ITEM 6c: REVIEW OF POVERTY ALLEVIATION THROUGH
FORESTRY ACTIVITY

Paper prepared for FAO by Jane Gronow

Introduction

Poverty alleviation has risen to the top of the international development agenda. Ambitious targets for eliminating world poverty have been set and a whole lexicon of new concepts and strategies devised to help eradicate poverty. Indeed, without a clear link to poverty alleviation, some of the world's largest aid agencies are unlikely to support a new development initiative, no matter how well intentioned.

Forestry is never immune to shifts and trends in the wider economic and political world. The purpose of this paper is to review the impact of the renewed international focus on poverty on forestry development. The paper begins by explaining how the international community defines poverty and the key mechanisms it is deploying to eradicate it: this is the field on which forestry development increasingly has to play.

Forestry is not a priority for any aid agency with a determined focus on poverty alleviation: the top slots invariably go to health, education and infrastructure development. Indeed there is an ongoing debate as to the potential and real contribution of forests and trees to poverty alleviation. Some say forestry can only provide a safety net to stop the poorest of the poor becoming utterly destitute. Others believe forestry has the potential, as yet untapped, to lift the poor out of poverty altogether. The paper runs through the key arguments in this debate.

Within this broader context, the position of the major international aid organizations on poverty alleviation through forestry activities is examined and the burgeoning programme of the FAO Forestry Department highlighted.

Finally the paper examines the ramifications of the new initiatives on poverty alleviation for the private sector: how might it be affected? More critically, how might it contribute?

What is poverty alleviation?

What is poverty? The simplest benchmark is the World Bank's US$1 per capita per day poverty line. By this measure, over 1 billion people are living in absolute poverty. Almost half of humankind, 3 billion people, lives on less than US$2 a day. The US$1 benchmark allows us to count the poor, but it does not help us to grasp the nature and causes of poverty.

Definition of poverty

The international development community has moved on from defining poverty as a simple economic measure of what constitutes an adequate standard of living. The World Bank now defines poverty as "a pronounced deprivation of well-being related to lack of material income or consumption, low levels of education and health, vulnerability and exposure to risk, and voicelessness and powerlessness."

To be poor is not just to lack money, but to be perpetually insecure, fearful and vulnerable to the slightest shock or change. In the new development terminology, rural poverty persists when people cannot access and control the various kinds of capital (natural, physical, financial, human, social, political) they need to generate a sustainable livelihood.

International milestones in poverty alleviation

The major international development agencies have agreed that poverty eradication should be their primary goal. Three milestones illustrate how this consensus was built:

• In 1995 at the World Summit for Social Development, 186 Governments resolved to eradicate world poverty.

• In 1999, the International Monetary Fund and the World Bank agreed to link debt relief to Poverty Reduction Strategy Papers.

• At the Millennium Summit in 2000, over 160 world leaders made a commitment to work towards the UN Millennium Development Goal of reducing by half the proportion of people living in extreme poverty by 2015.

Key mechanisms for poverty alleviation

Poverty Reduction Strategy Papers (PRSPs)² are at the centre of the aid community's pursuit of the Millennium Development Goal. National PRSPs encourage governments, civil society and private sectors of some of the world's poorest countries to work together to identify the causes of poverty and to agree on priorities, programmes and expenditures to reduce poverty over a three-year period.

PRSPs are based on a national poverty diagnosis and emphasize the importance of good governance and accountability. Pro-poor priorities often include basic education and health as a priority, legal reform and infrastructure development.

Since July 2002 all concessional lending from the International Development Association of the World Bank Group must be based on PRSPs. In addition, PRSPs now provide the basis for all debt relief under the Heavily Indebted Poor Countries Initiative. Major donors such as the United Kingdom's Department for International Development and the European Commission have strongly endorsed the PRSP process.

The PRSP mechanism is one of the most significant innovations in aid delivery in recent years. PRSPs are forcing aid professionals to move away from their old approach of development based on an eternal trickle of disparate overly optimistic projects, to helping nation states tackle the fundamental economic and governance problems that are keeping its citizens sunk in poverty and dependent on aid. The PRSP process is also forcing hitherto autonomous funding agencies to coordinate their responses to country-led concerns and to jointly monitor progress on poverty reduction.

