on the way forward for actors on the ground. The first webinar was held on 26 November 2020 on the topic: Innovations to overcome barriers to access to finance for smallholders, SMEs, and women, and was developed in coordination with FTA partner Tropenbos International. You can replay the whole event here.

***

Looking forward to engaging even more in 2021, as we wrap up a full decade of research since 2011.

By Sandra Cordon.

This article was produced by 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 ICRAF, the Alliance of Bioversity International and CIAT, CATIE, CIRAD, INBAR and TBI. FTA’s work is supported by the CGIAR Trust Fund.

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Insecurity, COVID-19 hit women-led shea sector on eve of Africa free trade deal


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After they are roasted and crushed, the shea nuts are ground into a fine paste by women in Burkina Faso. CIFOR/Ollivier Girard
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Article originally posted on Forest News.

Emphasis on agri-business exports puts small-scale producers at risk

Women have dominated shea production and sales for centuries in West Africa, managing trees, gathering nuts, roasting and crushing kernels to create rich butter used in cooking, cosmetics and medicines.

This women-led shea market value chain now faces increasing uncertainties on various fronts, exacerbated by the COVID-19 pandemic.

A deteriorating security situation in Burkina Faso has seen the country “replace Mali at the epicenter of the Sahel’s security crisis” over the past year, as countries in the semi-arid region engage in increasingly volatile battles against insurgencies with links to al Qaeda and Islamic State.

To explore the potential impact of multiple changes affecting domestic and international trade in shea, the Global Shea Alliance (GSA) – a multi-stakeholder platform comprised of government, private sector, non-governmental organizations, civil society organizations, research and women’s shea producer associations – recently organized three online sessions for a “Virtual Shea Lab.”

The shea trade has been seen by Europeans as a potentially lucrative investment opportunity from at least the early 20th century, said Andrew Wardell, a principal scientist with the Center for International Research (CIFOR), who delivered one of the presentations during the event.

“Various historical, political, economic and social threads are becoming entangled and should be addressed to protect the industry as the region confronts a confluence of significant crises and changes,” he said.

The first significant European incursions into the shea sector involved so-called Treaties of Friendship and Trade that were negotiated with local chiefs by the French, British and Germans as early as the 1890s.

In 1924, a colonial superintendent of agriculture and forestry in the Gold Coast Colony – now Ghana – observed that the collecting of shea kernels was entirely done by women, but anticipated that would change “…when it was found out there was money to be made from shea kernels,” Wardell said.

The most significant growth in shea demand in Burkina Faso has occurred over the past 20 years as large agri-business firms producing Cocoa Butter Equivalents (CBEs) have established trading bases and crushing facilities in the south-west of the country.

Although prices and the volume of trade in shea nuts have both increased, profit margins for women shea nut producers have been reduced as an oligarchy of wholesalers in Bobo Dioulasso — the country’s second largest city after the capital Ouagadougou — continue to act as intermediaries in bulking-up for the large transnational corporations, said Wardell, who has studied the sector for 20 years.

“In Burkina Faso, where 94 percent of households collect shea nuts and 60 percent of households sell shea nuts or butter, shea is the fourth largest source of government revenues after gold, cotton and livestock,” he said. “Not only is it the most significant source of household revenues and subsistence use for women, but it remains a staple food oil for more than 200 million people across sub-Saharan Africa.”

MARKET EXPANSION

The CBE technology was developed in the 1960s, although the main CBE manufacturers, including the Danish-Swedish speciality fats producer AAK AB., Indian fats and cosmetics company 3F Industries Ltd. and the U.S. agricultural commodities trader Bunge Ltd. did not establish trading bases or crushing facilities in the country until after 2005. Previously, they operated out of West African ports such as Abidjan, Tema and Cotonou and hence, depended on in-country wholesalers.

“Since global demand in chocolate products grew in the BRICS countries – Brazil, Russia, India, China and South Africa – we’ve seen a big growth in demand for shea nuts for use in chocolate manufacture because it’s much less expensive as a raw material,” Wardell said, explaining that cocoa butter can now be substituted up to 5 percent by a so-called equivalent.

Although the CBE manufacturers have recently initiated direct purchasing from women’s shea producer associations, they remain dependent on a complex pyramidal purchasing network established by Bobo Dioulasso wholesalers during the colonial period.

The network trading is based on trust, distant kinships, “apprenticeship” of wholesaler family members and an intimate knowledge of local units of sale — yoruba and cocotassa — and weight loss associated with the drying of shea nuts, he said.

The shea trade in Burkina Faso is now divided into two basic strands, Wardell added. The smaller strand, which represents about 10 percent of trade, is a classic agri-food, vertically-integrated value chain, driven by buyers and increasingly governed by trading standards. This is similar to the horticultural trade from other sub-Saharan African countries such as Kenya with European supermarkets. In this scenario, shea is typically traded as butter to supply the cosmetics industry.

The second strand is where 90 percent of the trade now occurs; it involves the unprocessed nuts or semi-processed nuts. The nuts are crushed, then they are fractionated to separate the different oils, the latter occurring outside the country.

TRADE OFFS

Now, the coronavirus pandemic poses new threats due to lockdowns, which have limited business activities, led to unemployment and reduced incomes, and limited mobility while creating obstacles to free trade, even as the African Continental Free Trade Area agreement (AfCFTA) moves ever closer to implementation.

Once roasted, Rabo Nafissatou (L) and Bassia Mariam grind the shea nuts to a paste, mix it with water and beat it. CIFOR/Ollivier Girard

“COVID-19 has made the 16 million women throughout sub-Saharan Africa who rely on revenues from shea nuts and shea butter increasingly vulnerable,” Wardell said.

The U.N. Economic Commission for Africa estimates that the African continent will face an immediate decline in gross domestic product growth from 3.2 percent to 1.8 percent in 2020 due to COVID-19, but with a further adverse impact if it is not contained in the short-term, said Ify Ogo, regional coordination specialist for AfCFTA at the U.N. Development Programme and a speaker at the GSA Africa Conference 2020.

“Trade is a significant conduit for this negative impact through three transmission channels,” she said, explaining that compressed demand related to Africa’s most important trading partners — including the European Union, China, the United States and India — are undergoing simultaneous crises and reducing imports.

Additionally, prices for many of the commodity exports on which Africa depends are dropping. Finally, disrupted supply chains are taking a toll, more than half of Africa’s exports go to countries that are significantly affected by COVID-19, while 53 percent of its imports originate from such significantly affected countries, she said, adding that quarantines and movement restrictions further frustrate supply chains.

