World Development Vol. 64, pp.

S113S124, 2014
2014 Elsevier Ltd. All rights reserved.
0305-750X/$ - see front matter
www.elsevier.com/locate/worlddev

http://dx.doi.org/10.1016/j.worlddev.2014.03.011

Are Forest Incomes Sustainable? Firewood and Timber Extraction

and Productivity in Community Managed Forests in Nepal
HENRIK MEILBY, CARSTEN SMITH-HALL, ANJA BYG, HELLE OVERGAARD LARSEN
University of Copenhagen, Denmark
YSTEIN JUUL NIELSEN
The International Woodland Company, Copenhagen, Denmark

and
LILA PURI, SANTOSH RAYAMAJHI *
Tribhuvan University, Institute of Forestry, Pokhara, Nepal
Summary. Lack of combined forest productivity and income studies means there is scant evidence for the sustainability of rural
household-level forest incomes in developing countries. This study examines levels and patterns of forest increment, wood product
extraction, and household-level incomes in three community managed forests in Nepal, using data from 240 permanent sample plots
and a structured household survey conducted in 2006 and 2009 (n = 507 and 558, respectively). We nd that analyses of sustainability
need to recognize the complexity of forest stand utilization, and that there is considerable scope, by altering how existing local forest
management rules are implemented, for increasing rural household forest incomes while keeping harvesting levels sustainable.
2014 Elsevier Ltd. All rights reserved.
Key words sustainability, commons, participatory forest management, livelihoods, Himalayas, South Asia

1. INTRODUCTION

largely unmet challenge. To our knowledge, no published

study has combined detailed socio-economic and forest inventory data to investigate if such winwin situations exist. Such
studies are costly, dicult to design, and challenging to implement. Firstly, accurate estimation of forest product extraction
volumes are rendered dicult by the large number of products, many of which have short harvesting seasons. Some
products may also be obtained from other vegetation types
than forests, e.g., meadows. And much work is required to
estimate values for subsistence products. Hence quantities harvested, origin, and value need to be ascertained for a large
number of products throughout a prolonged period to determine the value of products extracted from a given forest. This
can be done for a representative random sample of households
through recall-based structured surveys, although challenges
to this methodology are acknowledged (Angelsen et al.,
2011). Secondly, in the absence of volume and growth tables,
generating the forest productivity data necessary to estimate
whether a given harvesting level is sustainable requires longterm measurement in permanent sample plots or tree ring
analysis in combination with temporary plots. However,
establishing and maintaining permanent plots has proved
dicult throughout the tropics (Dawkins & Philip, 1998)

Around three-quarters of the poor in developing countries

live in rural areas (Chen & Ravallion, 2007) and are highly
reliant on natural resources to meet their subsistence requirements and generate cash (Barbier, 2010). Household-level
studies have reported average shares of forest income in total
income ranging from 15 to 39% (Babulo et al., 2008, 2009;
Cavendish, 2000; Kamanga, Vedeld, & Sjaastad, 2009; Mamo,
Sjaastad, & Vedeld, 2007; McElwee, 2008; Uberhuaga, SmithHall, & Helles, 2012; Yemiru, Roos, Campbell, & Bohlin,
2010) and evidence is accumulating that forests are important
to rural households in preventing and, in some locations,
reducing poverty (Fisher, 2004; Shackleton, Shackleton, Buiten, & Bird, 2007). Typically, poorer households are relatively
more reliant on forest resources than the more well-o, though
the latter have higher absolute forest incomes (Vedeld, Angelsen, Bojo, Sjaastad, & Berg, 2007). While our understanding
of the level of importance of forest products to rural households and the factors determining dierent levels of reliance
is rapidly improving (Angelsen, Larsen, Lund, Smith-Hall, &
Wunder, 2011), a key question remains unanswered: are
household-level forest incomes in developing countries sustainable? The answer has developmental and environmental
policy consequencesif forest incomes are not sustainable this
may result in higher levels of poverty among already poor rural households coupled with forest resources degradation. Indeed, there are ample examples of unsustainable forest
income, e.g., when forest is converted to agricultural land
(Chomitz, 2007).
In Sunderlin et al.s (2005: 1394) review of how poverty alleviation and forest conservation can be made convergent, they
conclude that creating winwin solutions is a daunting and

* We thank all the households and communities that participated in the

study. Faculty from both the Pokhara and Hetauda campuses of the Institute of Forestry contributed to data collection. Input to an earlier version of
the paper was received at the Poverty Environment Networks science
workshop at the University of East Anglia in June 2011. Further input to the
manuscript was received from three anonymous reviewers. The study was
funded by the Danish Ministry of Foreign Aairs through the Council for
Development Research (FFU, Grant No. 104.Dan.8.L.716).
S113

