0365-A2

Towards improved classification of non-wood forest products through existing international product classification schemes

Paul Vantomme ¹

Abstract

The purpose of the paper is to contribute towards improving the identification, classification and visibility of non-wood forest products (NWFPs) in international trade statistics by making proposals for amendments to existing international product classification schemes and for their implementation by countries. Internationally agreed upon product classification codes for major NWFPs and their use by the relevant agencies of countries trading in these products is an essential prerequisite for achieving more accurate international trade statistics on NWFPs and assessing their economic contribution.

A phased approach is suggested by addressing first those NWFPs that are traded internationally and by focusing on the most widely used product classification system: the Harmonized System (HS) of the World Custom Organization (WCO). The HS is harmonized with other existing major international and national product classification systems and by adopting multi-digit coding is adequately flexible for incorporating the reporting on NWFPs and therefore capable of being adjusted to the contexts within which different organizational units operate and to the specific situation of individual countries.

FAO and the International Network for Bamboo and Rattan (INBAR) have initiated actions leading to the development of a proposal for amending HS codes for bamboo and rattan products, through an international expert meeting held in Rome, in December 2002. Bamboo and rattan are the flagships of NWFPs, and it is hoped that the lessons learned on the elaboration and implementation of HS trade codes on bamboo and rattan can be expanded to other major groups of NWFPs, such as medicinal plants, forest-gathered wild vegetables, wild mushrooms fruits and nuts.

The importance of clear terms and definitions regarding NWFP

Clear definitions and with their related terms well defined on products gathered from forests or from wild sources from any other type of land are an essential prerequisite to elaborate and use product classification systems applicable to non-wood forest products, or to any other initiative such as standards setting exercises related to governing practices of wild gathered products (like the Organic Practices Standards of IFOAM, or the Good Practices of Gathering Medicinal Plants by the WHO). Product classification systems are the basis for compilation and aggregation of production and trade statistics on non-wood forest products or on products gathered from wild sources outside forests. Good statistical data on the NWFP sector is essential to value their contribution to national economies and for the elaboration of appropriate policies and regulations governing a sustainable development of the NWFP sector. In addition, national level statistics are the basis for compiling regional and international trade statistics. However, although several countries have made considerable progress in elaborating product classification systems for NWFP for use at their national level, these national systems are not comparable among countries and not easily adaptable as a basis to gather trade statistics at the regional and international level.

The concept of "Non-wood forest products"

Millions of people derive a significant part of their subsistence needs and income from gathering plant and animal products in forests. Some of these products are of major commercial importance for international trade.

Since the early 1980's, the discussions about the fate of tropical forests were heating up, as timber exploitation was perceived as being destructive to forests. Gradually more emphasis was given to the interests of forest dependent people and on the importance of the other then timber products obtained from these forests. The sustainable use of all forest plant and animal species is receiving more attention now as a means of mitigating deforestation, hence maintaining forest cover and preserving biodiversity, while at the same time realising income from it, particularly for forest-dependent people. The term "Non-wood forest products" has emerged as an expression to catch the vast array of both animal and plant products other than wood derived from forests. This and similar terms were introduced to get this vast, but so far hidden or poorly known aspect of forest use to the surface and to facilitate a shift of focus towards the economies of forest-dependent peoples. As such it was hoped to encourage a more balanced management and utilization of forest resources as to shift away from the prevalent industrial timber production focussed approach to forests. In this sense, any of those terms much more emphases on the way the products were obtained rather then on specifying the kind of products.

Terms and definitions

Presently, a vast array of terms is used to represent all forest products other than wood or other then industrially produced timber. The following are some of the terms in use: minor forest products; other forest products; forest biodiversity products; special forest products; non-wood forest benefits; non-wood goods and services; non-timber forest products; non-wood forest products; wild-crafted products; bush products; etc.... Scope and coverage of all these terms are somewhat different or even vague. In most cases, the coverage is limited to "forests" only, although this varies depending on the situation. The term "wild-crafted products" includes products gathered on all types of lands, as long as these products have not been cultivated.

