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Sustainability Transformation from Supply Chain Integration
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Title: Sustainability Transformation from Supply Chain Integration
Physical Description: Conference Papers
Creator: Hildebrand, Peter E.
Conference: 2008 European IFSA
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Acquisition: Collected for University of Florida's Institutional Repository by the UFIR Self-Submittal tool. Submitted by Peter E. Hildebrand.
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Sustainability Transformation from Supply Chain Integration: Quality in Natural Resource Production Systems as a First Step toward Eco Labeling? David S. Wilsey Doctoral Candidate, Interdisciplinary Ecology, School of Natural Resources and Environment, Un iversity of Florida Peter E Hildebrand Emeritus Professor, Interdisciplinary Ecology, and Food and Resource Economics, University of Florida Abstract Commercial natural resource extraction by individuals in farm/forest communities generates and diversifie s household income and ostensibly provides incentive to protect forest resources. However, once resources can be procured outside of the forest (e.g. by cultivation), extractive systems often tend toward unsustainable practices. The economic and environmen tal effects of such shifts in production processes ultimately resonate throughout the farm/forest livelihood system. Such has been the case for extractors of Chamaedorea p alms (Chamaedorea spp), which are used in floral arrangements and in Easter celebrati ons and have historically been collected from tropical forests in Mexico and Guatemala. Recently, the certification of palm extraction and/or trade has arisen as a strategy to facilitate conservation and economic benefits. Eco labeling efforts for palms be gan in 2001 and a small, but growing demand certification while looking at its ability to promote both forest conservation and economic development. To do this, palm extraction has been considered at three levels: the farm/forest livelihood system, the value chain, and the broader global commodity system. This paper assesses the dimensions and components of the global system. Palm certification appea rs limited by three factors. First, economies of scale represent an obstacle for actors in the commercialization process. Second, the seasonality of certified demand suggests that extractors might confront challenges adjusting their year round processes to accrue benefits for a single season. Finally, barriers to entry for newly certified extractive systems could be imposing. In Guatemala, a shift from quantity to quality based procurement within a sustainable management framework has led to stable arrange ments offering price incentives for high quality palms throughout the year, while leaving open the option for sales to consumers of certified palms during the Easter season. Quality procurement has reduced the number of palms harvested while providing ince ntives for forest communities to increase value added processing. We concluded from this experience that a combination of quality driven procurement of natural resources and vertical integration of early stage processing might represent an intermediate ste p in the development of markets for natural products certified for sustainability, a phase that could otherwise preclude participation. Keywords: NTFP, Value Chain, Quality, Conservation Introduction Few genera of palms rival Chamaedorea for variety in fo liage, size, and growth habit (Hodel, 1992) Collectors prize numerous species as garden specimens and a general tolerance in the genus for shade doors. Trade of Chamaedorea specimens and the cultivation of plants from seed can be dated to the 19th century; however, large scale procurement and distribution did not begin until the middle of the 20th century (CEC, 2002) The harvest of palm leaves followed rapidly, and since the 1950s North American and European florists have used the imported leaves of several species from the genus Chamaedorea as decorative foliage in floral arrangements. Churches also use the large fronds of certain species for Palm Sunday celebrations (CEC, 2002) Chamaedorea palm fronds have been imported to th e United States for commercial use since the middle of the 20th century. Today palms are sourced from several states in Mexico as well as Guatemala and Belize. Markets for these palms exist in North America and throughout Europe as well as in the countrie s of their origin. Palm frond procurement has gradually been advancing along the path from forest extraction to cultivation in plantations, and the integrated livelihood and conservation benefits associated with palm extraction have

