Double Standards on an Uneven Playing Field:

Distribution along Senegal’s Charcoal Commodity Chain

WHAT IS COMMODITY-CHAIN ANALYSIS?

A method of analyzing factors shaping the distribution of benefits from a given product from its origin to end use

Method of analyzing “access”

Who reaps the flow of benefits from things [See Peluso and Ribot 2003]

Senegal Case1986 / 2006

Urban population

Retailers

Urban wholesalers

Transporters

Co-operatives

Merchants/Patrons

Migrant Woodcutters

Forest Villages

Rural Intermediaries

Kontrapalaas

Identify Market Actors

Retailers10,000

Urban Wholesalers

200

Merchants/Patrons5000-160 active

Migrant Woodcutters18,000

Forest Villages

FONT-SCALED PROFIT DISTRIBUTION

Wood & Charcoal

Loans

Market regulations

Unofficial relations

Urban population

Retailers

Wholesalers

Transporters

Co-operatives

Merchants/Patrons

Migrant Woodcutters

Forest Villages

Other Institutions

- Unions

- Religious Brotherhoods

Ministries

National Forest Department

Rural Intermeidaries

kontrapalaas

Regional Forest Service

Local Forest Service

ElectedRegional Council

Local Rural

Council/PCR

EXPLAINING DISTRIBUTION: MECHANISMS OF BENEFIT CONCENTRATION

• Villagers Forest access control

• Woodcutters Access to merchants

• Merchants Control of labor opportunities Control of access to markets Leverage over prices

• Wholesalers Control of distribution

• Retailers Maintenance of access to wholesalers Leverage over prices

Government attempted to Decentralize forestry control, but this did not Increase Local Benefits

• Progressive new laws 1996 & 1998– Elimination of quota– Transfer of decisions to rural council ’signature prealable’

• Implementation blocked by foresters and merchants

• National Policy Dialogue – wrote and produced play– Made it into film

• Campaign to leverage decentralization.

CONCLUSIONS

Without dismantling the “Environmental” policies that concentrate market access control with urban merchants, there is no economic decentralization

THE END

FUNCTIONS OF QUOTAS: CLAIMED FUNCTIONS

• Ecological• No relation with forest potential

• Supplying Dakar• No relation with demand [60% of consumption in Dakar]• Gap filled by quittances, overloading, under cover

transport, clearing quotas, train, etc.

• Equitable Distribution – preventing monopoly• Effect is the contrary

FUNCTIONS OF QUOTAS: ACTUAL FUNCTIONS

• Rent system—how patrons maintain their margin• Capture of the market by patrons [with professional card and

quotas] at expense of surga and CR• Maintenance of price by restricted market entry• Collusive price fixing by patrons (producer and transport prices)

[opposed to Décret 95-77 de 20 janvier 1995] • Secondary market in quotas• Market in ‘quittances’• Reduced competition by forbidding transport by train

• Patronage• Principal function of quotas et quittances – allocation to clients

• Barrier to decentralization and the transfer of powers• Usurpation of powers of elected officials right of refusal

FUNCTIONS OF PROFESSIONAL CARD

• Restriction on charcoal market entry• Contrary to Décret 95-132 février 1995

• Restriction on transport market entry• Via link between card, quota and circulation permits

• Patronage by Forest Service and Minister and the Union (UNCEFS)

• Via distribution of cards to new organizations

Functions of other laws and practices—for an other day!

• Permis de coupe• Permis de circulation• Permis de défrichement• Quittances • Taxe domaniale de deux tires (1200 et 700)• Plans d’amenagement –the new quota• ZPC, ZA, ZNC• Suivi Fiscal (contentieux)• Droit de signature préalable de PCR [Weexdunx]

Rural Council President Decision

• Weexdunx’s Signature

Mechanisms of Benefit Concentration• Villagers Forest access control

Treats of violence Village access (wells & housing)

• Woodcutters Access to merchants Social ties Social identity Technical skills

• Merchants Control of labor opportunities Permits Credit Control of market access

Control of access to markets Quotas, licenses Cooperative membership Social ties with government

Leverage over prices Collusive price fixing Inter-locking credit-labor arrangements Misinformation

• Wholesalers Control of distribution Credit Arrangements/Capital Knowledge of demand Social ties with vendors & merchants

• Retailers Maintenance of access to wholesalers Relations with wholesalers & clients

Leverage over prices Manipulation of Symbols Manipulation of Weight

à Management plansà RC right to say noà RC labor allocation

Market access control enhanced

à Dominance over RCà Pressure by SPà Pressure by forestersà Pressure by Union

and merchantsà Threats and Payoffsà Accusationà Shift of focus of

blame

Labor access control enhancedà Management Plansà Required training

More Implications

• Shift of focus of blame from line ministries to elected local authorities– [Cameroon; China]

• 1993 participatory code created participatory corvée

• 1998 Decentralized code necessitated coercion

There is plenty of profit in this market.

Forestry policies exclude local people from the benefits while enabling urban merchants to profit.

