INVESTING IN TREES AND LANDSCAPE ... - PROFOR

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OVERVIEW Reforestation measures for degraded lands, strategies for the sustainable management of forest resources, and agroforestry practices that incorporate trees into farming systems are increasingly demonstrating their promise for producing commercialized tree products. Although the level of investment so far has remained modest, the challenge is to find ways to scale up promising investments in a way that will have a clear impact at the landscape level. These types of investments can help achieve the “triple wins” of climate-smart agriculture: increased incomes and yields, climate change adaptation and greenhouse gas mitigation. TREE-BASED TECHNOLOGIES WITH PROVEN BENEFITS Market trends are promising for a wide range of tree-based technologies, including tropical fruits, cashews, honey, timber and wood products, lipids, gums and resins, tree crops, and agroforestry systems. The following observations stand out from a review of existing investment opportunities: • Many tree-based investments are highly profitable and are projected to remain so. • Many-tree based investments are critically important for providing environmental services and restoring landscapes; for example, fertilizer tree systems, parkland systems, and exclosure-based systems. • Some tree-based investments (for example, the parkland systems) provide win-win outcomes in terms of profits and ecological services. • Some tree-based investments could be improved upon to better deliver both profits and ecological benefits; for example, integrating high-value trees into tree crop systems. • Achieving large-scale restoration almost always requires a combination of investments in tree and non-tree technologies; for example, vegetation regeneration, soil conservation, planning for woodland-riparian management. SCALING UP LANDSCAPE INVESTMENT APPROACHES IN AFRICA In many cases, African entrepreneurs, farmers, civil society, and governments have responded dynamically to the widespread challenge of land degradation. The continent is dotted with landscapes where production of trees on farms and in managed forests has grown dramatically to meet market and subsistence needs; sustainable agricultural practices and revegetation have restored soils and watersheds; and key conservation areas are being protected. OVERVIEW 3
However, this is not happening at the scale required by societal needs in Africa. In part, this is due to a lack of strategic cooperation and coordination between private sector investors and land managers (who are focused on realizing profitable opportunities and meeting their own needs) and public and civil society actors (who are focused on restoring forest cover and ecosystem services). Such coordination is only possible when the biophysical potential for landscape restoration, private sector investment opportunity and incentives, and societal demand for multiple benefits converge. Much can be learned from examples of large-scale landscape restoration in Ethiopia, Kenya, Niger, Tanzania, and Zambia, and the variable roles of the private sector, farmers, government, and civil society in supporting and undertaking investment. A review of large-scale examples finds that private incentives for landscape restoration depend on ecological features of production systems, market infrastructure, eco-certified markets, and payments for ecosystem services. Spatial patterns of land and forest tenure, international investment, good governance, and armed conflict also matter. New mechanisms are engaging private investors and businesses more effectively in multistakeholder landscape restoration planning and action. More explicit analysis of the convergence of private and public interests in landscape restoration can help identify promising opportunities for cooperation. INVESTMENT OPPORTUNITIES AND CONSTRAINTS Investing in land and forestry simply to raise yields for fiber, food, and fuel—perhaps by achieving economies of scale—is a narrow objective that, more often than not, does not consider the longterm ecological, economic, and social consequences of land use change. Chapter 3 in this volume explains how forests and landscapes, particularly in Africa, can satisfy the needs of investors who are seeking an attractive rate of return combined with a sustainable and socially responsible impact. There is great investment potential in releasing the latent energy of the small and medium-sized enterprise (SME) sector. Local enterprises can manage and restore landscapes in a manner that reflects the need for achieving social, environmental, and economic objectives. These landscapes are populated by people who have certain rights over the land and the resources it provides. Climate-smart investment needs to consider the role local people play in the landscape, particularly in addressing the drivers of deforestation. However, investing in such enterprises involves constraints, such as low capacity, unclear tenure, and weak institutions. These constraints can be overcome if “soft” investment—from donors, multilaterals, and governments—precedes “hard” investment to improve the enabling environment and reduce transaction costs; for example, by supporting institutional reform and financing intermediaries that are often crucial in helping SMEs overcome their isolation from markets, investors, and political influence. Building a partnership among different types of investors, intermediaries, and SMEs requires trust, patience, and transparency. Certain steps are needed in the process to ensure a clear understanding of goals and the means by which issues such as benefit sharing and quality improvement will be handled in a businesslike manner. To turn opportunities into trees and landscapes, appropriate investments must be made in people and enterprises that have a value proposition and the wherewithal to carry 4 INVESTING IN TREES AND LANDSCAPE RESTORATION IN AFRICA
