6. CASE STUDY 2 - Targeting the poor: the Leasehold Forestry project

Nepal’s Community Forestry (CF) policy does not distinguish between users of unequal wealth or means; thus, it lacks an explicit focus on the poor. Evidence from recent studies indicates that despite two decades of CF practice and the consequent reversal of forest degradation trends, there has been no clear or consistent contribution to enhancing the livelihoods of the forest-dependent poor in community forest areas. Many observers claim that major inequities within community forest user groups are more common than exceptional.^[129] It is also apparent that resource poor households and socially marginalized people, such as women and disadvantaged groups, receive disproportionately smaller shares of benefits that come from the local management of community forests, with only a few exceptional cases documented to the contrary.^[130] The prevailing semi-feudal social structure in Nepal’s rural society primarily shapes this situation, based on historic and traditional caste and socio-economic class distinctions. This indicates the need to devise alternative institutional arrangement to tackle the problems of poverty and sustainable livelihoods, especially in the natural resource sector. The Leasehold Forestry (LHF) Project is Nepal’s attempt at addressing these needs. Ultimately, to revise the CF rules and regulations to incorporate LHF mechanisms would enhance access specifically for the socially excluded and most desperately poor.

6.1 Introduction

Leasehold forestry in Nepal was first mentioned in forestry legislation of the 1970s, but was virtually ignored until the late 1980s, at the time when the Master Plan for the Forestry Sector was being developed. In 1993, implementation of the first leasehold forestry project was begun, called the Hills Leasehold Forestry and Forage Development Project (HLFFDP). Leasehold forestry (LHF) was subsequently taken into account in the Forest Act of 1993 and the Forestry Regulations of 1995. The basic point of the LHF project has been to provide access to poor people in small groups to degraded forest under 40 year leases (renewable), with exclusive rights to the produce of the land.^[131]

The LHF approach targeting the poor contrasts with the nation’s Community Forestry (CF) programme. CF is several decades old and encompasses over a third of the population, the rich, the average and the poor in whole communities, while LHF initiatives are still new and have impacted only a small minority of people organized into small groups. The CF programme focuses on forest conservation, while the LHF project focuses on redistributing resource assets to provide access to degraded land to specifically targeted groups of resource-poor farm households. CF groups are legal entities, heterogeneous and typically large (sometimes up to several hundred members) while LHF groups are homogeneous (all poor) and small (7-10 hhs), but their legal status is still in question due to lack of clarity in the relevant legislation. Both LHF and CF groups prepare 5-year operational plans which must be approved by the District Forest Officer (DFO). According to many analyses, many CF groups suffer from ‘elite capture’ by the community’s rich and powerful, a situation only rarely (so far) reported for LHF groups. (See Case Study 1 - Community forestry: participatory forest management in action.)

Several other differences also define the two programmes. For one, CF is clearly given legal priority ahead of the LHF.^[132],[133] CF is the older and more mature programme, and although it started out with a heavy investment in the project approach by donor agencies, it is now quite clearly a government-run initiative in which existing projects and programmes are well integrated. Community forestry is a community-driven initiative, while leasehold forestry is more individually focussed. And, while CF is implemented through one agency, the Department of Forests (DOF), the leasehold project has operated through the coordination of several line agencies, each with specific roles and tasks. Earlier, four agencies were involved: the DOF as the lead agency, providing a Project Coordinator and the Project Coordination Unit, and coordinating the project at the district level through its DFOs who have the main responsibility with regard to the leasing process; the Department of Livestock Services (DLS), with the technical responsibility for fodder and pasture development and provision of animal health services to project participants; the Agricultural Development Bank of Nepal (ADBN), providing soft loans to leasehold farmers through its Small Farmer Development Centre (SFDC); and the Nepal Agricultural Research Council (NARC), to conduct applied research through its Fodder and Pasture Division. From 2003, only the DOF and DLS are involved.

Many similarities also exist between CF and LHF, such as the aim to hand over forest management to local people, the pivotal role of the DFO and the need for community consensus as a condition for hand-over. Significantly, these are also the areas of most confusion and conflict between the two programmes.^[134] The need for community consensus is constantly raised in critiques, pro and con, of the LHF project. If there were not ongoing difficult and contentious issues, one would know the project was not engaging fully with its difficult work!

The LHF Project began under a loan agreement through IFAD (the International Fund for Agricultural Development), complemented by an FAO technical assistance project funded by the government of The Netherlands. From 1993 to 2003 the program operated in a pilot project mode, in close coordination with the line agencies but with its own project infrastructure and heavy investment in technical assistance.