GSA could see financial gains through AfCFTA, which came into effect in 2019, Ogo said.

But it remains unclear if women shea butter producers will see economic benefits when the free trade agreement — which was originally to be launched on July 1, but has now been put on hold due to coronavirus — is eventually implemented.

While negotiations are still underway, 55 member countries would remove tariffs from 90 percent of goods, with the goal of boosting trade on a continent-wide free trade market valued at more than $3 trillion, which would serve 1.2 billion people.

Read alsoLaunch of African free trade deal postponed due to coronavirus

Shea nuts are harvested in Burkina Faso between mid-June and mid-September. After the pulp is removed, the nut is then washed and allowed to dry. CIFOR/Ollivier Girard

Under the agreement, shea exports could increase due to the removal of trade tariffs on shea products. Currently, tariffs on raw shea butter are between 10 and 40 percent in African countries, Ogo said. Other benefits would include the increase in productive capacity and enhancing trade readiness, she said.

Through the agreement, trade has a key role to play as a driver of economic recovery and development, therefore, for Africa, the post-COVID-19 stimulus package is the actual AfCFTA and the implementation of this agreement, she said, citing Wamkele Mene, secretary general of the AfCFTA secretariat.

“Under this scenario, trade routes must be open, so as yet it’s unclear how the single market would benefit women involved in the shea industry,” Wardell said. “As well, due to much of the work occurring in women’s collectives and associations, physical distancing makes production untenable.”

AfCFTA does not necessarily take into account historical trade routes, which are not always reflected in official country borders. Although it may be beneficial over the long term, it is still unclear how AfCFTA will help women shea producers in the short term, even without factoring in COVID complications.

“There is only so far the sector can expand,” Wardell said. “Women clearly get greater financial benefits from value-added processing of shea nuts into shea butter, then selling the unprocessed nuts. Even though there are greater volumes involved, the women are still getting proportionately very little from the trade in shea nuts.”

Research into this area continues at CIFOR through Globalizations in a nutshell: Opportunities and risks for women shea producers in West African shea parklands. The project, which is supported by Canada’s International Development Research Centre (IDRC) and the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), has so far supported three master’s students from Nazi Boni University’s Institute of Rural Development in Burkina Faso.

“Three draft theses are under review, one by a student studying the costs and benefits of certification of shea butter as a way of increasing the revenues of women shea producers,” Wardell said.

 

By Julie Mollins. 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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UN chiefs strengthen collaboration to achieve zero deforestation


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According to the UN, up to 23 per cent of all greenhouse gas emissions derive from the Agriculture, Forestry and Other Land Use (AFOLU) sector
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Originally published at World Agroforestry (ICRAF).

Seven leaders of UN agencies at the Climate Conference in Madrid call for an end to deforestation to address the climate emergency

‘Forests are essential to life on Earth; we cannot afford to destroy them. UN agencies are fundamental in supporting countries to take action.’

Naoko Ishii, Global Environment Facility

Carolina Schmidt, president of the 25th Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC), said that deforestation is the most critical challenge faced by humanity: a bold, new stand is needed against destruction of the world’s forests. She called on the UN and the world to heed the Santiago Call for Action on Forests and work collaboratively to achieve zero net deforestation.

In response, seven heads of UN agencies joined together in the first-ever UN Heads of Organizations Leadership Dialogue, 12 December 2019 at the Climate Conference in Madrid, to strengthen their collaboration in supporting member states achieve zero deforestation.

Patricia Espinosa, Executive Secretary, UNFCCC; Qu Dongyu, Director-General, Food and Agriculture Organization (FAO); Inger Andersen, Executive Director, UN Environment Programme (UNEP); Achim Steiner, Administrator, UN Development Programme (UNDP); Ibrahim Thiaw, Executive Secretary, UN Convention to Combat Desertification (UNCCD); Naoko Ishii, Chief Executive Officer and Chair of the Global Environment Facility (GEF); and Liu Zhenmin, Under-Secretary-General, UN Department of Economic and Social Affairs (UN DESA) explained their agencies’ past actions and commitments to increasing the synergies between each other to provide maximum support to member states, especially developing nations, to stop deforestation.

‘The UN system has enormous capacities around the world,’ said Espinosa. ‘Combined, we have the knowledge, experience and capacities to facilitate actions with governments. This is the first leadership dialogue and it augers fantastically for going forward. Coordination, communication and looking for synergies between our different entities is key. This is such an enormous challenge that no one of us can do it alone. To support developing countries, in particular, we really need to work together. Importantly, when we talk about forests and land use we must bear in mind the social dimensions of the work we need to do in this area, especially the communities in the most vulnerable developing countries.’

Deforestation, degradation and restoration have been included in the Kyoto Protocol, Paris Agreement and other international conventions, said Zhenmin of UN DESA, but loss and degradation of vast areas of natural forests continues, particularly, in the tropical domain where 7 million hectares of forests are lost every year.

‘Zero deforestation can only be achieved through UN member states,’ he said. ‘We must all work together; all should act as one to move forward on a common framework to achieve zero net deforestation.’

He pointed out that the High-Level Forum on Forests has developed a strategic plan for forests, which was adopted in April 2017 by the General Assembly, to tackle the drivers of deforestation and degradation; to find a balance between economic growth and sustainability; and to improve the strength of the forestry sector. The plan has six goals and 26 targets in an integrated framework of action for zero net deforestation designed to unlock the potential of forests to achieve the Sustainable Development Goals. If fully implemented, it will stop deforestation, increase reforestation and reduce poverty of forest-dependent people.

He committed his agency to continue support to member states to implement the plan and urged them to speed that implementation. DESA would strengthen collaboration in capacity building of member states and in mobilizing funding for forest management and deployment of technologies.

Dongyu of FAO confirmed that there was a great need to address food security and forests together holistically. Over 20 developed countries have decreased the number of malnourished people and also increased forest area. His key message was that it is possible to reconcile these issues through coordinating a land-use approach across sectors.

The synergy of agencies’ efforts can already be seen in FAO and UNEP leading the Decade of Restoration. Their aim is to massively expand the scale of restoration of degraded ecosystems, including forests. In this process, decisions must be based on evidence and the world must look beyond forests alone and build collective synergy, for example, to reduce the carbon footprints of agricultural commodities.

‘Traditional agriculture has been focused mainly on productivity but now we must look at sustainability, especially, in cash crops,’ he said.

