CHAPTER- ONE 1.1 Background Federation of Community Forestry Users, Nepal (FECOFUN) was established in 1995 .

It is a leading organization for community forest user groups networking aimed to bring them together under one umbrella in order to secure their rights towards forestry and guiding them towards better livelihood by facilitating to help themselves. By now, it has established itself as the largest civil society organization working on the field natural resource management. The concept of community based forest management emerged in the late 70s following massive deforestation and natural resource degradation in Nepal but the concept of community forestry was materialized only in the 90s guided by Forest Act 1993 and Forest Regulations 1995, with the advent of multi-party democracy in the country. In recent years, Nepal has become renowned through the example of community forestry. Community Forest User Group (CFUG) and Community Forest (CF) processes have been remarkably successful in terms of resource conservation and management. Community Forest User Group (CFUG) has established itself as a successful model to regenerate and restore natural resource base which could be replicated effectively. There are more than 17685 CFUGs in the country reaching out to over 2.17 million households to which 16.5 million ha of forest land was handed over (DoF, CF Database report 2011). This network has been conducting various user-friendly programs and activities particularly targeted to support the rural poor and forest dependent users. However, CF development is yet to scale up and build on the lessons learned in many areas such as enterprise development, promotion, value addition and local level employment creation through sustainable management of forest resources particularly NTFPs, for the better livelihood of the forest managers/users. There is still room for improvement in many areas related to generation of positive social, economical and environmental impacts what'll benefit the local users as well as the nation itself. Nepal has bounty of renewable forest resources which can be used to generate employment in rural areas, create green jobs, and develop community enterprises along with bio-diversity conservation and governance improvement. Sustainable management of forest (SMF) and FSC certification could help manage resource in a sustainable way as well as help to establish a link with various national and international markets for the trade of high values forest products. In this context, Twinning Support To The Development of Smallholders Forestry Organization project has proposed to address the above scenario of the natural resources and provide opportunities to create green jobs in the rural area. The overall goal of the project is to promote participatory sustainable forest management through the community based forest enterprises and green jobs in order to improve the livelihood of forest dependent people The project will also contribute towards fulfilling the vision of poverty reduction incorporated in Nepal governments three-year interim plan. Under this project, FECOFUN intends to take CFUGs and their community based enterprises in vertical and horizontal integration through the supply of information and responsible resources and resources regarding business practices in Nepal. The project will develop and strengthen the capacity of facilitating organizations (which will be involved in project implementation in districts and local level), service providers and CFUGs in the project areas in order to commercially manage their forest resources, facilitate the establishment of enterprises, and mobilize community fund and other resources through community development activities. Despite such facilitations, sustainable supply of forest products for subsistence use will not be compromised. Also, the project will give special consideration to marginalized people and women in the project area so that the issue of equity and social injustice is properly addressed.

FECOFUN has been implementing the project in 20 CFUGs of four districts in the mid-western cluster. The project has been implemented basically to improve the livelihood of forest dependent poor people by establishment of community forest-based enterprises and creation of green jobs through establishment of community forest resources based enterprise. In this regard, Federation of Community Forestry Users Nepal(FRCOFUN) carried out a feasibility study of potential community forestry based enterprises in the eight CFUGs of the Tulsipur municipality area of the Dang districts based on the given Terms of Reference (ToR) and within specified time frame. 1.2 Objectives The main objective of the study was to identify the potential community forest and Agriculture based enterprises in selected eight CFUGs of Dang district. 1.3 Scope of the Work The feasibility study was conducted in eight selected CFUGs of Dang within the framework of the Ashwara and other seven CFUGs. The scope of the work was to develop community based forest based enterprise and to create green jobs in the rural portions of the project area. 1.4 Methodology 1.4.1 Study area The study was carried out in 8 CFUFs of the Dang districts under the mid -western cluster of the project. 1.4.2 Study Approach 1.4.2.1 Participatory and Consultative (P&C): The study was carried out through participatory approach. Using the participatory methods and approaches, the study team tried to understand the opinions of various interest groups and stakeholders as well as the potential forest based enterprises in the study districts. Therefore the study focused on analysis of potential community forestry based enterprises, forest resources, socioeconomic condition, potential market, constraints, opportunities along with roles and responsibilities of the concerned stakeholders. 1.4.2.2 Multi-Perspective (Poly-vocal) Approach: This approach aims to reflect the external and internal views along with the concerns of stakeholders who are involved in community forestry based enterprises and its products. Under this approach, the external view such as stakeholders' attitudes and ideas about the services provided by the facilitative organizations in the natural products was elicited through communication. Similarly, in the internal view internal system, procedures and processes in the community and cluster level as well as marginalized and poor people, market and services was assessed. 1.4.2.3. Combination of qualitative and quantitative data collection methods: The study combined both quantitative and qualitative techniques for conducting sub-sector analysis of the natural and other products. The quantitative data was collected from the secondary source whereas the qualitative data was based on primary data which was collected by using both person specific and group focused surveys. (Like PRA and focus survey, key informant survey). 1.4.2.4. Disclosure and Verification Approach: The study followed the disclosure and verification approach in order to ensure the transparency of findings of the study as well as to develop an ownership and ensure accountability. This approach not only helped to provide explanations for the above processes but also facilitated to develop a dialogue with the concerned stakeholders on the issues raised. For this, briefing, debriefing and field level consultative discussions were organized to discuss the findings of the study. 1.4.3 Sources of Data A multi-method data collection approach was used in the study. The consultants utilized both secondary and primary data related to the project and objectives of the study. The study used a rapid analysis of district's natural resources and prioritized the products based on their natural resources