The overall objectives of the LHF project are to improve living conditions and raise incomes of families below the poverty line, and to improve the ecological conditions in the Nepal hills, by leasing blocks of degraded and barren forest lands to small groups of poor farmers for rehabilitation. The project aims to increase access by the poor by improving the management and use of forest resources, and increasing forest-derived benefits to the poor,^[135] by improving the vegetative cover of the land and encouraging fodder production in support of investment in livestock rearing (cattle, water buffalo, goats) as an income-generating activity. ‘With assured access to additional fodder production from the leased land, families are able to increase their income from livestock production and other activities. This is reinforced through increasing fodder production on private land, and other income generating activities’. One justification for establishing the leasehold forestry project was the availability of degraded forest and uncultivated lands throughout the country, estimated to be nearly 1.6 million hectares.^[136]

The project is directed towards the poorest families in the community, defined according to two criteria: amount of private arable land (0.5 ha is the cut-off) and annual income (below Rs.2,500; c. $44 in 1993). More recently, an assessment of the food deficit condition of applicant households has been applied, as well. Poor households are among the most dependent on forest resources and livestock for their survival. Among the poor, the project focuses even more closely on the most marginal farmers (with less than 0.1 ha of land) and the landless or near landless (less than 0.05 ha), with special encouragement to deprived ethnic groups (e.g., Tamang, Majhi, Thami, Magar, Danuwar and Praja). Women, and especially women household heads, are also especially targeted, given their traditional involvement in daily fuel and fodder collection, and livestock tending.^[137]

In the project design there are three stages to the leasing process: land and leaseholder identification and group formation, land development and training and management and utilization.^[138]

Land and leaseholder identification and group formation

This stage usually takes one to two years to complete. Members are poor and group size is small, typically 7-10 individuals (households), as compared to much larger groups under community forestry. Women and members of poor ethnic groups are especially encouraged to join. A number of leasehold forestry groups are led by women (undoubtedly because livestock and fodder collection are women’s work).

The group formation stage involves several steps towards gaining final access to the leasehold lands, although the implementation of some stages has been problematic and controversial. The District Forest Office and local forest rangers are to be involved in most of these steps. The steps are:^[139]

1) Initial site selection.

2) Community discussion for consensus.

3) Public notice to allow the community time to apply for community forestry status.

4) Public notice to solicit any conflicting land claims.

5) Group formation and registration with ADBN.

6) Preparation of the leasehold application including an five-year operational plan (extendable over the life of the 40-year lease).

7) Site survey and boundary demarcation

8) Submission of application for final approval at the department and ministry levels.

9) Hand-over of the leasehold land to the group.

Land development and leaseholder training

This stage normally begins by implementing improved management strategies (restricted grazing, fire control) followed by site development (enrichment planting of grasses, leguminous ground cover and fodder and fruit trees), land and livestock development training to all new leasehold farmers (both husband and wife), and technical assistance (forest and forage management, animal health services, etc.)^[140] The project design also supports secondary activities, including village infrastructure development (drinking water, trail improvement, school building renovation, minor soil conservation and irrigation works, and building culverts and bridges), farmer-to-farmer exchanges, formation of savings groups, and the installation of fuel-efficient cook stoves, all of which are designed to help enhance access to and use of improved resources by the poor.

The initial land development stage has taken from six months to two years, and may continue for several more years depending on local need. This stage may overlap with the group formation stage as site protection sometimes begins before the leasehold forest is formally handed over.

Management and utilization of the leasehold

This stage is achieved, depending on the site, when the land has become fully productive and produces fodder and forage, fuelwood, poles and small timber, and possibly fruit, medicinal plants, bamboo and other AFRs.

The project was first implemented in two districts, Kabre (Kabrepalanchok) and Makwanpur, beginning in 1993, with gradual expansion to ten districts by 1999, and to 26 of Nepal’s 75 districts by 2003. By early 2003, approximately 7,000 ha of degraded forestland had been handed over to about 1,729 Leasehold Forestry User Groups (LFUGs), involving 11,756 households, each of which has received, on average, 0.62 ha of forest land. Seventy percent of the LFUGs were formed between 1997 and 2000.^[141]

The LHF project has not been without controversy. It is, by now, well recognized that the project has both notable strengths and benefits, and some glaring problems that affect access to resources by the poor and full acceptance of it by others in the communities and in higher levels of government and society. Both the benefits and the problems have been substantially discussed in available documents, such as the Phase-2 of the FAO Technical Assistance Project and IFAD evaluation and inception reports.^[142]

