| Although community forestry is widely recognized as a critical element in sustainable forest management strategies and the livelihoods of forest dependent people, the economic viability of community forest enterprises (CFEs) is poorly understood. Focusing on two second-tier CFEs -- ICOFOSA, Mexico and FORESCOM, Guatemala -- this study analyzes the competitive factors of CFEs, the emergence of collective entrepreneurship, the balance between business and social goals, and the influence of external interventions. The methodology consisted mainly of semistructured interviews of 125 key informants, including personnel of CFEs, buyers, government institutions, and NGOs.;Buyers see the competitiveness of CFEs reduced by their "sell-what-you-have" mentality. Still, they regard CFEs as interesting business partners as long as these meet their price, quality, volume and other requirements. By doing so, the social and environmental credentials of CFEs may translate into a competitive advantage.;Vertical integration through second-tier CFEs does not necessarily improve profitability. Difficulties to control the cost of processing, marketing, retailing and overall business administration compromise the benefits of acquiring additional functions in the value chain. Thorough market analysis and continuous efforts to reduce costs are critical to both second-tier and first-tier CFEs.;CFEs are often driven by social and political motives rather than market orientation. What it takes to run a social enterprise has rarely been questioned. CFEs often suffer from a lack of strategic vision due to (a) vaguely defined social value propositions, (b) underqualified staff, (c) insulation from market discipline caused by employee ownership, (d) immature corporate governance structures and mechanisms, and (e) limited external linkages with other chain actors. As a result, the economic results of CFEs are mixed at best.;The study findings call for a more realistic view of the trade-offs CFEs face between their social and economic goals, and for innovative approaches based on producer agency to adjust their governance structures and interactions with other chain actors to the realities of the market and the overall business environment. Future research and development initiatives need to advance the conceptualization of collective social entrepreneurship, the provision of business development services to CFEs, and opportunities for the professionalization of CFE management. |
