THE WORLD BANK OPERATIONS EVALUATION DEPARTMENT The Challenges of Community Participation in Forest Development in Nepal Nalini Kumar Director-General, Operations Evaluation: Robert Picciotto Director: Gregory K. Ingram Manager: Alain Barbu Task Manager: Nalini Kumar The author is a Senior Evaluation Officer in the OED Sector and 2002 Thematic Group (OEDST) of the World Bank. This paper is The World Bank available upon request from OED. Washington, D.C. OPERATIONS EVALUATION DEPARTMENT ENHANCING DEVELOPMENT EFFECTIVENESS THROUGH EXCELLENCE AND INDEPENDENCE IN EVALUATION The Operations Evaluation Department (OED) is an independent unit within the World Bank; it reports directly to the Bank's Board of Executive Directors. OED assesses what works, and what does not; how a borrower plans to run and maintain a project; and the lasting contribution of the Bank to a country's overall development. The goals of evaluation are to learn from experience, to provide an objective basis for assessing the results of the Bank's work, and to provide accountability in the achievement of its objectives. It also improves Bank work by identifying and disseminating the lessons learned from experience and by framing recommendations drawn from evaluation findings. OED Working Papers are an informal series to disseminate the findings of work in progress to encourage the exchange of ideas about development effectiveness through evaluation. The findings, interpretations, and conclusions expressed here are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank cannot guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply on the part of the World Bank any judgment of the legal status of any territory or the endorsement or acceptance of such boundaries. Contact: Operations Evaluation Department Partnerships & Knowledge Programs (OEDPK) email: ecampbellpage@worldbank.org email: eline@worldbank.org Telephone: 202-458-4497 Facsimile: 202-522-3125 http:/www.worldbank.org/oed iii Contents Preface............................................................................................................................................iv Abbreviations and Acronyms........................................................................................................v 1. Introduction .......................................................................................................................1 2. Summary Findings and Lessons ......................................................................................2 3. Background........................................................................................................................5 The Forest Sector in Nepal..................................................................................................5 Community Participation in Forest Resource Management--How Did It Begin? .............5 International Support and Bank Lending for Community Forestry ....................................7 4. The Success in the Hills.....................................................................................................8 5. Challenges of the First Phase .........................................................................................10 6. The Second Phase Challenges ........................................................................................13 Boxes Box 1. The User Group (UG) Approach in Community Forestry: How Does It Work?........6 Box 2. Ramche UG: A Target-Driven Exercise?......................................................................11 Box 3. Jalbire Women's Community Forest Group ................................................................15 Box 4. Forest Regeneration: Do the Poor Lose?.......................................................................17 Box 5. Chhatiwan Community Forest.......................................................................................19 iv Preface This thematic overview draws on a survey of the literature, and extensive discussions with donors, civil society, and other stakeholders. The report also draws on a recent Joint Technical Review of the Community Forestry Program in Nepal, a collaborative effort between the government and its development partners. In addition, the review builds on the research done for the Operations Evaluation Department (OED) review of the Bank's 1991 Forest Strategy and its implementation. Community forestry has been under implementation in Nepal for more than two decades. Nepal's unique experience offers broad lessons for other countries that have just begun supporting community participation initiatives in forest protection and management. The review also offers analysis that is pertinent to community-driven development (CDD), an approach which is currently favored within developing countries by the World Bank as well as other multilateral and bilateral institutions. v Abbreviations and Acronyms COs Community organizations CDD Community Driven Development DANIDA Danish International Development Assistance DDC District Development Committee DFID Department for International Development DFO District Forest Officer ERR Economic rate of return FAO Food and Agriculture Organization of the United Nations FECOFUN Federation of Community Forestry Users Nepal FD Department of Forests FUG Forest user group GTZ German Technical Co-operation HCFP Hill Community Forestry Project HIMAWANTI Himalayan Grassroots Women's Natural Resources Management Association HMG His Majesty's Government of Nepal ICR Implementation Completion Report ICIMOD International Center for Integrated Mountain Development IDA International Development Association LSGA Local Self-Governance Act NGO Nongovernmental organization NNTP's Non-timber forest products ODA Overseas Development Assistance (UK) PAR Performance Assessment Report PCR Project Completion Report SAR Staff Appraisal Report SDC Swiss Agency for Development and Co-operation TCN Timber Corporation of Nepal VDC Village Development Committee UG User group UGM User group management UNDP United Nations Development Program WATCH Women Acting Together for Change 1 1. Introduction Nepal is a leader in engaging communities in forest resource protection and management. The country's community forestry program is now more than two decades old and has helped regenerate substantial areas of degraded forests. During these two decades, the implementation of the program has not been smooth. In the absence of precedents, the country has had to learn through trial and error and find innovative solutions to meet challenges as they emerged. Most economic and social indicators put Nepal among the poorest countries in the world, with an estimated 40­50 percent of the population below the poverty line. Yet, in terms of pursuing a strategy of community participation in forest resource management, Nepal has outdone almost every other country. This thematic review has a twofold purpose. First, Nepal's unique and long experience offers broad lessons for other countries that have just begun supporting community participation initiatives in forest protection and management. Second, it offers lessons pertinent to community- driven development (CDD), an approach rooted in community participation. CDD has attracted widespread borrower interest and has been supported by the World Bank as well as other multilateral and bilateral institutions. This Nepalese example illustrates the economy-wide impacts that a process of community participation in resource management has the potential to create. Several broad questions are addressed: How has Nepal been able to achieve its success with community forestry? Is its success likely to be sustainable? Is community participation an effective strategy for forest resource management? Why is it that, even in Nepal, the success of community forestry has been confined to the mid-hills and did not spread to the Terai region or the high mountains? What have been the major challenges of the first phase and what are the emerging challenges that the program faces during its second phase? How can the forest resource management effort contribute to poverty alleviation in the country? The thematic review is in six sections. Chapter 2 pulls together some important summary findings and lessons. Chapter 3 provides a background to the forest sector in Nepal. Chapter 4 looks at the special circumstances that have allowed community forestry to be successful in the mid-hills. Chapter 5 examines the first phase challenges. Chapter 6 explores the second phase challenges. 2 2. Summary Findings and Lessons The Nepalese experience offers two main findings and three broad lessons for countries embarking on community participation in forest protection and management. For the sake of clarity, the lessons are put in the context of the Nepalese experience, although they have implications for other community-driven development activities elsewhere. Finding 1: Significant success has been achieved in the mid-hills but it has proved difficult to replicate the hill model in other parts of the country because of the differing conditions in those areas. Finding II: Nepal's experience also shows that there are two distinct phases that can be discerned in the implementation of community forestry. Phase I is simply the establishment of the structure for the implementation of community forestry: the building of capacity in the forest department to handle community forestry; formation of user groups (UGs); and handing over of forests to them for protection and management. Phase II involves integration of the program with other development efforts in the country and a consolidation of gains, a much more challenging task. Lesson 1: Community forestry brings about complex and irreversible changes in the social, economic, and political fabric of society. Policymakers need to give careful thought up front to the details: the nuts and bolts of the decisionmaking process, the specifics of the benefit sharing arrangements between stakeholders, and the implementation strategy. Suitability of these factors to country conditions is of paramount importance. Mistakes can be difficult and expensive to correct. · Nepal's experience illustrates the widespread ramifications of a community forestry program. When community forestry was being promoted in the hills the major objective was protection of a dwindling, degraded resource. At that time it was not anticipated that the forests could rejuvenate and provide significant economic returns. The potential for economic returns from community forestry has understandably made the government cautious about replicating the community-based hill model in the rich forest resource in the Terai. · The finality of the decision has added to the government's caution. Once the forests are handed over there is no going back. Handing-over forest resources to the community in the Terai with 100 percent of the current and future benefits going to them means a significant loss of revenue for the government. Currently there is no consensus among the government and other stakeholders on a strategy for the Terai. While this review does not make a recommendation for the Terai, it re-emphasizes the need for all stakeholders to come together to work out a consensus. Given the strong civil society movement, the presence of numerous donors that are small individual players and a government that retains ownership of the forest resource, a facilitator may be needed to bring the parties to the table. · A major issue is the future returns from a previously degraded resource that starts yielding substantial incomes. Is it reasonable for the government to expect that once a resource is rejuvenated it should start contributing toward the development effort of the country, particularly when the country is as poor as Nepal and has limited domestic budgetary resources? Critics argue that the user groups are already contributing by supporting