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Reducing export restrictions on timber to sustain commercial forestry investments in Uganda

FAO Agricultural Development Economics Policy Brief 25














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    Brochure, flyer, fact-sheet
    Brochure
    Unlocking future investments in Uganda’s commercial forest sector
    Understanding the impacts of timber trade restrictions on the profitability of pine plantation and sawmill investments
    2020
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    Key messages: - Supplies of pine produced by commercial plantations will increase rapidly over the next 5 years. Pine plantations planted in the early 2000’s will soon mature, leading to an increase from roughly 200 000 m3 of pine production currently, to 800 000 m3 in 2023, and stabilizing at 1.2 million m3 after that. - Exporting timber from Uganda is impeded by restrictive policies. Numerous approval requirements and a lack of approved grading standards substantially hinder access to export licenses for timber. These restrictions are suppressing domestic prices relative to neighboring countries. - Trade restrictions hinder the profitability of commercial pine production. Based on average production costs and current domestic prices the Net Present Value of investment in commercial pine production ranges between negative USD 368 and negative USD 657 per hectare. - Removing export restrictions is critical to attract and sustain future investments in pine plantations and sawmilling. Access to higher prices offered in regional export markets contributes to a positive Net Present Value of pine plantation investments, in most scenarios, and a positive Net Present Value for investment in sawmilling.
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    Brochure, flyer, fact-sheet
    Brochure
    Assessment of the Ugandan commercial timber plantation resource and markets for its products
    Summary
    2021
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    Forests are critical resources in Uganda, providing numerous benefits, including the most common forms of energy; charcoal and firewood (nine in every ten households in Uganda use fuelwood for cooking). Forests Uganda’s forest estate comprises both natural forests and commercial timber plantations, with demand for forest products from the latter, estimated at 300 000 cubic metres per year (m3/ year). The current demand for wood products (locally and in the region) greatly exceeds the current supply; although supply is expected to grow tremendously in the next five to ten years. Increase in supply of forest products from commercial forest plantations in Uganda is attributed in part to the technical guidance and the financial assistance of the Sawlog Production Grant Scheme (SPGS), which has supported establishment of commercial forest plantations over the last 15 years. FAO is implementing Phase III of SPGS, among whose objective is to address a critical gap in the forestry value chain- the development of knowledge and expertise relating to the processing of logs produced by the timber plantations. Phase III also focuses on development of markets (domestic, regional and global) for wood products as well as resource supply and market demand. Previous phases of SPGS focused mainly on establishment of quality plantations. There is no formal record of the extent of the commercial forestry estate in Uganda and an analysis of existing and potential markets has been difficult. FAO therefore conducted a study to: 1) Estimate the extent of the timber plantation resource; 2) Characterize the timber that the commercial plantations will yield in the next 10 years; and 3) Assess the markets and demand for forest products from timber plantations.
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    Article
    Journal article
    Enhancing public-private sector collaboration: A case of the Uganda Timber Growers Association affiliated tree growers and public actors building a sustainable commercial forestry industry
    XV World Forestry Congress, 2-6 May 2022
    2022
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    Uganda’s forests are a treasured natural asset contributing 8.7% to the national economy (NEMA 2011). However, Uganda has been losing its forest cover alarmingly, from 24% in 1990 to 9% in 2015. In Uganda, Forestry is coordinated by the Ministry of Water and Environment through the Forest Sector Support Department. Government through the National Forestry Authority has provided land in degraded Central Forest Reserves (CFRs) to private investors under license. Nearly 70% of planted forests are in CFRs. Additionally; Government initiatives like the Sawlog Production Grant Scheme project is providing financial and technical support based on a set of national Forestry standards. Finally, Government has created a conducive environment for the commercial forest sector to grow at an unprecedented rate of 7000 ha per year. Since 2004, the private sector in Uganda has been exemplary, on building a private sector-led commercial forestry industry. Most of the investors (99.8%) are small to medium scale (1000 ha and below). The private sector is coordinated by the Uganda Timber Growers Association (UTGA), the umbrella body of tree growers that does advocacy, networking, information sharing, collective procurement, marketing and extension. The private sector is growing over 85% (over 80,000 ha) of Uganda’s forest resource. UTGA has promoted the certification of plantations and chain of custody with area up to 42,000 ha, the largest in East Africa and two organizations certified in chain of custody. Plans are underway for the establishment of an apex body for carpenters, timber traders and wood processors. The strong collaboration between Government and private sector actors has yielded remarkable results for Uganda’s forestry. The public private partnerships have provided solutions to challenges of illegality, poor governance, forest degradation and deforestation by providing a platform for individuals, companies and communities to grow trees while protecting gazetted forest land. Keywords: Planted Forests, private sector, CFRs ID: 3487300

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