Forest-dwelling communities in south-western Ethiopia, who have been organised into community cooperatives and allowed to harvest wild coffee, honey and other forest products, have benefited from the regular income which this new marketing model brings them. But the security that comes with this predictable income means they aren’t saving for a rainy day.
This is worrying in light of non-existent financial markets to ‘hedge consumption against income shortfalls’, explains the researcher.
‘Previously, when such communities were harvesting from state-run forests, they were selling their products directly to traders in their community. But they were often exploited by the traders,’ explains Dr Dambala Kutela from the University of Cape Town’s School of Economics in South Africa.
Without knowledge of the markets and the true price of their produce, these communities became price-takers in their dealings with local traders.
‘But since 2004, when the government agreed to allow these communities to have resource rights in the state’s forests, they formed themselves into cooperatives which access national and global markets directly,’ says the Ethiopian-born Kutela, who earned his doctorate on the back of this research.
Now, individuals sell their produce directly to the community cooperatives, which they each have shares in. They receive a more fair price for their product, and also benefit when the cooperatives distribute dividends.
‘But before this cooperative model came in, communities were vulnerable to fluctuations in their income. So the money they did earn, they would invest through buying livestock. Now that the cooperative ensures a regular income stream, people are spending their earnings rather than investing.’
Kutela says that this leaves them potentially at risk. If market interest in the product wanes, for instance, they could lose their income.
The researcher also looked at how these benefits were distributed throughout the community. He found that while everyone benefited to some extent, the elite and powerful in a community tended to benefit the most.
‘We call this ‘elite capture’, in this context,’ explains Kutela.
If government and civil society wish to roll this model out in other regions, as a way of encouraging natural resource management and development in communities, they need to ensure that the right legal and management structures are in place to allow equitable distribution of the gains throughout the community.
‘Following the end of the reign of Haile Selassie as emperor in the 1970s, Ethiopia was ruled by a socialist state which nationalised all forests, banks and private property. But in the early 2000s, with pressure from civil society, the state agreed to allow community rights access to some of these forests in the south of the country, to see if it would discourage illegal timber harvesting and the spread of farming into the forests,’ he says.
Lessons learned from these study sites can inform the roll-out of similar initiatives in other state forests around the country.
Kutela, who has been based in the School of Economics’ Environmental Policy Research Unit for the past 18 months, will travel to France next month where he will present these findings at the 3rd International Conference on Environment and Natural Resources Management in Developing and Transition Economies, taking place at the University of Auvergne, from 8 to 10 October 2014.
Read more about the conference here: http://www.eaere.org/sites/default/files/event-file/CERDI_conf.pdf.
by Leonie Joubert