Introduction

Growing demand for wood has revitalized the forest sector in recent years, but concerns about worldwide deforestation mean that the world’s timber demand will be increasingly satisfied by plantation forests (McEwan et al. 2020; Fenning and Gershenzon 2002). Owing to their good management, better quality wood, high growth rates, short rotation lengths, and use of improvement technologies, industrial plantations will make considerable contributions to commercial wood supplies but their expansion will be constrained by economic, social, and environmental challenges (McEwan et al. 2020; Barua et al. 2014).

Given the expected restrictions on the expansion of large-scale plantations, smallholder forestryFootnote 1 has been gaining importance in terms of its potential contribution to commercial wood supplies (Arvola et al. 2020; Nambiar 2021; Midgley et al. 2017) Smallholders are defined as people living in the rural tropics who own small areas of land for subsistence or commercial purposes and rely mainly on family labour (Pokorny et al. 2010). Smallholder farmers are important entities in wood supply because of their number, possession of forest land parcels, and potential to be receptive to tree management technology (Vallesteros 2016). Their ability to grow trees for commercial purposes is of particular interest because currently they support many industries worldwide (Nambiar 2021; Arvola et al. 2020; Midgley et al. 2017). Small-scale plantations managed by smallholders can also create jobs, support local livelihoods and development, and provide a range of ecosystem services (Nambiar 2021; Pirard et al. 2017; Ayana 2021). Despite their benefits and potential, the development of smallholder plantations is uneven worldwide, with some areas having vibrant participation of smallholder tree growers and others where uptake of plantations has been slow or declining (Do and Mulia 2018; Schirmer et al. 2015; Roshetko et al. 2013).

Carias et al. (2022) argued that an important weakness in the promotion of smallholder plantations by state and non-state actors was the strong focus on getting smallholders to plant trees without enough attention paid to the needs of their business partners. This problem was also identified by Midgley et al. (2017) who state that studies of rural development give much attention to the cultivators/growers, failing to see the interconnections between different actors, as well as the surrounding institutional environment. Hence, the recommendation is to adopt a value chain perspective, which offers a systemic view, unlike supply chain approaches which push the supply of products in isolation from other market participants (Midgley et al. 2017) (Collins et al. 2015). Using a value chain perspective, Carias et al. (2022) identified twenty conditions that enable the entire range of actors to engage in successful smallholder value chains. In this paper, we build on the work of Carias et al. (2022) by delving further into details about the enabling conditions identified and their influence on value chains, and then locate these conditions within the entire plantation investment cycle.

The main objectives of this paper are:

  1. (a)

    To describe in detail the conditions that enable the entire range of actors to engage in successful smallholder value chains;

  2. (b)

    To provide examples from the literature on the enabling conditions and

  3. (c)

    To locate the conditions within the stages of the plantation investment cycle and identify the actors who have control/influence over the conditions and

  4. (d)

    To provide state and non-state actors with some basic guidelines and recommendations for the promotion of smallholder timber value chains.

The paper is organized into five sections. This first section was an introduction. Sect. "Methodology" describes the Methodology and Sect. "Results" the Results. The results are subdivided into parts, the first one summarizing the enabling conditions and the second one locating them within the plantation investment cycle. Sect. "Discussion" discusses the conditions and what they mean for practitioners and agencies wanting to support smallholder timber plantations. The last section is for conclusions and potential future directions.

Methodology

Carias et al. (2022) used a literature review to provide a broad indication of enabling conditions for smallholder tree planting and integration of rural producers into value chains. Table 1 shows the search terms they used. Combinations of the terms were used to search for information rich articles in Google Scholar complemented with searches in Web of Science. The research was circumscribed to low- and middle-income countries in the tropics. A variety of analytical frameworks and theories were compiled as value chains are better approached from a multidisciplinary perspective (Collins et al. 2015). The publications were read in full, with the identified enabling conditions encoded in NVIVO software according to broad sociological themes. Most of the documents selected were peer-reviewed articles from journals related to forestry, agroforestry, land use, development, and rural livelihoods. The selected works covered a time span between January 1990 and early 2022. The first search yielded fifty publications for the analysis. Another fifty-two publications were identified from the reference section of the first batch of articles.

