Socioeconomic factors in non timber forest product (NTFP) management

1. Socioeconomic factors in non timber forest product (NTFP) management Mike Jacobson Penn State

3. Rural poor

4. 56% of rural involved in some informal activity • E.g., Firewood, maple syrup, other forest products • “Non timber forest products mobilized to bridge regular gaps in income or need, and when there is a catastrophic downturn in household economies” • Emery 1998

5. Non-timber forest products (NTFPs) • Non-timber forest products are not defined by what they are, but rather by what they are not. • Very diverse group of products • Also referred to as: • Nontraditional, secondary, minor, non-wood, specialty • USDA Forest service term = special forest products • Natural products • untapped markets

8. Ginseng Ginseng

9. NTFP characteristics • Relatively low yield and returns for hard work • Substitution and competition • Short-term trends or fads, • but often require long-term resource investment • Most NTFPs are only present in small volumes and therefore unlikely to attract market investment • The informal, invisible trade • Poverty trap or stepping stone?

11. Marula beer

12. Woodcraft

13. Fruit juices and jams

14. Thesis • Instead of ignoring the informal sector, one needs to develop appropriate measures to help them move forward, become more ‘commercial’ – the enabling environment • Political-legal framework • Local rules, traditions, customs • Livelihood/diversification/poverty reduction

15. Paradoxes to commercialization • Conditions for commercialization are not met in poor areas • Process of commercialization may have an anti-poor bias • Intensification may have negative biodiversity implications • But small-scale producers need • technical assistance • access to information, technology, credit • institutions

21. Success and factors • Strong entrepreneur • Community partners • Geographic location • Product

22. Common risks and reasons for failure • Substitute products • Nature • Wrong people • Business establishment • Breakdown in relationships • Logistics • Transport and manufacturing • Location • Capital • Market

23. Bangladesh: Chittagong Hill Tracts

24. Prices along market supply chain: Case Study of Menda bark Dry bark: 25- 32 BDT/Kg Raw bark: 7- 12 BDT/Kg Tabu powder: 32- 52 BDT/Kg

26. NTFP income

27. NTFP and forest dependence

28. Stakeholders’ income from NTFPs: Case Study of medicinal plants

29. “Forest farming” in Pennsylvania

30. Lentinula edodes Shiitake

31. As many 50 eastern North America forest plants traded annually in medicinal markets

33. Rural income form NTFPs • “The extra income I speak of brings Christmas to the mountains – keeps the children in school, buys medicine, buys food, pays bills and taxes.” • “I remember well that my fathers income was quite modest and we supplemented same with trapping during the winter months and harvesting as much as a pound of dried ginseng per season, which value of $60.00 was a great boost to our economic situation. • “Ginseng when I was a kid was ¼ of our living. All day digging was generally 8 to 10 lbs green.

35. Aug 2008: ¼ lb. root from PA (124 grams)

36. Potential advantages/benefits: Societal & ecological Income Stewardship Integrity

37. Potential advantages/benefits: Production cost savings Carrying cost $12,000-$25,000/acre

41. Consumer Manufacturer Bulk distributor Regional consolidators Local buyer or “country dealer” Collector/grower General market network for North American forest botanicals

42. Profit potential of 8 forest crop candidates • Discounted cash flow and sensitivity analyses • Discount rate (4%, 6%, 8%) • Propagation method (seed vs. transplant) • Prices (1990-2005 mean, mix, max) • Growing period (early vs. average yrs to harvest) • Production costs (fixed and variable) • Yields (per 1,000 m2 and per root)

43. Botanicals Trade volume (lb/yr/dry): 1997-2005 Scientific name Trade name Actaea racemosa black cohosh Caulophyllum thalictroides blue cohosh Chamaelirium luteum false unicorn root Dioscorea villosa wild yam Hydrastis canadensis goldenseal Panax quinquefolius American ginseng Phytolacca americana poke Sanguinaria canadensis bloodroot

45. Net Present Value ($US, 4% discount rate) Price received Species Mean Min Max Black cohosh <12,731>** <12,888>** <12,485>** Blue cohosh <15,609>** <15,662>** <15,495>** <12,720>* False unicorn root <14,137>* <15,454>* Wild yam <12,971>** <13,044>** <12,810>** Goldenseal <10,518>* <12,084>* <8,423>* American ginseng 15,261** 4,610* 32,030** Poke <7,782>* <7,816>* <7,707>* Bloodroot <13,441>* <14,234>* <12,632>* * = seed ** = transplant

46. Break even prices: American ginseng EH Early harvest NSC No stock costs NAC No annual costs Historic prices Seed Transplants

47. Break even prices: black cohosh EH Early harvest NSC No stock costs NAC No annual costs Historic prices Seed Transplants

49. Yield increases would help economics for certain species (e.g. Goldenseal) but…..

50. Common themes • Neglected sector • Need recognition (political will and legislation reform) • Recognize complexity • Minimize regulatory barriers • Lack of technical assistance/education • Regional service centers • Build on what is there • Livelihoods vs. enterprises (not just profit) • Facilitate effective intervention • Organizations and markets • Service oriented client based approach • Diversification • Harvesters in management decisions • communication channels • Way of life/tradition/culture • non-monetary benefits