S114

WORLD DEVELOPMENT

where tree ring analysis is also still in its infancy (Vetter &
Wimmer, 1999). Finally, such studies require coordinated research across the natural and social sciences which remains
challenging (Lele & Kurien, 2011).
Comprehensive investigation of forest income sustainability
(see Section 2a), assuming a constant governance framework,
requires three basic building blocks: information on forest
product quantities extracted, valuation of these quantities,
and species level increment (e.g., m3 ha 1yr 1) estimates.
While there are no studies in rural communities and natural
forests in developing countries covering all three building
blocks, a large literature exists that deals with one or two.
Forest product extraction studies typically focus on a specic
product group, e.g., rewood, without valuing household
income from the products. Such studies typically provide
local scale estimates of annual household consumption using
a combination of key informant interviews, footpath surveys,
weight surveys, or construction timber surveys (e.g.,
Appasamy, 1993; Bolton & McClaran, 2008; Fox, 1984;
Metz, 1994; Singh, Rawat, & Verma, 2010; Watkins, 2009)
or indirect measures such as recording tree stump diameters
and ages in plots with subsequent conversion to total tree volume (Bufum, Gratzer, & Tenzin, 2008; Chettri, Sharma, Deb,
& Sundriyal, 2002; Sundriyal & Sharma, 1996). Higher scale
studies seek to identify determinants of household-level forest
product consumption patterns (e.g., Dayal, 2006; Guptaa &
Kohlin, 2006). Many forest income studies (mentioned above,
e.g., Mamo et al., 2007; Uberhuaga et al., 2012) use structured questionnaires to estimate household forest income
for all major forest product groups. Few studies from developing countries provide tree species-level growth estimates.
Methods applied are biomass measurement for trees of
known age (e.g., Applegate, Gilmour, & Mohns, 1988), tree
ring analysis (e.g., Bolton & McClaran, 2008), and rarely
time-series measurements from permanent sample plots
(Chettri et al., 2002).
To avoid the large quantities of data required for comprehensive local evaluations of sustainability, the use of proxies
is common. For instance, proxies used to indicate forest
condition (which is then used to assess sustainability of use)
are: partial vegetation structure data (e.g., Bajracharya,
1983; Bufum et al., 2008; Coleman, 2009; Ganesan, 1993;
Hegetschweiler, van Loon, Ryser, Rusterholz, & Baur, 2009;
Maren & Vetaas, 2007), frequency of stumps (Urgenson
et al., 2010), availability of used or preferred species
(Appasamy, 1993; Gugushe, Grundy, Theron, & Chirwa,
2008; Strde, Nebel, & Rijal, 2002; Webb & Dhakal, 2011),
diversity of indicator species and dead wood availability
(Christensen & Heilmann-Clausen, 2009; Christensen,
Rayamajhi, & Meilby, 2009; Hegetschweiler et al., 2009),
forest users and/or foresters perception of forest condition
(Bajracharya, Furley, & Newton, 2005; Gibson, Williams, &
Ostrom, 2005; Hayes, 2006), changes in land cover classes
(Abbott & Homewood, 1999), and changes in forest product
availability (Urgenson et al., 2010) or collection time (Baland,
Bardhan, Das, Mookherjee, & Sarkar, 2010). Most sustainability proxy studies ignore valuation and income or use rough
proxies such as the percent of households that depend substantially on the forest for subsistence livelihoods as an indicator of livelihood contributions of the same forest (Persha,
Agrawal, & Chhatre, 2011, p. 1606). At any rate, when assessing sustainability it is advantageous to use inventories rather
than proxies as this allows for a more accurate and nuanced
understanding of the many complex aspects involved, including spatial, temporal, species and intra-species variations.

There is thus a dearth of studies that combine detailed local

level forest inventories with carefully collected household income data. The present study contributes to lling this gap,
emphasizing inventories of forest trees and incomes from
wood products. It uses data from Nepal, where the aims of
the national-level community based forest management program are to conserve the forest while improving the livelihoods of forest users, primarily through subsistence
provision of forest products (Acharya, 2002). There is general
agreement in the literature that implementation of community
forestry in Nepal has resulted in increased forest product supply and improved environmental conditions at the forest stand
level (e.g., Pandit & Bevilacqua, 2011; Tachibana & Adhikari,
2009; Thoms, 2008). Studies of the nancial consequences of
this to households are, however, few (Adhikari, Falco, & Lovett, 2004; Adhikari, Williams, & Lovett, 2007; Malla, 2000)
and do not include quantitative estimates of impacts on household income. In three dierent sites we empirically investigate
current wood-based forest incomes and whether these can be
maintained without reducing the woody biomass. We combine
structured household surveys focused on eliciting income
(Angelsen et al., 2011) with biophysical data from permanent
sample plots (Meilby, Puri, Christensen, & Rayamajhi, 2006),
i.e., we monitor households as well as the actual forests they
use. This allows a detailed analysis of forest sustainability
(at forest stand level, for individual species, and across diameter classes) which is combined with price data to estimate sustainable household forest income. We compare existing
harvest levels against the annual increment in forest wood biomass, and compare household benets under the current
implementation of extraction rules (harvest of wood biomass
only for rewood) with potential benets under alternative
implementation of extraction rules (commercial harvest and
sale of timber). Using these data we evaluate to what degree
current extraction levels are sustainable and whether households could potentially derive higher sustainable forest income.
Policy implications are briey discussed. Analyzing issues of access and distribution of benets from community forests as well
as the various reasons behind current regulations, while equally
important, are beyond the scope of this study.
2. METHODS
Data were obtained through a combination of household income and forest inventory surveys. The quantity of forest
products extracted was assessed through both household recall
and recording of tree stumps over time in permanent sample
plots. Product values were obtained from household respondents and market surveys, and species-level tree increment estimates were obtained from repeated measurements in the plots.
(a) Applied denitions
Total annual household income is the sum of incomes (both
subsistence and cash) from all sources, measured in income
per adjusted adult equivalent unit (Cavendish, 2002), of household economic activities throughout a one-year period. We use
the value added income measure (Sjaastad, Angelsen, Vedeld,
& Bojo, 2005): all reported income is gross value minus costs
of intermediate inputs and capital costs (own labor costs are
thus not subtracted). Total income is aggregated by income
in four sectors. Forest income is the sum of the values resulting
from extraction of raw materials from forest, processing forest
products, and wages for forest-related activities. Environmental income is value added from extraction of non-cultivated