A key to this effort is to ensure that subsidies are not driving deforestation and that enacted policies are in place for food security. Technologies and innovations are also keys to achieving rapid results and must be deployed widely, with a strong focus on environmental functions. He also emphasized that the world needs a strong and flexible set of forest monitoring tools that can readily upload and access data through technology such as mobile phones. To speed the transition to zero deforestation and stronger food security through sustainable agricultural value chains, partnerships are needed between UN agencies and businesses.

Ishii of the GEF stated that the science is clear: 73% of deforestation is driven by conversion to agriculture. How, she asked, are we to deal with the economic forces that are driving this?

‘We need to understand this better and implement all commitments, like the New York Declaration on Forests. We are failing in translating commitments into actions. Why are we failing? The lack of feet on the ground to translate into action is a lesson we have learned from the past. To address this, GEF has created a coalition of countries that have committed USD 430 million to create multistakeholder platforms that bring together ministries of forestry and of agriculture, local governments, businesses and financial institutions.’

The actions, she said, need to be based on land-use planning and adopt both landscape and value-chain approaches. To stop deforestation, protection of forests is needed with sustainability embedded right through to consumption.

‘The challenge is to get all the players together in their countries while also including the global value chains,’ she said. ‘We can do this better working together to be more inclusive of business, governments, financial institutions and communities. Would have a better success rate.’

The USD 9.8 billion in replenishment funds committed to the GEF would help speed progress.

Steiner of UNDP said that, ‘We are underperforming to meet our own objectives with the deforestation figures.’ He went on to agree that FAO has a key role to play but so do all the agencies. ‘We all have a role to play in keeping forests on national agendas.’

Steiner noted that REDD+ is a key mechanism that brought together UNDP, UNEP and FAO through UN-REDD. Norway has backed the boldest experiment in mitigation, adaptation, land use, restoration. ‘Don’t let Norway be the only supporter,’ he urged.

A focus on increasing the ambition of NDCs was needed, with particular emphasis on nature-based solutions. He noted that 100 countries were engaged with the NDC Partnership and called for ‘a far greater focus on forests to address climate/NDCs and biodiversity/CBD’.

‘On the ground, these differences between conventions don’t matter,’ he said. ‘As the UN community, it is a responsibility to bridge the conventions. Next year is the year of nature.’

Thiaw of UNCCD reminded the panel and the audience that ‘we need to feed 10 billion to come without depleting our ecosystems’ and that the UN can do better on science and policy. Land degradation neutrality was important; we need to use land but also conserve it.

Andersen of UNEP stated that 70% of forests were under threat, mostly from commodity production.

‘We are part of the problem,’ said. ‘We need to help that sector flip into sustainable production; we need to clean up our supply chains. Governments and UN leaders need to step up, especially FAO. We need to partner with the private sector. We need to help them towards positive agricultural outcomes.

She also noted that the price for carbon varies greatly (USD 26–35) but the forest carbon price was at USD 5.

‘This is why we need a good outcome for Article 6 [of the Paris Agreement],’ she said. ‘Let’s label products over time. Let’s clean up supply chains. In the context of the European Green New Deal, 2020 is the ‘super year’ for nature.

The Santiago Call for Action has seven core elements:

1) Reducing emissions from deforestation and forest degradation and enhance carbon sinks: countries must strengthen efforts in line with Article 5 of the Paris Agreement, expand the scale of actions and increase knowledge;

2) Increase the ambition of Nationally Determined Contributions (NDC) through Nature-Based Solutions based on forest activities (Including REDD+);

3) Advance NDC implementation through effective and measurable multistakeholder action; including voluntary calls such as the Bonn Challenge;

4) Increase NDC transparency: reinforcing trust in the Paris Agreement. It is important to share how countries will mitigate the impact of the climate emergency and to track progress;

5) Scale-up predictable financial support from all sources, including through REDD+;

6) Build on existing technical support for NDC implementation and reporting; expanding the scale of technical support for reporting, particularly, for developing countries;

7) Actively engage local communities and indigenous peoples, including women and youth: a holistic approach is essential to turn the tide on deforestation.

 

World Agroforestry (ICRAF) is a centre of scientific and development excellence that harnesses the benefits of trees for people and the environment. Knowledge produced by ICRAF enables governments, development agencies and farmers to utilize the power of trees to make farming and livelihoods more environmentally, socially and economically sustainable at multiple scales.

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Linking smallholders to existing wood value chains for sustainable supply


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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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  • FTA Digital Summit on Inclusive Finance hosted by the GLF

FTA Digital Summit on Inclusive Finance hosted by the GLF


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Men process palm oil fruit in Cameroon. Photo by M.Edliadi/CIFOR
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A woman in Fatumnasi, Indonesia holding a harvest of cassava. Photo by A. Sanjaya/CIFOR

Within the framework of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), Tropenbos International and the Center for International Forestry Research (CIFOR) have initiated a project on inclusive finance. This project includes eight interviews with key stakeholders involved in forest and tree product finance in developing countries and a summary of existing documentation on the topic.

This process, or learning journey, now enters into a consultative, interactive phase. During this phase, we invite you to share your thoughts on finance for inclusive and sustainable landscapes with experts on the topic.

Join us on 9 July 2019, 14:00 Central European Summer Time (CEST), for a Digital Summit on Inclusive Finance organized by FTA and hosted by the Global Landscapes Forum (GLF).

Pauline Nantongo of Ecotrust in Uganda, Juan Carlos Gonzalez Aybar of Althelia Funds and an impact investment manager from Mirova, and Marco Boscolo, forestry officer in the policy, governance and economics group of the Food and Agriculture Organization of the United Nations (FAO) will discuss their experiences and thoughts on the way forward for the upscaling of innovative finance mechanisms that support sustainable landscapes and consider the smallholders within these landscapes.

REGISTER FOR THE DIGITAL SUMMIT HERE.

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  • Top of the tree: FTA in 2018

Top of the tree: FTA in 2018


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A variety of mango grows on a farm in Machakos County, Kenya. Photo by ICRAF
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The year 2018 saw the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) chalk up some notable achievements in the worlds of sustainable development, food security and addressing climate change.

A variety of mango grows on a farm in Machakos County, Kenya. Photo by ICRAF

A number of the program’s research findings reverberated throughout the scientific community, impacting discussions at major events and informing work on the ground.

Read on to find out which news articles, research publications, presentations and videos were most-viewed on the FTA website throughout the year.

Gender, agroforestry and combating deforestation were strong points of interest among news articles, topped off by research on orphan crops – underutilized crops that are being brought out of the shadows by plant breeding – which was also covered by The Economist and the Financial Times. The 10 most-viewed news articles on the FTA website in 2018 are as follows.