Without dismantling the policies that concentrate forestry market access control with urban merchants, there is no economic decentralization

THE POVERTY OF ENVIRONMENTAL POLICY

BROAD POLICY IMPLICATIONS

• Move away from property land-tenure security as entry point for policy:– Toward broader access focus on benefits– Forest ownership or control does not produce benefits

• Move toward benefit security– Via taxes, stumpage fees, market access, accountable

representation– Organizing—E.G. Coalition of Rural Council Environment officers

• Extend concept of ‘public resource’ to ‘profit from public resources’

• Study policy processes as linked to patronage and commercial resources– Bates policy and institutional choice

POLICY RECOMMENDATIONS

Note: The following section of the power point was not presented at the talk.

OBJECTIVES OF RECOMMENDATIONS

• Maintain ecosystem services and functions for local, national and global objectives

• Establish democratic decentralization in natural resource management• Establish a space of local discretion • Produced citizenship

• Increase local benefit retention for local development• Fund the CR

1: ELEMENTS FOR PROTECTING THE ENVIRONMENT

• Identify activities to transfer that do not threaten ecosystem functions

• Identify simple rules (shift to minimum standards approach) to assure ecosystem functions – This shift eliminates rent-seeking opportunities

2 : ELEMENTS FOR EFFECTIVE DEMOCRATIC DECENTRALIZATION

• Transfer of powers (not just obligations) concerning natural resources • Meaningful (relevant to population, lucrative)• Discretionary (giving real alternatives to rural councilors)• Lucrative opportunities

• Accountability of rural councilors to the population• Secure powers• Accountability mechanisms

3 : ELEMENTS FOR INCREASING LOCAL BENEFITS

• Transfer of lucrative opportunities to Local Government • Exploitation opportunities• Transport and trade opportunities/market access

• Establish a tax for the Rural Community• In a free market benefits will be zero without a tax• This tax must be significant

– close to magnigude of current oligopsony rents• This tax must be set nationally—not council by council

5 LINKED RECOMMENDATIONS

1. Deregulate the market following laws already legislated:• Eliminate Quota: [see Code Forestière 1998, art R66]

• Eliminate Professional Card: [Décret 95-132]

• Stop Price Fixing: [Décret 95-77]

2. Shift to minimum standards approach:• Identify uses that can occur without management plans or approval by forest

service• Identify exploitation rules/standards• Reserve plans for production enhancement or problem zones

3. Tax on forest products for the CR:• Fixed at national level• At least 500-1000 CFA the sack

4. Civic education:• Population needs to know their rights and the powers of their reps. • Representatives need to know their powers and recourse

5. Transparent fiscal management system:• Public access to revenues and expenditures information• Experiment with participatory budgeting

STEPS OF TRANSITION

2 Models : Slow [and painful] elimination

1: ================== NON================== Slow establishment

Eliminate old system all at once2: OUI

===================Establish new system progressively

RISKS TO MANAGE

• Ecological destruction• The fragile Sahel—this discourse is not viable• Anarchic cutting—nothing worse than present system

• Shortages in Dakar• Patrons strikes—as their policy leverage

• Political pressure of patrons• Re-conversion requests• UNCEFS• Votes

• Recentralization • With forest classification• With management plans• With control of former permission

STRATEGY FOR MANAGING RISKS• Mettez les risque en perspective

• Risque écologique pas si grave—régénération forte; populations contre• Risque de pénurie gérable—gaz; appelle de production

• Pénuries a Dakar• Lancez la reforme quand le charbon est abondant au fin de saison• Stockage publique de charbon de bois au dépôt a Dakar • Stockage de gaz butane en surplus [les ruptures en CdB peut promouvoir conversion vers la gaz]• Éduquer les journalistes pour expliquer que c’est les Exploitants et pas les Eaux et Forets derrière

des pénurie• Libéralisation de marchée de transport vas assurer approvisionnement • Libéralisation vas diminuer la prix (même avec une taxe pour le CR)

• Endommagements Écologique• Réponse poste hoc Trouvez les solutions quand les problèmes émerge• Faire la production (a traverse la mise en défense) dans les zones dégradé en lieu de reforestation

• Nouveau système de gestion vas s’établir a partir des imprévisible dynamiques et problèmes crée par l’élimination de vieux système.

On droit avancer sans avoir tout les éléments en place. Réagir a chaque problème qui émerge

• Contrôler la flux a l’entrée des grandes centres de consommation• Enregistrement des permis de circulation donnée par les CR

Double Standards on an Uneven Playing Field:

Distribution along Senegal’s Charcoal Commodity Chain

A Case Study of POLICY & PROFIT

Jesse C. Ribot/ World Resources Institute (WRI)Institutions and Governance Program

ribot@wri.org

METHOD OF COMMODITY-CHAIN ANALYSIS

• Identify actors• Quantify distribution of profits

– Price Margins– Expenses– Market Shares– Identify nodes of concentration

• Explain patterns of profit & concentration– Conduct, structure, performance—Farruk, Lele, Timmer, Harriss– Social identities, social relations, social histories– Policy’s role– Explore functions of policy

• Develop Policy Recommendations