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Myanmar-Nepal Exchange of Forest and
Farm Producer Groups
Organized by MERN, IUCN, ANSAB, and FECOFUN
Sponsored by the Forest & Farm Facility and Pyoe Pin
9-16 June 2014
Executive Summary
On June 6-19, 2014, 24 representatives of Myanmar NGOs, parliamentarians, the Forest
Department, and local communities visited Nepal to learn from its experience with community
forestry and see what it takes to build successful community businesses. They met community
forest user groups (CFUGs), community enterprises, NGOs, buyers and marketers, and
government officials and discussed a range of issues from forest management to business
establishment and marketing. The trip, which was organized by IUCN and ANSAB, the Asia
Network for Sustainable Agriculture and Bioresources, was sponsored by the FAO-led Forest &
Farm Facility (FFF) and Pyoe Pin, a DFID/Sida-funded civil society support program in Myanmar.
The exchange demonstrated communities can manage community forests for both timber and
NTFPs sustainably for commercial and subsistence use. The community-based businesses the
group visited were profitable, created employment for community members, and provided
community shareholders with annual dividends of up to 50% of the share price in their best
years. Myanmar participants saw supply chains from harvest to export for a variety of natural
products, including handmade paper, bio-briquettes, and essential oils. The group visited
community forests (CFs) and successful community-based businesses in the middle hills, where
they discussed harvest, production, and sale of natural products. In the Terai, the group
discussed timber management and ecotourism with a CFUG and heard from the Chitwan
District Forest Office about CF management, illegal logging, and human-wildlife conflict. The
trip ended with a day and a half workshop where ANSAB, the Federation of Community
Forestry Users Nepal (FECOFUN), MoFSC, FNCSI, and IUCN Nepal shared their experiences with
community forestry, community enterprise, and FFF.
Nepal’s experience indicates that community-based businesses must be not only permitted but
actively encouraged in order to be successful. These community enterprises received initial
support from NGOs and donors and continue to receive assistance from companies like
Himalayan Naturals ad Himalayan Bio Trade Pvt. Ltd. in market analysis, advertising, supply
chain management, packaging, and obtaining various product certifications. These groups have
also provided training and technology to improve and standardize product quality for urban and
international markets.
Lessons from Nepal’s experience with these community enterprises can inform how Myanmar
might structure a market-led expansion of CF. While first generation community forestry in
Nepal focused on forest regeneration, second generation issues focus on community
enterprise, poverty alleviation, and governance. These stages are not mutually exclusive,
however, and business opportunities could encourage the spread of community forestry in
Myanmar and provide incentives for sustainable local forest management.
Forest and Farm Producers from Nepal and Myanmar Share Experiences
One-third of Nepal’s population, comprising 2.7 million households, is organized into over
18,000 community forest user groups. Over 25% of forested land in Nepal, over 1.8 million
hectares, is under community management. In contrast, by 2013 Myanmar has established 753
community forests covering around 48,549 ha, around 0.15% of its total forest area. In Nepal,
community forestry has benefitted from decades of strong donor support and a long process of
government decentralization. Though the Community Forestry (CF) Instruction was written in
1995, CF in Myanmar has received comparatively little support. Myanmar’s 30 Year Forestry
Master Plan (2001-2030) sets a target of just under 1 million ha (2.27 million acres), about 2.8%
of the country’s forested area, of CF by 2030. To date, only 48,549 ha are registered as CFs,
only 5% of the way toward the national target.
Myanmar’s Forest Department is increasingly open to collaboration with NGOs and is making
community forestry a higher priority, as indicated by the recently established Community
Forestry National Working Group and the creation of a Community Forestry Unit within the
Forest Department. Sustained commitment to expanding CF could allow Myanmar to emulate
the successes of Nepal’s CF system.
Throughout the visit, Myanmar participants were impressed by how well government, civil
society, and communities seemed to work together to support sustainable forest management.
In Myanmar, these relationships are newly developing and trust between government, NGOs,
and communities needs to be built. The establishment of community forests can contribute to
this process as it provides a positive way for communities and the Forest Department interact,
usually with NGO facilitation. FFF’s small grants program and domestic and international
exchanges also contribute by creating a space for these three groups to come together and
discuss CF.
