Nepal - Forestry sector review

Report No. 1952-NEP Nepal Forestry Sector Review FILE ' August 1, 1978 Agriculture B South Asia Projects Department FOR OFFICIAL USE ONLY U Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   FOR OFFICIAL USE ONLY NEPAL FORESTRY SECTOR REVIEW Table of Contents Page No. SUMMARY ....... i -vi I. INTRODUCTION ....................................... 1 II. DEFINITION OF MAIN SECTORAL ISSUES ................. The Rural Energy Crisis and its Implications for Future Fodder and Food Production ....... 2 The Problems of Soil Erosion .... .............. 6 Population Growth and Land Use Policy in the Terai ................................... 8 Reforestation of the Area of Forest Land Needed to Supply Future Domestic Demands for Industrial Wood and Scope for Inten- sified Industrial Plantations .... ........... 10 Social and Institutional Constraints to Forestry Protection and Development .... ..... 11 III. FUTURE DEVELOPMENT STRATEGY ........................ 12 Rural Forestry: The Way Ahead .... ............ 12 Expanded Training Programs .... ................ 14 Restructuring of the Forest Service .... ....... 15 Definition of Future Planting Targets .... ..... 16 Budgetary Implications and Economic Justification ................................ 18 Agricultural Settlement Policy and Land Use Development Strategy in the Terai .... ....... 19 Protection Forests and Wildlife Resources ..... 22 IV. TOWARDS A FORESTRY DEVELOPMENT PROGRAM .... ......... 23 Projects Suitable for External Assistance ..... 23 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  -2- Table of Contents (Cont'd) ANNEXES 1. Total Commercial and Non-commercial Energy Consumption by Types of Fuels (1974/75) 2. Energy Demand and Supply 3. The Inter-relationship Between Farmyard Manure (FYM) Production, Rural Energy Needs and Foodgrain Production 4. Bovine Population Related to Fodder, Soil Fertility and Cultivation Situations 5. Estimate of Tree Fodder Requirements 6. Fuelwood/Fodder Trees Suitable for Planting or Trial 7. Allocation of Forest Land in the Terai 8. Ministry of Forests: Proposed Organization Chart Forest Department Staff and Budget 9. Summary of Indicative Plantation Program Requirements for the Hills for the Period 1980-2000 10. Rural Afforestation Program for the Hills 11. Economic Analysis of Community Forest Establishment 12. Summary of Main Aid Agency Projects in the Forestry Sector 13. Economic Returns from Alternative Investments in the Terai 14. Panchayat Forest Legislation MAP S 13458 Altitudinal Zones and Forest Cover 13459 Forest Land in the Terai, and Location of Wood-using Industries (Eastern Terai) 13460 Forest Land in the Terai, and Location of Wood-using Industries (Western Terai) 13'i Politic. D1-iviqions a nd Location of Forest Nurseries 13462 Population Density Census, 1971  NEPAL FORESTRY SECTOR REVIEW SUMMARY i. The main objective of this report is to assist HMG in reviewing the role that the Forestry sector should play in the national development strategy. Increasing population density, scarcity of agricultural land, maintenance of livestock herds which significantly exceed the carrying capacity of the upland pastures and increasing pressure on forest resources to meet the basic needs of the rural populace for fuelwood, fodder, poles and building materials have resulted in a reduction by 25% of the forest area in the Hills over the last decade. This in turn has caused considerable problems of soil erosion, loss of potential agricultural land, drying up of mountain streams and severe downstream flooding and sedimentation. About one million ha of Hill forests have been completely destroyed during the last decade and recent studies by a Rural Energy Sector Study Team from the University of Tribhuvan in Kathmandu indicate that increasing population pressure and fuelwood and fodder demands could result in the complete disappearance of all the accessible forest in the Hills in the next 15 years and in the Terai in 25 years unless reforestation programs are initiated on a massive scale. The Rural Energy Crisis ii. Due to the obvious deterioration of the forest resources and increasing soil erosion, it is essential that HMG's development strategy fully considers the possible future long-term consequences of failing to deal effec- tively with the current rural energy, fodder and soil erosion crises. The mission's calculations indicate that an afforested area of about 1.3 million ha of plantations by the turn of the century will be needed to meet rural and urban demands for fuelwood, to supply the manufactured forest products needed for economic growth (e.g., construction timber and paper), to make a substan- tial contribution to tree fodder requirements, and to make a significant impact on current problems of soil erosion. If such reforestation programs are not implemented, the rural populace will be forced to burn increasing quantities of dried animal dung, agricultural residues and livestock fodder to meet their basic heating and cooking needs. The result might lead to a decline in soil fertility and foregone foodgrain production of over one mil- lion tons per year by the year 2000. iii. While additional administrative and financial resources will have to be allocated to reforestation programs, the key to resolution of the pre- sent situation will depend primarily on HMG's ability to mobilize coopera- tion of people at village level in tree planting. HMG has already taken an important step in this direction with the new Forestry Act, which makes provision for forests to be protected, controlled and exploited by the Village Panchayats. The pilot experiments carried out by Government and external aid agencies have already shown that where small forest nurseries have been started to provide local people with a ready supply of tree seed- lings, it has been possible to gain local support for reforestation programs.  - ii - iv. As the technical package for establishment of forest fodder and fuelwood trees based primarily on indigenous species is already known to the rural populace, it is evident that there is enough already known to justify HMG translating these pilot experiments into a national program of rural reforestation. The major issues, are - how quickly can this be achieved and what action can the Bank Group and other outside agencies take to assist HMG in strengthening its rural forestry programs? Population Pressure and the Scope for Further Agriculture Settlement in the Forest Areas of the Terai v. Although HMG started land settlement schemes in the mid-1950's in an effort to control spontaneous settlement in Government forests (following large-scale malaria eradication in the Terai), it has played a minor role in settlement. Of an estimated 400,000 migrants from the Hills in the decade of 1965-74, only about 8% were settled by Government on 9,000 ha. The balance settled spontaneously on 120,000 ha of forest land in the Eastern, mid-Western and Inner Terai. Limited expansion of organized settlement has been due to difficulties in obtaining a decision on release of forest land for settlement, the time it has taken to introduce organized logging and sawmill operations to deal with the volume of timber being removed prior to settlement, the fact that timber production from settlement schemes exceeds domestic market require- ments and has therefore necessitated the development of export markets, and the limited institutional capacity of Government agencies to handle large- scale settlement projects. vi. One of the major issues is definition of the forest areas to be alienated to agriculture. The difficulty arises from conflicting land use data. For example, the Bank Group's 1974 Agricultural Sector Survey team reported a discrepancy of I million ha in estimates of the area of cultivable land. Estimates made by the IDA appraisal team of the Terai Settlement Project in 1974 concluded that about 250,000 ha of flat forest land on soils of good agricultural potential 1/ were suitable for agricultural settlement. Since then, the Ministry of Forest Resource Survey teams have made their own survey of the Terai forests and have classified only 60,000 ha as being alienable for agricultural settlement. As the Forest Department estimate is based primarily on the disposal of small forest parcels isolated from main blocks, impractical to exploit commercially, it is probable that this figure is too low; the higher figure of 250,000 ha has therefore been retained for the purpose of this report in anticipation of the results of a Canadian Land Use Survey in progress in the Western Region which, in course of time (2-3 years), will provide a more reliable basis for land use planning. vii. The short run policy issues are to define more accurately the areas of potential agricultural land in forest areas and also to resolve inter- Ministerial disputes concerning land allocation. The longer term issue is the extent to which settlement of forest lands can significantly contribute to relieving population pressure. 1/ Excluding the sandy, gravel "Bhabar" soils which underlie the forests of the Terai foothills.  - iii- Recommendation viii. Against this background it is recommended that HMG forestry devel- opment strategy give priority to a national rural reforestation program which should aim at establishing 640,000 ha of village woodlots in the Hills and 400,000 ha in the Terai, over the next 20 years. The total cost of such a program would amount to US$197 million in 1977 prices (including staff salaries, nursery establishment and operating costs, and cost of restructuring Nepal's forestry training facilities, but excluding labor costs for plantation establishment). Other forestry investments required to satisfy domestic requirements for urban fuelwood (133,000 ha) and industrial wood (160,000 ha) would amount to US$68 million. A large percentage of total cost (85-90%) will be in local currency. This total of US$265 M is a formidable investment program for Nepal whose annual Government budget amounts to US$235 million (1977/78). Thus, its phasing will have to be carefully determined in the context of Nepal's overall development priorities. ix. Implementation of the long-term rural afforestation program which would simultaneously ensure improved fuelwood and tree fodder supplies would also play a significant role in protecting steep hillsides from further ero- sion. In particular such a program should give priority to restoring the vegetative cover of eroded and abandoned agricultural land and reforestation of gullies. A complemnentary soil conservation program would need to be implemented in parallel 1/. An initial effort in this direction is being carried out by the Department of Soil and Water Conservation for which HMG has already requested external assistance and USAID is now preparing a pro- ject which will provide the necessary technical assistance and funding. It will be essential that the two programs of afforestation and soil conservation be closely coordinated. X. The social and institutional constraints to implementing the pro- posed large scale rural afforestation program are formidable and the proposed strategy fully recognizes the magnitude of the problem. Institutional con- straints relate primarily to the critical shortage of forestry trained man- power, and to the fact that the traditional forestry training received by existing government officers has fostered pre-occupation with forest reserva- tion and long-term management objectives and adherence to extensive natural forest management systems which are inappropriate in the light of Nepal's present needs. Social constraints relate to the ever increasing population pressure on forest resources, to a possible lack of motivation for forestry development of a rural population whose most basic needs are not satisfied, and finally to the fact that the rural population perceive the government forestry officers as a "police force" whose role has been to keep them out of the forests. xi. The first phase of the rural afforestation program must therefore be directed towards removing these constraints. A first three to five-year 1/ Consideration of soil conservation measures other than afforestation are not included in this proposed forestry investment program.  - iv - project is therefore recommended with two main objectives: first to promote the forestry program at the village level in order to secure the cooperation of the local people who will be responsible for establishing their village plantations under the leadership of one Forestry Village Extension worker; and, secondly to build up the staff resources and organization needed to pro- vide the technical assistance and support services to the villagers. HMG has taken specific policy measures in this direction before seeking external assistance. These include: (a) a positive statement by Government from the highest possible level, of its recognition of the implications of the current rural energy crisis and soil erosion problems and its deter- mination to assist people in the rural areas to overcome these problems. (b) decision to include the first rural forestry development pro- gram for 1980-85 in Nepal's Development Plan (US$15 million). (c) legal provision to transfer the ownership, management and pro- tection of the newly established village forests to the wards and panchayats. 