ARE FOREST INCOMES SUSTAINABLE? FIREWOOD AND TIMBER EXTRACTION AND PRODUCTIVITY IN COMMUNITY S115

products collected outside the forest. 1 Farm income is the economic value from crop and livestock production including
wages for on-farm work. Crop income derives from subsistence and cash annual and perennial crops, including from
agroforestry and horticulture; livestock income comprises subsistence use and sales of livestock products, also live animals,
and services but excludes incremental stock value changes.
Non-farm income refers to income from other sources than
the three above: primarily self-owned businesses, remittances,
pensions, and non-farm salaries and wages.
Inspired by Haberl et al. (2006), forest income is narrowly
dened as sustainable if the wood-based forest products,
whose harvest results in the income, can be sustained without
long-term decrease in forest biomass. Forest biomass is assumed not to be compromised if, in the long term, the annual
harvest does not exceed 80% of the annual increment of
woody biomass. This percentage is similar to the adjustment
factor applied by, e.g., Meyer (1943) and represents a margin
of safety which ascertains that woody biomass is not overexploited even if its increment is overestimated slightly (e.g.,
due to short-term climatic uctuations or the fact that measurements are only ve years apart), or if current stocking is
below the normal level. Note that the applied denition means
that forest income can be sustainable even if ecological or social sustainability is not maintained, e.g., if one species disappears, forest income is sustainable if the same income can be
derived from other species.
(b) Study sites
Three study sites were selected in 2004 to cover the altitudinal variation in Nepal (Meilby et al., 2006) and thereby the
variation in agricultural production, forest types, and market
access (Table 1). Here they are referred to as the Lowlands,
Middle hills and High mountains sites. Forest management
at all sites is subject to similar governance constraints 2: forests
are government owned, communities have use and management rights, and there is a high degree of rule enforcement.
In general, there is little deforestation at any of the sites. Products such as rewood are typically harvested by individual
households. Commercial sale of timber is de jure allowed but
does not de facto take place as the procedures are complex
and not encouraged by local forest administrations. Local forest user groups are required to submit management plans
detailing rules for collection of rewood and non-timber forest
products, annual allowable cut, rotational harvesting and
regeneration, etc., to the Department of Forests for approval.
De facto, most forest management plans are drawn up by the
Department of Forests; they typically limit rewood collection
to dead wood and set a low quota for timber extraction which
may only be used for community or personal purposes. To cut

timber community forest members have to purchase a permit

from the local forest user group committee. Forests in the
Lowlands and Middle hills sites are managed by Forest User
Groups (FUGs) while management in the High mountains site
is by Conservation Area Management Committees (CAMCs).
The Forest User Group in the Lowlands site, located in the
Upper lowlands (Siwaliks), was established in 1995 by migrants who had come from the middle hills since the 1950s.
The handed over forest was partly deforested as a consequence
of the settlement process and excessive harvesting, but later
forest improvement was promoted by widespread regeneration
of Shorea robusta Gaertn. and limited planting of Dalbergia
sisoo Roxb. ex DC. (both are valuable timber species) in lower
lying at areas. The infrastructure and market access in the
Nepalese lowland are generally good and the Lowland study
site represents the widely found situation where commercial
vegetable farming is an important income-generating activity.
The FUG in the peri-urban Middle hills site has managed its
forest informally since 1972 and formally since 2002. The forest mainly consists of relatively mature Schima wallichii (DC.)
Korth. and Castanopsis indica (J. Roxb. ex Lindl.) A. DC.,
two medium-value timber species. Most households are engaged in commercial vegetable production and have access
to non-farm employment in the nearby city area. Large parts
of the Nepalese Middle hills are located far from motorable
roads and cities and in this sense the Middle hills site is representative only of a limited number of market-close sites. The
High mountains site has relatively low population density
and the forests are less degraded. Here the forest has been formally managed by the users since 1992 under the auspices of
the National Trust for Nature Conservation, a national conservation-oriented non-governmental organization. The forest
is dominated by Pinus wallichiana A.B. Jacks. and some oldgrowth Tsuga dumosa (D. Don) Eichler, two valuable timber
species. Tourism and agriculture are important sources of income. One community in the High mountains site is located
on a tourist trail, and from 2008 connected to a road, while
the other is o trail and more representative of the general situation in the High mountains. In all sites, remittances constitute an important source of income.
(c) Data collection
The forest inventory was conducted in the spring of 2005
and repeated in 2010; it followed a common research protocol
for forest plot location, measurements in permanent plots, and
data handling. It was explicitly agreed with the local communities that forest utilization should continue unchanged, also
in the permanent forest plots. The inventory emphasized trees
with a diameter of at least 2 cm. With the purpose of obtaining
a sample that would both be suitable for estimation of

Table 1. Characteristics of the three study sites in Nepal

Site name

Lowlands

Middle hills

District
Elevation (meters above sea level)
Accessibility

Chitwan
350
By motorable gravel road

Kaski
1000
By tarmac road, bus service

Main livelihood activities

Dominant forest typesa
Forest area (ha)
Private trees on agricultural land
No. of households in community, 2006

Vegetable and rice farming

Shorea robusta
760.1
Yes
1542

Vegetable farming, non-farm employment

Schima-Castanopsis
79.0
Yes
222

Terminology according to Stainton (1972).

High mountains
Mustang
22003000
By plane and foot, from 2008
by gravel road
Tourism, farming
Pinus wallichiana
1177.8
No
300

S116

WORLD DEVELOPMENT

increment and extraction, forest areas were stratied based on

species-level basal area and distance to the village. The spatial
distribution of plots (n = 241) established in 2005 followed a
coee-house 3 design within each stratum (Muller, 2001).
Measurements in plots followed a nested design and included
tree species identication, tree positioning and diameter at
breast height (DBH) measurement for all trees. Tree height,
health, and quality were measured for a species-stratied set
of panel trees (1363 trees in 2005, 1266 trees in 2010). Trees
that had reached a sucient diameter size between the two
measurements were recorded as ingrowth. All plots except
one in the High mountains site were found again in 2010
and re-measured (hence, n = 240). Trees felled during 2005
10 were identied by registering stumps in 2010.
The household survey data collection and handling followed
the Poverty Environment Network (Angelsen et al., 2011;
PEN, 2007a, 2007b) procedures and were thus similar across
the three sites. Data collection included site-level qualitative
background information and four quarterly household
(n = 507 in 2006 and 558 in 2009) surveys eliciting all main
components of total (cash and subsistence) household income.
Reported local units of weight and volume were measured
repeatedly until suciently consistent results were obtained
(standard error less than 10% for all major products) and converted to SI units. Local market surveys and value quality
checks (Wunder, Luckert, & Smith-Hall, 2011) conrmed
the validity of own-reported product prices. In addition to
household income from forests, FUG and CAMC income
from timber extraction for member and community use was
elicited through interviews with executive committee representatives.
(d) Data analyses
For each permanent sample plot, for each year of measurement (2005 and 2010) and for each tree class (1: live at both
measurement occasions, 2: dead and still present in the forest,
3: harvested, and 4: ingrowth), measures of stand density (trees
per ha and basal area) and volume (m3 ha 1) were estimated
for trees in 10-cm diameter classes for main species and residual groups. Total volume, i.e., including both biomass less
than 10-cm diameter that is an important source of rewood
and the usual timber volume (diameter >10 cm), were estimated using volume functions developed by Sharma and
Pukkala (1990). Plot, stratum, and forest level estimates for
standing stock in 2005 and 2010 and the increment were calculated and compared with the estimated harvest. This was done
separately for species groups and diameter classes. Spatial
interpolation was carried out using kriging, and maps showing
the spatial variation of the change of stocking from 2005 to
2010 were prepared.

