Previous Page Table Of ContentsNext Page


3.2.1 The Extent of Forest-Based Income Generation

There are a great number of forest products which are gathered, processed and traded. This discussion focuses on a few examples such as fuelwood trading, rattan collection, and palm product processing in order to shed light on the widespread importance of such forest based activities.

Perhaps the most important feature of forest based enterprises is their role as rural employers. In most countries examined in Fisseha's study the "forest-based" group of processing activities are the second largest source of employment in rural manufacturing. As manufacturing in turn accounts for the larger part of all rural enterprise activity - from 32 to 63 percent in the six countries - forest-based processing is apparently one of the most widely available non-farm sources of income in rural areas (see Table 3.7).

Table 3.7: Major economic contributions of forest-based small-scale enterprises

Contributions

Jamaica

Honduras Zambia

Egypt

Sierra Leone

Bangladesh

Total employment ('000)

10.2

-.-

137.4

-.-

18.0

-.-

Workers trained

(No.)

1663

-.-

4647

-.-

-.-

-.-

Share of FBSSI in total SSI:

- Value added (%)

- Value of production (%)

47

49

16

14

-.-

-.-

18

19

23

27

18

-.-

Net return to family labour (US$)

2494

1221

-.-

495

371

308

Prevailing wage as a % of return to FBSSI family labour hour

61

         

Rate of return

on investment2

in FBSSIs (%)

33.0

41.7

-.-

27.5

32.2

54.2

1 Financial figures (all in US$) and number of trainees are given on

annual basis.

2"Return to FBSSI family labour hour" is before opportunity cost of

family labour is deducted.

Source: Fisseha, 1987.

Though the absolute numbers of people involved in these enterprises are not high in relation to the entire rural population, they form a large share of those employed outside agriculture. For example, the estimate of an equivalent of 80,000 person years of employment in informal forest-based processing in Zambia compares with a total recorded employment in the country of 365,000 (see Table 3.8).

Table 3.8: Distribution of enterprises and employment among the Zambian forest-based SSE Group1

Enterprise type

Enterprises

Employment

------------------------------------------------------------------------------------

Number

Percent

Number

Percent

Workers/firm

1.

2.

3.

4.

5.

6.

7.

8.

9.

Basket/mat

Carpentry/ furniture

Carving

Pitsawing

Fuelwood

Logging

Upholstery

Sawmills

Other Mfg.1

31,474

7,467

6,217

2,937

2,147

141

5

2

1,819

56.6

13.4

11.2

5.3

3.9

0.2

0

0

3.3

52,041

12,783

7,548

9,925

4,350

141

5

2

2,806

54.7

13.5

7.9

10.4

4.6

0.2

0

0

3.0

1.65

1.71

1.21

3.38

2.03

1.00

1.00

1.00

1.54

Total Mfg.

52,209

94.0

98,606

94.3

1.72

10.

Retail

410

0.7

514

0.5

1.25

11.

Vending

2,947

5.3

4.913

5.2

1.67

Total Serv.

3,357

6.0

5,427

100

1.62

Grand Total

55,566

100

95,033

100

1.71

1 Mfg. and Serv. stand respectively for manufacturing and services.

2 Beginning with Section 2.2, the forest-based SSE study lumps together vending and retail activities as total services.

Source: Fisseha, Y. and J. Milimo, 1986.

The greatest amount of information on the economic importance of forest-based gathering and processing enterprises comes from India where the overwhelming picture which emerges is that in many rural areas, income generated from gathering and processing of forest products is a key component of the rural economy. Table 3.9 provides an indication of the numbers of people involved in the gathering and trade of non-timber forest products. Overall more than 30 million people in India are thought to be involved in these activities (Cecelski 1984).

