Munishi, PKT (1), Shear, TH (2), and Temu, RPC (1)

(1) Department of Forest Biology, Faculty of Forestry and Nature Conservation
Sokoine University of Agriculture, PO Box 3010 Morogoro, Tanzania (2) Department of Forestry, College of Natural Resources, North Carolina State University
Raleigh NC 27695, USA


      This article examines the household level impacts on forest resources and the feasibility of using market-based incentives to reduce negative impacts on the forest resources of the Eastern Arc mountain region of Tanzania. Market based incentives are seen as having high potential to conserve the forest resources and can be applied in different ways including user rights, collaborative/joint management, complete/partial privatization of some parts of the forests, and polluter pay principles. Other indirect alternatives which enhance household incomes thus reducing dependence of households on forest resources for income generation are also discussed. It is argued that the challenge to using market based incentives is the problem of designing policies and institutions that can efficiently assign, implement and administer property right and user right scenarios to different forest amenities and values. The design of such policy and institutions depends very much on proper analysis of the existing incentive structure to forest resource management and finding a way of marketing environmental services tha are major products from these forests. Mechanisms whereby the value of these services can be internalized into existing economic systems so as to ensure that the incentives for the production of these services reflect their value to society need be developed. 


      Rural households are rarely the target of forest conservation efforts because their impact on the forest is a commutative results of millions of household resource management decisions, all of which are identifiable agents in forest conversion, and thus amenable to intervention. Though forest clearing for household agriculture and forest resource extraction for household income generation may be the two most important factors driving forest degradation in the region the furtiveness of small decisions makes mitigation efforts exceedingly difficult.

      Like other families throughout the world, the decision that Tanzanian families make in regard to the use of forest resources are strongly influenced by desire to improve their livelihoods. Yet, although many forest resources are consumed directly by the families that harvested them, forest resource degradation becomes most pronounced when forest goods are gathered for sale in regional and international markets. The importance of trade to household economies and as a determinant of forest resources prompts an examination of the potential for using market-based incentives to enhance household incomes while conserving forest biodiversity. Some aspects of negative and positive consequences of household decisions to use forest resources are discussed, followed by several approaches that are feasible as market based incentive that may reduce the negative impacts and their applicability in the management of the forests of the Eastern Arc mountains 


   The rain forests of Tanzania occupy small areas confined to isolated mountains. Most of these forests are the so-called Eastern Arc Mountain forests. This region is among the areas with high population density in Tanzania. Most of the remaining forests are gazetted reserves managed as catchment forests - forests managed for rainwater capture. Most lowlands are either dry or have been deforested for agriculture and there are no alternatives to catchment forests for capturing water (Kalaghe et al., 1988; Nsolomo and Chamshama, 1990; Bjondalein, 1992; Munishi and Temu, 1992; Rodgers, 1993). Population pressure therefore would be expected to be high on the forest resources of this region. Household decisions on the use of forest resources may have both negative and positive impacts though one may outweigh the other.

   The impacts of population pressure on the forests comes from different uses or potential uses different households make of the forests as well as desire to expand agricultural lands. Such impacts are likely to be negative with respect to forest conservation especially when there is no alternative incentive to conserve the forests. On the other hand some household decisions may have positive impacts on the forest when such decisions entail less dependence on the natural forest for different purposes. A negative impact in this article is defined as any household decision and actions thereof that result into deterioration of the forest resource base, while a positive impact is a decision and actions thereof that result into sustainable co-existence between households and the forest resource base. 

Negative consequences of household decisions to use forest resources

      Human interference on the Eastern Arc mountain forests may date back to more than 2000 years ago (Schmidt, 1989). The impacts were probably severe as early as the Early Iron Age (EIA) at least locally. However the most serious degradation in most parts of the Eastern Arc forests has undoubtedly taken place in the second half of this century (Kalaghe et. al., 1988; Hamilton and Mwasha, 1989; Bjondalein, 1992).

