Managing the Miombo Woodlands of Southern Africa Policies, incentives and options

3.3New integrated conservation-development markets are expanding and emerging but …

3.3.1The problem

3.3.2New investment opportunities for miombo

The World Bank strategy (2004c) recognises the potential of partnerships with the private sector and engagement with responsible investors. It notes the importance at a national level of good governance whilst Chomitz et al (2007) adds the need for incentivisation at the local level: a good system with incentives is more effective than narrow a regulatory approach (WB 2003). Creating the right environment requires certain policy and market interventions: whilst this will inevitably vary between country and sub-sector, some common policy issues emerge (Chomitz et al 2007, World Bank 2003, 2004c, 2007d, UNDP 1999, Karsenty 2000):

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  Policy reform can help reduce and/or make equitable transaction costs, and create the legal space for certain types of investments to operate or markets to become viable.
  

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  Institutional or governance reform can improve transparency in decision-making processes, in law enforcement, in land and resource ownership and tenure; through establishment of credible standards and monitoring systems, can improve accountability.
  

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  As part of trade reform, fiscal and trade policies can be revised to improve forest revenue collection, increase rent capture and ensure benefits are effectively distributed; to establish systems and processes for the financing of or payment for environmental services.
  

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  Conservationist practices can be rewarded through market-oriented certification instruments, although the degree of penetration this offers is often market-limited.
  

There is clearly a role for both the public and private sectors, in a range of sectors outside of, but related to, forestry as well as forestry itself. Fiscal, legal and market policy reforms will influence the role the private sector can play in strengthening miombo management and use by the poor.

3.3.3Institutional options for forest-based enterprises

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  Research, analyse and document a selection of past economic activities relating to miombo woodlands to identify the critical business success (or failure) features relating individual activities
  

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  Identify and document within each miombo country (and also regionally for those providers that operate regionally) where the most suitable mix of miombo related business extension assistance services are located.
  

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  Recommend capacity building investments to overcome “missing links” in the business development process for miombo related economic opportunities. This could include a wide range of activities, including possibly: selected product market studies, selected product resource availability surveys, subsidised business plan preparation services, capacity building of relevant government/ quasi-government and private extension services, capacity building for miombo related business plan preparation, a contestable fund for business planning/ business establishment, and management training.
  

The challenges facing the small investor or entrepreneur in the miombo are technical and specific on the one hand (related to the low inherent productivity of the system) but also cross-sectoral and generic to many small enterprises on the other. Sub-national planning and influence may be the tactic to use to draw issues of developing sustainable forest enterprises into national budget processes.

3.3.4Non-timber forest products

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  Production is often dispersed and markets poorly developed
  
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  Markets are diverse and faddish, but product development is long
  
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  Volumes are typically small
  
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  There are frequent misunderstandings about the level of technology required to get NTFPs to market
  
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  Barriers to entry may be high, when the product development costs are taken into account. Barriers are particularly stringent for food and herbal or medicinal products. Very few low-income countries have the high degree of infrastructural and institutional development, to implement and maintain the strict quality control and sophisticated supply-chain management practices necessary to enter the international market with a new product.
  
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  Certification is a mixed blessing in that it requires a high level of organisation and technical sophistication from producers, especially with regard to management planning, monitoring, product tracing and marketing
  
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  There are often intellectual property rights issues.
  

Box 6 provides the case of Honey in Zambia and the constraints broadly echo the generic points above.

3.3.5Tourism

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  Growth is more likely to be broad-based and involve the poor if they have decent education and training, health care, access to infrastructure and market information, and do not face too many barriers to entrepreneurship.
  
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  The literature on ‘pro poor growth’ identifies many factors that can make growth (in any sector) less broad-based and inclusive of the poor, including macro instability, low human resources, inadequate infrastructure, asset inequality, gender inequality, and insecurity.1
  
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  Interventions to increase the human capital of the poor can have a dramatic influence on their ability to participate in the mainstream economy.
  

3.3.6Payment for environmental services

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  First, an assessment of the range of ecosystem services that flow from a particular area, and who they benefit
  
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  Second, an estimate of the economic value of these benefits to the different groups of people
  
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  And third, a policy, subsidy, or market to capture this value and reward landowners for conserving the source of the ecosystem services.
  

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  One size does not fit all
  
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  Identify the services being provided clearly
  
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  Understand and document the links between forests and services
  
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  Begin from the demand side, not the supply side
  
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  Monitor effectiveness
  
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  Design flexible mechanisms
  
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  PES is not a universal solution
  
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  Ensure the poor can participate through the planned delivery mechanisms
  

There are already instances of PES from miombo forests in Mozambique and Zimbabwe (Hegde 2007). There are many schemes operating worldwide, with either internal government funding (e.g. Vietnam for forest protection) or external donor assistance (Indonesia, Central America, China, Venezuela).

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  The legal recognition of private PES arrangements
  
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  The regulation of the participation of interpmediaries; and
  
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  The legal arbitration in cases were external parties wish to criticise a PES arrangement.
  

There is reportedly limited evidence at this stage of the impact of PES on reducing household vulnerability. The focus has been on the scheme (Ravnborg et al 2007) and Hegde (2007) reports that in the case of Mozambique, payments have reduced the need for forest use as an income generating option.

