New Release: Financial Viability for Community-Based Forest Enterprises
Research on community-based forestry has typically centered on timber production and improved management; rarely does the focus shift to the business operations and financial viability of the community-based forest enterprise (CFE), even though these elements are critical to ensuring the broad potential benefits of community forestry.
A new publication co-authored by former EII Researcher Shoana Humphries and EII’s Senior Scientist David McGrath approaches CFEs through this new lens, analyzing the income growth and financial management of Brazilian timber cooperative Coomflona over six years using Green Value, a simplified tool for financial analysis. While many CFEs struggle to sustain themselves, the study’s authors were able to use Green Value to look at the history, costs, and challenges of the CFE, and identify areas for efficiency gains. Over time, Coomflona was able to implement different strategies to improve its financial viability based on its analysis using Green Value.
“Community forestry initiatives are failing not because they’re not managing their forests well, but because they don’t have the tools to manage their business,” said Dr. McGrath. “Communities control enormous forest resources yet their capacity to capitalize on them is often not very high. Green Value was designed to do just that – develop capacity in finance administration.”
The case study on Coomflona highlights the elements that influence the poverty-alleviation potential of other CFEs in the tropics: the importance of initial support for start-up capital, subsidized access to trainings and technical assistance, and access to markets.
Access the article on ScienceDirect to read the full case study.