Nepal - Community Forestry Development and Training Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 2663a-NEP NEPAL STAFF PROJECT REPORT APPRAISAL OF THE COMMUNITY FORESTRY DEVELOPMENT AND TRAINING PROJECT March 25, 1980 South Asia Projects Department Education and Agricultural Institutions Division 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.  CURRENCY EQUIVALENTS US$1.00 Nepalese Rupee (NR) 12.00 WEIGHTS AND MEASURES Metric System FISCAd YEAR July 16 - July 13 ABBREVIATIONS AO Attached Officer CCF Chief Conservator of Forests CDO = Chief District Officer CF Cofimmunity Forester CFAD Community Forestry and Afiorestation Division CFU Community Forestry Unit DAP District Administration Plan DFO Divisional Forestry Officer FD Forest Department HMG His Majesty's Government of Nepal ICB i= nternational Competitive Bidding LCB Local Competitive Bidding MEU Monitoring and Evaluation Unit MFTW Ministry of Forest Training Wing MOF Ministry of Forest MOHP Ministry of Home Panchayats MPU Motivation and Publicity Unit PDO Panchayat Development Officer PF Panchayat Forest PFF = Panchayat Forest Foreman PFW = Panchayat Forest Watchers PP = Private Planting PPF = Panchayat Protected Forest SIU = Stove Improvement Unit SLC = School .Leaving CertificatE SWC Soil and Water Conservation TCN Timber Corporation of Nepal TOR Terms of Reference  FOR OFFICIAL USE ONLY NEPAL COMMUNITY FORESTRY DEVELOPMENT AND TRAINING PROJECT Table of Contents Page No. I. BACKGROUND ...................... ....................... I A. Introduction ...................................... 1 B. Project Background ................................ 1 The Panchayat System .............................. 2 C. Forestry in Nepal ................................. 4 Environmental Conditions and Forest Types .... ..... 4 Present Consumption of Fuelwood, Fodder and Other Forest Products ........................... 5 Problems of Soil Erosion .......................... 6 Exploitation of Forest Resources .... .............. 7 Contribution of Forests to the Economy .... ........ 7 Forest Land Ownership ............................. 8 Forestry Institutions ............................. 9 Forestry Training ................................. 10 Forestry Projects ................................. 10 Policy for Forestry Development ................... 11 II. THE PROJECT ............................................ 11 A. General ........................................... 11 Community Forestry Development .................... 11 Forestry Training ................................. 12 General Description ............................... 12 Project Area - Community Forestry Development ..... 14 Community Forestry Development .................... 16 B. Detailed Features ................................. 16 Panchayat Forest .................................. 16 Panchayat Protected Forest ........................ 17 Tree Planting on Private Land ..................... 18 Improved Stoves ................................... 18 Forestry Research ................................. 18 Project Implementation - Community Forestry Development ..................................... 19 Operating Procedures .............................. 20 Forestry Training ................................. 21 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.  - ii - Table of Contents (cont'd) Page No. Technical Assistance .............................. 24 Midterm Review and Feasibility Studies .... ........ 25 III. COST ESTIMATES AND FINANCING ............................ 26 A. Cost Estimates ..................................... 26 B. Financing .......................................... 28 C. Procurement and Disbursement ... ................... 28 D. Accounts and Audits ............................... 29 IV. ORGANIZATION AND MANAGEMENT ............................ 30 Community Forestry Unit (CFU) ..................... 30 Seed Stores ....................................... 31 Forestry Research ................................. 32 Motivation and Publicity Unit (EPU) .... ........... 32 Monitoring and Evaluation Unit (MEU) .... .......... 32 The Stove Improvment Unit (SIU) .... ............... 33 Administration and Logistics Section .... .......... 34 Project Coordination .............................. 34 Inservice Training ................................ 35 V. PRODIJCTION AND MARKETING, COST RECOVERY AND IMPACT OF PROJECT ON GOVERNMENT BUDGET .......................... 35 Yields and Production ............................. 35 Markets and Prices ................................ 36 Distribution of Produce between Villagers ... ...... 36 Cost Recovery ..................................... 37 Project Impact on HMG Budget ...................... 37 VI. BENEFITS, JUSTIFICATION AND RISKS ...................... 38 Benefits ............ .............................. 38 Economic Analysis and Rates of Return .... ......... 39 Sensitivity Analysis . ............................. 40 Project Risks ......... ............................ 40 VII. AGREEMENTS REACHED AND RECOMMENDATIONS .. ... 41 LIST OF ANNEXES 1 Community Forestry Development: Production of Forest Products from PF, PPF and PP Table 1: Natural Grass and Fuelwood Production - Panchayat Forest Table 2: Leaf Fodder and Fuelwood Production - Private Planting Table 3: Leaf Fodder and Fuelwood Production - Panchayat Protected Forest  - iii - 2 Procurement and Disbursement 3 Economic Analysis Table 1: Incremental Production of Leaf Fodder, Grass Fodder and Fuelwood Table 2: Dt:--ivation of Economic Price of Fuelwood Table 3: Economic Price of Maize Table 4: Derivation of Economic Price of Leaf Fodder and Grass Fodder Table 5: Economic Costs and Benefit Streams 4 Schedule of Estimated IDA Disbursements 5 Implementation Schedule 6 Ten Year Manpower Requirement Predictions - Diploma and Certificate Levels - MOF 7 Project Costs and Charts Table 1: Summary Project Costs Table 2: Community Forestry Development: Project Organization, Staff and Other Operating Costs Table 3: Community Forestry Development: Investment Costs - CFAPD Divisional Field Offices and Research Components Table 4: Community Forestry Development: Village Forestry Program Nursery Overhead Costs Table 5: Community Forestry Development: Nursery and Forestry Development Costs Table 6: Community Forestry Development: Improved Stoves - Investment and Operating Costs Table 7: Community Forestry Training: Staff and Other Operating Costs Table 8: Community Forestry Training: Buildings, Housing, Vehiples and Equipment Costs Table 9: Community Forestry Training: Training Costs Table 10: Technical Assistance Costs Chart 20617 - Proposed Organizational Structure of Ministry of Forest Chart 20618 - Proposed Organization Chart of Community Forestry and Afforestation Division of Ministry Of Forest 8 List of Material Available in Project File MAP IBRD 14534 - General Map of Forest Divisions and Project Area   NEPAL COMMUNITY FORESTRY DEVELOPMENT AND TRAINING PROJECT I. BACKGROUND A. Introduction 1.01 Ever growing population, mountainous terrain, limited irrigation, increasing cultivation of steep landslide-prone hillsides, over-grazing of pasture lands and defoliation (for livestock fodder) and destruction of forests, all contribute to declining standards of living for the residents of the Hill and Mountain region of Nepal. 1.02 To remedy this deteriorating situation, His Majesty's Government of Nepal (HMG), IDA, and several bilateral agencies 1/ are now assisting in the development of a number of Hill districts. As part of the strategy to improve the quality of life in these areas, HMG, jointly with the FAO/IBRD Cooperative Program, produced a report entitled "Nepal Community Forestry Development Project" in April 1979. This report became the basis of an application for IDA assistance in the implementation of a project for devel- opment of forestry in the Hills, covering those parts of the country not already included in ongoing rural development projects. 1.03 This report is based on the findings of an IDA appraisal mission which visited Nepal in May/June 1979, comprising A.J. Pritchard, H. Kim (IDA); W.J. Ellis (forestry consultant); R. Noronha (sociology consultant); P.J. Wood (forestry training consultant), and I. Evans (stove technology consultant). B. Project Background 1.04 Nepal is landlocked between China and India. It can be divided into three parallel ecological zones running east-west. The Terai Plain, an extension of the Gangetic Plain of India; the Hills, actually the foot- hills of the Himalayas, and ranging from 500 m to 4,000 m in height; and the Himalayan Mountains to the north. These three zones account for 17%, 68% and 15% of the total area (140,797 sq km), respectively. Rivers and streams running north-south cut the Hills into isolated areas, with varying microclimatic conditions providing a range of environments for plant growth depending on aspect, cloud cover, slope, etc. 1.05 Nepal is one of the world's least developed countries, with current annual per capita income estimated at US$110-120, but it can be as low as US$24 in the Hills. GDP growth during the last decade has averaged about 2.4% annually. 1/ USAID, ODA, SATA, Australia Aid, CIDA, ADB.  - 2 - 1.06 Nepal's population is estimated at 13.5 M and is currently increas- ing at 2.2% annually. About 65% of the population live in the Mountains and Hills where thle density is now 24 and 103 persons per sq km, respectively. However, when related to the area under cultivation in these zones, the popula- tion density has reached an alarming 1,500 per sq km of arable land. In com- parison, the figure for the Terai, which has two-thirds of the country's cultivable area, is 565 per sq km of arable land. Population pressure and the lack of employment possibilities in the Hills forces 10 to 50% of male family members to migrate, either seasonally or permanently, to the Terai, Kathmandu or elsewhere in order to find employment and supplement incomes. 1.07 Agriculture is the main source of livelihood for 95% of the popu- lation. Paddy, wheat, maize and millet are the major crops, forming 80-90% of the Nepalese diet. Cash crops (tobacco, oilseeds, jute and sugarcane) are grown on less than 10% of the total croppe!d area and are mostly confined to the Terai. Livestock play an important role in the way of life of rural Nepal and animal products form an integral part of the subsistence diet. The most serious constraint on livestock production is scarcity of adequate feed. 1.08 Differences in income and economic status among Hill villagers are not great 1/, but this egalitarianism is the result of low economic develop- ment and widespread sharing of poverty. Ethnic differences and social status are usually expressed through geographic distribution in which the Hindu and Hinduized groups live at lower altitudes and in the valleys; the more tribal- ized groups live at higher altitudes. Generally, villages are neither ethnically nor linguistically homogenous (only 52% of the population are native speakers of Nepali). 1.09 Most Hill areas are without road access and can only be entered by foot trails. Villages and settlements are dispersed, and administrative services are irregular at best and largely nor.-existent. The Panchayat System 1.10 Administratively, Nepal is divided into four Development Regions. Each comprises a section of the country, running north to south, containing Mountain, Hill and Terai districts. Each Development Region is subdivided into Development Zones, varying from 3 to 5 irL number, which are further divided into Districts. 1.11 The panchayat system, which encompasses the political and develop- ment organizations, has three tiers. The loweLst political level is the village panchayat or, for areas with a population of 10,000 and more, a town panchayat. The next level is the district parnchayat. The highest level is the national panchayat whose 125 members are either elected by members of the district panchayat or appointed by His Majesty the King. The village panchayat is generally comprised of nine wards, each containing about two villages, which are the smallest socioeconomic units. The average area of 1/ On the basis of a limited survey, the Gini coefficients were estimated at 0.43 for the Hills and 0.51 for the Terai.  - 3 - a Hill panchayat has been estimated at 3,670 ha (see Project File, Item 2), with a population of 4,300 (about 700 families). 1.12 Present political developments in Nepal indicate the possibility of a shift from the partyless panchayats system of government to one based on represet. ation of the people through elected members of political parties. This change, if it eventuates, is not expected to affect the project signi- ficantly, since any alteration in the system must continue to recognize the district as the basic organizational and administrative unit that would be administered by a body of elected representatives. At village panchayat level, representation would continue to be through popular elections, the only change being that representatives would be members of national political parties. 1.13 The working of the panchayat system and assistance in local devel- opment are the responsibilities of the Ministry of Home Panchayats (MOHP), and implemented, at district level, through the District Administration Plan (DAP). 1.14 District Administration. The Chief District Officer (CDO) is the administrative head of all government functionaries of line ministries operat- ing at the district level, which are merged into a District Secretariat, which also functions as the Secretariat to the district panchayat. DAP defines two areas of responsibility of the CDO as maintenance of law and order and dis- trict development. Execution of the latter function is entrusted to a Panchayat Development Officer (PDO) under the CDO's supervision. 1.15 Line ministries retain technical supervision of staff at district level while delegating administrative and financial responsibility to CDO for preparation and implementation of district development plans. Popular participation in development is established through a number of coordination committees, chaired by the district panchayat chairman and comprising CDO, and representatives of line ministries, as non-voting members, and individuals chosen by district panchayats from among their elected body as operational members. The District Secretariat is responsible for implementation of approved projects. Guidelines for "Integrated Panchayat Development," which consider the village panchayat as the basic level for planning and plan implementation, have been recently approved by HMG. 1.16 Village panchayat programs are initiated at village meetings and submitted to the district panchayat for technical clearance and financial assistance. Each year a district development plan is prepared, comprising all the activities in the district other than those of zonal or national scope. Village panchayat plans, which specify priorities, estimated costs and the contribution the panchayat can make (including labor and materials) are consolidated by the district panchayat into the district plan. The district panchayat also assigns priorities to projects to be undertaken. Government line officers then examine proposals from the district panchayat, assess their technical feasibility, and relate proposals to the executive capacity of the line department and to funds and other resources available. After further discussions, the final district plan, approved by the district  -4 - assembly, is submitted to MOHP for its approval and release of funds. A recent innovation requires that district plans be sent to the Zonal Commis- sioner for his comment and scrutiny before they are submitted to MOHP. 1.17 Village panchayat projects are implemented through local implement- ation committees composed of village panchayat chairmen, district assembly members and voLuntary workers. Technical supervision is provided by district panchayat staff and line department personnel. MOHP provides a multi-purpose development worker to each village panchayat who also acts as secretary of the panchayat. Such workers not only serve as a liaison between the district administration and village panchayats, but also provide administrative support, especially in respect of record keeping and accounting. 1.18 The position of the Ministry of Forest (MOF) in the panchayat system is somewhat anomalous. Forest Divisions are larger than administrative dis- tricts and the Divisional Forest Officer (DFO) may have responsibilities for more than one district. At present, DFO attend district panchayat meetings only rarely and are represented by more junior Foresters or Rangers, lacking the authority to influence decisions. The result has been that forestry has rarely featureid in district plans. 1.19 Experience in implementing the Rural Development project in Rasuwa/ Nuwakot (Cr. 617-NEP) has shown that the panchayat system works efficiently with adequate technical assistance. C. Forestry in Nepal 1.20 The present forest area of Nepal is about 4.5 M ha (2.8 M ha in the Hills and Mountains and 1.7 M ha in the Terai). These figures represent a reduction of 25% in forest area over the past cLecade. The situation is, how- ever, worse than figures suggest because many areas of the Hills, now classi- fied as forest, are in fact degraded waste lancl with few or no standing trees. Projections show that, with present usage and increased demand from a growing population, accessible forests in the Hills will disappear within 14 years and those in the Terai within 25 years. 1/ Environmental Conditions and Forest Types 1.21 Variability of the climate and its interaction with soil fertility and physical features determine vegetation types and these are described in Project File, Item 1. Briefly, the major climatic influences are: the south- east monsoon which brings heavy precipitation from May to October, varying from a maximum of 3,500 mm in the east of the country to a minimum of 250 mm in the west (average annual rainfall is 1,516 mm); pre-monsoon droughts in the west; and temperature gradients resulting from increases in altitude over short horizontal distances. Only the Terai has a humid subtropical climate. 1/ Nepal Couamunity Forestry Development Project, FAO/World Bank Cooperative Program, 1979, page 7.  - 5 - 1.22 Natural forest types reflect the dissected topography of the country and the variability of its climate. Forests between an altitude of about 2,600 m and the limit for trees at about 5,000 m, consist mainly of conifers (fir, spruce, blue pine) with some hardwoods (oak, hemlock). Much of this forest is over mature. In the Terai (below 300 m), mixed hardwood forests, mainly of sal and asna, are found which contain almost no su zwood species. 