113 This increase in tree planting, particularly by individuals and communities, demonstrated a positive commitment toward
restoration of degraded lands and forests Table 7 and indicates a trend towards potential long-term sustainability.
Table 7. Tree plantations on different types of land
Source: CES 1998.
5.4 Economic assessment of different possible forest restorationrehabilitation strategies
In Nepal, forests are major sources of rural livelihoods, income and employment. The sector generates about 9 percent of Nepal’s GDP and about 87 percent of the population depends directly on it for forest products, subsistence farming and
for ecosystem services. Forests fulfill 80 percent of the energy needs and 35 percent of the fodder needed for domestic animals in Nepal.
The government is well aware of this demand on forest produce and the need to prevent forests from becoming degraded. Increased level of compatibility between forestry and economic development has increased the potential for sustaining
forest resources in Nepal. However, enhanced social, political and financial commitments are necessary to effectively harness this potential.
5.4.1 Forest restorationrehabilitation strategies
The country has practised various rehabilitation, protection and management strategies for deforested and degraded land, but schemes do not contribute unilaterally to the strategy implemented. Most of the forests other than national
forests within the management control of the government were either degraded forests or young plantations when they were handed over. Most forest transfers occurred in the 1990s following the promulgation of the Forest Act 1993. Forest
management has begun to yield outputs in the form of poles and a few trees that are marketed.
The government strategy of encouraging greater public participation in forest management still holds. Increased areas of forest area are being handed over and an effort is being made to enhance governance of these institutions. However, in
the process, national forest management has been left behind. Major chunks of forests are still under the control of the government which lacks proper forest management techniques, largely due to no enforcement of commitments.
Table 8. Financial state of the forestry programme in Nepal
Forestry programmes
Area managed
ha FUG or
group no Population
benefited Employment
generated Income generation
NRyear Comments
Community forestry
1 700 048 18 133
2 237 195 hh Not available
NR10 096 452yr 177 130.7district;
max. = 2 638 187 Chitwan, min.= 2 770
Manang A household
hh is considered
to have 5.44 members CBS
2013 Leasehold
forestry 40 898.36
6 934 65 997 hh
Not available Collaborative
forestry 54 072
19 3 321 738
482 712yr Royalty 916 533 850yr
Budget 159 991 649 Buffer zone
forestry Private forests
2 360.84 2 458
3 329 885 trees
Adapted from DoF 2012, DoF 2013.
Type of forest land
Public government Community forest
Private forest Leasehold forest
1993
3 056 4 420
3 559 298.4
1994
NA 3 044.6
6 656 436
1995
NA 2 913.5
8 800.2 899
1996
NA 1 313.4
NA NA
Area of plantations ha 1992
2 667 3 732
6 810 NA
114
Community forestry programme: Nepal’s community forestry programme has been successfully conducted for the last three decades. During this period, according to the Department of Forests, about 1 700 048 ha 29.2 percent of forest
area has been managed and is benefiting some 40 percent 13 423 170 of households Table 8. These community forests more than 18 000 FUGs produce an average annual income of NR177 130 for each district. The Forest Act 1993 allows
these groups to trade surplus forest products and use the income for a range of community development activities. In addition, the process has generated local employment and enhanced empowerment of many civil society organizations
CSOs. Above all, financially these are self-sustaining forest management institutions, which pay taxes to the government.
Leasehold forest: Participation of poorer communities in forestry is being actively promoted. The practice principally follows that of community forestry, but the groups are much smaller and manage smaller areas of degraded forests. The
process is unique because a different land-use practice is allowed, other than forestry, if the group desires.
Collaborative forest management: Following the community forestry principle, to advance the technical capability of the group, highly priced timber-yielding sal forest has been handed over to the Collaborative Forest Group. There is no
limitation to the area of forest this group can manage. There are 19 groups formed so far and all are in the Terai; the biggest is 5 087.43 ha Kapilvastu Collaborative Forests DoF 2012.
Buffer zone forest management: In addition to the efforts carried out for national forest, Buffer Zone Community Forest Management addresses the buffer zone of the protected area. Following the principles of community forestry, silvicultural
management is not practised here but ecotourism, REDD and others are being promoted.
Private forestry and its enhancing role: The government is inviting the private sector to take an active role in forest product supply. There are altogether 2 458 private forests registered; total forest area registered amounts to 2 360.84 ha.
The timber supply trend over the last five years shows that 49 percent of the total requirement for timber supply comes from private forest DoF 2012. Similarly, community forestry provided 37 percent and national forest, DoF-managed forest,
supplied only 14 percent. Timber supply from national forest is decreasing, partly because of the green felling ban, and lack of governance in the management of national forests.
Compensatory payment approachesmechanism: This has been developed with a view to discouraging conversion of forest land to other land uses. In this context the “responsible agency has to plant equal area of forests in the area
specified bearing all the responsibilities for protection and management costs for up to five years when the forest has been converted to other development projects or non-profit purposes. In case of profit making purposes, responsible agencies
are required to: i plant 25 trees for every single tree felled or harvested, and ii plant equal area of forests in the area specified and bear all the protection and management costs for up-to five years” HMGN 1996.
Following this policy, the MoFSC has imposed a 5 percent environment tax on the profits of eight hydropower projects. It is necessary to obtain the permission of the MoFSC for the construction of hydropower projects, highways or other
projects. The Energy Producers Association of Nepal EPAN is opposing the aforesaid compensatory payment policy of the government. EPAN does not see any rationale to impose an environmental tax on hydropower projects as it perceives the
construction of hydropower projects as a means to stop deforestation which otherwise would happen due to the collection and burning of fuelwood.
Private investment in the forestry sector: Information on private sector investment in forestry is very scarce. Of the many forest-based industries operated by the private sector, many of them do not have their own plantations to feed the
industries but use raw materials obtained from government forests. In lieu, these industries pay royalties to the DoF.
Production from mines and quarries on forest lands is considered forest produce in the forest legislation of Nepal. There are stone, gravel, slate, lime and marble quarries operating on forest land in various parts of the country. Private entrepreneurs
are involved in such activities. Statistics on the production of these materials are not available.
There is very little foreign direct investment FDI in the private sector. Dabur Nepal, since its inception in 1992, is a private sector company engaged in promoting medicinal and aromatic plant products through direct funding. It has exported
medicinal products worth US32.19 million, thereby contributing over US2.57 million to the Nepalese treasury in just one decade see www.dabur.comnepal.
In brief, revenue mainly comes from the royalties obtained from the sale of forest products such as timber, fuelwood and various NWFPs. Entities such as CFUGS have to pay the government 15 percent of their income obtained from the sale of
forest products, in addition to a 13 percent VAT, which is applicable to the sale of timber and other forest products coming from private forests as well. Ecotourism is a relatively new major source of income that largely comes from protected
areas in the form of fees and hunting licences. The DNPWC generates a substantial amount of revenue from ecotourism making it a major contributor followed by the community forests programme. Private forests are growing into a sector for
supplementing forest products, especially timber. Trees outside the forest are another potential source of income revenue which has yet to be computed. Forestry programmes are financed by the government, however a significant portion comes
from bi- and multilateral donor agencies.
