Presented by Ani Nawir of the Center for International Forestry Research at the 3rd Asia-Pacific Rainforest Summit, on 23–25 April 2018 in Yogyakarta, Indonesia

1. Fostering the Social Forestry Program:
Inclusive Business Models (IBMs)
in Community-Based Wood & NTFP-Based Production
3rd Asia-Pacific Rainforest Summit
24 April 2018
The Alana Yogyakarta, Indonesia
Ani Adiwinata Nawir, PhD
SLF – Sustainable Landscape & Food System Team, CIFOR

2. THINKING beyond the canopy
1. Inclusive Business Models (IBMs):
Integrate smallholders into value chains (markets) of a certain product
Aims:
improve the overall competitiveness of a value chain,
& reduce poverty (benefiting poor farmers & rural business
community).
Initiators: a group of organized producers, private, intermediary
market brokers, or NGOs.
“Inclusive”: the constraints of linking smallholders to markets.
“Business”:
mainstreaming business tools into product development.
“Inclusive” & “business”:
Involved trade-offs: between competitiveness and inclusiveness.
Source: FAO. 2015. Inclusive business models (FAO, 2015)

3. Household livelihood strategy & local value chains
are driven by national policy and regulations
2. Integrated supply & value chains based on the nature
of the products: wood, NTFPs, & environmental services
Scales: local, regional, & global

4. Timber:
The ‘unfavourable characteristics’ of timber-based management to the poor:
a long term investment with high risks due to price fluctuations, tenure
insecurity, and natural hazards (e.g. fire).
Added value small-scale wood processing: needs a financial capital.
Ecological services:
Provided to on-site forest users and off-site beneficiaries at the regional,
national or global levels (e.g. downstream water supplies).
Business model:
Payment for Environmental Services (PES); community-based ecotourism.
NTFPs (Non Timber Forest Products):
Limited economies of scale for commercialization:
high harvesting costs per unit area
Characteristics of the benefits from forest:
NTFPs, timber & ecological services

5. Limited timber uses
(in village-trading)
Household income portfolio
Privately-
owned lands
Protected forests
or nature reserve
Domesticated NTFPs:
e.g. candle nuts
Policy regulating access
to utilize the forests
(Limited) extractive NTFPs:
wild forest honey
Regulation on timber
management &
harvesting permit
Regulation on
timber legality
verification
NTFPs
Processing &
Market
Timber processing & marketing
Transporting timber
Transporting NTFPs
Regulated locally based
on national policy
Customary
norms &
rules
Regulated locally based
on national policy
Eastern Indonesia: West & East Nusa Tenggara
Inter-relation: livelihood strategy, value chains, & forestry policy and regulations

6. THINKING beyond the canopy 6
Source: http://www.co.greene.pa.us/secured/gc2/images/conserv/what-is- watershed-... A watershed is
the area of land that drains into a common waterbody.
Watersheds:
as the main unit of the analysis at the landscape level
Grand strategy for integrated management of timber and NTFPs at the
landscape level: directing community-based enterprises development

7. THINKING beyond the canopy
Management
aspect
Forest function & watersheds (Zonation)
Upstream Midstream Downstream
Area
management
Objective: Enforcing the conservation function of the area
as the buffer zone and/or rehabilitating the degraded areas,
while enhancing local livelihoods
Business
management
Objective: Promoting the establishment of small-medium
scale enterprises for value added processing activities
both for timber and NTFPs
Institutional
arrangements
and management
Objective: improving the coordination, synergy, and inter-
connectivity of various government agencies at various
levels, as well as between these agencies and private
market industries.
Management & business plans:
viable & feasible community-based enterprises