development efforts such as schools and bus shelters in their villages. However, the variation in income among UGs can mean that some villages are able to develop while others are left behind. Is this fair? If not, what is the alternative? Should the UGs be expected to contribute to the central exchequer? There are difficulties in 3 bringing this about given that community forestry currently operates outside the national tax system. Also, how is it to be brought about, without conveying to the people that the government is not actually withdrawing its support for community forestry but using it as a means to further its development effort? Lesson 2: Particular attention needs to be given during implementation of the community forestry program to issues that impact the lives of the poorest. In predominantly agricultural economies like Nepal, forest sector development can have a major impact on their lives as fuelwood, fodder, and other non-timber products gathered from nearby forests are an important supplement to their daily labor incomes. · Tackling the challenges of the second phase would not have been easy in any country, let alone Nepal, which is currently grappling with problems of political instability. However, if these challenges are successfully tackled, then community forestry can also become a strong component of a poverty alleviation strategy. So far, although the forest area has regenerated, the benefits to the poor have been limited. · In some cases, while the community as a whole may have benefited, there is evidence that the condition of the poor actually may have worsened. However, adequate attention to the interests of the poor in the drafting of the benefit-sharing arrangements, and in the process of forming executive committees for UGs, may avoid their marginalization. Planners and implementers need to give attention during the early implementation phase to questions like: Where will the landless meet their demand for fuelwood and fodder? What will happen to the income of the headloaders? What can be done to avoid the short- term costs to these sections of society? Are the benefits from community forestry likely to be captured by a few? If so, how can it be avoided? · Specific attention to the research, marketing, trading, and development needs of non- timber forest products can go a long way in ensuring that the poor are not losers in a program of community forestry. Lesson 3: Even though community forestry may be a win-win strategy in the long run, there are major short-run cost implications for the government when using external support. The support of the international community has made it possible for Nepal to implement a program of community forestry. But general lack of coordination has worked to the detriment of both the donors and the country. · A distinguishing feature of external support in Nepal has been the presence of numerous donors that have provided relatively small amounts in grant and concessional lending. Between 1971 and 1989, there were 48 distinct forestry projects in Nepal. Of these, three were World Bank­supported projects that provided 60 percent of total funding. Eleven other projects provided less than US$1 million between them. Multi-donor presence in the forest sector has meant that substantial resources have been available to implement the community forestry program. Given the scarcity of domestic resources, it would not have been possible for Nepal to implement community forestry without donor support to bridge the budgetary gap. In addition, it is quite possible that without pressure from international donors, the policy and legal framework for community forestry may not have been established as early as it was in Nepal. · Within the broad national vision, individual donors have supported different aspects of the community forestry program in Nepal, depending on their individual priorities.Thus, some donors have given greater importance to promoting policy reform, others to supporting UG identification and formation, and still others to building capacity of the 4 FD. While all aspects of the community forestry program need support, donor agenda and mission, rather than a coordinated, well-planned strategic approach, has been the deciding factor. In addition, individual donors have preferred working in particular districts.This has meant that each donor has pushed in a particular area and field according to its own priorities. This has also put a tremendous coordination burden on the government and stretched its limited institutional capacity. · Lack of coordination for the country has meant that the available resources have been used less efficiently than they might have. Diverse implementation strategies in different districts according to specific donor requirements have often created confusion, especially among field staff who are frequently transferred between districts. The uncoordinated approach has also resulted in some important institutional issues receiving inadequate attention. As an example, support for research to address specific problems emerging from field implementation has fallen between the cracks.1 · For the donors, lack of a strategic approach has meant limited leverage. Individual donors have tried to deal with the first and second phase challenges in the context of individual projects with localized successes. Conversely, the synergy and leverage created by their combined strength in the early 1990s facilitated the passing of a policy and legislative framework in support of community forestry. · In recent years there has been a broad consensus among donors on the need for greater coordination of their activities. The establishment of the Forest Sector Coordination Committee, a formal committee chaired by the Ministry of Forests and Soil Conservation, is one such serious effort. This has improved the process of donor coordination and created greater awareness among donors about each others' programs. It has also led the donors and the government to come together to identify major bottlenecks, as has been done in the case of the joint technical review. However, coordination of donor activities on the ground continues to be limited by their differing geographic foci and conditionality. 1The Region in its comments notes that each donor implementing the program independently in a different geographical area provided an opportunity to test different arrangements for the implementation of the "community forestry" model. According to the Region this diversity brought lessons of experience and introduced flexibility. The Region agrees that a coordinated forum would have strengthened this sharing of experiences, but notes that a unified model of implementation would not be the solution. 5 3. Background The Forest Sector in Nepal Approximately 80 percent of the total area of Nepal is either hills or mountains, and forests and shrubs occupy approximately 40 percent of the land (HMG 1999). Wide variations in altitude give Nepal a range of forest types from the subtropical to alpine. The forest sector contributes about 15 percent to GDP and meets over 75 percent of the country's total energy requirement. Physiologically, Nepal has five zones: the high Himalayas (Himadri), the high mountains (Himachal), the mid-hills, the outer Himalayas (Shivaliks), and the Terai. Together, the Terai and the Shivaliks account for 27 percent of Nepal's total land area and approximately 35 percent of the forest resources. The Terai is a narrow, fertile, densely populated lowland, predominated by farmlands and industrial communities along the border with India.2 The forests in the mid-hills are scattered, intermixed with settlements and agricultural land, not easily accessible, and valued primarily for meeting the livelihood and subsistence needs of the local population. In contrast, the Terai forests, located in continuous belts often relatively far from settlements, have been a major revenue earner for the state and a source of valuable timber for meeting the needs of the entire economy. Until the 1960s, the Terai was malaria-infested and large areas remained without human settlement. In recent years, however, growing population pressure, agricultural development, and other factors have significantly reduced the forest cover. The estimated total forest area in the 20 districts of the Terai is approximately 560,000 hectares. Administratively, forests are the responsibility of the Department of Forests (FD) under the Ministry of Forests and Soil Conservation (MFSC). Organizationally, FD was expanded in 1984 to include 5 regional directorates and 75 district forest offices. The department has three main divisions: National Forests, Community and Private Forests, and Planning and Monitoring. The Private and Community Forestry Division is responsible for undertaking initiatives related to community forestry. Timber and fuelwood marketing in Nepal involves both private and public actors. The majority of traded timber and fuelwood comes from the national forests of the Terai region (Mitchell and others 2000). In the past, the Timber Corporation of Nepal (TCN), a wholly government-owned corporation, was largely responsible for harvesting and processing of much of the timber. However, since the Master Plan for the Forest Sector (1989) put emphasis on the privatization of parastatals, the government has significantly cut down the corporation's activities. TCN has a variable record and has been running at a loss for the past few years. In various reports, the World Bank has recommended that the corporation be wound up, as its tasks can be performed more efficiently by the private sector. Community Participation in Forest Resource Management--How Did It Begin? Community participation in forest management and protection has a long history in Nepal. From long ago, indigenous systems have managed the country's forest resources, albeit under less population pressure than the present day. In 1957, with the Private Forest Nationalization Act, the government brought all forests under its direct control to ensure their proper use. The 1961 Forest Act provided the legislation to support state administration of the forests. However, the government was not able to control the rate of deforestation. In the absence of indigenous and traditional systems of control, forest guards were unable to protect the forests from indiscriminate felling. Consequently, large areas of forests were lost during the 1950s and 1960s. The failure of 2The Terai is a subtropical extension of the Gangetic plain and accounts for 60 percent of the country's total agricultural output. (Hobley 1996) 6 state-controlled measures to protect natural resources led to the re-emergence of interest in participatory resource management. The government took significant steps to build a sound policy and legal environment to support community forestry. The Panchayat Forest Regulations and Panchayat Protected Forest Regulations were adopted in 1978 and provided for the handing over of limited areas of government forest land to panchayats.3 The government forestry sector policy in the Sixth Five- Year plan (1981­85) emphasized community participation in forest resource management. The move toward community participation was strengthened by the Decentralization Act of 1982. However, the practice of handing over forests to panchayats often excluded those forest users who lived outside the administrative area of the panchayat. Hence the concept of user group management (box 1) was adopted by the 1988 amendment of the Panchayat Forest and Panchayat Protected Forest Regulations of 1978. Nepal's Master Plan for the forestry sector (1989) strongly advocated the participation of communities in forest management. It also emphasized the need for reforms in government policies, institutional structures, and legal base to support community forestry. Thus, the 1993 Forest Act, which accords community forest