Trade in Forest products

• Trade in forest products - issue for low forest cover countries

• Non-wood products in low forest cover countries

All aspects of forestry have become increasingly global in recent years. This includes the substantial and increased investment that has been made in development and in technology transfer. The global nature of production and ownership, differential rates of population and income growth, the changes that have occurred in consumer preferences etc have been instrumental in this, which have transformed the global supply and demand situation for forest products. Increased incomes and population expansion have resulted in increases in the demand for these products. As a result, like other aspects of forestry, international trade, which has always been global, has become even more so.

Only a small percentage of forestry products are traded internationally. About one fourth of the wood-based panels and paper products and one fifth of the lumber and wood required for pulp enter international trade. The estimated share of forests in GDP is only 2%, and 3% of the international trade of manufactured products. As it may be assumed, the global market in forestry products is dominated by the developing countries both in terms of imports and exports. In brief, it can be stated that:

(a) International commerce in forest products is highly regionalized. Three major regions, consisting of the Pacific Ocean, North America, and Europe (particularly Western Europe), are the major players in the trade of forest products. In these three regions the most important importers are the developed countries, along with some developing Asian countries which have also increased their share of imports. These imports are mostly timber and semi-processed products.

(b) The most important exporters of forest products are developed countries with high forest cover in temperate with advanced processing industries. However, developing countries such as Malaysia and Indonesia with high forest covers also play an important role in world export. In 1995, five countries share of the world trade was 55% while the share of the US and Canada stood at 33%.

About one quarter of the world surface is covered by forest (3.5 billion hectares) 97% of, which are natural and semi-natural forests. Out of the total, 135.6 million hectares occur in countries with less than 10% forest cover. In other words, about 70 countries possess only 3.78% of the world’s forests, out of which 30 countries have less than 1%, implying that out of the global total of 135.6 million hectares, 7.9 million hectares (approx. 5.7%) belongs to countries with less than 1% coverage, giving them a share of 0.23% of the world’s forests. These LFC countries are spread across five continents, with 25 in Asia, and 22 in Africa, 10 in the Americas, 6 in Europe, and 8 in Oceania.

From 1995 to 1998 the trade value of forest products in LFC countries, on the average, was over $ 29 billion in imports while their export amounted to over $ 10 billion. These values represent 20.2 and 7.5% of the global imports and exports respectively. There is also a wide geographical discrepancy associated with these countries. In Africa, the share of LFC countries was about 8.6% of the regional imports and 13.1% of exports. In Asia, the share of 26 LFC countries, during the same period (95-98) was 26.9% of the imports and 26.5% of the exports. An interesting point concerns the LFC countries in Europe, where 5 out of the 6 developed countries had the largest share in trade of forest products, up to 58.0% of the imports and 52.2% of the exports. LFC countries of the Americas can be considered among the least important countries in the international trade of forest products, while the share of 7 countries in Oceania is about 5.70% of imports and 7.6% of exports. It should be noted that the share of African LFC countries is about 1.7% and 1% of the global imports and exports respectively. In Asia, LFC countries share is 5.40% of imports and 2% of exports and American member countries also have a small share in the overall trade (0.2% of imports and 0.4% of exports), and the situation is very similar in Oceania. However the situation is the opposite in Europe. Six European LFC countries, from 1995 to 1998, were able to conduct 11.7% of the imports and 3.9% of the exports.

Evaluation of data on trade and production indicates that between 1995 and 1998, on a yearly average, the share of LFC countries is about 20.2% of total value of imports and 7.5% of exports. The enclosed table provides details on the regional production and trade of LFC countries. The table indicates the following:

The highest volume of trade belongs to five European LFC countries, namely Denmark, Holland, UK, Ireland and Iceland with 58.3 and 52.5% of the total value of imports and exports respectively. Only LFC countries in the Americas have a share of less than 1% in international trade. From available data on round wood, production in LFC countries is about 251 million cubic meters (7.5% of total). The main producers in this category are in Africa (48.2% of total) and Asia (31.6% of total). On the import side Europe is considered as the largest importer both in terms of volume and value since half of the imports of the round wood among LFC countries belongs to five countries. Asia is second in this category (31.2% value of imports and 40.4% of volume). On the export side of round wood trade an opposite trend is evident. Countries in Oceania have the largest share with 61% of the volume and 48% of the total value. Their respective share in world export is 10.4% (by weight) and 8.3% (by value). Africa is considered as the second major participant in this category.