Sector-wise household income per adult equivalent unit

(aeu) was calculated in each site (Cavendish, 2002), including
total annual mean forest income per aeu per forest product
group. Household-level woody biomass extraction from the
forest was calculated based on amounts of timber, rewood,
and poles extracted. 4 Price data was combined with biophysical data (annual increment per forest product group) to estimate potential average annual household-level sustainable
forest incomes. Setting the sustainable harvest at 80% of the
increment, potential forest incomes were calculated for two
scenarios (only rewood income; timber income when potentially possible (diameter >10 cm) and the remaining biomass
yielding rewood income) using prices from the household
and market surveys.
3. RESULTS
Results on forest stocking (volume of wood), increment, and
extraction from the biophysical survey are presented, followed
by results on forest income from the socio-economic survey.
Lastly, levels of sustainable household-level forest income
are estimated.
(a) Biophysical results
A total of 9603 trees were registered of which 7111 were
alive in both 2005 and 2010, 1023 new trees were measured
in 2010 (ingrowth), and 1412 trees were harvested in the period
(Table 2). Seven trees were missing from the database (i.e.,
their presence was registered but they were neither measured
in 2005 or 2010); 50 trees registered in 2005 were recorded
as standing dead trees in 2010.
Extraction of wood biomass in the Lowlands and High
mountains sites ranged from 28 to 43% of the increment in
the study period (Table 3). In the Middle hills site, the average
annual extraction was more than three times the average annual increment; the standing stock in this forest was decreased
by 14% (from 207.5 to 178.1 m3 ha 1). Annual extraction gures derived from the household survey were similar to those
from the plot data, with a tendency for the household reported
extraction gures to be lower (up to 18% lower).
Patterns of forest utilization diered between the three sites
(Figures 1 and 2). In the Lowlands site, most of the increment
took place in the 1020-cm diameter class while harvest was
mainly taking place in large diameter classes with relatively little standing stock; the standing stock of S. robusta increased
by 29% (from 77.5 to 99.8 m3 ha 1) while Dalbergia sissoo
(not shown) almost disappeared as these plantation areas were
converted to other uses (community-based income-generating
activities such as sericulture). In the High mountains site, a

Table 2. Overview of absolute and relative distribution (%) of trees (n = 9603) to categories based on permanent sample plot (n = 240) data, per site, Nepal,
20052010

Tree classa

Lowlands (66 plots)

Middle hills (52 plots)

High mountains (122 plots)

Total (240 plots)

Live
Dead
Harvested
Ingrowth
Missing
Total

2224 (61.5)
4 (0.1)
756 (20.9)
633 (17.5)
1 (0.0)
3618 (100.0)

1786 (75.2)
6 (0.3)
402 (16.9)
180 (7.6)
0 (0.0)
2374 (100.0)

3101 (85.9)
40 (1.1)
254 (7.0)
210 (5.8)
6 (0.2)
3611 (100.0)

7111 (74.0)
50 (0.5)
1412 (14.7)
1023 (10.7)
7 (0.1)
9603 (100.0)

Live trees were alive both in 2005 and 2010; Dead trees were alive in 2005 and dead but still present in the forest in 2010; Harvested trees were
felled during 200510; Ingrowth are trees that were measured in 2010 but were too small in 2005; Missing are trees that were registered but with no
measurements recorded.

ARE FOREST INCOMES SUSTAINABLE? FIREWOOD AND TIMBER EXTRACTION AND PRODUCTIVITY IN COMMUNITY S117
Table 3. Forest area, stock, increment and extraction data based on permanent sample plot (n = 240) data and extraction data based on household (n = 507
in 2006 and 558 in 2009) surveys, per site, Nepal, 20052010
Site

Lowlands
Middle hills
High mountains

Forest area

Standing stock

Change of
stock

Incrementb

V2005

V2010a

(ha)

(m3)

(m3)

(m3)

(m3)

760.1
79.0
1177.8

86,195
16,392
334,309

101,832
14,073
348,018

15,638
2319
13,709

29,025
993
26,202

Annual values
Increment

Increment

Extraction

(m3 yr 1)

Extraction
(plot data)
(m3 yr 1)

Extraction
(hh data)c
(m3 yr 1)

Surplus
(plot data)
(m3 yr 1)

(plot data):
Increment
Ratio

5805
199
5240

1603d
647
2263

1316
624
1932

3134
449
2977

0.28
3.26
0.43

The standing stock in 2010 is calculated as the sum of the volumes of live trees and ingrowth.
The increment in the ve-year period is the change in volume of trees alive both in 2005 and 2010, plus the volume of ingrowth.
c
Estimates of wood product extraction (m3) from forests is the sum of (i) households own-reported gures, mean of 2006 (n = 507) and 2009 (n = 558),
and (ii) average annual extraction from 2005 to 2010 for community purposes as reported by FUGs and CAMCs.
d
The recorded extraction from plots was 2671 m3 yr 1. However, approx. 40% of the extraction was from clear-cutting for the establishment of temporary
Maoist cantonments; villagers did not get the products from the clear-cutting and this amount is hence excluded from the analysis. Including this clearcutting would bring the extraction:increment ratio to 0.46.
b

60

High mountains
2005
2010

50
40
30

Standing

stock

(1000 m )

20
10
0
5

Middle hills

4
3
2
1
0
40

Lowlands

30
20
10
0
0
0-1

-20
10

-30
20

-40
30

-50
40

-60
50

-70
60

-80
70

0
-90
-10
80
90

00
>1

Diameter class in 2005 (cm)

Figure 1. Changes in standing stock (m3) across diameter classes, per site, Nepal, 20052010 (trees have been kept in the diameter class to which they were
assigned in 2005).

small increase in standing stock was observed across almost all

diameter classes and for both main species. In the Middle hills
site, the standing stock was reduced in virtually all diameter
classes, and standing stock for the main species S. wallichii
and C. indica was reduced while the standing stock for other
species remained stable.