management the highest priority. The act gave legal status to forest user groups (UGs) and recognized them as "autonomous and corporate institutions with perpetual succession," with a right to sell and acquire forest products. The 1995 Rules provide the procedural guidelines for implementation of the Forest Act of 1993. Box 1. The User Group (UG) Approach in Community Forestry: How Does It Work? With User Group Management (UGM), protection of forests is no longer the sole responsibility of the government. Under current arrangements, the local community is entitled to 100 percent of the benefits flowing from the forests under their protection, though land ownership remains with the government. Hence they have a vested interest in protecting the forests. There is no limitation to the size of the area over which UGM can be applied. The emphasis is on identifying users rather than administrative definitions for local organizations. Both primary and secondary users are included. Primary users are those who regularly use the forest area and have locally recognized rights to obtain all their forest product needs from the forest. Secondary users are those who occasionally use the forest area for a specific purpose or product and are not given full rights by the primary users to obtain all forest products. This approach also enables the incorporation of nomadic users. The work of motivating and forming UGs is done by FD staff working as extension agents. Government authority for handing over forests to users "in perpetuity" has been devolved to the District Forest Officers (DFOs). Two distinct stages need to be completed before a forest can be officially handed over to a UG. First, the users associated with a particular forest area need to be formed and registered as a UG. Second, the UG needs to produce an operational plan, which must be approved by the DFO. The UGs are tightly tied to the operational plan, which defines the area to be managed, contains agreements for protecting it, describes practices for management and harvesting of forests, identifies the areas and species to be planted, and establishes a community forestry nursery if needed. UGs can also register themselves as independent bodies. Surplus income generated from UG-managed forests can be used for development work other than forestry. However, a percentage of the benefits from community forestry are to be directed back into enhancement of the forest resource. The Forest Act of 1993 does not limit community forestry to the hills. If forests are accessible, and it is possible for the communities to manage them, community forestry can be applied. As of now, most of the progress has been mainly in the mid-hills. Large areas of the higher mountains are inaccessible to communities to meet their daily needs. Though there have been numerous 3The panchayat form of local government has now been replaced by elected local governments. The panchayat is the equivalent of the present day Village Development Committee, which is the lowest political and administrative unit in the country. 7 efforts to identify and establish forest UGs in the Terai, supported through the initiative of donors, little success has been achieved so far (Chapter 6). International Support and Bank Lending for Community Forestry Nepal has relied heavily on external support to implement its community forestry program. Currently about 80 percent of the development budget for community forestry comes from donors (DFID-Nepal 2000). The objective of protecting the forest cover in the face of a rising population is ambitious. Given the scarcity of domestic resources, it would certainly not have been possible for Nepal to undertake such a massive program through its FD alone. Though in the long run the community participatory effort may work out to be significantly less expensive than a program undertaken by the government alone, there are enormous start-up costs in the form of reduced access to forests for the community and resources needed to train the FD staff and community members in participatory resource management techniques.4 The challenges of the first and second phase also have enormous resource implications (Chapters 5 and 6). The Bank is only one of several donors to have provided extensive assistance for community forestry in Nepal. The World Bank's first forestry operation in Nepal, approved in April 1980, was the Community Forestry Development and Training project, under which the Bank financed social forestry in 18 Forest Divisions in the hills covering 340 village panchayats. The Second Forestry Project was in the Terai. Lessons learned during the first project in the hills helped in better preparation of a follow-on project (the Hill Community Forestry project), which became effective in May 1990. For a combination of reasons, among them disagreement on the future of the TCN, no other Bank-supported project has been approved in the forest sector. Though considerable preparation was done for a Second Terai Forestry Project, it did not go through. Currently, DANIDA, SDC, AusAid, USAID, GTZ, and DFID are the major donors supporting the forest sector. DANIDA's National Resource Management Sector Assistance Program (NARMSAP), is supporting building of national capacity in natural resource management. Initiated in 1998, it has also taken over from where the Bank-supported Hill Community Forestry project ended in 1999. Government of Australia support for the forest sector in Nepal began in 1966. Since 1997, the Nepal-Australia Community Resource Management Project has been supporting the development of sustainable community resource management systems in two districts. DFID has supported the forest sector in Nepal since 1979 and now proposes to support a 10-year livelihood and forestry program approach to help improve the livelihood of rural poor in Nepal. 4As noted by the background papers to World Bank 2000c. 8 4. The Success in the Hills Though lack of baseline data makes it difficult to quantify success, community participation in forest resource management has led to significant regeneration of degraded forests in Nepal. About 15 percent of the forest area has been brought under community management, primarily in the mid-hills. Current data show that while the rate of deforestation has slowed in the mid-hills to about 0.2 percent per annum, the forests in the Terai are being depleted at an annual rate of about 1.3 percent. Analysts argue that the grass-root social capital built in the form of forest UG capacity to protect and manage forest resources is also an indicator of the success of the program (ICIMOD 1999b). Currently more than 10,000 UGs are protecting about a million hectares of forest lands in the country. Ex-post analysis shows that community forestry in the mid-hills succeeded because of the simultaneous occurrence of five factors. First, in the 1970s, when community forestry began, there was considerable debate worldwide about the deteriorating condition of Nepal's forests and the seriousness of the situation.5,6 These views about the crisis, and the rapid visible degradation of the hill forests, made the government eager to take urgent action to control deforestation. Second, the government did not consider the forest resources in the mid-hills of major commercial value as most of them were degraded and were not easily accessible. Hence the government was willing to hand over forests to the people for protection and management. Moreover, since there was little inflow to the state exchequer from these forests, there was also little expectation of future economic returns to the government from these forests. Given the poor transport and communication situation in the hills, the scattered nature of the forests, and the limited government staff, the government was convinced that protection of the hill forests needed the cooperation of the people. Third, the people in the hills realized that if they were to conserve their fragile environment, it was essential to protect the forests. They had witnessed firsthand the consequences of deforestation--landslides, erosion, drying streams, and soil degradation, to name a few. Hence there was willingness to come together to protect the resource. The old, stable settlement patterns (footnote 42) and the scattered nature of the forests made it easier to identify UGs to which specific responsibility for a particular forest area could be given. Fourth, the international development community at that time was supporting experimentation with participatory efforts. In the late 1970s and 1980s, participation had become the favored approach for all rural development. Multilateral and bilateral donors, including the World Bank, were willing to provide the needed budgetary resources in support of a program of people's participation in forestry. 5"In the 1970s, public awareness grew regarding deforestation and its side-effects in developing countries. This received publicity in the Nepali media as well. Eric Eckholm, in his book Losing Ground, painted an alarming picture of the degradation of the mountain environment in Asia, Africa, and Latin America. In South Asia, for instance, increasing flood damage in Bangladesh was thought to be a direct consequence of the deforestation in the Nepal Himalaya. This relationship later gave birth to the theory of Himalayan Environmental Degradation. This simplistic cause and effect theory attracted a great deal of academic and media followers and generated international investment interest in afforestation." (Panos Institute 1999). 6An energy sector study by the Energy Research and Development Group of Tribhuvan University in 1976 had estimated that the remaining accessible forests in the hill regions will disappear within 12 years and those of the Terai region within 20 years unless steps were taken by His Majesty's Government (HMG) to resolve this problem. World Bank research led to the recommendation in 1978 that HMG forestry development strategy give priority to a national rural afforestation program, which should aim at establishing 640,000 hectares of village woodlots in the hills and 400,000 hectares in the Terai over the next 20 years. 9 Finally, had the crucial policy, procedural, and legal changes not been introduced, the community forestry program in Nepal would not have been where it is today. Given the favorable environment for community forestry, the eagerness of the government to pursue participatory resource management strategies, and the scarcity of domestic resources available to support the program, there was an opportunity for the World Bank and other donors to "push" for policy and legal reforms in support of the program. It is quite possible that, given the unstable political situation prevailing in the country at that time, without pressure from international donors, the policy and legal reforms in support of community forestry may not have come through as quickly as they did. Hence the need and desire of the country to protect its forests converged with the efforts of the donors. 