Is the contribution of community forest users financially efficient? A household level benefit-cost analysis of community forest management in Nepal

Rajesh Rai ,Prem Raj Neupane ,Arun Dhakal

doi:10.18352/ijc.594

Abstract

Community forestry in Nepal is considered an exemplary forest management regime. However, the economics behind managing a community forest is not fully studied. This study examines whether the benefits generated from community forest management justify the contributions of forest users. The study is based on a survey of community forest users in Chitwan, Nepal. A household level benefit-cost analysis was performed to quantify and compare the costs and benefits from community forest management. Only direct benefits were included in the analysis. The study shows that older forest user groups derive more benefits to households compared to more recently established ones. The extent of timber harvesting also substantially influences the size of the household benefits. In addition, redistribution of benefits at the household level, in terms of income generating activities and payment for involvement in forest management activities, also enhances household benefits. Sensitivity analysis suggests that the current practice of community forest management enhances the welfare of rural households in this subsistence community. However, this finding is sensitive to assumptions regarding the opportunity cost of time. The study also found that the household costs of community forest management depend upon two factors – the area of community forest and the size of the forest area relative to the number of households.

Highlights

The households’ dependency on forest resources in developing countries has motivated policy-makers to decentralize the forest management approach, thereby leading to the evolution of community forestry (CF) as a dominant forest management strategy
The results suggest that active forest management can enhance the benefits of CF management, which can be financially attractive to the households even when labor contributions are fully costed
The results indicate that the age of community forest user group (CFUG) determines their performance in terms of generating benefits per unit household

Summary

Introduction

The households’ dependency on forest resources in developing countries has motivated policy-makers to decentralize the forest management approach, thereby leading to the evolution of community forestry (CF) as a dominant forest management strategy. In the context of forest degradation and deforestation in developing countries, the CF has gained a considerable attention in the international forest policy discussions This is mainly due to its contribution to the improvement of environmental conditions in degraded areas and to the enhancement of the livelihoods of forest dependent communities (Baland and Platteau 1999; Shrestha et al 2010; Pandit and Bevilacqua 2011). Kellert et al (2000) suggest that whatever has been achieved so far on the socioeconomic side through CF intervention has been at the expense of conservation goals This trade-off between the economic and conservation goals in CF management may be the consequence of a desire to encourage forest users to participate in forest management activities. Most of the forests handed over to communities are natural forests which may require less effort in order to achieve welfare gains compared to the effort required to achieve welfare gains from alternate forms of social mobilization

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Conclusion