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Sustainable development of non-timber forest products

by Eric L. Hyman

Agenda 21 discusses the predicament of low-income people and their relationship to forest environments in Chapter 2 on combating poverty and Chapter 11 on protecting forests. It emphasizes that providing rural people with greater economic incentives and managerial control over local natural resources can empower them to conserve these resources more effectively over the long term if they have the necessary initial technical assistance. One of the areas in which this hypothesis applies most clearly is in nontimber forest products (NTFPs). Agenda 21 also emphasizes the need for environmental monitoring and helping forest resource users gain access to the information needed for effective resource management.

Poverty forces NTFP gatherers to maximize short-term income by overharvesting at the expense of future income. Traditional systems that control use of open-access resources are breaking down, and governments are facing constraints in enforcing resource use restrictions. Forest resources are also being lost to other major land uses such as agriculture, commercial logging, livestock grazing and mining. At the same time, population growth and migration are placing Increasing stress on the remaining resources.

Low-income people living in rural areas, particularly women and indigenous cultural groups, rely on forests for subsistence products and an important source of income. Yet, while some NTFPs bring high profits to processors and traders in international markets, gatherers selling NTFPs usually receive a small share of the value of the final products.

Unorganized gatherers typically sell small amounts of NTFPs with little or no processing. Individually, these small-scale producers have little bargaining power and lack information on prices and alternative markets. There are often many intermediaries in the marketing chain for NTFPs. Buyers frequently carve out exclusive purchasing territories, especially in remote areas where transport and transaction costs are high and products are perishable or have a short harvest season.

When processing takes place closer to the forest, NTFP gatherers can obtain higher prices for raw materials because several layers of intermediaries are eliminated. Processing enterprises can also be structured so that gatherers earn additional profits through an ownership share. Even if local processing is not feasible, marketing cooperatives can reap economies of scale and improve gatherers' bargaining power. But to make these changes possible, NTFP gatherers often require some initial external assistance.

Because of the link between conservation and development, development assistance agencies are devoting increasing attention to NTFPs. One example is the work of Appropriate Technology international (ATI), an international NGO that joins forces with local NGOs and the private sector to help smallscale producers. ATI's value-chain approach begins with an analysis of the feasibility of local processing and alternative marketing arrangements to identify profitable opportunities that can be environmentally sustainable. ATI and its partner organizations help organize production and marketing and leverage financing. They also develop or transfer technologies for production and processing, and provide technical and managerial assistance and training.

By emphasizing low cost, labor-intensive technologies, ATl's previous activities have always had at least neutral environmental impacts. After participating in the UNCED NGO summit, ATI began developing new programmes with more explicit goals for positive environmental benefits, such as NTFPs.'

Helping NTFP producers increase their earnings and have a greater stake in long-term resource sustainability through processing can help motivate local people to preserve forest resources, but does not guarantee sustainable practices will be followed. NTFP development is not a panacea for saving forests because deforestation has other larger economic, social, and political causes that it cannot address. Furthermore, many products previously obtained from the wild have been replaced by cultivated or synthetic substitutes.

Consequently, NTFP programs need to be carefully designed, managed, and monitored. For this reason, ATI helps establish systems for tracking and regulating harvesting rates, avoiding resource-damaging harvesting practices, and monitoring other environmental impacts. ATI works with other NGOs and local groups in environmental monitoring and identifies mitigation measures as needed.

Jatamansi Oil in Nepal

Some 50,000 people collect NTFPs in the mountains of mid-Western Nepal, and trade in these products is estimated to be in the thousands of tons. The area has high biodiversity, but forest resources show signs of overuse by the growing population. In September 1993, the Biodiversity Conservation Network (BCN) funded an ATI feasibility study on the processing of various NTFPs in Western Nepal and jatamansi (Nardostachys grandiflora) was identified as one of the most promising. The essential oil extracted from jatamansi rhizomes is used in traditional medicines, cosmetics and flavoured tobacco in India. It is also increasingly popular as a fixative for perfumes and aromatherapy products in other countries.

ATI subsequently helped local residents in the Humla area to form their own NGO, the Humla Conservation and Development Association (HCDA), and in December 1994 financed establishment of the Humla Oil Pvt. Ltd. to process jatamansi. The goal of this project is to increase the incomes of the gatherers and strengthen community-based conservation systems. Technical and managerial support are being supplied by the Biodiversity Unit of the Asia Network for Small-Scale Bioresources (ANSAB), a nine-nation network based in Kathmandu which ATI helped launch in 1991.

Before the local processing plant began operating, gatherers harvested jatamansi from common-property lands and sold the rhizomes unprocessed or with minimal preprocessing (cleaning and sun-drying) to traders, who then exported it unprocessed. Previously, there were at least four levels of intermediaries between the gatherers and Indian processing companies, and while the Delhi price for dried jatamansi rhizome was US$2.26 per kilogram, gatherers in Humla received just US$0.36 per kilogram.

The processing plant produces essential oil through steam distillation. About 150-180 kilograms of dried jatamansi rhizomes can be processed per batch, which yields 1.33-1.60 kilograms of oil. Annual production is expected to be 150 kilograms of jatamansi oil, which should expand to 250 kilograms. At full capacity, the facility will serve 225 gatherers, who each sell an average of 150 kilograms of dried jatamansi per year. The main market is Indian manufacturers, but European and North American cosmetics firms are potential purchasers. The processing plant sells mare (the residue after producing the essential oil) to domestic artisanal producers of incense. The company plans to diversify its operations by processing other NTFPs in the future.