1! (d) legal provision which allows the Forest Department gradually to entrust the management and protection of existing public forests with the wards and panchayats, subject to the results of various experimental approaches now being initiated in the Hills. 1/ (e) decision to reorient and strengthen national training programs for both professional and technical foresters. (f) establishment of a forestry preparation cell 2/ within the Ministry of Forests with responsibility for formulating the rural forestry program, coordinating various forestry projects within the overall development program, and pre- paring a phase one project for Bank Group financing and further suitable projects for financing by the Bank Group and other donors. (g) decision to establish, when appropriate, a Village Forest Unit (VFU) within the Ministry of Forests with responsi- bility for implementing the program. xii. As a result of these policy decisions, it is now considered appro- priate that preparation of a first phase project should be initiated in the fall of 1978. Components could be: 1/ Extracts from the relevant Forest Legislation are in Annex 14. 2/ Four officers have already been appointed to the preparation cell.  v (a) Initiation within the Hill Divisions of surveys of panchayats and wards which would be agreeable to the selection and demarcation of small areas of land which would be set aside for afforestation and brought under intensive man- agement and protection by the villagers. (b) Initiation of the development of a national network of forest nurseries at both ward and panchavat level as needed to achieve a sustained seedling supply. (c) An intensive program of extension training based on the principle of selecting con,muiLy leaders at the village level for short courses in simple nursery and tree plant- ing techniques. (d) Training of professional forestry graduates, rangers and foresters, including construction of new training facili- ties where appropriate. (e) Subsequent to the above, initiation of village planting programs and protection of remaining forest areas. (f) Intensive forestry research into fast growing tree species. xiii. This first phase would lay down the foundation for a series of coordinated projects to be implemented over the following fifteen years, in order to achieve a total planting target of 180,000 ha in the period 1985-90, 330,000 ha in 1990-95 and 505,000 ha in 1995-2000. Implementation of these projects, which would be area specific, could be carried out with the assistance of various donor agencies. xiv. It is also recommended that HMG should give high priority to com- pletion of its land use survey for the whole Terai with Canadian and possibly other aid agency assistance, as the survey will enable a clear definition of the forest areas of the Terai (estimated at 1.6 M ha) and an assessment of potential land use. When the results of this survey are available, the following should be carried out: (a) Definition of the limits of the Protection Forest required for the Churia Hills and the adjoining Bhabar Zones (esti- mated at 950,000 ha). (b) The planning of the orderly clearance, settlement and conversion to agriculture of all forest areas of the Terai wherever soils are suitable for agriculture (esti- mated at 250,000 ha), since on economic grounds as well as on social grounds there are co-ipelling reasons for Riving high nrioritv for aaricultural settlement in these areas. This would also allow the Forest Depart- ment to make more effective use of its administrative  - vi - resources by concentrating its protection and develop- ment efforts in areas clearly destined for forestry over the long run. (c) The planning of intensive forest management for the remaining production forests, including conversion of natural forest to plantations of fast growing species in order to ensure the domestic supply of urban fuel- wood and industrial wood. An estimate of 273,000 ha would be needed by the year 2000. (d) Other forest areas would remain as national parks and wildlife reserves (approximately 100,000 ha). xv. Concerning the longer term issue of the potential of the forest lands to relieve population pressure, it appears that the forest areas are only a partial solution to future population expansion. Assuming an average of 1.5 ha per family, the Terai forests could absorb a further one million people. Since the population is expected to grow from its present level of 13 million to 20 million by the year 2000, the forest areas of the Terai could absorb only about 15% of this increase. Still this would be no little achieve- ment and HMG should consider ways and means of overcoming the institutional problems which have plagued organized settlement activities, and of regulating spontaneous settlement which is wasteful in terms of suboptimal crop yield and wasted forest resources. In the short term, one way of speeding up settlement operations would be to revert to selling logs rather than lumber. This is recommended since the profitability of selling sawn timber from high value logs such as Sal is questionable at the present time. In the long terms the recommended expansion of Nepal's forestry training facilities should remove the most fundamental constraint to a rapid implementation of land clearing programs, which is the shortage of adequately trained staff in the Timber Corporat ion. xvi. In view of the limited settlement opportunity in the Terai, develop- ment strategy should clearly be directed towards providing the people with an alternative to further encroachment into marginal forest areas. The key ele- ments of such a strategy lie in other sectors than forestry. They include improving access into the Hills, increasing agriculture productivity through wider distribution of improved seeds, fertilizer, credit and other inputs, strengthening extension and marketing, increasing the irrigable cropping area (estimated potential at least 0.8 million ha), upgrading of livestock production, increased use of fodder crops, diversification of agriculture cropping with emphasis on labor intensive cash crops, increasing industrial development, and effective family planning.  NEPAL FORESTRY SECTOR REVIEW I. INTRODUCTION 1.01 A Bank Group mission 1/ visited Nepal in November/December 1977 to assist HMG in formulating a revised forestry development strategy, to address increasing problems resulting from deforestation in the Hills and land pressure in the Terai, also with the supplementary objective of identifying projects in the forestry sector suitable for external assistance. This mission followed up on the conclusions and recommendations of a Bank Agricultural Sector Survey carried out in 1974, which described the main features of the Forestry sector including the location and extent of Nepal's forest resources and forest industries, existing organization and management capacity, domestic and export market prospects for forest products, levels of budgetary allocation for forestry and proposed development plans. Since the basic background informa- tion on this sector has not significantly changed since 1974 and can be referred to in this previous report 2/ this sector review proceeds straight to more detailed analysis of the current issues and to a discussion of future development strategy. II. DEFINITION OF MAIN SECTORAL ISSUES 2.01 In reformulating its forestry sector development strategy, HMG is currently facing five main issues: (a) The rural energy crisis and its implications for future fodder, livestock and food production. (b) Formidable problems of soil erosion in the Hills and the adverse impact of erosion on agriculture and water supplies. (c) Increasing population pressure on forest lands and related land use policy issues on the Terai. (d) Retention of a sufficient area of forest land to ensure future domestic industrial wood supplies. (e) Social and institutional constraints to the implementation of effective forestry protection and development programs. 1/ Consisting of J. S. Spears (Mission Leader) and I. Girardot-Berg (Agricultural Economist)(IDA), Sir Roger Swynnerton (Consultant, Agriculturist) and G. Devitt (FAO, Forester). 2/ Agricultural Sector Survey of Nepal, IBRD Report 519a-NEP, 20 December 1974.  - 2 - The Rural Energy Crisis and Its Implications for Future Fodder and Food Production 202 Because of population pressure, increasing domestic demands for fuelwoo-d and focdder and the effects of settlement of people from the Hills in the forest lands of the Terai, the total area of forests in Nepal declined in the pEriod 1964-75 from about 6 million to 4.5 million ha, i.e. by about 25%. RecenL studies carried out by various Government and other agencies indicate that continued encroachment into forests for fuelwood, fodder col- lection and agricultural settlement is inevitable and that the accessible forests of the Hill areas could disappear within 15 years and those of the Terai within 25 years unless large scale afforestation programs are initiated in the next five years. 2.03 Overshadowing all other forms of wood use in terms of volume and forest area requirement is the demand for fuelwood which in the rural areas accounts for over 95% of all wood consumption. For the country as a whole fuelwood also accounts for 87% of all energy consumption (Annex I). A recently completed Energy Strategy Study 1/ which investigated all alternatives for meeting future energy demands to the year 2000, including improved end use efficiency, bio-gas, solar energy, wind, geothermal, hydro-electric, coal, lignite and other sources, concluded that in the rural areas, wood fuel will remain the principal source of energy for as long as supplies last. In order to sustain future supplies in the Hills at the forecast level of rural energy demand to the year 2000, the rate of afforestation would have to be increased from the current level of less than 5,000 ha a year to over 80,000 ha a year to achieve a total area of about 0.8 million ha over the next decade, a target which is clearly unattainable in the short run because of institutional and sociological constraints, but which might be attainable over a 15-20 year period. If it proves possible to protect part of the remaining natural forest cover (mainly in the Western Region) this reforestation target could be reduced to about Qo6 million ha by the end of the century. 2.04 HMG's current development strategy needs to be modified to deal with this impending rural energy crisis and with its possible impact on future fodder availability, livestock and food grain production and human nutrition. The alternatives, other than afforestation, for meeting future rural energy needs, cited above, can at best only meet about one third of total rural energy requirements 2/ (Annex 2). Destruction of the accessible forest areas, if not compensated by afforestation programs on an appropriate scale, on land unsluitable for agriculture, will force the rural population to burn increasing 1/ "The Energy Sector" A study prepared by the Energy Research and Devel- opment Group of the University of Tribhuvan, Kathmandu, November 1976. 2/ And this may be an over-optimistic assumption because it will depend c-', Pdm-'ir)n in the rurnl areas of more efficient woodburning stoves and resolution of technological problems of operating small scale bio-gas plants in the colder upland areas.  quantities of either livestock fodder or animal dung in order to maintain minimum heating and cooking needs. In some areas this process has already commenced, the quantities consumed are still relatively small (about 150,000 tons of fodder and 100,000 tons of dried animal manure in 1974/75), but they could reach alarming proportions beyond 1985, if the present rate of forest destruction continues. Preliminary calculations indicate that some time between 1985 and 1995, the annual burning of livestock fodder and animal manure could rise to more than 8 million tons (Annex 3). This represents foregone production of over 1 million tons of foodgrains (equivalent to about 25% of current foodgrain production) and significant quantities of livestock products, particularly milk. If this amount of foodgrain had to be imported, the net foreign exchange drain would exceed US$100 million a year. This probable impact of deforestation in the Hills on future food production is a matter of critical concern, in a situation where according to recent Bank studies 1/, about 60% of the children in the Hills are already below normal weight, height, or both, as a result of undernourishment and malnutrition. In many areas, average farm size is already down to a level which at best can only ensure subsistence, with little prospect of generating surplus cash income for purchase of essential fuel requirements. 2.05 A clear appreciation of the interdependence of forestry, fodder and livestock and arable crop output is fundamental to devising an appropriate forestry development strategy for the Hills. These interrelationships have been summarized in the diagram on page 4. 