Internationally, the most frequently used terms are NTFP and NWFP. The terms non-timber forest products and non-wood forest products are comparatively precise and suggestive of their scope. It is likely that all these terms will continue to be used in a general way in describing different situations. What is important is that, whatever term is used, scope and coverage must be well clarified and the term needs to be defined for the context of their use.

Non-wood forest products ( NWFP) consist of goods of biological origin other than wood, derived from forests, other wooded land and trees outside the forest (FAO 1999). The term "NWFP" will be used throughout this paper for reasons of consistency and clarity and does not imply any value judgement regarding to the other above described terms in use.

The term NWFP consists of three essential terms and aspects:

1. Non-Wood: The term NWFP excludes all woody raw materials. Consequently, timber, chips, charcoal, fuel wood, as well as small woods such as tools, household equipment and carvings are excluded.

2. Forest: NWFP should be derived from forests and similar land uses. FAO has elaborated a definition of "forest²"; "other wooded land³" and "trees outside forests" (Trees growing on lands, outside those defined under footnote 1 and 2).

3. Products: In the definition, the term product corresponds to goods, which are tangible and physical objects of biological origin such as plants, animals and their products. Forest services (e.g. ecotourism, grazing, bio-prospecting), as well as forest benefits (e.g. soil conservation, soil fertility, watershed protection) are excluded from the term NWFP.

2. Towards improved reporting and statistics on NWFP at (inter-) national level

An important purpose of product classification is to compile statistical information at (inter-) national level. Comprehensive statistical data gathering at the national and international level hardly exists for NWFP, and development of this will have to be approached in stages, starting with those products for which statistical information is comparatively easier to collect.

Wood products are reasonably well classified already and, except in the case of fuel wood, are adequately covered by (inter-) national systems of statistical reporting. Unlike in the case of wood products, the bulk of production and consumption of NWFP takes place at the subsistence level so that transactions of NWFP takes place outside the formal and organised markets.

As a broad group, the forest products other than wood exhibit a high degree of heterogeneity in terms of their source, production systems, characteristics, and utilization. These products, of both plant and animal origin, fall under a large number of product groups, with each group having considerable variety. In order to understand their scope, boundaries, and linkages, it is necessary to have clear understanding of terms, and an adequate system of product classification.

However, improvements in the reporting on NWFP have to take place within an improved system for forestry as a whole. Treating NWFP statistics in isolation will be artificial since forest benefits, wood and non-wood goods and services are inextricably linked. Forest influences and many intangible benefits (for example, watershed values) cannot be classified either with (or as part of) wood or non-wood products.

NWFP in the formal sector often get reported under other sectors, (e.g. agriculture, horticulture, manufacturing) in the absence of a relevant classification and accounting structure regarding the source of the product (wild-crafted versus farming) or the stage of processing (raw materials versus semi-processed products). On the other hand, some NWFP are also gathered on non-forest land. Considering them as forest products will be anomalous. Therefore, it becomes necessary to identify and classify sources. Accordingly, the adjective forest qualifies the product. Forest products should cover only those originating from forests or obtained from a system of land use, which can be included under the general heading of forestry.

The cost involved in establishing and elaborate statistical systems for NWFP may well be beyond the capacity of many countries; this also makes it necessary to adopt a step-by-step approach. Even though it is possible to identify, count, weigh and measure NWFP, and there have been improvements in this direction, lack or inadequacy of institutions and data gathering arrangements still present serious problems. It is necessary also to harmonize on the correct units and measurements to be adopted for reporting on quantities of different products.

