Building India’s Forests of the Future – Roundtable in Shimla with Govt., Industry and Academia

30th August 2022: The Roundtable, hosted by the Indian School of Business along with the Centre for Responsible Business,
was held at Shimla earlier today on Boosting the State’s Economy from a Responsible & thriving Forest
Economy. Senior representatives from the Govt. of Himachal Pradesh, Industry & Academia discussed the
opportunity that security of tenure provides in building responsible and thriving forest economies; and in harnessing the triple-win opportunity of benefiting people, planet & profits. 

Prof. Chhatre highlighted, “We need to relook at our approach towards Forests. Forests are a source of immense economic opportunity to the industry and to the people who protect them. Only when this opportunity is harnessed, will forest will be cared for & looked after in the long run.” Himachal Pradesh has a very high percentage of forests; and is one of the rapidly growing states in India, with a per capita GDP of Rs. 212,262 (US$ 2,880) in 2020-21. The Forests of Himachal Pradesh hold a large opportunity in bringing in newer investments and economic growth. The State has a rich endowment of forests and alpine pastures, a rich and abundant natural resource, which can be managed responsibly through enhanced Security of Tenure and can be harnessed into a thriving forest economy of immense value for the State. Prof. Ashwini Chhatre, Associate Professor & Executive Director, Bharti Institute of Public Policy, Indian School of Business shared the outline of the forest economy model, anchored in secure tenure. “Forests are spaces of production and national economic opportunity; and not just spaces to be preserved and conserved”, he said. He shared the three levers on which this model will emerge – 1) Communities are entitled to ownership rights over forests under Forest Rights Act, 2006; i.e., Community Forest Resource Rights (CFRR). This brings in the necessary ownership incentive for communities to care for and manage forest resources sustainably, 2) Industry will source raw material from community-owned and women￾led enterprises, and 3) communities will aggregate into enterprises of scale to grade, sort, and process raw materials they source from forests.

The Roundtable discussion saw a coming together and sharing of multiple divergent, yet many
connected views from the key stakeholders in the forest economy.
Government representatives from Women & Child Development, Tribal Development & Industry were present and shared how specific schemes and programmes in their respective departments can be harnessed in building this initiative, which also generated further interest amongst the industry
participants.

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Three large and key holding thoughts that emerged are 1) technology to make the economy visible, which in turn, will open opportunities amongst all stakeholders – SHGs, entrepreneurs, and industry. 2) when the value chains are built at scale, e.g., a valley-level community-owned and women-led
enterprise, economies of scale kick in, and mechanization and digitization solutions can further propel the efficiencies in the value chains for all. 3) one must keep sight of Net Welfare Gains and efficient supply chains, where complementary skill sets and roles of different stakeholders bring a win-win opportunity for the industry and communities, along with benefitting sustainable management of forests.
Prof. Chhatre also elaborated, “Net Welfare Gains are far greater when community-owned enterprises become sustainable and reliable sources of raw material to the industry rather than trying to compete with the industry in packaging and marketing final consumer products. These efficiencies, where each stakeholder brings their respective strength to the supply chain, will deliver larger benefits for all involved stakeholders – communities, industry and forests.”

Multiple future opportunities from forests were touched upon, both by the industry and academia, e.g., the big opportunity that pine cones and pine needles, found in huge quantities across vast hectares of Himachal Pradesh’s forests, present as packaging material alternatives, and fossil fuel substitutes respectively.
 The Roundtable aimed to bring together multiple stakeholders in Himachal Pradesh to debate and collaborate to build the model of a sustainable and thriving forest economy. By the end of the discussion, there was significant energy and enthusiasm amongst stakeholders to engage and collaborate with each other for the forest economy model, anchored on the security of tenure.

Quotes:
Dhruv Sharma, CEO of Jagdish Commercial Services, one of the large traders from Amritsar, India’s key and one of the largest nuts & spices markets, “My father grew up in Himachal Pradesh and we always love coming back here. It has always been difficult to source these valuable forest raw materials from clean and visible sources. The forest economy model built on formal community owned enterprises of scale will solve for it, the model clearly has the potential to enable sustainable forests management! We would love to explore working with this model very soon.” He also shared, “there exists a large wholesale market, that is connected to the market on both ends. Harnessing this leg of the supply chain will bring in substantial efficiency in the supply chain of forest-based products." 

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Somit Mukherjee, Chief Procurement Officer, Dabur mentioned “when supply chains are built on business models, they are the most sustainable business models which benefit all stakeholders together. We have seen the self-propagating nature of such models at scale from our own experiences directly. The same can be replicated to the forest-based supply chains. Himachal Pradesh is a home state for Dabur, we are deeply engaged with the State and want to extend our engagement further.”

Anubhav Shrivastava, Director – Sourcing & Trading for South Asia, AAK, said, “AAK imbibes the potential of the forest-economy model remarkably from our proficiency of working with multiple communities in different geographies across the Globe. We are excited to extend our engagement with the forest- based communities in India and source from community-owned forests; not just for our existing raw material requirements but for our future ambitions as well”.

Pankaj Date, Business Development Manager, New Business Team, Purchasing & Logistic Area South
Asia, Inter IKEA Group
“IKEA is committed to promoting responsible forest management to generate a positive impact on people and the planet to enable efficient production, improve biodiversity and resilience of ecosystems. Mr. Roopesh Jain, Manager, Business Development, ITC-Agri Business Division said, “This Forest Economy model based on secure tenure is promising. Scale is important to us for any Proof of Concept; we look forward to exploring the potential from this opportunity”.