1.23 The forests of the Hills lying between 300 and 2,600 m vary con- siderably in composition and are scattered in patches throughout the area. In general, at higher altitudes, fir and oak predominate, gradually giving way to chir pine, and species of Prunus, Castanopsis, Schima and Alnus at medium elevations and, ultimately, sal at lower elevations. Present Consumption of Fuelwood, Fodder and Other Forest Products 1.24 Nationally, fuelwood accounts for 87% of wood consumption and 97% of that used for non-commercial purposes. 1/ It provides botV heat and light and the average per capita consumption is estimated at 1 m per year (about 725 kg). Greater demand for cooked food and heating in the Hills, and the inefficiency of stoves commonly used, explain the larger fuel requirements of Nep9l as compared to the plains of India (estimated at the equivalent of 0.26 m /person/year. 2/) Alternative sources of energy, such as kerosene, are too expensive for general use in Nepal. 1.25 In some areas, shortage of fuelwood has forced the rural population to burn either livestock fodder or animal dung in order to provide for mini- mum heating and cooking needs. Quantities presently consumed are small (about 150,000 tons of fodder and 100,000 tons of dried animal manure in 1974/75 3/). The concern is, however, that, if the present rate of forest destruction continues, somewhere between 1985 and 1995 the burning of live- stock fodder and manure could rise to 8 M tons annually. Since farmyard manure is the main crop fertilizer used in the Hills, and assuming an average dressing of 2 tons/ha of dry dung and a resultant increased yield of 300 kg/ha of grain, the burning of 8 M tons of dry dung would represent a foregone annual production of over 1 M tons of foodgrains (25% of current cereal production). This loss of food would be particularly critical in the Hills. 1.26 In order to meet demands for fuelwood (and industrial wood to supply the needs of industry), Nepal will require about 1.3 M ha of plantations by the turn of the century. To provide this, a national reforestation program 1/ Nepal. The Energy Sector. Energy Research & Development Group. Institute of Science, Tribhuvan University, Kathmandu, Nepal, 1976. 2/ Staff Appraisal Report. India: Gujarat Community Forestry, (2601-IN), 1979. 3/ Nepal Forestry Sector Review, (1952-NEP), 1978, page 23.  - 6 - has been recommended 1/ under which 32,000 ha of village woodlot would be planted annually in the Hills and 20,000 ha in the Terai over the next twenty years. 1.27 In rural areas, domestic fuelwood is collected from November to May by women and children, as sufficient wood must be stocked and dried before the onset of the monsoon in June. The time spent gathering fuel is now approximately 60 man days/year/family and varies from 1.5 to 5.0 hours per day, depending on the distance of the wood source; but this is expected to increase substantially as forest resources disappear. 1.28 Many of the forest and waste land areas are grazed by domestic animals and free ranging unproductive cattle, which are protected from culling by religious beliefs. Useful animals are tethered at night and are stall fed with fodder leaves and grass collected in the forests. The Hill areas are now heavily overstocked. This was clearly demonstrated by a recent sample survey of panchayats (Project File, Item 2) which showed a stocking rate equivalent to 77 Stock Un:its 2/ per ha on low quality grass and waste land or 23 per ha on both grass and forest. The average number of cows and buffalo kept per family is 4.4 which ideally require access to 50 fodder trees, especially during the winter months. 3/ Assuming that the farming community can derive half of its fodder requirements from existing trees, a planting of 25 fodder trees per famiLy is still required to provide adequate levels of animal nutrition. This is equivalent to an additional 80,000 ha of plantations in the Hills and '50,000 ha in the Terai, over and above that required to meet fuelwood requirements (para 1.26). 1.29 Forests in rural areas provide wood for building and for manufacture of farm implements and simple tools. The amount required is small in compar- ison to that needed for fuelwood, amounting to 3% of total non-commercial wood production. Problems of Soil Erosion 1.30 The natural erosion process in the Hills is too great to be com- pletely contained by deliberate intervention. It results from steepness of the terrain and geological instability of the area, the scouring effects of ice and glacie-rs, and enormous run off during the monsoon period. The erosion process, however, is considerably increased by the activities of Hill farmers, who are largely unaware of conservation practices and cultivate soils on steep slopes, overstock and overgraze, and destroy fcrests when seeking fuelwood and 1/ Nepal Forestry Sector Review, (1952-NEP), 1978, page 23. 2/ Usually a Stock Unit is equivalent to one ewe, with five ewes equal to one cow. If, to compensate for small animals in Nepal, one cow is taken to be the equivalent of 2.5 ewes, the stocking rates are still high at 35 and 11.5 Stock Units per ha. 3/ Nepal Forestry Sector Review, (1952-NEP), 1978, page 34.  -7 - fodder. This combination of nature and man results in loss of top soil and potential agricultural land and causes declining crop production. In addition, the effects of lowered infiltration of water into the soil, due to increased runoff has reduced groundwater levels and led both to drying of mountain springs and to downstream flooding when run off quantities exceed the capacity of river bec8. Exploitation of Forest Resources 1.31 Most commercial exploitation of forests is concentrated in the Terai, where it is carried out by private Indian contractors, the Forest Products Development Board, and the government-owned Timber Corporation of Nepal (TCN). These forests support about 50 sawmills and some small factories which manufacture furniture, plywood and matches. Urban areas, especially Kathmandu, provide the main markets for sawn timber and fuelwood. In Kathmandu, a bundle of fuelwood weighing 35 kg is sold for NRs 25 (US$2). Wood is carried into these centers from surrounding Hill areas, and, in the case of Kathmandu, also trucked in from the Terai by the government-owned Fuelwood Corporation. 1.32 The high forests are generally inaccessible and have not been exploited commercially. They are now being encroached upon by farmers seeking new land and fodder and there are clear signs of extensive fire damage. 1.33 Exploitation operations in Hill forests are wholly restricted to the supply of forest products for local requirements (fuel, fodder and house construction). Except where trees are privately owned and usage regulated by the owner, local forest areas are plundered; trees and grass being regarded as "free goods" to which every member of the community is entitled. This contin- ual lopping and felling has resulted in progressive destruction of state-owned forests near villages, and, more recently, of those in remoter areas. The net result is that remnant forests near villages produce a mean annual increment of growth of only about 85 kg/ha of wood 1/ and villagers obtain the rest of their needs from surrounding scrub land, crop residues and by illegally cutting forests nominally under the protection and control of the Forest Department (FD) staff (paras 1.41 to 1.43). There is increasing evidence that, where communal woodlots are being threatened by overgrazing, farmers protect trees sited close to their homesteads, especially when they are pri- vately owned and the output used for domestic consumption. Contributions of Forests to the Economy 1.34 In 1976/77, the value of forest output (not including an estimated NRs 160 M for herbage and tree fodder and the unquantified benefits from free grazing) was NRs 1,100 M (US$92.0 M), equivalent to about 10% of total agri- cultural output. The breakdown of this output was as follows: 1/ Nepal. The Energy Sector. Energy Research and Development Group Institute of Science, Tribhuvan University, Kathmandu, Nepal, 1976.  - 8 - Forest Products (1976/77) NIRs M Sawlogs Etnd Plylogs L88.6 Fuelwood (estimated) 871.1 Medical Hlerbs 4.3 Nuts and fruit 10.0 1,074.0 SouLrce: Secretariat, National Planning Commission, National Accounts Project, Agricultural Sector of Nepal 1976/77, Kathmandu, 1978. Forest Land Owniership 1.35 Private forests were nationalized in 1957 with a view to preserving an important source of national wealth and providing for protection and con- trolled exploitation by the people. Excluded from the purview of the Act, were stray trees in cultivated lands, orchards and private forests in the Hills and Kathraandu Valley up to a maximum of 1.25 ha. Unfortunately, the Act was misunderstood by the people who believed the State had removed their right of free access and use of forests. Under these conditions, villagers rapidly ceased to apply any traditional rules for forest management and community responsibility for forest protection disappeared. Fuelwood, timber and fodder were collected indiscriminately and the rate of forest destruction was significantly accelerated. 