The first batch of PRSPs was criticized as being drafted in a hurry by consultants without significant national input. However, the World Bank and the International Monetary Fund (IMF) have also produced a sourcebook as a guide to help countries develop and strengthen PRSPs.

Contribution of forestry to poverty alleviation

Forests and trees contribute to poverty alleviation in two ways. Firstly, forests and trees act as a safety net, helping rural people avoid becoming even poorer. Secondly, forests and trees may have the potential to act as a stepping-stone, helping people out of poverty altogether.

Forests as safety nets for the rural poor

At present, the main contribution of forests and trees to poverty alleviation is as a safety net. In the absence of a welfare state or a bus ticket to a better place, people head to the forests in times of hardship and crisis. Forests and trees on farms yield fuelwood, medicines, meat, fodder, water, and subsistence goods for sale in local markets. Around 1.6 billion people worldwide rely heavily on forest and tree resources for their livelihoods. More than 2 billion people still rely on fuelwood for cooking their food and heating their homes.

UN Millennium Development Goals The goals focus the efforts of the world community on achieving significant improvements in people's lives: they establish a common framework for measuring progress. Goal 1. Eradicate extreme poverty and hunger • Target: Reduce by half the proportion of people living on less than a dollar a day. • Target: Reduce by half the proportion of people who suffer from hunger. If the poverty eradication goal is achieved it will reduce the number of people living in extreme poverty to 890 million by 2015, that is from 29% of all people in low and middle income economies to 14.5%. Since 1990, global poverty rates are down 20%, except in sub-Saharan Africa and the transition economies of Europe and Central Asia. Much of the progress has been in Asia where China has succeeded in lifting 150 million people out of poverty since 1990. Sub-Saharan Africa remains the greatest cause for concern. Goal 2. Achieve universal primary education · Target: Ensure all boys and girls complete a full course of primary schooling. Goal 3. Promote gender equality and empower women · Target: Eliminate gender disparity in primary and secondary education by 2005. Goal 4. Reduce child mortality · Target: Reduce by two thirds the mortality rate in children under five. Goal 5. Improve maternal health • Target: Reduce by three quarters the maternal mortality rate. Goal 6. Combat HIV/Aids, malaria and other diseases · Target: Halt and begin to reverse the spread of HIV/AIDS. · Target: Halt and begin to reverse the incidence of malaria and other major diseases. Goal 7. Ensure environmental sustainability • Target: Reverse loss of environmental resources. • Target: Reduce by half the proportion of people without access to safe water. • Target: Achieve significant improvement in lives of 10 million slum dwellers. Goal 8. Develop a global partnership for development · Target: An open trading and financial system. · Target: Address the least developed countries special needs. · Target: Address the special needs of landlocked and small island developing states. · Target: Deal with developing countries debt problems. · Target: Develop decent and productive work for youth. · Target: Provide access to affordable essential drugs. · Target: In cooperation with the private sector, make available the benefits of new technologies, especially information and communication technologies.

But the forest goods that help poor families survive rarely have the potential to lift them out of poverty. The poor use these goods because they are accessible to all; easy to harvest (without additional technology or capital); and can be sold locally. In short, they are poor people's goods. These goods generate low returns and will soon be substituted for manufactured goods in urban, middle class areas. One example is that of the Marantaceae leaf often seen in rural West African markets. The leaf is easily harvested by women and children and sold to market women to wrap around snacks prepared there. If a crisis befalls a family, a bundle of leaves can quickly be collected to sell in the market. The income obtained is small and inexorably plastic bags are replacing the leaves.

Forests as a stepping stone out of poverty

The second potential role of forests and trees, to act as a stepping-stone out of poverty, is largely unrealized. Heavily forested regions are often remote, marginalized areas where health, education and transport facilities are inadequate. The only routes out of poverty in these regions are to diversify into non-farm activities, to migrate, or to hope and pray for external investment or aid projects to boost the economy of the area.

The international forest products trade, including timber, is worth billions of dollars annually. However, to commercially harvest timber requires expertise and access to permits, politicians, markets, capital, and technology. These resources are beyond the reach of the poor. In addition, there is little high value timber in the dry forest zones where many of the poorest people live.