10 5. Challenges of the First Phase The major focus in the early years was on identification and formation of UGs and handing over of forest land to them for protection and management. Though this may sound simple, in practice it was a challenging experience. UGs could be formed only if there were clear policies, laws, and procedures to support their formation and existence. In addition, the FD, the main implementing agency, had to have the capacity to undertake the whole UG formation exercise. Then again, since rights to forest land can be unclear, creating disputes, conflict resolution mechanisms had to be developed. Formation of UGs is essentially a process of building grass-roots social capital. Researchers have stressed the importance of allowing sufficient time for building the spirit of community participation at the grass-roots level. In some cases UGs became defunct a few years after they were formed. One important reason has been the lack of sufficient time to build grass-roots capacity. FD staff are generally allotted annual targets for UG formation and these targets do not allow staff the flexibility of devoting more time to groups that may need more assistance. Often the pressure to make decisions quickly to fulfill preset targets limits the consultation process undertaken and can result in actual users being left out.7 Though the UG formation process in 8 Ramche may not be typical, it is certainly not rare (box 2). Inadequate time devoted to UG formation can result in an institution with which few users can identify. Sometimes donor projects are to be blamed, as they push for physical target achievements. This is often because their monitoring system views progress in terms of number of groups formed, and not in the quality of the groups.9 Clear policies, laws, and procedural guidelines to implement community forestry. Clear policies, laws, and procedures are crucial to building trust between the communities and the FD. Even though the concept of UGM was adopted in 1988, implementation was slow in the early years because a supportive framework was missing. Analysts observe that FD staff were themselves unclear on how to proceed with the actual implementation. Donor pressure led to the passing of the Forest Act of 1993. The procedural clarifications on the implementation of the act followed with the rules in 1995. As a result, identification of UGs and handing over of forests began in greater earnest after 1995. The 1993 legislation and the 1995 Forest Rules continue to be the major legislation regulating the forest sector, though with the passage of time there are several contradictions that have emerged between forestry and later legislation. 7"The following is adapted from SOS Sahel, but . . . the issue of the pace or rate of change is relevant to all stakeholders: · The move from passive to active involvement takes time. · Building positive working relationships between stakeholders cannot be hurried. · Shared forest management combines both short and long term benefits which can be tangible or intangible. · Stakeholders need time to understand and adapt to their changing role in resource management." ODA 1996. 8The Region in its comments acknowledges that target orientation in project implementation was an issue in the Bank's forestry projects in Nepal and will perhaps continue to be an issue because disbursements are tied to the targets of the cost tabs and not to outcomes or goals. According to the Region, change in this perception will only be possible if Bank processes are changed to create disbursement categories related to outcomes instead of inputs. 9The India Country Study, Alleviating Poverty through Forest Development, carried out as part of OED's Forest Strategy Review, noted "Monitoring and evaluation indicators in projects are also ill-suited to measure achievement in project objectives. In current projects, while project objectives stress the achievement of results, indicators are designed to measure quantitative progress" (Kumar and others 2000). 11 Box 2. Ramche UG: A Target-Driven Exercise? The Ramche UG, of 137 households in Dhankuta District in the hills, was formed in 1991. The UG was formed by a ranger with the help of staff from the Pakhribas Agricultural Center and without FD staff visiting each household. According to standard principles (box 1), the operational plan should be written after the FD staff has had an opportunity to establish an understanding with all users. However, in this particular village, the plan was prepared by the ranger and endorsed by users at the General Assembly. Since it was prepared by the ranger, the operational plan is largely a reflection of the views of FD staff. The Executive Committee in Ramche consists largely of village elite who make decisions on behalf of the group. Although several meetings have been held, several members are ignorant of the operational plan preparation process. They are reported to be aware that a new committee had been formed and the general perception is that the forest had been "closed" by the committee. Several of the poor are reported to have been adversely affected by the closing of the forest: "All the poor members of the group interviewed felt that utilization rules were too rigid. For example, users were allowed to collect most forest products only in a specific season. One Tamang women, for example, with no land expressed that since the formation of user group, all her traditional sources for forest products were effectively closed. She was depending solely on twigs and dry branches for cooking. There was no provision in the regulation to increase the allocation for such poor households. She would get an average of five Bhari (one bhari is equal to 30 Kg of green weight of wood) of fuelwood in a year, equal to that received by wealthier members of the group." Source: Information on Ramche is from Pokharel (1997). Development of capacity in the FD to support the UG formation process. A major and expensive challenge has been turning the FD around from playing a policing role that involved protecting the forest resources from the people to working with the people in forest protection and management--a 180-degree change in direction. A number of donors, including the Bank, provided resources for reorienting the FD toward its new role.10 The change in attitude of the FD was not achieved overnight. It took time for staff to accept the concept of people's participation. It also took time for the people to accept the FD as their ally. Though FD staff appear to have accepted the fact that they cannot protect the forests without the participation of the people, it remains unclear how deep is the conviction among them that the people have total right over the resources that they protect. Given that the land ownership remains with the government, it would not be surprising if, at least subconsciously, some of the old values persist. A much-discussed problem has been the shortage of staff to handle the demand for UG formation and drafting of operational plans. Though UGs were being formed at a rapid pace, drafting of operational plans could not keep pace because there were simply not enough staff. As a result, the formal hand-over process was delayed despite the readiness of the groups to go forward. Development of tools for conflict analysis and resolution. Conflicts were a major challenge in the first phase since there was little capacity and experience with conflict resolution in the country. Conflicts in the early years of implementation are reported to be broadly of two kinds-- those within a UG, and those between UGs. Within-UG conflicts are said to have occurred because of incorrect identification of users, inadvertent omission of some users, dissatisfaction with the benefit-sharing procedures and lack of agreement about leadership in a group.11 10The Region in its comments on the capacity of the Forest Department notes that the community forestry program provided an opportunity to identify alternative institutional mechanisms to meet the demand from FUGs. Third parties (like private rangers, NGOs) could be involved, once the groups were mature and had sufficient resources to voluntarily hire independent service providers. The Region notes that this was tried during the last years of implementation of the Hill Community Forestry Project, but there was insufficient time to further explore this issue. 11"The (forest department) field staff investigates within the village, by discussion or by checking to determine the real users of a particular forest. But a low caste person or a disadvantaged person may miss the chance to be included in the 12 Secondary and nomadic users (box 1) were easily missed in the user identification process. Moreover, it was natural for some members of the UG to be more active in forest protection than others. It was also natural for the more active members to be dissatisfied with the equal benefit- sharing criteria generally followed in a UG. In some groups, conflicts arose because two or more individuals vied for leadership of the group. In a village society, acquiring the chairmanship of an organization like the UG can have tremendous implications for the social status of individuals (ICIMOD 1996b). Conflicts between UGs have arisen because of lack of agreement over the boundary of a particular forest area or because two UGs have staked their claims to the same forest area. Forest ownership reportedly is still contested in several areas in Nepal (Hobley 1996). The International Center for Integrated Mountain Development (ICIMOD) has played a valuable role in studying conflicts through case studies, thereby building capacity in the country to understand and resolve conflicts. ICIMOD findings have been disseminated through workshops. Availability of a mediator in which the UGs have faith is crucial in a conflict situation. Experience shows that UGs generally depended on the FD for conflict resolution, though minor cases of conflicts related to violation of rules and similar problems are also solved by the forest UG committees themselves (ICIMOD 1999b). However, given the shortage of FD staff, the need for the development of other conflict-resolving intermediaries who are trusted by UGs has been noted. Though local elected institutions have played some role in the past, given their increasingly important political status (with the passing of the Local Self Governing Act in 1999), they may have a much more crucial role to play. However, while using local political bodies as intermediaries, there is a need to ensure that the interests of the weakest are not sacrificed, especially when the conflicts arise because the weaker sections in the village feel that they have been wronged by the elite, who may also be the leaders of the village institutions. users' group, as low caste people do not usually speak out in a community dominated by higher castes. As a result, when a users' group is formed such persons are excluded, and, at the time of benefit sharing conflicts may surface" (ICIMOD 1996b). 13 6. The Second Phase Challenges Nepal has come a long way in implementing community forestry. The renewed forest cover in many hill areas has reached maturity, bringing the country, as it were, to a second phase of community forestry. Though this phase has brought its own specific challenges, political instability and poor governance are major cross-sectoral challenges in Nepal.12 As in other sectors, corruption and weak implementation result in wastage of resources available for the implementation of the community forestry program. It is comforting to note, however, that the notion of community forestry itself is now strongly entrenched in the minds of the hill people. The hill people have seen what loss of forest cover can mean for their fragile ecology, and they have a genuine appreciation of the externalities that result from an improved forest cover. In-country consensus on the major objective of community forestry--basic needs of the community or more--is an important second phase challenge. Currently the full potential of community forestry is not being utilized. Initially the dominant idea was protection of forest resources and meeting the basic needs of the people. Given the rapid rate of deforestation and the degraded nature of forest resources at that time, this was a reasonable goal. Accordingly, the UG operational plans emphasized forest protection. Currently, most UG income comes from non- forest sources such as fees and fines, and income from sale of forest products has been limited (Unasylva 2000). However, circumstances have changed significantly. Since the forest cover has regenerated, many community-managed forests are now capable of meeting more than the basic needs of the communities. But because the UGs are closely tied to their operational plans, the commercial potential of these forests is rarely realized, even though at the national level the government sees an important role for community forestry in poverty alleviation.13 Several factors are responsible for this situation. Lack of consensus continues among policymakers and FD staff on whether it is actually desirable to promote community forestry for commercial purposes. Some staff are concerned that commercial exploitation may come at the expense of meeting the basic needs of the community and may increase the degradation pressure on nearby national forests. Policymakers fear that once cash enters the system the motivation of the elite to monopolize the benefits will increase (ODI 1999). Lack of clarity has resulted in unclear directions and contradictory messages to field-level staff.14 In addition, numerous government restrictions on transportation, marketing of forest products, and subsidies and price controls continue. Individual field staff interpret government circulars and the simultaneous existence of government restrictions according to their own understanding, creating a situation whereby there are different opportunities for UGs in different districts. Hence some UGs have been able to get substantial incomes from the sale of forest products (like medicinal plants), while others have been barred from making any profits. 