This paper is meant to promote a better understanding of the nature of major cross-sectoral linkages affecting forest development and to identify priority areas for attention and action in relation to the influence of policies external to the sector. This is in line with the strategies promoted since 1985 by the Tropical Forests Action Programme (TFAP) and more recently by UNCED's Agenda 21 which stressed the importance of the influence of other sectors'development on forestry and the need for harmonized action.
Beyond a general recognition of their importance there has been limited research and systematic analysis on cross-sectoral linkages related to forestry. For this reason preference was given to presenting some examples which illustrate the main interactions between other sectors and forest development. Major categories of situations are identified and a general matrix for the analysis of cross-sectoral linkages is proposed. However no specific analysis of linkages in each category of situations is attempted as it requires a treatment in line with the complexity of the interactions and it goes beyond the limits of this paper.
The main areas of external policy influences on forestry are then identified as a basis for stressing major implications in terms of strategies and action priorities. They relate to macroeconomic policies, to rural development and poverty alleviation, to the environment and the conservation of natural resources, to the changing role of government institutions and the increasing involvement of rural communities and the private sector.
Priorities for action are proposed. They include the review of national investment policies, the internalization of sectoral externalities on forestry, the externalization of forestry benefits, the incorporation of forestry's economic contribution in national accounts, the review of policies and rules governing land use and tenure, the modernization of the institutions responsible for forestry and within them, the development of capacities for policy analysis and research in order that the forestry sector itself be better equipped to relate to other sectors.
In concluding it is stressed that macroeconomic policies and land use policies ultimately determine whether sustainable forest development can be an attractive long term land use option. It is suggested that their influence be ascertained by focusing specifically on the capacity of forestry to compete with other land uses under the prevailing conditions of policy, institutions and subsidies and incentives.
1. The many contributions of forests and forest based activities to the economy, to food security, energy supply and many aspects of the environment and social well-being, are by now well recognised. There is also awareness in the North as well as in the South of the incapacity of traditional forestry strategies to address alone the accelerating pace of deforestation and forest degradation. Policy measures and activities in other sectors determine the ability of forests to perform their economic, social and environmental roles at least as much as the implementation of forestry policies set within the sector.
2. Already at the time of its launching, the Tropical Forests Action Programme (TFAP) recognised the important role of related sectors in the conservation and development of tropical forests and the need to mobilize their commitment and to harmonize action through a consistent and convergent policy environment towards the objectives of national forests action programmes. Experience has shown the difficulty of ensuring proper dialogue with other sectors related to forestry and developing actions in these sectors which complement or support those in forestry.
3. This paper which is addressed mainly to policy makers is an attempt to assess the degree of understanding of the major cross-sectoral linkages and the influence of external policies on the contribution of forests to sustainable development and environmental stability within the framework of UNCED Agenda 21 for forestry and the Forest Principles. Section II identifies broad cross-sectoral linkages and major categories of situations within which there should be further analysis to identify significant policy interactions. A analytical matrix is presented in Section III. A concluding section proposes possible response strategies and action priorities.
1. Although the results of UNCED are well known, some of the main outcomes relating to forestry and particularly to the subject of this paper may usefully be recalled.
2. The "Rio Declaration" proclaimed its general principles to guide states and people in a "new and equitable global partnership" in matters of the environment and development, and insisting on the need for environmental protection to be an integral part of development to reduce and eliminate unsustainable patterns of production and consumption; to adopt appropriate and effective environmental legislation; to undertake environmental impact assessments at national level; while emphasizing the right of every country to exploit its own resources according to its own environmental and development policies.
3. Agenda 21 calls for the integration and coordination of policies and strategic actions at national and international level. The social and economic programmes described are clearly related to conservation and management of natural resources and are conditioned by the availability of human, technological, cultural, and economic resources and means.
4. The Forest Principles covering all aspects of forestry state that "national policies and strategies should provide a framework for increasing efforts, including the development and strengthening of institutions and programmes, for the management, conservation and sustainable development of forest and forest lands" and the underlying need to integrate in a comprehensive way "all aspects of environmental protection and social and economic development as they relate to forests and forest lands".
5. Agenda 21 Chapter 11 "Combating deforestation" stresses the need for integration of forests in broader cross-sectoral approaches to sustainable development. It calls for more effective measures and approaches at national level to improve and harmonize policy formulation, planning and programming and for cross-sectoral coordination to sustain the multiple roles and functions of forests and forests lands; to integrate national forestry programmes and plans for the management, conservation and sustainable development of forests with other land uses; for concerted action to increase people's perception of the value of forests and of the benefits they provide; to establish the systems needed for a continuing observation of forests and forests lands to integrate them in national planning and decision-making.