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diminished accordingly. Certification of palm management and extraction has been suggested as a counter measure to the plantation trend (Current et al. 2003) Environmental and social justice standards target procurement/production systems, in general, and sometimes an en tire value chain. Commodity procurement often occurs in multiple localities and global sourcing may; therefore, involve numerous, interrelated value chains. Thus, outcomes of efforts to certify a particular procurement/production system or value chain usin g a set of standards may depend partly on the attributes of the broader commodity system. Specifically, efforts to certify extraction or trade based on environmental and/or social justice standards may not adequately address the economies of scale necessar y for all enterprises within the extractive system or value chain to remain profitable. Profitability, of course, is a business fundament and failure to consider it in certification efforts or other interventions may quickly precipitate market failure. Ove rdevest (2004: p.174) observed: S]trategies for certifying high markets for certified goods. Such market construction refers to the capacity of NGO hts the importance of achieving critical levels of supply, and in the case of Chamaedorea palms, where demand is incipient; it is conceivable that market failure could equally result from insufficient consumer demand. Moreover, both the overall size of bot h supply and demand, as well as their dynamics, should be considered as influential factors in the success of NTFP certification efforts (Ros Tonen et al. 1995; Shanley et al. 2005) For this reason, it is insufficient to examine a particular procurement system or emerging market niche in isolation. These and other components need to be viewed as parts of a broader commodity system and understood within that context. To date, little to no effort has been made to integrate localized certification efforts into a co mprehensive framework linking the numerous diverse Chamaedorea procurement systems and contexts. Theoretical Framework: The Global Commodity Chain It is possible to delineate relatively discrete value chains, or production to consumption systems (Belcher, 1998) that are conceptually or socially distinct but, in fact, no system exists in isolation. See mingly distinct value chains eventually come together, resulting in what might be referred to generically as a meta system or, in the present context, a procurement network. Hopkins and Wallerstein (1986: p.159) k of labor and production processes (Gereffi and Korzeniewic z, 1994; Gereffi et al. 2003) Contrary to the name, the global commodity chain is a commodity system : rather than a linear structure, it is a network comprised of all parallel and interconnecting permutations of individual production to consumption sys tems, or value chains. In this sense, GCC represents the highest level of analysis possible while retaining organization based upon a single commodity or product. Concerns such as product substitutability, and consumer preference, both of which involve con sideration of multiple products, are certainly relevant in production related discussions, but fall outside of the purview of the GCC framework. Hypothesis and Research Objectives The overarching objective of conducting research at the level of the Global Commodity Chain, or System, was to assess the potential feasibility of certified Chamaedorea extraction given the dimensions of the global system. We hypothesized that the feasibility of certified extraction would depend upon the attributes of certified s upply and demand relative to the attributes of supply and demand for conventional product in the global market. The choice of the word attributes rather than values, highlights the importance of understanding not only overall supply and demand values, but also nature of these values with regard to aspects such as seasonality and trend. Similarly, it is important to understand the drivers of overall supply and demand: the principal producers and consumers, respectively. A complete description of a global c ommodity chain or system includes three important elements (Kaplinsky and Morris, 2001; Marshall et al. 2006) : 1) important actors and their activities; 2) key trade routes; and, 3) main consumers. We have added to these three items the need, described above, for understanding the attributes of supply and demand. Taken together, these four elements coalesce into the two specific research objectives of this chapter.