12"Between 1994 and early 2000 there have been nine different governments (including six coalitions), and not withstanding strong declarations of intent, there have been no coherent overall drive to promote economic development" (World Bank 2000b). 13The goal of the government's current, 9th Five Year Plan (1997-2002) is sustainable poverty alleviation through broad- based growth. The plan visualizes a broader role for community forestry, beyond meeting the basic needs of the community to making available raw material for industry and increased employment and income opportunities for the poor. 14A government circular in December 1999 put a ban on green felling for commercial purposes. This circular was later repealed and was replaced by another that allowed selling of timber provided that extraction is not in excess of the annual increment and at prices that are not less than the government fixed minimum stumpage fee. This circular requires that FUGs revise their operational plans so that they reflect growing stock inventory and annual increment and annual allowable cut. However, since the FUG members do not have the expertise to make forest resource inventories or assess annual increments, in practice it has meant a prohibition on sale. 14 If community forestry is to serve only the basic needs objective, then the expectations from community forestry need to be toned down even in government documents (footnote 13). However, if there is agreement to realize the commercial potential of community forestry, then the challenge is to ensure that the commercial objective does not conflict with the basic needs objective and shift degradation pressure onto the national forests. Other obstacles to meeting the commercial potential will also have to be tackled: support and training of UGs, contradictions in policies and laws, and poor marketing opportunities are few examples. Given the shortage of domestic resources for these activities, perhaps there is a role for donors to play. The need is for the country to be in the driver's seat, with the donors contributing according to their comparative advantage. More sophisticated conflict resolution mechanisms are required. The second phase conflicts are of three basic kinds: those between UG members and non-members; between UGs and the FD; and between UGs and other grass-roots institutions. Analysts note that when non-UG members see that the value of the protected forest has become substantial, they desire a share of the profit. They then try and stake a claim to UG membership. Their entry into the UG at this late stage is resisted by the UG members, leading to conflict. Whether or not the non-members succeed in becoming members depends on several extraneous factors, including their political and economic clout. The second kind of conflict can arise for one of two reasons. It can arise simply when UGs violate operational plans, or because of the complex institutional arrangement that underpins community forestry in India and Nepal, as noted by the OED Forest Strategy Review.15 The violation of operational plans can happen because enterprising UG members want to take advantage of the commercial potential of the maturing forests. This can also happen if UGs feel that rules are being applied discriminately as noted earlier, or they simply feel frustrated by the restrictions imposed on them. The experience of the Jalbire Women's Group (box 3) is an example of an UG that tried to take advantage of the economic opportunity from community forestry with the consent of the local FD staff, but their efforts were frustrated by vested economic and political interests. The second kind of conflict in this category is much more challenging. Analysts note that the institutional arrangement (land owned by the government but managed by the UGs) leaves room for conflict between the FD and UGs. How much authority should the FD have to interfere in UG activity? The legislation provides for FD re-control if there is evidence that the community forests are not being adequately managed. Studies have shown that in UGs where this happened (Lalitpur, Gorkha districts), UG members have seen it as "overbearing government control." It is obvious that in cases where the FD itself is a party to the dispute it is not possible for them to be a part of the solution, as was the case in most first phase conflicts. Also, during the second phase, as the economic benefits from community forestry become greater or are perceived to become greater, there is danger of local conflicts becoming politicized through interest group politics. The changing nature of the conflicts raises new challenges in terms of the need for more developed resolution strategies and new mediators, in whom all affected parties have faith. Increasingly, organizations such as the Federation of Community Forestry Users Nepal (FECOFUN) have begun playing a role in conflicts between the FD and UGs.16 Unfortunately, FECOFUN is seen by some as a political organization and not a true representative of grass-roots 15In Nepal, as in India, though forest land remains under government control, responsibility for protection and management is transferred to the communities. The OED country study on India noted that this is an institutionally demanding strategy (Kumar and others 2000). 16FECOFUN Nepal was founded in 1995 to mobilize and articulate the interest of user groups by increasing awareness and by strengthening them in a coordinated manner and to link forest users from all parts of the country and represent their interests at the national level. 15 UGs. The potential for FECOFUN, with its network of support from grass-roots organizations, to work with the government to find solutions for second phase conflict solutions is tremendous. Box 3. Jalbire Women's Community Forest Group The conflict between the Jalbire Women's Community Forest Group and the FD illustrates how vested interests can politicize a simple conflict and lead to a breakdown of local conflict resolution mechanisms. The group, which protects a forest area of about four hectares, was formed in 1989, and is a part of Gorkha district in Nepal's western development region. The conflict arose because in January 1992 the user group violated its operational plan provisions and harvested more timber than allowed for in the plan. The local forestry staff, encouraged by the regeneration in the forest, encouraged them to do so. However, when the group decided to get a better price for their product by selling it in Kathmandu instead of the local market, local timber contractors felt threatened, mobilized public opinion against them, and the violation of the plan was reported to the center. Under normal circumstances the dispute could have been easily resolved. The publicity escalated the simple conflict beyond local conflict-resolution mechanisms. The central FD took two years to make its final decision (April 1994). The women were not allowed to sell the cut wood during that time. Approximately 25 percent of the cut wood decayed, leading to substantial loss of income for the group. This not only negatively affected their morale but, in a male-dominated society, also resulted in tremendous loss of face and status for an enterprising group of women. "The dilemma for the officials at the center was whether or not to take the community forest back from the users' group and revert it to a national forest, hence losing the confidence of other forest user groups in the district and possibly jeopardizing the community program in the district. At the same time, the officials were undecided about whether or not to take action against the district forest staff for prescribing a silvi- cultural operation which was technically sound and being practiced in another district. The users' group demanded hand-over of the timber seized on the grounds that they had acted upon the advice of the district forestry staff. This conflict dragged on for almost a year." Source: ICIMOD 1996a,b. The potential for the third kind of conflict has been created by the passing of the Local Self- Governance Act (LSGA) of 1999, which made all forests within the administrative boundary of a Village Development Committee (VDC) its property.17 By extension, this gives the VDCs and the DDCs unchallenged authority over UGs. The Forest Act of 1993, however, did not provide a role for VDCs/DDCs in community forestry. When the Forest Act was drafted, ownership of forests rested with the central government. Fortunately, to date, VDCs and DDCs have played little role in UG planning and decisionmaking. As long as leaders of a UG are also members or leaders of a VDC, the situation can be under control. However, this is often merely coincidental (ICIMOD 1999b). And when the two institutions have different leadership, the potential for conflict is tremendous. Studies report that in several villages UGs have more funds than the VDCs, and thus greater political clout. Rich UGs have also contributed funds for village development works such as schools, roads, bus shelters, drinking water schemes, and village temples. Another problem is the different physical boundaries associated with UGs and VDCs. While the administrative boundary of a VDC is a village, UG membership can come from several villages (box 1). If a VDC claims rights over the returns from a particular forest within its administrative boundary, UGs from another village may object.18 17Administratively, the country is divided into five development regions and 75 district development committees (DDCs), which are further divided into over 3,900 village development committees (VDCs) on the basis of the population. A VDC is the lowest political and administrative unit. Over the years, a number of donors have provided support for capacity building at the local level. However, although the legal structure in support of decentralization is in place in the country, there is still little understanding of the legislation and its implications at the local level (World Bank 2000a). 