Table 1 Search terms for literature review.
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The categories and twenty conditions identified by Carias et al. (2022) were fleshed out in further detail to understand how their presence enables the functioning of smallholder value chains. Quotes from the literature were extracted to illustrate the enabling conditions at work. A quick ranking exercise using NVIVO software, which counts the number of references for a specific node or theme, led to the identification of three top enabling conditions. Adequate knowledge and skills had a total of 84 references, followed by 77 for streamlined rules and regulations, and 74 for presence of producer organizations. Closely behind presence of producer organizations were financial benefits with 70 references. After this, the conditions were placed along the plantation investment cycle, with the main actors who have influence over the conditions, also identified.

Results

There are twenty enabling conditions identified for timber value chains with smallholder tree growers as suppliers. Since value chains are complex and context-sensitive systems, it is unlikely that there will be ‘silver bullet’ conditions, or conditions that guarantee success across all contexts. Nevertheless, three top conditions that emerged from the literature as key to enabling value chains involving smallholder tree growers as suppliers are: adequate knowledge and skills; streamlined and consistent regulations; and presence of producer organizations.

The conditions have considerable interactions. For example, infrastructure conditions have a strong bearing on the financial benefits of tree planting, mostly through transportation costs. Plot characteristics and their biophysical traits affect the choice of technologies in terms of species selection and harvesting technologies. Skills and knowledge of smallholders affect tree characteristics which in turn affect harvesting and processing technologies. There are countless such interactions which emphasize the complexity of these systems and their feedback loops.

Categories of Enabling Conditions and Description of the Enabling Conditions

Physical and Technological

This category encompasses factors related to the characteristics of the land to be planted such as plot size, topography, biophysical characteristics, road accessibility and other types of infrastructure, proximity to other planted plots, and availability of technologies for production and processing. Dispersed and scattered smallholder plots complicate the aggregation of timber volumes and increases costs, hence connectivity among smallholders is a necessary consideration. The biophysical characteristics of land must be suitable for growing plantation trees of specific species (Ratnasingam et al. 2021; Brancalion and Holl 2020; Kallio et al. 2011; Evans and Turnbull 2004). Trees must be in the right area for the market and be planted in sufficient amounts to reach a critical mass for processing sites (Jenkin et al. 2019a, b). Roads and waterways provide low-cost access to plantations and trees should not be planted on land with poor access (Evans and Turnbull 2004). Woodlot topography and distance to roads will impact the final prices downstream actors negotiate with producers (Arvola et al. 2019; Roshetko et al. 2013).

Different crops and markets have different production and processing technologies encompassing land preparation equipment, rotation times, management techniques, and specific harvesting and processing equipment. These are all important aspects of successful tree-growing schemes (Arvola et al. 2019) and their selection must coincide with farmers’ priorities and locally-specific farming systems (Iiyama et al. 2018). Species selection and availability of quality germplasm have a strong bearing on successful development of smallholder-based tree systems (Stewart et al. 2021; Cornelius and Miccolis 2018; Kallio et al. 2011; Lilleso et al. 2011; Nichols and Vanclay 2012; Roshetko et al. 2008). Box 1 shows examples from the literature on the physical and technological enabling conditions.

Box 1 Examples of how the presence or absence of physical and technological conditions enables or disables timber value chains
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Economic and Financial

Investment in forest plantations is mostly motivated by its financial benefits (Aoudji et al. 2012; Zhang and Owiredu 2007; Herbohn et al. 2003). The relative advantage of forestry when compared to other land uses encourages tree planting (Ratnasingam et al. 2021; Arvola et al. 2020; Pokorny et al. 2010). The availability and costs of inputs such as labour, fertilizers, water, seedlings, and fuel impact the costs of plantation establishment and operation, and of other activities downstream such as harvesting, transportation, and processing. Government incentives, such as subsidies and tax breaks, provide economic motivations to establish plantations. Other value chain agents will only consider buying smallholder timber if it has cost advantages when compared to other sources of supply, and if smallholders are reliable business partners (Putzel et al. 2012).