"While you in the West are interested in conserving natural resources, our daily lives depend on it," said Tsewang Lama, Director of the HCDA, which is gradually taking over ownership and management of the processing plant. I HCDA is encouraging sustainable resource use by training gatherers to cut only part of the rhizome. Jatamansi is already overharvested in parts of Nepal, but is still abundant in the remote project area. At present, Jatamansi is not cultivated on farmland and its requirements for cultivation are not known.

To expand processing to benefit NTFP collectors in more locations, ATI leveraged additional funding from the Biodiversity Conservation Network, which has also designed a monitoring system to track the resource and environmental impacts. ANSAB established a company, Western Jaributi Services (WJS), to assist the various NTFP enterprises. WJS will receive a royalty on gross sales, which will be used for further expansion and to recover its costs of product identification, business plan, preparation, technical and managerial assistance, quality control, marketing and resource monitoring.

Other NTFP Activities

AT/lndia (a local affiliate of ATI) and Economic Development Associates (EDA), a consulting firm, are helping to establish a company that buys raw honey produced in natural forests for processing and marketing. The honey can be marketed as an organic product because it is made by an indigenous bee species from the nectar of wild plants, rather than by a commonly introduced species in fruit orchards where pesticides are used.

The processing company promotes improved practices to maintain bee colonies (better hives, division of large colonies, pest and disease control, and supplementary feeding) and more efficient extraction of honey (through a centrifugal extractor that can be shared by ten families). As a result of project technical assistance, annual production of honey per hive is expected to increase from 1-3 kilograms to 5-8 kilograms. A part-time family enterprise could easily produce 75 kilograms per year.

The first honey processing plant will initially be owned and operated by AT/lndia and later divested to local beekeeper committees who purchase shares of the company. Technical assistance costs will eventually be recovered through a royalty on gross sales.

AT/lndia and EDA are also promoting production of tasar silk. Tasar silk is a stronger fabric than regular silk and commands a higher price in India. It is produced by a different type of silkworm (Antheraea proylei) that eats leaves of several oak species instead of mulberry. Harvesting the leaves from communal forests is a sustainable use that encourages maintenance of the tree cover.

The main constraint is the availability of good quality tasar silkworm eggs. This constraint will be overcome by establishing decentralized "grainage units," which produce disease-free eggs. Each grainage unit will be owned by a local cooperative and can serve 600 growers. For each grainage unit, 150 home-based microenterprises will be established to reel cocoons, which will be purchased from the growers by the grainage enterprise, using a wet process. The reeled silk will be marketed domestically to weavers under a common brand name.

ATI provided technical assistance to an Ecuadorian enterprise processing for wild mushrooms export. They are produced by a mycorrhizal fungus (Suillus luteus), which lives symbiotically on roots of an introduced species of pine (Pinus radiata). These mushrooms can generate more income than the trees, greatly increasing the returns to reforestation. About 200 local households currently collect this mushroom, which is produced 8-9 months a year in the area.

ATI began its work in rattan in the Philippines with a subsector analysis of this industry. Small-scale producers are heavily involved in rattan harvesting, preprocessing and processing. Rattan is a high-valued raw material for the furniture and handicraft industries. The industry generated US$275 million in annual export sales for the Philippines in 1992, but exports fell 16% since 1989 due to declining raw material supplies.

Improvements in rattan harvesting technology can reduce waste from large cane breakage by half and allow resprouting of multistemmed small cane species. Better drying technology and chemical treatment can improve the quality and selling price of the canes. More effective monitoring and enforcement of government requirements for enrichment planting of rattan in natural forest concessions are also needed, and improved nursery techniques can increase the survival and growth of rattan seedlings.

ATI/Philippines is providing technical assistance to local NGOs working with rattan producers and processors. It convened a national conference to disseminate the findings of the subsector study and prepared a comprehensive program for expansion of the industry. The programme includes cost recovery for local NGOs assisting microenterprises and leveraging of enterprise finance from commercial banks and government development banks. ATI is also developing rattan activities in Indonesia.


NTFPs merit increased development assistance because they can benefit lowincome producers while providing an incentive to preserve natural forests. ATI's value chain approach examines a range of potential interventions in collection, preprocessing and marketing, processing, and resource regeneration. ATI then implements the most promising options with local partners.

In ATI's experience, organizing producers to process and market NTFPs (especially for export) is often more of a challenge than technology dissemination. More research is needed on optimal harvesting rates and methods, but simple, improved technologies for processing NTFPs are often available.

NTFP enterprises can be owned or managed by producer groups or linked to larger firms, and technical assistance can be structured to recover costs and prevent continuing dependency. These enterprises will only continue to benefit small-scale producers over the long term if they are commercially viable. Operating cost subsidies should be avoided because they only benefit a small proportion of potential beneficiaries.

To ensure resource sustainability, an ongoing system should be instituted to monitor the resource base and promote regeneration. More collaborations between the private sector and development assistance and conservation organizations can be beneficial.


1. Some other ATI post-UNCED programs are assisting coffee producers and processors (reducing pesticide use and converting processing waste into fertilizer) and improving dairy feeding systems (increasing productivity while reducing methane emissions associated with global warming).

2. The BCN is a joint venture by World Wide Fund for Nature (known in the US as World Wildlife Fund), The Nature Conservancy, and World Resources Institute, with funding from USAID.

This paper is a condensed version of the author's Assisting Small-Scale Producers of Nontimber Forest Products Through a Subsector Approach. The author would like to acknowledge the helpful comments of Ann Koontz and Leyla Alyanak and the extensive suggestions of Susan Drake Swift.