How national forest funds can support small-scale forest businesses to deliver ecosystem services

National Forest Funds (NFFs) represent an increasingly relevant funding source for the forest sector at the global level. With the increasing role of NFFs, their structures and operational procedures are becoming more complex and diversified. While many of these funds are State-driven and often support projects that include public goods with a focus on social and environmental benefits, some also support privately managed small-scale “for profit” businesses related to wood and non-wood forest-based value chains. This paper describes some the recent developments of NFFs and presents the results of a research effort that analyzed how NFFs' funding targeting small-scale forest enterprises can contribute to the provision of forest ecosystem services. For this analysis, five case studies from Costa Rica, Guatemala, Luxembourg, Portugal, and Tanzania have been selected. In specific, the Forest Financing Fund (FONAFIFO), the FONABOSQUE, the Forest and Climate Change Fund (FCCF) of Luxembourg, the Floresta Atlantica Fund, and the Tanzania Forest Fund (TaFF) are reviewed. The research addressed several key research questions, including: How are NFFs operations conceived to support small-scale forest businesses? What type of funding windows are targeting small-scale enterprises? What are the current practices of NFFs supporting ES provision through small-scale forest businesses? How could NFFs further support small-scale enterprises while unleashing contributions to the provision of ES?.