Complementary markets for thinnings, branches, and off-cutsFootnote 2 that allow smallholders to receive income prior to full harvesting are considered key for maintaining smallholder interest in growing trees (Weersink and Fulton 2020; Sikor and Baggio 2014; Byron 2001; Godoy 1992). Markets for non-timber forest products and environmental services are advantageous if they are compatible with plantation cycles and management regimes. Markets for carbon and environmental services have proven to be effective in overcoming barriers to tree planting such as high initial costs and perceived risks of long-term investments (Cole 2010).

The presence of traders is included as an enabling economic condition because traders provide crucial services, such as contacting smallholders, evaluating the quality of their resource, paying cash, harvesting, aggregating and sorting the resources of multiple suppliers into commercial consignments, finding the right buyers, transporting the timber, dealing with authorities, accepting low prices for low quality wood, providing credit, and even paying bribes (Midgley et al. 2017; Perdana and Roshetko 2015; Aoudji et al. 2012; Velde et al. 2006; Nawir et al. 2007). Their presence enables the flow of timber between different value chain agents by reducing transaction costs (Zylberberg 2013), but they are also controversial because they exert market power over smallholders (Velde et al. 2006).

Financial resources are usually needed to solve cash flow problems when costs are incurred before revenues are earned. Plantations have high upfront costs, and the benefits are not accrued until many years later (Brancalion et al. 2017; Herbohn et al. 2003). A farmer’s financial capacity to make these types of long-term investments can affect their decision to plant (Starfinger 2021; Pannell et al. 2006; Byron 2001). Financial resources are also necessary for investing in processing facilities, technological investments, investments for certifications, logistics systems, skills development, or other product requirements needed for market entry and participation (Thiele et al. 2011; Trienekens 2011; Altenburg 2006).

Risk is a major consideration for farmers. Smallholders tend to be risk averse, and investments with extended time horizons exacerbate risk exposure for smallholders (Arvola et al. 2020) (Brancalion et al. 2017). Risk management options such as insurance or guarantees are formal financial instruments that may lower risk to a level preferred by investors, but choice of rotation length and crop diversification are risk management strategies usually employed by smallholder growers (Phimmavong et al. 2019). There are also risks for businesses dealing with smallholders; there is always a risk that smallholders will not fulfil their commitments (Altenburg 2006). The use of written contracts and laws protecting them can reduce risk (Altenburg 2006), but in rural markets in developing countries it is more common to rely on trust, social bonds, and reputation to deter contract non-compliance by trading partners (Trienekens 2011). Box 2 provides examples from the literature of the enabling economic and financial conditions.

Box 2 Examples of how the presence or absence of economic and financial conditions enables or disables timber value chains
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Human and Social Capital

The right human capital ensures that smallholders have the specific skills and knowledge to establish and manage plantations and produce products of reliable quantity and quality (Ota et al. 2020; Kallio et al. 2011; Pokorny et al. 2010). Minimum skills, including finding business contacts and knowledge of how to do business, are also necessary for successful trade (Belcher and Schreckenberg 2007). Harvesters and processors must also have the right skills and knowledge to handle and process smallholder wood and transform it into what the market requires. Timber conversion requires technical competence, monitoring, and supervision which are crucial for economic efficiency and greater timber yields of the chain (Holding Anyonge et al. 2011).

There are private courses of action that may only be possible with the cooperation and support of families, neighbours, and communities (Szulecka and Secco 2014; Pannell et al. 2006) (Byron 2001). Social capital is the valuable, but intangible, public good that emerges from relationships among individuals (Katz 2000). Strong social capital manifests itself when families, neighbours and entire communities cooperate and support tree growers to guard against theft and damage (Sikor and Baggio 2014; Pannell et al. 2006; Byron 2001). It is also present in the social interactions and collaborative relationships that are vital to the functioning of value chains (Ayana 2021; Meinhold and Darr 2019; Pulhin et al. 2010). Social capital contributes to business success by facilitating connections among value chain stakeholders for mutually beneficial transactions, and with other stakeholders outside the value chain (Meinhold and Darr 2019). Organizations such as growers’ groups or cooperatives are another manifestation of social capital. These forms of collective action facilitate commercial activity by aggregating smallholder production to reduce transaction costs, promoting economies of scale, increasing bargaining power, providing group credit and other collective services, and developing human capital (Starfinger 2021; Ochieng et al. 2018; Meinhold and Darr 2019). Box 3 contains examples of human and social capital conditions.