Page 1 and 2: INVESTING IN TREES AND LANDSCAPE RE
Page 3 and 4: Acknowledgments This volume draws o
Page 5 and 6: REFERENCES_________________________
Page 7 and 8: vi INVESTING IN TREES AND LANDSCAPE
Page 12 and 13: out their plans. This vision of cli
Page 14 and 15: ABBREVIATIONS ACT ADB BDSP CA CBI C
Page 16 and 17: PROFOR RA REDD REIT SADC SAGCOT SFM
Page 18 and 19: INTRODUCTION WHAT DO WE MEAN WHEN W
Page 20 and 21: The approach can involve the use of
Page 22 and 23: HOW CAN WE GENERATE INVESTMENT? Des
Page 24 and 25: 1 TREE-BASED AND OTHER LAND MANAGEM
Page 26 and 27: Macro Trends That Affect Demand for
Page 28 and 29: In this context, investment opportu
Page 30 and 31: Indigenous Fruits, Nuts, and Kernel
Page 32 and 33: Honey The global trade in honey is
Page 34 and 35: TABLE 1.4. PRODUCTION AND CONSUMPTI
Page 36 and 37: continue to depend on charcoal and
Page 38 and 39: Tree Crops Coffee is one of the top
Page 40 and 41: Faidherbia albida intercropping sys
Page 42 and 43: Carbon storage in fertilizer tree s
Page 44 and 45: Marketing and Processing Investment
Page 46 and 47: 1.4 VALUE CHAIN INNOVATIONS FOR PRO
Page 48 and 49: In Africa, farms that engaged in ce
Page 50 and 51: 3. Some tree-based investments, suc
Page 52 and 53: 2 WHERE DO PRIVATE MARKET INCENTIVE
Page 54 and 55: and coordinate investment in major
Page 56 and 57: BOX 2.1. KAGERA RIVER BASIN: TRANSB
Page 58 and 59: at first seemed modest, when adjust
Page 60 and 61:
with strong policy and extension su
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country-level analyses to identify
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supermarket in Africa, and growing
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nonfarmed areas in infrastructure,
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BOX 2.5. WESTERN KENYA TEA LANDSCAP
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size of an agricultural carbon proj
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COUNTRY PUBLIC PRIVATE (by descendi
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To avoid participating in this scen
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need to be developed. Progress in l
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3 OPPORTUNITIES AND CONSTRAINTS FOR
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BOX 3.1. REDD BENEFITS TO LOCAL COM
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SMEs operate in various kinds of va
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sovereign wealth funds, and so on.
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Investors may be neither willing no
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BOX 3.3. OVERCOME REGULATORY BARRIE
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land must be unclaimed wilderness.
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issues should be dealt with before
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Capacity building is relevant for a
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Certain issues should be explored f
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anything. For this reason it is som
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to increasing the capacity of commu
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Hard investors, on the other hand,
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REFERENCES Aagaard, P. 2010. “Con
Page 106 and 107:
Cheboiwo, J. 2007. “Economic and
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Feleke, S.T. and R.L. Kilmer. 2009.
Page 110 and 111:
Huang, S. 2004. Global Trade Patter
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Mathenge, M., J. Olwande, F. Place,
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Place, F., S. Franzel, J. Dewolf, R
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Sileshi, G., F. Akinnifesi, O.C. Aj
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_____. 2011. Conflict, Security and
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ANNEXES ANNEX I. SOURCES OF SPATIAL
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ANNEX II. INVESTOR TYPES IDEAL TYPE
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BO LAGER pointed out that farmers w
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areas and watersheds and to anticip
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The company does not deal with fore
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ANNEX IV. INVESTMENT FORUM PARTICIP
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FIRST NAME LAST NAME TITLE COMPANY
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FIRST NAME LAST NAME TITLE COMPANY
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HISTORICALLY, BOTH PUBLIC AND PRIVA
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