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Linking FLEGT Voluntary Partnership Agreements to Jobs and Growth

Potential Challenges and Benefits for Small and Medium Sized Forest Enterprises

By Dominic Elson - DFID, Forest Trends
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This brief report discusses the potential impact of the European Commission’s Voluntary Partnership Agreements (VPAs) on the extent to which improved investment and business climates supported by VPA programs can support the small and medium forest enterprise (SMFE) sector. Recognizing the important roles that SMFEs play in rural development and the alleviation of rural poverty, the report argues that VPAs must seek to support opportunities for SMFEs to improve competitiveness, productivity and revenue, as well as mitigate any additional challenges these enterprises may face due to changes in market or trade structures caused by the VPA itself. It goes on to explain how policy makers can design a process whereby the potential risks to SMFEs arising from the VPA are minimized, and the wider vision of development and alleviating rural poverty can be realized. It proposes that the goals of VPAs – and those of emerging schemes such as REDD – are co-dependent with the aspirations of SMFEs and forest  communities. Greater SMFE benefits can be supported if the associated programs can: ensure broad stakeholder participation in the VPA design and implementation stages, ensure clarity of land tenure, contribute to organizational capacity building through nurturing the growth of industry associations, provide clarity and transparency of legality verification transaction costs, ensure that a broad range of forest products are included in the agreement, and recognize the contribution of SMFEs in achieving development and poverty alleviation goals.