6.2 Benefits to the leaseholding poor

Through a series of project and independent studies, a number of positive benefits to participants have been documented in relation to improved vegetative, social and economic conditions. These benefits, however, must be seen in light of the fact that the leasehold project is quite small (less than 2,000 groups, in only 26 districts) compared with the CF programme (nearly 13,000 groups, in all 75 districts). Nonetheless, for participants, the benefits are significant. A recent sample survey of leaseholder households found that LHF participants achieved significant gains (over a control group) regarding the composition and value of livestock ownership, availability of animal feed (fodder), household food security, cash income earnings, and ownership of small tools and assets.^[143] It was also found that six percent of participating households report the return of a household member who had previously migrated for work, compared to control households that reported no migrant returns.^[144] While this is only a small percentage, it is of interest because migration for employment is one of the only strategic livelihood alternative for many households with insufficient means or access to natural resources for household subsistence.

Similarly, it was found that increased fodder production under leasehold has made it easier for participating farmers to convert from free grazing to stall feeding their livestock, thus reducing the pressure on forest vegetation, which leads to improved environmental conditions. This has been achieved, in part, by the involvement of NARC in fodder and stall feeding technology research. ‘This in turn allows women to undertake more socially and economically productive activities, including learning [e.g., adult literacy] and income generating activities. As a result, the household income increases, as well as the education and social status of women’.^[145]

Two studies were specifically conducted to examine benefits to women with differing access to forest resources in several districts. Using DFID’s Sustainable Livelihoods Approach, the researchers compared women in LFUGs with access to leasehold forests, women members of CFUGs, and women with no access to either leasehold or community forests. The researchers concluded that significant gains were made by women with access to leasehold forests considering availability of forest resources, time spent on collection of forest resources, livestock numbers and stall-feeding, income and income sources, training and literacy rates, and decision-making within the household.^[146] Of particular importance in enhancing women’s roles and benefits are village women organizers and promoters.^[147]

Since the benefits of access depend on time available to realize them, it is significant that the time women spent collecting forest-based fodder decreased over a five year period from nearly 4 hours per day to less than 1.5 hours per day.^[148] The difference in time spent on fodder collecting has allowed them more time for socially and economically productive activities and has strengthened their position within the household in terms of income and decision making. The stronger role of women in the household and engaging in household enterprises is attributed, in part, to the fact that the project included both husband and wife in training. As a result, the economic disparity between male- and female-headed households has decreased, while the education and social status of women has increased.^[149]

Lack of access to resources is a main problem of the poor. The LHF project has concluded that although the degraded land handed over as leasehold forest to poor households may not be the best land (in fact, it is the only land available), the leaseholders’ commitment to regenerate the forest resources has brought them a measure of tenure security (40 year leases), thus motivating them to invest in land and forest resource improvement with a long-term perspective. Regarding the plight of women, the project concludes that while their overall condition increases in the long-term, in the short term, at the start up of the leasehold activity when there is little or no fodder to harvest but when their physical presence is required to protect the resource, the plight of women (and men) may, in fact, temporarily increase.^[150]

When asked why pursue leasehold forestry in light of the community forestry alternative, the project documents state that under the LHF project the focus is access to resources specifically by the poor. Project managers have each pointed out, for example, that ‘Leasehold forestry is an effective poverty alleviation mechanisms, which specifically targets the poorest section of the community, while community forestry tends to benefit the better off in the community more than the poorest households. This is not to say that leasehold forestry is better than community forestry, but rather that the concept and implementation of community forestry could be enriched by integrating the concerns for poverty reduction, social inclusion and access of LHF into a jointly implemented programme’.^[151]

6.3 Technical problems with Leasehold Forestry

A case study such as this one is dependent on the observations of its authors and the availability of relevant literature to analyse. In this case, the literature is limited to project reports and papers and a few critical essays based on field studies, each with its own biases. The LHF project has generated a lot of heat in Nepal, but not much analysis. There has been no well-balanced assessment to date that looks critically at both sides, the pros and the cons. It is well known, however, that throughout its short life (barely over a decade) the LHF project has been characterized as confused and controversial. This in itself, however, is not a bad thing, and to be expected. After all, the project is directly concerned with poverty reduction and the opening up of sustainable access by the poor to natural resources.

Four of the technical problems that have arisen are discussed below, namely the issues of community consensus of who gains access, conflicts over land use rights and traditional access, how eligibility for leasehold access is determined, and the high cost of programming access for the poor.

