BIOMASS FOR BETTER LIVING - Forest Based Micro-enterprises
Prema Gera & Madhavi Makkapati

“Ecological forestry” with the objectives of conservation and sustainable use is the new approach to forest management.  For centuries now people have been collecting Non-Timber Forests Products (NTEPs) from forests.  Value-addition to this biomass, we believe, is an excellent means of linking conservation with employment.  Micro-enterprises (village/house-hold level) will facilitate this value-addition.  These enterprises while providing  sustainable livelihoods to the rural  poor will also lead to prudent utilisation of natural resources.

An FAO study (1987) sums up the advantages  of forest based small scale or micro-enterprises as ‘incredibly diverse’ but having several common characteristics.
They are :

Two factors which are crucial to the success of any enterprise would be its environmental and social soundness.

Environmental Soundness
Uncontrolled collections often endanger regeneration of the NTFP generating species.  Whether contractors hire local people for collecting NTFPs to the Forest Development Corporations / Co-operatives, the immediate economic gain combined with non- surety of tenure or rights on the trees  seems to result in over-exploitation.

In the mid 1980s, the government of Uttar Pradesh replaced the contractor system by grassroots organisations called Bheshaj Sanghs.  Members of these Sanghs were trained in sustainable methods of harvesting NTFPs and issued licences to collect in areas demarcated by the Forest Department.  A study by Economic Development Associates, New Delhi, has found that licence holders hired cheap migrant labour (mainly from Nepal) who collected as much as they could to earn higher wages.

Environmental soundness is clearly dependent more on the stake people have over the resource, than on rights to collect the products.

Social Viability
The existing system of collection and value-addition of NTFPs is disadvantageous to local communities, being confined to the household level with a middleman serving as the link with the market.  Technology is most cases is obsolete, product development negligible  and capital for improving the production process virtually absent.  They are mere wage earners and categorised as ‘unskilled’ labour.

Here again, past experiences provide direction for the future.  The wooden match box industry in India is an excellent example where concerted effort by the government in the form of protective tariffs and differential excise duties has favoured the expansion of the small-scale sector (handmade) which produces about 67% of the total match boxes in the country and employs about two lakh people.

The progressive policy of the government however has not be able to contain the ascendancy of 18 families who have virtual monopoly in this sector by controlling a number of cottage  level units through sub-contracts.  It has also been unsuccessful in stalling deliberate fragmentation by bigger units to take advantage of the incentives offered to smaller units.

A study by FAO (1991) - ‘Women’s Role in Dynamic Forest Based Small Scale Enterprises’ - has found that women benefit substantially from these enterprises.  It is also true that commercialisation, organised collection, technology introduction, training and institutional support tend to favour men.

These learnings will have to be taken into account in determining the social viability of micro-enterprises.  Selection of individual entrepreneurs from among the ‘rural poor’ is crucial for ensuring benefits to the most needy.   Group enterprises of ‘clusters’ of families linked in a production and marketing network is another option available for equitable distribution of benefits.

These insights notwithstanding, Forest Based Enterprises are still poorly understood.  Environmental and social soundness are not doubt important; but economic viability too is necessary for success.  Further research is required to understand the inter-relationships between all these factors.  The challenge lies in using this understanding to design institutional and other linkages that are essential for enterprise promotion product development, production, marketing, credit and financing mechanisms and investment.

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