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Supporting forest sector micro, small and medium enterprises at scale

The experience of the FAO-EU FLEGT Programme











Pohnan, E. & Cavanagh, T. 2021. Supporting forest sector micro, small and medium enterprises at scale – The experience of the FAO-EU FLEGT Programme. Rome, FAO.



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    Policy brief
    Stronger together: How trade associations in tropical timber-producing countries multiply benefits for forest sector MSMEs
    The experience of the FAO-EU FLEGT Programme
    2021
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    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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    Book (series)
    Enabling micro, small and medium-sized enterprises to participate in legal timber production and trade
    Transformational changes generated by the FAO-EU FLEGT Programme
    2022
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    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, a growing number of countries are adopting demand-side control measures that require proof of legality of forest products. Forest sector MSMEs will require significant support – and changes to the types of support they receive – to fulfil and even take advantage of these new and emerging market requirements and related opportunities. This paper draws from 110 initiatives in 20 countries supported by the FAO-EU Forest Law Enforcement, Governance and Trade (FLEGT) Programme between 2016 and 2022 and seeks to provide examples of how to support forest sector MSMEs cost-effectively and at scale to integrate them into domestic and international legal timber value chains. The initiatives discussed in this paper offer a wealth of experience and knowledge, which can be capitalized upon to boost forest-dependent livelihoods and promote both social equity and sustainability within timber supply chains. Implementing a portfolio of these strategies in a comprehensive support package generate “transformational changes” that help realize the potential of MSMEs to move past traditional business-as-usual modes of operation towards sustainable growth and more inclusive, resilient economies.
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    Brochure, flyer, fact-sheet
    Ghana: Targeted trainings allow small and medium forest enterprises (SMFEs) to comply with national legality requirements
    FAO-EU FLEGT Programme: Success story
    2021
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    Ghana signed a Voluntary Partnership Agreement (VPA) with the European Union in 2009, as part of the EU’s Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan to address illegal logging. In this context, the FAO-EU FLEGT Programme partnered with Kumasi Wood Cluster (KWC) through two consecutive projects to assist Small and Medium Forest Enterprises (SMFEs) in complying with forest legality standards. SMFEs were able to identify gaps in operations and received trainings to undertake corrective actions to close these gaps. These trainings equipped operators with new skillsets, leading to increased compliance with the Ghana Timber Legality Assurance System established under the framework of the VPA.

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