  1. Orphan crops for improving diets
  2. The power of science to halt deforestation
  3. Climate change atlas presents suitability maps for agroforestry species in Central America
  4. Halting deforestation is ‘everyone’s fight’
  5. FTA’s research domain on livelihood systems receives strong rating
  6. Picks and spades can triple farmers’ yields in Kenyan drylands
  7. Good investments in agriculture and forestry can benefit smallholders and landscapes
  8. Innovation and excellence from chocolate producers
  9. Agroforestry offers pathways to sustainable landscape restoration
  10. Woman on a mission: Pushing for rights and a seat at the decision-making table
Findings have shed new light on the role of forests and trees in the climate debate. Photo by Eko Prianto/CIFOR

Research publications are of course not only viewed via the FTA website but also via the websites of partner institutions or scientific journals.

Of those collated on the FTA website, however, the top 10 most-viewed encompassed ecosystem services, value chains and climate, along with the relationship between trees and water – a popular topic that was the subject of a two-day symposium in 2017 and a follow-up discussion forum in 2018:

  1. Co-investment in ecosystem services: global lessons from payment and incentive schemes
  2. Analysis of gender research on forest, tree and agroforestry value chains in Latin America
  3. Decision support tools for forest landscape restoration: Current status and future outlook
  4. Certifying Environmental Social Responsibility: Special Issue
  5. Suitability of key Central American agroforestry species under future climates: an atlas
  6. Landscape Restoration in Kenya: Addressing gender equality
  7. Forest ecosystem services and the pillars of Bhutan’s Gross National Happiness
  8. Tropical forest-transition landscapes: a portfolio for studying people, tree crops and agro-ecological change in context
  9. Trees, forests and water: Cool insights for a hot world
  10. Bridging molecular genetics and participatory research: how access and benefit-sharing stimulate interdisciplinary research for tropical biology and conservation
Strengthening women’s tenure and rights to forests and trees and their participation in decision making.

As always, FTA scientists presented their work to colleagues and to broader audiences at workshops and events around the world. The top 10 most-viewed presentations of those collected on the FTA website looked at governance, REDD+ and tenure.

  1. Comparing governance reforms to restore the forest commons in Nepal, China and Ethiopia
  2. A personal take on forest landscapes restoration in Africa
  3. Strengthening women’s tenure and rights to forests and trees and their participation in decision making
  4. Are there differences between men and women in REDD+ benefit sharing schemes?
  5. Conflict in collective land and forest formalization: a preliminary analysis
  6. Implications of the ASEAN Economic Community (AEC) for trans-boundary agricultural commodities, forests and smallholder farmers
  7. Reconciling policy and practice in the co-management of forests in indigenous territories
  8. Informing gender-responsive climate policy and action
  9. Assessing REDD+ readiness to maximize climate finance impact
  10. Forest policy reform to enhance smallholder participation in landscape restoration: The Peruvian case
Drone technology for science.

FTA’s partner institutions produced compelling video content in 2018, drawing in viewers interested in drones, nutrition, landscapes and more. The top 10 most-viewed videos posted on the FTA website are as follows.

  1. Agroforestry in landscape restoration for livelihoods, climate and ecosystem services
  2. Drone technology for science
  3. Daniel Murdiyarso talks about the interaction between land and oceans
  4. Expansion of oil palm plantations into forests appears to be changing local diets in Indonesia
  5. Lessons learned from REDD+: progress in 8 countries and the way forward
  6. Restoring landscapes, respecting rights
  7. Creating a movement on sustainable landscapes
  8. Developing and applying an approach for the sustainable management of landscapes
  9. Social inclusion, equity and rights in the context of restoration – lessons from the ground
  10. Integrated landscapes approaches: From theory to practice

Finally, a special mention goes to a well-received infographic from FTA’s gender team: Gender matters in forest landscape restoration.

As the program forges ahead into 2019, it expects to see a continued presence at high-level events and even wider dissemination of its work, in line with its innovative research projects ongoing around the world to further the contributions of forests, trees and agroforestry to sustainable development.

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  • Fit for purpose? A review of guides for gender-equitable value chain development

Fit for purpose? A review of guides for gender-equitable value chain development

12 September, 2018

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This article presents a review of seven guides for gender-equitable value chain development (VCD). The guides advocate persuasively the integration of gender into VCD programming and raise important issues for designing more inclusive interventions. However, gaps persist in their coverage of gender-based constraints in collective enterprises, the influence of norms on gender relations, and processes to transform inequitable relations through VCD. Guidance for field implementation and links to complementary value chain tools are also limited. The article identifies opportunities for conceptual and methodological innovation to address the varying roles, needs, and aspirations of women and men in VCD.

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Baseline for assessing the impact of fairtrade certification on cocoa farmers and cooperatives in Côte d’Ivoire

02 July, 2018

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In 2014, Fairtrade International, Fairtrade Africa, the World Agroforestry Centre (ICRAF) and Bioversity International initiated a collaboration for the development of a multidimensional baseline on small-scale cocoa farmers and their cooperatives in West Africa. The baseline is expected to provide a fuller understanding of the current situation for Fairtrade cocoa production and marketing as well as provide the foundation for rigorous assessment of outcomes and impacts of Fairtrade certification on cocoa cooperatives and smallholder households in West Africa in the future. Côte d’Ivoire and Ghana, the two largest Fairtrade cocoa producers in West Africa, provide about 68 percent of the cocoa that is sold under Fairtrade terms in global markets.

In 2013, the year this study was commissioned, the volume of Fairtrade cocoa sold from West Africa reached 133 400 tonnes, involving 71 cooperatives and producer associations and 138 800 farmers. Most of this cocoa originated from Côte d’Ivoire and Ghana. The rapid growth in the number of cocoa-producing organizations joining the Fairtrade system in Côte d’Ivoire and Ghana provides a unique opportunity to build a baseline on Fairtrade cocoa producers in West Africa for future monitoring and impact assessment. This report focuses on the Fairtrade cocoa baseline for Côte d’Ivoire (a similar report is available for Ghana). It describes the conceptual framework and methods used in the design of the baseline, followed by an assessment of the context in Côte d’Ivoire. Key features of the baseline data at the cooperative and household levels are covered in detail. The report concludes with some recommendations to Fairtrade for expanding Fairtrade International in Côte d’Ivoire and for follow-up actions for future baseline work.