During the studied period the production of round industrial wood in LFC countries amounted to 67.6 million cubic meters. Total imports amounted to 3.4 million or 45.8% of total imports of industrial wood with an estimated value of $ 659 million. On the export end LFC countries contributed about 12.9 million cubic meters of industrial round wood (10.5% of total world exports) with a value of about $ 890 million. This figure represents 8.2% of the hard currency earned by these countries. From the point of view of production, the African continent is the major producer and similar to the round wood situation, Europeans are the largest importers in terms of value and volume. Asian countries, in turn, are responsible for 31% of the imports by volume and 41.2% by value which places them second after Europe. The highest value associated with traded industrial woods by Asian countries when compared to the volume, is due to the trade of higher quality and unique products related to deciduous species. Oceania and America do not play a significant role in this respect.

With regards to sawn wood and sleepers where the share of LFC countries is 2.6% of the global production is mainly obtained from Europe and Oceania. Africa is third with 18.4% of the share. Imports follow the same pattern and developed European countries have 55.2% of the share by volume and 58.5% by value while Asian and African countries are distant second and third (21.3 and 18.3% respectively). On the export side Asian and European countries (with five members) are considered as the main exporters of these products, since 48% (by weight) and 46% (by value) of exported sawed wood is Asia’s share while Europe has 43% and 48% of the share by weight and value respectively.

Total production of wood based panel amounts to 7 million cubic meters (1995-1998) representing 4.7% of global production. Imports of these products represents 21.91% (by weight) and 23% (by value) of the global trade. The export side of the trade is not significant since only 5.75% of the total weight of wood based panels in the global export trade belongs to LFC countries (1.1 million cubic meters) with a respective share of about 6.6% of the total value. Europe is considered as the main producer and importer with 50.3% of the production, 53.3% of the imports by weight and 54.1% by value. Following Europe the import markets in LFC countries belong to Asia, which holds the biggest share of exports i.e. 50.4% by volume and 45.5% by value. Europe is the runner up in exports with 39% by weight and 43% by value taking into account exports by LFC countries.

International trade in non-wood forest products includes many products, several among which are non-processed or semi-processed. Estimations indicate that there are currently 150 non-wood forest products of significance in international trade. Even though most non-wood products are traded in very low quantities (and thus value), some products have relatively large quantities and very high value. As an example, imports of natural rubber have reached $1,000 million in value. It is also difficult to classify some of these secondary products among forestry products, since they can be industrially produced as agricultural commodities.

The main trade flow for most non-wood products is from developing countries, LFC countries among others, to developed countries. As an example, out of the total production of 25,000 Tons of gum arabic, Sudan alone produces 20,000 Tons. Major users of non-wood products are the advanced economies in America, Europe, Japan and Canada; these countries purchase over 60% of the total production, which play a vital role in income and employment-generation for ,many developing LFC countries. Increased processing will further assist in this regard. Investment and resource allocation from developed countries for the processing of these products in LFC countries can play an important role in the sustainable development of the forestry sector.

Studies suggest that the world’s forests will be able to supply the raw material needed for wood processing factories, but with considerable difficulty in a number of areas – especially those without the financial means of meeting deficits through imports. A low or declining capacity to produce wood and forest products is a major reason for LFC developing countries needing to import; while the need for hard currency and economic poverty is the motivation behind exports. Since some of the LFC countries possess unique forests with high and diversified production potential and are able to produce unique products not available elsewhere, their exports take place due to high demand for these products. This strong export demand has placed further pressure on the already limited forest resources of these countries.

Sustainable forest management is considered to be a priority worldwide. But there are approximately 70 countries with less than 10% forest coverage, which are mainly characterized by fragile ecosystems and are located in arid zones of the world. International discussions related to forests do not generally include these countries and a new chapter has been opened to discuss these countries explicitly. The supply and demand situation for wood products in global markets indicates that the increase in demand is a consequence of increase in population and income. Most wood products other than firewood are positively sensitive to increases in income. Since a considerable number of LFC countries are also considered developing, it is expected that increased population pressures will result in increased demand for firewood, warning of a bleak future for the forests, trees and woodlands of these countries. The effect of increased income on the demand for industrial products such as logs, and the demand for forest environment services, is being felt now in countries with lower income while its impact is slower in countries with higher income.

