Profiling the dynamics of informal timber value chain in Uganda : actors, business networks and benefit distribution

Abstract

In Uganda, most of the timber is produced and/or traded informally resulting in social, economic and environmental problems such as revenue loss, inequitable distribution of chain rents, distortion of timber markets and unsustainable timber extraction rates. This, coupled with the inadequate documentation on the dynamics of the trade, constrains the development and/or implementation of appropriate policy and management interventions aimed at increasing the number of actors operating formally. This study specifically analyzed the socioeconomic characteristics of the actors engaged in informal timber trade, the business networks facilitating their operations and how benefits are distributed between players. The study used a cross-sectional design that involved administering semi-structured value chain questionnaires and producers’ questionnaires to actors in the timber value chain to collect data on characteristics of actors and their activities, business networks and timber incomes and costs. The numerical data was analysed quantitatively using analysis of variance whereas categorical data was analysed using chi square tests. Results indicate that majority (74%) of respondents engaged in a single activity dominated by retailers at 29%. As regards socio economic characteristics; the timber value chain is dominated by adult men, with low education level, moderate wealth, who have spent a long time in the business, engaged in unregistered businesses and not operating from their areas of origin. Their business networks are characterized by verbal agreements, negotiating timber prices and their customers not demanding for formally produced/traded timber. Actors engaged in multiple activities receive most of the profits from the timber value chain dominated by upstream and for the single activity players producers received more than retailers and traders. The study concluded that the chain has several actors with different socioeconomic characteristics which determine the business one engages in, their business networks are informal and trust based characterized by verbal agreements and spot-market negotiation of timber prices and benefits are not evenly distributed along the timber value chain with upstream actors gaining more profits compared to other nodes. The study recommended that: efforts to register timber businesses should be increased, encourage formation of a formal umbrella organisation to guide operations of the actors, provide incentives to producers to procure efficient equipment and develop strategies that can enhance the participation of women, youth and small-scale operators.