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Small-scale forest-based processing enterprises comprise an important, but neglected, part of the forestry and forest industries sector. They process a large part of the raw materials from the forest and supply some of the main markets for forest products, in particular in the rural areas of developing countries. Our concern in the work reported on in this publication has been to determine the main features, prospects and problems of such small-scale enterprises and what support could enhance their developmental contribution, and therefore the developmental impact of the forest sector. Many small enterprises are currently unstable, and offer little security or prospect of self-reliance for those engaged in them. These problems need to be tackled by promoting viable enterprises run by rural people through effective participatory organizations which can increase peoples' control over their own economic destiny. External support to increase production and efficiency needs to be compatible with those valuable elements of local culture which still have a role to play in the modern context.

Because of their close association with other rural economic activities, small-scale forest-based enterprises can only realise their potential if their development is integrated with that of agriculture, larger forest industries, forest resources development and rural manufacturing as a whole. Common weaknesses, such as their tendency to exploit and underpay workers and their inability to yield adequate profits for those who invest in them, need to be corrected. Both problems are currently aggravated by flaws in the way enterprises are organized and by excessive dependency on middlemen for access to markets. The present publication is intended to contribute to the process of increasing awareness of the small-scale forest-based enterprise sector, and about what needs to be done to help it attain sustained viable development. It brings together quantitative information on their nature and magnitude, and applies to these forest-based activities a wide range of relevant experience in related fields.

The justification for promoting small-scale enterprises lies in enhancing their contribution to development. There is need to promote viable enterprises which will contribute to improving the economic well-being of those engaged in them. The small enterprises' contribution is currently constrained by small and insecure markets, raw material shortages, limited access to institutional finance, poor availability of suitable technology and skills for it, weak management, poor organisation of producers, and unsupportive policies. To release the potential of such enterprises thus requires multifaceted interventions which address all these issues. Within the forestry sector the major emphasis should be on policy and programme adjustments to ensure sustained availability of raw materials; better sales and allocation procedures to accommodate small enterprise needs; inclusion of non-wood forest products in forest management where they support small industries; amendment of legislation to make it more supportive of small-scale activities with commercial potential; and assistance to rural communities for participation in forest resource management to support processing enterprises.

M.A. Flores Rodas
Assistant Director General and
Head of the Forestry Department

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