The development of suitable forestry policies based on sustainable management of resources should be based on an integrated approach through continuous discussions between all involved, taking into account cross-sectoral elements. Establishing indexes on the relationship between environmental impact and wood or non-wood production will assist in discussions among beneficiaries aiming at the desired goal of the sustainable management of the forests. These discussions will assist in the coordination of national policies related to forest management with other macro-economic sectoral policies. It is evident that such political goals, which often utilize very complex means to achieve them, can learn from, and frequently should be in line with, the political goals and the tools used in other countries, and this will contribute to improved regional and global collaboration. In this respect, political goals and the participatory processes to achieving them, require information on forest product outturn, supply and demand and the analysis of trends, and should assist in developing policies to increase national forest, tree and woodland resources.

Other factors also play a key role in changes in demand particularly in certain poor countries where products made of metals, plastic and other wood substitutes are more available. In oil producing countries plastic has been used as a substitute for most wooden products. On the other hand, increases in income may result in more demand for environmentally friendly products. In most LFC countries the governments are the owners and the managers of the forests. While they remain as the sole producer of wood they also frequently dictate prices to the market, which do not reflect the cost of all the resources used in producing the product. Where there is global competition in the supply of certain forest products then there will be no increases in price of the products or certain raw materials for manufacture, which may not have rise value for several years. LFC countries, which are mainly importers of raw wood products, will gain in this respect. Where the market for manufactured products is a local and closed market it is, however, less subject to competition and will be subject to an increasing trend in prices. In these markets, price can be used as a mechanism in policies and it should be noted that the increase in price which can result in lower legitimate demand for wood products, will at the same time increase the cost for protection of the forests which will be more subject to illegal cuttings.

During the last decade there has been a major focus on addressing the comprehensive management, protection and sustainable development of forests worldwide. The Earth Summit (UNCED) in 1992 highlighted the general framework for the sustainable development of all forests. In 1995, the Intergovernmental Panel on Forests (IPF) was established under the UN Commission on Sustainable Development (UNCSD) in order to facilitate the implementation of UNCED decisions related to forestry, and in particular forest policies. The IPF, in its final report, identified future actions that need to be taken to promote sustainable forest development and its management.

The follow-up forum to the IPF, the Intergovernmental Forum on Forests (IFF), was given the task of continuing the global forestry discussions begun by the IPF and focusing on issues that had not been resolved. One of these has been Trade and the Environment. Views and positions on many of the issues covered by this topic have been difficult to reconcile in many areas. Although some consensus is finally emerging, translation of the decisions into action that will assist countries such as the LFC countries, will be difficult. Public institutions and the private sector should continue their activities in international dialogues concerning trade. In the proposals put forward by the IPF, there were no decision made concerning LFC countries. It is therefore of increased importance that the interests of the LFC be highlighted in the final report of the IFF to the UN Commission on Sustainable Development. As a first step, it may be necessary for the LFC to identify those issues of greatest importance to them, and to discuss common positions and possibly common solutions. In this identifying where international action and arrangements is needed.

Of note is the relationship between international trade of forest products and resource management and sustainable forest development. The governments of developing countries with low forest cover do not have the financial resources, the political will, or in many cases the negotiating strength to become entangled in many of the current controversial issues concerning trade, especially those connected with environmental issues. They therefore require assistance from other countries more conversant with the issues and able to assist the LFCs. This may take the form of assistance in investigating the issues and their solutions, training of staff, improvement in statistical collection, improvement in policy formulation, support in international negotiations, and resources in relevant field projects.