Within the sites, changes in standing stock also displayed

spatial variation. Figure 3 illustrates changes in the Middle
hills site where harvest exceeded increment in the stratum
characterized by old forest while regeneration took place in
large parts of the other strata. Stock changes in the Lowlands
site included decreases due to conversion of forest land

S118

WORLD DEVELOPMENT

200

14
12

2005
2010

Standing stock (1000 m )

10
8

150

6
4
2
0

100

50

0
a
ore
Sh

r
he
Ot

a
is
im
ps
ch
no
S
a
t
s
Ca

Lowlands

r
he
Ot

Middle hills

us
Pin

Ts

a
ug

r
he
Ot

High mountains

Figure 2. Changes in standing stock (m3) across species, per site, Nepal, 20052010.

Change
m3ha-1
20
0
-20
-40
-60
-80
-100
-120
-140
-160
-180

0m

200 m

400 m

600 m

800 m

Figure 3. Overview of permanent sample plot locations (squares), strata and changes in standing stock (m3 ha 1) in the forest of the Middle hills site,
20052010. The households are located south-east of the forest.

(D. sissoo plantations) to other land uses and selective felling

in natural old forest, and increases in regenerating young forest. In the High mountains site, standing stock was built up in
strata with younger forest while reduction in standing stock
was only found close to some human settlements.

(b) Socio-economic results

Average relative household-level forest income was 6.8%,
ranging from 3.0% to 11.3% (Table 4). It was lowest in the
Lowlands and highest in the High mountains. Environmental

ARE FOREST INCOMES SUSTAINABLE? FIREWOOD AND TIMBER EXTRACTION AND PRODUCTIVITY IN COMMUNITY S119
Table 4. Total annual mean household absolute (USD PPPa) and relative income per adult equivalent unit by income source and site, Nepal, mean of 2006
(n = 507) and 2009 (n = 558)
Income source

Lowlands

Middle hills

Sample mean

Rel

Abs

Rel

Abs

Rel

Abs

Rel

Forest income
Firewood
Timber/furniture
Poles/sticks/utensils
Charcoal
Bamboo
Leaf litter/fodder grass
Mushrooms/wild vegetables
Wild fruits/medicinal plants/others
Forestry wage

59.6
22.8
1.5
2.6
0.5
0.1
11.1
0.8
16.1
4.1

3.0
1.1
0.1
0.1
0.0
0.0
0.6
0.0
0.8
0.2

115.0
74.9
4.9
0.9
0.0
0.2
2.2
0.0
25.0
6.9

4.3
2.8
0.2
0.0
0.0
0.0
0.1
0.0
0.9
0.3

314.8
73.6
59.6
20.9
10.1
25.7
43.4
29.9
32.5
19.1

11.3
2.6
2.1
0.8
0.4
0.9
1.6
1.1
1.2
0.7

164.1
52.6
23.3
8.9
3.8
9.3
21.0
11.2
23.9
10.1

6.8
2.2
1.0
0.4
0.2
0.4
0.9
0.5
1.0
0.4

Environmental income

163.0

8.2

129.1

4.8

39.6

1.4

111.4

4.6

Farm income

685.6

34.4

830.5

31.2

990

35.6

829.1

34.1

Non-farm income
Remittances
Pensions
Business
Non-farm wage work
Other

1085.7
606.8
163.3
121.8
69.5
124.4

54.5
30.4
8.2
6.1
3.5
6.2

1590.4
497.0
485.9
153.9
4.5
449.1

59.7
18.7
18.2
5.8
0.2
16.9

1435.4
383.0
105.4
597.1
147.2
202.7

51.6
13.8
3.8
21.5
5.3
7.3

1323.3
503.6
212.1
300.6
83.7
223.3

54.5
20.7
8.7
12.4
3.4
9.2

Total income
No. of obs.

1993.9
446

100.0
41.9

2664.9
234

100.0
22.0

2779.7
385

100
36.1

2428.0
1065

100.0
100.0

Abs

High mountains

1 USD PPP = 22.65 Nr in 2005 (World Bank, 2011).

Abs = absolute income.
c
Rel = relative income (%).
b

income, ranging from 1.4% to 8.2% with an average of 4.6%,

displayed the opposite pattern. In all sites, wood products
were primarily extracted from forests, from 73.5% of total
wood volume in the Lowlands to 99.0% in the High mountains. Income from rewood, poles, and timber, the products
for which annual increment was assessed through the biophysical survey, contributed 51.7% of the average forest income
across sites, from 49.0% in the High mountains to 70.2% in
the Middle hills. Non-farm income was the most important income source, ranging from 51.6% to 59.7% of total household
income, though the dominant component varied, e.g., business
in the High mountains and remittances in the Lowlands. Farm
income made up approximately a third of total household income in all the sites.
In Table 5, average annual household forest income is
compared assuming (i) current and sustainable harvest levels
(the latter based on the repeated forest inventory and estimated as 80% of mean annual increment), and (ii) current
and alternative implementation of rules for forest product
harvesting and sale. In the Lowlands and High mountains
sites the lowest annual average household forest income gures are under the present conditions of below-increment
harvest and only sale of rewood, while the highest sustainable gures illustrate the hypothetical situation of harvest at
sustainable levels combined with the possibility of commercial timber sales. If the latter scenario was realized, it would
increase average household forest incomes ten-fold in the
Lowlands and three-fold in the High mountains. Allowing
for commercial timber sales at current harvest levels would
increase household wood-based forest incomes from 52 to
173% depending on site. In the Middle hills site, the sustainable harvest level would decrease average household income
to half (commercial timber sales allowed) or a quarter (rewood only).

