The forestry sector, particularly the production of timber and Brazil nut, is an important part of the economy of the Amazon lowland region of Bolivia, notably in the region of Riberalta-Beni. Over the last few years important regulatory, technological, industrial and institutional developments have taken place in Bolivia to stimulate production for the export markets. However, less attention has been paid in policy and research to the local market and the role in rural development. In this study the importance and dynamics of the local market in Riberalta-Beni for timber and brazil nut is analysed, - the role of actors involved, forms of organization, the developments and the impacts on the forests and the people’s livelihoods. It particularly focusses on the negotiation and financing arrangements in the production and sales of forest products.

The study underpins the importance of selling timber for communities both as an economic complement to their livelihood, as an insurance for emergencies and as a saving to change their lifestyle (i.e. investment in luxury goods). The study also reveals that the increase of timber prices together with the ambition for life style changes has led to an increasing intensity and frequency of timber harvesting at the household level. This has gone at the expense of the traditional agricultural and Brazil nut activities.

The domestic market of timber shows a rapid increase in volumes and actors involved; it has evolved as a market niche for all those local people who depend on income from the forest but without the means, skills and time to comply with the formal market rules and requirements. Existing chainsaw operators help them with the operation and intermediation. For the communities, the chainsaw operators, who buy and sell the timber are the critical link that enables them to sell their timber in the informal timber market.

Whereas at the community level self-financing is predominating, most external financing arrangements are informal and largely framed within traditional relationships and social constructions. In Brazil nut business the “habilito” (forward payment) controlled by the nut-cracking company is the most frequently used mechanism. In the case of timber, forestry operations are financed usually in adequate quantities by informal creditors, the chainsaw operator and relatives who provide loans at high interest rates.

The community forest operations in Riberalta-Beni differ from other regions of Bolivia, like Guarayos, Chiquitania and in lesser degree the North of La Paz. Here community forestry operations are more related to large timber companies producing for the export market and the bigger scale sawmills producing for the domestic market.

The study was jointly implemented by the Bolivian Institute for Forest Reseach (IBIF) and Tropenbos International with financing of the Netherlands Embassy in Bolivia.