A start may be through the encouragement of regional cooperation in international trade of forest products and in order to provide an integrated framework for considering the issues, problems and possible solutions.

lack of forest resources to a) reduce the need for imports and b) develop a sound domestic wood industry

limited participation in international trade – and hence in decisions affecting this trade

structural deficiencies in production systems

lack of adequate and accurate data and information on resources, production, trade

lack of information on overseas markets, their trends and requirements

absence of basic information makes analysis and policy development for wood and non-wood production very difficult.

increasing demand for most wooden products due to expanding populations and rising incomes.

consequences of these for the environment

restricted regional and global collaboration

inability to obtain assistance from developed countries for the training of staff, improvement in statistics, improvement in policy formulation, support in international negotiations.

 Introduction

This paper describes the importance of non-wood forest products (NWFPs) in LFCCs, identifies some of the main issues related to NWFPs and outlines general action to be taken in order to develop their potential in the countries considered. The potential role of donors and international organizations is presented.

Non-wood forest products are goods of biological origin derived from forests, wooded lands and trees outside forests.

In drylands and other areas with low forest cover, NWFPs support the livelihoods of millions of people. Traditionally, the most important roles played by NWFPs are health care, food security and nutrition (fruits, leaves, seeds and nuts, mushrooms, honey, sap and animals are all important sources of food in the LFCCs), support to agricultural and livestock production, construction materials, household items and cultural values. NWFPs vary greatly with local availability and preferences. They range from products used for local consumption to products which are traded in the international markets and which have represented major commodities for a long time. However, in LFCCs, the majority of NWFPs is used for subsistence and in support of small-scale, household-based enterprises which provide income and employment for rural people, and especially women.

In spite of the great diversity of LFCCs, these countries share common features such as a fragile environmental balance and similar land use practices: livestock production (often based on nomadic systems) is often the main production system. The goods and services provided by forests and trees in LFCCs are much more important than timber production. The activities related to the collection and processing of NWFPs are closely linked to the farming cycle.

Despite their importance for local economies and for the people, NWFPs in LFCCs are still largely neglected in the policy and decision-making processes of natural resource management. The main constraints facing the contribution of NWFPs to sustainable rural development are: very little quantitative data available on production and values of NWFPs (and little reliable data on internationally traded NWFPs); overemphasis on timber production; lack of research and information on ecology of the species, management practices, harvestable level, sustainable harvesting practices, post-harvesting and processing technologies, market opportunities, quality requirements and control; market fluctuations, lack of clear and appropriate legislation and policy support.

Some important issues to be addressed in the LFCCs are: the need to look at NWFP management and development in LFCCs in the context of integrated land use practices; the compatibility of NWFPs with services such as watershed protection; the challenge of domestication (when, where and to what extent NWFPs can or should be produced in plantations or agroforestry); the need to address such issues as conflict management (pastoralists/settled farmers), targeting at rural women, and tenure systems (for example in Africa, where there is a prevalence of common property regimes). All these factors impede NWFP development, which should be seen as opportunities to stimulate action at the national and international level.

With adequate policy support, research, and investment, NWFPs can contribute to household economies and food security, to national economies, and to environmental objectives (such as the conservation of biological diversity) in LFCCs. Successful enterprises which improve the income generation of women can represent a means to empower this social group, which is central to resource management, and contribute to equity in these countries.

NWFPs should be given appropriate importance in the economic, industrial and trade policies of the government. The following lines of action are identified which could be followed by national governments of LFCCs to develop the full potential of NWFPs:

At the policy/institutional level:

Governments should undertake formulation, review and/or revision of policies having direct impact on NWFPs, with clear orientation towards sustainable management of resources by:

Properly identifying and accounting the contribution of NWFPs in the system of national accounts;

Enhancing the investment and budgetary provisions for development of NWFPs;

Introducing appropriate pricing mechanisms;

Granting local organisations (e.g. cooperatives, user groups) and the private sector a greater voice in management of the resources;

Recognising the socio-cultural importance/significance of the products and their resource base;

Establishing strategies by clearly identifying priorities.

In the process of policy formulation/review it is necessary to involve multidisciplinary teams, with all interested groups represented. It will also be useful to collaborate with and learn about the experiences of other countries.