18The Region correctly identifies the need for a clearer understanding of the thinking amongst FUGs about a more formal institutional linkage with the local bodies before further advances are made on the decentralization agenda. According to 16 Contradictions in laws and policies can seriously handicap implementation in the future. Though some analysts still argue that the major problem is lack of adequate implementation of existing policies and regulations, the need to iron out and harmonize the contradictions with policies and legislation in other sectors is paramount. As an example, there are inconsistencies between the Forest Act and other acts, such as LSGA (as already seen above), the Land Act, the Nepal Mines Act, the Public Roads Act, the Electricity Act, and the Water Resources Act (Mitchell and others 2000).19 Two biodiversity-related issues are also raised here. Analysts note that although biodiversity conservation is high on the agendas of both the government and the international community, little attention has been given to biodiversity in operational plans of UGs. Non timber forest products, which include rare medicinal plants, are still not covered by UG operational plans. Moreover, there are no clear guidelines for action when livelihoods are threatened by wildlife (leopards and wild boars have hunted down domestic animals and destroyed crops). In community forests, UG members are allowed to collect dead wood and leaf litter that are part of the habitat of several plants and micro-organisms, thereby negatively impacting biodiversity conservation. So far, training programs are reported to contain little on the importance and potential of biodiversity conservation in community forestry (Nepal Biodiversity Action Plan 2000). Though these issues may appear trivial, they can hinder progress on both biodiversity conservation and community forestry development. Community forestry may degrade national forests. Researchers note that the protection of community forests has often promoted degradation of nearby national forests as the local population tries to make alternative arrangements for meeting its immediate fuelwood and fodder needs.20 This is especially true in the case of the poorer households, as they have no private trees and are forced to travel to non-protected areas (Hobley and Shah 1996). Depletion of government-managed forests close to community-managed forests has been observed in several areas and has been a cause of major concern for the FD.21 A two-pronged strategy in the long run could help to deal with this challenge. First, some researchers favor a strategy that balances protection with active forest management because it would ensure that a major part of the requirement for fuelwood and other basic products is met from the community forests. However, active management will only be possible after the forest cover has regenerated to a significant level in the first place. Second, a strategy that emphasizes community forestry on forest land along with social forestry--that is, agro-forestry and tree plantations on non-forest lands--may the Region, similar experiences in India have shown that while the user groups welcome informal associations with local bodies, they are often reluctant to take a more formalized approach. 19Thus according to the Forest Act 1993, any material within a national forest is a forest product. However, according to the Nepal Mines Act (1966), whether in private or national forest is governed by the Nepal Mines Act. Similarly, the government has the authority to acquire land for development under the Public Roads, Electricity, and Water Resources Acts by making provisions for compensation. But it is not clear how this would work out in the case of community forestry when ownership of the land remains with the government but usufruct rights are held by the user groups (Joint Technical Review 2000k). 20"So far success has been concentrated mainly in the middle hills. Open access to community forests is controlled. As a result, some community forest users go to lower high-altitude forests to gather forest products. Use of high-altitude forest without restriction by mid-hill users is also a reason for the degradation of high-altitude forests." (Joint Technical Review 2000j). 21"Community forests have also increased pressure on national forests. Degraded land in the vicinity of villages are more productive after being taken over and protected as community forests, but users still go to government owned forests located on the ridges for fuel and fodder. Recent surveys in two districts, Sindhu Palchowk and Kavre in central Nepal, where a much acclaimed Australian funded forestry programme is involved, have shown remarkable results. While forests near villages are showing vigorous growth, there has been a rapid decline of government owned forests on the higher mountains where the ecology is even more fragile and regeneration slower. If this trend continues and spreads to other parts of Nepal, high mountain forests could be in serious jeopardy" (Panos Institute 1999). 17 be able to reduce pressure on national forests as it would create other sources of fuelwood and fodder supply that the poor could draw on (Kumar and others 2000). Box 4. Forest Regeneration: Do the Poor Lose? First, the equitable benefit sharing criteria does not allow for the greater dependence of the poor on the forest resource. Table 1 shows that the dependence of the poorest on community forests for fuelwood is the greatest, yet equitable sharing gives the maximum benefits to those who are least dependent. Another study done in the Dolaka and Ramechhap districts of central hills of Nepal supports this finding (Upreti 2000). Table 1. Comparison between Fuelwood Received from Community Forests and Household Needs (Kgs.) Fuelwood Household economic category Rich Medium Poor Total required 4,500 4,500 4,500 Required from community forests 250 1,400 2,250 Received from community forests (plantations) 400 400 400 Percentage difference +60 -71 -82 Received from community forests (natural forests) 800 800 800 Percentage difference +220 -43 -64 Note: Based on a headload of 50 kgs. Source: Timila (1999). Second, Analysts note that as the forests become richer, the elite and the powerful groups in villages begin questioning the access of the marginalized groups to the forests (Hobley and Shah 1996). Given that the power structure in the village is dominated by the elite (who often also dominate user groups), the poor find it difficult to challenge decisions made to their detriment. The poor also find it difficult to challenge the decisions made by the elite as they are otherwise dependent for their labor incomes on farms owned by the elite (ICIMOD 1999b). Malla (Unasylva 2000) further notes that the usual practice regarding timber and poles from community forests is to distribute the products through an auction or tender system. Though the price at which the product is sold is lower than the market, the poorest members of the forest UGs can usually not afford to compete with the wealthier households. A recent study by ICIMOD (1997) shows that conflicts over community forest resources often are manifestations of deeper divisions based on class, caste, and other factors. Third, community forest management rules themselves weigh against the weaker sections. A large proportion of the poorest are dependent on non-timber forest products. However, the importance given to production of timber and wood of better quality in operational plans of UGs often results in herbs and other plants of medicinal value being neglected (Unasylva 2000). A report prepared under the Nepal-UK Community Forestry Project (1994) notes three reasons why: a) NTFP harvesters are mainly women and children from poorer households with less political power and leverage to influence community decisions; b) the NTFPs may be harvested in such small quantities that they may not require community protection; and c) the emphasis in community forestry is more toward fuelwood, fodder, and timber rather than NTFPs. Fourth, the poor also loose out in UG-supported village development schemes. Such schemes often require local contributions in cash or labor. The wealthier sections of the community are able to make their contribution in cash, but the poorest are often able to afford contributions in labor only. This takes them away from income-earning activities and negatively impacts their livelihood (Unasylva 2000).a Thus, for several reasons, the identification of the poor with the community forestry program is likely to be less than that of the better-off sections of the community. This is confirmed by surveys undertaken by ICIMOD.b a. "The irony of this is that since the poorer households often work in a nearby market center on a higher wage rate than in the village, their labor contribution may end up costing them more than the amount paid by members of wealthier households" (Unasylva 2000). b. "Surveys have shown that literate and relatively well-to-do users are the ones who have some understanding of current community forestry policy. Experience has shown that many villagers, especially those belonging to disadvantaged groups, think that the community forests were handed over to the FUGC members, who are often the village elite. They use the term "samiti ko ban" (committee's forest) rather than "samuha ko ban" (group's forest)" ( ICIMOD 1999b). 18 The forest has regenerated in several areas, but the benefits to the poor have been limited.22 More than 90 percent of the population of Nepal lives in rural areas, and forests are important to their livelihoods. There is significant evidence in the literature to show that the dependence of the poorest sections of the rural community, the landless and the marginal, is greater as forest products are a major part of their survival strategies. The onset of community forestry, especially in degraded areas, requires that the forests be brought under some form of initial protection and UGs put restrictions on their use. Yet these restrictions (which may be in the form of limited or controlled access) often adversely affect the poorest, who are likely to depend on the forest on a daily basis--for example, blacksmiths may depend on the forest for their supply of fuel.23 In other cases, bringing an area under protection has forced some groups to change their way of life-- head loaders (those who earn their income by selling fuelwood in nearby markets) may have to find employment as laborers (ICIMOD 1999b).24 A regenerated forest cover also does not mean an increased daily flow of forest products to the community.25 Neither does it mean that the poor benefit automatically (box 4).26 Notwithstanding the negative experience so far, supporters note that community forestry does have a tremendous potential to make a substantial contribution to the lives of the poorest. However, the impact of community forestry on their lives is not clearly understood and more research is needed (Joint Technical Review 2000h). But attention to those issues that directly affect the poor--production, marketing, harvesting, and local processing of NTFPs--can have a significant beneficial impact.27 In addition to neglect of NTFPs in operational plans of UGs (box 4), development of fair marketing opportunities for NTFPs has been neglected by policymakers.This is despite the value of NTFPs as a supplementary source of income for millions of poor, landless households in off- season months when there is little demand for farm labor. Community-based small-scale collection, processing units, and cottage industries located close to the source of collection also have the potential to generate substantial returns through reducing cost of transportation and 22It was not possible for this review to undertake a user-group-level survey that could assess the impact on the poor through normal impact validation procedures of comparing villages with and without. The evidence here is based on a survey of available literature and interviews with UG members, FD staff, academics, and NGOs. 23"For instance, banning the extraction of fuelwood from a CF may severely compromise the livelihood outcomes of the Kami (blacksmith)--whose dependence on forest products is very high. . . . What appears to be straight trade-off between social and environmental sustainability, is in fact a trade-off between short term benefits that favor the poor and long term benefits (in the form of enhanced timber supply) that are of interest to the wealthy. The poor tend to have very low asset levels and are less able to substitute wood from private land for any fuelwood supply they've lost. They are forced to substitute their only asset--human capital--and take up wage labor to pay for fuelwood, this will detract from childcare and food collection and will reduce their access to other opportunities" (Joint Technical Review 2000h). 