1.36 This legislation was followed by the Forest Act of 1961 concerned mainly with forest administration and covering the description of forests, their registration and demarcation, and defining forest types; rights and duties of FD; and offenses and penalties. 1.37 Realizing that the aims of the 1957 Act had been misinterpreted and in recognition of the need to involve local communities in protection and regeneration of forests, if wanton destruction were to be prevented, the Act was amended in 1977, and new categories of fore!sts--panchayat forest (PF), panchayat protected forest (PPF), religious forests and contract forests were recognized. In the Act, PF are distinguished from PPF in that the former comprise governmental forest lands which have "been rendered waste or contain only saplings" and which require replanting, while PPF require only protection and management to ensure adequate forest cover. Products from PPF would be sold according to prevailing law which requires payment of 60% of income to HMG and a 40% royalty to the village panchayat. 1.38 To encourage private planting and the development of private forests, the Act was again amended in September 1978 and the restrictions on total area of private forests lifted.  Forestry Institutions 1.39 Ministry of Forest. Responsibility for the forestry sector lies with the Ministry of Forest (MOF). At present, this includes the following cell and departments (Chart 20617): (i) Forest Department: responsible for overall administration and management of forest on behalf of HMG. (ii) Soil and Water Conservation: responsible for design and coordination of conservation practices, and for projects, including complete watershed development and management. (iii) Botany and Medicinal Plants: responsible for conservation and production of material used in traditional medicinal practices; (iv) Resettlement: responsible mainly for the identification of persons for resettlement and selection of resettlement areas in the Terai; (v) Planning Cell: responsible for advising the Minister and Secretary for Forestry on planning and policy matters. 1.40 MOF is also responsible for the activities of a number of semi- autonomous government corporations dealing with: timber production and sales (Forest Products Development Board); public sector sawnwood production (Timber Corporation); management of resettlement projects (Resettlement Company); supply of fuelwood to Kathmandu (Fuelwood Corporation) and specific develop- ment projects, such as the Sagarmatha Forest Development Project (Forest Products Development Board). 1.41 Up to the present, FD has been mainly concerned with licensing and organizing timber sales and with forest law enforcement. In terms of the needs of Nepal, its replanting program is insignificant, with only 10,000 ha having been planted over the last 3-4 years, the majority of which has been in Chautara Division in the Hills. 1.42 The headquarters Divisions and Central Offices of FD include: (i) Administration and Utilization; (ii) National Parks and Wildlife: responsible for management of national parks and protection of flora and fauna; (iii) Forest Survey and Research: responsible for aerial photo- graphic interpretation, ground survey, mapping, forest growth studies, etc.; (iv) Afforestation: consisting of seed, nurseries and plantation units and responsible for national afforestation programs.  - 10 - 1.43 The Forest Department is under the direction of the Chief Conserva- tor of Forests (CCF), who is directly answerable to the Secretary for Forests. The territorial organization of FD covers the whole country and consists of nine major subdivisions, known as Circles, further divided into 40 Divisions and 174 Ranges. Most Forestry Divisions in thie Hills have been created recently, and basic infrastructure (offices, housing) is either lacking or rudimentary. The forestry staff is composed of 148 Forest Officers, many of whom, in addition to basic training at the Indian Forestry School at Dehra Dun, have post: graduate training overseas. Sone 250 Rangers and 90 Foresters have been trained at the Nepal Forestry Institute at Hetaura. There are, in addition, several hundred Forest Guards who receive no formal training. Forestry Training 1.44 There is no training at the degree or diploma level for professional Forest Officers in Nepal. Forest Officers have, in the past, been trained mainly at the Indian Forestry School, although in recent years it has been increasingly difficult for non-Indian nationals to gain admission there. The non-availability of Forest Officers is one of the constraints to forestry development in Nepal. 1.45 The training of forest technicians at the certificate level is done at Hetaura in the Inner Terai where a center has been established and admin- istered by Tribhuvan University. School Leaving Certificate (SLC), normally obtained after 10 years of school, is required for admission. Foresters are trained by means of a two-year Certificate course. Forest Rangers were originally trained by means of an additional one-year Senior Certificate course available upon successful completion of the Certificate course, but this has now been dropped and Forest Rangers will, in the future, receive the necessary training, additional to that given Foresters, through inservice training programs. In spite of the fact that intake to the Certificate course has been increased in recent years, the present annual output of about 100 Foresters and Rangers is insufficient for the country's needs. Any expansion of forestry operations would require an increase in the number of trained forestry stafif which could not be provided with the limited facilities avail- able at Hetaura. 1.46 The courses at Hetaura are run by Tribhuvan University, which is responsible for all post SLC training in Nepal. Present training is oriented mainly toward commercial forestry production in the Terai, which in the past was the most important forestry activity in the country. With the increasing importance of community forestry in the Hills, a reorientation of current forestry training has become of paramount importance for forestry development in Nepal. Forestry Projects 1.47 The Forest Department has a limited program of afforestation under- taken with its own resources (para 1.41). Community forestry development, however, is increasingly an important component in a number of aid assisted projects. Forestry activities are included in the Rural Development Project (IDA Credit 6]17-NEP) and Lamasangu-Jiri Rural Development Project (financed  - 11 - by SATA). The Australian-assisted Chautara Division Forestry Project also includes substantial inputs into reforestation. Forest development is included in six other projects to be financed under assistance from ODA, SATA, USAID, CIDA and ADB, covering 27 other districts. The Nepal Settlement Project (IDA Credit 505-NEP) is concerned with land clearance and logging operations c-i resettlement in Terai forests. Policy for Forestry Development 1.48 In the past, the Forest Department, due to lack of local interest and shortages of staff and funds, has not been in a position to control the nationalized forests located in the Hills. To prevent further destruction of these forests, HMG, through the National Forestry Plan (1976) and recent (1978) alterations to existing Forest Rules, is seeking to reestablish respon- sibility in local communities for community forestry development and for forest protection and management and is actively encouraging the establish- ment of PF and PPF. To ensure maximum impact from forestry operations, highest priority is being given to the production of fuelwood and fodder. This will relieve pressure on existing forests and ease the burden of fuelwood collection. A lower priority is to be allocated to fruit production and other activities, such as collection and production of forest byproducts, including medicinal plants. 1.49 No tradition has been developed among villagers in Nepal for affore- station, forest regeneration or fuelwood conservation, mainly because wood shortages have only become intense over the last decade. Most panchayats are, therefore, lacking the necessary background knowledge to enable them to outline and follow policies for forestry development. II. THE PROJECT A. General 2.01 The project would be the first phase of a national forestry program, the main aims of which would be: (i) development of community forestry in the Hills; and (ii) establishment of training facilities within Nepal to satisfy internal needs for qualified forestry and soil and water conservation personnel, and provide inservice training. Community Forestry Development 2.02 Operating within policy guidelines which provide for greater responsibility for forest management and protection to be allocated to local communities, the national community forestry program would ultimately involve all the panchayats in the Hills (1,090), and would be implemented over the  - 12 - next twenty years. The project would be the first phase of this program, during which 340 panchayats, scattered throughDut the Hill districts of Nepal, would participate in afforestation and forest maintenance activities. 