Policies relating to NWFPs should consider the following:

a broader policy environment and compatibility with related policies (development, environment, agriculture, industry, etc).

identification of particular cultural groups requiring specific resource allocation and policy attention,.

appropriate measures to facilitate the participation of local communities in designing and implementing strategies for NWFP development, and in managing NWFP resources;

decentralisation of forest resource management ;

revision of existing rules and regulations having an adverse impact on NWFP;

giving clear identity to NWFP and incorporating them in the public forest administration system;

support to the establishment/strengthening of research institutions having the capability to conduct research on the different aspects of NWFPs, including new product development;

ensuring institutional mechanisms to support technology transfer, education, training and extension, investment, credit, marketing;

establishment of information systems covering resource inventories, production, processing, marketing, utilisation, trade, consumption of NWFP

development of national standards for NWFPs (including quality control, and certification procedures according to market requirements)

strategies to add value locally, so that, considering the importance of NWFPs in local economies, bias against small-scale enterprises should be avoided;

more transparent transactions along the NWFP market chain;

processing and market development of NWFPs, which should not deprive the rights of local communities to goods and services such as forest food, fodder/grazing, medicinal plants, and construction materials.

promotion of service-oriented, income-earning opportunities like nature tourism which must be environmentally sound;

increasing the local uses of NWFPs (for example, with the establishment of NWFP user industries such as cosmetics, paints, etc.)

identification of critical ecosystems (such as drylands, mangroves, wetlands and upland watersheds) for policy attention

protecting and profitably using local traditional knowledge about the NWFP resources and their use.

initiatives for prospecting biological diversity in forests for their chemical and biological values so as to derive legitimate benefits for the country and the people. Experiences of countries where such developments are taking place should be shared with other countries.

domestication of NWFP species and their integration into agroforestry systems;

environmental impact assessment of projects related to the use of NWFP resources

Donors and development assistance agencies should consider raising the priority for funding NWFPs and support adequate flow of investment capital into the sub-sector. Increasing attention should be accorded to the socio-economic issues relating to NWFPs and their support and facilitation efforts should be directed accordingly.

The following lines of action could be explored:

facilitate transfer of technology/know how between developed and developing countries, as well as among developing countries;

donor supported programmes for improved processing and marketing of NWFPs should

carefully assess the risk to small producers compared to other alternatives. Where the risk is high, it is necessary to establish mechanisms to avoid or share that risk;

support product development, market research and improvement of processing and marketing capabilities of producer groups;

programmes on industrial use of NWFPs supported by donors and development assistance

agencies should incorporate research on development of new NWFPs with economic potential;

industrialised donor countries should assemble and share their experiences in the management of NWFP resources and their utilisation;

NWFP programmes of national and international research institutions should be given special consideration for enhanced support including for such activities as skill development, data base management and dissemination of information.

Foster and facilitate South-South and North-South cooperation in aspects of common interest through mechanisms such as collaborative research, seminars, consultations and joint ventures.

Research institutions at all levels should develop mechanisms for involving stakeholders in planning, implementation and monitoring of NWFP research. They should also recognise and adequately reward local know-how and facilitate its refinement. Important research themes and priorities are as follows:

Document and disseminate fast-disappearing local knowledge on the management and use of NWFPs, in collaboration with disciplines such as anthropology and ethnobotany where considerable research on and publication of information relevant to NWFPs have been carried out;

Improvement of product quality through better harvesting, processing and handling;

Research on new products and practices for diversifying production and for meeting changing demands;

Economic and market research, including strategic evaluation of market conditions and opportunities;

Research and development on process optimisation, quality improvement and new formulations of NWFPs;

Mechanisms to transfer research findings on new products and processes to the private sector industries;

Study management systems for NWFP production along with their environmental impact and socio-economic implications;

Study the ecology and biology of NWFP species, along with their domestication, agronomic practices, and integration in agroforestry systems;

The linkage of research and resource management for inventories and bio-diversity prospecting of NWFP resources should be strengthened;

Research on the impact of policy measures and regulations on the resource management and

utilisation of NWFPs.

