"We are looking at gold and calling it rock"

Read the full blog post at: http://namati.org/we-are-looking-at-gold-and-calling-it-rock/
(Originally published for the World Bank’s People, Space, Deliberation blog)

Rachael Knight presents Namati’s approach for supporting communities to estimate the cost of replacing their communal lands and natural resources. Communal land, forests, and water sources are essential to the survival of many communities around the world. However, investors seeking resources may negotiate contracts that do not include rental payments.

To address this imbalance, Namati and its partners designed an activity to empower communities to grasp the inherent value of their common areas to them, so that they can reject inequitable contract offers and negotiate land deals that actually benefit the community. The facilitated activity takes communities through a process of identifying the resources currently supplied by their common lands and resources and then estimating their cost in local markets.

The results so far have been astounding!

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There is interesting research by CIFOR that relates to questions of income, valuing resources, and quality of life. Under the Poverty and Environment Network (“the world’s largest and most comprehensive global analysis of tropical forests and poverty”), researchers have surveyed around 8,000 households across 24 countries across Asia, Africa and Latin America since 2004. Apparently “the bulk of the data recorded income that households generate from diverse sources, including forests.”

An article on the study discusses relationships between data on monetary income and well-being and life satisfaction. Researchers have found that:

A narrow focus on raising incomes can lead to people feeling (and being) worse-off, even as they make more money, says Angelsen. “Higher income and higher mobility is related to loss of trust, loss of social capital and weakened family ties, which are all important for well-being – so if you sacrifice some of those things for higher income, happiness is not necessarily improved,” he says.

It makes me think of the valuation exercise because it is so common to think that rural, remote, and indigenous communities are suffering as a result of poverty and lack of cash income - but this research challenges that idea, and so does the valuation exercise, which shows that many communities actually have incomes of thousands, even millions, of dollars worth of resources from their common lands, forests, and waters.

…the averages indicate that further research may lead to a finding that concessions agreements with very low annual rental rates will further impoverish poor rural communities and adversely affect community members’ ability to survive. Averaged across 14 communities, calculating only an average of 7 items gathered or grown for household use, the average replacement cost of common lands shared by an average of 863 households is $1,394,352 annually. In a hypothetical situation in which an investor requests a 1000-hectare concession of community common lands, remunerated at $4 USD/hectare per year, the rental cost would total $4,000/year. Even if Namati’s basic method of replacement cost valuation is wildly inaccurate (failing to include certain goods and services while over-valuing others), the data indicate a differential of more than 100 times the hypothetical rental fee.

Aren’t these numbers powerful? We certainly find that the exercise is very motivating for communities embarking on the community land protection process. But we do want to continue to improve and strengthen the valuation tool. Does anyone have suggestions of research papers, other tools, or researchers that we could learn from?