Source: IIED

25November 2014

By Duncan Macqueen

In Bolivia, the state is providing support to encourage community organisations to trial innovative new business models that challenge free market norms. Could such new ways of doing business also deliver greater benefits for the planet?

The Plurinational State of Bolivia (Bolivia), rather ironically, produces 85 per cent of the world's 'Brazil' nuts. Members of 17 Bolivian forest farm producer organisations visited the Manuripi in Pando last week, to see how a new association of Brazil nut collectors was developing a joint business to improve returns from formerly fragmented family units, who had been at the mercy of intermediary traders.

They also visited a struggling rubber tappers' association to learn what had undermined that attempt at collective business. The field visit was part of a week-long training programme on Market Analysis and Development (MA&D) (PDF) funded by the Forest Farm Facility (FFF) to strengthen forest farm producer organisations in Bolivia.

The timing of this work could not have been better. Bolivia has recently passed a 2012 Framework Law of Mother Earth and Holistic Development for Living Well – quite a mouthful! But behind the rhetoric is some innovative thinking that challenges accepted free market norms. Earlier in 2010 the Bolivian government had publically condemned 'mercantilist market mechanisms, such as the mechanism of REDD and their versions + and ++, which are violating the sovereignty of peoples'.

This rejection of 'mercantilist market mechanisms' is not just talk. Through the Forest and Lands Audit and Social Control Authority (ABT), the government of Evo Morales has completely inverted the situation of land and resource ownership.

Of the 57 million hectares of land titled between 1953 and 1992, 70 per cent was granted to large and medium land owners. By the end of 2012, 23.2 million hectares had been newly titled or retitled to communities through a legal mechanism know as Original Indigenous Native Peasant Territories (TIOC).

Bolivia sees local forest farm producer groups, whose tenure has been secured through TIOC, as a holistic solution to environmental protection and social development. Instead of a REDD+ programme, Bolivia has set up thePlurinational Mother Earth Authority (APTM) (Spanish language PDF) – the 'plurinational' reference is to the 38 indigenous peoples within the country. This oversees three new climate change mechanisms covering:

Joint mitigation and adaptation (MCMA

Non-forest mitigation (for example in energy and industry), and

Adaptation.

The first of these will work out the practicalities of how local forest farm producers can both adapt to and mitigate climate change through business models that put the holistic nature of sustainable forest farm management at the foundation.

MCMA is currently developing national and regional 'platforms' through which these models will be discussed and then supported through national and municipal government authorities – alongside donor programmes aligned with that vision. The FFF is one of those aligned partners and has been assigned a critical role in identifying, strengthening and supporting the representation of forest farm producer groups in the platforms.

The challenge of representation is complicated on two fronts. First, many community-level organisations are not yet fully registered or legalised. For this reason FFF is supporting a national producer federation CIOCEC (Coordination and Integration of Producer Organisations) to broaden and accelerate legal registration at community-level.

Secondly, many of the community-based forest farm producer organisations have yet to develop their business plans and organisational models – with inadequate knowledge of what support is required – and what models could be scaled up.

For this reason, FFF has started to run Market Analysis and Development training courses, and will fund a national association of workers groups (MINGA) to help forest farm producer organisations develop and implement their sustainable business plans in the Chiquitanía. Three pilot areas have been selected: Pando, North of La Paz and Chiquitania in Santa Cruz. Further small grants to particular forest farm producer groups are also being discussed.

Training participants heard about the successes and challenges of Brazil nut and rubber tappers' associations. They also shared their own experiences with timber, cocoa, coffee, Brazil nut, açai, quinoa, honey, llama wool and chicken production. Perhaps the defining lesson from the week was that, while business information (about markets, legal requirements, technology, social acceptance) was essential for successful production, it was organisation management and accounting that were 'make or break' for businesses.

Many local failures cited initial profitability, but said that this was then undermined by inadequate management and a failure to reinvest profits into business growth and development – or by changes in management staff without adequate preparation of replacement staff.

Too often, political powers at community level were allowed to use hard-won reinvestment funds for short terms social objectives. For example, a community forest enterprise (EFC), Taruma, generated $230,000 USD in profits from timber sales between 2009 and 2012. Careful distribution of those profits into reinvestment funds (50 per cent) participating members (30 per cent) and community social project (20 per cent) was then compromised by changes in management staff and political interference in the use of the reinvestment funds.

When Taruma was persuaded to switch buyer, and that buyer failed to pay – the lack of operational capital led to demoralisation within the business and almost complete collapse. The structuring and financial separation of advisory 'oversight' assemblies or boards from 'operational' management structures is an area that requires more attention at every stage of business development.

Building forest farm business models that can learn from such lessons will be fundamental to the success of the holistic vision of the Plurinational Mother Earth Authority. As Alicia Canaviri, a quinoa producer and participant from the Economic Solidarity and Commercial Justice Movement of Boliva (MESyCJB) observed: "We leave this training with a different mentality – we need to better structure and operationalise our business ideas around multiple product lines – and provide services to our members".

IIED is working through the FFF to capture in a compendium examples of locally controlled forestry business models that can be used to inform national programmes such as MCMA. For it is on the innovation in business models that the future of 'Mother Earth' depends.

Duncan Macqueen (duncan.macqueen@iied.org) is a principal researcher in IIED's Natural Resources Group, working on forest use and policies.

Read the original publication here