3.3.7

Box 7: Lessons from nature-based tourism in Malawi Tourism contributes widely towards the costs of managing protected areas. The Integrated Conservation and Development (ICD) approach builds on the protected area approach by linking conservation and tourism development and by involving the people living in or near protected areas. However, experience in Malawi shows that while tourism can generate significant revenues, this does not always benefit local communities directly. Liwonde National Park (LNP) is one of Malawi’s smaller parks, high in biodiversity and popular among tourists. However, local communities forced to relocate outside the park still experience conflicts with park authorities regarding ‘problem animals’, such as elephants, which destroy their crops and pose a life threat to community members. The Department of National Parks and Wildlife (DPNW) aims to make Liwonde an example of ‘best practice’ for protecting the biodiversity of Malawi, whilst ensuring its sustainability through tourist revenues. Research has found: While tourism has brought in revenue, the park only retains enough to cover operating costs, with the rest going to the government. Tourism employs 77 people in park lodges and a few small local enterprises. Besides this, there is little local economic impact from tourism. Local people resent the lack of employment opportunities, which they consider necessary since they can no longer rely on natural resources from the park. While tourism has supported conservation, it has not brought much development locally. The DNPW is looking at ways to generate more benefits and reduce poaching. Lessons drawn out are that: Revenues must be shared fairly, encouraging entrepreneurial development and discouraging poaching. The DNPW has been granted permission to split total park revenues between the LNP and the local communities, but nothing has happened so far. Village Natural Resource Management Committees have been formed, but the lack of empowerment and human resource development among park officials and local people undermines the involvement of key individuals. Further research should assess community attitudes, particularly after the implementation of the scheme to share tourism revenues. Source: IDS 2007

Carbon and avoided deforestation

3.3.8Concessional loan finance and livelihoods

3.3.9Intervention options

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  Wealth accrues locally
  
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  Conflicts due to external resource appropriation are reduced – decisions are made close to home
  
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  Entrepreneurship spreads – ideas move through face-to-face contact
  
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  Service networks develop – through local multiplier effects
  
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  Cultural identity / niche markets are catered for – with products of local relevance
  
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  Local environmental accountability is strengthened – e.g. in patchwork landscapes smallholder producers are more accountable to each other for their actions linked to forest resources
  

Nevertheless, not everyone is going to want to be a rural micro-entrepreneur – some people just want to have a job. It is the elite that are likely to be at the forefront and the trade offs for the poor (and their subsistence-related risk strategies that rely on woodland access and use) needs to be appraised and their basic needs secured.

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  Supporting producer organisation (e.g. producer cooperatives) to improve economies of scale, marketing and price negotiation. Evidence suggests (e.g. Bukula & Memani 2006) that the key to making small forest enterprises work is the development of effective alliances, confederations, cooperatives and associations:
  
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  Promoting community-private sector linkages particularly for local processing or value addition. Using appropriate modalities donors could support technical advice on specialist processing technologies or niche markets, standards development processes, and support for building local certification and verification capacity.
  
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  Increasing private sector financing (both domestic and foreign) by “selling” forestry opportunities as investment options that are viable and competitive with other opportunities.
  
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  To support the identification of investment need related to financing miombo related business analysis of the existing development financing/ micro-financing institutions, and the “missing links” in the business finance process for miombo related economic opportunities will be needed. This is most likely to result in a recommendation for subsidised assistance packages (with designated “miombo related funding”) to selected DFIs/ NGOs and micro-finance institutions.
  

The lack of credit terms that meet the cash-flow requirements of forestry investments (particularly long term tree planting) is a problem worldwide and results in the lack of interest in forestry investment by private landowners in both developing and developed countries (Arnold 2001). Options to gain the confidence of the business community, and enhance its strategies for generating interest in forestry investment (Joshi 1998) include:

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  modifying traditional biases against forestry investment and credits;
  
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  increasing private returns through financial subsidies and public technical assistance;
  
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  reducing investment risk and uncertainty; and
  
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  eliminating or significantly reducing the cash flow problems associated with long planting and gestation periods. While the first strategy is critical for domestic, mostly local small landowners, the other three are common to both domestic and foreign private investors.
  
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  At the household level, other credit options need to be applied:
  
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  Using low risk forms of micro-financing (not credit, but saving schemes) to generate capital for enterprises. Savings schemes provide a low-risk entry point for the poor to access resources for alternative livelihoods. This may require facilitating engagement between governments and finance institutions.
  
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  At the micro level, there may be need to support the establishment of and over see the running of credit and saving schemes designed to grow financial resources at low risk levels.
  
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  Focus new financial instruments on small forestry enterprises and invest in small forestry enterprise information, connection and capacity.
  

Payments for environmental services (PES) provides another valuable route to monetising rural communities fortunate enough to own resources important for ecosystem functioning. PES does have possible negative trade-offs for the poorest:

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  Requires secure land tenure – poorest often have no access to land
  
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  PES funds when coming in to a ‘community’ risk capture just as with other benefit sharing
  
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  PES places traditional conservationist (often INGOs) and developmentalist (often donors) paradigms on either side of the forest fence.
  

The investment opportunity to expand the use of PES in relation to miombo forests will present similar issues to those facing more traditional enterprises. Obviously the size, variability and wide range of differing community situations involved in and around miombo forests, will mean careful identification and prioritisation of opportunities that have both the potential for the greatest environmental gains, plus the potential to interest beneficiaries with a willingness to finance environmental services. This could be facilitated by providing greater clarity on the potential financial benefits of environmental services and greater certainty regarding the associated markets.