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CAUTIONS MinnesotastatutesoŌen allowforharvestofcerͲ tainforestproductsfor personalusebutdonot allowcollecƟonforcomͲ mercialuses. BioƟc: Pertainingtoliving things. Ecosystem: Acommunity oflivingandnonliving things. Ceded territory: Lands cededtotheUnited Statesgovernmentby NaƟveAmericannaƟons, throughvariousTreaƟes, inexchangeforcertain rightstohunt,shand gatheroncededlands. MARKETS MinnesotalifestylesandlivelihoodsareenͲ richedbytheharvesƟngofnaturalresources includinggathering,hunƟngandtrapping. Livelihoodbenetsaccruedirectly,though useandconsumpƟonofharvestedproducts, andindirectly,throughtheexchangeand saleofharvestedproducts,inraworproͲ cessedforms.Thereisnoreasontoassume thatsustainableharvesƟngandmarketͲ orientedharvesƟngareincompaƟble.HowͲ ever,sustainablemarketͲorientedharͲ vesƟngrequiresbasicunderstandingofmarͲ ketconsideraƟons. Issueareas Fourgeneralissuesinuencethesuccessof marketsfornaturalresourcesandnatural resourceͲbasedproducts.Shouldyoudecide topursuemarketͲorientedharvesƟng,you willmostlikelyencounteroneorallofthese issues,atleasttosomeextent.InpracƟce, manyoftheseissuesareinterconnected. ECOLOGICALISSUES EcologicalissuesrelatetothepotenƟalconͲ sequencesofcommercialharvesƟngacƟviͲ ƟesonplantoranimalpopulaƟons,the broaderbioƟccommunityandthegreater ecosystem.Eīectscanbedirect,aswould bethecaseoverƟmeifaplantwereharͲ vestedfasterthanitcanreproduce,suchas wasthecasewithAmericanginseng.They canalsobeindirect.Oneexamplemightbe thatpoorharvesttechniquesmakeplant populaƟonsmoresuscepƟbletopredatory insectsordiseases,suchasinthecaseof birchbark. ECONOMICISSUES EconomicissuesrelatetopotenƟalsetbacks orfailuresofcommercialstrategiesrelaƟng tofactorssuchassupplyanddemandor economiesofscale,tonameacouple.For example,abuyermayrefusetodobusiness withyoubecauseyoucannotprovidesuĸͲ cientproducttojusƟfyapickup.Likewise, youmayndthatyoucannotforesee enoughsalestojusƟfythecostofpermits andharvesƟngequipment. SOCIALANDPOLITICALISSUES SocialandpoliƟcalissuesrelatetowriƩen andunwriƩenclaimstoparƟcularresources andassociatedcustoms.ArecreaƟonal mushroomgathererinapublicspace,for example,mightreceiveamuchdiīerent recepƟonfromparkoĸcialsorothergatherͲ ersshouldhisorhergatheringbecomecomͲ mercial.Culturalandethnicdiīerencesin resourceharvestandusemightalsoleadto misunderstandingandchallenges.Oneof themostimportantsocial/poliƟcalconsiderͲ aƟons(andmisunderstandings)inMinnesoͲ tapertainstoNaƟveAmericangathering rightsoncededterritoriesaroundthestate (seeimagenextpage)andtreatyrightsassoͲ ciatedwiththeseterritories. MANAGEMENTCOMPATIBILITY Finally,itisimportanttoconsiderthecomͲ paƟbilityofmanagementofpublicandpriͲ HARVESTERHANDBOOK Above:Abuyersolicitsbalsamboughson apublicthoroughfare.PhotobyD.Wilsey. 13
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MARKETS - University of Minnesota · popula ons more suscep ble to predatory insects or diseases, such as in the case of birch bark. ECONOMIC ISSUES Economic issues relate to poten

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Page 1: MARKETS - University of Minnesota · popula ons more suscep ble to predatory insects or diseases, such as in the case of birch bark. ECONOMIC ISSUES Economic issues relate to poten

�CAUTIONS�Minnesota�statutes�oŌen�allow�for�harvest�of�cerͲtain�forest�products�for�personal�use�but�do�not�allow�collecƟon�for�comͲmercial�uses.�����BioƟc: Pertaining�to�living�things.���Ecosystem: A�community�of�living�and�nonliving�things.���Ceded territory: Lands�ceded�to�the�United�States�government�by�NaƟve�American�naƟons,�through�various�TreaƟes,�in�exchange�for�certain�rights�to�hunt,�fish�and�gather�on�ceded�lands.�

�MARKETS� ��

Minnesota�lifestyles�and�livelihoods�are�enͲriched�by�the�harvesƟng�of�natural�resources�–�including�gathering,�hunƟng�and�trapping.�Livelihood�benefits�accrue�directly,�though�use�and�consumpƟon�of�harvested�products,�and�indirectly,�through�the�exchange�and�sale�of�harvested�products,�in�raw�or�proͲcessed�forms.�There�is�no�reason�to�assume�that�sustainable�harvesƟng�and�marketͲoriented�harvesƟng�are�incompaƟble.�HowͲever,�sustainable�marketͲoriented�harͲvesƟng�requires�basic�understanding�of�marͲket�consideraƟons.��

Issue�areas�Four�general�issues�influence�the�success�of�markets�for�natural�resources�and�natural�resourceͲbased�products.�Should�you�decide�to�pursue�marketͲoriented�harvesƟng,�you�will�most�likely�encounter�one�or�all�of�these�issues,�at�least�to�some�extent.�In�pracƟce,�many�of�these�issues�are�interconnected.��ECOLOGICAL�ISSUES�Ecological�issues�relate�to�the�potenƟal�conͲ

sequences�of�commercial�harvesƟng�acƟviͲƟes�on�plant�or�animal�populaƟons,�the�broader�bioƟc�community�and�the�greater�ecosystem.�Eīects�can�be�direct,�as�would�be�the�case�over�Ɵme�if�a�plant�were�harͲvested�faster�than�it�can�reproduce,�such�as�was�the�case�with�American�ginseng.�They�can�also�be�indirect.�One�example�might�be�that�poor�harvest�techniques�make�plant�populaƟons�more�suscepƟble�to�predatory�insects�or�diseases,�such�as�in�the�case�of�birch�bark.���ECONOMIC�ISSUES�Economic�issues�relate�to�potenƟal�setbacks�or�failures�of�commercial�strategies�relaƟng�to�factors�such�as�supply�and�demand�or�economies�of�scale,�to�name�a�couple.�For�example,�a�buyer�may�refuse�to�do�business�with�you�because�you�cannot�provide�suĸͲcient�product�to�jusƟfy�a�pickup.�Likewise,�you�may�find�that�you�cannot�foresee�enough�sales�to�jusƟfy�the�cost�of�permits�and�harvesƟng�equipment.��SOCIAL�AND�POLITICAL�ISSUES�Social�and�poliƟcal�issues�relate�to�wriƩen�and�unwriƩen�claims�to�parƟcular�resources�and�associated�customs.�A�recreaƟonal�mushroom�gatherer�in�a�public�space,�for�example,�might�receive�a�much�diīerent�recepƟon�from�park�oĸcials�or�other�gatherͲers�should�his�or�her�gathering�become�comͲmercial.�Cultural�and�ethnic�diīerences�in�resource�harvest�and�use�might�also�lead�to�misunderstanding�and�challenges.�One�of�the�most�important�social/poliƟcal�considerͲaƟons�(and�misunderstandings)�in�MinnesoͲta�pertains�to�NaƟve�American�gathering�rights�on�ceded�territories�around�the�state�(see�image�next�page)�and�treaty�rights�assoͲciated�with�these�territories.���MANAGEMENT�COMPATIBILITY��Finally,�it�is�important�to�consider�the�comͲpaƟbility�of�management�of�public�and�priͲ

HARVESTER�HANDBOOK�

Above:�A�buyer�solicits�balsam�boughs�on�a�public�thoroughfare.�Photo�by�D.�Wilsey.�

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Formal markets: Markets�governed�by�regulaƟon��in�which�parƟcipants�reͲport�transacƟons,�pay�taxes�and�generally�adͲhere�to�legal�requireͲments.�� Informal markets: MarͲkets�that�are�unregulated�or�that�operate�in�spite�of�regulaƟons.�� Market: A�market�is�one�of�a�variety�of�systems,�insƟtuƟons,�social�relaͲƟons,�procedures�and�infrastructures�through�which�goods�and�services�are�exchanged.��Structure: The�physical�arrangement�of�the�marͲket�that�results�from�inͲteracƟons�and�relaƟonͲships.� Scale: The�volume�of�product�bought�or�sold�for�a�given�period�of�Ɵme.� ValueͲadded: Physical�or�other�transformaƟons�to�raw�materials�that�inͲcrease�their�value.���

