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ArticleIncreasing legality compliance amongst forest sector MSMEs: creating an enabling environment for responsible forest product trade and socio-economic recovery
XV World Forestry Congress, 2-6 May 2022
2022Also available in:
No results found.Micro, small and medium-sized enterprises (MSMEs) play a critical role in meeting the growing demand for forest products worldwide, with potential to contribute to responsible supply chains that combat illegal logging while promoting economic growth. However, MSMEs have been challenged by the emergence of regulated markets requiring verified legal timber, which involve more stringent regulatory compliance and additional up-front costs. Recognizing the need to ensure MSMEs can benefit from – and are not penalized by – the responsible forest trade, the FAO-EU FLEGT Programme supported 100+ projects in 20 countries between 2016 and 2021 that sought to improve MSME capacity to supply legal timber. These projects employed several strategies: • Increasing MSME legal compliance through capacity building, mentoring and technical assistance; • Formalizing MSMEs to achieve legal status and access to benefits such as credit, training programs, and labour protections. • Strengthening associations that represent MSMEs and provide technical and financial assistance; • Reducing the regulatory burden through the simplification of existing legal frameworks; and • Integrating MSMEs into responsible value chains by linking with buyers or manufacturers. The Programme analyzed the impacts of these projects to determine best practices for supporting MSMEs atscale. It was found that the formation of associations was the most impactful intervention for helping MSMEs to formalize and produce legal timber. Capacity-building efforts also must integrate business skill development with training on legality compliance. The paper discusses options for further deployment of these strategies at scale, emphasizing the importance of building an “ecosystem of support” by forming a variety of mutually supporting partnerships. This will be central to assisting MSMEs negatively impacted by COVID-19 imposed lockdowns and economic slowdown. Keywords: Illegal logging, timber trade, small and medium-sized enterprises, forest governance, responsible markets ID:3486686 -
Policy briefSupporting forest sector micro, small and medium enterprises at scale
The experience of the FAO-EU FLEGT Programme
2021Also available in:
No results found.Between 2016-2021, the FAO-EU FLEGT Programme funded 96 MSME support projects in 20 countries globally. These projects reached 3,300 MSMEs in total, but the 41 projects with a specific capacity building focus were able to train an average of 71 MSMEs per project. Although these projects were instrumental in helping beneficiaries to operate legally and access new markets, the number of MSMEs reached remains small compared to the sheer number that require support in tropical timber-producing countries. The current scale of engagement is not entirely limited by investment and resources, but also by several challenges that make it inherently difficult to effectively engage MSMEs. As part of a Programme-wide global experience capitalisation process, staff members conducted interviews with local partners and, where possible, end beneficiaries of the projects. Local partners were asked to reflect on strategies that could have allowed them to reach more MSMEs in their projects, and on the broader enabling conditions that would need to be put in place to enable MSMEs to participate in legal timber production at a larger scale. Through these interviews, and the collective experience of these MSME support projects, the Programme has identified strategies for overcoming these challenges and that could be adopted by future interventions to reach tens of thousands – rather than hundreds – of MSMEs. These strategies are discussed in the paper. -
Policy briefStronger together: How trade associations in tropical timber-producing countries multiply benefits for forest sector MSMEs
The experience of the FAO-EU FLEGT Programme
2021Also available in:
No results found.A wide body of experience within and beyond the forestry sector recognizes the power of associations in bringing together small-scale actors, especially micro, small and medium-scale enterprises (MSMEs). Associations offer increased economies of scale in purchasing, producing, and providing greater bargaining power. For this reason, support to forest sector associations has been at the heart of the FAO-EU FLEGT Programme’s engagement with the private sector, recognizing that achieving legality in the forest sector of tropical timber-producing countries is not possible without effective and meaningful collaboration with the private sector. Associations of companies provide critical entry points to gaining access to larger groups of enterprises. The arguments put forward in this paper draw upon the experience accrued in supporting associations of timber producers through the FAO-EU FLEGT Programme. As part of a Programme-experience capitalisation process, staff members conducted interviews with both service providers and, where possible, end beneficiaries of the projects. The Programme analyzed the impacts of these projects to determine best practices for supporting associations and the benefits they bring to MSMEs.
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