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Research Objective 1 Identify the components of the Global Commodity Chain/System: prevailing production systems, regions, and key actors Research Objective 2 Describe the dimensions of the Global Commodity Chain / System for Chamaedorea palms Methods The process of establishing the dimensions and components of the GCC was informed by the first au palm production and marketing systems. Although early Chamaedorea research primarily focused on palm biology, recent work has sought to address conservation and development issues relating to commercialization (CEC, 2002; Current and Wilsey, 2002; Bridgewater et al. 2006; Endress et al. 2006; Wilsey and Radachowsky, 2007) These studies provide a reasonably comprehe nsive overview of Chamaedorea production systems and regions as well as insight into the dimensions and dynamics of the markets for palm fronds. Aggregate trade data were accessible through government reports organized by the harmonized tariff schedule, w hich is based on the international system established by the World Customs Organization. Chamaedorea palm fronds are aggregated with other foliage, branches, and like products. In the United States, Chamaedorea palm import data are classified using the For Statistics and Information (INEGI, in Spanish) aggregates trade data for Chamaedorea palm fronds with data for other live plants and floriculture products (CEC, 2002) accessed through the Ventanilla nica which is managed by AGEXPORT. The U.S. Depar tment of Agriculture (USDA) Agricultural Marketing Service (AMS) provides disaggregated trade data through their online portal (AMS, 2007) maintain records on the authorized transport of Chamaedorea palms (R eyes Rodas and Wilshusen, 2006) All data were standardized through the conversion of reported units to stems (Table 1). Temporal reporting inconsistencies (e.g. the AMS 10 year moving window) have been addressed by synthesizing data from multiple sources Table 1. Select equivalencies in reported units Quantity Unit A Quantity Unit B 1 Bunch 20 Stems 1 Roll 30 Bunches 1 Gruesa 1 144 Stems 1 Gruesa ( C.elegans ) 0.95 Kg 1 Stems / gruesa may vary by location n and/or transport, rather than export, data allows for the possibility that significant quantities of illicitly harvested and exported palm may escape inclusion in national statistics. Thus, in characterizing the market we have elected to use the US impor t statistics rather than national or regional production and transportation figures in order to avoid the problem of underreporting resulting from illicit harvesting or other factors. There are obvious limitations characterizing a global system using U.S. import data, but since much of the internationally distributed palms pass through the U.S., we concluded that it represented the best available strategy. Commodity system information as well as specific information about the actors and institutions compri method. A Sondeo is a rapid assessment method that was developed to facilitate a holistic understanding of particular systems, notably farming systems (Hildebrand, 1981) Because Sondeo was developed for use in a particular location, the method required some modification, if only to allow for the challenges i mposed by working within the expanded geographic footprint of the GCC. First, the method was developed for use by an interdisciplinary team of researchers working within a community or region. For this phase of research, which extended beyond the zone of i nfluence of many local and regional institutions, a single researcher with interdisciplinary training conducted the Sondeo. Second, the Sondeo calls for conversations with key informants to transpire over the course of several days to a week. In this resea rch, conversations were by necessity dispersed over three field visits, which occurred between the summer of 2005 and the summer of 2007.

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Results Components of the Global Commodity System Production Systems Palm Extraction Historically, most commercial pa lm leaves have been extracted from naturally occurring populations, those in which regeneration is a natural process. Even today, a large part of the palms encountered in markets originated in relatively unmanaged forest ecosystems (Everett, personal commu nication). Extractive systems vary with location but the procurement process is fairly uniform. An individual or team of extractors enters the forest on foot in search of naturally occurring palms or palm clusters. Trips to and from the forest frequently r equire several hours of walking. In many regions, distances from communities to harvesting locations have increased over time with sustained commercial pressure on the resource. Palm fronds are cut by hand to meet local and/or industry specifications u sing a modified machete or a knife. Extractors bundle the fronds into gruesas (144 stems in theory, but varied in practice); gruesas are later assembled into bultos ( gruesas bound or wrapped by burlap or blankets). The number of gruesas