2.06 Livestock create an inexorable demand on forest resources for forage, grazing and bedding and on cultivated lands for crop residues. In return they do or should help to meet human protein requirements by means of milk and meat, they should meet the farmyard manure (FYM) requirements of the farmer if well husbanded, they should provide the draught power for arable cultivation and they should contribute to farm income by production of sur- plus milk, meat and wool products. Major limitations on their productivity include malnutrition due to stocking rates beyond the capacity of the land to feed, nutrient imbalance from farm production and social and religious taboos on slaughter of cattle and female buffaloes. 2.07 lIaving regard to the pressure on resources and, in the present context in -which forests and trees provide significant quantities of green forage, grazing and bedding, it would appear that, to meet the requirements of the rural population, particularly in the Hills, within the constraints of current fodder production from arable, grazing and forest lands, a bovine herd 20% to 30% smaller than present would serve farmers' needs adequately. This wouli also permit numbers to be brought into better ecological balance (Annex 4). This would be achieved without reducing the numbers of sheep and goats. Nevertheless, the prospects of achieving a significant reduction in stock numbers in the light of current sociological and religious attitudes 1/ See IBRD Appraisal Report on Nepal Rural Development Project Credit 617-NEP in which it was estimated that farm food production in the project area provided a daily adult food intake of 1700 calories compared with normal daily subsistence needs of 2600 calories per adult.  - 4 - INTERRELATIONSHIP BETWEEN FIREWOOD, FODDER AND FARMYARD MANURE LIVESTOCK AND ARABLE CROP OUTPUT "Community" owned pro- Farm resources Off-farm duction resources interactions Homestead Home fireNOOd area industry Marketed goods Forest compost land Fuelwood \ ~~~~manure\ feed \(/uel)Fodder and services manure Uln / (fertilizer) Ucrops \Fodder Purchased goods Draft trees Ilivestock/\ and services feed feed \ Grazing Manure\ land Lowland paddy Conceptual model of a Nepal hill farm production system Source: A Study of Hill Agriculture in Nepal: The Rockefeller Foundation Team; April 1976. World Bank - 18709  - 5 - appear slim and, for the purpose of this report, it has been assumed that livestock herds will remain at least at present levels over the next two decades. 2.08 Just as the establishment of fuelwood plantations for the rural communities to replace the denuded Hill forests is essential to retain FYM and crop residues in the farming cycle, equally so is the need to expand and improve the various sources of livestock fodder. These include increas- ing the production of on farm fodder, e.g. by planting legumes as an integral part of arable crop rotations, by making more effective use of crop residues, e.g., rice straw, by planting of fodder legumes and grasses in mountain pastures and the conservation and planting of fodder trees. 2.09 The Mission's preliminary calculations indicate that livestock in the Hills and Mountains depend on the grasslands and forests for about 74% of their feed (32% in the Terai). Since, with overgrazing and lack of any grazing management system, grass growth ceases within a month or two of the cessation of the monsoon rains, livestock are almost entirely dependent on tree fodder and forest forage for seven or eight months of the year, from November to June. Because of this and rising fuelwood demands, large areas of former tree covered land have been so cut back that fodder regeneration is limited. 2.10 In many areas forest fuelwood and fodder sources are becoming too remote for available family manpower to collect, often at a time when men of the family are obliged to be absent seeking supplementary income in employment in the Terai or India. Already in some villages (Table 1), households may devote an average of 15 man days per month to fodder and 11 man days to fuel collection, time better spent in improving farm operations, on farm soil conservation (e.g. maintenance of terraces), developing alternative sources of fodder, planting up and managing productive fodder trees within easy reach of the homestead, participating in village woodlot development or gaining further income from employment. Table 1 Rasuwa - Nawakot Rural Development Project Family Labor Input (mandays per month) Variation between Collection Men Women Children Total Villages Fodder 4.3 7.7 3.0 15.0 3.3 - 21.6 Firewood - - - /a 11.0 4.7 - 19.1 Water 1.8 5.3 0.7 7.8 1.6 - 23.7 /a Breakdown not available. Source: By courtesy Lars Birdegard: October 1977.  - 6 - 2.11 The mission's calculations (Annex 5) suggest that a total refore- station program for the Hills of 0.6 million ha by the year 2000 (para 2.03) could also supply a substantial portion of tree fodder requirements provided that use is made of appropriate dual purpose species (i.e., species which combine the characteristics of fast growth, good fuelwood qualities, and foliage suitable for animal feed - Annex 6). Alternative sources of fodder need therefore to be developed; if fodder trees were to supply the balance, a fodder tree planting program would still be needed of 80,000 ha in the HilLs and of 50,000 ha in the Terai. The Problems of Soil Erosion 2.12 Natural erosion is estimated to account for half the erosion 1/ in the Hills and is partly a result of the exceptional heavy monsoon rainfall patterns prevailing in these Upland areas between July anrd September. The Southwest monsoon winds cross the Arabian Sea and the Bay of Bengal, picking up large quantities of moisture on the way, turn north-westwards at the head of the Bay of Bengal and then advance along the Himalayas from east to west. Here the moisture bearing winds strike the youngest, longest and highest mountain range of the world, causing precipitation levels unequalled elsewhere. In some cross sections of the mountain range there are differences of eleva- tion of almost 9,000 meters over a distance of only 150 kilometers. The steepness of the terrain and the geological instability of the area, as well as the relatively young age of the mountains all contribute to the erodibility of the slopes, and a natural weathering process results. In the high mountains of perpetual snow and ice, glaciers scour the mountain slopes and transport rocks and boulders to the lowland valleys. 2.13 The huge amount of water run-off caused by precipitation and snow melt and the considerable speed of run-off result in a natural erosion process which is so great in its effects that it would be both technologically and economically impracticable to try to contain it by deliberate intervention. Furthermore not all such erosion has negative results if viewed as a regional phenomenon. Without such a natural weathering process there would be no fertile river valleys or plains, or, for that matter, no fertile delta area in Bangladesh. 2z14 Man-made erosion, which is responsible for about half the total erosion in the Hills, is primarily the result of the high population density, steepness of the terrain, friability of the soils, cultivation on steep slopes without adequate soil conservation measures 2/, overstocking of mountain pas- tures and overgrazing of pasture and forest lands, and the scavenging for fuelwood and fodder which has led to destruction of a quarter of Nepal's forest cover over the last decade. The results of this type of erosion are 1/ Source: FAO/UNDP Watershed Management Project Studies, 1977. 2/ Although terraces are highly developed in th-Le Ilills, the ma.npower required for their adequate maintenance is high and in many areas terraces are inefficient because not enough time is spent on their protection.  - 7 - well documented in many Government and other agency reports. In summary, the most critical problems arising are those associated with loss of top soil and potential agricultural land thereby leading to declining food crop production and secondly, the adverse effect of increased stream run-off on water supplies in the Hills, and downstream flooding effects. 2.15 Increased run-off makes itself felt in two ways: in terms of run-off quantity and in terms of run-off speed. To begin with, increased run-off quantities may temporarily exceed the capacity of down-stream river beds and thus directly cause flooding. In addition, reduced infiltration of water into the soil may reduce the groundwater level and thus lead to the drying up of springs. Mountain springs are important for the supply of drinking water and irrigation. According to studies made by a German Aid 1/ team, there seems little room for doubt that many springs in the Hill areas of Nepal have reduced their flow or dried up completely in recent decades because of destruction of the forests. In many villages visited by the team, the villagers confirmed that water now has to be fetched from further off than a generation ago. 2.16 Sheet erosion, gully erosion and landslide erosion, together with the scouring effect of the torrents and streams, produce sand and silt in huge quantities, which is transported to the Gangetic Plain. Thus the Karnali river shifts 75 million cubic meters of solid material annually, equivalent to a 1.7 millimeters layer for the whole catchment area 2/. The sand and silt are deposited when the rivers reduce their speed, i.e., when they break into the plains, thus constantly raising the river bed. According to Nepali observers the beds of the Terai rivers are rising by 15 to 30 centimeters annually 3/. This leads to flooding as well as to quite considerable shifts in the course of the rivers. The Kosi in Bihar, for instance, has shifted its course 115 kilometers westwards within two centuries, burying 15,000 square kilometers of once fertile land which provided subsistence to 6.5 million persons. 2.17 Over the last five years, Government experts assisted by FAO and other aid agencies, have developed an effective technical package for dealing with man-made erosion problems in selected areas, including terracing, tree planting along the contour in eroded areas, construction of check-dams and other measures needed to prevent further agricultural land losses, to protect water catchment retention capacity and to protect major infrastructural works such as roads, irrigation, canals and hydrodams. The economic cost and bene- fits of such works have been demonstrated at the project level 4/ and enough 1/ See "The Himalayas and Ganges Plain as an Ecological System" H. C. Rieger 1977. 2/ IBRD, Nepal Agricultural Sector Survey, Vol. III, Annex 6. p.2. 3/ HMG, Draft Proposals of Task Force on Land Use and Erosion Control, 1974. 4/ See, for example, Annex 17 of the Bank's Nepal Rural Development I Project.  - 8 - is known to justify proceeding on a larger scale. The main issue is that of defining a realistic program which could make a meaningful impact on the prob- lem. Planning and implementation of a long-term fuelwood plantation program of 0.6 million ha which would simultaneously serve to ensure improved tree fodder supplies for livestock could also play a significant role in pro- tecting steep hillsides from further erosion and restoring vegetative cover to eroded and abandoned agricultural lands. In particular, such a program would give priority to reforestation of gullies. Check dams and embankment construction, where necessary, would be carried out by the Department of Soil and Water Conservation (DSWC) within the Ministry of Forestry. DSWC is a relatively new Department (it was established in 1974) which still cperates on a very small scale. An expansion of its activities is essential. HMG has already requested external assistance for this purpose, and USAID is now preparing a project which will provide the necessary technical assistance and funding. Population Growth and Land Use Policy in the Terai 2.18 Bank and Government population projections indicate that the present population of 13 million people will increase to about 20 million by the turn of the century. The additional population to be absorbed by the year 2000 therefore, amounts to some 7 million people. 2.19 Information on available land use is poor. A reconciliation of available information by the Bank's 1974 Agricultural Sector Review mission gave the following picture: Table 2 Current Land Use Statistics Land Use Million Ha % Forests: 5.0 /a 35.5 Commercial (2.2) (15.6) Non-commercial (2.8) (19.9) Cultivated Area 2.3 16.3 Grasslands 1.7 12.0 Land Under Permanent Snow 2.1 14.9 Other* 3.0 21.3 Total Area 14.1 100.0 *Primary wasteland (barren, rocky and eroded land), built-up areas, water bodies and shrubs. /a Revised estimates made in the Energy Sector Study indicate that they raly h nnT < arlinpd to 495 million ha.  - 9 - Earlier Bank missions have noted the major discrepancies which exist in Government land use figures. The information on total cultivable area, for example, varies between 2 million ha and 3 million ha according to source of surveys. Of the Bank's estimate of a total of 2.3 million ha of cultivated land, it appears that about 1.6 million ha are located in the Terai. 2.20 Previous Bank agricultural sector a-id other surveys have clearly pointed out the development problems associated witlh increasing popDUIation and a declining land resource situation. Average farm size in the hialls has declined from about 0.7 to 0.4 ha over the last decade ardn continues to decline. Average farm size in the Terai is down to about 1_5 ha per family. Because of increasing population pressure, and scarcity of agricultural land, HMG's Forest Department has been under increasing pressure for the last decade to give up forest land for agricultural settlement. 