Leasehold forestry without community forestry - access without consensus

Since the very beginning, confusion over the LHF project and conflict with CF have occurred. Early on, for example, it was argued that the LHF project had caused dilution of resources (especially of forestry staff) at local and district levels and confusion among villagers and field staff (rangers) due to the different approaches and methodologies of each programme.^[152] It is clear that where community ‘consensus’ does not exist, leasehold forestry becomes seriously problematic. What is sought is consensual access with community participation. Some argue that what has ensued is ‘a virtual Cold War between these two lobbies,’ CF and LHF, with proponents lined up strongly on both sides.^[153] Others present that LHF is not “against” CF, but that rather CF could be enriched by integrating the concerns for poverty reduction, social inclusion and access found in LHF.^[154]

What is meant by ‘consensus’ is unclear in the discourse so far. It must be noted that conflict is generally at the centre of issues about social inclusion and access, and is to be expected in heterogeneous communities. It should not be seen as an ‘unexpected’ problem. Consensus implies harmony, cooperation and unanimity. The centre of the LHF project is about opening up access to hither-to excluded social groups. This, by its very nature, is contentious and involves conflict. Therefore, what is missing in the discourse so far is the equally strong need for analysis of where conflicts have been resolved and the poor have benefited by gaining access to resources with community support.^[155]

Access to forest resources under each programme is different. CF is more well known and has priority over LHF, and the two programmes represent different ways of empowering community groups to manage local forest resources. Many CFUGs have relatively good forests to manage, while LFUGs must cope with degraded forests. CF operates through one line agency while the LHF project struggled to coordinate four agencies and now only two are involved. In CF, large heterogeneous groups (rich and poor) share the resources, while in LHF the groups are small and economically homogeneous (all are poor). There is evidence that in some instances when wealthier farmers discover that they cannot participate in a particular leasehold project, they have raised strong enough objections to have it closed down.^[156] Of the two programmes, it is assumed that CF operates on the basis of community-wide consensus though it does not often provide sufficient access for the poor, and that LHF, specifically designed to provide access for the poor, should also operate by consensus in tandem with CF, but too often does not.

In Chitwan District, for example, there is no CF programme in the hills but there is a high amount of degraded forest land available.^[157] The Chitwan DFO, in fact, has used leasehold forestry as a (top-down) substitute for community forestry, in a system within which conflict apparently abounds. The author of one report alludes to the problem, obliquely, when he says that ‘it is only to be expected that problems are reported in the implementation of leasehold forestry in Chitwan’. Then he recommends that since it cannot be successfully implemented by itself, ‘leasehold forestry should always be linked to the community forestry programme’.^[158]

Strengthening the relationship and linkages between community and leasehold forestry was strongly recommended early in the programme. ‘What is needed is an integrated extension approach comprising both community forestry and community-based leasehold forestry. Rangers need to be trained in both methods (thus there will be no need to have separate “leasehold rangers”). The decisive factor should be the community’s consensus, whereby forest land can be allocated simultaneously to either community forestry management or leasehold forestry management’.^[159] What is implied by this statement is that ‘community consensus’ is easy. It does not adequately recognize that empowering the poor to have access to resources generally raises conflicts, and that in any serious attempts to address this issue conflict management strategies must be employed so that communities are able to go forward to open up access to disadvantaged groups. And further, these are not just local level issues, but they integrally involve actors at the macro level and are, in general, politically contentious.

Conflict over territory - traditional access denied

A number of cases have been described in the literature about the problem of identifying leasehold land that was traditionally utilized by people other than those selected to become the new leaseholders. This is an issue of territorial conflict. The leasehold development process has a built-in mechanisms for soliciting prior claims to the land, but these do not always work. For example, some of the very poorest Nepalese farmers have traditionally practiced shifting cultivation on degraded forest lands, but this practice is not recognized in law; hence, it does not justify prior claim. If these farmers are not identified as potential leaseholders, they become the losers. Such lands, when requisitioned for leasehold, have been described as ‘lands [that] have actually been snatched from much poorer people’.^[160] The whole issue of pre-existing indigenous rights and traditional use of leasehold forest land by rich and poor, alike, is not well addressed under the LHF project. There is considerable agreement that much of the land allocated for leasehold should, in fact, be considered for common use by all members of a community through the CF programme. On the other hand, as is now evident from experience, the CF programme does not have a good track record of sharing such resources with the very poor.

