The financial benefits of forest certification: case studies of acacia growers and a furniture company in Central Vietnam

Maraseni, Tek Narayan and Son, Hoang Lien and Cockfield, Geoff and Duy, Hung Vu and Nghia, Tran Dai (2017) The financial benefits of forest certification: case studies of acacia growers and a furniture company in Central Vietnam. Land Use Policy, 69. pp. 56-63. ISSN 0264-8377

Abstract

The demand for forest products is growing and plantation forests are supplying an increasing proportion of wood
to industry. There are also increasing market requirements to demonstrate the sustainability of timber supply.
Vietnam has some 3.9 M ha of plantation forests, 44% of which is on short-rotations managed by smallholders.
More than 80 percent of the harvested volume from the plantation forests is used for woodchip production to
serve domestic and international markets. The Vietnam Government has goals to increase the domestic supply of
suitable wood for furniture production to international markets by increasing the supply of larger logs grown in
plantations and the supply of certified wood to industry. However, it is not clear that these objectives will
necessarily benefit growers and processors. This study compared financial returns from certified and non-certified
forest products for: (1) growers with 10-year rotation acacia plantations; and (2) a furniture processing
business (battens for chair and table) in Quang Tri Province, Central Vietnam. The data were collected from
smallholder tree growers and a sawmilling company, triangulated with and supplemented by formal and informal
interviews with other stakeholders. Currently, much of the cost of certification is met by external aid
donors. Results showed that net returns from both certified and non-certified timber products are positive for
both actors and are higher from certified timber production than non-certified timber production. When the full
costs of certification are included, the benefits to growers of certification are much reduced and potentially
negative unless the fixed costs can be spread over a large group of growers. A minimum of group with 3000 ha
may be required to make certification cost effective. In recent years, the price difference between the certified
and non-certified logs is narrowing and this may discourage farmers from attaining certification. For the sawmiller, the benefit of certified timber production is greater. It would be in their interests to increase prices paid togrowers for certified logs. Government policy measures to support certification should include consideration of who bears the cost, support for aggregation of smallholder growers and improved communication in timber supply chains.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to published version, in accordance with the copyright policy of the publisher.
Faculty / Department / School: Current - Institute for Agriculture and the Environment
Date Deposited: 24 Jan 2018 04:56
Last Modified: 24 Jan 2018 05:00
Uncontrolled Keywords: acacia plantation, certified forest, Vietnam, grower, sawmill, furniture industry
Fields of Research : 07 Agricultural and Veterinary Sciences > 0705 Forestry Sciences > 070504 Forestry Management and Environment
Socio-Economic Objective: D Environment > 96 Environment > 9607 Environmental Policy, Legislation and Standards > 960799 Environmental Policy, Legislation and Standards not elsewhere classified
Identification Number or DOI: 10.1016/j.landusepol.2017.09.011
URI: http://eprints.usq.edu.au/id/eprint/33413

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