What market system approaches did the ProLand assessment recommend for reducing deforestation and increasing rural incomes at scale in the Democratic Republic of the Congo (DRC)? The team identified a number of opportunities to stimulate alternatives to forest products, but to increase rural incomes and improve forest management at scale, community small scale logging and charcoal production come out on top.

MARKET SYSTEM APPROACHES TO DAMPEN DEMAND FOR FOREST PRODUCTS

DRC’s rural economy depends on activities that consume forested land, such as agriculture and mining, and activities that extract forest products, such as logging, charcoal production, and the sale of non-timber forest products. Neither the government nor the private sector effectively implements regulations to curb the negative forest impacts of these activities and incentives to promote sustainable management. For these reasons, investments in rural industries threaten forest health, and donors must dampen demand by upgrading the value chains of forest product alternatives. They could stimulate businesses that reduce urban wood demand through sales in liquid petroleum gas (LPG); large-scale production of high-quality, fuel-efficient cookstoves; promotion of reusable and durable construction materials; and support to commercial tree plantations.
 

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Private sector specialists have developed various market-system approaches to catalyze economic growth in these sectors. Market system projects use public-private partnerships (PPP) to stimulate enterprises to perform new or currently underserved functions; challenge grants to create incentives for existing businesses to invest in upgrades; accelerators to attract more entrepreneurs or enable existing businesses to add services or products through financing or capacity development; and enabling environment platforms to engage civil society and public and private sector actors to collaboratively advance policy and improve its implementation. The USAID ProLand assessment identified opportunities to use these approaches to dampen demand for forest products. Donors could use:

• PPPs to launch a large-scale improved cook stove manufacturing facility in Kinshasa.
• Challenge grants to distributors of LPG to invest in experiential marketing strategies to develop a growing customer base.
• Accelerators to equip entrepreneurs selling or leasing sustainable building materials with improved skills and greater chances for financing.
• Enabling environment platforms to negotiate new certifications and standards for LPG suppliers or relief on tax and import tariff during a ramping-up phase.

JOINING THE PRIVATE SECTOR WITH IMPROVED FOREST GOVERNANCE

Successfully employing market system strategies improves how markets function; used effectively in DRC, they would strengthen sectors providing alternatives to forest products. But this process would do little to increase rural incomes or improve the management of forest use. Because investments in forest product enterprises will likely increase the unmanaged extraction of forest products, when working on enterprises based in rural communities, donors must make such investments within a strategy of natural resource governance improvement.

In DRC, donors employ four such strategies to promote economic growth and strengthen resource governance: conservation enterprises, jurisdictional programs, certification schemes, and community forestry. They apply these strategies to investments in ecotourism, sustainable wood-fuel, cocoa, non-timber forest products, wood-fuel, and timber. The USAID ProLand assessment identified small-scale logging and charcoal produced in community forest concessions as the most promising options. To apply market system approaches to these sectors, donors could use: 

• PPPs to establish a local consulting firm to provide technical assistance to communities and artisanal loggers.
• Challenge grants to domestic logging firms to create a protocol for agreements between community concessions and domestic logging partners.
• Enabling environment platforms at the provincial level to shepherd the process of crafting regulations to alleviate pressures on community concessions from expanding sectors.

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To be successful when implementing private sector approaches within community forest concessions also requires partners to help government and communities negotiate the trade-offs between technical effectiveness and adaptation to local community capacity. Harvesting plans need to be both simple and technically sound. Partners will need to assist community forest groups to diversify of the products they sell over time, manage market risk, and enable more inclusive growth. Donors will also be critical in reinforcing an exploratory learning approach among all participants in this new and evolving field for the DRC. Overcoming the barriers to using private sector approaches to reduce deforestation will not occur overnight. Identifying approaches to collaborate with private sector enterprises and communicate successes will be important as countries like the DRC grow to meet demands for food and fiber while also attempting to manage pressures on forests.