Timber is notoriously under-valued by Governments in many developing countries and royalties are often poorly collected or squandered. It is estimated that US$5 billion per year is lost worldwide by governments unable to collect taxes from forest concessions. Thus even when commercial harvesting takes place on public lands, the enterprise is more likely to generate easy money for the well-connected timber man than to be a source of development revenue for local communities.

In the 1960s, forest industries were believed to have the potential to bring socio-economic development to remote regions. Forest industries were to be centres of prosperity. In practice, the potential was not realized as the capital intensive modern technology ate up precious foreign exchange reserves, the best jobs went to outsiders with the requisite skills and eventually the enterprise was mothballed as quality of production could not be maintained.

Today it is estimated that forest industries provide more than 10 million `real' jobs in developing countries. But an estimated 30-50 million people make a living from the informal sector (including carpentry, woodfuels and carving). While governments and financing institutions are generally well geared to subsidizing and supporting the formal sector, the same cannot be said of the informal sector.

For many people, the greatest potential contribution of forests to poverty alleviation is still as a source of new land for farming. In those countries where conversion is still possible, it is often the entrepreneur farmers buying up large tracts of land who will realize the benefits of the new frontier while the poorer families will provide the labour.

In the last 20 years, the situation has started to change. Social forestry has become fashionable, leading to new programmes designed to give communities rights over forests. Partnerships between communities and private businesses have also increased, for instance out-grower schemes and ecotourism initiatives such as CAMPFIRE in Zimbabwe³. Because working with communities is not easy, due to internal squabbles and the risk that the local elites will pocket the profits, partnerships are very attractive.

In summary, the safety net function of forests and trees in mitigating poverty is not disputed. It is however poorly understood and invariably ignored by policy makers. The ability of forests to lift people out of poverty altogether is a more contentious issue. In 2001, FAO organized a Forum on How Forests Can Reduce Poverty to debate the issue. The Forum concluded that forests can contribute to poverty alleviation if the barriers that prevent the poor utilising forests are removed.

Many of the barriers are hangovers from colonial and post-independence eras and reflect a bias in the use of forests towards the state, the industrialists (and latterly the biodiversity conservationists). The barriers include inequitable forest taxation, inadequate finance for sustainable forest management, corruption in forest services, punitive penalties, insecure tenure, and lack of technical support. For example, forest regulations enacted many decades ago can still severely restrict community access to public lands for collection of minor forest products while at the same time allowing the state to grant discretionary harvesting leases to foreign companies in return for royalties that do not capture the market value of the product.

An agenda for action on forestry and poverty alleviation⁴

The FAO Forum on How Forests Can Reduce Poverty resulted in an Agenda for Action that tries to address the barriers preventing the poor from utilizing forests more productively.

The Agenda has been widely distributed by FAO as a Policy Brief and covers four points:

• strengthening rights, capabilities and governance;

• reducing vulnerability;

• capturing emerging opportunities;

• working in partnerships.

Strengthening rights, capabilities and governance

Secure tenure allows communities to protect forests from outside encroachment, to obtain credit, and to enter into business contracts. A focus on good governance may finally lead to equitable forest taxation and the provision of professional forest services to all clients.

• support the poor's own decision-making power;

• strengthen forest rights of the poor and the means to claim them;

• recognize links between forestry and local governance.

The Community Forestry Programme in Nepal has set out to do the unthinkable; to hand government forests over to local communities to manage. Despite many setbacks, it has created a way for remote communities to generate and control funds for local development.

Reducing vulnerability

The regulations that govern poor people's use of forests are excessive and often inconsistent, for example imposing timber felling bans on community forests but not on concessions. The poor often face punitive penalties when caught in a forest without a permit; the more powerful can often defy regulation with a well-placed phone call.

• support tree planting outside forests;

• cut the regulatory burden on the poor and make regulation affordable;

• reduce unfair obligations in forest management;

• make safety nets not poverty traps.

In Niger, the government and rural communities joined forces to design a set of radical new regulations governing fuelwood harvesting and marketing. The new system puts local women in control of well-organized fuelwood markets. The scheme has stamped out illegal fuelwood harvesting and created real business opportunities for local women.