4. DISCUSSION
While forest income is not a dominant income source to rural households in the study sites, it still makes up 3.011.3% of
total household income and is thus arguably important. This is
particularly so given the generally low levels of household income and the slow national economic growth (average annual
GNI per capita growth of 1.4% from 2002 to 2009; World
Bank., 2011). Furthermore, Baland et al. (2010) found that
in Nepal rising incomes had a negligible eect on household
collection of rewood as had rising costs, e.g., through increased collection time due to decreasing forest quality. It thus
appears likely that forest product use will remain important to
most households in Nepal in the foreseeable future; this is conrmed by the 199596 and 200304 Living Standard Measurement Surveys that showed an increase in the percentage of
households using rewood for cooking from 77% to 84%
(Nepal, Nepal, & Grimsrud, 2010). In our study sites, the
share of rewood collecting households was constant at 84%
in 2006 and 2009. In 2009, more than half (57%) claimed to
use less time on rewood collection than ve years ago.
(a) Sustainability of current harvest levels
Forest level sustainability ndings can be nuanced by looking at three measures of within-forest sustainability: across
species, diameter classes, and spatially (strata). At the forest
level, current harvesting levels are well under the annual increment in the Lowlands and High mountains sites, while in the
Middle hills site current extraction exceeds annual increment
threefold. However, within-forest ndings show a more complex picture. For instance: (i) in the Middle hills site the main
species S. wallichii and C. indica are currently subjected to
unsustainable harvesting levels while other species, typically

S120

WORLD DEVELOPMENT

Table 5. Comparison of actual and potential annual household forest income (USD PPP yr 1) in total and per adult equivalent unit (aeu) under current
(rewood only) and alternative (timber and rewood) implementation of rules for actual annual harvests and sustainable harvest levels
Species

Firewood only

Lowlands

Middle hills

High mountains

Total

Income: sustainable annual harvesta

Income: actual annual harvest

Timber and rewood

Firewood only

Timber and rewood

Whole forest

Per aeub,c

Whole forest

Per aeub

Whole forest

Per aeub

Whole forest

Per aeub

Shorea
Other
Sub-total

155,884
104,684
260,567

21.2
14.3
35.5

566,464
145,444
711,908

77.2
19.8
97.0

648,347
106,641
754,988

88.3
14.5
102.9

2,551,012
172,450
2,723,461

347.6
23.5
371.1

Castanopsis
Schima
Other
Sub-total

29,945
63,732
5,551
99,228

30.2
64.2
5.6
100.0

67,130
118,722
8,720
194,571

67.6
119.6
8.8
196.1

8,323
11,210
4,820
24,354

8.4
11.3
4.9
24.5

21,526
22,468
7,958
51,952

21.7
22.6
8.0
52.4

Pinus
Tsuga
Other
Sub-total

165,585
6,688
37,702
209,976

127.8
5.2
29.1
162.0

256,593
10,521
52,438
319,552

198.0
8.1
40.5
246.6

321,157
60,376
7,430
388,964

247.8
46.6
5.7
300.1

517,573
96,634
4,914
619,122

399.4
74.6
3.8
477.7

569,771

60.9

1,226,031

131.1

1,168,306

125.0

3,394,536

363.1

Eighty percent of observed annual increment (Table 3).

b
Based on the number of households registered in 2006 (Table 1). Average adult equivalent units (aeu) per household in the lowlands, middle hills and
high mountains sites were 4.76, 4.47, and 4.32 respectively (mean of 2006 and 2009).
c
The household aeu income gures are based on inventory data and thus not directly comparable to the own-reported values in Table 4. As expected the
inventory-derived gures (in the rewood only column under actual harvest) are a little higher, e.g., for the Lowlands the average per aeu in this table is
35.5 whereas it is 26.9 (the sum of values for rewood, timber, and poles) in Table 4.

used for non-wood purposes such as fruits and medicines, are

not unsustainably harvested, (ii) the spatial distribution of
changes in standing stock in this site shows that there are large
strata in the forest with accumulation of standing stock, and
(iii) while there is generally a large standing stock accumulation in the Lowlands site, large diameter classes are subjected
to above increment harvesting.
The sustainability picture is further complicated when considering temporal aspects, e.g., it could be argued that households in the Middle hills site are currently capitalizing on the
forest protection they have been practicing for decades. If they
allow the heavily harvested stratum and species to regenerate,
as they have in the past, then current high harvesting levels
cannot be termed unsustainable in the longer term. The history of each site and the dierential patterns of harvesting
within the sites thus indicate that caution should be exercised
when determining whether ongoing harvesting is sustainable
or not. Snapshots based on proxies or partial inventories,
e.g., in only one part of a forest or only including certain species, could be highly misleading.
The above ndings have a number of policy implications.
First, they illustrate the importance of having volume and
growth tables that allow calculation and projection of stock
data from basic inventory measurements. There are many locally important species in natural forests in developing countries for which such tables are missing; national forest
authorities should thus prioritize development of such tables
through a commitment to establish and manage permanent
sample plots. 5 Second, quick and simple inventory techniques
that will allow local forest users to generate stock change data
need to be developedstandard inventory approaches are
likely too complex and costly to be widely adopted. The latter
should, however, be used to investigate which proxies are most
suitable for local measurements; experiences have shown that
it is possible to develop high-quality local monitoring methods
that can be replicated and scaled-up (Danielsen et al., 2010).
Other authors have also called for development of appropriate
local level forest inventory techniques that can be implemented
by local people albeit for other reasons, e.g., Hull, Ojha, and

