Agriculture, CSR and Sustainability, Deforestation, Government, Policy and Reform, Smallholders, Supply Chain

Preventing deforestation: How to incentivise smallholders and rural communities to protect forests

Innovation Forum held an online workshop on this difficult yet vitally important topic, over three hours, on September 9th 2020.

Some bullet point notes, unattributed, are below. We must thank the following individuals for their remarks on the topic and general contributions.

Speakers included:

  • Rod Taylor, global director, forests program, WRI
  • Mansuetus Darto, secretary-general, Oil Palm Smallholders Union, Indonesia
  • David Meyers, executive director, Conservation Finance Alliance
  • Gerome Tokpa, country head, Earthworm Foundation, Côte d’Ivoire
  • David Croft, global director sustainability, environment and human rights, RB
  • Gotz Martin, head of sustainability implementation, Golden Agri Resources
  • Verina Ingram, assistant professor, Wageningen UR, Forest and Nature Conservation Policy Group
  • Marianne Smallwood, landscapes lead, WWF
  • Fitrian Ardiansyah, executive chairman, IDH Indonesia
  • Stephen Donofrio, program director, supply change and ecosystem marketplace initiatives, Forest Trends Association
  • Dr Peter Stanbury, research group lead, Innovation Forum

They were joined by more than fifty other executives and experts from brands and sourcing companies, traders, suppliers, NGOs and others.

We ran the online Zoom workshop in three sessions, here’s some summary bullets below, which captures some, but not all of the conversation.

Acacia honeybees, an income option for smallholders in Riau, Sumatra, Indonesia. Picture by the author, September 2019

Session 1: Paying farmers to save forests. What works?

 

  • Habitat destruction is a social issue not environmental. Forests feed farmer families, shelters and clothes them – it’s a resource they have to use. The question is how.
  • We need to think more in terms of behavioural economics. How do we get from “do no harm” to “positive farming”?
  • Farmer-friendly farming is the future. Those farmers who are outside of value chains – help them to not simply clear land before they are part of a value chain.
  • Laws and enforcement need to be better aligned with the interests of farms and farmers.
  • Sometimes small incentives can have a big impact.
  • Access to capital has to be tied to a management plan.
  • Cost savings are always pushed along the supply chain and ultimately are inflicted on farmers, who are price-takers, not price fixers.
  • Governments are too often hesitant to do anything that potentially threatens corporate activity.
  • Link local to global. For farmers – demonstrate that lack of rains, for example, could be linked to lack of trees, and how that in turn impacts broader climate change. Make clear the consequences of forest loss.
  • Accept that managing multiple actors in a multi-stakeholder process is undeniably challenging, and old-fashioned engagement – workshops, discussion – is often the only way to go.
  • Leverage of supply chain incomes. Production landscapes do have income streams – are there smart ways to leverage this to help fund improvements?
  • Sustainability standards and expectations MUST “meet farmers where they are” as a guiding principle, considering skills, crop varietals, pest management, and offtake agreements as examples.
  • Larger players must support more research into how examples of smallholding farming success around conservation, restoration and protection can be used elsewhere, particularly across commodities, given farmers often grow different crops on the same land.
  • Costa Rica was cited as an example of success, with payments for replanting of trees, and protection, based on a gas tax. Other examples were cited, including water funds based around using payments from taxes on hydro-electric projects to fund upstream water conservation. Mexico also has examples of community monitoring of progress on conservation and protection and/or restoration.
  • The Earthworm Foundation examples of approaches taken in Côte d’Ivoire are worth studying in further detail as a model where lessons can be learned. Their project focuses on agroforestry payments, restoration, land conservation and assisted natural regeneration. Carbon pricing is a key factor, as are HCV and HCS approaches. For more information from Earthworm Foundation see ‘further information’ bellow.

Livestock breeding can be another alternative income for smallholders, provided it doesn’t involve cutting forest of course. Picture by the author, Riau, Sumatra, Indonesia, September 2019

Session 2: What are the challenges and obstacles to incentivising smallholders and communities on deforestation?  

 

  • When working at the farm level, we must accept that a process of trial and error is inevitable. Village-level dialogue is an essential starting point.
  • Assessments and other interventions cost money. Often costs can be up-front. So, smart non-traditional funding models are necessary.
  • Legal status of farms remains a big challenge – there is no incentive for improvements if who owns the land isn’t clear.
  • It’s hard to make smallholder farming risk-free, particularly for very seasonal crops such as palm oil. So, diversification of income very important. Risk taking is sometimes required.
  • There’s not yet agreement on what constitutes a reasonable livelihood for farmers. Brands need to understand better what goes into the pockets of the farmer families.
  • Establishing payments for ecosystem services is a complicated and time-consuming process. Therefore, it is inevitably down the list of priorities for farmers who need income now.
  • Buyers need to stop thinking of commodities as commodities. Think more about where they come from and how.
  • There is a pressing need to focus more effort in zones with large amounts of standing forest – frontier forests. These smallholders need access to markets and support for their farms. Too much effort is focused in already deforested regions where farmers are already part of established supply chains.