      The major types of human impacts and intrusions on the Eastern Arc mountain forests especially at household level include cultivation and grazing, general consequences of increasing population pressure, small scale logging, collection of firewood and non wood forest products, charcoal burning and in some cases mineral exploitation (Bjondalein, 1992; Munishi and Temu, 1992). Such impacts on the forest resources may result into decline in forest area, deterioration of forest structure, species composition, gene pool resources and ecological functions of the forest such as hydrology. A detailed documentation of human impacts on the Tanzanian rain forests have been presented by Lundgren (1985), Hermansen et. al., (1985), Pócs, (1988), Kalaghe et. al., (1988), Hamilton and Bensted-Smith, (1989), Nsolomo and Chamshama (1990), Hedberg and Persson (1990), Bjondalein (1991), Bjondalein and Pocs, (1991), Munishi and Temu (1992).

      The consequences of these impacts may be grouped into three categories; (i) effects on forest extent, (ii) ecological effects and (iii) hydrologic effects. All these will be discussed from local perspectives (probably with implications on wider context of regional and global consequences). 

Effects on forest extent

      Agricultural expansion, in form of both shifting and permanent agriculture results into decrease in forest lands. In some cases, the farmers do not have a choice because they need land for production of agricultural crops (both food and cash crops). Continued use of a piece of land without proper conservation measures in fragile ecosystems like mountainous terrain, results into deterioration of soil fertility and productivity. This is a serious problem in the Eastern Arc region. Decline in soil fertility forces farmers to clear forest lands which are relatively virgin and fertile resulting in decrease in forest area.  Such pressure normally comes from outside the forest pushing in the forest boundaries. Annexing of forestlands, with some degazzettement of forest reserves for agriculture in the west Usambaras is a good example of negative impacts resulting from population pressure.

      Despite heavy pressure from agricultural expansion, its impact inside forest reserves has not been very extensive, though encroachment by squatters may be found in some forest reserves (Bjondalein, 1992; Munishi and Temu, 1992). Most farmers do respect forest reserve boundaries whenever the boundaries are clearly marked.  Overgrazing normally suppresses tree growth and results into soil erosion. When trees are suppressed, they become replaced or invaded by weedy species. This problem is prevalent in some forests like mount Meru forests.

      Mineral exploitation is a recent problem in some parts of the Eastern Arc forests like Ruvu forest reserve on the foot of the Uluguru Mountains. The destruction of the forest through mining is very obvious that in mining areas the soil is stripped off down to the bedrock to follow presumed mineral veins (Bjondalein, 1992). This process completely deprives the regenerative capacity of the forest where mining is done resulting in decline of forest cover. 

Ecological effects

      One of the major impacts in almost all the forest of the Eastern Arc region is illegal pitsawing activity. Though pitsawing may represent a more careful harvesting method than industrial logging, it may create some imbalances in the forest structure due to large gaps that may have adverse impacts on forest regeneration. Normally, regeneration of different tree species in the mountain forests may be suppressed in gaps formed by felling large trees.  This is because dense growth of climbers and stranglers of different types tend to grow in gaps and suppress the regeneration of other species.

      Selective forest harvesting may result into genetic erosion especially where no regeneration in assured. Harvesting in the Eastern Arc forests usually selects a few speices of timber value such as Milicia excelsa, Newtonia buchananii, Ocotea usambarensis, Podocarpus spp.and Cephalospphaera usambarensis. If this selective harvesting is not done carefully it might erode the gene pool of these species. For example large trees of Cephalosphaera usambarensis (which is endemic to the Usambaras and Ngurus) are almost extinct. Other species susceptible to gene pool erosion are Allanblackia stuhlmanii, Beilschmedia kweo, and Juniperus excelsa (Kalaghe et al., 1988).  Such impacts may be a hindrance to future plant breeding and regeneration programs using indigenous species (Bjøndalein, 1992).

      Growing of cash crops inside the forest that require forest cover (shade) such as Cardamon has resulted into vast forest deterioration in the Usambaras. The natural forest normally becomes incapable of regeneration when Cardamom is grown in the understory and this has a severe impact on the forest structure and its sustainability.

      The effects of collection of firewood, building poles and plants for medicinal use, a common activity by the local communities in the eastern arc mountains can have adverse effects on forest conservation. This type of extraction like pitsawing is usually selective and can result into erosion of gene pools for the species harvested. Although this is not very severe and can sometimes be sustainable, increased pressure on use may cause severe impacts.