6. Major areas of concern in relation to forests in sustainable development and the environment arising in Chapter 11 and the Forestry Principles are as follows:
a) management, conservation and sustainable development of forests,
b) promotion of sustainable patterns of production and consumption of goods and services from forests,
c) social aspects of forests,
d) institutional strengthening and capacity building.
7. The influences of cross-sectoral linkages and the impacts of policies of sectors related to forestry have to be identified and analyzed within these areas. Research on the main causes of deforestation, specially in the tropics, have concluded that different types of agriculture policies and production technologies together with population pressures and some macro-economic policies (fiscal, prices, trade, etc) are among the main causes. Forest development may be negatively impacted through:
- the loss of productive forests resulting from their clearance and conversion into other land uses either by spontaneous settlers practising shifting cultivation or by planned colonization for agriculture;
- degradation of mountain and hilly catchments as a consequence of unsuitable land tilling practices;
- desertification and degradation of semi-arid and sub-humid areas due to over-grazing;
- degradation of important tropical forest ecosystems and loss of species diversity.
8. Negative impacts on forests can also result at the interfaces of forestry with mining, infrastructure, and tourism that often produce significant land use changes and conflicts with indigenous forest communities.
1. Consideration must be given to those sectors whose policies influence forestry most significantly . They are population policies, land tenure and use policies, policies aimed at raising agricultural production including those affecting farm and agriculture commodity prices as well as those policies which determine opportunities for employment outside of agriculture. Furthermore government policies often force the rural poor to migrate onto fragile, marginal lands. It is precisely on those lands that forestry may be able to contribute more significantly to rural development by addressing the twin problems of poverty and environmental fragility.
2. In most countries forest development has been determined in relative isolation by central forestry administrations through forestry policies and laws reflecting the national priorities for revenue generation, foreign exchange and national economic development. The evolving and sometimes conflicting expectations of an increasing diversity of groups depending on or interested in the fate of forests create difficult policy challenges related to both the forest and national development. The problem is now one of intricate relationships between forestry, food security, poverty alleviation, rural development and environmental stability. The new approaches to sustainable development place greater emphasis on the integration of the forestry sector in rural development and the balance between socioeconomic and environmental needs at local, national and global levels.
3. Policy decisions taken outside the forestry sector may be determinant for the sustainability of forestry. Faced with the demand for more land for crops and pastures by clearing forest, more energy to meet the needs of households and rural industries by overcutting for fuelwood, more timber for housing through uncontrolled logging, more raw materials to be collected by rural people for sale and off-farm income generation, the fundamental problem facing policy makers is the need to address the underlying causes: population growth particularly in rural areas, poverty, hunger, inequitable access to land and to inputs to increase agricultural productivity, lack of jobs and income, debt service, and, in general, economic expansion generating pressure of demand for forest products and services. Policy decisions and instruments in other sectors which address these problems result in cross-sectoral linkages on which forestry policy makers usually have limited influence even if they may facilitate, distort or constrain the implementation of forestry policies.
4. Fiscal policies, exchange rates, terms of concessions of public lands, controlled prices, transportation networks, land and tree tenure, tariff and non-tariff barriers to international trade, investment incentives, agricultural sector strategies and other macroeconomic policies all affect economic motivation and the management and conservation of temperate and tropical forests.
5. The linkages between forestry development and macro-economic policies, population and social policies, agricultural and land use policies and those of environmental, energy, industry, trade and infrastructure are complex and would require more than the succinct analysis which is possible in the present paper. For this reason preference was given to selecting a few illustrative examples which could stimulate discussion and further analysis.
6. Policies which influence land use and tenure are of critical importance as the land resource base is the common denominator of all sectoral policies dealing with natural resources and rural development. Furthermore land use constitutes an integrative element in sustainability. A recent FAO/World Bank agriculture review in Ecuador mainly recommended changes in national policy on activities that are not directly related to the forestry sector, yet impinge upon it. In particular, there is clearly a need to improve land utilization in the Sierra and Costa regions so as to take migratory pressure off the moist tropical forests (MTF). Environmentally sensitive policy decisions are also needed for petroleum exploration in MTF areas and for expansion of the shrimp industry in the mangrove forests. In general. there is need for cross-sectoral coordination of legislation and development approaches, compatible with environmental conservation.
7. Experiences in some cases have evidenced the impact of forest destruction on agriculture production. In fragile ecological situations agriculture production benefits from the conservation of some forest areas and trees in farming systems in which farming, forestry, animal husbandry and sideline occupations are fully integrated. In Chuina's Xiji county, Ningxia Hui Autonomous Region, an important component in the "Three North" Shelterbelt System, undue emphasis was put on the slogan "taking grain production as the key link" in the past, and as a result, forest were heavily destroyed and the forest cover was brought down 3.8 %. The loss of a balanced ecosystem caused a constant decrease of agriculture production.
