Financial and marketing strategies for sustainable development of dipterocarp forests and poverty reduction in forest dwelling communities in India

December 13, 2006 by


Teki Surayya


National Institute of Financial Management, Sector-48, Pali Road, Faridabad-121001

Tel: 91-0129-2418875, 2418857, 2418893 (EPBX), extension 270,

Fax: 91-0129-2418867, Email: teki@nifm.ac.in teki9@rediffmail.com



Abstract



Sustainable management of natural forest is indeed a current global concern, as forests are indispensable for all. The forests contributed both economic (timber and nontimber products) and non-economic (oxygen, rain, carbon sequestering, etc.) benefits. In India 100 million people live in or near forest. Almost all are poor and depend on forest (mainly on NTFPs) for their livelihoods. Out of necessity they use unsustainable methods of harvesting NTFPs, cattle grazing etc., these and other biotic and economic pressures cause serious depletion of forest. Pressure on forest could be reduced by promoting community/farm/agro-forestry, regenerating/reclaiming the degraded forests, increasing public awareness. Till recently only timber was considered important contribution of forests. During the recent past NTFPs management is also considered equally important for sustainable forest management as 25 percent to 55 per cent of forest dwellers’livelihood comes from NTFPs trade. This accounts for about 20% of consumer price due to lack of NTFPs value addition at primary level. Studies in India reveal that only one forest division out of nine surveyed has posted fiscal surplus. This is because of non-accounting of intangible forest benefits. And only 21% of total price spread of selected timber species accounted for farmers, due to ill marketing practices in timber industry, the same is the case with forest department. Forest organization can be sustainably managed if it has good financial and marketing managements. Aggressive promotion of timber contributes substantial economies in short-term, but long-term sustenance of forest will be threatened. Thus one has to develop strategies that will fetch enough revenues without over-harvesting timber. Developing forest based economies, demanding compensation under carbon trading covenant, automobile green tax, public education, niche and IT enabled marketing can supply funds for sustainable dipterocarps forests. Therefore this paper aims at discussing marketing and financial strategies that would generate revenues without aggressively promoting the timber sale, for sustainable development of forest and forest dependents.


Key words: Dipterocarps forest, NTFP, Poverty alleviation, Sustainable Development.



Introduction



Sustainable management of natural forest is indeed a current global concern, as forests are indispensable for all people, flora and fauna. In fact forests render numerous benefits, however, the benefits contributed by forests can be largely segmented into: a) economic/quantifiable (timber and non-timber products), b) non-economic/unquantifiale (oxygen, rain, carbon sequestering, etc.) benefits. There are studies, such as those conducted by ITTO and World Bank to estimate economic/market value of these non-economic/unquantifiale benefits accruing from forests. A field survey (2001-02) conducted in India reveals that only one forest (fourth level geographic area wise unit) division out of nine divisions surveyed has posted fiscal surplus. This is basically due to non-accounting for intangible benefits like carbon abatement, energy requirement to poor, housing bio-diversity, preserving rich cultural heritage etc. that are rendered by the forests. Till recently only timber was considered as an important contribution of forests, as it had been remitting sizable revenues to exchequer on average 2% of India’s GDP had come from forestry. But during the recent past NTFPs (mohual/sal leaves and seeds, dammars, resin, camphor, butter fats, tannin, etc.) are being major dipterocarps NTFPs (Shiva & Jantan 1998) management is also considered equally important for sustainable forest management as nearly 80% of forest dwellers in India depends on NTFPs. A large portion, 25 to 55% (Table 12) of their survival is derived from NTFPs harvest, collection and trade. However this accounts for only about 20% (table 13 ) of ultimate consumer price spread of in NTFPs trade. This is mainly because of lack of NTFPs value addition at primary/forest dwellers (FD) level.


Pressure on forests has been increasing not only in India but also world over . In Indonesia alone,( www.mofa.go.jp) the rate of deforestation has reached of about 1.6 million hectares per year during the last three years. In this world (Pethiya and Teki 2000) every minute proximately 50 acres (22 hectares of forest cut down (WWF 1998). To compensate this slaughter (Haque, Kannapiran, and Paul 1998) every minute Rs. 5,94,000, funds must be pored in. Thereby this environment can sustain for long time without terrible disasters and catastrophes. How will and from where does these huge outlay of funds come is a problem to be addressed.

In India 100 million people (www.recoftc.org) live in or near “forest land”. Almost all are poor live in poverty and depend forest (NTFPs) for their survival. Out of necessity they use unsustainable methods of harvesting NTFPs, cattle grazing etc., these and other biotic and economic pressures creating serious depletion of forest. Pressure on forest can be reduced; (a) promoting community/ farm/agro-forestry, (b) regenerating/reclaiming the degraded forests (c) public education.

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