Important non-timber forest enterprises in many parts of the world are the collection and processing into oil of nuts and palm oil seeds. In rural northeastern Brazil, for example, approximately 450,000 households (2 million people) depend on income generated from the collection and processing of Babassu palm kernels (May et al. 1985a). Similarly, in the Bo region of Sierra Leone, Engel et al. (1985) found that 93% of the farmers interviewed are involved in palm oil processing. Palm fruits are collected from the wild in the off-peak agricultural season.

Table 3.9: Percent distribution of annual quantities of fuelwood collected, consumed and sold per household according to category of labour

Labourcategory quantity

Annual average ME-day house- hold

Total quantity collected per household kg.

Percent of total quantity collected %

Total quantity Consumed per household Kg.

Percent of total quantity consumed %

Total quantity sold per household Kg.

Percent of total quantity %

 

1. Rural Bo

 

Male adult

Male child

Female adult

Female child

9.5

2.0

35.2

5.7

1283.7

186.5

5566.1

619.5

16.8

2.4

72.7

8.1

274.4

60.4

2809.7

418.5

7.4

1.7

78.9

11.7

1009.4

126.1

2756.5

201.0

24.7

3.1

67.3

4.9

All groups

52.4

7655.8

100.0

3562.9

100.0

4092.9

100.0

     

2. Rural Makeni

     

Male adult

Male child

Female adult

Female child

10.3

2.0

40.2

6.7

1282.5

261.3

5497.3

858.3

16.2

3.3

69.6

10.9

225.8

228.8

2296.3

734.4

6.5

6.6

65.9

21.0

1056.7

32.5

3201.0

123.8

23.9

0.8

72.5

2.8

All groups

59.3

7899.3

100.0

3485.3

100.0

4414.1

100.0

Source: Adapted from Kamara, 1986.

The trade of unprocessed rattan provides another example of a non-timber forest enterprise; its estimated value is $50 million annually in Southeast Asia (IDRC 1980). Rattan collection and processing is a common village level enterprise throughout the region. The actual number of people involved in the

industry is not known, although it is thought that at least half a million people are employed in rattan collection, processing and small-scale manufacturing (IDRC 1980). In Malaysia, the Forest Department earns more than

$100,000 annually from royalties collected for rattan extraction (Salleh Modh. Nor 1987). Rattan is a foreign exchange earner, and as such is heavily exploited in many areas (in Thailand, for example, it is considered the most important forest product (Poudyal 1985).

As urban populaLions-have grown and fuelwood in surrounding regions has become scarcer, the fuelwood trade has become an important activity for many rural people. Agarwal (1986) estimates that 2 to 3 million people in India are dependent on the fuelwood trade, earning an average Rs. 5.50/day per 20 kg. headload of fuelwood. Similarly, fuelwood collection is an important commercial activity in some areas of rural Sierra Leone. For example, in rural Bo, more than half the fuelwood collected is sold: 122.8 tonnes are sold out of a total 229.7 tonnes collected annually (Kamara 1986) (see Table 3.9).

There is little comparative information available on employment in small forest enterprises. Nonetheless, many authors have attempted to quantify people's involvement in non-timber forest product trade and processing. A selection is presented in Table 3.10.

Table 3.10: Estimates of involvement in forest based activities

Source (country)

Estimated number of people involved in forest enterprises.

Van Buren, 1982 (India)

25% of the fuelwood used is sold in commerce, an as many as 15 million people (full-time) are involved with market trade.

Agarwal, 1986 (India)

2 to 3 million people are dependent on fuelwood trade, earning an average Rs. 5.50/day/20 kg. headload of fuelwood.

Surin and Badhurl,1980

(Chotanagpur, India)

Fuelwood sales are an Important source of income for 70% of forest-dweller households.

Hunter, 1981

(Madhya Pradesh)

The collection of Tendu (Diospyros melanoxylon) leaves for bids cigarette wrappings employs ten million people part time in the off-peak agricultural season, and earns the state some $40 million in revenue.

Tewarl, 1982 (India)

Tendu leaf collection provides about 90 days employment to 7.5 million people; a further 3 million people are employed In bidi processing industry; 3 million people are Involved in lac (resin) production; 735,000 people earn income from sericulture; 550,000 people are employed In bamboo-based craft enterprises.