Paudel (2010) argued that this would empower local communities. Third, the standard approach to forest management
planning and implementation in Nepal needs to be reconsidered: rather than emphasizing rigid standard conservative
management interventions in community forest operational
plans (Acharya, 2002; Dev & Adhikari, 2007; Yadav, Yadav,
Yadav, & Thapa, 2009) these should take into account spatial
and temporal species-level variations in harvesting possibilities. This would serve to avoid the widely reported (Adhikari
et al., 2007; Gautam, Shivakoti, & Webb, 2004; Pandit & Bevilacqua, 2011; Schweik, Nagendra, & Sinha, 2003; Tachibana
& Adhikari, 2009; Thoms, 2008) underutilization of community forests.
(b) Sustainability of current forest incomes
In the Lowlands and High mountains sites, the wood-based
part of the currently realized household-level forest income is
assessed to be sustainable. Even if there are concerns regarding
within-forest sustainability in each of these forests as discussed
above, current household forest incomes can easily be maintained while addressing these concerns (e.g., by shifting harvest spatially or between diameter classes). In the Middle
hills site, current wood-based forest incomes are clearly not
sustainable if not followed by periods of forest regeneration
(i.e., with lower forest incomes); reducing harvests to sustainable levels would decrease household forest incomes to 25
52% of the current estimate (depending on scenario; Table 5).
In the Lowlands and High mountains sites, it appears that annual household forest incomes can be increased substantially,
up to ten-fold (Table 5).
Approximately 1,652,654 households are currently involved
in community forestry in Nepal (DoF, 2011) and increasing
their forest income could have a nationwide impact on poverty
(e.g., doubling per household forest income would generate an
additional annual income of hundreds of million USD PPP).
The 1993 Forest Act allows communities to commercially sell
the timber from their forests. But a complex mix of factors
interacts to prevent this legally possible implementation of

ARE FOREST INCOMES SUSTAINABLE? FIREWOOD AND TIMBER EXTRACTION AND PRODUCTIVITY IN COMMUNITY S121

current rules. First, community based forest management was

originally promoted in order to achieve conservation outcomes and meet household forest subsistence requirements
(e.g., Gilmour & Fisher, 1991; Springate-Baginski & Blaikie,
2007). Changing the focus to include income generation and
commercial trade may thus require a cultural change in key
institutions including the Department of Forests. Second,
government foresters have much inuence on the design and
contents of local user groups constitutions and operational
plans which promotes the conservation-oriented approach to
local forest management; changed operational plans must be
approved and due to lack of capacity this may take many
years (Thoms, 2008). Third, since 2000 user groups must prepare operational plans based on forest inventories (now following the 2005 Forestry Inventory and Yield Regulation
Guidelines) which has further increased the reliance of user
groups on government foresters as the groups do not have
the technical knowledge to complete the inventories themselves (Dev & Adhikari, 2007). Fourth, a substantial increase
in the amount of timber harvested for commercial purposes
could lower market prices and thus result in lower income
gains than those estimated here. However, the large-scale
domestic trade in illegally harvested timber from state and
community forests (Iversen et al., 2006; Paudel, Keeling, &
Khanal, 2006) indicates a large unmet demand for timber.
Allowing timber exports to neighboring countries could also
increase the demanddemand for timber is rising rapidly in
both India and China (ITTO, 2010). Fifth, the spatial conguration of biomass resources may mean that not all resources
can be harvested, e.g., to avoid erosion on steep slopes. Sixth,
lessons from the past 30 years of community-based management have shown that benets may be appropriated by elites
(Gautam, 2009; Iversen et al., 2006; Malla, Neupane, & Branney, 2003). Studies on income generation from non-timber forest products indicate that it may be dicult for local people to
obtain fair prices for their products (Larsen & Olsen, 2007)
and the forest product trade in and from Nepal is beset with
poor governance, including local interpretation of ocial rules
and extensive rent-seeking (Larsen, Smith, & Olsen, 2005; Olsen & Helles, 2009; Paudel et al., 2006). It has been argued that
problems of elite capture, distributional inequity and rentseeking are particularly severe in the high value lowland forests (Iversen et al., 2006). 6 Lastly, it should be noted that local
developments may also directly inuence site-level prices, e.g.,
the High mountains site was recently connected via road to
markets in the lowlands. The potential increase in household
forest income under the commercial timber sale scenarios
means that current income levels can likely be maintained even
if prices decrease signicantly. 7
Including forest wages, wood-based incomes contributed
5276% of total forest income (Table 4). In the Lowlands site
the income contributions from leaf litter and wild fruits/
medicinal plants was similar (46%) but in the Middle hills
and the High mountains the contributions were lower (24%
in both cases). Thus, at least in the Lowlands site, a more complete assessment of the sustainability of forest income would
require data on the availability of forest litter and fruits/
medicinal plants. The availability of forest litter is related to
the woody biomass and is therefore partly and indirectly covered by the present analysis, but continued extraction of a
large proportion of the litter deposited may lead to reduction
of nutrient pools (Fisk & Fahey, 2001), thus potentially jeopardizing forest incomes in the very long term. Wild fruits and
medicinal plants include products harvested from a large number of species, some of which are scattered, sparse, inconspicuous, or only visible during a short season. Designing an