in a bulto depends on t he carrying capability of the harvester, but a bulto typically does not exceed ten gruesas. Carrying the bulto on their backs, extractors hike out of the forest or, in some contexts, to a central collection point in the forest, so animals or pickup trucks can bring out the palms. Extracted palms are typically sold to middlemen, or coyotes simply visit periodically to buy palms. Traditionally, extractors have been paid based on the quantity of gruesas harvested. In recent years there has been an effort in some areas to shift to quality driven purchasing (CEC, 2006) Selection and processing typically occur further along in the value chain. Palm Cultivation Palm plantations in agroforestry systems are the second important source of supply. As with many NTFP, t here is a growing trend toward system intensification and palm cultivation. Unlike the relative uniformity of the extractive production experience, plantations can take varied form. Perhaps the most (commercially) successful plantation system is cultivatio n under the natural forest canopy in recovering forest fallow. In this system, existing understory vegetation is cleared and palm plants are transplanted from germinated seed stock under the requisite shade of the original tree canopy. Coffee productio n systems represent another context within which palms are cultivated. Both the traditional polyculture and rustic coffee production systems common to Mexico contain a diverse assortment of commercial and useful species and palm fits well within these dive rsified systems. Palms have also been observed in cultivation under the shade of rubber tree plantations. Production Regions Commercial palm fronds destined for sale or redistribution in the United States have principally been procured from Mexico and Gu atemala (Figure 1 ), the former responsible for the greater share over the (CEC, 2002) (Figure 2 ). Figure 2 is deceptive, however, in its por trayal of overall production: not all palms enter the U.S. prior to broader distribution. In 2005, Guatemala, as a case in point, shipped principally to Holland (48.4%), followed closely by the United States (46.6%) (Reyes Rodas and Wilshusen, 2006) remains the leading producer. P alms from Belize are reaching international markets via illicit extraction by Guatemalan harvesters, who have for years been crossing the contested Guatema la Belize border to cut fronds for years (Bridgewater et al. 2006)

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Figure 1 Principal palm regions **THI S IS ONLY A DRAFT FIGURE** Figure 2 Annual imports to the U.S. from Guatemala and Mexico (AMS, 2007) (ada pted from CEC 2002) Mexico Mexico encompasses several important palm regions. One of the most important, in terms of volume, is the Los Tuxtlas region in the state of Veracruz. In Veracruz, palms are primarily cultivated under the shad e of fallow forest. The rapid increase in the importance of cultivated palm in Veracruz corresponds with and contrasts the decline of palm extraction in the Chinantla region to the south, in the adjacent state of Oaxaca. Ri Cajonos valley, a source of naturally abundant palms, extraction remains a time and resource intensive production activity. Rising fuel prices coupled with high variability in extraction rates have negatively impacted contributions from this region. The states of Chiapas and Tabasco are important sources of extracted palms (Camarena M, 2005) A large majority of palms have historically originated from the Selva Lacandona located in the eastern part of Chiapas and sharing borders with Tabasco and El Petn, Guatemala. Another important extraction region in Chiapas extends along the Sierra Madre d e Chiapas the coastal range beginning east of the Isthmus of Tehuantepec (in Oaxaca) and running southeast toward Guatemala. At its northwestern limit, Chimalapas region. Throughout Chiapas and into Tabasco and the Ch imalapas, C.quetzalteca is the predominantly extracted commercial palm The El Cielo Biosphere Reserve in the state of Tamaulipas represents another important palm extraction region (Endress et al. 2006) Within the Reserve, extractors collect the leaves of C.radicalis from seasonal tropical and pine oak forests. San Luis Potosi is another Mexican state known to have significant palm extraction activity. Little information is available for this region, but the majority of the palm is C.elegans destined primarily for European markets. Guatemala s within the Maya Biosphere Reserve Petn (Reyes Rodas and Wilshusen, 2006) Palm extraction is an integral part of life and livelihoods in the ssions, in some villages contributing more than 50 percent to male incomes (Radachowsky a nd Ramos, 2004) A direct sale agreement in 2005 to commercialize palms between the largest U.S. palm importer and two community forest concessions Uaxactn and Carmelita represents a landmark development in the