      Hunting for meat is likely to endanger the existing wildlife populations at least for those hunted. Deterioration of wildlife communities in the forests means loss of the value of the forests for ecotourism, disruption of ecological interactions that result in forest regeneration and species distribution such as seed dispersal among others. 

Hydrologic impacts

      The functioning of a forest ecosystem may be affected through the disruption of its hydrology, which affects its water conservation and supply capacity (Bruen 1989). Most of the forests on the Eastern Arc region have been assigned a special category as catchment (protective) forests managed primarily for water conservation. Deforestation and changes in forest structure resulting from household decisions to use the forests (improperly) will have adverse impacts on the capacity of the forests to conserve and regulate water supply at least locally. Deforestation in the mountains affect large areas outside the forest and negative effects can be observed along the entire watershed system. Apart from decrease in forest areas, soil erosion, siltation of dams, landslides, severe flooding in the lowlands downstream and reduced land productivity are some of the effects human impacts have on the forests (Bjondalein, 1992; Munishi et al., 1997).

   Landslides and severe soil erosion caused by deforestation and subsequent improper land uses in the upper catchment of the mountains has been shown to have severe negative impacts on water supply and land productivity in the Ulugurus (Temple, 1972; Temple and Rapp, 1972, Rapp et. al., 1972; Lundgren and Rapp, 1974; Munishi et. al.1977). Such effects on other mountains e.g. Kilimanjaro have been illustrated by Bjondalein (1991) which include complete sedimentation of the Nyumba ya Mungu hydroelectric power dam in Kilimanjaro region as a result of excessive erosion on the upper catchment of the Kilimanjaro forest reserve. 

Positive consequences of household decisions regarding forest resource use

      Household level decisions may have positive impacts on forest resources. Such positive impacts arise from household decisions that result into less dependence of households on forest resources or wise use of forests. Household decisions may make it possible a rational use of particular products or species from the forest resulting in conservation of the particular resource.

      In general consequences of positive impacts of household decisions are conservation of the forests and their ecological functions. In this respect the discussion here will concentrate on several household decisions that are likely to result into less dependence of households on forest resources although they might not eliminate completely such dependencies. Such decisions include decisions to plant trees in farmlands for different purposes, decisions to raise livestock for supply of meat, decisions to build permanent houses, decisions to domesticate certain plant species, decisions to value the forest for other intangible benefits like hydrologic values, climatic values, and spiritual values. Although at times the decisions come out as community level decisions, in essence they are aggregations of complex individual household decisions (Beckley, 1998). 

On farm tree planting

      On farm tree planting means at least some of the desired forest products like fuel wood and poles can be obtained from on farm sources, and need not come from an existing natural forest. This action will therefore reduce pressure on the natural forests at least locally. On farm tree planting by communities surrounding the Eastern Arc Mountain Forests is prevalent albeit poor organization and lack of adequate assistance and extension. 

Livestock management and grazing

      Hunting in the forest is an activity related to satisfying household food (protein) requirements and at times, economic needs. Whenever a household decides to manage livestock/poultry within their farming systems, it will reduce hunting pressure in the natural forests with a resultant positive impact on wildlife populations. Such decisions are sometimes accompanied by decisions to stall feed the livestock as the cases in densely populated areas like Usambaras, Kilimanjaro and the southern highlands of Tanzania. Stallfeeding reduces possible negative impacts that would result from overgrazing in the forest. Fodder may be obtained from the forest but this is manageable and has less negative impacts.

Construction of permanent housing

      Housing construction uses poles and other small round wood from natural forests when these products are not available on farm. Most communities surrounding natural forest reserves use the natural forest as a sole source of building material (Munishi and Temba - in preparation). The lifespan of houses in such cases is a determinant factor with regard to forest harvesting. Short lifespans in situations where the old material is not re-used will tend to create more frequent pressure on forest harvesting.  On the other hand, permanent houses require less frequency of inputs of material from the forests and the impacts of such decisions on forest resources are always positive towards forest conservation.

