Can Smallholder Tree Farmers Help Revive the Timber Industry in Deforested Tropical Countries? A Case Study from Southern Philippines - Smallholder Tree Growing for Rural Development and Environmental Services - page 178

Domestic demand for sawn wood in the Philippines for the year 2010 has been
estimated at 1.646 million cubic metres, with a log requirement to meet this
demand of 3.418 million cubic metres (Sanvictores 1994). If fast growing trees
were planted on small farms yielding just 6.0 m 3 ha −1 year −1 on rotation periods of
10 years, the log requirement to meet domestic demand for sawn wood in 2010
could be produced if 569,667 has of tree farms had been established in the year
2000. This represents just a small fraction of the land potentially available for agro-
forestry and farm forestry in the Philippines.
Unfortunately, existing policy disincentives constrain the establishment of tree
farms and the use of trees by the wood processing industry. Although, recent legis-
lation exempt owners of planted trees from paying forest charges, farmers are
required to apply for a Certificate of Registration of the plantation and a Certificate
of Verification to show that trees are ready to be harvested (GOLD 1998; DENR
1999). Moreover, at the village level a lot of confusion exists on whether certain
fees have to be paid or not. Field inquiries revealed that many farmers are required
to pay harvesting fees to local officials, although there is no legal basis for such
fees. The owners of SSS interviewed also complained about the many restrictions
and permits required to operate. These include, in addition to the licenses required
to any business or industrial activity, harvesting permits from village governments,
transport permit (Certificate of Origin) (Andin 2002) and frequent road check
points by the DENR, and probably further restrictions to the establishment of SSS
as stated in the general objective of the Five Year Mini-sawmill Rationalization Plan
(DENR 1996b). Incentives to encourage forest plantation establishment, like
income tax, holidays tax and duty free importation of capital equipment, and
exemption from contractors' tax (ITTO 2001), are, however, better suited for indus-
trial plantations and have limited application to smallholder farmer conditions.
By giving large industrial plantations such incentives, they function as de facto
disincentives for smallholder timber producers. What is required in forestry policy
is a paradigm shift that recognizes the legitimate role of smallholder farmers as
contributors to national timber production (Van Noordwijk et al. 2003).

8.4 Conclusions and Recommendations

In the past two decades, small farms in northern Mindanao have generated a signifi-
cant marketable surplus of fast-growing timber trees and viable farm forestry indus-
tries have emerged in the region as a result. The volume of farm-grown timber
harvested, processed and traded in the past few years, proves the success of small-
holder upland farmers in tree growing and marketing, demonstrating that they can
produce large quantities of timber in their smallholdings and efficiently supply
local, national and international markets.
However, current produce is not a practical substitute for timber products requiring
large diameter and quality logs. Therefore, the Philippines are still largely dependent
on imported timber to meet its increasing domestic demand. Wood processors have