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Abstract

The latest phase of support to community forestry in Nepal from the UK government — the Livelihoods and Forestry Programme (LFP) — has focused on improving the livelihoods and incomes of the poorest members of community forest user groups. In 2008 a study was carried out to assess the economic impact of community forestry and LFP.

The study compared the 2008 situation against the results of LFP’s 2003 baseline study. The new study administered a questionnaire to 1,350 households that were members of the LFP-supported forest user groups surveyed in 2003. They were a representative sample of the ethnic, caste and socioeconomic makeup of user group households. Key informant interviews and focus group discussions were also carried out.

The main study finding was that the annual incomes of respondents (after adjusting for inflation) had increased by 61% between 2003 and 2008. This annual growth rate of 12% was five times the national growth rate. The study attributed 25% of this increase to community forestry and LFP support, 54% to remittance incomes, 12% to general economic growth and 9% to other development efforts.

Community forestry was found to have contributed to the increased incomes in a number of ways. Access to low-interest loans from user group revolving funds was a major factor, with a fourteen-fold increase in the number of loans taken between 2003 and 2008. The positive impact of LFP’s enterprise and development support was shown by the larger increase in incomes amongst households that had received income generating support (a 67% increase) compared to those that had not (a 45% increase). The availability of forest products had also increased, leading to time and cost savings.

The incomes of Dalits (ex-untouchables) had increased by 93%, whilst those groups with the highest incomes in 2003 had increased by only 7%. Thus LFP and community forestry had contributed to reducing the wealth gap.

The number of households living below the poverty line dropped from 65% in 2003 to 28% in 2008. The proportion of very poor households came down from 42% to 10%. These figures imply that 72,000 households (about 433,000 people) had moved out of poverty in the seven study districts. Improved living standards were recorded in terms of asset ownership, sanitation and access to drinking water and electricity.

The above-average increase in Dalit incomes, the narrowing wealth gap, and the fact that 86% of user group constitutions had specific provisions to benefit poor people, women and Dalits suggests that LFP's income-generation and governance support have mostly benefited poor and excluded users.

The study calculated that it cost LFP about £35 to bring one person out of poverty between 2003 and 2008. It is important to note that this outlay has also resulted in many other benefits including more cohesive communities, empowered women and excluded group members, improved local governance, forest conservation and carbon sequestration.