potentiality. Primary data were collected from the study sites (project districts) with the help of checklists prepared in advance for the fieldwork 1.4.3.1 Secondary Data Secondary data collection is also one of the important and relevant methods for the study. Secondary data were obtained from a wide array of qualitative and quantitative resources such as case studies, literature reviews and desk research which provided information on geographical and biological aspects, socio-economical aspects, governance and policies along with technological and marketing aspects of natural and other high value products. Project documents, books, and publications required for literature review and desk research were accumulated from various existing facilities with an emphasis on cost-efficiency. 1.4.3.2 Review of relevant documents from secondary source The team members reviewed the documents which were collected from different sources including both FECOFUN central level and district level organizations. It included review of literature, published and unpublished documents of concerned stakeholders including websites, annual progress reports, district forest sector plan, five years forest management plan and enterprise related reports and plans etc. 1.4.3.3 Meeting with Ashwara and other eight concerned CFUGs The team members met the Ashwara and other eight concerned CFUGs in the field level in groups or individually ,held preliminary discussions on different aspects and also shared their previous experiences on enterprise potentiality. An interaction programme was organized among the consultants and the Ashwara and other eight concerned CFUGs representative which included discussions regarding the given ToR before field mobilizations. At the meantime, any confusion and query related to ToR were clarified in the forum. 1.4.3.4 Preparation of checklist/ questionnaire A set of detailed checklists/ questionnaire were prepared in order to extract information, organize discussions during interview, and gather primary data. The checklists covered important aspects of forestry based enterprises resources potentiality, value chain and business plan related information in the target groups in this area. 1.4.3.5 Primary Data Collection The field visits were carried out in the project's study districts on clusters basis. The primary information were drawn through consulting meeting, focus group discussion, key informant interview and field observation by the concerned stakeholders, entrepreneurs, marketing centers, traders etc . The study team members visited different parts of the districts and interviewed directly to the respondents such as collectors, community leaders, village traders, district level traders and other stakeholders involved in enterprise and marketing. It included the following sources of data collection. 1.4.3.6 Consultative meeting with district Stakeholders A separate consultative meeting was held with different stakeholders including DFO, DADO, DDC, DLSO,traders along with the representatives of networks, federation, non-governmental organizations and other related stakeholders. This meeting gave the overview of the enterprises products, its actors and functions status in the district. The study was complemented with interactive discussion sessions among producer networks, business chambers, and government officials at district and national level in order to deliberate on how sub-sector could serve the people better and how specific end market studies could be used for demand and consumer trend analysis. 1.4.3.7 Field observation The study team visited districts of mid-western cluster and directly observed the field level activities and their potentialities. During the field visit, potential sites for the enterprises and markets were observed and relevant information was collected. 1.4.3.8 Focus Group Discussions

A Focus Group Discussions was organized in each CFUGs and discussions with different focus groups as like market centers and target groups in different locations were conducted in order to assess the forest resource based potential enterprises and to collect potential market related information. 1.4.3.9 Key Informants Interview Key persons' interviews and discussions were conducted with the officials of DFO, owners of enterprises, businessmen, concerned district line agencies and other relevant stakeholders in the study district in order to find out the potentiality of forest based enterprises, their function, relation and stakeholders perception on different enterprises. The information was collected by utilizing a prepared checklist for key informants including CFUG leader, local businessmen, VDC personnel, MEDEP partner, local farmers leaders, farmers associations, co-operatives etc. A separate open ended but structured questionnaire was prepared to cover all the selected topics consistently. Visits were made to the officials of the concerned district level line agencies to solicit information. 1.4.3.10. Debriefing meeting with stakeholders The study team presented the preliminary findings of the study prepared by the consultants and debriefed the information with the concerned stakeholders in the districts in order to get feedbacks and comments on the analysis of natural resource potential product, market and target groups in the district for future interventions. The meeting identified the market centers and potential enterprises in the districts. 1.5 Limitations of the study The study team efforts were made to cover entire topic of TOR and visit all target group and enterprises in the districts basis. The season had busy of local farmers and rainy season difficult to manage their time during interaction. But due to a busy schedule of the farmers coupled with the rainy season, it was difficult to manage time for interaction. 1.6 Report Organization This report is organized into 6 chapters. The first chapter includes background, objectives, scope, methodologies and limitations of the study. The second chapter presents the general demographic and socio-economic information along with information regarding the infrastructures and institutional development of the district. The third chapter deals with study findings. The fourth chapter deals with conclusion and recommendation, the fifth chapter includes references and annex in six chapter. CHAPTER- 2 2.1 General Introduction of the Study Districts 2.1.1 Location The feasibility study was carried out in Dang, Salayan, Pyuthan and Rolpa districts in the Midwestern cluster of the project within the framework, keeping in view of the FECOFUN target groups, potential community forestry based enterprises, resources and its market scenario. The study districts are located in the mid western development of Nepal. Topographically, the study districts incorporate the High Mountain, Mid Mountain, Siwalik and Terai regions.. The geographical location of the study districts are briefly represented in the following table. Table no: 1 Location of the study districts SN Name of district 4 Dang
(Sources: District profile 2001

Latitude Longitude between 27 37 and between 82 2 and 82 28 29 North latitude 54 East longitude

Gorahi, Khalang and Libang are headquarters of Dang, Pyuthan, Salayan and Rolpa districts respectively. All headquarters have good access to road which connects these headquarters to

different markets of the Nepal. Rolpa is one of the last established districts of the Nepal. Rolpa is located in the high mountains whereas Salayan and Pyuthan are situated in the middle part while Dang is located in the southern parts up to terai region. Administratively, study districts have 10 electoral constituencies , 46 Illaka and 186 VDCs and 2 municipalities. In the study districts of the Midwestern cluster, municipalities are developed in nominal scale . Most of the districts headquarters have moved into semi -urban areas. Brief administrative information is given in the following table. Table no: 2 General administrative information S.N. Particular Dang Pyuthan Rolpa Salyan Total/Avg 1 Total 41 49 51 47 188 VDC/Municipality(39+2) 2 13 11 11 11 46 Ilaka 3 2 2 2 10 Electoral constituencies 4
(Sources: District profile 2001)

According to the second national living standard survey conducted by CBS, GoN, per capita food requirement of Nepal is 2144 Kilo-Calorie. But the calorie consumption of the majority of people within the study area were found to be low and in direct contrast with the national standard. 2.1.2 Physical Feature Physiographically, the study district is divided into four ecological regions: high hills, mid hills, siwalik/churia and terai range. The altitude varies from 213 m (Sisiniaya VDC of Dang) to 3639 m in Rolpa district. This variation in altitude within the district is responsible for diverse climatic zones and richness in biodiversity. Similarly, the microclimatic condition varies from sub-tropical zone including the terai regions of Dang to sub-alpine zone including the upper parts of mountain in Rolpa district. Rapti is one of the largest rivers of the study districts which flows in the upper part of Pyuthan district and passes through Dang district. Madikhola, Lungrekhola, Tribhani, Jhimruk, Mandapi are few associated rivers flowing in Rolpa and Pyuthan districts. Along with these rivers there are many Tars and Besi which serve as main paddy growing pockets in the mountain region of the districts. Besides that, the valley and terai region of the Dang district consists of high fertile productive land favorable for agricultural production. . However, major cultivated areas lie on the steep terraces in the hilly areas and most of them are rain fed. 2.1.3 Climate In the study districts of the Midwestern cluster, there is a dominance of temperate climate but there are few areas fostering sub-tropical humid climate mainly at river basin areas. Furthermore, in the northern parts of the study area sub-alpine climate can be found. Difference in altitude is an important factor influencing the temperature of the districts. The average maximum annual temperature is 33 C in Dang and minimum annual temperature is 3/6 C in the upper parts of Ropla district. The average annual rainfall is 2043.5 mm. Most of the district has rain fed agriculture but there is a substantial area under irrigation as well.. Four types of climates are observed in the districts, which are as follows:

-Alpine climate 2.1.4 Land Resources and Land use pattern

Based on district profiles, total area of the study districts is 814328.5 ha. Out of them, total 487150 hector (60%) is covered by forest. Similarly, out of the total land area, 245965 hectors of area (30.33 %) and 81213.5 hectors of area is occupied by agriculture and others (Rivers, Rocks etc) respectively. The agricultural land comprises of cultivated and non-cultivated land. The following table briefly shows the land use pattern of the districts. Table No.3 land use pattern of Study districts Particular Dang Pyuthan 1 Total Area 295,500 136500 ha. 2 Total forest 192,155 72694 area ha. 2.a Forest Area 65.% 53% in percentage 4 Agriculture 90,395 43041 land 5 Others 12950 20765
(Sources: FECOFUN Cluster report 2011)

Rolpa 187150 94097 50.%

Salyan 195178.5 128204 66%

Total/Average 814328.5 487150 60%

59855 33198

52674 14300.5

245,965 81213.5

2.2 Socio-economic Characteristics

2.2.1 Demographic Characteristics

The total population of the study districts is 1098368 where male and female are 48% and 52% respectively (CBS, 2001). The proportion of male and female is 0.99. The population density of the districts is estimated to be 73.14 people per sq. km. The total number of households is 216545 with household size being 5.51 per family. The general demographic information is briefly presented in the table below. Table no.4 General Demographic Information: S.N. Particular Dang Pyuthan Rolpa Salyan Total/Avg 1 Population: 462,380 212484 210004 213500 1,098,368 Male 49.05% 46.30% 48.38% 50.04% 48% Female 50.95% 53.70% 51.62% 49.96% 52% 2 Households 82495 40263 38512 55275 216545
(Source: LFP Dang Cluster report 2011)

2.2.2 Education /Literacy condition In the study districts, the average literacy rate was found to be 50.27% which is comparatively lower than the national standards. The status of the literacy is shown in figure -1. According to figure 1, the average literacy rate was found to be 58%, 48%, 53% and 45% in Dang, Pyuthan, Ropla and Salayan districts respectively. Dang had the highest literacy rate than other districts while Salyan had the lowest. As per figure no 1, average male literacy rate was 67%, 62%,50% and 59% in Dang, Pyuthan, Rolpa and Salayan districts respectively. Similarly, female literacy rate was 33%, 38%, 47% and 41% in Dang, Pyuthan, Rolpa and Salayan districts respectively. On average, female literacy rate was found to be lower than the male literacy rate. The female literacy rate of the Dang was found to be 33% which is comparatively lower than other districts.

Figure 1: Literacy rate in study districts

2.2.3 Caste/Ethnicity composition: The study districts were found to be more heterogeneous in terms of ethnic/caste composition. In the context of cast composition within the study districts, 45.98% of the people were Brahmins and Chhetris, 36.57% were Janajatis and 16.95% were Dalits. In case of Janajatis, 48% were found in Dang, 39% were found in Pyuthan, 44% were found in and 16% were found in Salayan. In case of Brahmins and Chhetris, 39% were found in Dang, Pyuthan and Rolpawhile66% were found in Salayan district. Similarly, in case of Dalits, 12% were found in Dang, 22% were found in Pyuthan, 17% were found in Rolpa and 17% were found in Salayan district., , and . The status of the caste composition is shown in the figure no.2. According to the figure, 22 % Dalit community were found in Pyuthan district which is the highest among the study districts. Similarly, 48% Janjati community were found mainly composed of tharu caste in Dang whereas in Rolpa district ,44% Janajati community were found especially containing Magar caste. A total of 66% Brahmin and Chhetri community were found in Salayan district which is the highest among the study districts. Dang and Rolpa districts had the highest population of the Janajati community as compared to other study districts.

Figure 2: Caste HHs composition in study districts

2.2.4 Language In the study area, 16 different languages were spoken on an average. Out of the total population, more than 85.05% people spoke Nepali language, 7.52 % spoke Tharu and 5.61% spoke Magar .In Dang, 30.1% people spoke tharu language only. Magar language ranks as the third most frequently spoken language in the study districts with 18% of total population in the Rolpa district speaking the language which is highest among the study districts. The status of languages spoken in the study area are presented in the table below: Table No. 5 Population distribution by language in percentage. S.N. Particular Dang Pyuthan Rolpa Salyan Total 1 Nepali in % 64.5 94.70 81.8 99.21 85.05 2 Tharu in % 30.1 0 0 0 7.52 3 Magar in % 1.7 2.68 18 0 5.61 4 Newar in % 0.2 1.06 0 0 0.31 5 Other in % 3.5 1.56 0.2 0.79 1.51 Total 100 100 100 100 100
(Source: District Profile, 2001)

2.2.5 Religion status In the study areas, over 90.70% of the total population followed Hindu religion on an average. Similarly 8.25% followed Buddhism, 0.75 % followed Islam and 0.30 % followed other religion. The status of the population distribution based on religion is shown in table no-6. Based on the table below, percentage of people following Hindu religion was highest in Pyuthan district whereas percentage of people following Buddhism was highest in Rolpa district. Table No.6 percent of population distribution by religion S.N. 1 2 Particular Hindu in % Budha in % Dang 96.48 1 Pyuthan 96.70 2.96 Rolpa 75.49 24.25 Salyan 94.43 4.83 Total 90.70 8.25

3 4

Islam in % Other in %

2.32 0.2 100

0.30 0.4 100

0.05 0.21 100

0.36 0.38 100

0.75 0.30 100

(Source: District Profile, 2058)

2.3 Economic characteristics 2.3.1 Economically Active and inactive population In the study area, the population was categorized into economically active and inactive population. Based on census 2001, population lying within the age group between 10 years to 59 years are known as economic active population. The total population of the study area was found to be 774144. Out of this population, 516478 were economically active and 257043 were economically inactive. Among the four districts, Pyuthan had the highest economically active (147379 or 79.20%) population and Dang had the highest economically inactive population (129505 or 38.69%). Most of the district's economy was found to be highly influenced by agriculture and livestock sector. The districts wise economically active and inactive population distribution is presented in the figure below:

Figure 4: Economically active &inactive population

The above figure no 4 has described the employment status of the study districts. Out of the total population, 71.76% are engaged in agriculture, 3.68% in service sector, 6.04% in Business, 13.1% in Industry and 5.42% are engaged in the others sector. 2.3.2 Population of employment status The mid western region was found to be rich in agriculture and forest resources therefore most of the people were involved in agriculture and forestry sector which helped to generate employment. Out of the total population, 454389 people were found to be employed in different sectors within the study districts. Out of them, 71.76 % were involved in agriculture, livestock and forest sector, 3.68% in different services, 6.04% in business, 13.10% in the industries, and 5.45% in others sectors. In Rolpa district, 84% of people were employed in agriculture, livestock and forest sector which was highest among the study area. Only 2.48% of the total population were employed in the services

sectors in Salayan district.