2.03 The principal objective of the community forestry aspect of the project would be to increase supplies of fuelwood in Hill areas through establishment of new plantations and rehabilitation of areas of degraded forest. This would require a reorganization and strengthening of FD and the provision of supporting services and training facilities to enable it to respond to the needs of the program. Secondary objectives would be to provide fodder, grass, and wood for the manufacture of agricultural implements and house construction. As a fuelwood conservation measure, the project would introduce and popularize improved cooking stoves. Forestry Training 2.04 New and improved training facilities provided under the project would enable Nepal to meet future trained manpower needs of the forestry sector from institutions developed within the country. Expanded inservice training facilities would enable existing staff, presently concerned with commercial timber extraction and forest law enforcement, to be retrained in the skills of community forestry. General Description 2.05 During a five-year period, the project would: (1) Commmunity Forestry Development (a) provide funds for staff, equipment, horses, vehicles, operating expenses and nurseries at the Forest Divi- sion and village panchayat levels to: (i) establish about 11,750 ha of Panchayat Forest (PF); (ii) rehabilitate about 39,100 ha of Panchayat Protected Forest (PPF); and (iii) establish about 0.9 M trees on private land; (b) support FD operations by provision of additional staff, buildings, seed stores, equipment, vehicles and operating expenses to: (i) establish a Community Forestry and Affore- station Division (CFAD) in FD; (ii) strengthen MOF forestry research activities; and  - 13 - (c) introduce fuel conservation measures through the estab- lishment of a Stove Improvement Unit (SIU) in CFAD and construction of about 15,000 improved stoves. (2) Forestry Training: Expand staff training facilities by providing staff, operating costs, civil works, equipment and -hicles to: (a) establish a new university campus; and a program for training Forest and Soil and Water Conservation Officers, Foresters, and Soil and Water Conservation Technicians; (b) upgrade the existing Forestry Institute; and (c) establish an Inservice Training Wing within MOF; (3) Midterm Review and Feasibility Studies: Provide funds for: (a) a midterm review of project progress; (b) a feasibility study on the extraction of timber from high altitude forests; and (c) a feasibility study on the provision of fuelwood for urban areas; (4) Technical Assistance: Provide about 115 man-years of technical assistance to assist: (a) the field planting program; (b) CFAD organization and administration; (c) forestry research; and (d) training course design and the lecturing program. Responsibility for implementation of the community forestry and inservice training components would be with Ministry of Forest; and for diploma and certificate training with the Tribhuvan University under the Ministry of Education. 2.06 The need to establish forests on substantially greater areas than proposed in this project is recognized, 1/ but the constraints of trained man- power shortages and lack of skills in community forestry (especially at the village level) dictate a slow development rate over the present project 1/ Nepal Forestry Sector Review (1952-NEP) 1978 recommended 480,000 ha of village woodlot at year 15, compared to the proposed 63,500 ha PF and 99,000 ha PPF under this project.  - 14 - period. Dependent upon the success achieved in the field planting program and in providing the necessary manpower, any follow-up project would have increased afforestation targets. Project Area - Community Forestry Development 2.07 The project would be implemented in 28 administrative districts which are not presently covered by forestry components of existing or proposed integrated rural development projects. The proposed district I are located in 17 Forest Divisions (Map IBRD 14534) covering about 51,000 km (one-third of Nepal) with a population of about 5 M people. 2.08 Project plantings would be confined to some 340 village panchayats located in the middle hill zone, most of which lie between 500 and 2,000 m a.s.l. It, therefore, excludes high altitude fDrest areas located above 2,600 m. Within the project area, many sites for reforestation have been identified (Project File, Item 3), amounting to an average of 700 ha per village panchayat. 2.09 The proposed community forestry program for each village panchayat would be to establish a nursery in the first year and to plant, in the follow- ing six consecutive years, 5, 10, 15, 20, 20 and 20 ha of PF. Thus, 90 ha of PF would be planted per village panchayat over a seven year period. Allowing for pre-project establishment of nurseries, 70 ha would thus be planted over the five year project period, but this would onLy be possible in those pancha- yats entering the project during the first year. In addition, from the second year onwards, the program would provide each panchayat with about 900 seedlings annually for private plantings and setedlings for enrichment plant- ing of PPF. The latter would be specified by C:FAD staff after inspection of the areas proposed for PPF by village panchayats. 2.10 On the basis of available staff and an assessment of the receptivity of village panchayats to establishment of community forests, FD has classified Forest Divisions in the project area into two categories. The first, consist- ing of Ilam, Kanchanjunga, Dudh Koshi, Kathmandu, Gorkha, Pokhara, Dhaulagiri, Ridi, Dandeldhura and Mahakali Divisions (Group A), would enter the project in the first year. The people in the second category, consisting of Solukhumbu, Tamakoshi, Sindhuli, Trisuli, Marshyangdi, Achham and Doti Divisions (Group B), would require further reorientation and education before they would be ready to participate and their entry would be necessarily delayed until this has been done. 2.11 The lack of 90 ha of suitable, but unforested land, which could be delineated as PF under present rules, would not preclude a village panchayat from participating in the project. Most village panchayats have adequate areas of easily accessible forest (Project File, Item 2), much of it, however, degraded and presently of low potential. Such areas can be made productive by enrichment planting, but under the Forest Rules prevailing at the time of appraisal, the presence of 120 trees/ha classifies them as PPF and this precluded the area from reforestation. With such small numbers of trees, these areas would never become productive, even if allowed to regenerate.  - 15 - The Forest Rules were amended so that all areas in need of reforestation can now be designated as PF. With the new definition, the area available for PF has increased substantially. 2.12 The proposed planting and rehabilitation program is given below: Project Planting Program Project Year 1 2 3 4 5 Total Panchayat Forest (ha) 250 925 2,025 3,550 5,000 11,750 Panchayat Protected Forest (ha) 5,750 9,775 9,775 9,775 4,025 /a 39,100 Total (ha) 6,000 10,700 11,800 13,325 9,025 50,850 % 12 22 24 27 12 /a 100 Private Plantings ('000 trees) 43 116 189 262 292 902 No. of Panchayats 50 85 85 85 35 Ia 340 /a Assumes that only 340 panchayats would participate in the project and, therefore, areas devoted to PPF and number of participating panchayats are reduced in project year 5. Depending upon recommendations made as a result of the midterm review, it is likely that the rate of entry of 85 panchayats each year into the project would be maintained or increased. 2.13 The rate of development within any Forest Division would be limited to the induction of five village panchayats per year, and to a maximum of 20 panchayats per Division. This rate of induction would mean that panchayats would be brought into HMG's long term plan for community forestry development as follows: No. of Panchayats Program Year Calendar Years in the Program 5 /a 1980-1985 340 10 1989-1990 645 15 1994-1995 935 /a Covers present project period. 2.14 At the proposed rate of development, the following targets should be met:  - 16 - PF Program Year Planted PPF Private Planting (ha) (ha) (M of trees) 5 (1984-85) 11,750 39,100 0.9 10 (1989-90) 37,350 74,175 3.0 15 (1994-95) 63,450 107,525 6.3 Community Forestry Development 2.15 The concepts underlying the three categories of forests to be established under the project differ in many respects, including establish- ment practices, management, species content, etc. Details of each type of forest are given in paras 2.16 to 2.24. Establishment costs are given in Annex 7, Table 4 and summarized below: Type of Forest Planting and Establishment Costs /a (NRs/ha) Panchayat Forest 894 Panchayat Protected Forest 109 /b Private Plantings 876 /c /a includes nursery, planting, protection and maintenance costs. lb for protection and enrichment planting only. /c includes an estimated NRs 720 for labor provided by individual farmers for forests and trees planted on their own land. B. Detailed Features Panchayat Forest (11,750 ha) 2.16 Planting. The trees planted in PF would be mainly species suitable for fuelwood production. Given the urgency for rapid production of this commodity, preference would be given to faster growing species. Species to be planted, planting density and the management scheme to be followed would depend on the site selected for reforestation (Project File, Item 3). Guide- lines for plantation species and silvicultural regimes considered to be appropriate are given in Project File, Item 4. 