24There are instances where the negative impact on the poorest has been avoided through the specific and timely action of some UGs themselves. But such instances are rare. An example is a UG in Myagdi district where the UG members realized that closing the forest would have a disproportional negative impact on the poor. Hence they responded with a goat keeping scheme directed towards the poorest, which provided credit for the purchase of animals and special access to the forest for fodder (Joint Technical Review 2000h). 25A Forest Resource Assessment and Socio-Economic study was undertaken under the Nepal-UK Community Forestry Project in four districts in the Koshi Hills of Nepal. Most of the forest in the study area could be regenerated through coppicing. The study shows that there was an overall improvement in the condition of the forests under community protection. However, because of the strict enforcement of protection, the flow of products from the forest areas to the communities seems to have declined, indicating that access to forest products in many UGs has not improved with protection. The study also shows that protection is likely to result in increase in the long-run availability of timber, but this will be at the expense of the short-term needs of the users for fuelwood and other products. The study notes that this may have a disproportionate impact on the poorest (Nepal ­UK Community Forestry Project 1998c). 26IFAD has been supporting a Leasehold Forestry and Forage Development project in Nepal since the early 1990s under which blocks of degraded forest land are leased to groups of poor households. Leasehold forestry is a variation of community forestry in which an attempt is made to directly increase the resource base exclusively for the poor. 27One estimate notes that in certain cases nearly 50 percent of the average annual household income is derived from NTFPs (Edwards 1995). 19 increasing returns to locals (Joint Technical Review 2000c). Training in NTFP production, processing, and marketing is a potential area of support from donor agencies. Researchers note that changes in the basic guidelines for implementing community forestry can go a long way in creating a pro-poor environment. Benefit-sharing in accordance with dependence, greater voice for the poor in decisionmaking, and special schemes to ensure that the poorest do not loose out in the initial years of protection (for example, see footnote 24) could improve the position of the poorest. Overall, increasing the awareness of the field-level FD staff through training and provision of clearer guidelines on handling equity issues in the UG formation and post-handover support phases is likely to have a major beneficial impact. Box 5. Chhatiwan Community Forest "Four thousands hectares of rich sisoo-khair-sal forest on the bank of the Karnali River in Kailali District has officially been handed over to 1,600 households (hhs) mostly from Kailali District (Chhatiwan Community Forest). Most members of this UG are immigrants from the hill district of Accham, who came some decades ago. The local people we talked to estimated that prior to this handover a substantial number of people from 11 different villages (the total population of these villages is between 44 and 66 000) on the Southern side of Karnali used to also benefit from these forests. These people were predominantly Tharu ethnic communities in the Rajapur area of Bardiya District on the other side of the Karnali River. With the exception of a few households they have not been included in the UG. The few that were included lived along the river on the other side and were considered to provide effective protection against encroachers. The Southern bank of Karnali virtually had no forests because they are surrounded by the Royal Bardiya National Park to the east, India to the south and the Chhatiwan forest to the west. Previously they had used the forest on the northern bank of the Karnali when the current of the mighty Karnali calmed down in the post-monsoon period and they were able to cross. Being excluded from this forest has been a serious blow on their traditional use right and they are presently trying to rectify this situation. They have complained to the district administration, claiming that the forest used to be under their jurisdiction, but as a poor ethnic group, they have little hope of winning. Also the District Forest Office (DFO) has already formalized the handover which means they have to do battle not only with the officially recognized UGs but also with the DFO, a government entity. The DFO that was responsible for this handover has been posted to another district so was not available to answer questions. However, the new DFO felt this was clearly a case of political pressure having been exerted by those who received the forest." Source: Extract from Baral and Subedi 2000. Women's participation continues to be limited.28 Women in Nepal have the primary responsibility for meeting the fuelwood and fodder needs of the family. While noting that the data on gender relations in the Hindukush Himalayas is inadequate, Gurung (Unasylva 1999) emphasizes that mountain women bear a greater proportion of household and farm responsibilities than men, or even the women in the plains.29 Hence when a forest area is brought under protection in the hills, the adverse impact on the women, who then have to walk longer distances over uneven terrain, is even larger. Current forestry legislation (1993 Act) in Nepal does not include any gender-specific policies, though the Master Plan of 1989 did propose a quota for women members in the executive committees of UGs (ICIMOD 1999a). Researchers note that in the past, attention to participation of women in UG activities was limited because the largely male FD staff found it difficult to communicate freely with them. In addition, the shortage of staff and the emphasis on achievement of targets made it difficult for staff to 28The need for suitable action to enhance the participation of women in community forestry was identified as a key issue in the 1999 Workshop of Participatory Forest Management organized by ICIMOD (ICIMOD 1999a). 29"The back breaking chores of carrying water, fodder and fuelwood up and down steep mountain slopes are undertaken daily, consuming large portions of the women's time and energy" (Unasylva 1999). 20 spend more time per UG--a strategy they would have to follow to consciously reach out to women. Another factor was the limited number of female extension staff in the FD (Pokharel 1997). Supporters of community forestry argue that, over time, the burden on women decreases as protection rejuvenates previously degraded forest lands and brings fuelwood and fodder closer to their doorstep. They also argue that women have started playing an increasing role in UG activities, and this has contributed to improving their social status within their families. They cite the women's-only UGs as examples of progress. Though women's participation in UG activities has increased over the years, it is small in comparison with their contribution to forestry activities. Though attempts have been made to increase their membership in UG committees, it does not necessarily ensure an increase in their rights or benefits.30 Given the hierarchical nature of society in Nepal, women continue to have a limited voice and still feel inhibited in expressing themselves in mixed gatherings.31, 32 Limited women's participation is not just true for the forest sector. Despite the provision in the LSGA (1999), women representation and participation in VDCs has also been limited. Increasing the participation of women will require considerable effort from FD staff. Non-government organizations (NGOs) can make a valuable contribution.33 A two-pronged approach could be successful. First, further attempts can be made to directly increase women's participation in UG activities through training. Second, and simultaneously, activities that directly contribute to the well-being of women could be promoted. Thus, since women play a major role in harvesting and processing of NTFPs, they would benefit tremendously from improved marketing and processing facilities. In all this debate, it is important to remember that the extent of women's participation and involvement in UG activities is a reflection of their position in Nepalese society. Community forestry, insofar as it empowers women, can help improve their social status, but it is unreasonable to expect that it would radically transform gender relations. Build FD capacity to meet continuously increasing expectations. Peoples' participation in forest protection and management has radically changed the expectations of the FD. Under community forestry, FD staff are not expected to police the forests. Instead they provide extension service and advice to the UGs in forest protection and management. Often the expectation for advice is beyond forest sector issues. FD staff participate in conflict resolution and support other UG-supported development activities in the villages. This is a 180-degree change in job description for department staff, who are being called on to deliver results in areas where they have had little experience. Moreover, the demand for the kind of advice changes with 30"Women in the Western Hills of Nepal have been involved in the management of `community forests' but despite this, they have not benefited equally. The participatory methodologies which have recently gained popularity emphasize the mobilization of women and the disadvantaged (the poor and occupational/lower caste) yet in reality they are excluded from the planning and decisionmaking process" (ITTO 1998). 31"Many factors constrain women's participation in community forestry. When asked why they are not interested in serving on committees, rural women respond that they can spare too little time from domestic chores. The social norms, in which women are discouraged from speaking publicly and interacting with male members of society and professional staff, also limit women's participation. This is compounded by the prevailing high illiteracy rate among women. As such, most of the women members of the FUG have no option but to agree to what the men decide in FUG meetings" (ICIMOD 1999b). 32"Women in villages still covered their heads and hid their faces when they had to come before men or elders. They could not talk openly with men. When some women made efforts to undertake development and work for people's welfare or, in short, when women stepped out of the house, they were bound to be misunderstood. In villages people still believed that women could not make any decisions by themselves" (ICIMOD 1998). 33NGOs have played an active role in increasing the awareness among women about UG activities and promoting their participation. The Himalayan Grassroots Women's Natural Resources Management Association (HIMAWANTI) and Women Acting Together for Change (WATCH) are some examples of NGOs that have played an active role in promoting women's participation in community forestry. 21 the length of time that the UG has been protecting the forest.34 Training constantly needs to be re- oriented according to the evolving needs of the UGs. Though donor projects have provided considerable training to FD staff, there is a long way to go.35 FD staff are still not adequately equipped to deal with several issues of post-handover support.36 Moreover, there is still no consensus on when it is reasonable to expect UGs to meet their post-handover needs through their own efforts and by paying for services from NGOs and private sectors. 