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  • Blend, bond and blockchain: The financial landscape is changing to fit the planet's needs

Blend, bond and blockchain: The financial landscape is changing to fit the planet’s needs


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A large cashew tree grows in Burkina Faso. Photo by O. Girard/CIFOR
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Upfront investment in REDD+ can be a burden for many countries in the short term, but in the long term can instill a sense of ownership, as seen in the case of Brazil. Photo by N. Palmer/CIAT

On a map of global landscapes, the most expansive ecosystem will not appear: finance.

It is the underlying rooted network channeling funds to the right places at the right times, or the superimposed atmosphere raining down fertilization where needed. However you view it, it is a constitutional source of life for its biological brethren, and enormously so.

Yet sustainable finance is also struggling to adapt to the rapidity of global development, forcing global research and dialogue to move quickly in figuring out how to keep it healthy and green. What existing mechanisms can we leverage, and what must we innovate? What financial infrastructure do we prune, replant, grow?

Such was the focus of the third annual Global Landscapes Forum Investment Case Symposium, in which the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) participated, held on May 30, 2018, in Washington, DC, the US. Looking at the state of landscape investment this year, the event pulled certain topics forward as being important of late: blended finance, bonds and blockchains, with discussions on the three synthesized in this article. REDD+ finance was also a key topic at the summit.

Read also: New study finds little private finance in REDD+ efforts, suggests blended finance as way forward

BLENDED FINANCE

Thirty years ago, China’s Loess Plateau had reached a desperate state of soil erosion and land degradation. After centuries of unsustainable grazing and agricultural practices, an area the size of France that had once fed nearly a quarter of the country’s population had floods and crop failure as its norms, keeping millions in poverty with no way out.

The World Bank stepped in, and with the help of some US$500 million of public investment matched with about the same from the private sector, the landscape transformed. Incomes doubled, agricultural output shot up, and the dusty dry landscape gave way to fertile terraces — all in just 15 years.

“I’ve seen with my own eyes that it’s absolutely, entirely possible to transform a completely degraded landscape in a very poor environment with no capacity to do anything,” said Juergen Voegele, Senior Director of the World Bank Food and Agriculture Global Practice and member of the Loess project team.

He was describing a successful scenario of blended finance, which the Organisation for Economic Co-operation and Development defines as “the strategic use of development finance for the mobilization of additional commercial finance towards the Sustainable Development Goals in developing countries.” In other words, public or philanthropic capital is put up first to attract further investment from the private sector.

It is irrefutable that public money alone cannot fund the work imperative to achieving major restoration projects like the Paris Agreement, Bonn Challenge and AFR100. But despite growing pressure for the private sector to step up to the plate and chip into such efforts, its role in landscapes is — and should be — limited. Not every climate change effort should be made into a business opportunity, or prioritize financial logic and returns.

“To really start moving the billions, we need to collaborate effectively, and know our role within the ecosystem,” said Jennifer Pryce, President and CEO of non-profit social impact investment firm Calvert Impact Capital. Investing assets, she said, does not solve situations that need legal or diplomatic help.

Logs are seen on a riverbank. Photo by K. Evans/CIFOR

This is reflected in the World Bank’s Maximizing Finance for Development (MFD) concept, which urges development banks and other public funders to pool their capital to help developing countries build policy framework and capacity, cement high standards and reduce as many risks as possible for environmental projects. Once these bones are in place, the private sector can — and will be more apt to — step in and flesh out efforts.

Laura Tuck, the World Bank’s Vice President of Sustainable Development, elaborated on how this manifested in Vietnam’s Mekong Delta, where more than half of the country’s mangroves were cleared for shrimp ponds. After the Bank helped the government mandate 50 percent of shrimp ponds to have mangroves and take out a loan for restoration, the ecosystems were revitalized, and private companies flocked in for the ease with which they could harvest organic, premium-quality shrimp.

The appeal of blended finance is not exclusive to developing countries. Private landowners and businesses has begun investing more in the US forest estate — the world’s fourth largest — following a 10-year government commitment of federal funding for community-driven projects in 23 different landscapes, to combat the country’s growing spread of wildfire and insect disease.

“That’s that model of long-term anchoring of commitment to a landscape with defined outcomes, supported by the community, that enabled others to say that this is worth leveraging the federal dollar to get additional work done,” said US Forest Service Deputy Chief Leslie AC Weldon.

Read also: Making landscape finance more inclusive

BONDS

With a background in molecular biology and plant breeding, Howard Yana-Shapiro, the Silicon Valley-based Chief Agricultural Officer at Mars, Inc., is a self-proclaimed “gene jockey”. Within the last eight months, he has witnessed big data advance to a point where extraordinarily complex heterozygous genomes can be annotated with ease.

If big data can do it for genes, it can do it for landscape finance, he believes. “I can’t imagine that for the things we’re talking about mixing — bonds, instruments — that you couldn’t write a 3,000-line algorithm that would give you all the answers to all the complexity you’d want to know about which particular finance facility works best in which places.”

Bonds, as he said, are one of the primary mechanisms pushing forward in the landscape arena, serving as a way to refinance and finance projects by channeling capital into an investment that then generates revenue and gets repaid.

Dr. Christine Negra, principal at Versant Vision and advisor to the Climate Bonds Initiative (CBI), the foremost organization focused on advancing the bond market, said the ‘bond universe’ is still in its early days, with different forms popping up left and right. Asia’s first corporate sustainability bond was issued in Indonesia in February. Global green bond issuance reached US$155.5 billion in 2017, and climate-aligned bonds — which include green certified bonds and non-certified bonds geared toward the low-carbon economy — currently value US$895 billion.

So far, the Forests Bond launched by the International Finance Corporation (IFC) is at the front of the pack, having received substantial acclaim. A five-year ‘green coupon bond’, it gives investors the choice of taking a 152 million bond in cash or in forestry carbon credits — which can be used to offset emissions or sold on the carbon market — purchased from a 200,000-hectare REDD+ conservancy project in Kenya.

Vikram Widge, IFC’s Global Head of Climate Finance and Policy, said that replicating this bond form in commodity sectors such as coffee, cocoa and oil palm could help build market infrastructure and provide alternative livelihoods to impoverished communities — 90 percent of which rely on forest resources — while we wait for the roughly US$300 billion needed to significantly slow deforestation rates.

A large cashew tree grows in Burkina Faso. Photo by O. Girard/CIFOR

CBI is the main hand behind setting global bond standards and sector-specific criteria, to ensure the ‘green credibility’ of bonds — as well as issue a litmus test for the market. “Putting criteria out there is a way to build it and see if they come, to see the demand for certified bonds,” said Negra.