8. Policies that affect the economy in general are obviously affecting the forestry sector, in particular the economics of forestry development and the competitiveness of investments in forestry. This was particularly exemplified by a 1993 World Bank review of the forestry sector in Argentina but it applies to many other countries. Inefficient macroeconomic policies which constrain growth contribute to the destruction of native forests as exemplified by the situation of Argentina. Macroeconomic instability, leading to low or negative growth rates, has contributed to loss of native forests by; (i) lessening alternative job opportunities for poor rural families and thereby increasing the attractiveness of subsistence agriculture in or close to native forested areas; (ii) fostering inflation, which boosted the demand for inflation hedges, and, thus, the demand for land as a long-term but illiquid hedge, and cattle as a short-term and very liquid hedge; these demands encouraged expansion of the frontier at the expense of native forests; (iii) making counterpart funds scarcer and thereby depriving protected areas and other native forests of the effective protection needed; and (iv) lowering the priority attached to preservation of native forests at the national level because of very pressing macroeconomic concerns.
9. The potential rent from the Philippines' forest sector was estimated at more than $1.5 billion during 1979-1982, while actual rents were slightly more than $ 1 billion. The difference reflects inefficient industrial and fiscal policies which encouraged inefficient processing. A log exported as saw timber or in raw form brought higher net returns than the same log used for plywood. During this period, the government's total revenue from forest charges and export taxes represented around 11 percent of potential rents. Specialists conclude that the government's inability to capture a larger share of the available rent promoted rapid deforestation by encouraging timber booms throughout the country.
10. Irrigation/power generation policies frequently affect forest development as immediate employment and generation and economic considerations take precedence in determining development programmes with little or no regard to the forestry sector; often forest policies have to adjust themselves to accommodate this situation. A study of interactions between forestry sector policies and irrigation/power generation programmes in Sri Lanka provides an example of the pressure of poverty and unemployment which are so pervasive in Asia, in the short and medium term, that weightage has to be given to quick yielding economic development programmes, which invariably means that forestry sector policy has to take a back seat in the scheme of things. This arises either due to the lack of an accepted forestry policy or because the forest policy, if there is one, has been drawn up in isolation, with little or no regard to its linkages with the rest of the economy and the socio-political environment.
11. Government policies concerning dialogue between sectors and interest groups may facilitate or on the contrary constrain interaction and convergent development strategies. For example in Canada significant concerns about how forests are managed have been raised by environmental groups, aboriginal and non-aboriginal communities, and research scientists. Many of these groups agree on these four issues: that forestry has focused on timber production at the expense of all other interests; that communities should be involved in decision making about the forest; that there is too much reliance on single forest-based industries which leads to economic instability in rural areas; and that forestry practices such as clearcutting, pesticide use, and road construction are environmentally damaging. Government tends to have separate mandates. Comprehensive policy is difficult to establish, and trade-offs are made through legislation and regulations rather than discussion. These problems have forced provincial and federal forest agencies to remove barriers between institutions with different mandates, moving to a forest management philosophy that include all values pursuing cooperation among the various agencies and stakeholders groups so that they seek common goals. Under these principles were created the Model Forests, managed by a partnership of key stakeholders industry, community groups, government agencies, environmental groups, academic and educational institutions, aboriginal groups, private landowners among others.
12. Policies which determine the role and structure of the public administration in particular with regard to the management of natural resources and of public lands are most influential on forestry development. Careful consideration must be given to the placement of forestry in the institutional and public administration set-up. Such placement affects the incorporation of forests as a fully recognized option adequately integrated in land use policies and plans as well as the balance between the productive and the protective functions of forestry. Frequently insufficient political attention with regard to securing an adequate placement and level of forestry in the institutional framework results in weak forestry institutions unsuccessful in interactions with other sectors, and unable to establish and maintain an adequate dialogue with other land use sectors on the harmonization of policies and strategies on cross-sectoral issues.
13. The impact of evolving cross-sectoral linkages on forest development must be carefully monitored in those situations in which governments are modifying the roles and responsibilities of the public and private sectors and of local organizations in land use and management as a consequence of macro-economic changes and structural adjustment programmes. The responsibilities on environmental and natural resources questions among Government institutions in charge of major land using sectors are often redistributed and tenure and use rights may be devolved to other actors, private sector, NGOs, local institutions, organized communities. Government agencies withdraw from productive activities while retaining power to attend to more specific and sensitive socio-economic problems; their financial and human resources are reduced. This calls for different institutional attitudes that must go in the direction of leadership, coordination and integration and interrelation of policies and programmes among interacting sectors. In such situations it is imperative that possible irreversible negative impacts on forest development be identified and corrected and that permanent arrangements be made to ensure inter-sectoral dialogue.