Box 3 Examples of how the presence or absence of human and social capital conditions enables or disables timber value chains
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Regulatory and Institutional

The institutional environment is a network of culture, policy, regulatory, and socioeconomic factors which interact with and influence one another. The resulting environment is in constant flux, serves as a resource for and constraint on behaviour, and influences the incentives and ability to adopt practices such as forestry (Nair and Toth 2016). Government rules and regulations, and property rights institutions have a significant impact on the success or failure of community-based forestry and forest-based small and medium enterprises (Scudder et al. 2019a, b). Well-defined property rights over managed land and trees throughout the growing cycle and beyond, provide incentives to use resources efficiently and encourage private investments (Linde-Rahr 2008). Even when property rights are securely in the hands of households or communities, the entitlement to exercise these rights is enabled or constrained by administrative arrangements at various scales (Katila et al. 2014).

Plantations are often affected by forest sector regulations which can be highly normative and restrictive, especially for native species, and which do not differentiate between trees harvested in natural forests and those from agricultural land (Foundjem-Tita et al. 2013, Sousa et al. 2016). Regulatory frameworks affecting smallholder tree growers and their business partners range from those meant to curb illegal logging and promote sustainable forest use, to those addressing rights to commercialization of timber and forest products, and regulations on the use of specific technologies such as chainsaws (Obidzinski et al. 2014; Foundjem-Tita et al. 2013; Wit et al. 2010; Evans and Turnbull 2004). Lengthy, complicated, and costly processes for obtaining permits, licenses, and approvals are modelled with large-scale actors in mind and result onerous and overwhelming for smallholders (Katila et al. 2014).

To further complicate matters, agricultural, forestry, and conservation policies tend to overlap and create confusion and contradiction on the ground. In general, complicated regulatory frameworks, levies, quotas, or fees set on smallholder tree growing and sales act as disincentives to tree growing (Pokorny et al. 2010; Byron 2001). Small-scale producers flourish in regulatory environments with low cost of entry and operation with few burdensome regulations (Scherr 2004). Box 4 provides examples of regulatory and institutional enabling conditions.

Box 4 Examples of how the presence or absence of regulatory and institutional conditions enables or disables timber value chains
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Domestic and International Process Conditions

Domestic and global events, trends, shocks, and other exogenous phenomena that impact demand for smallholder timber are included in the domestic and international processes category. For example, timber scarcity due to dwindling supplies from natural forests or restrictions on expansion of large-scale industrial plantations open opportunities for smallholder tree growers (Midgley et al. 2017). Also included in this category, are market standards and requirements to which smallholder producers are increasingly exposed, due to their links with stakeholders connected to global markets (Putzel et al. 2012). Operation in certain domestic and international markets requires adherence to standards for timber legality, sustainable forest management, and product quality (Wiersum et al. 2013; Zylberberg 2013). Better market access and higher timber prices are powerful incentives to participate in these markets, as are intangible benefits such as prestige, recognition, and an improved image (Wiersum et al. 2013). However, strict forest management and quality standards can become deterrents for many smallholders to participate if they have high costs of compliance (McDermott et al. 2015; Atyi et al. 2013). Box 5 provides examples of enabling conditions in the domestic and international process category.

Box 5 Examples of how the presence or absence of domestic and international process conditions enables or disables timber value chains
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Enabling Conditions Over the Plantation Investment Cycle

The relevance of the conditions will vary depending on the stage of the plantation cycle, and different stakeholders will have varying levels of control over the conditions. Figure 1 provides a general representation of the most relevant enabling conditions during each stage of plantation investment. Table 2 summarizes the enabling conditions with a brief description, citations, and their timing during the plantation investment cycle.