Yana-Shapiro, on the other hand, warned of having too many tick boxes, and said bond measurement should hone in on five criteria only: productivity, profitability, environmental stewardship, good government and solid management, and social inclusion.

He posed the challenge of how to make the landscape sector worth more than Apple, which is soon to break worth of US$1 trillion. “I would suggest to you that it is not an abstract idea. We are looking at things today that are equally complex in a genome as in a landscape, and we’re able to put that together… to facts and not fiction.”

Read also: Good investments in agriculture and forestry can benefit smallholders and landscapes

BLOCKCHAINS 

Landscape finance would not be properly of the times without a disrupter trying to challenge its ways. Blockchains appear to be filling this role, emerging as a viable alternative to the traditional financial system infrastructure in certain situations.

Since Bitcoin emerged in 2008, not coincidentally alongside the global financial crisis and breakdown of trust in financial institutions, cryptocurrency has grown to account for some 400 billion in capital. This capital is distributed through blockchain networks, which Katherine Foster, Advisor on blockchains to the World Bank, defined as “decentralized, distributed, public (more or less) digital ledgers used to record data transactions across many computers.”

With the safety belt of cryptography, information is shared and stored across a chain of devices in a way “considered immutable and unchangeable.” Chains can be public or contained to a private group of users, and uploaded data can include everything from photos to e-signatures and legal certifications.

Because these are peer-to-peer networks that leave out centralized banks, institutions and other middlemen, blockchains can significantly lower transactional costs, both formal and informal. Vice President for US Business Development at blockchain software company ChromaWay Todd Miller said to think of all the money one can save by keeping one’s own records rather than hiring Goldman Sachs: “It’s not black magic here. It’s a distributed database not controlled by anyone.

And for that reason, “It’s up there with drones for how sexy it is for a lot of organizations,” he said.

Blockchain technology also has two defining features of every disruptor worth entertaining: it opens up new opportunities and makes life easier. In its role as a global contractual database time-stamped, date-stamped and signed, blockchain technology could stretch the horizon of capital acquisition, allowing people to borrow or invest without stepping foot in a bank.

By storing similar information on physical assets like commodity crops, it can also help supply chains be more efficient, transparent and safe. For instance, it could help Ethiopian coffee smallholders certify their beans as fair-trade; track the beans as they move through a supply chain, documenting every value added along the way; and ultimately show consumers the origins of their morning cup.

Already, in the famously iniquitous diamond industry, blockchain technology has proven enormously effective in reducing corruption and conflict.

The biggest challenge blockchains face, however, is quality data to insert into their networks. World Bank Land Administration Specialist Aanchal Anand said she often hears institutions say, “I want to be blockchain ready by 2020.” But this raises the question of whether or not they have data in digital form. If a government’s records are written on paper with coffee stains and tears, blockchains cannot help, she said. To get meta about it, data about data going into blockchains is needed to confirm accuracy.

There also needs to be a level of comfort with the technology, which Anand says comes from on-chain trust (knowing that transactions are validated) and off-chain trust (being able to call or email someone if and when something goes wrong).

Nevertheless, in comparison to Wells Fargo, for example, when consumers were oblivious to the grand misuse of their information, blockchains offer a new alternative with enormous positive potential. “We need to evaluate blockchains not compared to a perfect world,” said Miller, “but to the world we’re in today.”

By Gabrielle Lipton, originally published at CIFOR’s Forests News. 

This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.

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  • Deep down in supply chains, zero deforestation commitments look different to what appears on paper

Deep down in supply chains, zero deforestation commitments look different to what appears on paper


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Oil palm plantations are a driver of deforestation in Indonesia. Photo by Iddy Farmer/CIFOR
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A paddy field and oil palm plantation area is seen from above in East Kalimantan, Indonesia. Photo by N. Sujana/CIFOR

Oil palm, cattle, timber and soy have all received global attention in recent years for their outsized ‘forest footprints’ – the risks that their demand and cultivation pose for tropical forests around the world.

Thanks to pressure and advocacy from civil society, governments, shareholders and consumers in the Global North, many companies using and selling these commodities have begun to clean up their acts.

They have sought to become – or at least appear – more accountable for the environmental impacts of their supply chain activities. As a result, recent years have seen many make zero deforestation commitments (ZDCs) for the provenance of the commodities on which they rely.

From an environmental perspective, the move is welcome and timely. Tropical deforestation accounted for around 12% of global greenhouse gas emissions between 2000 and 2012. If these ‘big four’ commodities go deforestation-free, it could make a big difference for biodiversity and climate change mitigation worldwide.

However, following through without producing unintended negative side effects is going to be difficult. And this – or failing to follow through at all – could see ZDCs become dubbed with a tokenistic reputation as being just another public-relations and marketing strategy.

A new CGIAR Research Program on Forests, Trees and Agroforestry (FTA)-supported occasional paper by Center for International Forestry Research (CIFOR) scientist George Schoneveld and Particip GmbH consultant Peter Jopke seeks to assess the ZDCs of 50 ‘powerbrokers’ – companies that have the potential to shape rules in major commodities’ global value chains. The work attempts to unravel what these bold-sounding commitments might actually mean for forests, producers and communities on the ground.

Read more: Strengthening social inclusion within oil palm contract farming in the Brazilian Amazon

CLEAR AS MUD

Unfortunately, the researchers found serious gaps in ZDC implementation practices, which undermine the commitments’ potentials. “On paper the commitments are great, and they use the right terms and are fairly comprehensive in their scope, but by and large companies have yet to fully think through how they’re going to deliver on them,” says Schoneveld.

Company commitments to full transparency in sourcing locations and suppliers, and to independent verification, were found to be particularly weak. This doesn’t necessarily suggest that companies are trying to hide bad practices, say the co-authors, but more that it can be very difficult for them to follow their own supply chains back to their roots. Sourcing practices of the many upstream actors often involved can change without the lead firms being aware.

The study also found that almost 75% of companies did not demand company-wide ZDCs of their suppliers. This suggests that most companies actually tolerate deforestation in their supply chains, as long as their own supply comes from non-deforested areas. So suppliers to these companies might still be instigating deforestation and selling commodities from deforested areas to other, non-ZD–committed customers.

The finding makes sense, given that going zero-deforestation was “purely a business decision,” not a moral or philanthropic one, for most of the companies surveyed, says Schoneveld. As long as their brand is not contaminated, companies have little incentive to pressure their suppliers to stop deforestation entirely.

Oil palm plantations are a driver of deforestation in Indonesia. Photo by Iddy Farmer/CIFOR

PASSING THE BUCK?

