Organise to thrive

In the run up to the World Forestry Congress in September 2015, Duncan Macqueen highlights how Forest Farm Facility support to help groups organise is helping forest and farm producers in Guatemala.

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30 June 2015

Duncan Macqueen is principal researcher in IIED's forest team with the Natural Resources Group

A tree nursery run by Fedecovera, is the world's biggest exporter of cardamom and a cooperative with 25,000 members (Photo: Duncan Macqueen/IIED)

Need to know: the producer tiers

  • 1st tier – local producer or association built around a product (e.g. coffee)
  • 2nd tier – regional association/s, which makes money from services provided to members (e.g. processing, projects) 
  • 3rd tier – national federation representing second tier organisations
  • 4th tier – multi-country or global federation representing third tier organisations at international level

Organisation against conflict

The high mountains of Alta Verapaz, Guatemala, have been carved into pockets of cultural ecology inhabited by 23 linguistic groups, each with their own dazzling rainbow of traditional costume.

Each makes diverse use of distinct landscape resources. While that might be a recipe for division and conflict, it has not panned out that way. Organisation is why. The Forest and Farm Facility (PDF) is working with these communities to provide support.

The local coffee cooperative, Chicoj, for example, successfully mixes coffee farming and eco-tourism. It is just one of 250 diverse producer organisations that inhabit these landscape pockets. Most are organised into second tier cooperatives. Along with 35 other groups, Chicoj belongs to Fedecovera, a cooperative with 25,000 members.

Offering member services that benefit both forests and people

Fedecovera, is the world's biggest exporter of cardamom. Its members also produce coffee, cocoa, tea and timber certified by the Forest Stewardship Council

Fedecovera's forest nursery is Guatemala's biggest. It sells seedlings and management services to people taking advantage of government forest restoration incentive programmes, PINPEP and PINFOR. Its state-of-the-art sawmill uses the timber to make pallets for the fruit industry. 

It is a major shareholder in the country's most widespread rural development bank (Banrural) and receives a 40 per cent annual return on capital. Fedecovera also runs its own credit programme which disperses USD $2,500,000-5,000,000 annually in loans at much lower rates (4 per cent per year). 

While I was there, the cooperative was running two separate business training courses at its headquarters. 

Fedecovera's financial self-sufficiency is built around four income streams: supplying rural credit; selling services to members, added-value processing industries; and development project management. It does not drain the financial resources of its members through costly membership fees.

It is one of 11 regional groups united under a (third tier) umbrella organisation – the National Alliance of Forest Communities ('Alianza' for short). Alianza represents more than 388,000 producers, and sustainably manages 750,000 ha of forest (17.5 per cent of national forest coverage). 

The Guatemalan Alianza is a member of the (fourth tier) Alianza Mesoamericana (AMPB), which represents similar federations across the Americas at global level.

Building on strong business administration

"Rigorous financial administration is the key to financial self-sufficiency," says Alfredo Cu, Fedecovera's manager. 

Fedecovera has built up its capital by keeping careful track of each of its multiple business enterprises, reinvesting to enhance its business infrastructure, such as the coffee processing plant and new sawmill facility. A set of luxury tourist lodges is at the planning stage.  

The tight financial administration plays well with government, which is co-financing new sawmill production lines so that Fedecovera can move into the house construction business.

A Fedecovera state-of-the-art sawmilling facility, similar to those being co-financed by the government to enable houses to be built (Photo: Boris Fernandez)

As a member of Alianza, Fedecovera is able to engage national decision-makers. Discussions between Alianza and the government led to the first forest incentive programmes PINPEP AND PINFOR – which disperse around USD $10 million annually for forest restoration. 

Alianza is working with the government to design the follow on programme, PROBOSQUE. It is fighting to ensure the new incentive programme makes it through parliament with a maximum limit on forest units eligible for incentive payments (to avoid elite capture), and to protect watersheds vital to local communities. 
  
These efforts to enrich forest landscapes require patient enabling investment. Fedecovera has benefited from almost 40 years of investment from both government and civil society organisations, including eight years of support from the Swedish Cooperative Centre (now called We-Effect). Replicating its success among the more recent groups within Alianza will take time and require further investment in the emerging forest and farm producer groups.

Investing to scale-up success

The new Forest and Farm Facility (FFF) does this. With start-up financial commitment from Sweden, Finland, Germany, the United States and the European agency, Agricord (itself a federation of forest and farm producers), FFF has begun to provide flexible enabling investments. 

Designed in close collaboration with, and now steered by, representatives of forest and farm producer groups, the FFF invest in strengthening forest and farm producer group businesses, engagement with multi-sectoral policy platforms, and making their voice heard at the international level – just as Alianza tries to do. 

Together with Alianza, the FFF financed a full cycle of market access training-of-trainers courses in Guatemala and 13 other Latin American countries to support the development of small-scale forest enterprises and is now providing on-going support. 

This includes enabling 12 cooperatives to develop business plans; exploring loan options from the various credit possibilities with Guatemala (such as Fedecovera); underpinning market development for timber coming from forest plantations in the Northern Peten (together with other partnerships); helping establish a new Ramon nut production cooperative (with ACOFOP); strengthening policy engagement (with the National Forest Institute); and reviving the inter-institutional policy coordination group (GCI) on themes such as forests and the economy, forests and energy, and forests and climate change.

It is also plans to help provide business services to enterprise groups with the Ministry for Economy (MINECO) and redesign trade fair round tables for forest businesses to include forest and farm producer groups within the Alianza. 

FFF support has also been an integral part of important international forest policy processes in Guatemala, including strategies for Reducing Emissions from Deforestation and forest Degradation (REDD+) and efforts to strengthen Forest Law Enforcement, Governance and Trade (FLEGT), leading to bilateral agreements between Belize and Guatemala to tackle illegal logging in the protected Mayas Chiquibul Mountains. 

The role of the FFF is to ensure the participation and active engagement of forest and farm producers in such discussions. Support for organisations at all levels from innovative financial mechanisms such as FFF is clearly timely. The question now is whether it will be given the resource to continue supporting forest and farm producers at every level. 

Duncan Macqueen (duncan.macqueen@iied.org) is principal researcher in IIED's forest team with the Natural Resources Group.

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