2.21 Although HMG started land settlement schemes in the Terai in the mid-1950's, in an effort to control spontaneous settlement in Government forests (following large-scale malaria eradication), it has played a minor role in settlement. Of an estimated 400,000 migrants from the Hills in the decade 1965-75, only about 8% were settled by Government on 9,000 ha. The balance settled spontaneously on 120,000 ha of forest land in the Eastern, mid-Western and Inner Terai. Spontaneous settlement has been wasteful in terms of sub-optimal crop yield and wasted forest resources as the squatters burn the standing trees and leave the stumps in the cultivated plot. Limited expansion of organized settlement has been due to difficulties in obtaining a top level decision on release of forest land for settlement, the time it has taken to introduce organized logging and sawmill operations to deal wit-h the volume of timber being removed prior to settlement and the limited institutional capability of Government agencies to handle large-scale settlement projects. 2.22 One of the major issues is clearer definition of the forest areas which could safely be alienated to agriculture. The difficulty again arises partly from conflicting land use data. Estimates made by an IDA team which appraised the Terai Settlement Project in 1974 concluded that about 250,000 ha of flat forest land on soils of good agricultural potential were suitable for agricultural settlement (Maps 13459 and 13460). Since then, the Ministry of Forest Resource Survey teams have made their own survey of the Terai Forests and have classified only 60,000 ha as being aLienable for agricultui.al settlement (Annex 7). Since this later survey was based on the disposal of small parcels of forest land isolated from the main blocks, and not neces- sarily with soil of good quality, it is probable that 250,000 ha must be closer to the reality. To be sure, however, one must await completion of a Canadian aid financed Land Use Survey in progress in the Western Region which, in course of time (2-3 years), will provide a more reliable basis for land use planning. In addition, HMG should give high priority to completing a land use survey for the whole of the Terai forest area. 2.23 Whilst the problem.s of fuelwood scarcity and soil erosion in the Terai are not nearly as formidable as those of the Hills they are neverthe- less a significant constraint to optimizing agricultural production. In the  - 10 - area of the Terai settled so far, no systematic attempt has been made to pro- tect strips of indigenous forest on less fertile lands to provide a permanent source of fuelwood and building poles for local requirements. It is mainly in the Terai that significant quantities of dried animal dung are now burned for fuel instead of being used to improve soil fertility and to increase crop yields 1/. Similarly because no systematic program of forest protection or shelterbelt establishment has been carried out in the Terai, the whole region is affected by severe annual wind erosion which carries away many thousand tons of valuable top soil. Expanded rural afforestation programs should take into consideration the situation in the Terai but as a secondary priority to the Hills. Reforestation of the Area of Forest Land Needed to Supply Future Domestic Demands for Industrial Wood and Scope for Intensified Industrial Plantations 2.24 Part of the reluctance of Forest Department Officials to release more forest land for agriculture stems from a desire to protect forests, thereby ensuring the forest product requirements of present and future gener- ations. Present Government plans to retain about 378,000 ha under production forest management are based on the assumption that this would be managed as natural forest on long rotations - 60 years or more (Annex 7). Revised Bank calculations (Annex 9) suggest a smaller area of forest (about 160,000 ha) if converted to intensively managed plantations would satisfy foreseeable domestic demands for industrial wood to beyond the turn of the century. In addition, 113,000 ha would be needed to satisfy urban demand for fuelwood by the year 2,000. The main issues relate to the extent to which the technical package for intensively managed industrial plantations has been adequately resolved and whether or not large scale industrial plantation programs can be safely launcheS on a commercial scale. Fast growing plantations can produce up to 10-15 m per ha per ann m compared with slower growing indigenous forest which only produces about 2 m per ha per annum. ADB is currently financing the first phase of such a project in Janagkpur and the results of this first phase project should provide the evidence needed for further development of indus- trial plantations elsewhere, e.g. in Birganj or the Western Terai. 2.25 An associated policy issue is whether in fact it is necessary for HMG itself to initiate all the fuelwood plantation programs needed to supply future urban demands. The alternative of encouraging small private farmers to undertake such planting should be intensively explored. Prices being paid for fueAwood in Kathmandu and other urban townships such as Janagkpur (up to US$20/m ) indicate that it would be economically attractive for small farmers to enter this market, growing fuelwood plantations on eroded land no longer suitable for agriculture. Such land could be released by the Forest Depart- ment to farmers who would be willing to establish fuelwood plantations. This would be especially of interest to farmers located within a 50 km radius of l/ In India where similar deforestation has occurred it is estimated that the amount of dried cattle dung annually buLned currently exceeds the equivalent of 6 million tons of fertilizer.  - 11 - Kathmandu. A credit scheme for tree planting by small farmers such as that financed by the Bank in the Philippines 1/ could be an alternative approach to meeting urban fuelwood demands. Social and Institutional Constraints to Forestry Protection and Development 2.26 The most difficult forestry sector issue is that of defining at- tainable forest protection and afforestation targets in light of the formid- able social and institutional constraints to forestry development which exist in Nepal. 2.27 .n e short run, there is no realistic alternative open to the rural population, other than to go on gathering a high proportion of their iives-ock fodder and fuel requirements from the natural forest areas. Con- tinuecd encroachment into forest lands for agricultural settlement will remain a major orDIDIem. Intensification of agriculture inc'luding, for example, introduct-on of legumes into agricultural crop rotations, together with other improved agricultural practices, would in the longer term offer a viable alternative to overgrazing in the forest areas. But to introduce such programs on a large enough scale to achieve a significant reduction in dependence on forest and tree fodder grazing will not be possible for many years. 2.28 Because of population pressures, and because the local population does not benefit from the current system of forest management, Government legislation aimed at protecting the forests and keeping the people out, has been, and will continue to be, impossible to enforce. The rural population perceive the Government Forest Department officials in their role of a 'forest police' force. The traditional forestry training received by Govern- ment forest officers at Dehra Dun in India and elsewhere has fostered pre-occupation with forest reservation and long term management objectives and adherence to extensive natural forest management systems which are in- appropriaLe in the light of Nepal's present needs. Furthermore the majority of the Forest Department Staff are situated in the Terai, and very few in the Hills where village forest needs are greater. 2.29 A complete re-orientation of current training programs and Govern- ment priorities in forestry plus a significant increase in the level of budgetary resource allocation for forestry development will be needed if the cooperation of the people is to be secured and a significant level of rural afforestation achieved. 2.30 Shortage of adequately trained manpower is also the most fundamental cons.rain, to a rapid implementation of settlement and erosion control programs. For example, the Timber Corporation (TCN) does not have sufficient staff to carry out existing forestry clearing operations up to schedule and would re- quire numbers of additional staff, which are impossible to obtain at present. 1/ See PhiliDpines Smallholder Tree Farming and Forestry Projects IBRD 1696a-PH Nov 77.  - 12 - Similarly, the relatively young Department of Soil and Water Conservation is working well, but on too modest a scale, because of its very limited staff (33 professional and 75 technical foresters). This shortage of technical staff is most critical when one considers that both institutions have an immense task ahead. Clearly, one major step towards an acceleration of their activities must be a large expansion of Nepal's forestry training facilities. 2.31 A detailed review of training requirements is therefore recommended in order to: (i) determine the training capacity required for the success of large scale rural afforestation, soil erosion and settlement programs, and (ii) develop new curricula, with less emphasis on reservation, protection and long term forest management objectives which are out of context to Nepal's present needs. In this report, the analysis of such need is limited to the Hills where the most urgent problems exist. III. FUTURE DEVELOPMENT STRATEGY Rural Forestry: The Way Ahead 3.01 The best hope for the future lies firstly in Government's recent decision to involve wards and panchayats 1/ more directly in the management of village forests. Legislation has been drafted which makes it possible for the right to manage local forest areas to be vested in the ward or panchayat. 2/ This is a first major step in the right direction. However, the next major question is how to go beyond this and to build up a commitment from the village level upwards to forest protection and reforestation. The various pilot experiments conducted by Government with Swiss Aid, U.K., Australian, and other agencies' assistance have been invaluable in this respect and offer some hope for the future. 3.02 Recent sociological studies by USAID, for example, 3/ which have examined traditional social behavior responses at the village level, confirm that in some areas there is clear recognition by the people themselves of the need to conserve and improve the natural resources in the vicinity of their villages. These positive attitudes stem basically from an awareness by the people that deterioration of the resource position has led, for example to a progressive increase in the distance over which women and children have to walk to collect fodder or fuelwood (para 2.10). Such local concern has already led in some panchayats to a voluntary decision by the people to 1/ The Panchayat is a subdivision of a District, and Ward is a subdivision of a Panchayat. There are about 400 people in a Ward which would normally include one village. 2/ Extracts from this Legislation are in Annex 14. 3/ "Social and Organization Considerations". Section of USAID Soil Con- servation Mission, December 1977, by J. Gabriel Campbell (Sociologist).  - 13 - protect a particular forest area for fodder and fuel production. Cooperative approaches to natural resource management are inherent in some villages, (for example, in the Jumla region where the people of the village contribute food to one man who is appointed by the village to control and ensure equitable distribution of irrigation water). A tradition of communal fodder and fuel- wood gathering also exists in some areas e.g. the women of different villages voluntarily agree to organize the gathering of fodder, pine needles (for compost) or fuelwood from the same place and to organize collection in a rotational way which will allow for adequate regeneration or recovery. 3.03 In devising rural afforestation strategy Government should identify areas in which cooperation of the local people can provide a starting point for expanded afforestation. A key feature of this strategy should be to ensure full participation of local people in (i) selection of village woodlot areas for development and preservation; (ii) defining management objectives including such aspects as choice of fodder and fuelwood species to be grown; and (iii) establishing rules relating to possibilities for inter cropping of young trees, or for integrating grazing and forestry management in older plantations. 