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Improving opportunities for smallholder timber planters in Vietnam to benefit from domestic wood processing

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Since 1992, the Vietnamese Government has implemented far reaching policies and programs to increase the country's tree cover by promoting plantation forestry. In addition to providing environmental services, these efforts are intended to alleviate rural poverty through sustainable forestry. Towards this goal, more than 4 million ha have been assigned to households and rural cooperatives through forestland reallocation or management contracts. Although the extent of primary forest has continued to decrease, overall tree cover has increased by 47% since 1990, largely due to the spread of tree plantations. Meanwhile, in the last decade, with Vietnam's economic liberalisation policies, the timber processing industry has shifted from State-owned enterprises to private companies. By 2008, the processing sector had expanded into a $3 billion industry, one of Vietnam's top five export sectors and a major source of demand for logs and sawnwood. In 2010, an assessment in the industrial wood processing center of Binh Dinh province was conducted to gain insights on market opportunities for smallholder produced timber. The assessment revealed a number factors preventing local smallholders from fully capitalising on demand for wood from the processing industry. These included competition between the manufacturing sectors (e.g.furniture, woodchips and pulp industries), which creates an incentive for premature timber harvesting, and a lack of domestic supply of certified timber, resulting in Vietnam's furniture companies importing raw materials. To address the former, better segmentation of the wood production for the different sectors is recommended. The latter might be addressed through more aggressive efforts to certify household-scale timber plantations through simplified schemes such as the Forest Stewardship Council's Small and Low Intensity Managed Forests (SLIMF) certification, pending additional research to better understand the potential costs, benefits and risks of such a strategy.

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