When local communities in Ethiopia benefit financially from having access to state forests for harvesting timber and other products, they are more likely to invest in their children’s education and start up small businesses.
This is the finding of Dr Dambala Kutela, research fellow with the University of Cape Town’s Environmental Policy Research Unit (EPRU), whose work focuses on the benefits of community-focused forest management amongst people living in the south-western region of his home country.
‘The recommendation for policy makers, is that they need to enable market access for these communities,’ he says. ‘When these communities have reliable, predictable income, they can then invest in their families and off-farm businesses.’
In 2004, the Ethiopian government began giving forest communities resource rights to harvest from state forests. With access to the correct markets, this means people have been able to earn an income from selling forest products such as timber, wild coffee, and honey.
Through meeting with communities and studying how they’ve used this new income stream, Kutela has found that the reliability of cash from trading forest products has changed how communities invest.
‘Traditionally, communities would invest in livestock as a way of saving for a rainy day. They’re not doing this anymore,’ he observes.
However, Kutela says that with the reliability of this new income, communities are investing elsewhere.
‘They are putting their money into educating their children,’ Kutela explains. ‘The investment is still quite small, about 6 or 7 percent higher than it was before they started selling forest products.’
‘And now that they have cash capital, they’re putting their money into developing off-farm self-employment, and developing small businesses, such as setting up tuck shops. They’re trading in livestock. And they’re becoming middlemen in the coffee trade through buying beans directly from harvesters and selling to traders.’
Kutela’s interviews with community members shows that farming is a risky venture for them. However, being able to sell forest products lowers their risk because they can earn an income throughout the year, rather than just seasonally when crops ripen, for instance.
‘The take-home message for policy makers is that if they can help link up farmers to the market, this will drive development in the form of human capacity and boost non-farming income sources.’
Kutela presented his findings at the annual European Association of Environmental and Resource Economists held at the University of Helsinki in August this year.