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value chain and the creation of a cert ified market. Palm management in both concessions is certified through an addendum to FSC certification for sustainable forest management, the latter a legal stipulation for the community concessions. Terms of the arrangement specify that the palms must me et product quality, rather than process sustainability standards. The palms can be sold to conventional markets based on their quality, as well as to seasonal consumers interested in certified palms. Moreover, the concessions have integrated their procurem ent system to include many of the value added processes formerly handled by intermediaries and consolidators. Principal Actors This section presents a general overview of the GCC and its component actors. Actors in the individual palm value chains can dif fer by region, as can their specific roles and the shape of the value chains themselves. Figure 3 portrays a general schematic model of the GCC and its numerous actors and variations in paths to the international market. Figure 3 General Schematic Model of the GCC for Chamaedorea Palms International buyers of palms fronds are limited and the market at this level could justly be described as a monopsony. In the United States, one buyer Continental Floral Greens (CFG) of Texas reputedly imports the va located in Florida. CFG and W.F.R. (formerly Jewel) are the original importers of Chamaedorea palm fronds described earlier in this chapter. Consolidators and exporter s operating at the regional and national levels comprise the most diverse general category of actors in the supply chain. This diversity can be attributed to the fact that the value chain may take varied form between the harvester/grower and the importer, depending on numerous factors. Perhaps the largest national consolidators in Mexico and Guatemala are Continental and Plantas Arco Iris respectively. Local consolidators w hen they exist, take varied forms. One development professional described a case in a community in the Chinantla region of Oaxaca where one community member stored all of the palm fronds extracted by others throughout the week until the arrival of the intermediary (Santos, personal communication). In Uaxactn, Guatemala, a community ma naged storage facility was built to store palms brought in from the forest by pickup truck before they were cargo trucked to nearby Santa Elena. In these and most other cases, local actors consolidate extensive palm extraction so that the relatively capita l intensive modes of transportation may achieve economies of scale during periodic visits to the community. Intermediaries or coyotes operate both independently and as formal or informal employees of larger actors throughout the value chain. Intermediari es are frequently disparaged for exploiting extractors, but they often play important, yet under valued roles in the commercialization process. In some cases, the coyotes are themselves former extractors that have developed relationships with actors furthe r up the value chain. One role of the intermediary is the provision of transportation for extractors without a means to get their palms from the forest to the market. In the economically marginal regions where Chamaedorea palms are found, this role must no t be understated. Another role of the coyote is to stabilize supply through the consolidation of small quantities of palms harvested over a broad area, or by numerous harvesters. When institutions such as producer/extractor cooperatives are absent, it can be the coyote that helps to ensure that minimum feasible levels of supply are achieved in a particular region. Several extractor communities in the Chinantla region of Oaxaca, for example, were left without a market when an independent intermediary relocat ed. Extractors comprise one foundation for the palm commodity system. In most contexts, extractors operate independently, selling their harvest to an intermediary or other consolidator. Local contractors may

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also organize harvesters, or a community level a ssociation may organize them. Recent emphasis on the certification of palm production systems is driving new emphasis on models within which both communities and harvesters take more responsibility for delivering a quality or value added product. Cul tivators represent the other foundation for the palm procurement system. Cultivators can be large operations, such as Flor de Catemaco in Veracruz, Mexico, or cooperatives comprised of smaller growers, such as Tropicales de los Tuxtlas also in Veracruz. P alm cultivation by households in extractor communities has been promoted and observed, but it is extremely difficult to differentiate mode of production in those contexts. Dimensions of the Global Commodity Chain The Conventional Market(s) Palm fronds are important in the floral industry, yet retail assortment. Florists employ palms and other greens in retail floral arrangements either as decorative material, filler, or to provide structural support (Current and Wilsey, 2002) Typically, flower shop r etail customers request floral arrangements based upon one or a few predominant flowers, whereas additional flowers and