Building opportunities for small-farm agroforestry to supply domestic wood markets in developing countries

The fastest-growing demand for wood products is in domestic markets of developing countries. These markets could offer significant economic opportunities for hundreds of millions of small-scale agroforestry producers, in market niches where they can offer competitive advantages such as control over commercially valuable tree resources, lower cost structure, better monitoring and protection or branding for socially responsible markets. The most promising opportunities for small-scale farmers to sell high-value timber are as outgrowers for industrial buyers or by selling to intermediarieswood grown in agroforestry systems. Farmers located in forest-scarce regions near pulp mills may benefit from outgrower arrangements for pulpwood. Farmers located near inland urban markets may be competitive in some commodity wood and woodfuel markets. Opportunities in processed wood products are mainly in pre-processing, milling to supply low-end products, niches that cannot be efficiently served by industrial-scale producers, and through contracts for selected operations in vertically-integrated industries. To develop viable wood market enterprises, producers must improve their market position, strengthen their organizations, and forge strategic business partnerships. Forest market institutions must adapt by providing business services to small-scale farm producers, investing in regional forest enterprise development to fill gaps in the value chain for wood products, and targeting research, education and training. It is essential to remove policy barriers to small-farm participation in markets, by removing excessive regulations, creating fair and open competitive market environment, and involving farmers' organizations in forest policy negotiations.