Growing the Wealth of the Poor - World Resources Institute

W O R L D R E S O U R C E S 2 0 0 8174government-supported nurseries are helping to free small-scalepalm oil producers from one of their key competitive constraintsby supplying them with the same high-quality seed stock thatlarge plantations use (Vermeulen and Goad 2006:33). Technologyinterventions need not be highly sophisticated or expensiveto be effective. In central and southern Africa, significantincreases in honey yields have been realized by introducing newbeehive technology, such as replacing traditional bark or clayhives with simple wooden structures with removable slats(Molnar et al. 2007:25; FAO 2005a:19–21).Government guidance and support should not be confined totechnical and production issues. It should also extend to businessplanning and market analysis—skills that are required early in theenterprise cycle. Local NGOs and intermediary support organizationsfrequently take on the task of helping local enterprisesascertain their markets and prepare business plans, but governmentscan sometimes work at a higher level to coordinate theseservices. In The Gambia, the government adopted a stepwisemethod of helping communities determine the most suitable forestenterprises for them to invest in for maximum benefit.The program—called market analysis and development(MA&D)—is directed at communities that have establishedlegally designated Community Forests under the state’s communityforestry rules, which were put in place in the early 1990s. Ineach community, the MA&D method proceeds in three phases.First, community members, with the help of a facilitator, assessthe community’s financial objectives and inventory their forestresources. Second, they identify potential forest products, evaluatetheir market potential, and select the most promising. In thefinal phase, the community crafts a business plan, exploresfinancing arrangements, and is guided through a pilot phase ofthe enterprise (FAO 2005a:9–41).One of the strengths of the approach in The Gambia is themelding of practical and political concerns. The governmentsaw its adoption of the MA&D program as part of its overalleffort to decentralize forest management and enhance forestlivelihoods. It integrated the practical step of building localbusiness capacity with the political reform of creating CommunityForests, realizing that community forestry would only workwell if it resulted in real benefits to the local economy (FAO2005a:1–3, 59–60, 63).Another way in which governments can help nature-basedbusinesses expand their markets is in the area of product certification.Many small producers of coffee, spices, tea, timber,vegetables, and a number of other commodities and crafts haveadded value to their products by certifying them as organic, FairTrade, or “sustainably harvested.” However, certification canconstitute a considerable technical and cost barrier for smallbusinesses. Governments can facilitate the process by makingsure state regulations support and encourage certification and byproviding technical assistance and even financial support in someinstances. Certification is not likely to be useful or attainable forall enterprises, however, and governments should be cautiousabout making certification a requirement for resource management—ashas happened in some cases—lest it become aninadvertent barrier (Molnar et al. 2007:58).COST TO PRODUCERS OF INTERNATIONAL CERTIFICATION (US$)FSC*Fair Trade**Initial Certification$7,500$780 application fee +$3,125 certification fee.Ongoing CostsYearly Audit: $2000Documentation: $2,500Compliance: $10,000Yearly renewal: $1,560 - $2,500Compliance: Varies*Average for Oaxaca, Mexico community forests of over 4,000 hectares**For small farmer organization between 50 and 100 members:Source: Molnar 2003: 17; FLO-CERT 2008.Overall, the guiding principle in offering state technology,marketing, research, or other services should be that theseprograms are rooted in the demand from local enterprises. Stateextension services are nothing new, but there is abundantevidence that many such efforts fail to achieve their goals.In Indonesia, for example, the government funds nearly130 separate programs to support small and medium-size enterprises,but evaluations suggest that few meet their goals. Astronger element of local design would undoubtedly improve theeffectiveness of these programs (World Bank 2006a:xii).Improving National GovernanceIt is not enough to catalyze good governance at the communitylevel if this good practice is undermined at the nationallevel. Rural communities are often marginalized withinnational policymaking, leading to a lack of policy attentionthat can work against community enterprises. This is trueboth within national legislative bodies and within governmentministries where the regulatory regime governing naturalresource use is forged and enforced. The result is that ruralcommunities face a lack of representation of their interests,often resulting in onerous regulations that handicap theirability to manage local resources. At the same time, governmentline agencies often perpetuate a top-down mentalitythat can runs counter to the community-driven approach thatis known to foster scaling up of nature-based enterprises.While we concentrate in this section on the challenges ofimproving rural representation and the importance of reorientingthe attitudes of line agencies, we realize that manyother steps are necessary to improve national governance fornature-based enterprise, such as more complete decentralizationof natural resource governance, less tolerance for naturalresource–based patronage and corruption, and greater accessto judicial redress for the rural poor whose resource rightshave been violated.