3.04 The pilot experiments already carried out by Government and external aid agencies, have clearly shown that where small forest nurseries have been started to provide local people with a ready supply of tree seedlings, it has been possible to gain local support for reforestation programs. Whilst there is much to be done in introduction of fast growing exotic species, enough is already known of the capability of indigenous species to justify proceeding with planting on a much larger scale. Similarly, the programs developed by Government's Department of Soil and Water Conservation built on experience gained for example from the FAO/UNDP financed Trisuli Project have convincingly demonstrated that the technology for controlling soil erosion through a combination of terracing, reforestation, check-dam and other tech- niques is well proven. In addition, it has been shown that village people in critically affected areas are prepared to cooperate in implementation of such programs. In short, what is needed now is not further pilot scale operations, but translation of all those earlier efforts into a concerted national program of rural afforestation and soil and water conservation. The program should be on a large enough scale to make a meaningful impact on the problem, starting in those areas in which local cooperation is assured and spreading out from these as rapidly as possible. 3.05 Currently, suitable conditions for such a program exist in Nepal only in limited areas. Forest development strategy and the first phase of development of any national reforestation and soil conservation program must firstly be directed towards creating the necessary institutional framework and rural infrastructure needed to support a larger scale planting program. The problem is to first promote the forestry scheme at the village level, and second, to build up the staff resources and organization to carry out the program. A phase one forestry project which incorporates thceg two objectives is proposed in Chapter IV of this report.  - 14 - Expanded Training Programs 3.06 The Mission's preliminary calculations of the additional profes- sional and technical staff required by the Forest Department for implementa- tion of the expanded reforestation programs for the period 1980-2000, suggest that over this period in the Hills alone, it would be necessary to at least quadruple the present numbers in post as shown in Table 3 below: Table 3 Current and Future Requirements for Professional and Technical Grade Foresters in the Hills /a Current Staff Number Required Members in Post by the Year 2000 Professional Graduate Foresters 26 60 Forestry Rangers 84 280 Technical Foresters 239 1,150 Total 360 1,636 /a No attempt has been made to carry out a similar exercise for the Terai because the bulk of the Forest Department's staff are already in this area. A review of the Terai staffing requirements is also needed. These are only tentative figures which need further review and discussion, but they do give an indication of the order of magnitude of the problem. The Mission recommends a complete review of current forestry education training systems and curriculae. Such a review was outside the scope of this sector review Mission's work, but it might appropriately be included as part of project preparation activities for the project proposed in Chapter IV of this report. In the interim, the Mission's preliminary recommendations are: (a) Forest Officers. The Mission considers that overseas graduate training for a long-term continuing program is not as appropriate for dealing with the current develop- ment issues as training within a Nepalese environment. It is therefore recommended that a Forestry Faculty be created as part of Tribhuvan University, with the capa- city to turn out about 15 graduates a year. The course would be open to science graduates, (preferably in Agriculture), and would be of two years' duration with emphasis on rural forestry and closely linked to appro- priate land use and agriculture courses. Refresher and re-orientation courses for the existing graduate staff would be one important aspect of the Faculty work. (b) Forest Rangers. It is recommended that the existing training facilities for Forest Rangers at the Hetaura Training Institute should be expanded so that the output can be increased to 60 Forest Rangers a year. (The  - 15 - present output is 25 Forest Rangers and 60 Foresters a year). Revision of the curriculum is also required so that at least 50 percent of the training is directed towards the problems of Hill forestry and land use, and the social aspects of working with village people par- ticularly in the areas of building up extension at the village level. (c) Foresters. It is recommended that a new Foresters Training School be established possibly at Pokhara or some other Hill center (preferably not Kathmandu), with the capacity to turn out about 75 Foresters a year. The course should be primarily devoted to Hill Forestry and land use, again with particular emphasis on extension work at the village level and the development of simple systems of management for village community forests. In all cases, training should aim to shift the emphasis in the forestry cur- riculum away from traditional reservationist/protectionist/revenue collec- ting functions towards a more social/development oriented approach with strong emphasis on extension work. 3.07 The training of Village Extension Workers should be on-site at the panchayat level and should be carried out by the DFO and his staff. It should not be more than 1 week at a time, with training to be completed in (say) four to six, 1-week sessions spread over a period of 6 months or a year. Training should initially be in simple nursery work and tree planting, and in systems of harvesting fuelwood for communal distribution. As exper- ience is gained, additional aspects of forestry management such as improved production methods and the role of rotational grazing schemes in forest management could be introduced. 3.08 Fuelwood and, more especially, fodder production have to be seen as an essential component in increasing agricultural output. Some technical instruction in these subjects should therefore be given to agricultural extension workers (Junior Technicians and Junior Technical Assistants) during their training. Restructuring of the Forest Services 3.09 Restructuring of HMG's Forestry Service, to deal more effectively with expanded rural forestry programs, requires flexibility and new approaches. Recommendations made in this report are a basis for consideration by HMG. 3.10 HMG has already taken positive steps to reorient its forestry acti- vities more towards rural forestry and towards the Hill Districts, by a deci- sion taken in 1977 to create 26 Forestry Divisions in the Hills where there were previously only twelve divisions. It is intended that sixteen divisions will be manned with 1 DFO and 4 rangers as well as several foresters, and 10 with 1 DFO, 1 ranger as well as foresters. Already, 19 DFO's have actually been posted to the field; in the other 7 divisions a ranger is Acting DFO. The second step taken by HMG in this direction was to establish in May 1978 a  - 16 - project preparation cell within the Ministry of Forestry with the primary objective of preparing a rural forestry program and a phase one project suitable for international financing. 3.11 In addition to the above, consideration should be given to the establishment within the Ministry of Forestry of a separate Village Forest Unit (VFU) with specific responsibility for initiation of rural forestry programs. A chart of VFU's proposed structure is in Annex 8. Key officials selected to head up this VFU should be sent under fellowships on short over- seas study tours of rural forestry programs in other countries (e.g. Korea and the Philippines) 1/. VFU's success would depend on its ability to recruit a corps of young dedicated foresters who would bear the initial responsibility for getting out into the Hills and through the local panchayat and village leaders explaining the objectives of Government's revised social forestry development strategy. 3.12 One of the first tasks of the Forest Department staff will be to conduct a systematic survey of panchayats and wards in which there are good prospects for securing the cooperation of the people in implementation of forestry protection and afforestation programs. The key to securing the people's cooperation will be their ability to convince the villagers that they will be prepared to assist them in developing "their" forests as opposed to protecting "government" owned forests. They should encourage the people themselves to select forest areas for protection, to participate fully in decisions concerning choice of species, size of planting program and proposals for protecting young regeneration. They should also encourage the villagers to select a progressive farmer for training initially as an extension worker but who at a later stage (following Korean experience) might become a Village Forestry leader. 3.13 Taking a long range view of the field organization which VFU would need to create effectively to cope with the level of reforestation needed in the Hills, preliminary calculations suggest that by the year 2000, VFU may need to have an organizational network covering some 2,300 panchayats and 25,000 wards. The manpower requirements cited in Table 3 above, (para 3.06) are based on the assumption that one Forester would be needed per 2 panchayats (18 wards) and one Forest Ranger would be needed for 10 panchayats (i.e. to supervise the work of 5 foresters), one graduate Forestry Officer would be needed to supervise the work of 5 Forest Rangers (i.e. approximately 50 panchayats). Definition of Future Planting Targets 3.14 Since significant expansion of rural forestry planting will depend almost entirely on HMG's ability to resolve the sociological and institutional constraints described in the previous sections, it is difficult at this stage to formulate long range targets with any degree of precision. 1/ Six officials of the Ministry of Forests have already been sent on a study tour to Thailand and Japan as part of the FAO/UNDP TCP "Multiple Use Mountain Forestry Development" Project.  - 17 - 3.15 Nevertheless, a preliminary attempt has been made below primarily in order to illustrate the size of the problem relative to current levels of activity and to provide a basis for a further dialogue with HMG and other aid agencies. 3.16 Based on the assumptions that it would be HMG's objective to try to resolve the rural energy crisis by the end of the century, thereby making a significant improvement in the current soil erosion and fodder shortage situations, and also that an integrated forestry development program would include establishment of sufficient industrial and fuelwood plantations to meet domestic demands of the urban townships, the approximate program needed by the year 2000 would be about 1.3 million ha. See Annex 9 as summarized in Table 4 below. Table 4 Summary of Tentative Long Term Reforestation Targets to the Year 2000 Proposed Target Planted Area by the year 2000 '000 ha Category of Plantation Hills Terai Total Village Fuelwood/Fodder plantations 640 400 1,040 /d Fuelwood plantations required to meet urban township demands 20 /a 113 /b 133 Industrial plantations - 160 /c 160 Total 660 673 1,333 /a Plantations needed to supply Kathmandu Townships to be located in the Hills surrounding Kathmandu. /b Including 50,000 ha needed for Kathmandu Township. /c To meet sawlog and other industrial roundwood requirements primarily for the urban areas. /d This target assumes that existing natural forests would supply about 20% of fuelwood required in the Terai and that slow growing natural forests would be converted to intensive plantations. Remaining forests in the Hills would be protected and would supply about half the requirements. Assuming that it will take three to five years to strengthen the Government's Forestry Service, to re-orient training programs and to secure village level support for implementation of a significantly expanded planting program, the 1.3 million ha program would have to be implemented over about a 20 year period. To achieve this, the planting target of the Forestry Department currently 5,000 ha a year would have to increase to about 14,000 ha a year  - 18 - in the period 80-85, rising to 50,000 ha a year in the period 85-90 and averag- ing about 100,000 ha a year from the decade 1990-2000. Whilst these target figures sound formidable in absolute terms, the key to whether or not they can be achieved will depend almost entirely on whether or not it proves possible to secure support at the village level for the rural forestry programs pro- posed and to subdivide the total planting target into small woodlots. For example, if the average annual village woodlot planting program proposed for the decade 1990-2000 of about 52,000 ha for the Hills were spread over (say) 15,000 village woodlots, the average annual planting program per village would be about 4 ha. 1/ 3.17 Annex 10, Table 1 outlines a possible build up of the staff, nursery capacity and rate of planting needed to achieve an 0.6 million ha target of plantations needed in the Hills by the year 2000 based on the assumption that a total gross area of 80 ha per village would adequately cater for villagers' fuelwood requirements. This would be less than 5% of the average land area in each ward. 3.18 The inclusion of this table does not imply that HMG should adopt this as a definitive target. A judgment on the appropriate level of planting for the period 1980-2000 must depend on the progress made in resolving current sociological and institutional constraints over the next 3 to 5 years. The table is included primarily to illustrate the very extensive program of staff strengthening and nursery establishment needed to support a national refore- station program. 