Figure 3: Employment status in study districts

As the figure above suggests, agriculture, livestock and forestry sector contributed 71.76% to generate green employment at local level. The study cluster was found to be rich in forest resources but proper utilization of the forest resources based enterprises development for creation of green jobs has been lacking. 2.3.3 Farm land Size and land tenure In the study districts, approximately 40% of land was occupied by the agricultural activities. The farm size and land tenure pattern are important factors for improving the economic status of the people. In this region, the farm land size was categorized into 10 groups from the land less to the population holding more than 5 hectors of land. The farm land was categorized as: below 0.1 ha (landless), 0.1 to 0.2 ha. of land, 0.2 to 0.5 ha of land, 0.5 to 1 ha of land, 1 to 2 ha of land, 2 to 3 ha of land, 3 to 4 ha of land, 4 to 5 ha of land and above the 5 ha of land. In case of farm land size and land holding households, 0.4% of the household were land less, 2.80% had below 0.1 ha of Land, 9.20% had 0.1 to 0.2 ha. of land, 22.92% had 0.2 to 0.5 ha of Land, 25.87% had 0.5 to 1 ha of Land, 22.51% had 1 to 2 ha of Land, 9.86% had 2 to 3 ha of Land, 3.27% had 3 to 4 ha of Land, 2.03% had 4 to 5 ha of Land and 1.14% had above 5 ha of Land. Based on the table 7, 0.5 to 1 ha of land was held by 25.87% of households which was the highest and 1.14% of household held 5 ha or more farmland which was the lowest. The farm land size and land tenure status in each district is given in table no 7. Table no 7: farm land size and land tenure status S.N. Particular Dang Pyuthan Rolpa Salyan Total 1 Landless 410 118 229 41 798 (0.4%) 2 Below 0.1 2243 2069 584 690 5586 ha, of Land (2.80%)

3 4 5 6 7 8 9 10

0.1 to 0.2 ha. of land 0.2 to 0.5 ha of Land 0.5 to 1 ha of Land 1 to 2 ha of Land 2 to 3 ha of Land 3 to 4 ha of Land 4 to 5 ha of Land Above the 5 ha of Land Total

7819 8966 14506 22447 15375 5079 3466 2184 82495

5797 13651 10275 6372 1073 638 142 48 40183

2555 11670 13352 7582 1750 484 306 0 38512

2166 11400 13406 8427 1465 326 122 41 38084

18337 (9.20%) 45687 (22.92%) 51539 (25.87%) 44828 (22.51%) 19663 (9.86%) 6527 (3.27%) 4036 (2.03%) 2273 (1. 14%) 199274

(Source: District Profile, 2001

The above table reveals that total land fragmentation in the district has increased significantly during the last 10 years period. In case of land tenure, over 96% of the total households had their own land and few households were hired for farming the agricultural land. 2.4 Forest Resources status in study districts The project coverage area of Dang, Pyuthan, Salayan and Rolpa districts under the Midwestern Cluster has rich forest resources. The forest resources covered 471,140 (58.32%) hector within the four study districts. The forest type, forest coverage, existing forest management practices and community forest management status are briefly described below. 2.4.1 Forest Type The Midwestern cluster spreads from terai areas of Dang district to high mountain regions of Rolpa district with different climatic zones. Due to the high geographical and climatic zone variation various types of the forests are found ranging from Sal dominant forest to Bhaj, Katus, and Dupi forests. Sal forests are found mainly in the low lands or terai/Churia areas of the Dang and Pyuthan districts whereas Pine, Chilaune, Katus, Bhaj, Gurans, Dupi forests are found in the middle and high mountain regions of the Pyuthan, Salayan and Rolpa districts. Table no.8forest type in the study districts Districts Name Forest Type Remarks S.N 1 Dang Sal, Pine and mixed broad leave 2 Pyuthan Sal, Chilaune katus, Bhaj, Gurans, Dupi etc 3 Rolpa Pine, mixed and Broad leaf forest 4 Salyan Pine, mixed and Broad leaf forest
(Source: DFO report 2010)

The Sal dominant forest is productive as well as of high economic value. The other types of forest such as Pine and mixed broad leave which are found in the hilly regions are less productive than Sal forest. The hilly region forests consist of medicine and aromatic plants which have high market value. Thus, these forests have high potential for creating green jobs through development of medicinal and aromatic resources based enterprises.

2.4.2 Forest Coverage/Area The Midwestern cluster (Dang, Pyuthan, Salayan and Rolpa) of the project was found to be rich in forest resources. Total 487150 hectors or 60% area on an average is covered by the forests within the study area. Out of the four districts, Dang had the highest forest resources and Rolpa had the lowest. The forest coverage status of the each district is briefly summarized in the following table. Table no.9 forest coverage status in the study districts SN Particular Dang Pyuthan Rolpa Salyan Total/Average 1 Total forest 192,155 72684 94097 128204 487150 area ha. 2 Forest area 65% 53% 50% 66% 60% in percentage 3 Handed 98902.79 44337.23 36525 45988 225753.02 over C ha.
(Source: FECOFUN Cluster report 2011)

2.4.3 Forest Management Practices Different types of forest management practices such as community forest, leaseholds forest; religious forest, private forest and government managed forest are practiced in the study areas. Out of these forests management practices, community forest management practice is one of the successful community based forest management in Nepal which is recognized all over the world. In the study cluster, total 225753.02 hectors of forest area was handed over to 1810 Community Forest User Groups (CFUG) as community forests. Out of them, 118 were only managed by women. Similarly, six forests were managed as religious forests covering 128.68 hectors of forest area and 160.87 hector areas of the private forests were managed by 297 private land owners. The existing forest management practices and its coverage area along with number of groups are briefly presented in the table no 10. Table no.10 existing forest management practices in the study districts SN Particular Dang Pyuthan Rolpa Salyan Total/Average 1 CF coverage in ha. 98902.79 44337.23 36525 45988 225753.02 2 Religious forest 3(64.35 ha) NA 3(64.33) NA 6(128.68) 3 Private forest ha. 264(137.35) 2 (4.7 ) 4(4.98) 27 (10.72 ) 297(160.87 ) 4 Women's managed 59 16 38 5 118 CFUG
(Source: FECOFUN Cluster report 2011)

2.4.4 Community Forest Status Community forest has been managed through participatory community based forest management approach. It is one of the successful forest management approaches in Nepal. In the study districts, community forest program was found to be running successfully. The brief description of the community forest status regarding the potential community forest, handed over community forest, numbers of CFUGs, benefited households and wellbeing ranking information etc are presented in table 11. Table no.11community forest status in the study districts SN Particular Dang Pyuthan Rolpa Salyan Total/Average 1 Potential CF 81713 50500 80470 35513 248,196 area ha 2 Handed over 98902.79 44337.23 36525 45988 225753.02 CF ha.