filler greens are added at the discretion of the florist. In the floral industry; therefore, the end consumer of Chamaedorea palms is ef fectively the retail florist, rather than the flower shop patron. Certain denominations of Christian church es comprise another source of demand for Chamaedorea palms (CE C, 2002) Palms, which represent victory, are used in Palm Sunday celebrations. In contrast to the flower shop scenario, churches purchase the actual palm fronds by stem or bunch, in accordance with the congregation and the specific use in the celebrati on (i.e., structural dcor or distribution to parishioners). Palm Sunday palms can be purchased through retail florists and wholesalers, but are also available through businesses catering specifically to religious organizations. Church driven demand is lar ge, relative to demand throughout the year, but it is limited to the weeks preceding Palm Sunday. The notion of environmentally and/or socially certified palm production and distribution has the greatest traction among church consumers (Current et al. 2003) It is difficult to estimate the respective proportions of Chamaedorea import volume attributable to floral industry and church use. Floral wholesalers and retailers serve as intermediaries for both the floral and church markets, so floral industr y data may overestimate use in floral arrangements. Finally, cross denominational estimates of church palm use almost certainly include a wide variety of palm species including, but not limited to, Chamaedorea varieties. Market Dimensions and Trends Commer cial import of Chamaedorea palms began around 1950. Import and sales volumes increased in subsequent years before peaking once in the late 1970s, then again in the late 1980s. Annual import data synthesized from several sources (Johnson, 1999; CEC, 2002; AMS, 2007) offer a picture of the overall trend in palm imports to the United States since the early 1970s (Figure 4 ). Figure 4 Total annual palm imports to the United States, 1971 2006 Although annual imports have been vo latile throughout, they reached an absolute peak of nearly 450 million stems in the mid 1980s before beginning an erratic, downward trend. Only in recent years has the downward trend that began in the early 1990s slowed, or perhaps stabilized, with imports rebounding from fewer than 150 million stems in the early part of the current decade to about 225 million annually. Palm imports also vary by season. For most species demand doubles or trebles, with respect to the week to week baseline, during t he weeks preceding Easter. Seasonal peaks vary by species; however,

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and one of the most popular overall sellers C.oblongata typically receives only a 20 30 percent bump in demand during the Easter season. This point emphasizes to the importance of recognizing t hat Product Heterogeneity Latin Greens and Commodore are the two most common trade names used in the United States to generically reference all commercial varieties of Chamaedorea foliage. Because the commercial classification is comprised of numerous species, or products, it is important to recognize that aggregate annual and season a l export, import, and sales figures mask differences in species specific va lues. C.oblongata (Wide), C.elegans (Jumbo), C.quetzalteca (Giant or Chiapas), and C.ernesti agusti (Fishtail) are the predominant species, in terms of unit volume, used for commercial foliage (CEC, 200 2; Reyes Rodas and Wilshusen, 2006) S pecies level data are often unavailable or unreliable (Camarena M, 2005) Significant demand volume differences as well as regional availability of varieties may prove to be important considerations in determining location specific production system and market interventions, such as certifi cation. Eco Palms: an Emerging Market The most noteworthy emergent trend in the palm market is the recent establishment and rapid growth Environmental Coope ration (CEC) commissioned a study of the overall market for Chamaedorea palms in North America and Europe (CEC, 2002; Current and Wilsey, 2002) This market study identified a potential opportunity for developing a market for sustainably extracted palms oriented toward church consumers. This potential market niche was further explored in a subsequent study (Current et al. 2003) Agricultural an d Natural Resources Management (CINRAM) at the University of Minnesota. In 2006, the pilot was expanded to a regional sale centered on the Minneapolis Saint Paul urban area. The regional effort sold 80,000 stems, up from 35,000 in 2005 (Table 2). Fueled by the success of the 2006 regional effort, the sale went national in 2007 with sales of nearly 364,000 stems. 2005 2006 2007 Sales (stems) 5,000 80,000 364,000 Source: (Lacey, 2007) Eco Palm sales have generated a buzz among project promoters and in the broader Chamaedore a community. Yet, it is important to contextualize these sales figures by juxtaposing them against the conventional palm market. Plotting imports of conventional palms and sales of Eco Palms (both logarithmically transformed and the latter lagged one year) demonstrates two important points (Figure 5 ). First, annual sales of eco palms have grown exponentially. This pattern has justifiably fueled optimism. Optimism should be tempered; however, as the volume of eco palms remains several orders of magnitude low er than the volume of conventionally produced stems. In 2006, just over 200 million conventional stems came into the United States compared to the 400,000 stems of eco palms sold in 2007. Figure 5 Total annual imports to the U.S. and sales (1 yr lag) of Eco Palms (AMS, 2007; Lacey, 2007)