37 Analysts also argue that training alone is not enough to increase the responsiveness of the FD. There are other constraining factors that need attention--monitoring and evaluation capacity, supervisory methods, and issues of posting and transfer of staff.38 Institutional concerns related to travel allowance and transfer policies for staff, recruitment, and monitoring and budgetary issues have had a major impact on the implementation of the community forestry program. In the past, frequent transfer of FD staff hindered project implementation. In addition, weak infrastructure support for field staff negatively affected their motivation to travel to the field. Though considerable progress is reported in addressing these issues, much remains to be done. District Forest Offices continue to be seriously understaffed in comparison with the need for post- handover support to UGs. Monitoring of program performance continues to be weak, as is the coordination between various departments of MFSC in planning and implementation of activities. Build UG capacity to deal with the challenges of a maturing community forestry program. The capacity of the UGs to sustainably manage the forest resources under their protection continues to be limited. As an example, the UGs are not yet equipped to utilize the commercialization opportunity, were it an accepted part of the government strategy. Managing forests for sustainable utilization rather than protection will also require strengthening of UG skills in office management and record keeping.39 The high level of illiteracy has limited UG members' active roles in group activities. This has implications for decisionmaking and equity and works to the detriment of the poor and the vulnerable. In addition, currently, most UGs lack the skills to adequately exploit NTFPs. 34The Region in its comments notes the difference between groups formed at different stages of project implementation. It notes that groups formed at the beginning were more unstable and immature than the ones formed at the end, and questions whether this is a reflection of improvements in the orientation process. Given the time and resource limitations, OED is not in a position to explore this issue further. 35A Training Wing was established under the MFSC in 1980 with support from USAID to provide systematic in-service training to staff. The Department of Forests also operates five Regional Forestry Training Centers covering the 38 hill districts. 36"Presently the post-formation hand-over support is reported to have suffered due to: · inadequate number of forestry field staff in DFO. The number of posts available in DFOs has been found to be unable to cope with the growing number of FUGs functioning at operational level; · lack of appropriate organization and efficient management of the available manpower for the implementation and proper monitoring of CF; · little physical facilities and incentives for the staff in the field to make the best use of their existing motivation, commitment and effort in CF; · little know-how regarding type and kind of post-formation support to be provided; · absence of NGOs in the local/district level to provide post-formation support" (Karki and Tiwari 1999). 37The Region in its comments emphasizes the need to build linkages with private sector providers (NGOs, private rangers, and forest guards). 38"Some DFOs who were experienced in the project area and also enthusiastic to translate community forestry principles into practice were transferred to the Terai District for policing work" (Pokharel 1997). 39The Region in its comments also emphasizes the need for rural credit and banking, improvement in the management of the FUG funds, increased transparency, and healthier financial management. 22 The persistent shortage of qualified FD staff to assist UGs in upgrading their skills and other post- hand-over activities is already noted. Though some qualified NGOs have now emerged, there is a shortage of professional organizations to fill the gap. Though networking, study tours, and other experience sharing mechanisms can play a major role in augmenting UG capacity, the resource implications of these activities are enormous. Donors have provided and continue to provide considerable resources for supporting such activities. Research continues to receive limited attention. There is little provision to address particular problems that arise during implementation, even in the case of trees and timber. Most of the sisoo plantations under the Bank-supported Second Forestry project have been destroyed by disease. Though the government's National Conservation Strategy of 1988 highlighted the importance of establishing appropriate policies and regulations for the sustainable extraction of medicinal plants, research on NTFPs has been hampered by a lack of funds (Nepal Biodiversity Action Plan 2000). In addition, systematic research on indigenous tree species for development of agro- forestry has also been inadequate (Nair 1999). Social and agro forestry have tremendous potential to supplement community forestry in meeting the basic needs of the community. Partnership opportunities are rarely exploited. Currently, several government and non- government organizations are involved in community forestry. However, there is no clear division of responsibilities or roles among them. As an example, NGOs, government, and academic institutions are all involved in training UGs. Similarly, several organizations are involved in conflict resolution activities. There is no coordination mechanism to ensure minimization of duplication and sharing of experiences to avoid wastage of scarce resources. There is a need for the NGO effort to be made complimentary to the government effort and for each organization to work in the field of its comparative advantage. Given that the FD has limited financial and human resources, researchers note the importance of partnerships in finding solutions to critical problems. In addition, there is a need to give thought to the relationship between the FD and other departments that work at the field level in the rural space. Land management activities like building of check dams, gully plugs have implications for forestry, but generally fall within the purview of the Soil Conservation Department. When these activities are supported by UGs, how are they to be coordinated? Reluctance to Extend Community Forestry to the Terai. So far, the government has been reluctant to promote community forestry in the Terai.40 The richness of the forest resource and 41 the complex settlement pattern in the region makes identification of UGs a much more complex task.42 Even where forests have been handed-over to communities, social anomalies are reported. These include inequitable and unfair distribution of land and benefits (box 5). Another problem that critics raise, and that complicates matters in the Terai, is that handing over forest lands to users might mean legitimizing the encroachers, thus condoning illegal settlements and encouraging future encroachment. 40It is unfortunate that no other form of forest management has been promoted in the Terai. The current policy is a non- active forest management and allocates dead, decaying, and fallen trees for removal to TCN (Skarner 1999). Though the government has prepared several plans (largely with donor-aided technical assistance) for the scientific management of the Terai forest resources, none has been implemented completely. As a consequence, there has been a steady decline in those forest resources through uncontrolled conversion to agriculture, encroachment, uncontrolled felling, and grazing. 41The Region endorses the government's cautionary approach and notes that cautiousness comes from handing over well- established stocks, which are in many cases of great value and are ready to be harvested, to communities that have not contributed yet to their protection. 42In the hills the settlement patterns have been stable, the communities are homogenous, and there is limited encroachment by outsiders. The scattered nature of the forests make it easier to identify user groups. In the Terai, however, extensive in- migration has created heterogeneous populations, and since all users of forests do not live in their proximity, it is not easy to identify users. 23 Unfortunately no immediate consensus seems to be emerging among the various stakeholders about the right strategy for the Terai. Several NGOs believe that the FD is not willing to give up control over the Terai forests because of their economic value and the government proposal is against the spirit of the 1993 Forest Act.43 The NGOs and community representatives are interested in extending the hill model of community forestry to the Terai. According to them, given the settlement patterns, although it may be difficult to identify users, it is not impossible to do so, provided a careful process is followed. However, given the differing forest conditions and the reported social anomalies, the government considers a modified strategy (with a modified law), also based on community participation, to be more appropriate. Some other non- government analysts have also raised doubts about the appropriateness of the hill model for the Terai.The Joint Technical Review notes that one option is to maintain a common legal framework with sufficient room to allow for adaptation in implementation approach according to the specific requirements of a particular area. Still others support a strategy for integration of forest sector management with wider land use planning for the Terai. The latest government concept of forest management for the Terai, Churia Hills, and Inner Terai has become an emotionally charged issue between various stakeholders. There is no doubt that the economic value of the forest resource in the Terai is far greater than that of the hills.44 Though the government has been supportive of community forestry for more than two decades and the program essentially implies shared responsibility, there is still a reluctance to give other stakeholders a share in the decisionmaking on the future of the Terai. The government's ad hoc circulars and instructions and their varied interpretation by local staff have conveyed contradictory messages to civil society organizations and supporters of the community forestry program, who see them as indications of the withdrawal of government commitment to the community forestry program.45 43"It is clear that the DOF (FD) wants either to manage these forests themselves by cutting indigenous hardwood trees and planting soft-wood, or to give these forests on lease to industries, companies or wealthy powerful individuals" (N. Kaji Shrestha 1999). 44"A cubic foot of timber in the Terai is worth Rs. 400-500, whereas in the less accessible hills the figure is closer to Rs. 50-60. The difference is due to a combination of species (a good specimen of sal is said to fetch Rs. 50,000), and accessibility" (ODI 1999). 45A recent article published in a Science and Environment Fortnightly notes "A recent government circular threatens to bring the story of Nepal's community forest management (CFM) to an abrupt end. Aimed at the Terai region, where the government has shown reluctance in promulgating CFM, the circular was to stop commercial logging. But forest bureaucrats have asked communities all over the country to stop all forest-related activities" (Center for Science and Environment 2000). 24 Bibliography Acharya, D. P., and others. 1998. Community Forestry for Everybody Forever. Proceedings of the Third National Community Forestry Workshop, 27-29 Oct. 1998. Kathmandu: HMG/MOFSC Department of Forests. 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