Another issue of concern is the fact that in most cases, the powerbrokers did not explicitly account for the externalities resulting from their ZDCs, says Schoneveld. For example, insisting on buying commodities cultivated on non-deforested land increases demand for that land, which can displace former land uses such as food production. As a result, deforestation could occur indirectly as other users of that land are pushed to resume their practices elsewhere.

Committing to ZDCs may also prompt companies in the supply chain to sell off forest land banks that they hold, since they will no longer be able to use them to cultivate commodities. This land could then be deforested by a new owner or by communities vacating their farmland to enable corporate expansion.

Perhaps most concerning of all is that if companies implement more stringent production standards, only some producers will have the capacity to conform, so many smallholders are likely to be excluded, says Schoneveld.

“If you have to monitor everybody and trace all oil palm that comes in, and you have ten thousand suppliers, it becomes extremely costly,” he explains. “So a lot of companies are starting to say, ‘Okay, we have to cut our supply base and focus on those suppliers that we trust and know well.’ ” Oil palm refiners in Indonesia, for example, have begun to concentrate their ‘sustainable’ supply base around larger plantations.

And this is where the tensions become quite stark. One interviewed company, for example, complained that they were forced to remove a “huge chunk” of smallholders from their supply chain to please NGOs campaigning for ZD, because they expected to be criticized for failing to protect forests more than acknowledged for their efforts of including smallholders.

Read more: Corporate commitments to zero deforestation: An evaluation of externality problems and implementation gaps

A TALL ORDER

Certainly, given the influence powerbrokers have on both suppliers and governments, there are opportunities to innovate and exert pressure within value chains themselves. “It’s an important place to start,” Schoneveld acknowledges.

But it seems something of a tall order to expect companies to enact such holistic solutions all on their own. “If you want to have ZDCs that also contribute to agricultural development and food security, and support smallholder integration, I don’t think you can rely solely on companies to deliver on those,” he says. “And that’s where governments need to step in.”

Jurisdictional approaches that integrate landscape planning, deforestation monitoring and improved regulatory enforcement across a defined jurisdiction may provide part of the solution. Most companies are interested in working in places that can guarantee that production is sustainable, because it reduces their own monitoring and traceability costs. And smallholders within those areas can comply with ZD requirements, without needing to sign up to complex and expensive monitoring and evaluation systems. Some jurisdictions, such as Indonesia’s South Sumatra and Central Kalimantan provinces and Malaysia’s Sabah state, are beginning to apply these kinds of approaches, “saying, ‘hey, there could be economic benefits to being sustainable,’ ” explains Schoneveld.

Government involvement is also important because companies making zealous commitments to managing land differently in developing countries can be perceived as challenging their sovereignty. “There needs to be a better conversation between companies, governments, and civil society,” says Schoneveld, “about what role each could play in meeting environmental, economic and developmental objectives, and how to have more complementary initiatives.”

By Monica Evans, originally published at CIFOR’s Forests News. 

For more information on this topic, please contact George Schoneveld at g.schoneveld@cgiar.org.

This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.

This research was supported by UKAID and International Forestry Knowledge II (KNOWFOR II).

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  • Good governance and sustainability incentives can provide alternatives to land conversion fires

Good governance and sustainability incentives can provide alternatives to land conversion fires


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During land burning, haze blankets the landscape in Riau Province, Indonesia. Photo by Aulia Erlangga/CIFOR
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During land burning, haze blankets the landscape in Riau Province, Indonesia. Photo by Aulia Erlangga/CIFOR

In Indonesia, palm oil is a hot industry in more ways than one. In 2015 alone, it contributed USD 20.75 billion to the country’s export revenue. Oil palm plantations cover more than 14 million hectares of the country and, together with Malaysia’s, dominate the global market.

However, fire is still widely used in the development and planting of oil palm, including in carbon-rich peatlands. Resulting smoke and toxic haze have impacted the economy, the health and the environment of Indonesia and other Southeast Asian countries. In 2015, Indonesia’s peatland fires contributed to an economic loss of at least USD 16.1 billion and more than 100,000 premature deaths around the region.

In light of this, a new study led by Center for International Forestry Research (CIFOR) scientist Herry Purnomo, which also forms part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), looks at the extent to which good governance principles are applied to Indonesia’s palm oil value chain and analyzes options to help reduce the use of forest and land fires in the industry.

“Palm oil is one of Indonesia’s main commodity exports, surpassing oil and gas,” says Purnomo. “But if we do not manage its sustainability, this sector can fail.

The research focuses on Indonesia’s Riau Province, which experienced massive forest conversion to have the largest area of oil palm plantations in the country. Now, it has the highest domestic frequency of fires too.

“We know that 20% of fire incidences happen in oil palm plantation areas, so we tried to find out what caused the fires and how to reduce them.”

Read more: Towards responsible and inclusive financing of the palm oil sector

WHO’S GOT THE POWER?

In theory, the central government has power to influence the oil palm supply chain through law and policies; district-level governments have the most jurisdiction for law enforcement and information-spreading; and village governments are closest to plantation developers, thus having the responsibility of dealing directly with them.

However, good governance for the industry is not as simple as a top-down approach. From consumers to mills, refineries and developers, players in palm oil influence governance processes in different, sometimes unexpected ways.

“With the governance analysis, we looked at how existing powers contest,” says Purnomo. “Along the value chain, power is not at the landscape level but at the consumer level, or at the mills and refineries. The central government can only function through the district government, but mills can influence local government using incentives and coercion.

“Sometimes the Ministry of Environment and Forestry and the Ministry of Agriculture get the blame for forest and land fire incidences. While potentially, the problem starts from the Investment Coordinating Board (BKPM) welcoming investment for refineries without considering whether there is enough capacity to supply them from legal sources.”

Furthermore, the study found that illegal oil palm developers can hold a lot of influence at local levels and force village governments to support them, often through deceptive use of a Certificate of Land (SKT).

This imbalance between governance and supply chain capacity can drive actors at the landscape level to meet the mill demands in ways detrimental to landscapes.

“Now there are mills everywhere, even in national park areas. People respond by developing plantations everywhere. The fastest and cheapest way is by burning.”

Scientists observe a drone flying over burning peat outside Palangkaraya, Indonesia. Photo by Aulia Erlangga/CIFOR

ALT OPTIONS

When demand is high and burning has long been practiced, what reason do farmers and developers have to change their habits to more arduous land-clearing methods?