3 4 5 6 7

Total CFUGs CF users' Households CF Area/HH ha. Avg.HH/CFUG poor HH

481 92899 1.06 193 62%

373 38500 1.15 103 57%

485 43559 0.83 89 57%

471 45452 1.01 96 62%

1810 220410 1.02 121.77 59.50%

(Source: LFP Dang Cluster report 2011)

Based on the above table, a total of 248,196 hector forest area was allocated for potential community forest in the four study districts. Out of them, 225753.02 hector or on an average 90% of potential community forest was handed over to 1810 CFUGS as community forest and 220410 households benefited from it. A total of 481, 373, 485, 471 numbers of CFUGs have been managed as community forest in Dang, Pyuthan, Rolpa and Salayan districts respectively. Similarly, on an average 1.02 hector area per households and average 122 households per CFUG were found. In the wellbeing ranking information, on an average 59.50% of total population belonged to very poor and poor households in the study districts. In Dang and Salyan district the proportions of very poor and poor were found to be higher as compared to other two study districts. 2.5 Infrastructure development 2.5.1 Road The headquarters of the four study districts have good access to concrete motor able road which has made linkage to Kathmandu and other major cities easier. The east- west National high way also passes through Dang district. Dang has well constructed road networks as compared to other three study districts. The regular vehicular services have facilitated the transport from the major markets such as Gorahi, Tulsipur, Lamahi and Bhalubang of the Dang district to the headquarters of other three districts. In each of the districts, green road networks were constructed which linked different parts of the district with the headquarter. The most of the road were seasonal roads. Due to lack of resources regarding the road and vehicular services, agricultural, forest based products and home productions of the rural areas have not found a good market. 2.5.2 Communication The popular modes of communication in the district were mobile, tele-communication and postal services. Each district was facilitated by Ilaka and VDC level postal services. The telephone lines were distributed throughout the head-quarters and surrounding areas. The Fax and internet services were found to be available mainly in the headquarters of the districts. The mobile communication was found to be very popular communication tool both in rural and urban areas. Most of the households had mobile facilities. In addition, UTL phone were established for communication in the VDCs of hilly region of the study districts. In Rolpa district, 18 VDCs were found to be facilitated by telephone service. Table no.12 status of communication : SN Particular Dang Pyuthan Rolpa Salyan 1 Postal Office District office- District office- District office- District office1 Ilaka post-13 1 Ilaka post- 1 Ilaka post-9 1 Ilaka post-9 18, 2 Telephone reached VDCs-36, VDCs-22, VDCs-18 VDCs-11 VDCs Muncipality-2 3 Mobile facility Most of the Most of the Most of the Most of the VDCS VDCS VDCS VDCS 4 Email internets 3 1 1 1

FM

(Source: District Profile, 2001)

2.5.3 Electricity/Alternative energy The headquarters of four districts receive electricity supply from the national grid. Electricity was found to be available in the headquarters and other adjoining VDCs. Among four districts, A Butwal hydro-electricity private company has situated in pyuthan district, therefore received the electricity regularly during the load-shading period including Rolpa. In the Rolpa, only 11 VDCs were facilitated by electricity. Table no.13 status of electricity and alternative energy SN Particular Dang Pyuthan Rolpa Salayan 1 Electricity Benefited HHs 33.18% 31.2% 16% 1 2 Electricity Benefited VDCs 40 (Munci- 14 VDCs 11 15 1) 3 Fuel wood consumption 60.2 % 86.5% 96.97% 98.2% 4 Alternative energy (Biogas, LP gas 28.18 % NA 3.2% 2.8% etc)
(Source: District Profile, 2001)

In the study areas 40 households Solar Home System (SHS) and 96 households bio-gas were installed and taking benefits. 502 households benefited from peltry set and water mills and 361 households benefited from Energy Development. In addition to this, other sources of energy available in the district were kerosene and firewood. 2.5.4 Hospitals In the study areas, there were 4 hospitals, 5 Primary Health Centers, 33 Health Posts, 6 Ayurvedic Hospitals, and 147 Sub Health Posts which provided health services in the study districts. There were195 Health related organizations which were operating under the government. There were no private hospitals to provide health services to the people in the study areas. Table no. 14 health institutions of the district Hospital/Clinic/Health Dang Pyuthan Rolpa Salyan Total Post 1 Hospital 1 1 1 1 4 2 Health Post 10 2 11 10 33 3 Sub Health Post 36 35 40 36 147 4 Primary Health Centre 4 0 0 1 5 5 District Ayurvedic 2 0 1 3 6 Hospital 6 Private Hospital 0 0 0 0 195
(Source: District Profile, 2001)

2.5.5 Educational Institutions A total of 1412 educational institutes of different levels were running in the four districts. Categorically, there were 5 colleges,18 higher secondary schools, 169 secondary schools, 160 lower secondary schools and 1055 primary schools. The information indicated that the mid-western cluster of the study area had good educational infrastructures. The detailed information regarding the educational institutions is presented in the following table. Table no. 15: educational institutions in the district School/ college Dang Pyuthan Rolpa Salyan Total 1 Primary school 286 235 233 301 1055 2 Lower sec. 54 34 42 30 160

3 4 5 6

school Secondary school Higher sec. school Campus/colleges Technical institute Total

83 10 2 5 440

31 3 1 0 304

24 2 1 0 302

31 3 1 0 366

169 18 5 5 1412

(Source: District Profile, 2001)

