The forest economy must be nurtured

Ashwini Chhatre | Updated on: Aug 19, 2022
Forests represent a significant source of opportunities for the creation of jobs, wealth, and prosperity

Forests represent a significant source of opportunities for the creation of jobs, wealth, and prosperity | Photo Credit: BISWARANJAN ROUT

Promoting partnerships between local communities, industry and government will ensure multiple benefits

The extent to which forests are present in our urban middle-class homes is underestimated. It’s not just the timber used in our furniture, but also the ‘wild’ and ‘natural’ ingredients in our hand-lotions and soaps are sourced from our forests.

Consumers do not realise that the  amla used in hair oil or the  beheda included in traditional ayurvedic preparations like Triphala originated in a forest somewhere in central India. Or that sal butter is used as a substitute for cocoa butter in chocolate. Yes, the butter is derived from the seeds of Shorea Robusta, the most common tree species in many parts of eastern India. There is a large forest economy, which is the sum of all products that use raw materials sourced from a forest somewhere in India.

Forests play a crucial role in supporting rural livelihood. An estimated 200 million forest-dependent people collect several valuable products from India’s jungles. These are used as raw materials in diverse industries, such as processed foods and confectionery, pharmaceuticals, alternative medicine, cosmetics and perfumery, and paper and pulp.

Despite this, forests are generally seen as a space of poverty and deprivation. This indeed is true, as there is a strong congruence in the location of poverty and forests. The collection and trade of forest products is enmeshed in the informal sector, making it invisible. And the people who collect these forest products are also erased from the picture at the same time.

Unaware of the potential

At the other end, the industry is equally unaware of the potential of forests in creating jobs and wealth in the rural economy. They do not have information on the value, volume and distribution of seasonal forest products in the country because the first mile of the supply chain is invisible. Currently, forests do not create wealth at the source or benefit the people who ensure the supply of raw materials to industry. Wealth is created elsewhere, far away from the forests, leading to a congruence of forests and poverty.

Forests represent a significant source of opportunities for the creation of jobs, wealth, and prosperity. A three-pronged approach will convert forests into a space of opportunity. First, increase visibility by formalising the first-mile production system using digital technology. The Jan Dhan-Aadhaar-Mobile trinity provides a ready-made working solution.

Second, achieve economies of scale through community-based enterprises for aggregation and market linkage. The experience of FPOs (farmer producer organisations) in agriculture can be easily replicated to include forest products. Third, increase productivity by setting up processing for value-addition at the local level.

Aggregation, processing and market linkages for forest products will increase household incomes for some of the poorest and marginal communities in India. As a result, the volume of the collection will increase, with an obvious threat to the health of forests. To ensure sustainability, incentives of individuals must be aligned with the community to prevent the tragedy of the commons.

The recognition of community forest resource rights under the Forest Rights Act, 2006 is an easy solution to ensure the long-term sustainability of forests.

Investing in the forest economy presents several win-win opportunities.

The only reason why forests are protected and will be protected in the future is if the local communities living in and near the forest profit from it in tangible ways.

They have intimate knowledge of the forest, its products, as well the threats to its sustainability. If we create and capture value at the local level by empowering communities, we can ensure that our forests not only produce local benefits but enhance other services we expect from them.

The lynchpin of such an effort is a partnership between local communities as the custodians of forest resources, industry leaders using the products of these forests as raw material, and government agencies facilitating and regulating the creation of jobs and wealth. This proposal represents a triple-win opportunity by reducing environmental threats, creating jobs at the bottom of the pyramid, and establishing sustainable forest management systems.

It will bring greater transparency and traceability to forest-based supply chains, ensure quality and sustainability, and bring millions of forest-dependent households into the formal economy while also creating opportunities for businesses to demonstrate their commitment to responsible and sustainable practices.

We already have examples of such collaborative efforts bearing fruit. In Gujarat, for instance, communities in the Narmada district are managing forests while also supplying bamboo to the paper and pulp industry.

It is now time to nurture the forest economy across India.

The writer is a Professor at Indian School of Business

Published on August 19, 2022
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