Introduction The Climate Resilient Green Economy

Introduction
The Climate Resilient Green Economy (CRGE) strategy of Ethiopia targets afforestation and reforestation of 3 million ha by 2030 with the aim of re-establishing forests for their economic and ecosystem services, including as carbon stocks (FDRE, 2011).
Large scale plantation development started in Ethiopia in the early 1970s for production of sawn wood, wood-based panels and pulp. Of the three, sawmilling is the main forest industry in Ethiopia (Bekele, 2011).Again according to Bekele (2011), the area of forest plantations in Ethiopia was 972,000 ha in 2010. Of these, industrial plantations, which were developed for timber production for sown wood and poles, covered 190,400 ha of land (19.6%), and the non-industrial plantations, which were meant for fuelwood and construction timber production, covered 781, 600 ha of land (80.4). The tree species planted in the industrial plantations were Eucalyptus sps. (56.6%), Cupressus lusitanica(32.8%), Pinus sps. (2.5%), Juniperus procera (1.9%), Grevillearobusta (0.7%) and others (5.6%). The non-industrial plantation was mainly woodlots (96.6%) and the remaining 3.4% was peri-urban plantations.
The industrial scale timber and pulpwood production is faced with a number of challenges, and critical gaps in the sub-sector include the following: largely untapped plantation development potential and market opportunities given the strategic location of the country to supply various forest products to the nearby African and Asian markets, and instead Ethiopia becoming a timber trade destination, poor scaling-up of alternative timber species, lack of knowledge on timber quality of some species being widely planted, and lack of management tools, lack of proper propagation methods for some indigenous species, lack of species for large scale pulp plantations (long fiber), lack of optimum eucalypt coppice rotation and replacement techniques and untapped tree improvement potential for several timber and pulpwood species.
This particular report is a synthesis of policy documents of different countries, policy reviews, countries’ experience under different forest policy perspectives and forest policy implication on the development of large-scale tree plantation. The report also attempts to draw lessons from reviewed countries.
Policy Perspectives
Policies deal with the articulation of courses of actions to achieve specific objectives. They are the guiding principles that determine what is to happen. Objective of forest policy could be biodiversity conservation, wood production or watershed protection. Forest policy also has process, meaning policy formulation, implementation and review. The process is circular in that the review of the impact and effectiveness of a policy would lead either to a new policy or adjustments, or confirm the previous policy. Policies that can affect plantation development activities in most countries’ political, social and economic settings can take one or more of the following perspectives (FAO, 2001):
• Structural
• Revolutionary (Direct Government Involvement)
• Direct incentive or disincentive
• Indirect incentive or disincentive
The choice of an agent, be it company, communities or individuals is by itself a policy. The neo-liberal theories do not accept government’s direct involvement in large-scale investment spending such us large-scale plantation development emphasizing economic efficiency in a particular country, (Christopher J.K. Perley, 2001). On the other hand the neo-liberalists encourage governments to engage in strategies supporting corporate investment in large-scale commercial plantation developments (FAO, 2001).
Structural Policies and Plantation Development
The structural policy deals with assessing the forest sectors institutional capacities and the level of security of countries’ land tenure system with respect to forest development (Ruitenbeak and Cartier, 1998). The forestry sector functions well in a country where clearly articulated and secure land tenure system as well as a functioning strong forestry institution exist (Ruitenbeak and Cartier, 1998). The authors also argues that in a situation where countries do not have safe and sound land tenure system and if the forestry institutions are weak in most of their aspects it is most likely that the forest sector eventually ceases to function. The distortions in once established forest policy reduce significantly if countries are able to erect strong forestry institutions (Ruitenbeak and Cartier, 1998). The two authors have evaluated associated consequences of country’s land tenure security and forest sector institutions in their study. Accordingly, their study has found out that insecurity of land tenure leads to extraction damage of logs, wastage in harvesting, suboptimal silvicultural practices and under development of non-timber forest plantation products. On the other hand according to Khan (1998) secured land tenure system is a key factor for development of plantation forestry at individual, corporate and community level. According to Whiltshire (2000) this is possible mainly because corporate interests function at balanced level for all involved stakeholders. Whiltshire (2000) additionally points out that utilization of potential rights and benefits is stronger in this situation over control of land than the merely exercised legal ownership rights. Klooster (1999) supports this argument in his study suggesting the idea that jointly held legal control over forest resources by community with corporate institutions based on clearly prescribed benefit mechanisms is by far better than non-benefiting ownership right. This case has been witnessed to function in Mexico during the 1980’s. Prior to 1980 the Mexico government was not able to benefit from the forestry sector and grow the