In a recent study in Kabre District, it was found that the residents of two adjacent VDCs have long been in conflict over the degraded land allocated for use as leasehold forest. The LHF project in these communities effectively undermined the customary rights of one group of residents, both poor and non-poor, and gave away the benefits to others. Local residents also pointed out that some of the leasehold participants were not from among the poorest of the community, implying that definitions of ‘poor’ apparently differ between the project’s and the villagers’ points of view. Then, after the LHF program was begun, residents (both wealthy and poor) who lost their traditional use rights to the LHF project took the issue to court and, although they lost the case, the issue was so contentious that the community as a whole decided to place the contested land under community forestry.^[161]

What is ‘poor’? - deciding who gets access

Several instances have been described where some of the ‘poor’ selected for the leasehold project, were not the true poor at all. There are also various levels of poverty, sometimes referred to as the ‘poor’ and the ‘ultra poor’.^[162] Thus, there is a problem in correctly identifying who is truly ‘poor’. In some instances, local non-poor have taken advantage of the project (just as they have under CF). For example, the residents of a VDC in Ramechhap District, ‘expressed their worst experience’ upon seeing the leaseholds going to powerful political leaders and village elite. They voiced total dissatisfaction with the project’s criteria for selecting the ‘poor, and suggested that community involvement and consensus on who is eligible from the local community in place of the project’s prescriptive target oriented approach would help solve such problems.^[163]

The LHF project has more recently addressed this concern by reformulating how ‘the poor’ are defined and selected, taking it away from a strictly income and assets approach to a criterion based, in part, on household food deficit indicators, combined with community consensus.^[164]

6.4 The cost of access

The LHF project in its first decade (1993-2003) was a pilot project, heavily dependent on the project mode and costly technical assistance inputs. It is estimated that the average cost per participating household is $800, or $1,400 per hectare of degraded land.^[165] This figure includes for instance the cost of credit (most of which went to non-leasehold farmers), the cost of small scale village infrastructure (schools, water supply, etc.), and the cost of buildings (livestock service centres for instance). Actual costs would be more in the order of $300-350 per household, or around $500 per ha, which still includes around $200 in livestock inputs and services per ha.

Experience shows that even when implementing the most creative and timely initiatives, projects often stagnate after they are phased out, unless sustainability is built in through other mechanisms (e.g., integrating them into on-going government agency programmes). This also implies a change from a purely project-centric technology transfer (‘pipeline’) approach to development, to one that focuses on capacity building at all levels within the national and local development and innovation system. Accordingly, in the next phase of the LHF project, from 2003 onwards, it is apparently intended that the LHF project will be more fully integrated into government operations. Various agency and other organization actors will continue to be coordinated under the overall leadership of the Department of Forests, but seemingly without the heavy project overlay (although major donor support continues). It is expected that as the Department of Forests takes up more of the responsibility previously vested in the project structure, the cost of leasehold operations per household and per hectare should go down.^[166]

Observers commenting on the high cost of the project have reiterated the theme of improving the relationship between LHF and CF. It has been recommended that the local communities be involved in identifying the poor households or hamlets, to avoid the sort of member/non-member conflicts that have been identified in the past.^[167] CF/LHF linkage should also reduce overall costs, not only in financial terms but also in terms of training and personnel (e.g., DFO staff) required to operate and monitor the project. The recent project evaluation suggests that the project might be more efficiently implemented by ‘bolting on’ specific provisions for the poor to CF programme arrangements. Currently, the CF programme does not have specific legal provisions for targeting the poor, although some CFUGs are making such provisions on their own, such as cultivating grasses and cash crops (e.g., bamboo, vegetables) on allocated land, and discounting the sale of fuelwood. Some DFOs, however, do not approve CFUG operational plans unless measures to enhance access for the poor are included.^[168] These and other aspects involving improvements to the legal definition and provisions of the leasehold project are now under discussion at the highest levels, and are being experimented with in the field. At least one CF programme is also implementing leasehold forestry within its regular activities.^[169] They are also under discussion within the FECOFUN, where concern for the disadvantaged, for social inclusion, equity and empowerment, are now uppermost. Thus, moves within the CF programme, and within the FECOFUN, towards addressing empowerment and social inclusion issues (hence, access issues), are being brought more into the political and donor mainstream agenda.

6.5 Conclusions

This case illustrates a number of things concerning our analysis of policy processes and development practice. Clearly, leasehold forestry is primarily concerned with poverty reduction and improved access by the poor and marginalized to natural resources. This represents a government and donor commitment to implementing an often repeated policy declaration. It has engaged with the staff of four line agencies in trying to address increased access by the poor to natural resources. While in a sense, the project has been a classic action research ‘special project’ is also much more. It has, in many ways, helped to focus the attention of the Department of Forests, FECOFUN, other NGOs and donors who have been part of the community forestry programme coalition squarely on issues of access and social inclusion, issues that have not previously been central to their concerns. As these actors move to address these key issues, they will find some of the experiences and lessons from the leasehold forestry project useful in their work.