Fig. 1
figure 1

Timing of enabling conditions throughout the entire plantation investment cycle

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Table 2 Summary of enabling conditions and their timing during the plantation investment cycle.
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A good understanding of domestic and international market trends that may provide opportunities for smallholder grown timber is crucial before encouraging planting (Nawir et al. 2007). Governments and non-state actors assisting smallholders should have reliable information about these trends to make decisions about which markets to target. Production standards and certification requirements to participate in selected markets must be taken into consideration before promoting plantations to ensure that smallholders can adhere to them. Enabling conditions such as adequate skills and knowledge of different types and for different stakeholders, and strong social connections and relations between agents within and outside the value chain are crucial throughout the plantation investment cycle. These conditions are placed within the circle in Fig. 1. Good relationships between agents ensure that information about industry requirements such as species to be planted, expected product quality and quantities, necessary management techniques, and potential prices are conveyed early in the plantation investment cycle to smallholders. These good relationships and constant communication between actors bring more certainty to producers that there will be a market for their goods when the time to sell arrives.

Site Selection and Preparation

Factors related to plot characteristics such as size, number, location, topography, biophysical suitability, accessibility, and proximity to processing infrastructure are critical during the site selection and preparation phases. The location and size of the resource area is highly influenced by local or state authorities through use of territorial planning tools. NGOs, development agencies, and timber companies interested in out-grower schemes could also map areas of interest in conjunction with relevant state and local authorities. Ideally, plots with the right characteristics will be in the vicinity of processing industries or within reasonable distance (see Transport). Technological factors such as species selection, rotation times, management regimes, and equipment for land preparation should also be contemplated at this initial stage. Technological factors are dictated by the choice of product and market, but smallholders in a selected area must have the conditions, i.e., land, skills and knowledge, financial resources to adopt these technologies (Stoian et al. 2012; Sikor and Baggio 2014; Roshetko et al. 2013).

Perceived tenure security over managed land and trees is essential during these initial stages. The government must provide smallholders with assurance of rights, i.e., the expectation that rights will be enforced or upheld (Bettles et al. 2021), so that they can benefit from their investments in tree growing. Non-state actors can also take indirect actions to improve assurance of rights. These actions include advising governments on monitoring and evaluation of existing enforcement systems, assisting in the creation of publicly available land registries, or strengthening customary institutions (Bettles et al. 2021). Furthermore, clear boundaries between properties and secure land and tree tenure can prevent conflicts between smallholders regarding ownership of felled trees or access to a plot during the harvesting phase (Bowers and Belart 2015).

At this stage, financial resources and options for risk management must be available, both for smallholder plantations and for any processing infrastructure that needs setting up in the future. A common problem in developing countries is that access to credit for smallholder tree growers is limited in rural areas because financial institutions perceive rural smallholders to be high risk borrowers and forestry a high-risk activity (Bettles et al. 2021; Starfinger 2021; Midgley et al. 2017; Simelton et al. 2017). Lack of credit options for smallholders and other stakeholders can be addressed in various ways. Governments can establish low interest rates, credit programs and grants targeted specifically towards smallholders and forestry, while non-state actors can advise those programs and/or facilitate relationships between financial institutions and smallholder tree growers (Bettles et al. 2021; Carias Vega and Keenan 2016). In some circumstances, value chain agents including smallholders, may be willing to self-finance plantation establishment, management, and other activities (Aoudji et al. 2012; Sikor and Baggio 2014). Governments must signal willingness to enforce contracts that exist between smallholders and business partners so that risks and returns are fair for both parties.

Planting, Weed Control and Nutrition, Thinning (Management)

Availability of quality planting material and inputs such as fertilizers are essential during plantation management phases, and so is strong technical knowledge on topics ranging from germplasm and reproductive materials to nursery practices, site preparation, planting, tending, silviculture, and protection against disease, fire, and pests (Carle 2007). Smallholders usually internalize their labour costs, but depending on the scale of the operation and complexity of the management regime, they may need additional labour to carry out necessary tasks (Nambiar 2021) or reach out to other smallholders for mutual collaboration in each other’s plots (Cochard et al. 2021).