14. The ample evidence of policy interactions of a cross-sectoral nature which affect land use, the conservation of natural resource and forest development stresses the critical need for a national capability to carry out appropriate policy analysis and evaluations. The linkages between forest policies and policies affecting forests are difficult to evaluate. Policy analysis and evaluation are inherently subjective and politically sensitive. The following preconditions appear necessary to carry out these studies with success:
Political preconditions - The analysis and evaluation process must be recognized as essential to political stability and therefore supported by high-level Government officials. It also depends on positive political and administrative incentives favouring policy critiques.
Organizational preconditions - The analysis should be able to penetrate the policy making process, implying that it is integrated with decision making cycles and budgeting. A capacity to conduct policy analysis must exist at all appropriate administrative levels and be coordinated by a central unit.
Technical preconditions - The process requires adequate evaluation skills (professional capacity), conceptual frameworks, analytical methods, information systems, and reporting capacity.
15. A challenge to carry out sound policy evaluation is to match methods to purposes, to choose methods which favour the active participation by a wide spectrum of government bodies, NGOs, rural populations, other stakeholders and to integrate economic, welfare, participatory, and environmental criteria within a unified framework. Policy evaluation is not only a technical exercise, but also an opportunity for policy dialogue that can improve the inter-connection with related sectors.
1. Through history, the forest, as a major natural occupant of land, has been subject to clearance for agriculture, pasture and human settlements. With the growth of population and wealth, the demand of land for agriculture as well as the demand for forest products and services increase. Thus, forest development calls for an increasing productivity and diversity of goods and services while the forest must compete with other uses and demands for the land.
2. To facilitate the identification of the interactions among different sectors and to analyze their impacts on the sustainability of the forest development, the following broad ecological and socio-economic situations can be identified:
a) Lowland humid tropics, distinguishing those under high or low population densities. Socio-economically, the first group, exhibits a diversity of infrastructure influenced by their historical development and by pressure of population with commensurate demand for land, food, fuel and income. The major causes of deforestation are: illegal encroachment on remaining forests for subsistence farming, industrial agriculture, ranching, government land development schemes and physical infrastructure development. Degradation takes place through gradual reduction of biomass, and through changes in floristic composition and/or soil characteristics as a result of misuse and overexploitation.
Under low population densities these lands present large areas of undisturbed tropical forests mainly due to the lack of access and low pressure for new farm land. The expansion of agriculture and livestock activities is seldom based on land capacity assessment, effective land use development planning and limited knowledge of the ecosystems by the new settlers. Furthermore lack of effective implementation of sustainable forest management plans, insufficient investment in forest conservation and development, the absence of political will to set aside permanent forest estates, the lack of market and of local industries, are some of the constraints to the incorporation of forest lands in national development.
b) Tropical to temperate highlands, many of which are experiencing the effects of increasing populations on fragile and low productive soil and water resources are frequently characterized by old cultures with established traditions. Land use systems frequently consist of intensive combination of farming, grazing and tree growing in agrisylvipasture practices on small plots subdivided through succeeding generations. Tree planting is mostly done around the home or in small woodlots on land not suited for agriculture. Fuelwood and fodder may be in acute scarcity.
c) Arid and semi-arid lands, in which recurrent drought, overstocking with domestic animals, over cultivation and fire, over-harvesting of forest products have significantly reduced the protective and productive function of the biomass. Vast areas are prone to desertification and the rural population is exposed to increasing hardships. However, the typical vegetation has a tremendous resilience and plays a buffering function that absorbs up to a certain point the direct effects of recurrent droughts and the associated increase in pressure on the resources.
d) Temperate and boreal forest. Industrialized countries, and a group of countries in transition from centrally planned to market economies account for the major part of the temperate and boreal forests (87 %).
Industrialized countries are pursuing new approaches to the use of the natural resources. Environmental considerations are receiving much attention in policy decisions as a consequence of new social needs and the increasing concern for the conservation of these resources. The land area under forest is largely stable with slight changes due to removal of forest for urban use or addition to forest through afforestation of surplus and unused agricultural land and pasture. Main problems arise from local and transboundary atmospheric pollution mainly from industrial sources and from the adaptation of forest policies to evolving agricultural and rural development as well as environmental and nature conservation policies.
In countries in transition to a market economy, the capacity to earn foreign exchange through increased competitiveness on export markets is a major concern in the current macro-economic reform process. Privatization and the new orientations of agriculture, rural development and land tenure are also important elements of the context within which forestry is evolving. So far in most countries the forests continue to be predominantly state owned and only some forest operations and the forest industries have been or are being privatized. The reform process as it affects forestry must not threaten the long term sustainability of the resource. It entails a careful evaluation of the different sectorial policies that can impact on forestry development.