Plant species domestication

      In some cases people have decided to domesticate certain plant species that occur naturally in the forest (Munishi and Temba - in prep). Such actions will have very short term negative impacts on the forest genetic/biological resources.  But in the long run such plants and their related products will easily be obtained from on-farm sources of the domesticated plants. This can greatly reduce the impact on the same plants in the forest which is a positive impact towards forest resource conservation (Munsihi and Temba - in prep) and where applicable re-introductions can be planned. 

Putting value on intangible forest products

      Sometimes, different communities do value natural forests for their intangible benefits or benefits that are not directly related to the forest. This is common to most rural communities around large forested lands in Tanzania. Such values may be tied to traditional taboos, religious beliefs, the ability of the forest to conserve and regulate water yield (literally referred to as "forests make water"). For example almost all over Tanzania montane forests are related to water supply in many traditions, and to most communities forests mean water even without any explanation of how this come about. Such values tied to the existence of the forest will likely mean positive household decisions towards forest resource management and conservation.

      From the perspectives of negative and positive impacts of household decisions regarding forest management and conservation, it seems that the negative impacts are more numerous and direct as they deal with the day to day living of respective communities. On the other hand, positive impacts are more indirect, difficult to recognize, and probably relatively slow to take. This means that decisions with negative impacts are easy to make than those with positive impacts complicating the whole situation. 


Market Based Incentives-Background

      Once the decision to promote environmental quality and sustainable resource use is made, the next step is to find tools or instruments with which to achieve these objectives. Increased emphasis has been put on the so-called economic instruments.  These represent potentially effective as well as efficient incentives to economic agents to modify their behavior patterns in environmentally friendlier directions (WCED, 1987; Opschoor and Turner, 1994).

      It has been argued that increased reliance on market based incentives rather than government planning is the way to enhance the quality of life (Holcombe, 1995; Netting et el.; 1989; Geilfus, 1997).  In this concept markets are conceived as better at producing goods and services, but government planning is better at enhancing the quality of life. Among the essential indicators of the quality of life are the goods and services that an individual is able to consume and enjoy.  However, the activities of one individual affect the quality of life of other individuals so that a form of cooperation is necessary to enhance the quality of life. Holcombe (1995) argues that markets are fundamentally better able to enhance the quality of life by producing and conserving those things that are socially valuable. With private or semi private property and market allocation of resources, owners have an incentive to preserve the value of what they own (Holcombe, 1995).

      Critiques of the market system sometimes argues that it exploits future generations by using resources that should rightfully belong to future generations in order to produce more goods that can be consumed now. It is said that, under the market system, non-renewable resources are used up and there is no incentive to preserve wealth for future descendants. However, it seems that the opposite is true that market incentives provide substantial incentives to preserve resources for future generations. The fundamental principle is that if someone owns a resource in a market economy, the owner has an incentive to maintain and enhance its value because the resource can be sold any time the owner wants. If the government determines how the resource will be allocated then no body has a clear ownership interest. A private owner has every incentive to maintain and increase the value of a resource because he or she has the right to sell it for its market value.

      The market system, in contrast to government planning provides a direct way for the preference of future generations to be taken into account. Resources that are preserved for future generations and will have value to future generations can eventually be sold to them. According to Holcombe (1995), there are two key points to the essence of markets conserving resources for future generations. First in markets, individuals will find it in their self-interest to preserve resources for future generations because they can personally benefit from selling valuable resources to others. Because resources can be passed from generation to generation, the unborn has a say in today's markets. Second, political victories can never be permanent and are dynamics to that government preservation of resources is dynamic and a constant battle. Today's politicians may do away with resource preservation without affecting their future political battle.

      When markets for valuable resources exist, people do not need to consume the resources they own to benefit from them. If they preserve the value of the resources they can sell them so that there is an incentive to reserve any resources that will have value for future generations. Resources can be preserved for endless generation, with each generation preserving the resources with the expectation of selling them to future generations.

      Individuals have incentives to preserve resources for the future if they expect there will be future markets for those resources. The same is true for energy resources, environmental amenities, and anything else that can enhance the quality of life for future generations. The solution therefore is to provide clearly defined property rights (Opschoor and Turner, 1994; Holcombe, 1995; Bensel, 1995; Oates, 1996; Anoja-Wichramasinghe and Wichramasinghe, 1997). For example if manufacturing firms are allowed to produce pollutants as by-products without having to bear the cost of their activities, then they have no incentive to clean up their pollutants. With no property right over the environment therefore, firms may produce too much environmental damage.

