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Searching for win-win forest outcomes: Learning-by-doing, financial viability, and income growth for a community-based forest management cooperative in the Brazilian Amazon

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  • Humphries, Shoana
  • Holmes, Thomas
  • Andrade, Dárlison Fernandes Carvalho de
  • McGrath, David
  • Dantas, Jeremias Batista

Abstract

After more than two decades of investment by donors and governments in community forest management (CFM) initiatives for timber production from natural tropical forests, also known as community-based forest enterprises (CFEs), the sustainability of this livelihood alternative aimed at improved prosperity remains uncertain. Although many studies have focused on the environmental and social dimensions of CFEs, very little is known about their financial viability and socio-economic impacts, even though these elements are critical to ensuring the broad potential benefits of CFM. Furthermore, the lack of a consistent methodology for financial analyses severely limits the ability to learn from CFE case studies across initiatives and time. In an effort to measure the financial viability and identify critical factors that contribute to the poverty-alleviation potential of CFE timber production, we applied a simplified tool for financial analysis in collaboration with a CFE in the Brazilian Amazon three times over six years. The CFE operates in a national forest and is organized as a cooperative with more than 200 members from local communities experiencing high rates of poverty. We analyzed changes in labor productivity and the growth in incomes generated for seasonal and full-time workers, the value of goods and services purchased from the local economy, profits generated, and the overall financial viability of the timber operation. During the study period, the cooperative: (1) demonstrated substantial gains in efficiency and financial viability due to increasing returns to labor inputs, consistent with a model of learning-by-doing; (2) quadrupled the value of labor payments to local communities; and (3) generated substantial other economic benefits. We discuss strategies used by the CFE to improve its financial viability over time, maximize income opportunities for local residents, and respond to financial, social, and political challenges. Our findings indicate the importance of initial support from governments and other partners for start-up capital, subsidized access to trainings and technical assistance, and navigating complex bureaucratic systems, and the positive effect that improved productivity over time, scale economies, and access to markets can have in influencing the poverty-alleviation potential of CFE timber production initiatives in the tropics.

Suggested Citation

  • Humphries, Shoana & Holmes, Thomas & Andrade, Dárlison Fernandes Carvalho de & McGrath, David & Dantas, Jeremias Batista, 2020. "Searching for win-win forest outcomes: Learning-by-doing, financial viability, and income growth for a community-based forest management cooperative in the Brazilian Amazon," World Development, Elsevier, vol. 125(C).
  • Handle: RePEc:eee:wdevel:v:125:y:2020:i:c:s0305750x18301967
    DOI: 10.1016/j.worlddev.2018.06.005
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    References listed on IDEAS

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    3. Butler, Megan, 2021. "Analyzing community forest enterprises in the Maya Biosphere Reserve using a modified capitals framework," World Development, Elsevier, vol. 140(C).
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    6. Frey, Gregory E. & Charnley, Susan & Makala, Jasper, 2021. "Economic viability of community-based forest management for certified timber production in southeastern Tanzania," World Development, Elsevier, vol. 144(C).
    7. Hajjar, Reem & Newton, Peter & Ihalainen, Markus & Agrawal, Arun & Alix-Garcia, Jennifer & Castle, Sarah E. & Erbaugh, James T. & Gabay, Monica & Hughes, Karl & Mawutor, Samuel & Pacheco, Pablo & Scho, 2021. "Levers for alleviating poverty in forests," Forest Policy and Economics, Elsevier, vol. 132(C).
    8. Batara Surya & Haeruddin Saleh & Hamsina Hamsina & Muhammad Idris & Despry Nur Annisa Ahmad, 2021. "Rural Agribusiness-Based Agropolitan Area Development and Environmental Management Sustainability: Regional Economic Growth Perspectives," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 142-157.
    9. Migliavacca, Milena & Patel, Ritesh & Paltrinieri, Andrea & Goodell, John W., 2022. "Mapping impact investing: A bibliometric analysis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 81(C).
    10. Jagger, Pamela & Cheek, Jennifer Zavaleta & Miller, Daniel & Ryan, Casey & Shyamsundar, Priya & Sills, Erin, 2022. "The Role of Forests and Trees in Poverty Dynamics," Forest Policy and Economics, Elsevier, vol. 140(C).

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