A training organised by the Forest Smallholders Project of the European Forest Facility (EFI) in a small village of the Lampang Province north of Thailand has provided women with the skills they need to engage in family timber businesses and play more diverse roles, thereby contributing to more sustainable livelihoods.
This event will bring to life experiences and lessons learned from tackling the challenges smallholders face to operate legally and sustainably in the forest sector in the Mekong region. The event will explore ways to strengthen the technical and operational skills of smallholders and create an enabling environment for them to contribute to forest governance, rural livelihoods and gender equality.
Worldwide, at least 41 million people work in the informal forest sector – more than three times the 12.5 million employed in formal forest sector related businesses.
In the informal forest sector, micro, small and medium-sized enterprises (MSMEs) are often characterised as “illegal”. This is the case when their modes of production, sources of raw material or legal status do not conform to their country’s regulatory requirements.
In a new joint report, Promoting legality within the private forest sector: obstacles and incentives to formalization, the FAO-EU FLEGT Programme and the European Forest Institute (EFI) make a case for acknowledging the complex circumstances of forest-sector MSMEs, particularly in countries where requirements for legality compliance and achieving formal status are unclear.
If MSMEs do opt to formalise their business, the authors argue, there should be incentives and support to ensure that they benefit from formal status. This includes business development and credit, access to markets, and increased ability to participate in legal and sustainable supply chains.
Formalisation will not always be desirable or practical for all forest sector MSMEs, the authors acknowledge. Where the rule of law and / or law enforcement is weak, policy and legal contexts are unlikely to be conducive to these enterprises entering the formal forest sector.
The report builds on the experiences of the EFI and the FAO-EU FLEGT Programme, whose programmatic work has focused on helping MSMEs to produce and process legal timber for integration into legal and sustainable value chains.
In the informal forest sector, micro, small and medium-sized enterprises (MSMEs) are often characterised as “illegal”. In this brief, the FAO-EU FLEGT Programme and EFI make a case for acknowledging the complex circumstances of forest-sector MSMEs and argue that if MSMEs do opt to formalise their business, there should be incentives and support to ensure that they benefit from formal status.
Micro, small and medium enterprises (MSMEs) are a vehicle for development and generate almost half of jobs in the formal forest sector globally. They are key to local economies, generating significant livelihood and employment opportunities. Yet the recent economic crisis triggered by the COVID-19 pandemic has shown the vulnerability of MSMEs to sudden market developments.
A new brief describes the approach adopted by the European Forest Institute (EFI) over the last five years to support forest- and timber-based MSMEs in the Mekong region to operate legally and sustainably. The publication highlights the challenges and solutions tested, and lessons learnt from EFI’s interventions.
If MSMEs are encouraged to adopt legal and sustainable sourcing and processing practices, they can be part of the solution to reducing deforestation and forest degradation.
Growing their capacities, business performance and access to legal timber will allow these enterprises to participate in supply chains destined for regulated markets. This would in turn make them more resilient as businesses, with the potential to alleviate rural poverty and reduce impacts from crises such as COVID-19.
To this end, EFI has explored approaches that help forest- and timber-based MSMEs in the Mekong region to operate legally and sustainably. In six pilot projects in four countries – Laos, Myanmar, Thailand and Vietnam – EFI tested solutions to some of the key challenges that MSMEs face: low productivity and operational capacity, lack of formal registration and operating licences, and poor representation in policy processes.
This work, supported by the Swedish International Development Cooperation Agency, shows that specialised trainings can improve MSME’s operational capacity and regulatory compliance. The potential for FLEGT Voluntary Partnership Agreement (VPA) processes to trigger and accommodate legal reforms in support of MSMEs is also highlighted.
EFI’s pilots demonstrate the importance of regulatory revisions for resolving key challenges to MSMEs, and the need for interventions targeting these enterprises to integrate business continuity planning. Crucially, supporting MSMEs to access finance is critical to support them to rebuild after COVID-19, and to operate legally and sustainably.
MSMEs are a vehicle for development and generate almost half of jobs in the formal forest sector globally. They are key to local economies, generating significant livelihood and employment opportunities. Yet the recent economic crisis triggered by the COVID-19 pandemic has shown the vulnerability of MSMEs to sudden market developments. This brief describes the approach adopted by the European Forest Institute (EFI) over the last five years to support forest- and timber-based MSMEs in the Mekong region to operate legally and sustainably. The publication highlights the challenges and solutions tested, and lessons learnt from EFI’s interventions.
The EU FLEGT Facility has published a story describing how farmers in Thailand are starting to reap the benefits from international timber trade talks between Thailand and the European Union.
Until recently, forest laws put limitations on farmers around the harvesting and transportation of certain tree species. Organisations such as the Private Forest Plantation Cooperative Limited – a cooperative of tree growing farmers and private land owners – used the trade talks to push for amendments to forest laws to improve the situation for farmers.
In 2019, the Thai Government changed regulations regarding the use of trees on private land. Farmers can now legally harvest all trees on their land and get additional income from them without burdensome paperwork and/or field inspections.
Since 2016, the European Forest Institute (EFI) has been supporting wood-based micro, small and medium enterprises (MSMEs) in four Mekong countries to operate legally and sustainably. Under its Forest Smallholders Project, EFI has been testing solutions to MSMEs’ key challenges in pilot projects. Lessons learnt from these pilots are documented and disseminated nationally, regionally and internationally. Through its support to MSMEs, the Project promotes gender equality and women’s economic empowerment in the forest sector.
This website has been produced with support from the Swedish International Development Cooperation Agency. The contents of this website are the sole responsibility of the authors and can under no circumstances be regarded as reflecting the position of funding organisations.
Somporn Khongthanakrittakorn
Somporn Khongthanakrittakorn, European Forest Institute