Contribution of Leasehold Forestry in Reducing Poverty Among Participating Households in Nepal

Abstract

"The paper analyzes the role of leasehold forestry (LHF), an innovative forest management regime being experimented in the hills of Nepal with the objective of reducing poverty among participating households. LHFs are degraded public forest lands granted on a 40 years lease to identified poor households with the purpose of forest regeneration and raising forest incomes. Using micro-data collected from some 508 LHF households and 61 control households, the contribution of the LHF in reducing various dimensions of poverty and inequality has been examined. The findings reveal that LHF biomass contributed around 5 percent of household income. Though the non-LHF households with similar poverty and resource characteristics receive about one fourth less biomass flow income annually, the poverty incidence, poverty gap and severity among these two categories is not significantly different. However, among LHF households, LHF income contributed to reduce poverty incidence, poverty gap and severity by around 10, 17 and 22 percent respectively. Within the LHF households, there exists considerable inequality in the biomass income from LHF and the LHF benefit sharing was not found to be pro-poor. The study concludes that allocating land alone is not sufficient to ensure utilization and benefit flow for resource poor, socio-economically weak people as high transaction cost and lack of strong economic incentives discourage defending property right and utilization of leased forest land."