Forests are particularly important resources for the rural poor in tropical countries, with over 800 million people living in forests and woodlands in the tropics. Forest communities include indig-enous peoples and other local groups which have been living in forest areas for significant periods, as well as more recent settlers or immigrants. Many of the very poor are hunting or gathering tribes, landless people living around forests and landless forest workers.

In addition to improving livelihoods by providing a subsistence safety net, including food, shelter and fuelwood, the tropical forests also provide communities and smallholders with a source of cash income, a capital asset, a source of employment and an alternative health-care system based on forest plants. More needs to be done to improve the livelihood of forest-dependent people when they are interested in moving from subsistence livelihoods towards market-based activities. In many tropical zones, most local community cash income from forests comes from collection and commercialization of non-timber forest products such as bamboo, rattan, bushmeat, wild medicinal and aromatic plants and forest fruits. The employ-ment impact of these activities in the tropical rural areas is measured in millions in both the informal and formal sectors, but reliable estimates are lacking. However, due to poverty and difficult access, many forest communities are living in conditions in which even the most minimum standards for education, health, sanitation, potable water, infrastructure and employment cannot be met.

Indigenous groups and communities own or are entitled to the use of about 25 per cent of the forests in developing countries. According to a recent assessment, the forest area owned by commu-nities and indigenous peoples in the ITTO developing member countries in 2008 was about 332 million hectares. This was about 51 million hectares (18 per cent) more than six years earlier, demonstrating a strong trend to transfer formal ownership to forest communities. However, there are various countries where commu-nity forestry is not yet practised at all, or is still in the initial stages.

Community forests have existed for centuries and represent one of the main forms of forest ownership. For instance, in Guatemala, Mexico and Papua New Guinea, community ownership of forest land has been the dominant tenure form for decades. More recently, the Governments of Bolivia, Brazil, Cameroon, China, Colombia, Ecuador, Ghana, Guyana, Honduras, India, Peru, Thailand and Venezuela have revised their policies and legislation for this purpose, some of them with ITTO assistance. In addition to transferring or recognizing ownership rights, various other arrangements are being applied in the devolution of management or use rights to local communities and their members.

The process is not, however, as simple as granting communities title over forest areas, since this is usually not sufficient to ensure SFM and the development of community forest enterprises (CFEs). In general, forest communities are poorly equipped to manage their forests sustainably and to generate value through timber produc-tion and various other benefits. One reason for this is that the forest areas transferred to communities have often been degraded lands with limited development potential and a lack of investment in rehabilitation, which seriously limits their role as a livelihood source for local people who are in need of immediate tangible benefits.

In spite of the difficulties, community forest manage-ment and enterprises represent a huge opportunity for contributing to national development goals through poverty reduction, sustainable socio-economic devel-opment and environmental conservation in rural areas. It has become clear that, given the right conditions and incentives, communities can govern and manage forests sustainably for a variety of objectives, and restore degraded landscapes and ecosystems. However, improvement is generally needed in managing natural, human, financial, physical and social assets by communities.