Jha and Tha, 1985 (India)

126,000 households are involved in Tassar silk cultivation (of those 100,000 are from Bihar).

Blair, 1983 (Kerala)

More than 300,000 people are involved in mat production from reeds.

Jalal-ud-Din, 1984 (N.W. Pakistan)

More than 3000 families are involved in sericulture (raising silkworms), and over 3 million rupees is generated from the sale of cucoon crop (the majority is purchased by the Forest Department).

Fisseha, 1987 (Zambia)

25,000 are Involved In the fuelwood trade. There are more than 52,000 forest-based small-scale processing enterprises, who employ 137,400 people;

      (Sierra Leone)

18,000 people are employed in FB-SSEs;

      (Jamaica)

10,200 people are employed in FB-SSEs.

Marks and Robbins, 1984 (Zambia)

48,000 people are employed in charcoal production

(36,000 of them are part-time charcoal producers and traders);

11,500 people are involved with bee-keeping;

96,000 households earn income from handicraft production.

Johnson and Nair, 1985 (N.E. Brazil)

Gathering forest products is a component of the agriculture cycle. In 1980, 18,300 tonnes of cashew nuts were gathered and 18,000 tons of wax were collected from carnauba palm leaves.

Saadallah, 1978 (Tunisia)

The minor forest product trade provides 270,000 days employment a year.

Chetty, 1985 (Kolar, India)

Gum collection uses 300,000 man/days. There are an estimated 50,000 small-scale forest product processing enterprises. 20,000 people are involved in bamboo collection for local FB-SSEs.

Jambulingam, 1986 (Tamil Nadu, India)

The collection, processing and trade of Palmyrah products (sugar, wine and handicrafts) involves 28,000 households and generates Rs. 120 million/year.

Kulkarny, 1983 (India)

30 million people are estimated to derive part of their livelihood from forest products.

Rao et al, 1978 (India)

More than 80,000 tonnes of myrobalan fruit (tannin production) are collected annually by agriculturalists and tribals, and 150,000 tons of other tannins are also collected. Workers earn between Rs. 0.25-0.5/kg. for myrobalan fruit and 0.25-0.4/kg. for tannin bark.

Moby-Etia, 1982 (Bos-Wouri, Cameroon)

Palm wine production provides income for an estimated 20,000 people from region (an estimated 6,000 tonnes/month enter commerce).

Forest Service, 1982 (Senegal)

An estimated 700,000 liters of palm wine enter commerce a year.

Engel et al, 1985 (Bo, Sierra Leone)

60% of the farm households in the region process palm fruit and kernels for sale.

Kaye, 1987 (Côte d`Ivoire)

An estimated 65,000 people are involved in rattan cane basketry part-time while 1,500 are involved full-time.

Shiembo, 1986 (South- west Cameroon)

3,600 people are involved in raphia and rattan processing in the region.

      Source: Compiled by authors

Table 3.11: Distribution of employment in crafts and extractive activities in Rufiji District, Tanzania

Type of Activity

Men

Women

Total for

Region

Craft activities

Carpentry and other wood based activities

Canoe making

Mat making

Basketry

Coconut Oil production

Thatchery

Raffia

Extractive activities

Honey collection

Mangrove cutting

Logging

Charcoal production

 

2,761

881

789

978

420

2,644

576

 

450

3,098

262

5,011

 

-

-

12,177

737

4,295

162

10

 

-

-

-

596

 

2,761

881

12,966

1,715

4,715

2,806

586

 

450

3,098

262

5,607

Total of forest based activities

17,870

17,977

35,847

Other craft activities 1

10,348

4,532

14,880

Total of craft activities

28,218

22,509

50,727

1. Includes all non-forest based activities such as blacksmithing, masonry, tailoring, jaggery, salt production, grain mill, bicycle repair and fishing.