Capturing emerging opportunities

Small producers of forest products are frequently subjected to costly controls when harvesting, transporting and selling their products, while large scale and state producers are often subsidized. In markets where small producers have a comparative advantage, governments need to create a level playing field.

• remove the barriers to market entry;

• base land use decisions on true value of forests;

• ensure that markets for environmental services benefit the poor;

• support associations and financing for local forest businesses.

In South Africa, government policy has increased opportunities for poorer farmers to participate in timber markets and plantation companies are pursuing out-grower schemes with considerable local benefits. The FAO Forestry Department is working with the State Forest Service and private forest owners in Slovenia to build forest owners associations that can help the owners of newly privatized forests to sell forest products and compete in markets. FAO is hoping to expand the programme to many more countries in Eastern Europe.

Working in partnerships

Contractual partnerships between industry and local producers can help the former secure competitively priced raw materials and the latter access credit, technical know-how and valuable markets.

• simplify policies and support participatory processes;

• promote multisectoral learning and action;

• enhance interagency collaboration;

• make NGOs and the private sector partners in poverty reduction.

In Ghana, the Swiss Lumber Company has started a programme of timber cultivation with farmers (the company has a sawmill but no sizeable concession). The company bears the cost of research into planting techniques for indigenous species and guarantees farmers an advance forward payment, an annual rent, payments for weeding and a share of timber at maturity (up to 50% depending on the advance). The farmer is bound to sell the timber to Swiss Lumber. Farmers are clamouring for tree planting contracts with Swiss Lumber.

Position of international aid agencies

The largest funding agencies, including the World Bank, the United Kingdom's Department for International Development (DfID) and the EC are now committed to the Millennium Development Goals. To varying degrees, the big agencies have revamped their targets, organograms, funding strategies and programmes to fit this focus.

How has forestry development been affected by the renewed focus on poverty alleviation? A recent assessment of Forestry in Poverty Reduction Strategies⁵ found that 84 percent of PRSPs touched upon the forestry sector but generally in a modest and unsystematic manner. At present, poverty diagnosis has a clear bias towards the social sectors and agricultural development; it does not include a strong analysis of the role of natural resources, including forests as determinants of well being. The authors conclude that national forestry sectors need to be more pro-active in relation to the PRSP process to ensure that forest issues are taken on board. There is a risk that forestry may be reduced to a set of scattered activities across the major sectors, such as agriculture.

For some time, World Bank lending for forestry has been dominated by concerns for global biodiversity conservation (and prior to that by industrial forestry concerns). Recently the World Bank has successfully negotiated a revised World Bank Forest Strategy that is firmly rooted in the Bank's commitment to poverty reduction and is founded on three pillars:

• harnessing the potential of forests to reduce poverty;

• integrating forests in sustainable economic development;

• protecting vital local and global forest environmental services and values.

The revised Strategy uses the language of poverty reduction to call for more focused interventions that address opportunity, empowerment and security in forestry sectors. The priority areas in the revised Strategy are:

• Promoting policy, institutional and legal frameworks that ensure the rights of indigenous and other forest-dependent peoples and communities are protected;

• Empowering women, the poor and marginalized to take a more active role in formulating and implementing rural forest policies and programs;

• Supporting the scaling-up of collaborative forest management so that local communities can manage their own resources, rehabilitate and protect forests, market forest products and benefit from security of tenure;

• Working with local groups, NGOs, the private sector and other partners to integrate forest and agroforestry farming systems into rural development strategies.

In India, the Bank is providing massive funding for forest policy, legal and structural reforms linked to poverty reduction in a number of states. Three key areas are being targeted: forest finance, community forestry, corruption and governance. In Madhya Pradesh, 8 000 village forest groups have been empowered. The groups have generated substantial funds that members can access through revolving credit schemes. The Bank has also encouraged States to revise their policy on benefit sharing: in the case of the popular Bidi leaf, villagers now retain 80 percent of the value, rather than 25 percent as before. The reforms are having a genuine impact.

Forestry activities in sub-Saharan Africa that could be funded as part of PRSPs include: restructuring forestry institutions, review of forest licensing procedures, collaborative agreements with communities, societies and advocacy groups, forest micro-enterprises (Kenya), fuelwood policy development, transfer of resources to local management (Gambia).

