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Support of Forest-Related MSMEs in Ejidos and Communities – FIP Implementation – Mexico

This project seeks to demonstrate business models that reduce deforestation and degradation while increasing economic returns. “Support of Forest-Related MSMEs in Ejidos and Communities – FIP Implementation” supports community forest enterprises to increase productivity and preserve natural capital. Sustainable forest management can increase incomes for communities while managing resources for long-term return.

Fast facts:

  • Almost 5,000 people directly benefitted
  • Nearly 11,000 indirect beneficiaries
  • Aim of six per cent average increase in annual gross profit for enterprises
  • Potentially reduction of 105,000 tons of carbon dioxide equivalent

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The problem

One-third of Mexico’s land area is covered by forest, and 70 per cent of that is under control of ejidos, a collective ownership system unique to Mexico. The forests provide a basis for the lives and livelihoods for tens of millions of Mexicans. They are also ecological treasure chests, containing some of the highest levels of biological diversity in the world. Yet Mexico’s forest resources face severe threats, in particular through unsustainable management practices.

Sustainable forest management in Mexico is hindered by a lack of technical and entrepreneurial capacity, and a lack of access to higher-value markets. Low-productivity agriculture and unsustainable logging are made more economically viable as a result. This however, is at a severe environmental cost.

The solution

The project will provide technical and financial assistance, as well as loans to community forest enterprises to help them create and expand financially and environmentally-sustainable businesses in forest areas. They typically operate in the sectors of agroforestry, silvopastoral production, in addition to timber and non-timber forest products. With support from the World Bank, the project will help enterprises in low-income areas where forest is quickly being lost or where the levels of biodiversity are high.  It will make them more sustainable, while ensuring their long-term survival and profitability.

Helping the planet

Increasing the proportion of land under low-carbon strategies will contribute to the project’s greater framework of decreasing greenhouse gas emissions. Deforestation and forest degradation will hopefully be slowed. Likewise managing forest resources with a long-term view will help their preservation. Focusing on areas with high biodiversity will help prevent native species’ from becoming threatened or extinct.

Helping people

The community forest enterprises are expected to see higher profits, which could improve their quality of life. The project could also create specialized green jobs, while a sustainable approach assures that future generations will be able to continue to live off the forests.

Spillover effect

Demonstrating the viability of this business model while turning a profit, is likely to spark increased willingness among private sector actors to extend credit. Since this effort fits into the larger framework of Mexico’s Forest Investment Program, which includes targeting priority REDD+ areas, it has increased access to resources and funding mechanisms. Indeed, projects under the Forest Investment Program can tap into its significant financial resources, while the program is expected to leverage more than USD 700 million in additional financing for catalyzing sustainable forest management practices in Mexico.





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