      If property rights are assigned to the environment and firms are charged for damage they cause to the environment, they have the incentive to cause less damage now and to find better, cheaper, and more productive technologies for environmental protection in the future. On the other hand it has been argued that under certain circumstances, market and land (resource) rights may increase environmental damage e.g., deforestation especially where land clearing is a means of establishing land rights (Angelsen, 1996).  This however is likely to happen where there are no clear regulations governing resource rights so that there is a constant fear of being deprived of a resource. 

      According to WCED (1987) environmental and natural resource sustainability requires changes in the legal and institutional framework that will enforce the common interest, decentralized management of resources, and building environmental objectives into more general financial and economic policies such as taxation and trade incentives.  This would mean that environmental costs ought to be incorporated in prices.

      The problem with environmental protection is that in real world, private ownership is not complete and property rights are not clearly defined over many environmental resources such as air, water, wild animals, forests or wilderness, so that incentives do not exist to maintain their value. Some studies have shown that the incentives to protect and invest in natural resources (forest) protection or conservation are determined by what social and economic gains local people are likely to make from such actions (Lusigi, 1990; Southgate et al., 1996; Munsihi and Temba - in prep). Such benefits are both tangible and intangible and may include timber and non-timber forest products, and amenities. For products that can generate income local markets play an important role in enabling forest dependent households to realize a significant part of their cash income through sell of such products (Patel et al., 1995; Makwekwerere, 1996; Foley et al., 1997; Ndoye et al., 1998). Other studies have shown that forest product markets provide incentives for more intensive tree planting and farm forestry management (Munishi et al., 1994; Bausel, 1995).  

Applicability of Market-Based Incentives (MBI) in Sustainable Management of Forests Resources of the Eastern Arc Region of Tanzania

      The concept of market-based incentives in theory is based on private ownership of a given resource. The idea behind is that if a resource is privately owned, the owner has the right to decide whether to use the resource now or in the future and how to use it.  If the resource has a higher value in the future then the tendency is to manage it for future value.  On the other hand, in centralized planning nobody is anyhow responsible for the resources and nobody cares whether the resource is depleted or not. The tendency therefore is to use the resource to its detriment.

      Though the theory seems to be right, and the concept can have good results on resource management, its applicability is relatively complex especially on management of natural resources that sometimes do not have direct market values. There however exist other versions of this concept than strict private ownership that may be applicable in the management of the forests of the Eastern Arc Mountains in Tanzania. These may include resource use rights, regulatory incentives and possibly polluter pay principle (PPP).

      Our discussion on the feasibility of using market based incentives in the conservation of the eastern arc forest resources of Tanzania is based on the nature of the resources, and the existing socio economic/political conditions and different mechanisms are suggested. Such mechanisms include but not limited to (i) user rights where the forest belongs to the government but people are given user rights (ii) a person or group of people given the right to manage some specific forest tracts within the context of sustainability regulations set and agreed upon by both parties, (iii) other alternatives that directly or indirectly reduce the dependency of the local households on the natural forest around them, and (iv) polluter pay principle (PPP) for such problems as mining in a forest area and large scale timber exploitation. It should be argued here that if these instruments are to be successful the following need be addressed

User Rights

      This approach may be the best of all options if properly implemented. It is probably the basis of the present advocate of collaborative forest management or joint forest management in many parts of the world. The key issue here is how can the local communities/households share costs and benefits accruing from the forest that surround them of which they have an influence so that they can feel responsible for its conservation. In this approach the forest belongs to the government but the local communities have user rights in terms of revenues that accrue from the use of the forest by different agents. Where exploitable commercial products exist, the local communities are given the first priority to extract the product. The motive behind local communities using the forest resources is to improve their livelihood. The motive to conserve such forests will therefore be determined by the benefits accruing from the forest to the local communities (Fried and Huntsinger, 1998; Solecki, 1998; Peters, 1998). The present situation where revenues accruing from the use of the forests are not plunged back into the development of respective communities or where the money goes back indirectly as determined in the state budget is a big disincentive to management and conservation of the forests. If this is to work however there should be a need for the following

   The baseline here is to enhance revenues from the forest and get this revenue to the local communities essentially by helping them do the work themselves.

