The Potential of Sustainable Forestry Certification for Smallholder Tree Growing - Smallholder Tree Growing for Rural Development and Environmental Services - page 200

price they are prepared to pay for certified products. These studies give rather vari-
able results but quite a number claim to have identified a positive attitude of cus-
tomers. For instance, a recent study by Aguilar and Vlosky (2007) on a number of
consumer products found a willingness-to-pay, which varied between 10 percent
and 25 percent, this mainly depending on the income of the consumers. But similar
research indicates that the market for certified products is rather limited; see Kollert
and Lagan (2007) for an overview.
Willingness-to-pay studies do not necessarily reflect what consumers will do in real-
ity. Empirical studies must be done to clarify this issue but they are rare. A Finnish study
that compared timber certified under PEFC (the Programme for Endorsement of Forest
Certification schemes, see Section 10.5) with non-certified timber exported to the UK
and Germany, showed that certification leads to better customer satisfaction and a more
positive public reputation, but not to improved financial performance (Owari et al.
2006). For most producers, charging a price premium proved impossible. This may well
be due to the fact, that the certification market is dominated by a small number of large
scale suppliers and buyers, who are not willing to pay such a premium (Taylor 2005).
But there are empirical studies with more positive results. Kollert and Lagan, in a
study conducted in Sabah, Malaysia, compared a forest unit certified by FSC (see
Section 10.5) with two units without certification. They found a 40 to 56 percent
higher price for certified heavy hardwood, a 17 to 30 percent higher price for medium
hardwood, a two to eight percent higher price for light hardwood and no premium for
mixed types of timber. But the forest units were not strictly comparable: the FSC
plantation was the only state owned unit, causing a potentially better market entry. In
a study near to Sao Paolo, Humphries and Kainer (2006) found that FSC certified
timber obtained the formal market price, instead of the usual local price, which is four
times lower. The authors argued that this was caused by better market access due to
the certification. Nebel et al. (2005) also found a market price for FSC certified timber
in a large-scale project in Bolivia, which was five to 51 percent higher than for non-
certified wood. As the certified forests there are managed by only five companies, the
authors argued that the effects could not be separated from marketing strategies.
Thus, the overall picture in the empirical studies seems to be that price premiums are
available to most producers in Asia-Pacific (Cashore et al. 2006), but are obtained
only in special situations, particularly linked to a better market access.
Another potentially very important economic factor is donor support. In many
case sudies, the transition process was supported by international donor organiza-
tions, an example being Nebel et al.'s (2005) case study in Bolivia, dealing with five
large forestry companies. A study on certified community forestry conducted by
Markopoulos (1998) in the same country even came to the conclusion that the posi-
tive economic result was largely due to donor support. In this context, it should be
borne in mind that donors will in general support a transition period. They can greatly
help a project get off the ground, but they will not guarantee economic sustainability.
Other benefits for forestry managers are the indirect economical ones of better
access to markets and long-term sales agreements. The European and, to a lesser
degree the North American, markets increasingly demand certification of their
imported timber products. The importance of this has already been seen in the discussion