Inputs such as seedlings and fertilizers are sometimes provided by federal and local governments, development projects, and outgrowing companies as part of tree planting programs (Cornelius et al. 2010; Lilleso et al. 2011). However, small tree nurseries operated by small-scale farmers can emerge organically as a biproduct of smallholder demand for trees. These nurseries have been identified as a ‘win–win’ approach to germplasm supply as they not only enhance access to germplasm but benefit tree producers with increased income (Cornelius et al. 2010). Trees can also be provided by interested timber companies as part of out-grower schemes (Ayana 2021). Another common practice is for smallholders to collect free seeds and wildings, but this tends to compromise the quality of the mature trees (Cornelius et al. 2010).

Adequate human capital is particularly important during weed control, nutrition, and thinning, as tree quality depends to a large extent on good silvicultural management. Even with genetic material of good quality, the benefits of improved seedlings only fully materialize with improved management practices (Nambiar 2021; Arvola et al. 2019). Better silvicultural management results in better quality timber, is usually reflected in higher prices for smallholders (Cochard et al. 2021; Vallesteros 2016, Sousa et al. 2016) and results in trees of consistent dimensions that are easier to harvest, bulk, transport, and process (Russell and Franzel 2004). Smallholder tree growers often do not possess this critical human capital (Bettles et al. 2021). When it is lacking, governments and NGOs may provide it as part of extension activities supporting smallholder tree planting and delivered through local agents (Arvola et al. 2020). Human capital development can also be part of a package offered by an out-grower scheme.

This phase may also require additional financial resources for plantation maintenance investments (Hoch et al. 2009), presence of producer organizations to facilitate the distribution of adequate planting materials and to disseminate silvicultural knowledge, and complementary markets for various forest products and services to provide additional revenue and benefits.

Harvesting

During harvesting, the enabling conditions of financial benefits, strong social relations, adequate knowledge and skills, adequate technologies, streamlined regulations, rights to commercialization of forest products, and agents to reduce transaction costs come into play. Smallholders and their business partners need to receive a financial benefit from harvesting and selling the trees. Although some actors can exercise market power and exert control over the price of timber, the existence of strong social relations between value chain stakeholders means that all actors understand the interdependence of their businesses. Inequitable profit sharing across the chain and profit taking at critical steps leads to the disfunction and possible collapse of chain production and processing (G. Palmer, personal communication). Hence, competitive prices must be offered so that smallholder tree growers can benefit financially, as well as their business partners.

Harvesting timber in small volumes on small plots presents unique challenges and opportunities; adequate technologies, knowledge and skills are essential for reducing costs, improving mobility, minimizing damages, and increasing revenues for both smallholders and their business partners (Cushing et al. 2018; Smallidge 2018; Bowers and Belart 2015). Infrastructure in the form of durable road surfaces is crucial for performing harvest operations (Cushing et al. 2018). Distance from plantation sites to roads also affects costs and prices paid to growers (Wanneng et al. 2021).

Regulations on timber harvesting, transportation, and processing must not overly burden smallholders and their business partners with excessive transaction costs and prohibitions, including restrictions on equipment (Angelsen and Wunder 2003) and on forest practices (Cushing et al. 2018). Depending on the strength of connections and communication between smallholder tree growers and other value chain stakeholders, traders become vital agents connecting smallholders with other actors at this stage. Alternatively, smallholders organized in cooperative fashion can also facilitate the work of loggers (Cushing et al. 2018).

Transport

Seviceable roads are needed to ensure that timber is transported efficiently. For smallholders to realise acceptable returns on their timber, they should be connected to markets by low-cost, all-weather log transport systems (Midgley et al. 2017). Distance to processing centres and markets should generally be no more than 100 km and many times much less (Midgley et al. 2017). This stresses the importance of planning when sites are being selected for plantation establishment. Once trees have been established in areas with poor road access and/or far from processing centres, onerous harvesting and transportation costs place smallholder plots at a disadvantage (Wanneng et al. 2021; Ratnasingam et al. 2021).