3.19 Expressed as a percentage of the total land area of Nepal, the total 1.3 million ha afforestation program required for the whole country represents about 7% of the total land area or about half of the area currently classified as forest land (much of which is now, in fact, degraded pasture or abandoned agricultural land). Based on field observations and the conclusions of other Bank missions dealing with agricultural sector problems, it is now considered that to identify the areas of land suitable for reforestation purposes is not likely to be a major issue. Securing the cooperation of villagers in setting aside and protecting the forest area from unregulated grazing has been much more difficult. Once land ownership, development and exploitation are vested in the people, this should not be such a formidable problem. Budgetary Implications and Economic Justification 3.20 The budgetary implications of the above program would call for a tripling of the Forestry Department's 1976/77 annual budget of about US$1.75 million by 1980. Thereafter, assuming that the long term forestry program 1/ The Bank's experience in financing the Korean village fuelwood project is relevant in this respect. In that project, planting programs were increased from 50,000 ha up to 77,000 ha a year over a three year period primarily because the annual average planting area per woodlot was relatively small (less than 10 ha).  - 19 - proposed is implemented in five-year periods, total expenditures 1/ of US$28 million for the period 1980-85, mounting to US$50 million in the period 1986-90, US$75 million in the period 1991-95, and US$111 million in the period 1996-2000 would be called for (Annex 9). The total development cost involved in this whole program including the cost of restructuring the Gov- ernment's forest service and creating the rural infrastructure needed for the program would thus be approximately US$265 million (at 1977 prices), there- fore requiring large amounts of external finance. 3.21 The above estimates need to be firmed up in the context of Nepal's overall developmental requirements and resource availabilities. They are based on the assumption that the villagers, in return for the right to collect fuelwood and fodder, would provide labor for planting and subsequent protec- tion. 2/ 1MG would finance the cost of establishing and operating the VFU, including new houses and office building, vehicles, and equipment, the cost of proposed training programs for professional and graduate foresters, establish- ment of rural infrastructure needed for project implementation (namely access trails, initial forest demarcation, and forest nurseries). Either VFU or the panchayats would finance the field extension staff (Village Forest Unit extension workers). 3.22 The program proposed would be suitable for external agency support. It would build on and expand the ongoing activities of the various agencies already active in the forestry sector (Annex 12) and coordinate these various independent projects into a concerted long term national program with clearly defined regional targets, integrated eventually with rural development programs in progress or planned. 3.23 The economic justification for expenditures of this magnitude for a rural forestry program must be seen in the context of the possible conse- quences of not implementing it (Annex 3). If Nepal fails to implement the proposed program, additional foodgrain imports of about $100 million per annum in value by the year 1990 would be needed to compensate for the foregone production resulting from continued decline in soil fertility which will take place as a result of the more extensive burning of potential livestock fodder and farmyard manure, and the already low standards of human nutrition prevail- ing in the hills will be even more difficult to resolve. An attempt was made to quantify the returns to the economy of such a program by valuing alternative sources of energy that would be burnt in the absence of fuelwood (cow dung and fodder). The estimated rate of return is 13%. Agricultural Settlement Policy and Land Use Development Strategy in the Terai 3.24 An effective land use strategy is a prerequisite to further large scale settlement of the Terai. It is therefore recommended that: 1/ Excluding labor costs for plantation establishment. 2/ It is, however, recognized that this is an area where further dialogue is needed at the village/panchayat level before definite proposals for project financing and cost sharing arrangements could be formulated.  - 20 - (a) HMG complete a land use survey of the whole Terai plain with Canadian (already in the field) or other aid agency assistance, as a matter of urgency; (b) HMG establish subsequently, an interministerial Land Use Committee which would have the necessary political backing and professional strength to be able to determine and en- force the most appropriate forms of land use. 3.25 Underlying the whole issue of alternative land use policy in the Terai is the question of the relative economic value of using land of good agricultural potential for either agriculture or forestry purposes. Some of the confusion about conflicting land use claims emanates from a lack of data on this issue. Calculations (Annex 13, summarized in Table 6 below), clearly illustrate the relative higher value to the economy from agriculture compared with the alternative of using the same land for fast growing industrial tree plantations. On economic grounds, as well as on grounds of social needs therefore, there are compelling reasons for giving high pr-ority to agricul- tural settlement of these areas. This would also allow the Forest Department to make more effective use of its administrative resources by focussing protection and development efforts in areas clearly destined for forestry over the long-run. Table 6 Comparative Returns from Alternative Investment in the Terai Net Present Value /a of Average Annual Production Employment /b R.O.R. Rs/ha/year MD/ha/year Fast growing planta- tions for fuelwood 18 140 16 /c Fast growing planta- tions for fuelwood including taungya cultivation during first two years 22 175 17 Agricultural Settlement 47 435 166 /a At a 10% discount rate. /b Includes only labor for land development (infrastructure and buildings are excluded). /c This low figure is due to mechanical land preparation. 3.26 Upon completion of the land use survey, which will enable the iden- tification of forest land with good agricultural potential, the following should therefore be carried out:  - 21 - (a) Definition of the limits of the Protection Forest required for the Churia Hills and the adjoining Bhabar Zones (cur- rently estimated at 950,000 ha); (b) The planning of the orderly clearance, settlement and con- version to agriculture of all forest areas of the Terai wherever soils are suitable for agriculture (estimated at 250,000 ha). (c) The planning of intensive forest management for the remain- ing production forests, including conversion of natural forest to plantations of fast growing species in order to ensure the domestic supply of urban fuelwood and industrial wood. An estimate of 273,000 ha would be needed by the year 2000. (d) Other forest areas would remain as national parks and wild- life reserves (approximately 100,000 ha). Implementation of such a program will require an effective interdepartmental coordination and top level decision making transcending narrow departmental interests. 3.27 Concerning the longer term issue of the potential of the forest lands to relieve population pressure, the mission's conclusion is that the forest areas are only a partial solution to future population expansion. Assuming an average of 1.5 ha per family, the Terai forests could absorb at best a further one million people. Since the population is expected to grow from its present level of 13 million to 20 million by the year 2000, the forest areas of the Terai could absorb only about 15% of this increase. Still this is of no little significance, and HMG should consider ways and means of overcoming the institutional problems which have plagued organized settlement activities, and of regulating spontaneous settlement which is wasteful in terms of suboptimal crop yield and wasted forest resources. In the short term, one way of speeding up settlement operations would be to revert to selling logs rather than lumber. This is recommended since the profitability of selling sawn timber from such high value logs as Sal is questionable at the present time. 1/ In the long term, the recommended expansion of Nepal's forestry training facilities should remove the major bottleneck to a rapid implementation of land clearing programs, which is, in the mission's view, the shortage of adequately trained staff in the Timber Corporation. 3.28 Finally, development strategy should clearly be directed towards intensifying agriculture outside the forest areas and providing the people with an alternative to further encroachment into marginal forest areas. The 1/ Based on prevailing prices, income from timber operations confirms a higher return can be expected from sales of logs rather than lumber in situations close to the Indian border and in which marketing of high value species such as Sal accounts for a significant percentage of log output.  - 22 - key elements of such a strategy lie in sectors other than forestry. They include improving access and agricultural services in the Hills, increasing agricultural productivity through wider distribution of improved seeds, fer- tilizer, credit and other inputs, strengthening of extension and marketing services, increasing the irrigable cropping area (estimated potential at least 0.8 million ha), upgrading of livestock production, increased use of fodder crops, diversification of agriculture cropping with emphasis on labor intensive cash crops, increasing industrial development, and effective family planning programs. Protection Forests and Wildlife Resources 3.29 An associated land use policy issue is whether or not, in allocating forest land for settlement in the Terai, Government will be able to restrict settlement to the better soil areas and to retain under protection the Terai forests located on "Bhabar" 1/ soils and the forests located on the steep inaccessible and highly erodible soils of the Siwalik and Churia Hills adjacent to the Terai, which cover a total area of some 0.8 million ha. Already population pressure and spontaneous settlement have forced Government in the last three years to revise downwards its allocation of land in Terai forests settlement schemes on good soils from 2 ha to 1.3 ha per family at which level earlier Bank calculations indicate that these farms will do little better than ensure subsistence. The prospects of even these settlement farms located on better soils turning into 'rural slums' are real and it is obvious that if population density forces people to encroach in the "Bhabar" soil areas or into the forests of the Siwalik or Churia Hills, the situation could become far worse since these soils are clearly incapable of supporting sustained agricultural cropping. 3.30 Even in their present relatively undisturbed state, the Siwalik Hills are being heavily eroded in areas adjacent to those valleys which provide access routes from the Terai to the Hills. The resultant silt wash has covered substantial areas of Terai soils of high agricultural poten- tial. Encroachment of settlement into these areas of fragile soil and steep terrain would result in a significant further reduction of the already scarce arable cropping land of the Terai. The Forest Department protection budget for these areas and its staff resources for carrying out effective protection programs in the Siwalik and Churia Hills should be appropriately increased. 3.31 HMG has already taken positive steps to protect Nepal's wildlife resources by the establishment of national parks in Chitwan, Lukla, Phanta, Koshi Tappu, Bardia and Langtang, and through the creation of National Park and Wild Life Conservation Department within the Ministry of Forestry. This Department, though small, has been very effective in initiating protection programs and with UNDP and other aid agency assistance, is developing infra- structure and park management programs. 1/ These are medium to coarse textured soils with usually less than 20% clay and often distinctly sandy or gravelly. They are free draining and only suitable for drought resistant crops. They are highly susceptible to erosion, are among the least fertile soils and are the most difficult to manage. For these reasons the Terai Settlement Project appraisal mission recommended that they be excluded from Settlement.  - 23 - 3.32 The continued protection of wildlife resources is not a major policy issue at the present time because HMG is fully committed to a development program for these park areas. However, in the light of the rate of popula- tion increase and land scarcity situation it can be expected that there will be further pressure in the future for excision of wildlife conservation areas for settlement. HMGs programs of Conservation and Education will play an important role in helping to ensure continued preservation of wildlife. The establishment of an inter-ministerial Land Use Committee (para 3.24) could also help to strengthen HMGs objective of reserving National Parks in stra- tegic locations. IV. TOWARDS A FORESTRY DEVELOPMENT PROGRAM Projects Suitable for External Assistance 4.01 The recommended development program for the Nepal Forestry Sector (Annex 9), to be implemented over the next 20 years, comprises a series of coordinated area specific projects which would be suitable for external financing. The main elements of the proposed program would be: (a) a rural afforestation program aiming at establishing 640,000 ha of village woodlots in the Hills, and 400,000 ha in the Terai by the year 2000 (US$197 million). (b) 160,000 ha of industrial plantations of fast growing species in the Terai to supply Nepal's domestic requirement of timber and wood products (US$37 million). (c) 113,000 ha of concentrated government fuelwood plantations in the Terai to supply Kathmandu and the Terai urban centers (US$26 million). (d) 20,000 ha of small fuelwood plantations in the Kathmandu Valley, established by individual farmers on rented land released from the Forest Department (US$5 million). The total cost of such a program would amount to US$265 million in 1977 prices (including staff salaries, cost of restructuring Nepal's forestry training facilities and cost of establishing and operating nurseries). A high percent- age of this total cost (85-90%) will be in local currency. Such a development effort is formidable in the context of Nepal, whose annual Government expendi- tures 1/ amount to US$235 million (1977/78 budget). Thus, its phasing will have to be carefully determined in the context of Nepal's overall developmental priorities. 1/ Total, i.e., including recurrent and development expenditures.  24 - 4.02 In implementing this program, HMG agreed to give priority to solving the rural energy crisis wnich constitutes the miost urgent problem faced by Nepal's forestry sector today; the establishment of concentrated plantations ((b) and (c) above' must aw7it completion of X '-- -Ee survey for the region. 1/ 4.03 The cost estimate for the rural afforestaticn program is based on the premise that Government would fund the construction of nurseries and other needed infrastructure, and the cost of one Forestrv Extension Worker in each selected village who would run the nursery, organize the subsequent annual planting program and ensure protection of village forests. It assumes that the actual planting work would be done by commiunal labor provided free by the village (amounting to about 575 man days per year over a three month period, assuming an annual planting target of 5 ha per village). This con- tribution by the villagers to establishing "their" forest is, in the mission's view, essentia-l to secure the cooperation of the people for subsequent pro- tection and rational exploitation of the forest. It is fully Justified in the view of the mission and that of Government because the villagers them- selves will receive the full benefits of the planting program and because of the already large subsidy element in the form of extension advice and infra- structure. The mission has estimated the villagers contribution in the form of voluntary labor as US$87 M. 4.04 In order to secure the participation of the villagers, wLhich in the opinion of Forest Department officials may not always be forthcoming, an important component of the initial phase of the program will be a motivation campaign at the village level to be carried out by the specially trained Forest Department staff. The strategy will be to start in those areas where the fuelwood and tree fodder shortage is most severe and where people are thus likely to be more receptive; then spread from these pioneer villages which will serve as a model to neighboring villagers. It has already been demon- strated in experimental areas developed i'n Chautara District with Australian aid assistance that this approach works. 4.05 Accordingly, an initial three to five year project is recommended which will have the main objectives of: (a) promoting the forestry program at the village level in order to secure the cooperation of the local people who will be responsible for establishing their own village plantations under the leadership of the Forestry Village Extension worker; and (b) building up the staff resources and organization needed to provide the technical assistance and support services to the villagers. 1/ HMG has agreed that it is important to complete this survey for the whole of the Terai forest area as soon as possible, and has undertaken to seek further assistance from CIDA and to inform the Association if any financ- ing would be required under the proposed project identified in para 4.07.  - 25 - 4.06 In order to allow project preparation to proceed, HMG agreed at the highest level to the importance of taking measures to combat the current rural energy crisis, fodder and soil erosion problems, and is determined to assist people in the rural areas to overcome their problems; HMG also agreed to the following policy decisions and actions: (a) to include the rural forestry development program for 1980-85 in Nepal's Development Plan (US$15 million); (b) to invest the ownership, management and protection of the newly established village forests with the wards and panchayats; 1/ (c) gradually to entrust the management and protection of selected areas of existing public forests to the wards and panchayats, subject to the results of various experimental approaches now being initiated in the Hills; 1/ (d) to reorient and strengthen national training programs for both professional and technical foresters; (e) to set up a project preparation cell adequately staffed and funded 2/ within the Ministry of Forests with responsibility for formulating the village forestry program, coordinating various forestry projects within the overall development program, and preparing a phase one project to be financed by the Bank Group and further suitable projects to be financed by the Bank Group and other donors; and (f) when appropriate, to establish a Village Forest Unit (VFU) within the Ministry of Forests with responsi- bility for implementing the program. 4.07 Preparation of the first phase should now be initiated in the fall of 1978. Essential components would be: (a) Initiation within the Hill divisions of selection and demarcation by the people of wards and panchayats of small areas of land suitable for establishment of vil- lage forests, and selection of existing forests which would be brought under intensive management and pro- tection. (b) Initiation of the development of a national network of forest nurseries at both ward and panchayat level as needed to achieve a sustained seedling supply. 1/ Extracts from the relevant Forest Legislation are in Annex 14. 2/ Four forest officers have already been appointed to the preparation cell.  - 26 - (c) An intensive program of extension training based on the principle of selecting community leaders at the village level for short courses in simple nursery and tree plant- ing techniques. (d) Training of professional forestry graduates, rangers and foresters, including construction of new training facili- ties where appropriate. (e) Once suitable areas have been selected, nurseries estab- lished and staff trained the initiation of village plant- ing programs and protection of remaining forest area. (f) Intensive forestry research into fast growing tree species. Other possible components could be: (g) Initiation of a pilot credit program for establishment of fuelwood plantations by small farmers residing close to Kathmandu. (h) As a complement to the planting of fodder trees, develop- ment of alternative sources of cattle forage. (i) Introduction of innovative technology relating, for example, to wider use of more efficient wood burning stoves or en- couraging use of alternative forms of rural energy, such as wind or water power which, in the longer term, could signi- ficantly reduce the area of fuelwood plantations needed to meet future domestic requirements. (j) Technical assistance and possibly credit financing for further development of small scale wood using industries at the village level (e.g. joinery, furniture shops and small scale sawmills). (k) A study of soil conservation measures, complementary to the forestry program, necessary to control the serious erosion problems in Nepal; such a study would be coor- dinated with on-going HMG and USAID programs. 4.08 This first phase would lay down the foundation for a series of coordinated projects to be implemented over the following fifteen years, with increasing rates of planting of: 180,000 ha in the period 1985-90, 330,000 ha in 1990-95 and 505,000 ha in 1995-2000. Implementation of these projects, which would be area specific, could therefore be carried out with the assistance of various donor agencies. Annex 10 gives further details of the proposed phase one project.  - 27 - 4.09 In initiating further development of this program, close coordina- tion would be necessary with various ongoing activities which HMG has initi- ated with other aid agency assistance (Annex 12). At HMG's request, it was agreed with the donors concerned that whenever such assistance incorporated small afforestation components, the planning and implementation of such components would be as outlined in the IDA financed project.  - 28 - ANNEX 1 NEPAL FORESTRY SECTOR REVIEW TOTAL COMMERCIAL AND NON-COMMERCIAL ENERGY CONSUMPTION BY TYPES OF FUELS (1974/75) Energy Fuels Coal Tonne Replacement : % A. Commercial * 10.74 1. Coal 64,480 : 0.90 2. Petroleum Fuels 613,546 : 8.58 3. Electricity 90,331 : 1.26 B. Non-Commercial : 89.26 1. Fuel wood 6,204,000 86.78 2. Husk 86,000 1 1.21 3. Dung cake 28,800 : 0.39 4. Vegetable Wastes, etc. 62,757 : 0.88 Total 7,149,114 100.00 Source: Energy Sector Study by University of Tribhuvan, 1976 March 1978  - 29 - ANNEX 2 NEPAL FORESTRY SECTOR REVIEW NEPAL ENERGY DEMAND AND SUPPLYV1 (In Million Coal Tonne Replacement) 15 1- I__ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ APPROXIMATELEVELOFANTICIPATEDDEMAND INRURALAREAS 00-0. SD / z | / / ~~~~~AFFOETT 16N 10 5 )~~~~~~I GA 10 CFT; PLANTS T t~~~~~~~~~~~~SVN U OEFCEC INCRESwH SEASE 1980 1985 1990 1995 2000 ] Source: Energy Sector Study, University of Tribhuvan 1976 World Bank - 18708  - 30 - ANNEX 3 Page 1 NEPAL FORESTRY SECTOR REVIEW The Interrelationship Between Farm Yard Manure Production, Rural Energy Needs and Foodgrain Production 1.1 Production of Farm Yard Manure (FYM) Under reasonable conditions: One adult buffalo or cow produces 7 MT fresh FYM a year. A young beast produces 3.3 MT a year. 1/ 1.2 Average Nepal FYM production is likely to be less than this because animals are not well fed. Daily average FYM production in Nepal is therefore assumed as 10 kgs = 3.7 MT/annum 2/. Of total FYM production, 35% is lost in fields and 5% is used for lining of house walls, and the balance is available for either fertilzer or fuel as under: Metric Tons Fresh production FYM 1.00 Deduct 35% lost in grazing 0.65 Deduct 5% used for house construction 0.05 Balance available for fuel or fodder 0.60 Dry dung equivalent (4:1 conversion) 0.15 Total Nepal livestock population is 6.4 million cattle 3.5 milion buffalo Total 9.9 million 1.3 Total potential fresh FYM production for the whole of Nepal would therefore be about 9.9 million head times 3.7 MT per year of which about 40% is lost in grazing or used for house construction. The balance theoretically available for use as fuel or fertilizer thus equals 22 million MT approximately (i.e. about 5.5 million MT of dried dung equivalent). 1/ See p. 129 "Energy Sector Study", Tribhuvan University, Table 8.11. As a cross check national average for India is 16 kgs of fresh dung per day 'if beasts are reasonably fed' i.e. 5.8 MT/annum. 2/ See p. 130 of the "Energy Sector Study" (footnote 1 above). Source: IBRD Forestry Mission Calculations.  - 31 - ANNEX 3 Page 2 1.4 Rural Energy Needs by the Year 2000. According to the Energy Sector (p. 228) tree plantations would need to supply about 8 million tons of coal replacement equivalent to fill the anticipated future rural energy 'gap' to the year 2000. Dried dung has a coal replacement equivalent value of about 0.4 (i.e. 2.5 MT of dried dung are needed to supply the same amount of heat as 1 MT of coal equivalent). Even assuming therefore that all the 5.5 mil- lion MT of dried dung theoretically available on a national basis (para 1.3 above) were used for meeting essential heating and cooking needs, this amount of dried dung would only meet about 2 million tons of coal replacement equiv- alent, i.e. about 25% of the total energy required by the year 2000. The balance would have to be met by burning agricultural crop residues (straw and other potential sources of fodder for livestock) in very large quantities i.e. sufficent to meet at least 6 milliorn tons of coal replacement equivalent. 