CHAPTER-THREE 3.1 Study Finding( glthf ) Federation of Community Forestry Users, Nepal (FECOFUN) selected four districts comprising Dang, Pyuthan, Salayan and Rolpa for community forestry based enterprise development in the mid-western cluster. The main reasons for selection of the districts were availability of raw material for operating an enterprise, target beneficiaries groups (poor, dalits, women and ethnic groups etc), physical infrastructure (road linkage) and communication and remoteness, possibilities of available technology, market demand, investment probability, interest of people to start the business etc. Based on the above selection criteria, numbers of potential CFUGs were selected for enterprise development. The consultant team discussed with the FECOFUN district branch, District Forest Office, Plant office, Enterprises development supporting NGO, CFUGs, other line agencies, key informants and target beneficiaries in order to identify potential forest based enterprise, raw materials required, availability of skilled manpower, financial resources and market linkage etc. Then they finalized the forest resources based enterprises. The major findings of the feasibility study in the mid-western region are described below. 3.1.1: Selected CFUGs for forest based enterprises In the study area of the mid western cluster, there were 1810 CFUGs managing 225753.02 hector of community forest and 220410 households were benefited. Out of 1810 CFUGs, 20 CFUGs were selected for community forestry based enterprises based on the developed criteria in the four districts. The names of CFUGs according to their respective district are presented in the following table. Table no.16: selected CFUGs for forest based enterprises S.N. District Selected CFUGs for forest based enterprises 1. Dang

(Source: field survey 2011)

3.1.2: Potential forest based enterprises and its prioritization The western cluster of the project was found to be rich in forest resources including the non-timber forest products. Various consultations and meetings, key informant interview and interaction workshop with various concerned stakeholders were conducted during the study period to identify the potential community forestry based enterprises. On the other hand, marketability, availability of raw materials/resources, possibility of value addition, availability of technology etc were considered in order to select the potential enterprises. Based on the above criteria, the potential forest based

enterprises were identified and prioritized through discussions with focus groups, key informants, community forest user group, DFO and regional level CFUG interaction workshop. The potential forest based enterprises and its prioritization in each of the districts are summarized in the following table. Table no.17: potential and prioritization of forest based enterprises S.N. District Potential Enterprises Prioritization 1. Dang I II III IV -forest nurseries V VI

2.

Pyuthan

Herbal Soap (Chiuri, Ritha)

like Timur, Churi ghee etc

I II III IV V VI VII

3.

Rolpa

Timber saw mill

I II III IV

Timber saw mill

(Source: field survey 2011)

According to the table, enterprises are ranked from I to X based on prioritization. The top ranked enterprises in each district were selected as final enterprise. The selected final enterprises are going to be operated in the first phase of the project period and other low ranking enterprises will be carried out in the next phase of the project on the basis of their rankings. 3.1.3: Selected forest based enterprises The identified potential forest based enterprises were prioritized through series of various discussions, community and regional level consultations and interaction workshops following the criteria of marketability, availability of raw materials/resources, financial availability, accessibility,

possibility of value addition, availability of technology and commitments of community. Based on prioritization of potential forest based enterprises as per table no 17, the top ranked enterprises in each district were selected as final enterprise. The selected final enterprises are going to be operated in the first phase of the project period and other low ranking enterprises will be carried out in the next phase of the project on the basis of their rankings The selected enterprises of each district is listed in the table no-18. Table no.18: selected enterprises in the study area District Selected Enterprises Remarks S.N.
1 Dang Timber Saw mill

(Source: IDS Nepal field survey 2011)

According to the above table, timber saw mill as an enterprise was selected for Dang, Salayan and Rolpa districts and herbal soap production enterprise was selected for Pyuthan district. The selected enterprises are described under the following headings. 3.1.3.1: Timber Saw Mill: The community based timber saw mill enterprise was selected for Dang, Salayan and Ropla districts through series of discussions with community and concerned stakeholders. It is considered as one of the higher potential enterprises because of the availability of rich productive forest resources in the respective districts. In Dang district, five CFUGs have jointly made plan for establishing the timber saw mill enterprise. Most of the forests of CFUGs are situated in the Terai and Churia regions having accessible Sal dominant forests. On the other hand, CFUGs also have rich financial resources as well as good linkage with local financial institutions for managing funds. Similarly, in Salayan district, collaborations were made among the five CFUGs for establishing the timber saw mill enterprise. The CFUGs are located in the mid hill area and are easily accessible from different markets of the district. The majority of forest were found to be Pines and mixed broad leaf with productive condition. In Rolpa district, five CFUGs have jointly made plans for establishment of timber saw mill.. Most of the forest areas are accessible from different markets of the district. The forest operation plans have indicated that, there are enough raw materials available for the saw mill. But, these information were not found in the detailed forest survey and hence re inventory for detail forest resources survey to identify the actual stock of the forest is necessary. 3.1.3.2: Herbal Soap : Herbal soap is one of the enterprises having higher potential in Pyuthan district due to abundance of required raw materials such as Chiuri and Ritha species in the community forests of Rajakharka, Dobilke, Raniban, Sukabangkholi and Baddanda area. The soap manufacturing enterprises have been running in the Rajkharka and Dobilke CFUGs but not for commercial purposes. The performance of herbal soap production in Rajakharka, Maranthan VDC-1 was found to be good where two farming families have been leading herbal soap production along with involvement of pro-poor people at local level, but there is a need to convert such production into commercial production. Soap weighing 80 grams had been sold locally at Rs 25.. The demand for herbal soap is very high within the district as well as outside of the district. As the soap production technology and skills which has been employed currently were not appropriate for commercial soap production, the technology needs to be improved by incorporating required technology, skills and knowledge. 3.1.4: Coverage beneficiaries A total of 4483 households of 20 CFUGs were involved in the potential community forest based enterprises as beneficiaries in the mid-western cluster of the project. It covers 27000 people within 9 VDCs. Among the beneficiaries, 2433 (9.16%) were Dalits, 13727(50.84%) were Janajatis and

10800 (40%) were of other castes. The brief information regarding involved households and their caste composition is presented in the following table. Table no: 19 coverage beneficiaries of enterprises Coverage Population Coverage N. Name of The CFUGs HH VDC Dalit Janajati Others Total 1 Ashwara 1650 806 6817 1962 9585 1 2 Mahalaxmi 933 534 503 4653 5730 4 3 Triveni 970 909 2269 2370 5548 1
(Source: Field survey 2011)

3.1.5 Status of Forest Resources The selected community forests covered 4162.38 hectors of forest area. Most of the forests are productive. Most of the CFUGs have mentioned the forest resources stock in their own operation plans. But it is not sufficient, therefore a detailed survey of the forest resources for sustainability of enterprises is needed. The brief information regarding the selected enterprise, name of involved CFUGs and respective forest covered area is presented in the following table. Table no: 20 Status of forest resources S.N Involved CFUGs Selected Area in ha Stock Increment% /ha Enterprise 1 2 3 4 5 6 7 8 Ashwara CFUG Maha Laxmi CFUG Phulbari CFUG Mayalu CFUG Triveni CFUG Nava Durga CFUG Samjhana CFUG Mahila Namuna CFUG

