Over-Regulated and Under-Marketed: Smallholders and the Wood Economy in Isabela, The Philippines - Smallholder Tree Growing for Rural Development and Environmental Services - page 154

7.1 Introduction
The Philippines is one of Asia-Pacific countries that experienced major deforesta-
tion during the second half of the last century, transforming it from a timber
exporter nation to a net importer. The main source of timber, primarily high quality
tropical hardwoods, traditionally comes from the primary and residual forests. With
diminishing forest cover, the global trend is to source wood from industrial tree
plantations but in the Philippines, industrial forestry can hardly augment the coun-
try's need for wood and sustain the demands of its forest-based industries and
increasing population. In recent years therefore, the focus shifted to community-
level and individual smallholder plantings for multiple-use forestry.
Tree plantings represent one of the largest income generating assets in rural
areas, with the current stock of trees having involved huge investments of about
US$3.6 billion equivalent to Philippine pesos (PhP) 140 billion (World Bank 1999).
The same report estimated that there are about 4.5 million hectares under tree crops
where 70 percent of the rural households have some tree species, either commercial
or backyard. Mixed tree systems cover about 1.6 million hectares involving
27 percent of rural households, with 80,000 ha for backyard or home-gardens and
70,000 ha for fruit trees. While forests cover about 19 percent of the total land area
of the country, tree crop cover is not far behind at 15 percent.
By and large, farm forestry or agroforesty are probably the only definitive
affordable solution for various environmental objectives, creation of jobs in rural
areas, and as renewable source of timber and various tree products. Farm forestry
in the Philippines tends to be small but with several forms such as woodlots and
tree fallows, backyard tree crops, agroforestry in combination with food and cash
crops, and fence-line or boundary tree plantings. These multiple combinations in
different land-uses whether in public or private lands became widely dispersed
throughout the country through government subsidies. Widely grown species
include yemane or gmelina ( Gmelina arborea ), mahogany ( Swietenia macro-
phylla ), bagras ( Eucalyptus deglupta ), falcata ( Paraserianthes falcataria ), and teak
( Tectona grandis ) (Harrison and Herbohn 2000). These exotic species are used in
watersheds as well as in production forests and private small-scale wood lots, espe-
cially in the case of fast-growing gmelina.
Smallholdings in the rural economy are the lifeline of the people that value agri-
cultural land for sustenance, especially the farmers and workforce in the uplands.
Just like the bulk of agricultural production in the Philippines, tree crop production
is quintessential private and small-scale, averaging about one hectare. Many upland
activities are carried out around protected areas and forest reserves.
As forest resources have become increasingly scarce, wood gradually enters into
the local market and link the smallholders to the marketing system and the cash
economy. The perspective of policymakers on the markets for forest products will
be the key to an increasing contribution of tree-based products sector to reducing
the pressure on natural forests (Seve 2001). This is especially so because evidence
in agriculture and forestry shows that links between producers and markets are
often weakened by bureaucratic politics and organizational processes. Technological