Production analysis of collaborative forest management using an example of joint forest management from Gujarat, India

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Abstract

A framework for the production analysis of collaborative forest management (CFM) is proposed. The framework has four main features: (i) a social organization, not an industrial organization, responsible for the production process of CFM; (ii) conventional factors (land, labor, and capital) as well as non-conventional factors (social, cultural, and organizational factors) as inputs (iii) social, biological, and economic outputs; and (iv) a production model that includes transformation and transaction components. The framework is used for the production analysis of joint forest management (JFM) in the Gujarat state of India, by estimating the production functions of social, biological, and economic outputs on the basis of data from fifty villages having JFM. The outcomes indicate that the inclusion of non-conventional factors is critical for un-biased analysis, and the contributions of non-conventional factors dominate the contributions of conventional factors. The social output – social empowerment – and the biological output – forest canopy cover – are associate products, the social output and the economic output – supply of forest produce to meet local demand – are rival products, and the biological output and the economic output are associate products, but the degree of association and rivalry between the two outputs are not the same in different ranges.

Introduction

One of the main distinguishing features of sustainable forest management is the inclusion of local user groups in forest management. User group participation has resulted in the emergence of various collaborative forest management processes such as joint forest management (JFM) in India (Kant and Nautiyal, 1994), Community-based forest management (CBFM) in Nepal (Kellert et al., 2000) and in China (Zhang, 2001) and co-management in Canada (Beckley, 1998). These collaborative forest management (CFM) processes have attracted the attention of forest managers, environmentalists, donors, policy makers and researchers including economists and social scientists world wide. The most common approach to addressing economic issues associated with collaborative processes has been the property-right approach,1 and various efforts, such as Kant and Berry, 2001, Zhang et al., 2000, have been made to explain the outcomes of CFM using this approach. Some economists, such as Runge, 1986, Kant and Nautiyal, 1994, Sethi and Somanathan, 1996, Baland and Platteau, 1997 have used game-theoretic models to explain collective actions of communities. However, the production aspect of CFM has been unable to attract adequate attention from resource economists. Only a few studies, such as Hill and Shields (1998), have made preliminary and limited attempts at the production analysis of CFM. However, these studies do not distinguish between the production process of collaborative forest management, aimed at sustainable forest management, and the production process of conventional forest management, which is based on the exclusion of local user groups and aimed at timber production. In the process, these studies have not focused on the specific features of the production process of CFM. The production systems of these two categories of forest management, by exclusion and inclusion of user groups, are quite different, and hence an understanding of the production process of CFM is critical for the efforts of SFM to be successful.

Generally, in the neo-classical production analysis, the role of agency responsible for production process has been ignored; consequently only the transformation, and not the transaction, component of production process has been included in modeling and analysis.2 However, institutional economists such as Williamson, Coase, and North have demonstrated the importance of the role of agency beyond doubt. Hence, in modern times, the neglect of the role of agency is not only fatal for decision makers but also demonstrates the researcher's biased attitude; an attitude contrary to the basic premise of economics. In the case of production analysis of forest management, it is the agency responsible for production that contributes to the distinction between the production systems of collaborative and conventional forest management. In the case of conventional forest management for timber production, the agencies responsible for production process are industrial organizations (forest industries), government organizations (forest departments), or individuals (woodlot owners), while in the case of collaborative forest management, specifically in developing countries, generally the agencies responsible for production process are local community-level social organizations (village forest protection committees). Hence, CFM is more like a social production process rather than an industrial production process, and this difference will necessitate a fresh look at the factors and the outputs of the production process of CFM. Generally, the industrial production process has been described in terms of the neo-classical or conventional factors of land, labor, and capital, and the description of industrial form of timber production process has included time in addition to the three conventional factors (Nautiyal, 1988; p. 8). However, some non-conventional factors such as social, economic, and cultural factors, in addition to three conventional factors and time, will be critical inputs to the production process of CFM. Similarly, in the case of conventional forest management, the focus has been on physical outputs such as timber or wildlife, and the production analysis has been conducted either for a single output of timber or for multiple physical outputs. However, in the case of CFM, social and biological or ecological outputs3 are as important as physical or economic outputs. Hence, production analysis of CFM will require the use of concepts such as multiple outputs, joint production, and production possibility surfaces (PPS). These concepts have been used extensively in the forestry literature (Bowes and Kurtilla, 1989, Swallow et al., 1990, Vincent and Binkley, 1993, Arthaud and Rose, 1996), but none of these studies has analyzed the production process of CFM.

This article attempts to fill this gap in the forest economics literature. The article develops a theoretical framework of the production process of collaborative forest management. The main features of the framework are: (i) a discussion of the distinctions between a social organization, responsible for the production process of CFM, and an industrial organization (a firm); (ii) inclusion of conventional factors (land, labor, and capital) and non-conventional factors (social, economic, cultural, and organizational factors); (iii) the inclusion of social, biological, and economic outputs; and (iv) a model of the production process that includes transformation and transaction components. The framework is used for production analysis of JFM in the Gujarat state of India by estimating the production functions of social, biological, and economic outputs and by examining the production possibility surfaces (PPS) for these three outputs of JFM.

Next, we discuss four components – agency, outputs, factors, and a mathematical model – of the theoretical framework of the production process of CFM. This is followed by the methodology of data collection and the data analysis in Section 3. The estimated production system of JFM and its specific features are discussed in Section 4. Finally, we conclude with some major findings and policy prescriptions.

Section snippets

JFM and village-level organizations as production units

In a radical departure from the previous focus on policing and protection of state-owned forests, independent India's 2nd National forest policy (GOI, 1988) recognized the role of local people in the management of forests by asking forest-dependant communities, for the first time, to become equal partners with the forest department (FD) in management and protection of the state-owned forest resources. The Government of India indicated its seriousness about this change by issuing detailed

Data collection

Factors and output data were collected, between November 2001 and February 2002, from Gujarat state of India. In November 2001, JFM was being practiced in about 1200 villages spread across 12 forest divisions in three territorial forest circles (Surat, Vadodara, and Gandhi Nagar). Fifty of 1200 JFM villages were randomly selected. Methods of data collection and units for the outputs and factors of JFM are given in Table 1.

Data of the two outputs – social empowerment and supply of forest produce

Estimated production model of JFM

The estimated results of the three equations of the production model7 are given in Table 3. The estimated results are not sensitive to the exclusion of two outliers. Adjusted R2 of all three equations are quite satisfactory. The significance of a large number of coefficients of the interaction terms reinforces our contention about translog functional form of the production system of JFM. Further, the results

Conclusions

In this article, we proposed a comprehensive framework for the production analysis of JFM. The results of the analysis clearly demonstrate that the inclusion of non-conventional factors, such as heterogeneity of the user group, dependence of the user group, village leadership, and other factors, is critical for the unbiased analysis of the production process of JFM, and the contributions of the non-conventional factors are dominant over the contributions of the conventional factors. The

Acknowledgements

We are thankful to the three reviewers for their valuable suggestions on the previous draft of this article. Financial grants from the Social Science and Humanities Research Council (SSHRC), the Natural Science and Engineering Research Council (NSERC), the International Tropical Timber Organization (IITO) and the International Development and Research Centre (IDRC) are also appreciated.

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