Saw Mill Enterprise

(Source: field survey 2011), Note: NA Means Not Available

3.1.6: Status of human resources and technologies Professional human resources and efficient technologies are major parts required for enterprise development and its successful running. Most of CFUGs of the districts had few professional and experienced human resources in the fields related to enterprise management and business sector at community level. Traditional skills and technologies such as bamboo based crafts making, furniture etc were found at the local level. Most of the local level people were engaged in making furniture as carpenters and labors. Major ethnic groups such as Tharu, Magar, Dalit and pro-poor people are still working as labors and only a few numbers of people are involved as skilled manpower at local level. The selected enterprises and information regarding related human resources and technologies in this cluster are presented in table below. Table no .21 status of human resources and technologies Selected Human resources Technologies Remarks S.N. CFUGs enterprise 1 Ashwara CFUG Timber Few skill & No new CFUG has no saw mill knowledge people technologies at experience on exist at community community level, saw mill level, easily traditional operation available of technology require manpower. available.

Maha Laxmi CFUG

Timber saw mill

Few skill & knowledge people exist at community level, easily available of require manpower.

No new CFUG has no technologies at experience on community level, saw mill traditional operation technology available.

3 4 5 6 7 8

Phulbari CFUG Mayalu CFUG Triveni CFUG Nava Durga CFUG Samjhana CFUG Mahila Namuna CFUG

(Source: field survey 2011)

3.1.7: Status of financial resources The district branches of FECOFUNs have completed the preliminary meeting and interaction with concerned stakeholders along with involvement of selected CFUGs. During this period, a common understanding was developed as well as financial commitments were acquired in terms of shares, donations and other forms of financial support from the potential financial support agencies. The required fund sources were identified and a tentative financial resources management plan was prepared among the CFUGs. Basically, the fund sources comprised of share distributions, loans and donations from the support agencies. The fund investment from share is divided into three criteria: i)CFUGs, ii)Individual/private and iii)pro-poor level. Based on the table, Dang prepared a tentative budget of 2500000/- for timber mill. Similarly, a tentative budget of 100000/-, 1000000/- and 1100000/- was purposed by Pyuthan, Salyan and Rolpa respectively for establishment of enterprise and its operation. District wise enterprises, their tentative budgets and information regarding support agencies is presented in the following table. Table no .22 status of financial resources Selected Tentative Support agencies Fund collection by S.N. Districts enterprise budget in Rs 1. Dang Timber saw 2500000/CFUGS, DFO, Investment Share mill DDC/ VDC, private distribution, Loan sectors, FECOFUN- and donation AFPNet etc
(Source: IDS Nepal field survey 2011)

3.1.8: Market centers Market is one of the major parts for successful enterprise development. In the study areas, major market centers were identified through the interactions with concerned stakeholders, key informants ,forest based market agents and entrepreneurs along with field observations. Basically, the community based enterprises were found to be more focused on the local markets. The potential identified market centers are listed in the following table. Table no .23 Name of potential market centers S.N. CFUGs Name of potential markets 1. Local level market, district headquarter-Gorahi, Lamahi bazar, Bhalubang bazar, Chanautta bazar and Butwal etc.
(Source: Field survey 2011)

3.1.9: Modality of enterprises operating The model of community based forest resources enterprises operation was finalized through interactions with concerned stakeholders, communities along with interactions with experienced community based timber saw mill owners. The model should be managed by remaining within the principles of cooperative. Basically, the enterprise should follow the principles of P4 (public, private, poor and partnership approach). Most of the CFUGs have made plans to form managerial executive body with staffs who will work on daily basis with some authority for effective and efficient operation of enterprises. In this modality, the financial share will be distributed to involved CFUGs and interested private sectors as well as to the pro-poor groups. The share of the pro-poor groups will be provided from the CFUGs itself or from other support agencies. The modality of the enterprises operating in the project area is presented in the following table. Table no .24. modality of enterprises operating S.N. CFUGs Operational modality of enterprises 1. Dang Cooperative modality and share distribution to surrounding CFUGs, formation of separate enterprise operational body with authorized
(Source: Field survey 2011)

3.1.10: Benefits sharing mechanism The cooperative based enterprises should be operated by encompassing the involvement of key members of CFUGs. The surrounding CFUGs who are interested could also be the potential members of the enterprise. The investment fund has been managed through share distribution, loan, donation from projects and other support agencies. Basically, the share has been distributed to the members of CFUGs and interested private sectors. The loan will be refunded as per rules of financial institutions. The benefits will be distributed to respective shareholders based on the invested amount of the share value. The guidelines related to fund management and benefit sharing will be prepared and operated accordingly. 3.1.11: Major stakeholder and major role for enterprises development The major stakeholders, their roles and responsibilities regarding forest based enterprises establishment, implementation, monitoring and evaluation were identified through series of various level interaction workshops. The roles and responsibilities depicted in this section are consistent with present authorities, mandates of any organizations or institutions as per the law of the country, relevant policies, government approved procedures as well as procedures approved by other competing agencies or organizations.. The major stakeholders, their roles and responsibilities is presented in the table below. Table no .25. Major stakeholder and its roles and responsibilities S.N. Name of stakeholders Major roles 1. District forest office Technical support on sustainable forest management, Coordination & linkage development for commercial enterprises development. Financial supporting as donation and coordinating role for collecting fund from other agencies. Capacity building of enterprise owner as per requirement Technical support on management plan preparation and approval and legal supporting. 2. DFCC

Planning ,Coordinating, monitoring of the enterprises

3.

DDC/VDC Coordination & linkage development for fund collection and enterprise establishment, Financial support on enterprises development.

4.

MEDEP Technical, financial, marketing, quality control and capacity development of entrepreneurs as per requirement

Small & cottage industry development Support on enterprises registration process & monitoring Office Technical skill and knowledge transfer to entrepreneurs as per requirement. Private forest based enterprises

Support on financial, market linkage and development Market survey and market competitive productions Support on market linkage and market development, advocacy on the rights of entrepreneurs etc

FNCCI

Agro-forest Cooperative

based upport on financial and marketing of products

FECOFUN (centre & district branch) Support on coordination and linkage development with different concerned agencies, good governance practices Financial support on pro-poor based enterprises establish, awareness development and advocacy, capacity building Forest based projects Support on skill and knowledge development, enterprises registration process, financial support etc

10

(Source:Field survey 2011)

3.1.12: Constraints The constraints and challenges of forest resources based enterprises were identified through series of consultations and meetings, interactions, key informants interview and focus groups discussion during the study period. The major constraints which were identified are briefly listed below. Lack of knowledge and technologies related to forest resources based enterprise development at community level. Lack of the awareness among CFUGs regarding forest resources based enterprises establishment.

