SUPPLY CHAIN FOR AFRICAN BLACKWOOD MARKET ECONOMICS AND OPPORTUNITIES FOR COMMUNITY FOREST CERTIFICATION
This report assesses the supply chain and economic issues related to the certification of community managed forests in Tanzania and the implications for the Sound & Fair campaign which aims to realise a sustainable trade in African blackwood through a fully-certified chain of custody linking village communities in Tanzania to woodwind instrument musicians in the UK.
Looking at the source of supply (the forests and the communities managing them), it has been possible to gain a greater understanding of how the economics of the supply chain must impact upon those communities positively (and significantly) if it is going to be feasible long term.
EAT & MCP carried out profit and loss analysis of various scenarios, which enabled us to understand the viability of the trading system for the communities themselves.
A premium on the retail price will be essential, and this will need to be reflected in the profit margin at each stage in the supply chain, which should therefore be kept as short as possible.
The price premium on the more expensive, top end of the oboes and clarinets will yield the biggest benefits for producer communities with proportionally lower mark-ups required than for cheaper instruments.
The research also provided an opportunity to understand what the chain of custody would look like under certification.
MCP will act as a management body overseeing and monitoring individual community forests to ensure that they meet both ecological and social requirements related to forest management, and to ensure they get the best outcomes in terms of economic yield and social development.
The loggers union will work under MCP‟s supervision to ensure adherence to health and safety standards and quality control in the logging process.
Logs are purchased direct from the village by the sawmill – MCP have identified an initial partner sawmill who are keen – and who will have their own chain of custody certificate, as will the appropriate import- export agencies.
Manufacturers will also require a chain of custody certificate, possibly obtained through acooperative buyers‟ group to reduce costs.
Providing the margins are adequate, stakeholders at each stage in the supply chain appear willing to devote resources to this process, stating that “the time is right to do so”.
Our findings indicate that the supply chain is likely to take an absolute minimum of just under two years from village to point of sale (of a musical instrument).
Assuming a first harvest in November 2008, by which time MCP expects to be FSC certified, the first UK instrument sale will be October 2010.
The longest stage in the supply chain is that when the wood is left to dry out (seasoned) by the instrument manufacturer, which can be up to five years.