Session 3: How to overcome the barriers. The role of different actors

  • Scalability necessitates buyers having to deal with farmers collectively.
  • Expectation management is essential – complex problems don’t have quick and easy solutions.
  • As farmers are “price takers” – they have to accept what the market pays, whether or not this covers their bills.
  • Government is a key partner – they are the only vehicle through which some of the pilot programmes can come to scale. Yet, the engagement of government with these issues can be patchy.
  • Cooperatives are extremely important as a vehicle to reach farmers. These institutions give farmers a critical mass in terms of engaging with other stakeholders.
  • The issue of trust needs to be addressed. There is a need for different actors to be candid about what they want/need, as this helps others trust them.
  • Internationals need to be realistic about how farmers will operate. Farmers need to survive, and their incentive to use, for example, forests, to feed, clothe and house their family needs to be appreciated.

Past illegal deforestation by either criminal gangs or local actors. This tree was so large they couldn’t remove it once cut. Picture by the author, Riau, Sumatra, Indonesia, September 2019

Further information

With thanks to Earthworm Foundation for sharing these details, here, firstly, are two studies that do suggest availability of cash payments to individual farmers and households can be effective in reducing deforestation.

Secondly, on tools related to sustainability to meet farmers where they are:

  • The Forest Integrity Assessment Tool – a simplified version of a HCV assessment designed so that farmers can both do the assessment and monitor the key values afterwards.
  • The Accountability Framework initiative guidance on how companies can facilitate smallholder inclusion in ethical supply chains through contextualised implementation of supply chain commitments.

Some other reflections on discussions with Latin American cohort of the 2020 Policy accelerator on incentives for restoration are below. These include key elements to consider when designing public incentives for landscape restoration based on the experiences in Guatemala, Chile, El Salvador, Mexico, and Peru:

  • Identify the target groups: Who are the potential users, small landowners only?  Is there a target land-use the incentive wants to address, eg, focusing on sugar cane producers to restore lands, or are we looking for a more holistic approach targeting many lands uses?
  • Additionality: Are we paying for restoration activities that would have been implemented anyway?
  • Available resources: Would the programme be funded with taxes or national debt or bonds? How do we ensure the long-term sustainability of a programme?
  • Prioritisation:  will limited resources will prioritised in the landscape?
  • Permanence:  How do we guarantee the permanence of the restoration activity once the incentive expires?  How does the incentive promote value chain from products from the areas under restoration?
  • Perverseness:  What can go wrong? What is the potential of the incentive to cause the opposite impact? How is the government in general subsidising alternative (not restoration) land uses?

Our thanks to all who took part and contributed to the collection of resources above on this important topic.

This online workshop was held in advance of Innovation Forum’s Sustainable Landscapes and Commodities conference, which takes place using our virtual platform, on November 3,4,5 2020.

The next workshop, also in advance of the conference, takes place on October 8th, also online. You must be registered for the conference to take part. Details are here on how to register and here is the conference homepage and here is the agenda.

Our next workshop is on the subject of “Next generation smallholders: What’s required to empower youth and the farmers of the future”. Details are here.

You can also sign up for a related webinar discussion on the same day:

How do you make a company forest positive? A discussion with Anderson Tanoto

‘Forest positive’ sounds like public relations nonsense. It’s not. It’s a serious transformation process, well underway at one of Asia’s biggest forestry companies, with a global footprint.

Join us for a one-hour discussion with Asia Pacific Resources International Holdings Limited’s (APRIL) Director, Anderson Tanoto, about how that’s happening, today, and what leadership looks like to 2030 and beyond. Tanoto is leading the transformation of one of the world’s largest pulp and paper and dissolving pulp manufacturers, Asia Pacific Resources International Holdings Limited (APRIL) for its future growth as a sustainable business.

Several years ago, APRIL began implementing its Sustainable Forest Management Policy that balances commercial plantations alongside forest conservation and restoration. The company is set to announce one of the most ambitious sustainability strategies in this challenging – and often challenged – environment in early October.

Rainforest Alliance’s Nigel Sizer will introduce a challenging conversation between Anderson and Innovation Forum’s founder Toby Webb in a webinar at 1200 hours BST/1800 hours WIB/0700 hours EDT on 8 October to explore APRIL’s transformation and what a climate positive forestry company in Indonesia will look like by 2030.

Stakeholders around the world are invited to join, listen, put questions to Anderson Tanoto, and be part of what promises to be a fascinating discussion about leadership, targets and progress towards making ‘Forest Positive’ a reality.

If you can’t join live, register here and we’ll share the recording with you via email.

 

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