country’s forest cover because the forestry management system remained outside of community control. Forest land concessions were also bound under short-term agreement for forest plantation developers. This insecure land tenure system created problems like cut and run logging, corrupt local leaders, and violence between community members and corporate forest plantation developers were aggravated. Further the state Monospony starts to prevail in such kind of land tenure strategies. Forest owners become compelled to sell only for concessionaires controlled by the government at low price at their request. However policy improvement injected in by the Mexico government after 1980 was able to increase community benefit by 600% (Klooster, 1998). During the early 1990’s a significant portion (40%) of timber supply starts to come from community established plantation forests. The areas of policy improvement were:
• Increased access over control of benefits coming from forest plantation
• Skill improvement of communities on forest management and silviculture
• Improvement on access to market and market linkage
The Forest land tenure policy case of Solomon Island was also studied by Frazer (1992) and Bermett (1995). Forest resource owners in Solomon Island use to have little protection from the government legal enforcement institutions. Communities’ resistance was very high on large-scale forest resource owners. Considering this problem the government tried to liaison between the community and forestry investors. However, the adjustment in policy couldn’t bring any change due to the government’s lack to address the wider social and environmental issues. Southgate (2009) advocates ‘building trust among communities and various stakeholders in large-scale investments such as forest plantation are keys for policy and legislation implementation and control’. Putnam (1993) argues that a policy approach that emphasizes economic efficiency over social equity likely fails. Erskine (1991) has identified the causes for policy failures. According to him policy likely fails when:
• There are weak institutions and institutional support
• Rural development policies are poorly articulated
• Government’s fail to clearly identify their land use system
• There are weak, poorly trained, understaffed and underfunded extension services
• There exists poor linkage between sector institution
• There are thematic no thematic specific researches
Direct Government involvement through Institution
Direct government involvement in establishing large-scale plantation has a long and successful history.
Goals Include
1. Industrialization and Import Substitution
2. Regional development and employment creation
3. Water and soil conservation and rehabilitation
4. Biodiversity conservation and ecosystem services
New Zealand is an example in this success story. State plantations begin in the 1920’s after a new forest policy was developed by the government. The policy was designed to inject improvement in areas like:
• Expertise in plantation forestry
• Infrastructural support (eg. Nurseries)
• Education and research focused in forestry
• Creating strong forestry institution that in turn analyze and assist implementation of forest policy
• Encouraging private investment in forestry by facilitating the use of government build infrastructures and expertise support
The good example of New Zealand was followed by Australia and South Africa (Clapp, 1995). According to the same author natural advantage should sometimes be sufficient to create state involved plantation forestry development (China, Myanmar, Korea etc.). Naturally disadvantaged countries like Algeria, Morocco, Tunisia, and Libya the government should fight with desertification prior to entering into plantation forestry scheme (Clapp, 1995).
Direct Government Forest Plantation Development Policies
Encouraging Investors in Forest Development
Taxation varies between countries. Even with in a country one-tax legislation could be difficult. Perley (1992) suggest that changes in marginal tax rates may work to encourage and attract investors in forest plantation sector. Additionally, he advocates tax deductibility may be more effective for this purpose. Morell (1997) on the other hand argues tax exemption is the most common and more effective method to attract forest investors. Costa Rica was able to establish 50,000 hectare of plantation forests using tax deductibility method (Morell, 1997).
The other financing mechanism advocated by Potter and Lee (1998) was granting low or nil interest rates or direct government funding. For instance the Indonesia government gave zero interest rate loans to forest investors to encourage short rotation period pulpwood plantation. This act of the government gave rise to the pulpwood plantation to take one-third the cost of plantation forests established in the country with three years repayment period. Ireland was able to exponentially increase its forest plantation cover by designing a ‘compensatory allowance’ financing mechanism to forest plantation developers (Investors) to tackle the problem of long payback period (Gairdner, 1993). This approach was criticized by Klooster (1999) for two reasons: 1) some of the plantations were established on wetlands due to competition for land eventually disrupting the wetland ecology, and 2) It creates conflict among sector offices that has stakes to use large-scale lands (eg. the Agriculture sector). Forestry encouragement grant (1970 and 1984, N2) was also applied in Ireland. Lands that should be included in the plantation scheme were preconditioned to be marginal. Farmers will benefit from this encouragement plan if only they were able to identify marginal lands for the plantation purpose. In South Africa plantation were encouraged to be established on abandoned agricultural lands (Keipi, 1997).