2.17 Generally, hardy species of pine would be planted on ridge top sites, preferably blue pine or patula pine, but on severely degraded dry ridges, chir pine is probably the only species that can be recommended. In eroded gulley sites, Alnus, Prunus and Betula would be mixed with bamboo. In sites avail- able at lower elevations and in those areas occupied by agricultural terraces, Alnus, Prunus and Betula would be planted and the remnant sal and schima allowed to coppice. Because of their long rotation period (80 to 120 years) these latter species would not be planted.  - 17 - 2.18 Once land had been declared legally unencumbered (para 2.33), plant- ing sites would be demarcated and their suitability confirmed by technical CFAD staff located at Forest Division headquarters. Planting pits would then be aligned and dug before the onset of the monsoon in May each year and, if considered necessary, the area would also be fenced during this period. Planting would commence in June each year, coinciding with "I.e onset of the rains. Fodder grasses and legumes would be produced in PF, usually from indigenous species naturally regenerating, but high yielding species would be planted between trees when seeds become available from project seed stores. 2.19 Nurseries. Under the project, an average of two nurseries would be established in each participating village panchayat, giving a total project requirement of 680. The optimum size of these nurseries is about 25,000 pots, with annual production after losses of about 18,000 plants. In addition, one FD nursery and three Range nurseries, of 100,000 and 50,000 pots respectively, would be established within each Division to provide backup support for panchayat nurseries; and facilities provided for testing improved nursery techniques, raising species new to the area, and multiplying fodder grasses and legumes. 2.20 All seed would be provided through the DFO who would either arrange for its collection by staff of Range and Divisional nurseries or would obtain it from seed stores to be provided under the project. All planting stock would be at least one year old; therefore, in order for the project to begin at the time of the 1980 planting season, it would be necessary for nursery establish- ment, seed collection, forest demarcation, and some reorientation training (para 2.43) to begin before project effectiveness in the first 50 selected panchayats. 2.21 Forest Maintenance. Tending operations would consist mainly of re- placing dead seedlings and hoeing around trees. The amount of hoeing required would be minimal as villagers would be allowed access to PF in order to collect grass forage and, in many instances, this would be sufficient to remove weed competition. 2.22 Forest Protection. Because villagers participate in forest manage- ment and operation, protection would not be a problem and would be generally feasible without fencing, through cooperation of villagers, especially in the control of livestock grazing. Experience in the Chautara and Pokhara areas has adequately demonstrated that this approach is realistic. If considered necessary, e.g. near to recognized cattle paths, fences would be built of locally available materials or by using live hedges. The project would provide labor and materials to fence approximately 25% of the perimeter of PF and PPF in each panchayat. In any event, Panchayat Forest Watchers (PFW) would be employed to guard the forest. Panchayat Protected Forest (39,100 ha) 2.23 Degraded forests, which can be rehabilitated by simple protection, would be classified as PPF. The same protection measures as with PF would be used, with the addition of measures for fire protection in larger areas.  - 18 - These remnant forests vary in location, species content and condition and, therefore, management practices and potential yields also vary. In some cases, enrichment planting of PPF would be required, but in sal forests at lower altitudes, a substantial coppice pole crop could be obtained within 14 years with only protection measures. Management practices would be recommended by the DFO or other CFAD technical staff after inspection of the proposed PPF site. Guidelines for management schemes are provided in Project File, Item 4. It is estimated that an average of 115 ha of PPF would be established per village panchayat. Tree Planting on Private Land 2e24 Villagers would be encouraged to plant trees on their own land near the homestead. These would be mostly fodder trees, but some easily propagated fruit trees would also be planted. The target would be to plant about 900 trees per year per village panchayat, or a total of 0.9 M trees over the project period. Seedlings would be provided free of charge at the nurseries. In addition to production and sale of tree seedlings, supplies of tree seeds would be made available so that small farmers would be able to raise such seedlings on their own homesteads following the successful experience developed, for example, in various East African Countries. Improved Stoves 2.25 New stoves have been designed and tested at Tribhuvan University which, under experimental conditions, require only half the amount of fuel used by the traditional Nepalese stove. These can be manufactured from local clay at only a small cost (approximately NRs 70 or US$6 per stove). SIU would be established in the Forestry Department under CFAD. This Unit would demon- strate improvedl stoves in villages participating in the project and instruct village artisans in methods of construction. The aim would be to construct 15,000 improvec[ stoves over the project period. 2.26 The new Unit would be provided with equipment and vehicles and would be expected to maintain close liaison with Tribhuvan University, the research group working there on improved stove design, and the Monitoring and Evaluation Unit (MEU). The Unit would also provide a short training course in stove! construction to the National Development Service which is composed of postgraduate university students required to spend one year work- ing in villages before proceeding with their studies. These students, and volunteers from other aid agencies, would complement the efforts of SIU to introduce the new stove design throughout the Hills. Forestry Research 2.27 The project would provide for the strengthening of research services within CFAD by establishing a nationwide series of provenance trials; and also within the Forest Survey and Research Office of FD, where applied forestry research would be conducted on high priority problems affecting forest pro- duction (see Project File, Item 7). A series of field stations is already being established, with UK assistance, in the Hetaura corridor and a second series would be! established under the project in a contrasting climatic area.  - 19 - To ensure adequate coordination of research and liaison between scientists, a national forestry research plan is required. Assurances were obtained at negotiations that such a plan would be prepared by FD and furnished to IDA for review by July 15, 1981. Project Implementation - Community Forestry Development 2.28 The success of the project will depend on the efficiency of the restructured FD. Provision has therefore been made to establish (CFAD) within FD, which, through a specialized Community Forestry Unit (CFU), would implement, support and supervise the field planting program. Special support units would be created for Monitoring and Evaluation, Motivation and Publicity, Stove Improvement and Administration (Chart 20618). Funds would be provided for staff, office buildings, operating costs, equipment, vehicles, civil works, and seed stores (at Surkhet, Bhairawa and Dhankuta). 2.29 Forestry Staff. Under the project, funds would be provided for additional headquarters and field staff for CFAD and its constituent units. Requirements are given below: CFAD Staff Requirements Central Administration Total Additional at Full Existing Requirement Development Deputy Chief Conservator of Forests 0 1 1 Senior Foresters 0 4 4 Unit Heads 1 4 5 Assistants to Unit Heads 0 2 2 Stove Promoters 0 12 12 Accountants 3 7 10 Clerks 5 4 9 Support Staff 9 3 12 Mechanics/drivers 12 0 12 Guards 30 0 30 Field Operations Total Additional at Full Existing Requirement Development DFO 14 3 17 Forest Officer attached to DFO 2 15 17 Community Foresters 0 85 85 Community Rangers 0 17 17 Administration Foresters 0 17 17 Nurserymen 17 17 34 Support Staff 272 39 311  - 20 - 2.30 Housing and Transportation for Staff. A lack of government housing or rental accomodation is one of the major disincentives which discourages forest officers from working in the Hills. Funds would be provided under the project for the construction of houses and office accommodations for all professional and technical field staff. These would be constructed in accord- ance with standard government designs. In addition, quarters for volunteers/ associate experts providing technical assistance to the project (para 2.49) would be provided at the headquarters of Ilam, Baitadi, Sindhuli, Pokhara, Dudhkoshi, Doti, Dhaulagiri and Mahakali Divisions. 