1. On the basis of the above-mentioned characterization of the main cross-sectoral linkages and broad ecological and socioeconomic areas, a general matrix (see Table 1) is constructed for the purpose of further analytical work. Major sectoral policy areas involved, some specific types of components or instruments influencing these policies, linkages through which forestry is affected, and possible effects on forest development are indicated. Each policy area can normally be identified with a government department thus enabling an institutional focus. An alternative would have been to focus on major policy instruments, such as fiscal policies, pricing policies, land distribution policies and their applications through various sectors. However this would have made the identification of institutional responsibilities more difficult.
2. In identifying the impact on sustainability of forest development effects must be looked from the perspective of positive or negative contribution, and not limited to the conservation perspective. Furthermore in most cases the same cross-sectoral linkage can have a positive or a negative impact depending on the way it operates, the instruments used and the behaviour of the groups it influences.
3. The general matrix is provided as a tool for discussion and a indicative approach which could be applied to the analysis for each broad category of situations identified above. The development of a specific matrix for each type of situations entails a detailed analysis which goes far beyond the limits and scope of this paper. However there is no doubt that such an analysis is indispensable in order to identify in each situation the specific sectors involved, the nature of the cross-sectoral linkages, the type of impact and the strategy to correct negative linkages and to strengthen positive ones.
4. For example at the interface between forestry and other land use sectors, deforestation and other negative effects on forests will generally be related to the insufficient value attached to the forestry use of the land, to short term revenues derived from alternative uses, to the lack of clear ownership and use rights and to conflicts between indigenous forest communities and incoming groups of new settlers. The economic or social nature of the effect will originate in the interaction for example either in pricing policies in agriculture compared with forestry or in the legal arrangements for tenure and use of land or trees or both. Analyzing the financial, economic, social, and institutional nature of the identified effects is a first step in understanding the nature of the cross-sectoral linkage and in identifying the scope for corrective action through appropriate strategies and action priorities to ensure sustainable forest development.
1. Among all of the linkages identified in the general matrix most of which have a broad validity independently of the geopolitical characterization, the main areas where changes in policy have major impacts on forestry, are the following:
- policies oriented to promoting, expanding or stimulating national economies, like fiscal, monetary, trade, infrastructure, industrial policies;
- Policies oriented to improving people's welfare and life and to alleviating poverty, especially at rural level, such as population, crop and livestock, rural development, tourism, energy policies;
- policies oriented to conserving the environment and the protection of natural resources, such as environmental, agriculture, fisheries, industry, land use policies;
- policies orientated to increasing efficiency in the processing or intensifying the utilization of natural resources, such as privatization, fiscal, environmental, trade, infrastructure, energy and tourism policies;
- policies oriented to changing the role of the government and to increase participation of different actors, as reduction of public expenditure, privatization, energy, industry, trade, tourism.
2. There is a degree of over-lapping between these policy areas, each one affecting the forestry sector in different ways and directions (positively and/or negatively). Although it is not easy to summarise the possible major impacts on forest development, the following provides some indications of the implications.
3. Promote, expand, stimulate national economy. Many of the policies mentioned, mainly the product of or related to macro-economic policies and structural adjustment process, are oriented to pull economies out of recessions and to alleviate growing international debt. These are mainly problems of developing countries, where the concentration on major immediate socioeconomic issues and short term policies is rarely compatible with the long term policies, goals and strategies pursued by the forestry and environmental sectors. The impacts of these policies on forest development take effect in the short to medium term after their introduction and can result in higher demand for forest products, stimulate production and investments in forestry, and trade, increase harvesting of natural forests, reforestation, employment opportunities in rural and industrial areas, etc. However, such policies may also produce deforestation, over-harvesting, unsustainable use of the resources, and orient the economic operators towards minimising expenditure, diminishing investment and reducing government attention and resources' allocation to forestry. To avoid negative consequences for forestry the sector needs to be involved in consultations preparing government decisions on the economic expectations and the instruments for policy implementation.
4.
4. Improve people's welfare, and alleviate poverty in rural areas. Different inter-related policies can offer considerable opportunities to forestry sector to contribute to these policy objectives and social demands, specially through agri-silviculture, non-wood-forest products for human and animal consumption, medicinal products, fruit, soil protection, off-farm income generation and employment in small-scale forest-based rural enterprises, agri-tourism, and recreation. In many developing countries special attention is required to assess the extent to which sectoral policies and strategies are consistently promoting security of tenure of lands, resources and products, and stimulate the participation of rural people, native groups and communities to carry out sustainable forestry production, maintaining the economic viability of rural areas and integrating land use planning and management of these areas.
