After more than two decades of investment by donors and governments in community forest management (CFM) initiatives for timber production from natural tropical forests, also known as community-based forest enterprises (CFEs), the sustainability of this livelihood alternative aimed at improved prosperity remains uncertain. Although many studies have focused on the environmental and social dimensions of CFEs, very little is known about their financial viability and socio-economic impacts, even though these elements are critical to ensuring the broad potential benefits of CFM. Furthermore, the lack of a consistent methodology for financial analyses severely limits the ability to learn from CFE case studies across initiatives and time. In an effort to measure the financial viability and identify critical factors that contribute to the poverty-alleviation potential of CFE timber production, we applied a simplified tool for financial analysis in collaboration with a CFE in the Brazilian Amazon three times over six years.
Our findings indicate the importance of initial support from governments and other partners for start-up capital, subsidized access to trainings and technical assistance, and navigating complex bureaucratic systems, and the positive effect that improved productivity over time, scale economies, and access to markets can have in influencing the poverty-alleviation potential of CFE timber production initiatives in the tropics.