1.5 Effects of Burning FYM on Foodgrain Production. To illustrate the possible effects of burning FYM on foodgrain production necessitates an analysis of crop responses to fertilizer under Nepal conditions. Crop responses to application of FYM in combination with artificial fertilizer under experimental research conditions are well documented (See for example Annex 3 "Foodgrain Crop Production' in the Bank's 1974 Agricultural Sector Survey). However, in the Nepalese context, many farmers cannot afford or do not have access to artificial fertilizers and the use of fresh, or semi-dried FYM alone as a fertilizer is widespread (particularly for maize crops in the Hills where traditional application rates are 5 to 10 tons/ha). To illustrate the possible effects of having to divert all available on-farm FYM to heating and cooking reference was made to experimental evidence from research trials at Gandaki which showed that applications of up to 16 tons FYM/ha (without artificial fertilizer) resulted in an increase in maize yields by an average of 2 tons/ha. Theoretically therefore 22 million tons of FYM available on a national scale if used as fertilizer has the potential to increase maize production by at least 2.7 million tons a year on a national 16 tons FYM/ha basis. Since the Gandaki experiments were under research conditions, it would be more realistic to assume that only about (say) 40% of an increase in yield would be obtained under field conditions, i.e. national production of about 1 million tons a year. 1.6 This calculation is essentially theoretical because detailed analysis of the current patterns of FYM usage in Nepal was clearly beyond the scope of this review and in practice would require an extensive program of field sampling and research. Also because in practice not all FYM is applied to maize crops, it is used for other crops as well. However, the calculation does serve to illustrate one possible approach to quantifying the impact on a national scale of not carrying out a reforestation program in the Hills. The purpose of the illustration is not to provide economic justification for a particular project investment 1/, rather it is to focus HMG's attention more sharply on a problem which, in most reports studied by 1/ For the purpose of using this approach for project analysis, see Annex 11).  - 32 - ANNEX 3 Page 3 the Mission, has generally been perceived as a 'forestry' problem rather than being treated as part of the much wider issue of maintaining food production, ensuring minimum nutritional standards among the rural poor and trying to avoid the need for massive foodgrain imports.  - 33 - NEPAL Annex 4 FORESTRY SECTOR REVIEW BOVINE POPULATION RELATED TO FODDER, SOIL FERTILITY AND CULTIVATION SITUATIONS (Same IBRD Forestry Mission calculations) Hills/Mountains Terai Total 1. Bovine population - No. in 1972 (M)l/ 5.04 4.66 9.70 Per household 2/ 4.44 6.19 5.8 2. Rural population - Percent 60 40 100 No. (M) 7.2 4.8 12.0 Families @ 5.5 No. (M) 1.31 0.87 2.18 3. Arable area 1975/76 - Monsoor. rice and maize (M ha) 3/ 0.535 1.170 1.705 Winter cereals and oilseeds (M ha) 3/ 0.232 0.332 0.564 Total: 0.767 1.502 2.269 Cropped per family (ha) 0.585 1.726 1.040 Cropping percentage 4/ 143.4 128.4 133.1 5/ 4. Total bovines required based on - Local fodder availability - Million Million Million Crop residues 6/ 1.15 2.25 3.40 Natural grasslands and forests 7/ 3.22 1.04 4.26 Bovine carrying capacity 4.37 3.29 7.66 Present bovines 5.04 4.66 9.70 Destocking of bovines required 7/ 0.67 1.37 2.04 FYTI requirements 8/ 1.18 2.31 3.49 Draft power requirements 8/ 1.18 2.31 3.49 Minimum nutritional needs 9/ 2.00 2.68 4.68 1/ Families x household bovine population reduced by 13.4% to adjust to 9.7 M bovine 2/ Agricultural Sector Survey of Nepal, 1974, Annex 5. 3/ Taken from 1975-76 crop return. Assumes winter crops are successional, not planted on land not cultivated for monsoon cropping. 4/ Assumes winter crops are successional. 5/ Bovines have been calculated as LSU, then converted to total numbers required to cover followers. 6/ Assumes that 1 ha per crop will provide enough DM for 1 LSU, with TDN and DCP deficiencies supplemented. 7/ Assumes that 6.7 M ha of natural grassland (1.7 M ha) and forests (5M ha)(5M ha in the Hills/Mountains, 1.7 M ha in the Terai) are grazed by bovines and smallstock at a rate of 1 LSU per 2 ha, with allowance for 1.98 M (90%) of sheep and 1.15 M (50%) goats grazing in Hills/Mountains, the balance in the Terai, Carrying capacitv assumes grazings under greatest pressure in second half of winter and tree forage supplementation. 8/ Assures 1 LSU will supply 1 ha with FYM at 2 t/ha, improving to 4 t/ha, and draft power to fully cultivate 1 ha per season (2 LSU for 2 ha). 9/ Assumes 1 milk LSU in the Hills per family, 2 in the Terai, having regard to arable land available per family, for minimum nutritional needs.  - 34 - ANNEX 5 NEPAL FORESTRY SECTOR REVIEW ESTIMATE OF TREE FODDER REQUIREMENTS (Source: IBRD Forestry Mission calculations) 1. Figures have been established for green leaf and dry matter yields and digestible nutrients for a number of tree species, of which some give high values. The ODM assisted project at Lumle has measured that a buffalo will consume about 6 tonnes fresh tree forage a year, a cow 2.5 tonnes, in addition to greater amounts of grasses and herbs. The yield of good fodder tree species is of the order of 300 kg fresh matter a year. These figures suggest that a farmer will require access to about 20 trees to feed a buffalo and 8 trees to feed a cow. The owner of 4.4 bovines, the average in the Hills, equivalent to 3 LSU 1/, would therefore require access to about 50 fodder trees growing wild or planted (assuming a herd ratio of 1.9 buffalo LSU and 1.1 cattle LSU). Planted in blocks more scientifically, the required produc- tion might be obtained from a greater number of trees more closely planted on a small area or from wider spacings with lopping designed to give umbrella canopies. 2. Farmers and ward groups should therefore establish programs to con- serve as many fodder trees as possible in their areas. However, very sub- stantial planting programs will be required to supplement forest supplies. Assuming that the farming community could in the future derive half its tree fodder requirement from existing trees or by regeneration within an accessible area, the individual farmer would still have to plant 25 trees to secure the balance of tree fodder to meet his requirements, representing about 0.1 ha per family at 6 x 6 m spacing. The village woodlot program aims at planting about 0.4 ha of dual purpose fuelwood and fodder trees per family (i.e., 30 ha of trees per village for a village with an average of 400 persons). Cut on a ten-year cycle this would provide the fodder equivalent of 0.04 ha. On this basis a fodder tree planting program would still be required on 80,000 ha in the Hills and on 50,000 ha in the Terai. 1/ LSU - Livestock Unit.  - 35 - ANNEX 6 Page 1 NEPAL FORESTRY SECTOR REVIEW Fuelwood/Fodder Trees and Forage Plants Suitable for Planting or Trial Year to Altitude Species Harvest Nutritive Value 0-1500 m Acacia catechu - leguminous Artocarpus lakoocha 10 - 15 good Albizzia spp. - leguminous, fair Bauhinia variegata - leguminous, good Leucaena leucocephala - leguminous, good Shorea robusta 20 fair Ficus religiosa 15 fair Ficus benghalensis 15 fair Ficus glaberrima 10 - 15 fair Litsea polyantha 5 - 7 fair Morus spp. 3 - 5 good Sterculia villosa 7 - 10 Steriospermum tetragonum 7 - 10 Premna integrifolia 5 Chloris gayana (grass) 1 good Pennisetum typhoides (grass) 1 good 1,200-2,000 m Pueraria phaseolides (herb.) 1 leguminous, good overlapping Litsea polyantha 5 - 7 fair Albizzia mollis 7 - 10 leguminous, fair Morus ssp. 3 - 5 good Symplocos crataegoides 5 - 7 fair Schima wallachii 10 - 15 fair Ficus nemoralis 7 good Ficus roxburghii 7 good Ficus semicordata - Machilus gamblei 10 good Machilus odoratissima 10 good Bauhimia purpurea 4 leguminous, good Castanopsis indica 10 - 15 poor Castanopsis tribuloides 10 - 15 good Erythrina arborescens 7 good Prunus cerasoides 7 fair (HCN) Pennisetum clandestinum (grass) 2 good + soil binder Setaria anceps (grass) 2 good Desmodium uncinatum (herb.) 1 leguminous, good 2,000 m and Morus spp. 5 - 7 good above Salix spp. 3 - 5 good Ficus nemoralis 7 good  - 36 - ANNEX 6 Page 2 Year to Altitude Species Harvest Nutritive Value Ficus roxburghii 7 good Populus spp. 5 Quercus spp. 20 fair Aesculus indica 20 Betula utilis 20 Sources: Importance of Fodder Trees and Tree Fodders in Nepal, September 1975, by K. Panday. LAC Report on Village Forestry, November 1976, by T.J. Wormald. IBRD Appraisal of Rural Development Project, Nepal, February 1976, Annex 2. Prem Dutta, L.P. Sharma and H. van Swinderen, pers. comm. This list includes only those tree species which can be used for fuel and for firewood both; the herbaceous species listed are perennials which require multiplication in nurseries.  NEPAL FORESTRY SECTOR REVIEW ALLOCATION OF FOREST LAND IN THE TERAI (FOREST DEPARTMENT LAND USE SURVEY, 1974/75) Forest Production Protection Limited Alienable Special Border Division Forest Forest 11 Use Forest 11 Forest 1/ Forest I1/ Clearance 1, Totals Mechi 16,928 12,496 573 6,801 - 628 37,426 Biratnagar 21,542 24,691 13,806 1,551 3,406 - 64,996 Hanumannagar 4,395 120,062 5,842 371 - - 130,670 Janakpur 23,163 87,107 6,285 225 326 - 117,106 birgunj 78,225 103,950 1,716 408 34,837 - 219,136 ehitwan 24,406 194,839 790 30 26,064 - 246,129 Lumbini 39,206 71,467 7,692 2,173 - - 120,538 Kapilvastu 17,639 55,840 18,648 1,464 - 807 94,398 Banke 54,961 90,073 2,166 12,309 - 810 160,319 Bardia 21,370 33,794 5,683 14,089 18,107 1,846 94,889 Kailali 39,975 100,033 23,264 7,894 - 13,895 185,061 Kanchanpur 36,635 55,588 7,667 13,060 18,552 14,152 145,654 Totals 378,445 949,940 94,132 60,375 101,292 32,138 1,616,322 1/ The definition of forest categories is given in the Appendix. February 1978  - 38 - ANNEX 7 Appendix NEPAL FORESTRY SECTOR REVIEW Allocation of Forest Land in the Terai Forest Categories 1. The areas of Protection Forests are made up of the Churia (Siwalik) Hills and the adjoining Bhabar Zone. The Churia Hills rise sharply from the Terai Plain and therefore their boundaries can be readily defined from existing topographic maps. Because of the highly erodable structure of the Churia Hills they must be maintained under forest cover for the protection of the adjacent agricultural lands of the Terai Plain. Fringing the southern edge of the Churia Hills is a belt of bouldery and highly porous soils known as the Bhabar Zone. These Bhabar soils should also remain under permanent forest cover, although there are areas, particularly in the Eastern Terai, where cultivation has already been carried to the base of the hills. 2. Although the Churia Hills are extremely steep and very difficult of access, the protection forest covering them must eventually be brought into productive use. The quality of the forest is poor and therefore production of sawlogs need not be considered, but the area could certainly be used for fuelwood production under very carefully controlled conditions. The area of the Protection Forest is approximately 1.0 million hectares but, because of the difficult terrain in the Churia Hills, only one-fifth of this might be considered as available for fuelwood production. The growing conditions are poor and it is doubtful if the growth rate would exceed 2m3/ha/annum. Thus, the maximum fuelwood output that could be maintained in the accessible areas of the Churia Hills is 400,000 m3/annum, which would be available to villagers living close to the base of the hills. 3. Limited Use Forest is defined as degraded forest being used for village requirements and no longer suitable for the production of commercial timber. 4. Special Forest is defined as being those areas of forest allocated to game reserves, wildlife sanctuaries, etc. 5. Border Clearance areas are mostly productive forest being cleared in a settlement zone along the border with India. 6. Alienable Forest is made up of small isolated areas which the Forest Department feels could be released for agricultural use, in order to tidy up the boundaries of major forest reserves. 7. The existing forest areas are shown in Maps 13459 and 13460, which show the location of wood-using industries in the Terai and the major urban centres.  NEPAL FORESTRY SECTOR REVIEW MINISTRY OF FORESTS, PROPOSED ORGANIZATION CHART Minister of Forests Secretar of Forests Timber Corporation of Nepal Department of Soil and Water Conservation Fuelwood Corporation Forest Department -Royal Drug Laboratory Nepal Resettlement Corporation Forest Resources Survey Village Forest Unit CVFU) Afforestatjion Office District Offices (1 per 5 Rangers) Territorial WorkingCircle National Parks and Wildlife Office Forest Rangers (1 per 5 Foresters) Forest Divisions I I I Forest Products Development Board Foresters (1 per 2 Panchayats) Forest Districts Panchayat/Village Forest Associa- Forest Ranges tion Leaders (1 per Village) 1/ 1/ Initially, these could be extension workers who at a later stage of project development (depending on progress) could become VFA leaders responsible for administration of the village wood lot. February 1978 CO  NEPAL FORESTRY SECTOR REVIEW Ministry of Forests Budget and Staff of the Forest Department EXPENDITURE REVENUES Year Regular Budget Development Budget Totals Totals