Does Nepal's community forestry program improve the rural household economy? A cost–benefit analysis of community forestry user groups in Kaski and Syangja districts of Nepal

Abstract

While the Nepalese Community Forestry (CF) program is a highly prioritized development program with potential social, economic, and environmental benefits, its effect on the rural household economy has not been well examined. Using the cost–benefit analysis, this study examines the impact of the CF program on the household economy of forest users in the mid-hills region of Nepal. Both direct and indirect benefits and costs accrued by three wealth-ranked users were considered while calculating net present values. Results revealed that net benefits of the program were greater in rich households than in poor forest user households across a 50-year period. The poor households realized less direct and indirect benefits, yet they paid highest indirect costs incurred from the CF program. The CF program in Nepal requires prompt policy revisions to ensure cost-effective mechanisms to improve net income of poor households participating in the CF program.