Field manual helps create more equitable PFM projects |
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| Practical guidance for economic analysis of local user incentives and equity in participatory forest management projects and policies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A new field manual is allowing local or national economists who have not had in-depth training on natural resources economics to study participatory forest management (PFM) situations. The aim is to promote more equitable projects and policies. The book contains six ways of comparing local stakeholder incentives in forest management with alternative land or livelihood uses. It also breaks down communities into wealth- and gender-based sub-groups to assess how much each one is benefiting. Spanish and Chinese translations have been made. The manual was necessary because weak local involvement in PFM activities and poor understanding of the costs and benefits to local people have sometimes constrained the design of effective project interventions and policies. Also, there has been a lack of economic analysis of PFM, especially the incentives for local forest users. Project Ref: FRP15:
Research Programmes:
Relevant Research Projects: R6914 and R6914E (India case study). Institutional partners: the project was implemented by Overseas Development Institute with various national partners in the case studies:
The end product of the research was a book: Richards, M. Davies, J. and Yaron, G. 2003. Stakeholder Incentives in Participatory Forest Management. A Manual for Economic Analysis. ITDG Publishing. This is intended as a field manual for use by local or national economists (without sophisticated NR economics training) to undertake economic studies of PFM situations with the aim of promoting more equitable PFM projects and policies. The core of the manual is the 'economic stakeholder analysis' (ESA) toolbox, which consists of six methodological steps to compare local stakeholder incentives in forest management with alternative land or livelihood uses. A key aspect of this is an analysis of relative resource scarcity, so that technological or management changes are evaluated in terms of the returns to the household's scarcest resource be it labour, capital or fertile land, since this should conform closely to the farmer's decision-making criteria. Unfortunately many research studies, especially where the researchers are not economists, do not consider relative resource scarcity when evaluating livelihood or land use changes. A second key aspect is to break down communities into wealth and gender based sub-groups to assess how much each one is benefiting, and in order to better identify constraints to increased benefits. It is also important to consider both private and community forestry sources of forest products in order to assess dependence on community forestry. As much as possible, economic analysis should be as participatory as possible, partly to encourage ownership. At the same time, the manual assesses the limits to participation. The methodology also systematically integrates economic tools into a decision-making framework in a way that allows economists and practitioners of other disciplines, working in inter-disciplinary teams, contribute to more informed decision-making. We argue that the ESA framework represents an important contribution to 'livelihood economics' and has application beyond forestry. The book has been translated into Spanish and Chinese, with added regional or national case studies. The Chinese version is fully edited and has been sent for publication by Chinese Social Science Publishing House; the Mexican version is due to be published by Plaza y Valdes, but final editing is proving slow. Other outputs were:
These outputs respond to the following problems:
NB. There are many policy implications but it is not exactly a policy output.
The main commodity focus in the ESA case studies was timber (Bolivia, Mexico and Ghana), but non-timber forest products were important in four studies (Zimbabwe, Nepal, Mexico, India); subsistence forestry feeding into the farm economy was important in Nepal and India; and non-market benefits or ecological services were important in Ghana and Mexico. The book covers all these PFM situations, so ranges from market oriented timber or NTFP based PFM to subsistence forestry in which forests are valued more for the farming inputs, energy source and ecological services.
NB. 'High potential' is not ticked, but there is clear potential for 'win-win' outcomes from carbon forestry, especially the 'avoided deforestation' option suggested by Stern Review - but the book does not focus on carbon forestry. It can also be noted that many forests occur on steep hillsides.
The main contribution of ESA is to check whether technological or management changes, which appear technically and institutionally sound, make economic sense to villagers, especially in comparison with the best alternative use of their most scarce resource. In other words does the innovation or improvement compensate the opportunity cost. It may be easier to cluster with projects in countries and production systems where ESA has been piloted. With this in mind, rough order of priority: R6918. Potential to develop an integrated methodology for FUGs using our researchers (Drs. Maharjan and Dr Kanel). R6918 has done hard work of quantifying production change, and assessed inequality. ESA can increase transparency of equity impacts and lead to more equitable management rules by FUGs. R6322. A problem with fodder is that normally only households with livestock benefit. The answer is either to find a way to increase livestock ownership by the poor or look for tree species which produce firewood or poles for sale. R8101. 'Locally appropriate best practices' should be evaluated in terms of their equity implications (costs and benefits to wealth and gender sub-groups) R6320 and R7274. I assume thorough economic and equity analysis has been done on these, but if not, it would be great to apply ESA to carbon forestry. R7635, R7925. The ESA approach complements other decision-making tools. In the case of agroforestry, economic analysis is essential given that poor returns to labour has been a major cause of non-adoption of technologies like alley cropping. High potential technologies can increase returns to labour and land. For NTFP commercialisation, a key question is are returns to labour high enough for it to offer a poverty escape route? NTFP forestry can be a poverty trap due to low labour returns. Another concern is price elasticity of supply. R6709, R7285. Have improved silvicultural and management practices made forestry more attractive than other land/labour uses? Have poor groups and women benefited from fair trade, and how can they benefit more? What are the transaction costs? R7589. Certification has direct and indirect (opportunity) costs for communities and households. Do increased benefit flows compensate these? Again transaction costs are significant. R8305, R7822, R6549. Do the costs and benefits of management and processing provide positive incentives, and how much have poorer groups benefited? The per cow profit has increased, but has the return to labour and capital increased? There was most interest in replicating and extending the ESA methodology in Nepal, and CARE Nepal has encouraged 'participatory economic analysis' although the practical extent of this is unclear. The current Ford Foundation and CARE funded 'Action Research into the Poverty Impact of PFM (ARPIP)' study involving other ODI researchers incorporates some of the methods in the Stakeholder Incentives book into its research methodology. This is being applied in 40 villages in Kenya, Tanzania, Nepal and will be applied in Vietnam in 2007. The purpose of this study is to assess the poverty impacts of PFM. It will provide further evidence of the potential of the ESA toolbox to clarify equity impacts and lead to pro-poor PFM project and policy interventions.
Relevant Research Projects,
with links to the
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For relevant research projects, with links to further information  Geographical regions included: Africa,  Target Audiences for this content:Forest-dependent poor, |