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Discussion and Conclusions We hypothesized that the feasibility of certified extraction would depend upon the relative attributes of c onventional and certified supply and demand in the global market. Three observations germane to the hypothesis emerged from the analysis. First economies of scale represent an obstacle for actors involved in the commercialization process. Present demand makes segregation of eco palms from conventional palms in the supply chain infeasible over the long term ( Everett, personal communication). This assessment by one of the largest U.S. palm importers sheds light on the present gulf between annual demand for 400,000 eco palm fronds and the that strategies for the certification of high standard products and processes are often limited by the difficulty of co nstructing viable markets. For palms, the viability of a certified market appears to be limited by nascent consumer demand, manifested in insufficient economies of scale in the supply chain. Second the seasonality of certified demand suggests that palm e xtractors face challenges associated with adjusting their year round activities to accrue benefits for the Easter season. Communities extract palms throughout the year in most regions. Their willingness to pursue certification for the seasonal market will likely depend on three factors. First, the price of certified palms is a determining factor in assessments of the benefits of certification. Second, certification confers benefits to extractors through market, learning, and signaling mechanisms (Rickenbach and Overdevest, 2006) The extent to which they 1) recognize and 2) valu e these benefits will play an important role in their willingness to certify. Third, as state institutions increasingly focus on sustainability guidelines for the harvest of forest products, the extent to which certification facilitates state authorization for palm extraction might increase amenability to subjecting extraction to certification standards, even if market benefits accrue during the Easter season. Finally the barriers to entry for certified extractors could be imposing, especially if they are interested in accessing only the seasonal certified market on their basis of their ability to easily accommodate certification standards. The global palm commodity network is comprised of a few dominant actors and regions; most have established relationsh ips with other actors in the value chain and significant history in palm commercialization. Transaction costs to intermediaries and buyers of building relationships with new suppliers could represent a significant obstacle, particularly to existing actors, given the often under developed socio political infrastructure in extractor communities. This challenge becomes even more imposing if present extractors determine that certification makes sense. The case of the certified MBR community forest concessions a nd the current push for certification by international actors such as Rainforest Alliance suggest that such a scenario is worthy of serious consideration. We conclude that a combination of quality driven procurement of natural resources and vertical integr ation of early stage processing might represent an intermediate step in the development of markets for natural products certified for sustainability. including quality standards in sustainable manage ment and/or social justice certification schemes. Although the forest concessions in the MBR are commercializing palms that are certified for sustainable management through an addendum to FSC forest management certification, they are being purchased for th eir quality attributes. Palm certified for both quality and other social/environmental standards thus provides a possible solution to the problem of insufficient economies of scale. With proper handling (i.e. segregation) throughout the supply chain, these palms can be sold at current prices in the conventional market, or, when the demand exists, for a premium as certified palms to churches and other interested consumers. Moreover, emphasis on quality provides an opportunity for extractors and communities t o assume increased responsibility for early stage palm processing; in effect, vertically integrating these links in the palm procurement system. The recent direct sale experience of the forest concessions in the MBR provides some early evidence that such a model can be successful. Combining product quality standards and extraction process standards (i.e. sustainable management) represents a bundling of attributes that when taken alone might be insufficient to support commercial success for actors throughout the value chain. Vertical integration at the extractor level helps to ensure that more of the benefits to certification will accrue to harvester communities, where they may reinforce conservation efforts. Thus, the bundling of product quality and process standards coupled with vertical integration early in the supply chain might serve as an intermediate step in the development of a certified palm market, during a market development phase that might otherwise preclude the commercialization of process only c