5. Conserve and improve environment and protection of natural resources. Policies in this area would have impacts in the short term, such as the transfer of productive forest land to other categories, e.g. national parks, reserves, with consequent reduction in the availability of forest products. The long term will favour changes in silviculture practices in order to integrate biodiversity and ecosystem conservation in sustainable forest management, raising and diversifying its productivity and making for more economically and environmentally efficient forest industries. There will be reduced demand for raw materials particularly from natural forests as a result of more efficient utilization and recycling being stimulated. The efforts to define indicators to assess the sustainable management of natural resources including forests are oriented to measuring pursuit of these goals.
6. Improved processing and use of natural resources. The increasing public concern about the use of resources, the intensification or re-location of processing operations and the globalisation of markets, e.g. expansion of mining, development of hydro-electric power, fossil fuels exploration,etc. have significant impacts on forestry over the medium to long-term. Guided by new macro-economic policies, many developing countries and countries in transition to market economy have privatized many of the existing public enterprises, looking for higher technical and economic efficiency and favouring a more rational use of the forest resources and of the productive factors involved. Trade liberalisation will stimulate the supply and demand of forest products, and the competition will improve their quality. Environmental protection in trade policies (e.g. green labels, bans of tropical forest woods), however can have controversial effects on forestry. It can favour a reduction in the supply, trade and demand of some specific forest products coming from natural forests but can also produce deforestation due to the loss of economic interest in these products from the rural people, private sectors and governments.
7. Changing role of Governments institutions. New economic and political trends show a clear orientation towards reducing the involvement and activities of the public institutions in all sectors. Historically in most countries forestry has been a sector in which the state had a major role both as owner and producer, or has exercised strict control over activities carried out by others. Today the reduction of the involvement of public entities in national economic development and the consequential reduction of public expenditure has resulted in wider participation in the economy of other actors such as - the private sector, NGOs, rural communities, peoples associations, local institutions. Privatization of public forestry enterprises, of activities on public forest lands, of extension services, of research, is a growing trend in many developed and developing countries. Decentralization of functions to regional and local areas has also stimulated the participation of local people in forestry. The responsibility of public forestry institutions is now more on guiding national forestry development under the principle of sustainability, on integrating efforts and providing support to the participation of different agents, on rationalising forestry policies and strategies with those of other sectors, on increasing political and public awareness and understanding of forestry issues and on supporting national and international negotiations and agreements on forestry.
8. Policy and strategic choices in other sectors influence forestry to the extent that the agents directly involved in the sector have limited margins of choice and the responsible institutions cannot consider their policy decisions and implementation in isolation of interactions with those other sectors.
9. Therefore, there is a need to maintain a continued analysis of the impacts of the various elements of the national policy framework and to identify the necessary responses to them in forestry to secure sustainable management. In particular because of its special importance the land-use dimension requires that collaborative mechanisms be established between forestry and related sectors. These mechanisms should enable regular consultations for identifying specific areas or issues on which policy development and implementation should be harmonized or reforms required in pursuance of convergent and sustainable land use approaches.
10.
1. From this review of policy interactions, some actions can be identified which would promote, facilitate and improve the outcome of the interaction between different socio-economic sectors and forestry. But an important prerequisite is to increase accurate political and public awareness and understanding of the role and contribution of forestry.
A. Review of National Investments Policies. Investments are mainly oriented to those sectors which have a clear, direct and quick return in terms of the national development goals or to those which are indispensable to promote or sustain social welfare. Forestry and environmental options are not often among these priority areas. In developed countries environmental issues are receiving more attention from public and private sector as a consequence of public pressure and interest and the ability to deploy resources, although the main investments efforts remain the responsibility of the private sector promoted by governments through fiscal incentives and regulation directed to specific sectors, as industry, infrastructure, tourism. In developing countries, investments in forestry are mainly the responsibility of governments and often limited to the establishment of plantations; or if private they are financed through the application of fiscal policies (tax exemption or deduction from income taxes). If forestry and environmental activities are to play a significant role in national economy, government and main investment sectors should allocate increasing resources to this area of activities. This would demonstrate the mutual recognition of the equal importance of the forestry contribution to national development. However, the limited allocation of investment resources to forestry is also reflected at international level as can be see from table 2, and needs similarly to be promoted in priority and magnitude.
B. Internalization of the sectorial externalities on forestry. Mechanisms should be established to internalize the costs of the impacts on forestry of the different policies applied in other sectors. Some of the negative trade-offs that can be mentioned are: overexploitation and deforestation of native forests as consequence of agriculture, infrastructure, mining, energy, macro- economic and trade policies; pollution and contamination of forests originating in policies allowing obsolete technologies particularly in industries, mining and energy production and use; forest clearing due to fiscal and monetary policies in support to uncontrolled expansion of agriculture and livestock; abandonment of forest land and activities due to policies on urbanization and industrial promotion and development. In turn, positive impacts on forestry can also be identified from other sectors as indicated in the matrix. The mechanisms to be created should identify the negative impacts on forestry, assess their cost and facilitate the transfer of equivalent resources for carrying out compensatory activities or programmes in the sector.