Source: Havnevik, 1980

A study carried out on small scale enterprises in the Rufiji region of Tanzania, illustrates the importance of forest based activities in this area and shows the varied returns earned in different forest-based endeavors (Havnevick 1980). In Rufiji, more than half of the people employed in small enterprises work at forest-based activities (see Table 3.11). A total of 9,417 people were involved in extractive/gathering activities such as honey collection and mangrove cutting, while 26,430 were involved in processing and craft enterprises such as mat-making and carpentry.

This data on employment in forest-based activities suggests that these activities help support a large percentage of the population. However, an examination of the returns to labour of different forest based activities (see Table 3.12) suggests that, for many people, these activities may be undertaken as a last resort. The returns from carpentry and carving were estimated to be almost twice the rural minimum wage, while canoe-making and saw milling were only slightly higher than the minimum wage. For enterprises such as mat-making, basketry and bed-making, returns amounted to about one third of the minimum rate (see Table 3.12).

 

Labour return categories and crafts

I

Up to

Shs. 1/=

II

Shs. 1-2

III

Shs. 2-3

IV

Above and

inclusive

Shs. 3/=

Crafts:

Wooden beds

Mortar

making

Mat making

Basketry

Saw milling

Canoe making

Masonry

Potttery

Salt prod.

Shoe repair

Fishnet prod.

Blacksmith

Carpentry

Carving

Canoe

Tailoring

Coconut

oil prod.

Bicycle repair

Jaggery

Watch repair

Average hourly

return for the

category

Shs. 0.48

Shs. 1.51

Shs. 2.45

Shs. 5.91

Monthly potential

income (8 hrs/day)

26 days

(208 hrs/mo)

Shs. 99.84

Shs. 314.-

Shs. 510.-

Shs. 1,229

Number of nominal

participants

16,072

5,866

6,305

60

% of total nominal

participants

56.8

20.7

22.3

0.2

Source: Adapted from Havnevik, 1980

The activities which earned the highest returns were those that were the most integrated into the market. The author argues that the activities which cater largely to domestic needs have the lowest returns. It is of particular importance to note that the majority of women engaged in processing activities are in the low income generating activities such as mat-making. In addition, in the activities which involve both women and men, there is a tendancy for men to produce for the market and women to produce for domestic consumption (thus earning lower returns for their labours).

Table 3.13: Market integration of crafts and extractive activities in the various agro-economic zones, Rufiji District, Tanzania

Agro-economic zone

Extractive activities

Crafts

Fishing

Charcoal

Prod.

Coconut

Mangrove

cutting

ucil

prod.

Salt

prod.

Carpentry

& Saw

milling

North Hill

-

1

-

3

-

-

Western Valley

2

-

-

-

-

-

Flood Plain North

2

3

-

-

-

-

Flood Plain South

1

-

-

-

-

5

Inner Delta North

3

6

5

2

4

-

Inner Delta South

2

5

-

-

-

4

Delta North

4

   

2

1

5

-

Delta South

6

-

4

1

2

-

Note: The figures indicate overlaps between the set of major cash generating activities for the District as a whole (fishing, charcoal production, mangrove cutting, coconut-oil, salt production and carpentry and saw milling) and the set containing the most important activities in terms of participation for each agro-economic zone. The rank 1 to 6 is related to participation. Rank 1 indicates that the activity is the most important in terms of participation. Many overlaps and high ranking for overlaps are seen to be measures of high market integration for the zone.

Source: Havnevik, 1980

In Rufiji District, the extractive enterprises such as charcoal production and mangrove cutting generated relatively high returns to labour reflecting their predominant market orientation. Indeed, mangrove extraction and charcoal production were among the six main sources of producer income from small enterprises (see Table 3.13). In 1979, income from charcoal production in the district equalled that from sales of agricultural produce sold to the crop authorities. The relative importance of different activities varied between zones within the district reflecting the differential access to markets.