2.31 Community forests would be scattered over large areas and adequate transport for field and headquarters staff would be essential. At the divi- sional level, there is seldom a sufficiently good road system to warrant purchase of ca:rs which would be provided to only four divisions. In 13 of the 17 divisions, the DFO would be provided with a horse. The project would provide additional vehicles at central headquarters and a radio communications network. Forestry Department VehiclE: Requirements Forest CFAD MOF Divisions Headquarters Research Total Cars - 4 - 4 4-Wheel Drive 4 1 1 6 Pickup - 1 - 1 Horseas 13 - - 13 Motorcycles - - 8 8 Operating Procedures 2.32 Initially, village panchayats would be encouraged to participate in the project by field staff of CFAD, who, wit'h the assistance of the Motivation and Publicity Unit (MPU) and Monitoring and Evaluation Unit (MEU), would arrange seminars, meetings and field visits and provide necessary visual aids and educational material. In subsequent years, identification of panchayats prepared to participate in the projebct would result solely from the operations or MPU and MEU. 2.33 It would be the responsibility of the village panchayat to approach DFO with a reqiest to participate in the project. After the proposal has passed through the village and district panchayat system, areas to be planted to trees (PF), or protected (PPF) would be identified. In the absence of detailed survey, land cwnership in many areas is still in dispute at the local level and is a critical problem in areas where cadastral survey and boundary demarcation have not been attempted. However, forest areas can still be demarcated Dy agreement between village panchayats, FD and the Land Survey Departm2nt, if all these authorities concur that the land to be used is not indiv4dPally owned and is free from dispute. CFAD staff would help in the preparation of the forest management plan, and explain the nature and provisions of the agreement to be entered into between the panchayat and CFAD k2roject File, Item 4). Thne management plan would include details of future  - 21 - arrangements for the fair distribution of forest products, (not previously a problem under the traditional system of free access to the forest and its products, see para 5.04). It is likely that panchayats will opt for different distribution methods depending on the availability of forests and the local demands for its products. 2.34 The panchayat scheme, as approved by DFO, would be forwarded to the district panchayat. The District Forestry Committee would make recommen- dations to the district panchayat on the technical feasibility of the proposal, the priority level to be accorded, and a proposed date for acceptance into the project. The final decisions would be made by the district panchayat. 2.35 Once the proposal has been formally agreed and DFO informed, village panchayats would be assisted with implementation through regular visits and supervision by CFAD staff. 2.36 The agreements to be negotiated between the village panchayat and CFAD would outline the responsibilities of both parties and the rules for forest management. Under the revised Forest Rules, agreements similar to the proforma provided in Project File, Item 4 are to be executed. Assurances were obtained at negotiations that CFAD would issue a Forest Management Plan to each participating panchayat, the format of which would be agreed with IDA before September 1, 1980. 2.37 In order to carry out the project and to encourage the acceptance of responsibility for forest management and collection of forest products by the village panchayats, the Forest Rules were amended and clarified (para 2.11). Forestry Training 2.38 A dearth of trained forestry staff and staff trained in the skills of soil and water conservation (SWC) is a constraint which limits progress in development of the forestry sector. Inservice training is also lacking for professional and technical staff working in community forestry and SWC projects. The project would, therefore, support increased formal training (Diploma and Certificate courses) conducted by Tribhuvan University (by improving facilities at the Forestry Institute at Hetaura and by constructing a new campus near Pokhara) and by establishing a MOF Training Wing (MFTW) to provide short-term, job-specific courses for MOF staff. 2.39 Staff Training Requirements. The manpower requirements of MOF over the next 10 years (including a 10% replacement of the existing establishment) are given in Annex 6 and summarized below:  - 22 - Department Officers Technicians (Diplcma) (Certificate) Soil & Water Conservation 161 330 Forestry 219 970 Total MOF 380 1,300 Private Sector 4 10 TotaL 384 1,310 Annual Requirements 38 130 Annual Replacement 10 70 48 200 Based on probable future development and for planning purposes, it has been assumed that 40 officers (Diploma level) and 200 technicians (Certificate level) would be required annually. 2.40 Improvement of Training Facilities. The student intake to the Certificate course at the existing institute at Hetaura has already been sharply increased and lack of land and utilities would prevent any further large scale development of the campus. The institute would, therefore, be upgraded by the provision of an auditorium, student hostel, senior staff housing and single room living units. The institute is located in the Inner Terai where conditions differ considerably froir. those generally prevailing in the Hills, to which the emphasis of forestry in Nepal is now shifting. Hence, in order to strengthen and reorientate forestry training, a new campus would be built at Pokhara which would cater for the increased needs of both Diploma training for Forestry and Soil and Water Conservation Officers and an additional Certificate course in Forestry and SWC. This new campus would require complete teaching facilities, staff quarters and hostel accommodation (Annex 7, Table 8). 2.41 A new MFTW office building of about 520 m would be constructed on an available site in Kathmandu behind the existing MOF offices and adjoining the Soil and Water Conservation Center. In addition, an area for demonstra- tion and practical field training would be required for courses based in Kathmandu. For this, the Chautara area, 87 km northwest of Kathmandu, would be well-suited because of the community forestry development that has already taken place there. Two staff houses, a dormitcry and a teaching block would be built on a site there to be provided by HMG. Assurances were obtained at negotiations that suitable land had been acquired for all new construction work at Kathmandu, Hetaura, Pokhara and Chautara. 2.42 Staff Requirements. The teaching staff at Hetaura is more than adequate to cover training course needs there. The new Certificate course, to begin at Pokhara in 1981, would require 12 lecturers and five demonstrators. Six lecturers would be transferred from Hetaura, three shared with the new Diploma course, two would be expatriate volunteers and only one would be recruited from among the ranks of serving officers. The Diploma course would also begin in 1981 and would need 12 new lecturers, not including the Dean. Six new science/agriculture graduates and six serving SWC/Forestry Officers  - 23 - would be recruited for M.Sc. training abroad in the subjects to be taught as part of the Diploma syllabus. The timing of the return of these officers is critical to the commencement of the Diploma course. HMG had, therefore, selected potential lecturers and, at the time of negotiations, they had either left or were ready to depart for M.Sc. training at overseas universities. 2.43 About 100 technicians would be trained annually at Hetaura, and an additional 100 at Pokhara from 1981 onwards. From 1984 onwards, about 40 professional officers would also be produced at Pokhara. A range of courses would be given by MFTW to cover reorientation of DFO and Foresters, promotion of Foresters to the Ranger grade and the practical needs of nursery men and panchayat forestry employees. It is estimated that at full development 25 courses would be given each year for about 2,000 staff members. Draft cur- ricula have been prepared for Diploma, Certificate and Inservice training courses (Project File, Items 8 and 9). These were discussed at negotiations and approved by HMG and IDA. 2.44 Total training staff requirements are as follows: Certificate Diploma Staff Position MFTW Course Course Total Lecturers/Training Officers 3 14 /a 13 30 Technical Staff 2 - - 2 Senior Administrative Officers - 2 - 2 Matrons - 2 1 3 Office Staff 4 9 2 15 Other Support Staff 9 22 6 37 Total 18 49 22 89 /a Three lecturers would be shared between Certificate and Diploma courses. 2.45 Vehicles. The following vehicles would be provided under the project for training institutions. Vehicles MFTW Hetaura Pokhara Total Cars 2 - 1 3 Four-wheel drive vehicles 2 - 2 4 Trucks 1 2 2 5 Motorcycles - - 2 2 Mini tractors - - 2 2 Total 5 2 9 16 2.46 Stipends and Scholarships. A stipend of NRs 120 per month would be paid to each Certificate student to assist with living expenses. In addition, a scholarship of NRs 80 would be paid per month to candidates from  - 24 - Hill districts Twho would otherwise not be able to afford training. This is estimated to be about 50% of the student number. Students accepting stipends and scholarships would be expected to work for HMG for a period of at least two years after graduation. 