To summarize, the Bank's focus is firmly on the PRSPs and forestry will only register where strong personalities in government and the Bank can push it. If Ministers with forestry portfolios in developing countries become focused on the process and learn the language they could do more to attract funds.

The United Kingdom's Department for International Development (DfID) is also strongly focused on the Millennium Development Goals and believes in the primacy of Poverty Reduction Strategies. DfID increasingly allocates funds to cross-sectoral themes such as good governance rather than traditional sectors such as forestry and fisheries. Project funding is also declining in favour of budget support (the country agrees with DfID how to use the money to support reforms based on PRSPs).

DfID no longer regards forestry as a distinct sector and it is difficult to get approval for new projects unless they have clear poverty reduction outcomes⁶. There are fewer field projects and a gentle decline in spending, but forestry as an issue is being tackled under governance, decentralization and civil society. DfID still funds 10 country forestry programmes, including major initiatives in South Africa, Indonesia, Cameroon and Ghana. In Indonesia, DfID is funding a new initiative focused on governance, macro economic links and democratic development through community forestry.

At the EC, the story is similar. Since November 2002, the principal aim of EC assistance has been poverty reduction. The EC has adopted the Millennium Development Goals and is committed to the PRSP approach. The EC aid programme now focuses on six priority areas: (1) trade and development (2) regional integration and cooperation (3) macro-economic policies (4) equitable access to social services (5) transport, food security and (6) sustainable rural development and institutional capacity building.

In summary, the major donors now agree on the key issues⁷ to be funded in the environmental sector in order to tackle poverty. Increasingly, forestry is being seen not as a sector but as an issue that will only deserve support if it is linked to PRSPs. Forestry may need to develop a more rigorous analysis of the links between forestry and poverty in order to market itself as an important element of poverty reduction. If not, forestry departments in many developing countries risk being left out of future support from aid agencies. On the other hand, PRSPs are also a great opportunity for foresters and concerned citizens to push for the kind of fundamental reforms that have never before been possible.

The work programme of the Centre for International Forestry Research (CIFOR) also reflects the new concerns in forestry development. CIFOR's mission is to "contribute to the sustained well-being of people in developing countries". It is committed to addressing both the needs of the rural poor and environmental concerns through three core research programmes: (1) environmental services, (2) livelihoods and (3) governance. CIFOR has recently published a paper on forestry, poverty and aid⁸.

The World Conservation Union (IUCN) is proud of its pro-poor brand of nature conservation. IUCN supports the Millennium Development Goals and believes that the conservation movement must engage more actively in fighting poverty. IUCN's Forest Conservation Programme (FCP) is critical of some aspects of the World Bank's new Forest Policy but is keen to work with the Bank to ensure the potential of forests to contribute to PRSPs is fully recognized. The FCP⁹ is also running a Poverty and Conservation Project to demonstrate the links between poverty alleviation and ecosystem management.

IUCN operates a joint policy and strategy for forestry conservation with the WWF known as Forests for Life. Within the Forests for Life campaign, WWF focuses on `protection, management and restoration' of forests threatened by problems such as illegal logging, forest crime and conversion. WWF recognizes the importance of forests to local livelihoods and supports many community-based forest management projects and small scale certification schemes. Although it has formed an Alliance with the World Bank, WWF's work is not explicitly concerned with poverty alleviation.

The Global Environment Facility (GEF) remains resolutely focused on protecting the global environment from six major threats.¹⁰ GEF funds projects on deforestation, forest degradation and biodiversity, respecting local community needs, but with no explicit poverty goals.

The International Tropical Timber Organization (ITTO) facilitates international cooperation on issues relating to the timber trade, including sourcing of timber from sustainably managed forests. The ITTO has not shifted its goals in response to the changing development agenda. But, through its support to sustainable forest management, it encourages partnerships between concessionaires and civil society and funds a small number of community forestry projects.

Forest Trends is a new NGO, formed in 1996, to encourage market-based, equitable approaches to forest conservation. Its target audience is market players and influential governments. Its role is to convene diverse stakeholders and disseminate information on forest-based commerce. One of its core programmes promotes markets that improve the livelihoods of forest communities in Mexico, Brazil and China and fosters what it believes is the `growing trend' towards community-industry partnerships.