This differential income-earning potential of different forest based activities should be highlighted. In many cases the returns are quite marginal. The findings of a study conducted by Liedholm and Mead (1986) echo those found in Rufiji. The limited amount of information that is available on the subject suggests that returns to family labour are generally higher in carpentry than in craft activities such as mat and basket making (see Tables 3.12 and 3.14). In addition, the extent to which production is geared to the market appears to significantly alter profitability (see Table 3.13). Thus, access to markets is also an essential factor determining the profitability of different forest-based activities.

Table 3.14: Net return per hour of family labour and economic profit in small enterprises 1/ (US $/Hour)

INDUSTRY

Jamaica

Honduras

Egypt

Sierra Leone

Bangladesh

Return

Econ.

Return

Econ.

Return

Econ.

Return

Econ.

 
 

Return

Econ.

Wood

3.68

+

0.60

+

0.39

+

0.63

+

0.16

+

Furniture

4.55

+

0.60

+

0.96

+

0.63

+

0.16

+

Crafts

0.21

-

NA

NA

0.04

-

NA

NA

NA

NA

Food

0.50

-

0.64

+

0.48

+

0.81

+

0.15

+

Bakeries

2.34

+

0.64

+

NA 2/

NA

0.81

+

0.45

+

Other

-0.42

-

NA

NA

0.48

+

NA

NA

0.11

-

Textiles

1.14

+

0.21

-

0.22

+

0.52

+

0.10

-

Tailoring

0.92

+

0.78

+

0.55

+

0.50

+

0.21

+

Mats

NA

NA

NA

NA

0.11

-

NA

NA

NA

NA

Non Metallic

Minerals

5.98

+

1.58

+

9.87

+

NA

NA

NA

NA

Repairs

5.40

+

2.54

+

NA

NA

+1.45

+

NA

NA

All SSI

$2.71

+

$0.51

+

$0.38

+

$0.57

+

$0.16

+

Shadow

                   

Wage 3/

$0.84

 

$0.36

 

$0.18

 

$0.17

 

$0.12

 

1/ The net return per house of family labour was computed by subtracting from value added the hired labour costs, as well as the annual capital services valued at the shadow interest rate (i.e. capital recovery factor). The shadow interest rates used were Jamaica 20%, Honduras 20%, Egypt 10%, Sierra Leone 20%, and Bangladesh 20%. The numerator was then divided into totall hours of all family workers. The resulting return per hour figure can then be compared with the shadow price of labour, reflecting its scarcity value. If the return figure exceeds the shadow

price of labour, then the activity could be considered to be economically viable. Economic profit can be obtained by subtracting from net family return the imputed value of the family labour inputs, valued at their "shadow" price. A marginal activity would generate zero economic profits.

2/ NA = not applicable (no firms in cell).

3/ "shadow" wage reflects the prevailing hourly wage rate for small-scale industry workers.

Source: MSU Survey Data (Liedholm and Mead, 1986)

Table 3.15: Per capita weekly income by source: average of 75 households in 3 Maranháo Municipios, October-December 1983

Source

Cash

Cr$1

%

Non-cash

Cr$

%

Total

Cr$"

%

Babassu

Non-Babassu

597

906

39.7

60.3

217

617

26.0

74.0

814

1,523

34.8

65.2

Total

1,503

64.3

834

35.7

2,337

100.0

1: Exchange rate averaged Cr$ 1000 per US$ during this period.

Source:May, P.H. et al., 1985a. Agroforestry Systems 3.

The implications for household food security are unclear. As women are predominantly involved in craft activities, these findings suggest that household nutrition may suffer because women's income is most directly correlated with household nutritional well being. On the other hand, the benefits derived from products produced to meet domestic needs (often the function of craft products) may allow household cash income to be spent on other products such as food. While there is certainly not enough information to assess the impacts on food security, it is clear that some forest-based activities are likely to provide more secure and renumerative sources of income than others.


Previous PageTop Of PageNext Page