3. Product Classification Schemes

Importance and scope

There is no international and globally accepted classification scheme specifically designed for NWFP. Several countries classify NWFP, as good as possible, through their existing national product classification systems. In general, statistical information on NWFP is not properly or regularly reported, and they hardly feature in national accounts as a separate entity. Some of the products on which information is available often get reported under other sectors: agriculture, horticulture, etc. Thus, what we get is a distorted picture of the NWFP sector. However, developing international or globally applicable classification systems for NWFP might not be feasible neither practical. What is needed is to improve the existing national and international product classification schemes by a more detailed reporting as to provide an identity and clarity on the diverse group of products obtained from wild crafting from forests with their production and trade figures.

Existing International Systems for product classification

Several national and international product classification systems are already in place, and among the most widely used ones at the international level, are:

• International Standard Industrial Classification of all Economic Activities (ISIC) of the United Nations Statistical Division (UNSD);
• Standard International Trade Classification (SITC) of the UNSD;
• Harmonized Commodity Description and Coding System (HS) of the World Customs Organization.

These international systems often form the basis for the (further) elaboration of more detailed regional (Eurostat) and national product classification systems.

International Standard Industrial Classification of All Economic Activities (ISIC)

The ISIC defines an industry as the set of all production units engaged primarily in the same or similar kinds of productive economic activity. Such an activity is characterized by an input of resources, a production process and an output of products. The ISIC consists of 17 tabulation categories, 60 divisions, 159 groups and 292 classes, each of them with specified scope and coverage. The classes of activities under ISIC represent the industry of origin (i.e. the activity leading to the production) of products classified elsewhere. The advantage of the ISIC is that aggregation is made easily. In this regard, it is harmonized with the commodity description and coding system so that the activity and the resulting product can be related.

Statistical classification reflects compromises between theoretical principles and practical considerations, and it is difficult to meet all the needs for aggregated data, by simple aggregation through various levels of ISIC. It has therefore included annexes covering cross-classification of industries. This helps an international understanding about the combination of activity categories that could be regarded as representing a particular sector. ISIC Rev. 3, 1990, has included annexes dealing with activities related to two sectors, namely energy and tourism. The list of annexes is open-ended and more can be added in the future.

Since ISIC includes all economic activities, its four-digit coding allows only broad classes. The classes of activity which have (or could include) forestry components (related to wood and NWFP and services) are the following:

The explanatory notes on the classification indicate what are included under each class of activity, as well as exclusions. It is difficult to clearly recognise NWFP-related activities in the classification and they mostly fall under the residual classes, i.e. "others or those not elsewhere classified/specified - n.e.c.". Even the division (02) related to forestry has only one activity that is a "catch all" for forestry, logging and related services activities.

Standard International Trade Classification (SITC)

The SITC is a classification made according to physical properties of the product, duly considering the materials from which the product is made and also the stage of fabrication and industrial origin. The main purposes of SITC are to help international comparison of product situation, provide greater comparability in foreign trade and provide a basis for systematic analysis of world trade. Thus, only commodities entering external merchandise trade are included.

In SITC, Rev. 3, the products are classified into ten sections, 67 divisions, 261 groups and 1,033 sub-groups. Seven hundred twenty sub-groups are further divided into 2,805 items, providing 3,118 basic sub-groups. All products are provided as precise a definition as possible. SITC, Rev. 3, follows a five-digit coding.

To illustrate, the classification of walnuts:

The basic headings can be further divided by providing additional digits as desired for meeting specific needs of the countries. For example, there are a number of edible nuts of forest origin, which are not specifically, mentioned (e.g. pine nuts from Pinus pinea). It is possible for countries to add a sixth digit to 05779 to include an entity for such edible nuts.

SITC, Rev. 3 is harmonized with other international classification systems and is fully correlated with the Harmonized Commodity Description and Coding System. More information on the SITC and ISIC is available from: //unstats.un.org/unsd/trade/default.htm.

Harmonized Commodity Description and Coding System (HS)

The Harmonized Commodity Description and Coding System generally referred to as "Harmonized System" or simply "HS" is a multipurpose international product nomenclature developed by the World Customs Organization (WCO - www.wcoomd.org/ie/index.html). It comprises about 5,000 commodity groups; each identified by a six-digit code, arranged in a legal and logical structure and is supported by well-defined rules to achieve uniform classification. The system is used by more than 177 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics. Over 98 % of the merchandise in international trade is classified in terms of the HS. Only commodities entering external merchandise trade are included.