Policy and programme of the FAO Forestry Department

FAO is unique in being endowed with a strong Forestry Department comprising more than 75 professionals. The Department can advise its 160 member states on virtually any aspect of forestry: from familiar forestry matters such as harvesting, certification and economics to new areas such as climate change, equitable partnerships and even the income-generating potential of edible insects. The senior management of FAO is determined to build a stronger focus on poverty alleviation within the Department. Poverty alleviation¹¹ will not be the sole focus of the Department's work in future but it will be one of six priority areas in the next Medium Term Plan (2004-2009).¹² Funds have been allocated to support a Programme Entity dealing specifically with forests and poverty, beginning in 2004.

However, work on poverty alleviation has already begun. In 2001, the Department hosted a Forum on the Role of Forests in Poverty Alleviation. The Forum resulted in a policy brief on How Forests Can Reduce Poverty that has been widely distributed by FAO. Many elements of the Department's work already contribute to the Agenda for Action, including work on:

· global assessments of forest use rights;

· community-based enterprise development;

· market opportunities for private forest owners in eastern Europe;

· non-wood forest product development for local communities;

· modern wood energy systems and markets for rural villages;

· community based fire management;

· equitable partnerships between foresters, communities and the private sector;

· participatory diagnosis of forest policy concerns (NFP Facility);

· economic analysis of forestry-poverty links.

FAO is well-placed to help member states analyze and address the links between forestry and poverty, possibly as inputs into the PRSP process. The challenge for FAO is to combine its unrivalled expertise in technical matters to maximum, strategic effect to help alleviate poverty. A Task Force has been established to finalize this work.

Role of the private sector

How will the focus on poverty alleviation affect the private sector? Firstly, the shift towards poverty means that biodiversity conservation is no longer the main concern and production will no longer be a dirty word. However this is not a return to the days when industrial forestry was seen as the secret of all developmental success. Productive forestry will be welcome where it has the potential to bring prosperity to a wide group of forestry stakeholders.

Secondly, as we have seen, aid for forestry, particularly in sub Saharan Africa will increasingly be focused on fundamental reforms in areas such as forest finance, benefit sharing, forest governance, corruption, institutional reform and community rights. The reforms aim to reverse long-standing inequities in forest management that allow the state, the politicians and unscrupulous industrialists to exploit the forestry sector. The reforms should make it more difficult for those companies that do not wish to operate in a modern, tightly regulated and equitable environment to survive.

How can the private sector contribute to poverty alleviation? First and foremost, engage in the debate. As we all know, in developing countries, the industry is invariably made up of progressive companies and reactionary `business as usual' outfits. The former are already developing fantastic partnerships with communities, way ahead of government initiatives while the latter are still lobbying to keep royalty rates at ridiculous levels. If your company belongs to the former category - engage. The scale of your investments and receipts gives you enormous leverage in developing countries. In countries where the PRSP process is vital, your voice has tremendous influence - find out what is going on and engage in the legal and institutional reforms in good faith. Offer to work in partnership with government and other agencies to create a decent enabling environment for all forestry stakeholders, no matter how small.

While the costs to un-businesslike companies of engaging in a reform process may be considerable (tighter regulations, higher costs for raw materials) the results for well-run businesses are likely to be positive (more readily certifiable products, better public relations, more efficient government services, lower protection costs, better educated workforce, increase in area under forest cover and less `competition' from illegal operators).

On the international stage, a key venue for debate is the CEO's Forum on Forests, initiated by the president of the World Bank in 1998 and now coordinated by the World Business Council for Sustainable Development (WBCSD). The Forum brings together CEOs of large forestry companies, the World Bank and leading NGOs such as WWF, IUCN and Conservation International to exchange views and develop ideas on the removal of barriers to sustainable forest management. The Forum hopes to provide an opportunity for the private sector to be a more active partner in international forest policy dialogue at both global and more recently at regional and country level. Specifically, the private sector can support local and global efforts to reform:

· Forest finance: ensure the private sector pays a fair price for harvesting rights.

· Revenue collection: ensure revenue generated by forest industries on public lands is paid in full, on time.

· Forest legislation: help remove outdated, anachronistic legislation, even if it works in your favour.

· Forest governance: demand the highest standards of professional service and technical support from government forest agencies.