The policies are still not clear among the community forest users groups for establishing enterprises e.g. distance delineation for enterprises established within CF etc. Higher competition with private entrepreneurs in the marketing sector. Issue of quality regarding community level products. Inadequate availability of raw materials from the forest at one time from one area. Poor access of communities in the financial institutions for commercial enterprise development. Less accessibility in the areas with rich forest resources due to difficult geographical topography. Lack of the knowledge and skill regarding the market and marketing process as well as market linkage development. Unstable market and lack of establishment of proper market networks for flowing the market information to producers. The good governance practices have not been practiced on a regular basis in CFUGs. Lack of the knowledge and skill regarding sustainable forest management in the CFUGs. 3.1.13: Opportunities The opportunities related to forest resources based enterprises were identified through various consultations and meetings, interactions, key informant interviews and focus group discussions during the study period. The major opportunities are briefly listed below. Forest resources based enterprises establishment at local level such as timber and non-timber based enterprises. Proper utilization of the timber and non-timber forest resources at local level. Proper utilization of unused (byproducts of timber) products of timber for making small furniture and agro-forest related tools etc. Development of cooperatives and easy fund mobilization facilities at local level. Employment opportunities via pro-poor based green jobs at local level. To create investment opportunities on diversified enterprise establishment at local level for the interested private and community level investors. Sustainable forest management through proper use of forest resources. To establish cooperatives at local level in order to have an easy access to the fund at community level. CHAPTER 4 4.1 Conclusion and recommendation 4.1.1 Conclusions The study of the potential community forestry based enterprise in the mid-western cluster of the project was carried out by a team of consultants on behalf of IDS Nepal based on the TOR provided by FECOFUN center. The conclusion was reached on the basis of findings of study conducted by consultants using participatory tools and techniques as well as published and unpublished secondary information. The conclusions of the study are presented below. The potential forest based enterprises were identified and prioritized in each district by using various participatory tools. In this cluster, over fifteen community forestry based potential enterprises were identified with required resources. Out of them, timber saw mill was selected by Dang, Salayan and Rolpa districts. Similarly, herbal soap production was selected by Pyuthan district. The enterprises will operate within cooperative modality by following the poor, public, private and partnership (p4 principles) approaches. In the 20 CFUGs, a total of 4162.38 hectors forest were allocated as resources for the enterprises.

Most of the forests were found to be productive and also rich in non-timber forest resources. As per the availability of the forest resources, selected timber saw mill and herbal soap enterprises were found to be more appropriate in this cluster among others identified enterprises. CFUGs have little skill, knowledge and experiences regarding the timber saw mill operation, herbal soap production and business sector. But, traditional skill and knowledge especially on bamboo hand craft making and furniture are still in existence. However, these professional experiences and skilled human resources are not enough for commercial enterprise establishment. Therefore, there is a need to develop capacities regarding enterprise establishment and skilled human resources at community level for establishment of sustainable enterprises. Potential challenges and opportunities were identified during the operating period of enterprises. The major challenges were unclear policies in case of CFUGs for establishing enterprises, higher competition with private timber entrepreneurs, issues of quality of locally produced goods, inadequate awareness, unstable marketing, less awareness on value addition of the product, lack of coordination with district forest office and other relevant stakeholders, difficulty in renewing constitution and forest operational plans, lack of clear policies to market the products especially NTFPs. On the other hand, there are lots of the opportunities to establish forest resource based enterprises and to create green jobs through maximum utilization of the forest resources. Lack of knowledge, skill and experience on the selected enterprises operations were found. Therefore, there is a need to simultaneously carry out capacity building, technology transfer and sustainable forest management. 4.1.2: Recommendation The study identified over fifteen various types of potential enterprises and prioritized them in each district. Based on the primary level study findings, review of secondary information and field observations, following recommendations are made regarding the feasibility study of potential forest based enterprises in the cluster of Midwestern region. The marketable community forest resources based enterprises were identified and prioritized. The timber saw mill was selected by Dang, Salayan and Rolpa districts and herbal soap enterprise was selected by Pyuthan district. Regarding these enterprises, communities lack operation level skills and proper business plan. Therefore, preparation of business plan in a proper way and capacity building of local communities for successful running of enterprises is recommended. The timber saw mill will require more forest resources to operate commercially for a long term. But most of the CFUGs dont have detailed forest resources inventory which includes information regarding the NTFP in the forest operation plan. Therefore, an in-depth survey and analysis of forest resources is required for sustainable business of the timber saw mill. In most of the CFUGs, provisions regarding enterprise establishment are not incorporated in their Forest Operational Plan (FOP), therefore it is recommended to include enterprise establishment provision in forest operational plan through review operation plan. The enterprises of timber saw mill and herbal soap requires skillful human resources for commercial production but most of the CFUGs lack skilled manpower, therefore capacity building of local community is recommended.

Most of the enterprises will be operated using cooperative concept with the involvement of surrounding CFUGs and private sectors. In this management system, clear operational policies and strategies are required for the successful operation of enterprises. Therefore preparation of clear operational strategies separately for each district is recommended.

In most of the CFUGs, cooperatives were not found to be established during the study period therefore establishment of cooperatives at local level as per the requirements of the community is recommended. Most of the CFUGs lack awareness regarding market and marketing proceedings, linkage development and flow of market information. Therefore, establishment of proper market channel and linkage for regular flow of the market information is recommended. Most of the CFUGs don't have enough skills and knowledge on managerial sector especially on business management required for long term running of enterprises. Therefore capacity building regarding managerial sector is recommended. In the western cluster (Dang, Pyuthan, Salayan and Rolpa districts) 16.95% of Dalits, 36.57% of Janajatis and 59.50% of very poor and poor households were found to be involved in the community forest user groups as beneficiaries. Therefore, development of the pro-poor and socially inclusive commercial enterprises in the target areas is recommended. The three districts have selected the timber saw mill enterprise where huge quantities of trees will be required for long term running of enterprise. Therefore analysis of forest stocks of involved CFUGs and provisions for agreement regarding the supply of raw materials with them is recommended. The enterprises will require large quantities of raw materials in order to operate commercial business sustainably by utilizing the forests. Therefore sustainable forest management with capacity building of the local forest user groups is strongly recommended. All enterprises are related to forest resources which can have negative implications on environment at the local level. Therefore, interventions by utilizing IEE or environment protection measures are recommended.

THANKs TO ALL CONCERNs