2.47 Fellowships. Overseas training would be provided for forestry staff who would fill community forestry posts in the Hills and for lecturers and trainers who would work in the formal and inservice training centers. 2.48 To overcome the immediate staffing problems of CFAD, 20 selected science graduate students would be sent abroad for two year courses in fores- try. An extra five students would be trained in similar courses for the Research Unit, but these trainees would require an additional course, specif- ically on forestry research, for a period of about four months. Of the existing staff at Hetaura, two lecturers each year for three years would be sent overseas ior further non-degree training. Ideally, training for eight of the Certificate course staff for Pokhara would be arranged as follows: four would attend six month attachments in USA or UK; and another four would attend the nine month FAO training officers' course in the Philippines (one course a year for four years). Overseas training would also be included for the three training officers of MFTW and for twelve SIU promoters of stove technology. Technical Assistance 2.49 The concept of comaunity forestry is new to Nepal and the Hills, the target area of the project. Furthermore, there is a shortage of trained forestry staff. Therefore, in the early years, the project would require substantial amounts of technical assistance, not only to assist in execution of field planting programs and in organization and administration of CFAD headquarters, but also to heLp establish the training and research programs. The agencies arid countries indicated below have expressed an interest in providing and financing technical assistance and negotiations are in progress. In the event that technical assistance is not available, it is proposed that the Credit be increased and the shortfall financed under the Credit. The following technical assistance needs would be included in the project. (a) Community Forestry Development Program - CFAD Central O ffice (UNDP/FAO) (i) Forestry Advisor; (ii) Silviculturist; (iiiB SoCio-economist (MEU); ) iY a n-=unications Specialist (MPU).  - 25 - (b) Community Forestry Development Program - CFAD Field Program (UK, USA, Japan, Switzerland and Sweden). A total of 14 expatriate Foresters (volunteers and associate experts) to serve in seven of the Forestry Divisions would be recruited through FAO and serve as part of the UNDP/FAO technical assistance team. (c) Inservice Training - MFTW (USA). Two expatriate training officers--one in forestry and one in soil and water conservation--for two years. (d) Formal Training - Tribhuvan University (USA). A total of about 200 man months for the services of expatriate lec- turers and a coordinator for the Pokhara campus. (e) Forestry Research. Six research scientists for three years. (f) Stove Improvement - SIU. A consultant in stove technology to visit Nepal for two months for each of the first three years to provide advice and guidance on stove design and to assess the appropriateness of the technology being proposed. 2.50 In addition, consultants would be provided under the project to assist in the preparation of the midterm review. Midterm Review and Feasibility Studies 2.51 The project is the first phase of a longer term project for the reforestation of the Hills. As it is innovative in nature and may require adjustment, a midterm review is included under the project. This midterm evaluation would also be the basis for the design of any subsequent project in community forestry. At negotiations, an assurance was obtained that the terms of reference (TOR) and constitution of the review team would be agreed with IDA before December 31, 1981. TOR for the review would need specialized advice and provision is made, under the project, for hiring consultants to carry out this work. 2.52 Fuelwood supplies to many of the urban areas are now in extremely short supply. An estimated 70,000 tons are brought by government agencies into towns like Kathmandu from the Terai each year. Other sources have been the surrounding hills, from where wood is collected and brought to market in head loads. The demands are high and this has led to the gradual denudation of hills in the vicinity of towns and to a general degradation of the environ- ment. Obviously, it would be preferable for wood to be provided from woodlots located near urban centers and for energy saving stoves to be introduced, perhaps using bricks or other materials easily available in towns. Assurances were obtained at negotiations that a feasibility study would be conducted on fuelwood provision for urban areas. TOR would be drawn up by the Forest Department and submitted to IDA for approval before June 30, 1981 and a study team, acceptable to IDA, would be appointed before December 31, 1981.  - 26 - Assurances were also obtained that basic data required for the study would be collected before December 31, 1980. Draft TOR for data collection are pro- vided in Project File, Item 12. 2.53 Much of the forest above 2,500 m a.s.l. consists of conifers and some mixed hardwoods, is overmature and generally inaccessible. Population pres- sure is now forcing farmers to migrate to those areas where some parts of the forests have already been destroyed by fire in order to encourage growth of pastures for grazing. Techniques are now available for the extraction of logs from these areas by means of gravity winches and a study would be included under the project to explore the feasibility of exploiting these high altitude forest resources. Assurances were obtained at negotiations that TOR for the study and the composition of the team to carry out the study would be submitted to IDA for approval before June 30, 1981. Guidelines for TOR for both the mid term review and the feasibility studies are included in the Project File, Item 12. III. COST ESTIMATES AND FINANCING A. Cost Estimates 3.01 Total estimated five year project cost is NRs 297.4 M (US$24.8 M) including price and physical contingencies, and a negligible amount of taxes and duties. Details, summarized below, are in Annex 7. Foreign exchange amounts to NRs 116.9 M (US$9.7 M), or about 39% of total project costs. There is a complete :Lack of infrastructure in Nepal for community forestry develop- ment and, therefore, its establishment requires an estimated 27% of total project cost. Cost estimates are based on findings during appraisal, updated to December 19,79.  - 27 - Summary Cost Estimate Total Foreign Local Foreign Total Local Foreign Total Cost Exchange ------ NRs M ------ ------ US$ M ------ I. Village Forestry Program PF 8.75 0.97 9.72 0.73 0.08 0.81 PPF 4.35 0.48 4.83 0.36 0.04 0.40 PP 0.13 0.01 0.14 0.01 0.00 0.01 Nursery and Forestry Development 35.42 3.93 39.35 2.95 0.33 3.28 Subtotal 48.65 5.39 54.04 4.05 0.45 4.50 18 10 II. Project Administration, Research and Energy Conservation Infrastructure and Services 49.88 14.87 64.75 4.16 1.24 5.40 Improved Stove Program 1.93 0.97 2.90 0.16 0.08 0.24 Research 4.12 0.55 4.67 0.34 0.05 0.39 Forest Officer Training 0.00 8.10 8.10 0.00 0.67 0.67 Subtotal 55.93 24.49 80.42 4.66 2.04 6.70 27 31 III. Training 25.49 19.04 44.53 2.12 1.59 3.71 15 43 IV. Technical Assistance 4.90 44.30 49.20 0.41 3.69 4.10 17 90 V. Midterm Review and Feasibility Studies 0.55 2.65 3.20 0.05 0.22 0.27 1 81 TOTAL BASE COST 135.52 95.87 231.39 11.29 7.99 19.28 41 Physical Contingencies 8.10 1.63 9.73 0.67 0.14 0.82 3 Price Contingencies 36.91 19.37 56.28 3.08 1.61 4.69 19 TOTAL PROJECT COST 180.53 116.87 297.40 15.04 9.74 24.78 39 3.02 Physical contingencies of 10% have been applied to construction costs of buildings, nursery and forest plantations, building maintenance and stove construction. Price contingencies for all items, including civil works, equipment, vehicles, etc. are estimated at about 19% of project costs and are based on expected international and domestic price escalations of 10.5%, 9%, and 8% per annum for 1980, 1981, and 1982, respectively, and 7% thereafter.  - 28 - B. Financing 3.03 Project costs would be financed as follows: Technical Other Assistance Development % of Packages Costs Total Total --------- -U M -------------- HMG 1.7 1.7 7 IDA 0.3 16.7 17.0 69 Multilateral and Bilateral Aid Agencies 6.1 /a - 6.1 24 Tota'L 6.4 18.4 24.8 100 /a UNDP/FAO US$2.84 M, USAID US$3.24 M. The IDA Credit of US$17.0 M would finance 45% of foreign exchange costs amounting to US$4.3 M (i.e., excluding those provided under technical assist- ance agreements) and about 85% of local costs amounting to US$12.7 M, equiv- alent to about 69% of total project cost. HMG would contribute about 7% and bilateral aid agencies 24% (through technical assistance) of total project costs. At negotiations, HMG agreed that the UNDP and USAID grants would be executed prior to Credit effectivenenss. 3.04 In order to ensure an early start to the project, retroactive financ- ing not exceeding US$0.8 M would be provided from October 1, 1979 to date of Credit signing for expenditures incurred in the provision of planting material, for land prep