Storm Erupts Over Nepal's New Forest Products Tax

By Deepak Gajurel

KATHMANDU, Nepal, September 25, 2003 (ENS) - Community forest conservation has renewed degraded forests and generated funds for community development in many regions of Nepal, but a new government policy has shaken the foundations of the successful community conservation effort.

Community Forest Users Groups (CFUGs) across the country were appalled when they learned last month that they will now have to share 40 percent of the annual income generated from the sales of forest products with the cash-strapped government.

Shocked by the government's announcement the Federation of Community Forestry Users' Group Nepal (FECOFUN), an umbrella organization of community forestry user groups, summoned a two day consultative meeting this week to decide what steps should be taken.


Himalayan mountain forest in Nepal (Photo courtesy FAO)
Some 60 stakeholders from different parts of the country took part in the consultative meeting. User group members vowed that they would defy the government's order and take any actions required to prevent the intervention.

Some members, disturbed by the frequent interventions of the government, put forth more radical views and demanded that all trees be destroyed before the forest was handed over to the government. They proposed to launch an agitation, violent if necessary, to assert their inherent rights.

But the majority of the speakers stressed the need to take more cautious, sober measures to protest against the government's new policy.

The consultative meeting declared that the imposition of a 40 percent tax was against the spirit of the constitution, the law and by-laws, and called for the immediate removal of the tax.

President of the FECOFUN Bhim Prasad Shrestha told the meeting, "If the government will not listen to our peaceful protest, we will bring our members to the streets of the capital. We have already conveyed this message to the prime minister and other officials concerned."

Despite intense pressure from all quarters, the government refuses to withdraw the additional taxes it has imposed upon user groups. The government needs resources for development activities, and the government decision to ask for a 40 percent share of the income is not illegal, said an official at the Ministry of Forests.

Trying to calm the protests, a government statement said that the 40 percent tax will be applicable on the sale of forest products only to parties other than the members of the Federation of Community Forestry Users' Group.

But the forest users are not satisfied with the amended government decision. "This is meaningless," says Mahesh Sharma, a forest user of Dhading district. "It is illegal to impose any tax on community forests."

"Even if the government were to revoke its decision, it would take decades to rebuild the confidence among people in community managed forests," said Tribhuwan University ecologist Dr. Narendra Khadka.

Speaking at the consultative meeting, Bhola Prasad Bhattarai, general secretary of Federation of Community Forestry Users Group, said, "If the government does not withdraw its decision, forest conservation will suffer. The government must realize that forest preservation is impossible without the participation of the people."

Promoted and supported by western donor countries including the United States, Germany, United Kingdom, Australia, Denmark, Switzerland and others, community forestry is based on the concept of management and conservation of the forest by the local communities.


The Machhindranath Community Forest was government managed 11 years ago, people had free access and the resources were being depleted. It is now being restored by The Nepal Coppice Reforestation Project. (Photo courtesy Rothamsted Research)
Rural people are fully dependent on forest resources. More than 70 percent of the country's energy demand is met with forest resources.

Once the government hands over a national forest adjoining a settlement to the local community, the local level community forestry user group takes on all the responsibilities involved in managing and preserving it, including the annual harvest of timber.

With the income derived from managing their forests, communities are building health posts and classrooms for schools, paying salaries to schoolteachers, constructing gravel roads, organizing training on income generation activities, and supporting the poorest members of their communities.

In 1968, some experts had forecast that Nepal would turn into a desert if the present level of deforestation continued. This prediction has, however, been proved wrong by the conservation efforts made by the government and the forest communities.

Nepal's forested areas, which were on the verge of extinction, have revived, thanks to financial and technical support from donor countries and the joint participation of government and local communities.

Barren mountains and plains have been transformed into lush green forests. Most landslide prone mountains are today covered by green trees and the forested areas continue to increase. Spotted leopards, bears and other wild animals have become a common sight in the rural areas of Nepal.

People face fewer problems in getting firewood, fodder and other forest products.

Nepal's achievement in community forestry has been replicated beyond the national borders. Countries including Ghana, South Africa and Indonesia are following Nepal's footsteps in community forestry.

Acknowledging that resources conservation is not possible without the active participation of the general public, the Forest Master Plan of 1989 categorically states that 61 percent of the total forest would be handed over to the local communities.

According to the Forest Act and Forest Regulations, the forest land remains under government ownership, and the communities are given the overall management authority and ownership over the forests and their resources.

Appropriate procedures are spelled out in these legal frameworks for handing the forest patches over to the local people. Likewise, management procedures and guidelines to be followed by users of the community forest are also spelled out in these legal instruments.

Forests cover about one-third of the total land area of Nepal. Forest and shrub land together cover 39.6 percent of the country's total land mass.

The government's decision to impose the 40 percent tax directly affects about one in every three people in Nepal. There are currently 12,700 community forestry user groups in the country, managing a total of 10 million hectares of forested areas. These user groups are made up of 1.4 million households, totaling seven million people out of Nepal's total population of 25 million people.