Nonfarm employment in small-scale forest-based enterprises: Policy and environmental issues

This paper examines available literature on small forest-based enterprises to draw some conclusions on how these enterprises function, grow and change over time. Small forest-based enterprise activities are one of the largest sources of non-farm income in the rural economy of developing countries. They also account for a large part of the total harvest from forests in many areas. Income from these activities is particularly important during seasonal shortfalls in food and cash crop income and in periods of drought or other emergencies. Ease of access to forest raw materials means that forest-based activities are particularly important for the poor and for women. However, most of these activities provide very low returns to labor and may thus; provide only minimal and short-lived livelihood contributions. Some of the most important saleable forest products face uncertain markets because of growing competition from industrial or synthetic alternatives or domesticated sources of the materials. As demand grows, some activities are also threatened by depletion of or reduced access to forest resources.The author suggests that, in developing policies to support sustainable activities, it is important to distinguish between those activities that have the potential to expand and those that do not. Policy issues to consider include regulations that discriminate against the informal sector, policies that result in the shift from communally managed to uncontrolled open access of forest resources, and restrictions on private production and sale of forest products that impede the development of domesticating forest products.