�� MARKETS��

vate�lands�with�commercial�harvest�and�gathering.�While�resource�management�goals�and�gathering�objecƟves�may�be�mutuͲally�beneficial�in�some�cases,�incompaƟbility�may�undermine�commercial�harvest�venͲtures.�For�example,�habitat�restoraƟon�areas�with�valuable�products�might�be�highly�vulͲnerable�to�disturbances�caused�by�harvest.��

Markets�decoded�We�directly�and�indirectly�encounter�marͲkets�every�day:�the�grocery�store,�a�farmers�market,�online�shopping�or�at�the�gas�pump.�What�exactly�is�a�market?�Rather�than�as�a�place,�think�about�a�market�as�a�variety�of�systems,�insƟtuƟons,�relaƟonships,�proceͲdures�and�infrastructures�through�which�goods�and�services�are�exchanged.���SomeƟmes�we�just�come�across�an�opporͲtunity�to�sell�raw�materials�or�valueͲadded�products.�Someone�noƟces�that�you�make�beauƟful�holiday�greens�arrangements�and�oīers�to�buy�20�for�a�community�event.�You�might�do�it,�and�that�is�that;�or,�you�might�

think,�“I�should�consider�doing�this�to�make�some�money�every�year.”�In�the�laƩer�case,�it�pays�to�do�some�basic�market�research.���

Market�research�Ͳ��four�basic�quesƟons�There�are�lots�of�materials�and�guides�availaͲble�to�help�with�business�planning�and�marͲket�research.�One��goal�of�this�publicaƟon�is�to�keep�it�simple,�to�give�you�an�easy�way�to�start�thinking�about�topics�that�might�seem�complicated�at�first.�Market�research�essenͲƟally�boils�down�to�asking�four�quesƟons.��1.�WHAT�DO�I�SELL?�Is�it�a�raw�material�(like�berries)?�A�valueͲadded�product�(like�jam)?�Think�seriously�about�what�your�product�is�to�the�endͲcustomer.�Is�it�really�just�jam,�or�is�it�northͲern�Minnesota�in�a�jar?�Is�it�forest�stewardͲship�through�sustainable�harvest?�Is�it�a�local�job?�Is�it�the�Minnesota�lifestyle?�Knowing�what�you�sell�can�help�you�decide�how�best�to�sell�it�and,�therefore,�create�demand�for�your�product.��2.�HOW�DO�I�CONNECT�TO�THE�MARKET?�It�is�important�to�understand�market�strucͲture�and�how�you�connect�to�the�final�conͲsumer.�Do�you�sell�directly?�To�an�intermediͲary?�Online?�Knowing�how�you�connect�is�important�because�it�influences�costs,�marͲket�access�and�price.�Selling�to�an�intermediͲary�may�result�in�a�lower�price�but�likely�takes�far�less�Ɵme�than�making�many�individͲual�sales.�On�the�other�hand,�telling�your�or�your�product’s�story�may�be�far�more�diĸͲcult�through�an�intermediary.����A�related�consideraƟon�is�market�formality.�Laws�and�regulaƟons�govern�formal�markets,�where�transacƟons�are�reported�in�some�manner.�In�contrast,�social�understandings�and�agreements�typically�govern�informal�markets,�and�transacƟons�are�less�likely�to�be�reported.�Consider�the�degree�of�formaliͲ

Above:�Ceded�territories�in�Minnesota,�Source:�keepersoŌhewater.org.�

UNIVERSITY�OF�MINNESOTA�EXTENSION�

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�Scope: The�geographic�extent�of�the�market,�both�in�terms�of�obtainͲing�supply�and�meeƟng�demand.�

MARKETS� ��

ty�for�your�market,�why�it�may�be�the�way�it�is,�and�the�potenƟal�social,�economic�and�ecological�implicaƟons�of�the�way�the�marͲket�funcƟons.�For�example,�product�buyers�and�other�important�intermediaries�may�not�call�specific�aƩenƟon�to�their�existence�if�the�market�is�informal.���3.�HOW�DO�I�FIT�IT?�Likewise,�you�should�understand�how�what�you�sell�and�how�you�connect�fit�within�the�larger�market�system.�Market�scope�refers�to�the�geographic�extent�–�both�for�supply�and�demand�Ͳ�of�the�market:�local,�regional,�naƟonal,�internaƟonal.�Scale�refers�to�the�amount�(or�volume)�that�is�sold�in�a�given�period�of�Ɵme.�Time�is�another�consideraͲƟon.�Is�the�market�seasonal?�Is�it�growing�or�shrinking�over�Ɵme?�Does�anyone�else�do�what�you�do?�To�put�it�simply:�Understand�the�big�picture�but�operate�at�your�specific�level.���4.�IS�IT�WORTH�DOING?�In�the�end,�you�will�need�to�determine�if�the�acƟvity�is�worth�doing,�whether�for�financial�or�other�reasons.�Making�money�is�not�the�only�reason�to�harvest�wild�products;�for�many�harvesters,�it’s�not�their�main�moƟvaͲƟon.���There�are�many�diīerent�ways�to�begin�to�answer�the�above�quesƟons:��TALK�Talk�to�harvesters,�growers,�brokers,�buyers,�vendors,�store�owners�and�employees,�forͲesters,�neighbors,�friends�and�anyone�else�who�has�potenƟally�useful�informaƟon�on�how�markets�for�your�product(s)�work�and�why.��USE�Use�phone�calls,�personal�visits,�libraries,�the�Internet,�the�Chamber�of�Commerce,�univerͲsiƟes�and�local�businesses.�Buy�similar�prodͲ

ucts�and�make�samples�of�your�own�to�show�potenƟal�buyers�and�others�who�can�proͲvide�construcƟve�feedback.���INVESTIGATE�InvesƟgate�compeƟtors,�challenges�faced�by�others�in�the�business,�compeƟng�products�(subsƟtutes),�prices�(at�all�stages�of�the�marͲket�chain),�yearͲtoͲyear�trends,�seasonality,�value�added�opƟons,�producƟon�and�quality�standards,�common�and�unexpected�probͲlems.���

Concluding�thoughts�MarketͲoriented�or�commercial�harvesƟng�is�not�for�everyone.�Many�livelihood�benefits�

HARVESTER�HANDBOOK�

Selling�to�a�wholesaler�(above)�versus�sellͲing�directly�to�end�consumers�(below)�inͲvolves�fewer�transacƟons,�but�typically�entails�a�lower�price.��

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�REFERENCES�Neumann,�R.�P.,�&�Hirsch,�E.�(2000).�CommercializaͲƟon of nonͲƟmber forest products: Review and analysis of research. BoͲgor,�Indonesia:�CIFOR.��Wilsey,�D.S.,�&�Miedtke,�J.�(2009).�Management�and�markeƟng�of�nonͲƟmber�forest�products.�In�M.�J.�Baughman,�C.�R.�Blinn,�J.�G.�DuPlissis,�E.�Sagor,�A.�S.�Gupta,�D.�Drake,�.�.�.�G.�WyaƩ.�(Eds.).�Woodland stewͲardship: A pracƟcal guide for Midwestern landownͲers.�Saint�Paul,�MN:�UniͲversity�of�Minnesota�ExͲtension.��

�� MARKETS��

accrue�to�harvesters�of�wild�goods�without�them�ever�entering�the�market.�However,�for�some�harvesters,�markets�represent�an�apͲpealing�opƟon�for�generating�income�or�even�oīseƫng�the�expenses�associated�with�their�favorite�gathering�acƟviƟes.�Whenever�you�harvest�natural�resources,�but�especially�

when�you�do�so�commercially,�it�is�important�to�understand�the�market�and�the�potenƟal�that�market�demands�might�have�to�posiƟveͲly�or�negaƟvely�influence�good�harvesƟng�pracƟces.����

Notes��

What�do�I�sell�or�want�to�sell?�

How�do�I�connect�to�the�market?�

How�do�I�fit�into�the�market�system?�

Is�it�worth�doing?�

Advantages: � � � Disadvantages:�

UNIVERSITY�OF�MINNESOTA�EXTENSION�

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