Two decades of community forestry in Nepal: What have we learned?

Two decades of community forestry in Nepal: What have we learned?
2006, was driven by a strong pro-poor focus. This followed project objectives, and
was also essential to gain acceptance from the Maoists in the project area (who
were highly sceptical of any “capitalist” interventions). Entrepreneurial training
based on a variety of products was provided to some 500 villagers in many remote
areas. About 200 of those trained established micro-enterprises. Most were household-based,
a few were CFUG based, and three were medium sized enterprises,
established according to a tri-partite partnership model. The three partner
categories of these latter enterprises – processing traditional paper, fruit juice
and resin – were the concerned CFUGs, the bipanna amongst their membership,
and local investors or entrepreneurs. Each invested in the company and thus had
shares in it – with the project investing on behalf of the bipanna. In this way, the
project sought to both provide start-up capital for the enterprise, and ensure that the
bipanna had a voice in the management – with the opportunity to earn dividends
from eventual profi ts. This exciting and innovative model, inspired in part from a
study tour to India in 2003 (organised through a support agency for small businesses
in Bangalore), became known as the Pro-Poor Enterprise (PPE) model.
By 2006, some 23 different types of forest products were being processed and
marketed in the project area, but (with a few exceptions) there was little deliberate,
focused involvement in specifi c value chains. About 1,500 CFUG members were
receiving direct employment, ranging from 3 to 10 months per year. This does
not include the indirect employment generated in other value chains beyond the
project districts. The average total annual turnover had by then risen to Rs 12
million, of which more than 60% comprised wages for local people (Paudel, 2009).
Yet despite these achievements, there was concern about the unbalanced focus
between social and commercial objectives in the pro-poor enterprises. In particular,
very few bipanna understood the concept of shares, meaning that having shares
did not serve as any motivation to them. Indeed, the investment undermined any
sense of responsibility for the fi nancial risk entailed, and tended to promote a
mindset of dependency. It was also only replicable in situations where there was a
philanthropic intention rather than a solely commercial interest. Project staff thus
took a conscious decision to cease any direct fi nancial investment in forest-based
enterprises. There is a certain irony in this, in that “shares for the poor” have since
been taken up by a number of other agencies which do not appear to have realised
the associated problems. Essentially, purchasing shares in a company and
allocating them to poor people is a simple mechanism of making a donation, but it
not only does not guarantee, but often does not result in, genuine benefi t to those
whose names are on the shares.
“Most bipanna cannot be successful entrepreneurs despite very heavy facilitation and other
inputs. We have not been able to encourage adequate private sector investment in forest
based enterprises.”
Hem Tembe, Former District Project Coordinator, NSCFP, Ramechhap
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