TABLE 2: Trends in Lending, IBRD and IDA, Fiscal Years 1991-1993
Sector Total % Distribution
Millions US$
Agric. and Rural Dev. 3 266.7 13.8 (*)
Dev. Finance Co. 582.0 2.5
Education 2 006.2 8.5
Energy 3 586.1 15.1
Industry 1 086.6 4.6
Non project 3 580.8 15.1
Population, health and
nutrition 1 811.6 7.6
Public sector manag. 608.6 2.6
Technical Assistance 512.9 2.2
Telecommunications 353.1 1.5
Transportation 3 168.7 13.4
Urban development 1 978.7 8.4
Water supply and
sewerage 1 153.9 4.9
Total 23 695.9 100.0
(*) Include lending on Forestry for US$ 1.553,6 millions which represent 47.6% of the sector and 6.56% of all the sectors lending.
Source: Investment Center, DDC/FAO
C. Externalization of forestry benefits. As in the above-mentioned case, appropriate mechanisms should also be established to charge the costs of forestry benefits to those who will benefit from them. Examples of this type range from the reforestation and sound management of forests around watersheds and reservoirs in upper areas supporting electricity supply, clean water and other benefits to down stream areas; to afforestation and conservation of forests for the sequestration of CO2 for the benefits of the world climate and environment. Until now very little has been done in terms of repayment for such benefits to forestry, to increase the availability of resources for more substantial investments in the sector. Countries need to identify concrete mechanisms to assess these contributions of forestry to the sustainable national development and charge the society for them to finance adequate investment.
D. Incorporation of forestry's economic contribution into the National Account System. The national income accounting framework came from the 1930s, when raw materials were cheap and only a few could foresee the environmental threats that are common concern today. Today's accounting framework is particularly inadequate for countries where natural resources are among the principal economic assets. Many economic analysts endorse the view that national accounts should be revised to treat natural resources the same way that man- made capital is treated. At present national accounts leave out the effects of resources depletion and degradation. A nation's depletion of its natural resources - consumption of natural capital - can therefore masquerade as growth for decades, even though it will clearly reduce income prospects from resource sectors in the future. Appropriate accounting on the forestry sector economic contribution to national socio-economic development calls for a thorough analysis and assessment of its use and non-use values highlighting the economic and social importance of the sector.
E. Land use allocation. Land use policy should recognize that land is a finite commodity requiring careful allocation according to sustainability objectives. National policies provide an overall framework, but it is within the framework of regional, district and local planning that many sustainability policies are implemented. Unfortunately, many of these policies deal with forest land as a sort of open land fund or reservoir to which to resort in case of social conflicts in the rural area, without consideration of the land's use potential or suitability. The consequence of such policies are well known especially in tropical low and dry lands. Attention should also be focused on the issue of the large areas of unproductive lands that have already been cleared of forest and whether such land could be reclaimed economically, rather than resorting to further forest clearance. In Europe and the United States afforestation of surplus agricultural land is encouraged by "set-aside" policies being promoted by the European Union.
F. Modernization in the institutions responsible for the forestry sector. The importance of the issues indicated in this paper, the socio-economic and environmental relevance of forestry for the sustainable development of the countries, the different aspects and actors directly or indirectly involved in the sector, call for revision of political and institutional administration of forestry.
The rigidity and resistance to change on the part of public forestry administration have been an important constraint to the development of more flexible and outward looking forestry policies. Isolation of forestry staff from national policy makers is also a matter of concern, leading to the low priority for the forestry sector in national plans and financial allocations. These difficulties are being compounded by reallocation of responsibility for forestry among different ministries, including ministries of forest, agriculture, environment and natural resources, with the location of forestry in the government structure varying from country to country and sometimes divided between two or more ministries. Lack of sufficient staff, lack of multidisciplinary staff and lack of modern management skills is a further constraint. Effort should be made to increase the political support to the sector through an aggressive public relations to improve cooperation and coordination mechanisms between and within government agencies, with private sector, NGOs, communities and between countries, to achieve a more efficient administration of forestry by addressing these institutional weaknesses. However, the increasing participation of different actors in forestry makes it necessary to share responsibility and management of the sector among them. This implies new institutional dimensions have to be developed within the public forestry administration. Action in capacity building has to be oriented to strengthening skills not only of the government staff but also of these other actors, and especially of small farmers and organized community groups.