Processing

Adequate technologies for processing smallholder timber must permit achievement of low average unit production costs (Danilo et al. 2017). Smallholder-grown timber is usually of smaller diameter and more irregularly shaped than timber grown in large, industrial plantations (Midgley et al. 2017). The right human capital conditions to process the wood make a considerable difference in recovery rates which in turn affects the profitability of enterprises sourcing smallholder grown timber (Anyonge and Roshetko 2003). Machinery operators such as sawmillers must have the right skills and knowledge to minimize waste and maximize output (Danilo et al. 2017). Skills and knowledge on how to manage a processing business efficiently are also critical at this stage. Financial resources for operations may also be required during this phase.

There are cases when the harvesting and processing stages occur on the same place. An example of this is when farmers sell standing trees and logs to sawmillers. When timber volumes are low and tree farms are small and fragmented in the landscape, free-hand chainsaw milling is an operationally suitable technology (Cedamon et al. 2013). Portable sawmills are another technological option for primary processing on site. These technologies have considerable advantages such as low capital outlays and mobility for millers. However, sawn timber recovery rates tend to be lower, and this is further aggravated by unskilled operators who are also under high risk of injury (Cedamon et al. 2013; Dugan 2007). Hence, adequate human capital is crucial for processing, whether it be stationary mills or mobile technologies. These skills are usually absent in small-scale operations. The acquisition of the right skills to improve recovery rates and minimize risks of injuries depends on capacity-building offered by agencies supporting small-scale timber enterprises.

Discussion

The introduction to this paper argued that successful development of value chains requires an understanding of the ‘demand’ side of timber, not just the supply or smallholder side. Although smallholder producers can be of interest as timber suppliers for a variety of reasons, sourcing from hundreds or thousands of small-scale producers is economically and logistically onerous for any buyer (Seville et al. 2011). The issue of access to smallholder timber is a key factor determining its ‘attractiveness’ for other trading partners. It is affected by conditions such as the biophysical characteristics of the land and characteristics of the plots where trees are planted, as well as infrastructure. Good infrastructure increases the accessibility of smallholder plots to potential business partners, reduces the negative impact of physical distance and associated transaction costs, and improves prices paid to smallholders (Midgley et al. 2017) (Belcher and Schreckenberg 2007; Pannell et al. 2006; Byron 2001). The importance of site suitability for tree planting has been emphasized repetitively (see Brancalion and Holl (2020), Rana et al. (2022)), but institutional and regulatory factors will also influence the choice of planting areas and even tree species. Overly restrictive forest and conservation policies, for example, could prohibit harvesting of indigenous tree species in communal or state managed lands.

Timber quality and quantity, and supply reliability affect a buyers’ willingness to purchase smallholder timber (Arvola et al. 2019; Belcher and Schreckenberg 2007). The quality of genetic material available to smallholders, biophysical characteristics of land, and adequate silvicultural practices are conditions that impact quality, quantity, and reliability. Even if trees are planted in the right place, lack of skills and knowledge in smallholders will compromise the number of trees of desirable quality (Arvola et al. 2019). This knowledge must be made available to tree growers by competent agencies both in the private, public and NGO sector. Overall, any policy or program that seeks to motivate smallholders to plant trees for commercial purposes should pay strong attention to where these trees will be planted, what species will be planted, and to ensuring that smallholders have the desire and capacity to produce trees of a specific quality standard in the necessary amounts.

Timber markets are diverse, and they present different opportunities and constraints for smallholder tree growers. Since smallholders are not a homogeneous group, their response capacity to opportunities will vary (Sikor and Baggio 2014; Stoian et al. 2012). Not all smallholders can establish plantations with long rotations and intensive management regimes (Herbohn et al. 2003). Smallholders who are resource-constrained, i.e., limited knowledge and skills, inadequate access to financial capital, and scant support from local organizations, are better suited for more practical systems that are easy to manage with simple techniques, and which require low investments (Cochard et al. 2021; Scherr 2004). These types of smallholders respond well to tree-growing schemes involving short-rotation for wood for pulp and paper industries where timber quality and large diameters are not crucial (Arvola et al. 2019). Markets for high value products require specialization, intense management, and have more rigid demands in terms of quality, regularity, and timing of timber supply (Holding Anyonge et al. 2011; Belcher and Schreckenberg 2007; Evans and Turnbull 2004). These product markets are more likely to be within reach of landowners with more skills, participation in organizations, and access to finance (Sikor and Baggio 2014; Russell and Franzel 2004). If resource-constrained smallholders are given adequate support, they can upgrade their production systems, but it is a long-term process requiring improved interactions between value chain actors and service providers in order to strengthen capacities and share information, benefits, and risks (Sjauw-Koen-Fa et al. 2016). The availability of the right human capital and access to technologies becomes more crucial as the level of value adding increases (Stoian et al. 2012).

