Diagnosing the business models of forestry cooperatives: Reflections from the tropics
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Smallholder tree growers are the backbone in securing the increasing demand of wood products in tropical countries, particularly Ethiopia and Vietnam. Cooperatives, as a form of enterprise-oriented social organization, are gaining attention in the forestry field. Forestry cooperatives act as an instrument in managing forest resources and developing rural livelihoods. However, understanding the business models of forestry cooperatives involving rural smallholders still begs for further investigation.
We employed comparative analysis of two existing case studies of forestry cooperatives from northern Ethiopia and central Vietnam to diagnose their business models. The cases were purposively selected representing the well-experienced cooperatives of small-scale timber producers in both study areas. Grounded on the business model canvas framework, we systematically described the main components, such as main customers, key resources and cost-benefit structure. Data were obtained empirically through key informant interviews and complemented by institutional records.
Findings portrayed the selected Ethiopian cooperative (Case 1) generally as a timber wholesaler who collected Eucalyptus poles from member farmers and sold to other traders and/or local end-users. In contrast, the Vietnamese cooperative (Case 2) served as an institutional actor and a service provider in Acacia timber value chains (VCs). Despite their different position in the respective VCs, they both played crucial roles, particularly in facilitating linkages between their members to timber markets and forest-related knowledge extension. Regardless the business environment and characteristics, their performance implied various limitations, such as shortage in innovation capability and effective cost-benefit management. We derived lessons learned from each case study and outlined recommendations for enhancing business performance of forestry cooperatives.
Keywords: smallholders, rural entrepreneurship, Acacia, Eucalyptus, value chain, Ethiopia, Vietnam
ID: 3485352