· Forest governance: encourage the rule of law. Ostracize companies that engage in illegal operations. Complain about officials that condone illegal operations.

· Destructive operations: help shut down logging enterprises that degrade forests.

· Certification: insist on knowing the source of wood before processing.

· Partnerships: publicize innovative industry-community partnerships. Lobby governments for enabling environments to support progressive companies.

· Market approaches: help communities move to a market based approach to forest livelihoods instead of depending on aid and `goodwill' handouts from companies.

· Critical mass: make it clear that poverty alleviation matters to you - help create a critical mass of opinion in government and civil society.

· Workforce: ensure your forest workers are paid well and have adequate training, safety gear, insurance and career prospects.

In addition to supporting sectoral reform processes, progressive companies can continue to explore the opportunities for partnerships with local communities and farmers. Find out about the lives of people in your area of operation and see if you can do something to make a difference. Could you work with farmers to protect or restore a forest, undertake joint research on new silvicultural techniques, secure access to capital, technology and markets?

Conclusion

The language of aid is changing, moving away from sectoral and technical concerns such as soil and water conservation or pest control to new terms such as empowerment, pro-poor growth, sustainable livelihoods and good governance.

Poverty is real, shameful and overwhelming. How does someone live on one US dollar a day? Forestry may not be the main lever to change people's lives but it can make a contribution. As the generator of most of the wealth in the forestry sector, as the biggest investor and as the player who often has the loudest voice, the private sector can make a difference.

BIBLIOGRAPHY

Amanor, Kojo Sebastian. 1996. Managing trees in the farming system. The perspective of farmers. Forestry Department, Ghana

Arnold, J.E. Michael. 2002. Forestry, poverty and aid. Draft paper prepared for CIFOR.

Dubois, O. FAO. 2002. Forest-based poverty reduction: A brief review of facts, figures, challenges and possible ways forward. Prepared for the International Workshop on `Forests in poverty reduction strategies: capturing the potential.' Tuusula, Finland.

FAO and DfID. 2001. How forests can reduce poverty. Policy Brief. FAO.

Oksanen, Tapani & Mersmann, Christian. 2002. Forests in poverty reduction strategies. An assessment of PRSP processes in sub-Saharan Africa. PROFOR.

Sunderlin, William D., Angelsen, Arild & Wunder, Sven. 2003. Forests and Poverty Alleviation. Draft paper prepared for FAO publication on State of the World's Forests, 2003.

² The World Bank has set up a website called PovertyNet where copies of all PRSPs can be found. This site can be accessed at www.worldbank.org/poverty

³ Communities receive a share of profits from ecotourism in return for protection of wildlife.

⁴ This section is based on the FAO Policy Brief on How Forests Can Reduce Poverty

⁵ Forests in Poverty Reduction Strategies. An Assessment of PRSP Processes in Sub-Saharan Africa. Tapani Oksanen and Christian Mersmann. December 2002.

⁶ The purpose of DfID funded forestry work is to `realize the potential of forests and trees on farms to reduce poverty, and to maintain and where possible increase the national and global public goods provided by forests.'

⁷ Last year, DfID, the EC, UNDP and the World Bank agreed the key priorities for action on poverty and the environment are (a) improve governance (empower civil society, strengthen anti-corruption efforts) (b) enhance the assets of the poor (resource rights, management capacity) (c) improve quality of growth (appropriate private sector reform, environmental valuation) (d) reform trade policies.

⁸ CIFOR Occasional Paper No.33. Forests, Poverty and Aid. J.E Michael Arnold. August 2001.

⁹ IUCN is developing a joint programme with WWF, CIFOR and ICRAF (World Agroforestry Centre) called Forests as Resources for the Poor: The Rainforest Challenge.

¹⁰ GEF focuses on biodiversity, climate change, international waters, ozone, land degradation and pollutants.

¹¹ In its Policy Brief the FAO uses the terms poverty alleviation, poverty reduction and poverty elimination more or less inter-changeably. Other agencies use poverty eradication or elimination to mean lifting people out of poverty altogether and poverty alleviation to mean making poverty easier for people to endure.

¹² The other five priority areas are Forest Policies and Governance, Forests and Water, Forests and Climate Change, Forestry Information and Economic Aspects of Forests