The dating game: wood processors court local farmers


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Pulp mills and sawmills in many places around the world are finding it increasingly difficult to obtain large tracts of land for timber plantations. They are also facing growing pressure to improve their relations with nearby communities and to find alternative sources of wood

from outside natural forests. Over the last decade or so, this has led several dozen companies to make deals with farmers that involve the farmers’ land being used to produce wood for the companies in return for various benefits. In some cases, the farmers rent their land to the company to grow trees. In others, the farmers grow the trees, while the company provides services such as credit, technical advice and tree seedlings, and guarantees

it will purchase the wood produced at market prices. Deals like this are generally known as outgrower schemes or joint ventures.

“Global Survey and Analytical Framework for Forestry Out-grower Arrangements”, prepared for FAO by Helen Desmond and Digby Race, examines seventeen outgrower schemes in Brazil, Colombia, Ghana, India, Indonesia, New Zealand, Portugal, Solomon Islands, South Africa, Vanuatu and Zimbabwe, all of which began since 1989. At present, they involve a total of some 10,000 farmers, who have already planted over 80,000 hectares of trees. Small-scale farmers who each plant only a couple of hectares of trees make up the bulk of scheme participants, although in a few cases a single farmer may plant 200 hectares or more.

Both the companies and the farmers report that the schemes provide tangible benefits. For the companies that often means lower cost raw materials and fewer conflicts. For the farmers it may imply a new source of income and employment, access to services and other benefits, such as more secure land tenure.

As in any close relationship, sometimes one or both partners becomes dissatisfied. In places where only one company purchases wood, they often take advantage of their monopoly power to drive down the price. Farmers don’t like that. On the other hand, in places where several companies compete for the same wood, some farmers may get credit and technical assistance from one company, but then break their agreement and sell to another. Companies don’t like that. Planting trees is a risky business. Prices and policies change and companies go out of business. Some trees grow poorly. Pests, diseases and fires plague others. Companies and farmers would both like the other party to bear as many of these risks as possible. Overcoming these problems requires clear communication and a long-term commitment to making the relationship work.

Surprisingly, Desmond and Race document few cases where governments or non-governmental organizations (NGOs) proactively encouraged outgrower schemes or worked to improve them. Such matchmakers may well have a role, although not everyone wants an arranged marriage.

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Further reading

To request a free electronic copy of Desmond and Race’s paper or to send comments or queries to the author, you can write Digby Race at:

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