   There are different potential sources of revenue in the eastern arc forests both direct and indirect. On one side there are exploitable products such as timber, non-timber products and plants (ornamental and medicinal). On the other side there are indirect sources such as ecotourism and research fees (both of which are tradable). These are non- consumptive uses but can generate substantial revenues where adequate plans are prepared.

   Water is probably one of the products from these forests that have not been conceived as tradable commodity. Many urban water supply systems in Tanzania depend on water originating from the eastern arc forests. This water is usually taped and traded by urban water authorities. In essence this water can be traced back to its origin and a part of the revenues from water be used to develop the economies of the respective communities.  Although it is difficult to determine to whom the water belongs (as the sources cannot be specified) it is easy to allocate benefits based on the percentage forest cover on each respective subwatershed, or percentage (length) of vegetation buffer strips along streams. This has been practiced elsewhere in Belize (Erin-personal communications). Another source of revenue is carbon trading (conservation credits) whereby the carbon storage capacity of these forests is evaluated and its value traded in international and local markets (Daniel, 1995; Ronald, 1997; Cassey, 1997). The forests of the Eastern Arc Mountains have a high potential for carbon storage (Munishi, 2001).

   The whole essence of this is to ensure that tradable commodities and services obtainable from the forest are identified and with collaborative management, local communities are given the right to have or use a part or whole of the revenues accruing from trading these forest values. The central issue is to make it legal to use and trade with available forest products and services within the context of sustainability. A good example is the issue of trade in ivory in Kenya and Zimbabwe. It has been observed that in Kenya where trade in ivory is illegal, elephant population has declined, but in Zimbabwe where it is legal and profits from ivory and elephant hides go to local communities, the elephant population has increased (Holcombe, 1996). This is self instructive that where it is illegal to trade in a given natural resources and no one has the right to own the resource it is degraded, while where there is legal trade with a resource and profits benefit respective local communities the resource is conserved.

   Generally we would take the issue of user right as more or less private or semi private ownership whereby the local communities own forest resources through the right to benefit from it in both financial and non-financial terms. It can as well be a form of partnership in forest resource management and utilization. The essence is conservation (wise use) rather than preservation (non use). Such approach can greatly create incentives to conservation of the forest resources.

For this to work adequately

   This approach is well supported by the existing forest policy in Tanzania though relevant institutions governing the approach are yet to be adequately realized.

   Management of specific forest areas by private individuals or groups

   This approach may be an alternative especially where sustainable resource conservation regulations can be formulated, agreed, and adhered to by the stakeholders.  Wherever applicable individuals or groups or even villages are given the right to own and manage a piece of a forested land or even to create and declare a forest to be a private or local reserve and manage it for the supply of any desired products. The private owner(s) under this option are given the right by regulation/law that should be agreed by both parties as to the extent of required sustainability of the forest they own. On top of ownership rights, transfer rights and sale/trade rights either on the resource or products need be established. Through this option, utilization pressure on other forests that may be managed for other purposes (e.g., for protective function) is reduced and are relatively protected. 

      The problem with this approach is that allocation of forestland to each individual or household may be impracticable. In this respect group management becomes feasible.  The essence is that the right to trade in forest resources with its multiplier effects will enhance household incomes and create an incentive for their conservation.

      This approach has been attempted in Tanzania in what is referred to as local authority forest reserves and has adequate support in the existing forest policy and regulations. Such forests are normally administered by local governments (District Councils) and village governments under supervision and expertise from forest authorities at District level. In such cases the district forest authorities would assist the local authority to prepare detailed management plans, based on the objectives of establishing the forest reserve. Villagers have the right to harvest from the forest as detailed in the management plan under licenses issued by the local authority and respective local authorities use the revenue obtained. In return to harvesting, the villagers have a responsibility of raising tree seedlings to plant in farmlands to supply the necessary forest products for trade or domestic consumption. However at times government support may be needed such as supply of seedlings from centrally managed nurseries.  Under the same approach, some attempts on catchment forestry at village level have been carried out in west Usambara Mountains (Kalaghe et. al., 1988; Bjondalein, 1992).