The HS, issued by the Customs Co-operation Council, has 21 sections, divided into two-digit groups or chapters, 1,241 four-digit headings and 5,019 six-digit headings. The HS is gradually replacing SITC as the most widely used international product classification system. All the SITC headings relevant to NWFP are covered in HS, and some are further subdivided at the sixth digit level. In addition, countries may add for their own national product classification, 2, 3 or 4 more digits for further specification.

As an example, "Walnuts" are well defined in the HS classification up to the species level (Juglans regia) under 08.02.2 with a further specification of "In shell" (0802.31) and "Shelled" (0802.32). "Mushrooms" and "herbs" are unfortunately not as well defined. "Mushrooms" (dried, whole, cut or sliced and fresh or chilled) are classified under a single item: "Mushrooms and truffles" (07.12.30). However, many countries such as Japan, have added in their own national classification, additional digits to further specify species of mushrooms of importance to them. Also for the term "herbs" (12.11) further specifications at the country level would be needed to clarify entities, as the HS foresees only 3 groups: 1211.10: Liquorice roots; 1211.20: Ginseng roots; and 1211.90 "Others".

Other important groups of NWFP are not covered at all or only partially covered by the present HS codes. Striking examples are the many bamboo or rattan products, and for which HS codes exist only for their use as plaiting material (14.01.10 Bamboo; and 14.01.20 Rattan). No HS codes exist for other bamboo products such as: shoots; bamboo parquet, or bamboo furniture.

4. Conclusions

Definition, classification and a system of accounting are crucial in providing valid statistics for assessing the real significance and comparative roles of sectors and sub-sectors of the economy, for making realistic projections of sectoral outlook, and for planning sectoral developments. The intention here is to underline the need for these in respect of NWFP.

This paper does not pretend to present an authoritative statement on definitions or to present a definitive classification for NWFP. Its purpose is to facilitate discussion and solicit views and suggestions in that regard. It also seeks to promote and encourage national and international initiatives to collect and disseminate statistical information on NWFP.

A phased approach is suggested by addressing first those NWFP which are traded internationally and by focussing on the most widely used product classification system: the Harmonized System. The HS is harmonised with other existing major international and with national product classification systems and by adopting multi-digit coding is adequately flexible for incorporating the reporting on NWFP and therefore capable of being adjusted to the contexts within which different organisational units operate and to the specific situation of individual countries. The HS divides products into several sectors. According to this classification, activities related to NWFP are spread over a number of different activity sectors. Because of this, any assessment of the contribution of forest products other than wood, using HS as a basis, requires a cross-sectoral approach.

FAO and the International network for Bamboo and Rattan (INBAR) have developed a proposal for amendments to the HS codes for bamboo and rattan products, through an international expert meeting held in Rome, 2002. Bamboo and Rattan are the flagships of NWFP, and it is hoped that the lessens learned on bamboo and rattan can be expanded to other major groups of NWFP to elaborate HS trade codes for medicinal plants, forest gathered wild vegetables, wild mushrooms fruits and nuts.

¹ Forest Products Division, Forestry Department, FAO; Italy. [email protected];
Website: http://www.fao.org/forestry/FOP/FOPW/NWFP/nwfp-e.stm

² Land with tree crown cover (or equivalent stocking level) of more than 10 percent and area of more than 0.5 hectares (ha). The trees should be able to reach a minimum height of 5 meters (m) at maturity in situ.

³ Land either with a crown cover (or equivalent stocking level) of 5-10 percent of trees able to reach a height of 5 m at maturity in situ; or a crown cover (or equivalent stocking level) of more than 10 percent of trees not able to reach a height of 5 m at maturity in situ (e.g. dwarf or stunted trees); or with shrub or bush cover of more than 10 percent.