All walks of life have been affected by COVID-19 but smallholders from developing countries have been impacted more than others as they are heavily reliant on forest and agriculture for their livelihoods and have limited capacity to deal with COVID-19. Scholars are heavily engaged in assessing the impacts of COVID-19 on health and wellbeing, gender, food production and supply, stock market and the overall economy but not on the forestry sector. Using questionnaire surveys and key informant interviews—informed by grey literature and published articles— representing Division Forest Offices, Provincial Forest Directorates, and the Ministry of Forests and Environment in Nepal, this study assessed the impact of COVID-19 on the forestry sector of Nepal. Our analysis suggests that: (1) nature-based tourism is more severely affected than other sectors; (2) private, religious and leasehold forests faced minimal impacts of COVID-19 than that of community and government-managed forests; (3) wild boar (Sus scrofa), different species of deer, and birds have been more impacted than other wild animals; (4) the price of the timber has increased significantly whereas the price of non-timber forests products (NTFPs) has decreased; and (5) illegal logging and poaching have increased but the incidence of forest encroachment has been reduced. Our study further reveals that agroforestry practices in home gardens, borrowing money from neighbors/banks/landlords and liquidating livestock remained key alternatives for smallholders during COVID-19. Many studies reported that reverse migration could create chaos in Nepal, but our study suggests that it may enhance rural innovation and productivity, as returnees may use their acquired knowledge and skills to develop new opportunities. As COVID-19 has created a war-like situation worldwide, Nepal should come up with a forward-looking fiscal response with alternative income generation packages to local living to counter the impacts of COVID-19 on the forestry sector. One of the options could be implementing similar programs to that of India’s US$ 800 Compensatory Afforestation Program and Pakistan’s 10 Billion Tree Tsunami Program, which will create a win-win situation, i.e., generate employment for reverse migrants and promotes forest restoration.
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