Other alternatives

      There exist other alternatives that if developed can greatly reduce negative impacts on forest resources. Such alternatives are aimed at assisting and encouraging an on farm production of desired forest products and assisting the production of other tradable products from farmlands to enhance household incomes. In essence, all are aimed at reducing the dependency of households on natural forest resources for all or part of household incomes.  Such approaches include but no limited to assisting households to plant trees in farmlands in form of agroforestry or small woodlots and subsidies to on-farm or other types of tree planting (actually the village afforestation program in Tanzania was meant to meet this objective) (Mnzava, 1980; MLNRT, 1989). Others include assisting in developing interhousehold trade and marketing of forest products from farmlands, assisting farmers increase agricultural crop production to improve household incomes, assisting in construction of durable affordable houses that require less input of wood to reduce pressure on the forests for construction wood and assisting the processes of domestication of some forest plants of commercial value where possible. Domestication of some medicinal plants in Kilimanjaro northern Tanzania from the natural forest was an attempt by farmers to conserve valuable plants which they thought are endangered in their natural habitats (Munishi and Temba, in prep). Such efforts should be enhanced and where possible reintroduction efforts be planned. 

Polluter Pay Principle (PPP)

      Although this is not market based incentive per-se, and is applicable mainly to pollution generation, it can be applied to the problem of mining encountered in the Eastern Arc forests and large-scale timber exploitation. This however requires policies that will ensure that the people who do the mining and timber exploitation are held responsible for the destruction they do on the forest resources during their operations and become responsible for restoration.

      According to Holcombe (1996), markets can be created in pollution rights that allow individuals to create environmental harm only if they own the right to do so and if they allow individuals to sell the rights to others at market determined price.  In the case of mining in forest reserves, the respective miners should be held responsible for restoring the area to a desired and agreed level.  The miner in this case has also the right to sell the permit to any other individual who agrees to follow the same conditions at market determined price. This gives an incentive to reduce the level of destruction during mining in as much as they can (including the level of production) as long as the benefits exceed the costs (pollution costs inclusive).

      This can as well apply to forest harvesting in which a person given the right to harvest an area pays for the damage resulting from harvesting and has the right to sell such right to whoever desires to do harvesting. In essence the fee paid for damages will go back to communities around the forest to boost their incomes in different ways.  However, strict regulations governing damage rights need be enforced to avoid excessive damage that may result from damage rights. Any damage should be assessed on top of the normal harvesting fee the user is supposed to pay to the forest managing authorities. Local communities around the forests being harvested may be responsible for the collection of this additional fee. This will tend to reduce the scale of damage, as the respective harvesters will keep their operations or damage as low as possible in order to make the operation profitable. 


      Forest conservation and environmental protection in general is a goal that everybody believes to be worthwhile and would enhance their life. The major disagreement in forest conservation however is deciding how to implement policies that achieve the goal. Even when specific goals are agreed upon, the most effective method for achieving the goals is difficult to determine. Marketable values for forests in any aspect and use rights for the values can be successful instruments that can greatly reduce negative household impacts on the forest resources of the Eastern Arc region if properly administered. Although it may have a high potential, complete private ownership may be a feasible approach in public forest lands at least for the present time but modified versions of the same such as collaborative management or partnership in management can be among the effective ways to use in the existing forest reserves. The essence is to get these forests contributing to the enhancement of household incomes either directly or indirectly and making communities the owners and managers of the forests surrounding them. This will make them feel the responsibility of managing and conserving the resource as it has both direct and indirect value to them.  The challenge therefore will be on designing institutions that assign property rights and use rights to environmental amenities and other values of the forests.

      All the forests of the Eastern Arc Mountains are non-industrial forests and one of their features is the provision of goods and services that are not easily marketable. Such values include water resource protection, biodiversity conservation, carbon sequestration and a number of non- wood forest products. The challenge is therefore to find a way of marketing these environmental services. Mechanisms whereby values of these services can be internalized into existing economic systems so as to ensure that the incentives for the production of these services reflect their value to society need be developed.    


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