“We calculated whether existing incentives in the market are enough to change the situation on the ground,” says Purnomo. “The analysis looks at benefits distrubuted from oil palm plantation development using fire, who benefits, and what alternatives can be adopted to compensate.”

The first step is for the market to support certified producers, incentivizing them not to burn as well as to employ value-added farmers. This, however, raises production costs, as well as the cost of fresh fruit bunches (FFB) of oil palm fruits. As this price margin grows, the next step is to make sure that the financial benefits go back into the hands of the farmers, to incentivize their good practices as well.

“Intermediaries have taken the benefit from this margin until now. Farmers should unite to gain more bargaining power, so once they receive a delivery order, they can cut the middleman and go straight to the mill. This will increase their value added. It is important that palm oil businesses are not only certified but also fair.”

Another key step to fire reduction is agrarian reform. While many farmers possess an SKT, the land is still legally part of a state-owned forest area. The unclarity of land status dissuades farmers from investing resrources in land.

“Why should they spend money, when the government can take their land away at any time? The farmers should be guaranteed land legality at least for 25 years, so they can invest safely.”

Read more: The long and winding road to sustainable palm oil

CHANGING HEADLINES

Recently on the international stage, the European Union in January approved draft measures to ban the use of palm oil in motor fuels by 2020. While this sent Southeast Asian governments reeling, Indonesia’s included, Purnomo believes that this boycott will change little. Instead, he says the EU market should give incentives for sustainable production, and Indonesia should create an environment in which that can be done.

“Incentives can change the situation. The government of Indonesia should be more transparent with environmental problems faced by the palm oil industry, show real progress in improving the industry’s sustainability, draw a clear roadmap to meet international standards in three to five years and invite the EU to participate in palm oil in more constructive ways.”

Cleaning up supply chains will come at a cost, but market incentives combined with strengthened national policies and international regulators (namely the Indonesian Sustianable Palm Oil system and Roundtable on Sustainable Palm Oil) can together compensate to make this effort viable – and cool things down.

By Nabiha Shahab, originally published at CIFOR’s Forests News.

For more information on this topic, please contact Herry Purnomo at h.purnomo@cgiar.org.

This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.

This research was supported by the Department for International Development United Kingdom (DFID UK) and the United States Agency for International Development (USAID).

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  • Study examines bamboo value chains to support industry growth

Study examines bamboo value chains to support industry growth


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Men weed a bamboo grove in Indonesia. Photo by Riyandoko/ICRAF
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Men weed a bamboo grove in Indonesia. Photo by Riyandoko/ICRAF

More assistance could help to support the Indonesian bamboo industry, which is currently seen as underdeveloped and missing out on opportunities. 

Despite a significant contribution to the economy, the bamboo industry in Indonesia remains underdeveloped. In terms of policy, bamboo is also often overlooked, with timber receiving much more attention.

Indonesia is home to around 143 bamboo species and 2.1 million hectares of bamboo forest. For centuries, bamboo has been used for construction, housing, household items and handicrafts. It is a no-fuss species that grows rapidly compared to timber, is highly adaptable to various types of soils, and is relatively easy to process. The industry provides livelihoods for hundreds of thousands of people.

Marcellinus Utomo of the Australian National University has explored how the government of Indonesia could foster the bamboo industry, focusing on bamboo value chains in Gunung Kidul, Yogyakarta, as part of the Developing and Promoting Market-based Agroforestry Options and Integrated Landscape Management for Smallholder Forestry in Indonesia project, which is funded by the Australian Centre for International Agricultural Development and also forms part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA).

“The research findings are very valuable to us,” said project leader Aulia Perdana of the World Agroforestry Centre (ICRAF). “It will help us devise interventions, such as bamboo agroforestry systems, extension programs for silviculture, ways to better process raw material, and improve marketing and business skills. Additionally, we plan to test how to increase the scale of bamboo agroforestry to support the Thousand Bamboo Villages program.”

Read more: Mapping bamboo forest resources in East Africa

In December 2015, the Indonesian government initiated a 10-year program called Seribu Desa Bambu (One thousand bamboo villages) to foster the industry by establishing bamboo forests and factories. Yet, according to the research, the results have been suboptimal.

Utomo examined the value chains of three bamboo products: durable bamboo, kitchen utensils and handicrafts. Data were collected from June to August 2016 through interviews, focus groups, a literature review and direct observations.

He found that durable bamboo had the shortest chain with the least people involved, followed by kitchen utensils. The handicraft chain was the longest, involving the greatest number of people.

A diagram indicates the value chain flow for kitchen utensils. Source: Marcellinus Utomo

Although people in all the value chains were typically well-informed about markets, there was limited sharing of information by buyers to sellers about prices, which could be detrimental for some of those along the chain, such as growers and artisans.

Bamboo is still considered a cheap material. Straight bamboo with a large diameter can sell for between Rp 6,000 and Rp 7,000 (approximately 50 US cents) per pole. Because of the low prices, farmers are not inclined to go to great lengths, neither applying fertilizer nor using silvicultural techniques.

When income from bamboo was compared with national minimum income per capita, Utomo projected that for farmers the economic contribution of bamboo handicrafts was a mere 0.6–1 percent of the minimum income, while kitchen utensils contributed 6.4–8.9 percent and durable bamboo products 7.7–13.5 percent.

These low contributions were caused not only by low prices but also irregular demand. To make ends meet, farmers usually cultivated seasonal crops and rice and grew timber for savings.

Read more: Lack of knowledge may impede economic potential

Artisans who process and add value to bamboo, however, can gain significant income. Durable bamboo contributed 13.2–104 percent, to their incomes, kitchen utensils 152–472 percent, and handicrafts 169 percent up to 3,072 percent. From the numbers in the value chains, profit do not appear to be evenly distributed, with growers left as the most disadvantaged.

Some growers also lack knowledge about bamboo management, whereas artisans lack marketing knowledge and entrepreneurial skills. Weak English-language skills further constrain artisans’ opportunities because many buyers are foreigners.

Utomo also noted a lack of coordination between government bodies and limited coordination between people within value chains, which restricted overall growth of the industry. He suggested the government could establish a taskforce that would operate at both national and local levels to integrate the industry within agricultural and rural development programs, lobby ministries, collaborate with NGOs and research institutions, encourage more extension services, improve promotion of handicrafts, and support better access to microcredit. The formation of producer cooperatives, meanwhile, would help to build capacity and enhance bargaining positions within a chain.

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

This work is supported by the CGIAR Research Program on Forests, Trees and Agroforestry. We thank all donors who support research in development through their contributions to the CGIAR Fund.

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