8. THINKING beyond the canopy
Management aspect Forest function & watersheds (Zonation)
Upstream Midstream Downstream
Conservation:
buffer zone
development & forest
& land rehabilitation.
Agroforestry:
combining shading
trees & NTFPs for
conservation.
Intercropping: timber
& medicinal herbs
Plants: nectar in
bees farming.
Intercropping timber
& cash/food crops.
Enhancing local
livelihoods
Investing on the
host trees &
nectar plants for
wild forest honey
production.
Timber with high
economic values.
Bees farming for
honey production.
Fodder production.
Agro-silvopastoral.
Integrating
environmental
services for economic
development.
Community-based ecotourism: based on local potential and
context surrounding the protected and production forest.
Managed by: village government & funds.
Partnership: Pokdarwis (community group) & FMU/KPH.
Business plans based on selected commodities:
(complemented by Cost-Benefit Analysis)

9. THINKING beyond the canopy
3. Existing business models in the context Social Forestry:
Community Forestry Scheme in Nepal
Community Forestry Scheme (Hutan Kemasyarakatan-HKm) in Indonesia
Community-Company Partnership Scheme in Indonesia

10. 10
Aspects Nepal:
Com. Forestry (CF)
Indonesia:
CF (HKm)
Indonesia:
Com-Comp. Partnership
Property right
regimes for
community
involvement
State forestlands &
exclusive full rights are
transferred to FUGs
State property
(no recognition of
traditional rights).
Part of company
concession right
(limited traditional rights
recognized informally)
Description of
Benefit Sharing
Mechanism
(BSM)
Rightsallocation-based
(bundle of rights): all the
benefits;
Government: 15% of
revenues from the sale
of two commercial
species of timber
Rights-allocation
based (limited):
30% (NTFPs) & 70%
of land is for timber to
be left intact.
Mixed of input-based &
performance-based:
timber production-based
paid in royalty to
community partners.
Monitoring Government monitors
the BSM usually through
submitted reports and
occasionally through
visits
Limited information
sharing between
community and local
government.
Renewed subject to
assessment
Limited information
sharing between
company and community
partners, and local
government as the
regulator and evaluator
(?)

11. 11
Aspects Nepal:
Com. Forestry (CF)
Indonesia:
CF (HKm)
Indonesia:
Com-Comp. Partnership
Activities
being
rewarded
Improving forest condition:
conservation practices and
sustainable harvesting
Forest rehabilitation
activities & enforcement
of the State-property
boundaries
Securing timber plantation
development & company
access in the areas
Other
benefits
Rights to CF and
associated benefits as
entitlements; capacity
building; ecosystem
services.
Access for
intercropping on State
land
Financial (e.g. loans) and
other incentives (e.g.
rubber tree seedlings)
Main indirect
benefits
Community social capital,
& local democracy
Social capital Securing traditional rights
& access inside
concessions
Legitimate
beneficiaries
All members of the CF
group
Cooperative: 35 years Cooperative members
(contract agreement)
Mechanism
for payment
Spent on public and social
infrastructures, & 35% of
revenues for pro-poor
income generation
activities
No mechanism for
payment
Direct payment to
cooperative & no formal
shared benefits to local
government

12. Source for diagram: https://www.pinterest.com/pin/528821181226854516/
Inclusive
Business
Model (IBMs)
Competitive
Business
Model
1. Assessment on the current business capacity: comparative advantages &
stakeholder analysis along the supply & value chains.
2. Trainings on: policy literacy, developing & managing
socio-economically viable small-scale enterprises.
3. Starting-up packages: financing scheme, institutional arrangement
(take advantage the existing association),
developing management & business plans.
4. Strategic directions for promoting IBMs
4. Tailored incentives framework to overcome
challenges: direct & indirect, & enabling.
5. Favorable policy & regulation framework:
along supply & value chains.

13. 13
WBCSD claims:
A global, CEO-led organization of over 200 leading businesses working
together to accelerate the transition to a sustainable world.
Sustainable by focusing on:
maximum positive impact for shareholders, the environment and societies.
Member companies: business sectors and all major economies (a combined
revenue of more than US$8.5 trillion and with 19 million employees.
Global Network of almost 70 national business councils .
Work with member companies along and across value chains to deliver high-
impact business solutions to the most challenging sustainability issues.
Platform:
World Business Council for
Sustainable Development
(WBCSD) - http://www.wbcsd.org
Fostering Public-Private-People-Partnership

14. Terima kasih