Role of international organisations

International organizations, including FAO, should provide assistance to LFCCs for implementing programmes on NWFPs, also through project identification and formulation and donor identification. Areas in which the work of international organizations can provide support to NWFP development in LFCCs include:

Dissemination of information on the uses and markets of NWFPs;

Provide assistance to strengthen research and development institutions to develop additional industrial uses for NWFPs;

Develop a policy framework for NWFPs, suitable to be integrated within the overall forest sector policy, in order to serve as a guide and model to be adapted by countries;

Initiate and facilitate action to collect and publish international statistical information on production, trade and consumption of major NWFPs on a regular basis. This could include information on price movements and supply and demand trends gleaned from trade sources;

Identify regional centres of excellence to serve as focal points for regional networks on NWFPs to enable collaborative efforts, information exchange and technology transfer, and identify funding sources for implementation. FAO Regional Offices can play an important role in this regard;

Develop a system of classification of NWFPs (within the overall system for forest products) that is harmonised with existing international systems such as ISIC, SITC, CPC and SNA.

 

 Some past and ongoing activities of FAO related to NWFP in LFCCs

Recognising the great development potential of NWFPs for food security and sustainable forest management, the FAO Forestry Department launched, in 1991, a programme for the promotion and development of NWFPs. The programme has since developed as a centre of excellence on NWFPs at the global level and assisted member countries in their development efforts.

The programme consists of: (i) gathering, analysis and dissemination of key technical information on NWFPs; (ii) full appraisal of the socio-economic contribution of NWFPs to sustainable development; (iii) improved networking among individuals and organisations dealing with NWFPs; and (iv) technical assistance on NWFPs to FAO member countries.

(i) Specific categories of NWFPs and/or important topics for their development are highlighted in the FAO Non-Wood Forest Products Series. Twelve volumes have been published to date of which some with particular reference to given NWFPs from LFCCs, such as gums, resins and plant flavours like myrrh, frankincense, opopanax from Somalia; Acacia gums from countries in the Sahel; Carob and Mastic gums from the Mediterranean and Middle East regions; Indigo dye from India and pistachio nuts from Iran.

(ii) In general, the available statistics on NWFPs are very dispersed, still insufficient, not aggregated at the national level and far from being comprehensive or global in scope. In LFCCs, the available information base on NWFPs is even more limited. The following two activities of the FAO NWFP Programme are in support of the development of a comprehensive statistical database on NWFPs:

Improving methodologies for the classification and valuation of NWFPs, including further development and harmonisation of definitions and concepts on and related to NWFPs;

Compilation of an Information System on NWFP which includes descriptive and quantitative information on products, use(r)s, and production and trade statistics by country. These country briefs will be posted on the FAO Forestry Department website, as they become available. So far, country briefs for LFCCs in Africa, the Near East and Central America are being finalised.

(iii) In the past few years, an impressive network of contacts with organisations (governmental and non-governmental) and individuals working in the field of NWFPs has been developed by the NWFP Programme of the Forest Products Division of FAO. To further improve networking, the following three activities are supported: an annual news bulletin, Non-Wood News; a Directory on NWFP stakeholders; and international expert meetings.

Non-Wood News is an annual news bulletin compiled from voluntary contributions of relevant information about ongoing activities dealing with NWFPs, and is distributed to some 2000 individuals and organisations world-wide. Six issues of this bulletin have been published so far and are also available from the NWFP webpage at: http://www.fao.org/waicent/faoinfo/forestry//nwfp/nonwood.htm. Hardcopies of recent issues can be distributed free of charge upon request.

A Directory on NWFP stakeholders is being developed. The aim of this comprehensive database is to gather and collate reliable information about all stakeholders, including governmental agencies, NGOs, private companies and individuals involved with the development of NWFPs and to present the kind of activities with which they are dealing. A first draft of this interactive database is available from the NWFP webpage and it incorporates an option to download a questionnaire (available in English, French or Spanish) for those who wish to be included in the directory.

The heterogeneous nature of the NWFP sector and the multitude of stakeholders call for multidisciplinary involvement and coordinated effort. To increase awareness about NWFPs further and to strengthen collaboration and partnerships at the national, regional and global levels, FAO’s NWFP Programme has organised several international expert consultations on NWFPs world-wide. Of particular relevance to LFCCs are the workshops organised for countries in the Near East Region (Cairo, Egypt, 1997; and Lebanon, 1999) and the Anglophone African Countries (Arusha, Tanzania, 1993).

(iv) The FAO's NWFP programme also provides technical assistance, such as: backstopping to FAO field projects on NWFP related issues; project identification, evaluation and monitoring; and Identification of donors for project funding.