G. Development of appropriate policy analysis and research within forestry. Sound sectorial policies cannot be developed in isolation but must consider the broader framework of national goals for economic and social development. The framework for development of forest policies needs to consider areas of overlap, interconnections and interactions within the sector beyond the sector and indeed beyond the boundaries of the country. An important area for action concerns strengthening capability within the sector in the realm of policy analysis, impact analysis, policy formulation and policy implementation. This involves training and research within the sector but needs the participation of professionals and institutions competent in the related sectors. Priority areas for cross-sectoral policy research include population growth in relation to reforestation and sustainable land use, impact of economic policy, industrialisation and institutional evolution and the transformation of responsibilities for natural resource management.
H. International Cooperation. Many of the issues analyzed can only be implemented through action at national level, however, international cooperation can play a catalytic role to promote the awareness among all the socio-economic sectors of the need to consider the impacts that their policies, strategies and actions will have in the other sectors. Policy impact assessments should be a common practice among these institutions, especially by FAO and among the international financial institutions, viz. the World Bank and the Regional Development Banks, but also among the bilateral institutions that today are increasing their importance as providers of technical and financial support to divers sectors in developing countries.
From the financial point of view, efforts should be made through international cooperation to increase financial support to forestry, directly to the sector or indirectly supporting special actions/activities of other sectors that can stimulate related forestry development. This type of attitude can promote dialogue, coordination, and interaction among forestry and the other socio- economic sectors, contributing to improved cross-sectoral relationships and a stronger policy framework for sustainable national development.
Finally, international cooperation can promote national capacity in policy analysis by enhancing the exchange of information among countries. The promotion of knowledge and understanding within countries and regions and also between the international institutions dealing with forestry, and especially concerning the search for solutions to the problems and issues identified by this paper, will contribute to the achievement of a national and international forestry in harmony with sustainable development.
1. The analysis presented in this paper confirms the importance and complexity of cross-sectoral linkages and the influence of external policies on sustainable forest development. Policy interactions are particularly critical within the broader framework of macroeconomic policies and land use policies. The effectiveness of future efforts for the conservation and wise development of forests depends on the ability to improve the policy environment of these activities and to ensure that forests are a valid competing land use option.
2. Forests have seldom been able to compete with alternative land uses except in countries where they have benefitted for a long time from some forms of subsidy. The basic question is therefore: what are the conditions to make forest conservation and development a competing i.e. attractive land use option? The elements of answer lie partly within the sector itself and relate in particular to prices and values for forest goods and services and meeting the costs of sustainability.
3. Major elements of the answer are rooted in other sectors through cross-sectoral linkages. It is suggested that within the very intricate confluence of effects of other sectors on the position of sustainable forestry as a land use option special attention be devoted to three aspects:
(i) policy: the identification and reform of policies which contribute to macroeconomic instability and high discount rates resulting an environment within which forestry is not financially profitable and which is aggravated by insecure land tenure and use rights;
(ii) institutions: the evolution of the institutional framework and the reform of the public sector as they affect the distribution of responsibilities and the cooperation among the various agents in natural resource management; forest development requires the development of complementarities and the search for harmonized approaches among institutions and interest groups able to participate in the decision making process;
(iii) subsidies and incentives: subsidies to competing land uses may distort completely the validity of the forestry option and determine the behaviour of economic agents. Even when such subsidies do not exist natural forest management will seldom be profitable especially if conservation and environmental constraints are taken into account; the level of compensation/incentive to make sustainable management a valid option requires careful consideration against the profitability of alternative land uses and the willingness of consumers or of larger interest groups to pay.
4. Finally no meaningful discussion of the influence of external policies on forest development can ignore major exogenous factors which affect both national and sectoral policies. Such factors may arise from policies of neighbouring countries or within regional groupings (e.g. EEC, NAFTA); or they may be the result of international factors, especially trade relations, and in the recent years environmental policies. The exogenous pressures affecting policy may be exerted directly on the sector or indirectly by events outside the country through their influence on national policy. International assistance and investment policies also provide examples of divergent and sometimes conflicting signals, even within a single institution, concerning economic reforms and growth and environmental stability. National governments find it often difficult to reconcile economic and environmental sustainability in a genuine definition of priorities through dialogue among national agents. Forest development is affected by this context.
This paper was prepared by FAO's Forestry Policy and Planning Division with the support of an Inter-departmental multidisciplinary support group to forestry as a contribution to the second meeting of the Malaysia-Canada co-sponsored Intergovernmental Working Group on Global Forests, Ottawa, October 1994. Within FAO policy analysis and advice functions were given increasing importance in recent years. The FAO Council in June 1994 endorsed the proposals by the new Director General to strengthen the Organization's policy advisory role. A new Policy Formulation Division is established so as to be better able to provide sectoral expertise and policy services to member countries. This Division will benefit from analytical support by a new Agriculture and Economic Development Analysis Division. This new structure complemented by a degree of regional decentralization will enable the Organization to develop more effectively the understanding of interactions and impacts on forest development of policies beyond the forestry sector and to advise countries accordingly.