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anticipated levels of success and scale, product quality and process standards could be unbundled, although we expect that a regressive move of this type would be unlikel y. References AMS, 2007. Market News Portal, http://www.ams.usda.gov/ accessed: 27 March 2007. Belcher, B.M., 1998. A production to consumption systems approach: lessons from the bamboo and rat tan sectors in Asia, in Wollenberg, E. and Ingles, A. (Eds), Incomes from the Forest: Methods for the Development and Conservation of Forest Products for Local Communities Bogor, CIFOR, 65 92. Bridgewater, S., Pickles, P., Garwood, N.C., Penn, M., Bateman R.M., Porter Morgan, H., Wicks, N. and Bol, N., 2006. Chamaedorea (Xate) in the greater Maya mountains and the Chiquibul Forest Reserve, Belize: an economic assessment of a non timber forest product, Economic Botany 60, 3, 265 283. Camarena M, R.A., 200 5. Proyecto de comercializacin de palma camedor CONAFOR, Distrito Federal MX. CEC, 2002. In search of a sustainable palm market in North America Commission for Environmental Cooperation, Montreal, Quebec, Canada. CEC, 2006. Churches lend support to 'ec o palm' harvesters Commission for Environmental Cooperation. Current, D., Lassemo, E. and Cervantes, J.C., 2003. The potential market, and market and certification mechanisms for palms of the genus Chamaedorea CEC, Montreal. Current, D.A. and Wilsey, D.S ., 2002. The market for the Chamaedorea palms in North America and Europe: opportunities for sustainable management and green marketing of the resource with improved benefits for local communities CEC, Montreal. Endress, B.A., Gorchov, D.L. and Berry, E.J ., 2006. Sustainability of a non timber forest product: effects of alternative leaf harvest practices over 6 years on yield and demography of the palm Chamaedorea radicalis Forest Ecology and Management 234, 181 191. Gereffi, G., Humphrey, J. and Sturgeo n, T., 2003. The governance of global value chains, Review of International Political Economy 12, 1, 78 105. Gereffi, G. and Korzeniewicz, M., 1994. Commodity chains and global capitalism Westport, Praeger. Hildebrand, P.E., 1981. Combining disciplines i n rapid appraisal: the Sondeo approach, Agricultural Administration 8, 423 432. Hodel, D., 1992. Chamaedorea palms: their species and their cultivation Lawrence, Allen Press. Hopkins, T.K. and Wallerstein, I., 1986. Commodity chains in te World Economy p rior to 1800, Review 10, 1, 157 170. Johnson, D.C., 1999. Floriculture and environmental horticulture situation and outlook report ERS/USDA, Washington, D.C. Kaplinsky, R. and Morris, M., 2001. Handbook for value chain research IDRC, Sussex. Lacey, M., 2007. U.S. Churches Go "Green" for Palm Sunday, New York Times World/Americas, Marshall, E., Schreckenberg, K. and Newton, A.C., 2006. Commercialization of non timber forest products: factors influencing success: lessons learned from Mexico and Bolivia a nd policy implications for decision makers Cambridge, UK, UNEP World Conservation Monitoring Centre. Overdevest, C., 2004. Codes of conduct and standard setting in the forest sector: constructing markets for democracy?, Relations Industrielles / Industria l Relations 59, 1, 172 195. Radachowsky, J. and Ramos, V.H., 2004. Effects of managed extraction on populations of the understory palm, Xate (Chamaedorea spp) in northern Guatemala Wildlife Conservation Society, Flores. Reyes Rodas, R. and Wilshusen, P., 2006. El rol de los productos naturales en el desarrollo rural, el alivo a la pobreza, y gobernabilidad en el manejo del recurso: el caso de la palma xate (Chamaedorea spp) en la regin de Petn, Guatemala International Resources Group, Washington, DC. R ickenbach, M. and Overdevest, C., 2006. More than markets: assessing Forest Stewardship Council (FSC) certification as a policy tool, Journal of Forestry 104, 3, 143 147. Ros Tonen, M., Dijkman, W. and VanBuren, E.L., 1995. Commercial and sustainable extr action of non timber forest products Tropenbos Foundation, Wageningen, The Netherlands. Shanley, P., Pierce, A. and Laird, S., 2005. Beyond timber: certification of non timber forest products Forest Trends, Washington, D.C. Wilsey, D.S. and Radachowsky, J., 2007. Keeping NTFPs in the forest: can certification provide an alternative to intensive cultivation?, Ethnobotany Research and Applications 5, 1, 45 58.