inventory that covers such products as eciently and accurately as an inventory emphasizing woody biomass therefore
remains a challenge (Jensen & Meilby, 2012).
(c) Can we trust the ndings?
The two dierent methods used by the present study to estimate annual woody biomass extraction from forests provided
comparable results (Table 3), with inventory estimates being 3
to 22% higher than household-derived estimates. This is likely
caused by lack of recall of all products harvested as well as
underreporting as not all household product collection is in
accordance with local rules; non-reported harvesting by outsiders may also play a role, e.g., during our eld work the
army was observed cutting trees in the High mountains site,
while the Maoist army (Table 3, footnote) was seen harvesting
forest products in the Lowlands site.
The most widely studied forest product in Nepal is rewood;
we nd the expected pattern of decreasing per capita rewood
extraction from forests, and increasing extraction from nonforest environmental resources, from high to low altitude
(Bhatt & Sachan, 2004) and extracted per capita freshwood
rewood quantities are comparable to previously reported
estimates (Amacher, Hyde, & Kanel, 1999; Bajracharya,
1983; Fox, 1984, 1993; Metz, 1994). 8 In general, the plot-derived harvest volume is slightly underestimated as increment
after registration in 2005 is not counted (it is not known in
what year trees were harvested). By contrast, the increment
represented by ingrowth is overestimated slightly as the volume of ingrowth trees was not zero in 2005. The total volume
error is minor as these trees are very small and thus have low
volume. Regarding the levels of forest incomes, these are lower
(311% of total household income) than reported in many
other countries (1539% mentioned in the Introduction). Previous studies from Nepal have, however, also reported low
average forest income shares of 58% (Adhikari, 2005), 4
23% (Chhetri, 2005) and 622% (Aryal & Angelsen, 2007).
The range reported in this paper is, while at the lower boundary, comparable with existing estimates.
5. CONCLUSION
This paper has focused on contributing to answering the key
question: are household-level forest incomes in developing
countries sustainable? It has done so using biophysical data
from repeated measurements in 240 permanent sample plots
located in three sites, one in each of the main physiographic
zones of Nepal, and income data from 507 households in
2006 and 558 households in 2009, using the forests in which
the plots are located, collected through a repeated structured
household survey.
Using a simple income sustainability criterion based on the
proportion of annual increment harvested (80%) we found
that spatial and temporal issues should be explicitly considered
in the sustainability analysis. For instance: (i) it may be that
forest income and overall extraction level at a particular site
is deemed sustainable, but that a certain species or a certain
location within the site is being unsustainably harvested, or
(ii) that current forest incomes are unsustainable but only because the local community at the observed points in time is
capitalizing on its previously exercised forest protection. There
is scope for further operationalizing the concept of forest income sustainability to include explicit ecological and social
dimensions of forest utilization. Household-level forest incomes were sustainable at two of the three sites (unsustainable

S122

WORLD DEVELOPMENT

in one site due to the reduction of standing stock). Provided

that maintaining present stocking levels (very low in the Lowlands site) is deemed acceptable, and that presently unexploited harvesting options are actually as valuable as they
seem, sustainable household-level forest incomes could be increased signicantly, up to ten-fold, by altering the implementation of rules for community based forest management to
allow commercial harvest and sale of timber. This could increase the income of a very large number of rural households,
with possible nationwide poverty reduction eects, while keeping harvests within sustainable levels. The potential income increase in a particular location would vary with the size of the
forest, species composition and age class distribution as well as

market access and the number of households. The eect on income would also be positive in overharvested sites in the sense
that the additional income from timber sales would lessen the
impact of changing to sustainable harvest levels.
The present ndings indicate that introducing exibility in
local forest management, through allowing commercial harvest and sale of timber, could be a rare winwin opportunity
to simultaneously improve sustainable rural livelihoods and
forest conservation. This would not require any legislative
changes but a complex mix of cultural and economic factors,
e.g., traditional ocial emphasis on forest conservation outcomes rather than income-generating opportunities, would
need to be explicitly addressed.

NOTES
1. As a component of forest income is derived from returns to skilled
labor, this creates some bias when comparing income across sectors.
However, given the diculties in estimating labor costs (and normal
prots, required to use the rent income measure) and the relatively minor
role of forest income derived from processed products and wages, we nd
use of value added income the only realistic solution.
2. In the Lowlands and Middle hills sites, the investigated forests are
managed under the community forestry programme (Acharya, 2002)
regulated by the 1993 Forestry Act and the 1995 Forest Regulations. The
High mountains site is located in the Annapurna Conservation Area,
established under the 1972 National Parks and Wildlife Conservation Act
and subject to the 1996 Conservation Area Management Regulations. For
a discussion of the dierences between the community forestry and
conservation area management models, see Baral and Stern (2011).
3. In the coee-house design sample plots are distributed such that for
each additional plot the minimum distance to other, already established
plots is maximized. In our application of the design the location of the rst
plot is random but as the number of plots already established increases the
location of additional plots becomes increasingly constrained. The name
of the design is inspired by the way that arriving customers in certain
coee houses choose their table.
4. One headload of rewood was estimated at 43.6 7.3 kg (n = 24).
The bulk of rewood is harvested individually by cutting trees and
immediately splitting the wood in the forest, before transporting to the
village (the Lowlands and High mountains sites) or by an entrepreneur
cutting and stacking piles (Middle hills site). Conversion of rewood
weight to volume used basic densities (dry weight per fresh volume) for
Schima wallichii, 0.685 g/cm3 (Middle hills), Pinus wallichiana, 0.400 g/cm3

(High mountains), and Shorea robusta, 0.880 g/cm3 (Lowlands), assuming

a moisture content of 70% in the Lowlands and Middle hills sites and 53%
in the High mountains (Christensen et al., 2009).
5. Basic data from permanent sample plots can also be used for a number
of other purposes, e.g. estimating above ground biomass for use in
calculating per unit area carbon stocks.
6. This study has focused on answering the question on whether
household-level forest incomes are sustainable. This can be seen as part
of a wider discussion of whether the use of forests for poverty prevention
and reduction is compatible with forest conservation. Addressing this
broader issue is important but outside the scope of this paper as it requires
further detailed analysis of changes in household income portfolio over
time and the factors determining these changes.
7. This study only investigates the sustainability of wood product
incomes (timber, rewood, poles). As seen in Table 4 there are many nonwood forest products, e.g. bamboo, mushrooms and medicinal herbs, that
also contribute to local incomes. The sustainability of use of these
products, accounting for 29.8-51.0% of average household income, is not
assessed in this analysis.
8. Note that our ndings may not be directly comparable to those
published in the literature: the latter are typically own-consumption
estimates while ours are extraction for own-consumption plus for sale. In
some locations, own-consumption estimates would be the sum of
extraction plus purchased rewood. Comparison is also complicated by
use of dierent data collection methods, e.g. Fox (1984) has argued that
weight surveys are necessary to obtain valid per capita rewood
consumption estimates.

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