Plantations are not inherently pro-poor, and they may exacerbate existing inequalities (Sikor and Baggio 2014). Tree planting, harvesting, and processing require capital, skills, land tenure, production systems and time horizons which can constitute barriers of entry for tree growers without the right initial conditions (Angelsen and Wunder 2003). Although, markets vary widely in terms of their entry requirements, those that accept low-quality timber produced in traditional systems using cheap seedlings and poor silvicultural practices generate lower earnings (Maraseni et al. 2018; Versteeg et al. 2017; Maryudi et al. 2017). These low-cost systems are accessible for resource-constrained smallholders, but their potential contribution to incomes is modest. In contrast, higher value adding markets can raise incomes significantly and have strong development multipliers (Holding Anyonge et al. 2011; Scherr 2004). If better-off households are more capable of operating larger and more capital-intensive plantations than the poor, they see better returns from plantations which in turn leads to further income differentiation (Sikor and Baggio 2014).

Although this paper did not explore the impact of smallholder plantations for timber value chains on nearby natural resources such as forests, it is a question worth examining in new research. The impact of road and infrastructure development on deforestation is highly debated (see Pfaff et al. (2007)), but in some contexts, it has been found to be detrimental to natural forests (Laurance et al. 2009). However, the areas where smallholder timber value chains tend to thrive, had already been deforested before smallholder tree growers became established. Carias et al. (2022) argue that areas with abundant natural forests and low population growth are not profitable for smallholders to grow trees for timber. Where there is limited surrounding forest, growing trees for timber is a lucrative activity. The impact of plantations on natural forests will depend on whether land is being cleared for their establishment, or whether they are used to reforest previously cleared areas. Smallholder plantations may ease pressure on remaining natural forests and reduce environmental problems (Schirmer et al. 2015). Smallholder woodlots of fast-growing, non-indigenous species are not a substitute for native forests, but they could contribute to forest regeneration in densely settled landscapes (Kimambo et al. 2020).

Conclusions

This paper built on the work of Carias et al. (2022) who identified twenty enabling conditions for successful value chains with smallholder tree growers as timber suppliers. The value chain perspective provided a systemic view of timber trade, attempting to solve a problem common in approaches among international agencies, governments and NGOs advising smallholder tree-growers where support begins and ends with the smallholder. Smallholders cannot plant trees without a specific market in mind as this increases the likelihood that their products will be rejected, and their investments lost. Before encouraging tree planting, the potential markets and their requirements must be understood, and possible sites should be surveyed to determine whether they are adequate for a specific tree planting program. This will avoid a timber resource without proper scale and market. The paper cautions against assuming that smallholder timber plantations are inherently pro-poor.

Some markets may be completely out of reach for the most vulnerable smallholders, whilst others, although accessible, make more modest contributions to income. For smallholder forestry to be successful attention must be paid to each of the enabling factors with consideration to its overall impact on the production, processing and marketing of the products derived from the target tree. This necessitates a broader approach to determining the feasibility of smallholder production systems beyond focusing on technical aspects of growing trees on smallholder plots. With significant opportunity for smallholders to contribute wood products to a growing world demand, it is incumbent upon organisations that promote tree planting to consider the success of tree planting ventures from a value-chain perspective that can identify bottlenecks and constraints. Such an approach will invariably lead to more targeted programs specifically matched to a current or prospective value chain that can have a higher chance of success.