Field Visits
The Middle Hills
Site visits to forests and farms in the middle hills, where community forestry is strongly
established, showcased the effectiveness of CF in increasing and maintaining forest cover.
Visits to successful businesses based on the harvest and processing of NTFPs demonstrated the
potential of this model for generating income and providing incentives for sustainable forest
management. Community enterprises produce natural products including essential oils,
traditional medicines, orchids, bio-briquettes, and handmade paper products.
While these businesses were
successful, they also relied on NGO
and donor support during their
establishment and early
development. They also depend on
companies like Himalayan Naturals
and Himalayan Bio Trade Pvt. Ltd.
do conduct market assessments,
advertise, and make connections
with buyers. These visits identified
factors for success but also
challenges on both supply and
demand sides.
In Sikre, Sindhupalchok the group visited Sikre Briquette Enterprise, a company that pays
community members to make bio-briquettes. The bio-briquettes are made from agricultural
waste, ferns, and the invasive Lantana camera and are sold for 25 rupees a brick, 15 rupees
wholesale. The company sold 200,000 briquettes in 2013. Thirty-five households are
shareholders, together holding 600,000 shares priced at 100 rupees a share. The dividend in
2012 was 50% of the share price; in a typical year the dividend is around 30%. The company
directs a percentage of the profits to support forest management. Producers use an electric
grinder on the charcoal to ensure a consistent quality.
Sikre Wintergreen Enterprise operates in the same community and
pays community members 4 rupees/kg for wintergreen gathered
from the community forest. The plant is distilled to create an
essential oil that can be used in balms, lotions, and cosmetic
products. Production fell by 75% last season because a
neighboring community set up its own distillery, competing for the
services of wintergreen collectors. Sikre Wintergeen Enterprise is
looking into ways to secure a sufficient supply of wintergreen for
the coming year, including paying more for each kilogram
collected.
Making bio-briquettes in Sikre
Wintergreen distillery
The group visited Aashapuri Organic Farm, a model farm run by ANSAB, in Kavrepalanchok to
learn about their cultivation methods and business model. The farm tests the growth of crop
varieties and provides a model of organic agriculture techniques for surrounding communities.
This diverse farm grows everything from fast-growing Paulownia and alder trees for
agroforestry to goji berries, yakon (ground apple), and shitake mushrooms to sell in Kathmandu
and Singapore.
In Ugachandrinala Village Development Committee, FFF and FNCSI are supporting a community
business to develop an organic fertilizer farm, along with raising pigs, cattle, and vegetables.
The project plans to promote the adoption of organic agriculture by demonstrating techniques
and providing fertilizer to other farms. This project is led by Urmila Shrestha, who recovered
from cancer that she told us was caused by very high levels of agro-chemical use in the area.
The group also visited a co-op of 100 women who make and sell candy from the indigenous
Lapsi tree (Choerospondias axillaris), also known as the Nepali Hog Plum. There are multiple
women-only co-ops and CFUGs in Nepal, directly providing opportunities for leadership and
entrepreneurship that remain less accessible to women in other CFUGs and enterprises.
Marketing and Sales
In Kathmandu, the group visited two natural products companies, Himalayan Naturals and
Himalayan Bio Trade Pvt. Ltd. Community businesses rely on these companies to connect them
with buyers, conduct market research and advertising campaigns, and provide input on design
and quality assurance. The importance of these businesses demonstrates the large level of
investment at multiple points in the supply chain that is necessary for successful community
enterprises in Nepal.
Himalayan Naturals is a bio-briquette wholesaler and marketer. The company was established
in order to create a market for bio-briquettes, which at the time were a new product. They
have conducted market assessments and marketing campaigns. They also provided charcoal
grinders to communities to standardize the quality of the briquettes. Briquettes are not
produced during the monsoon because they are dried in the sun, so the company stockpiles
bio-briquettes in hot season to maintain sales during the monsoon. After a successful
advertising campaign for urban buyers, the company told us they will have to continue to
innovate to maintain their position against competitors that may enter this new market. They
shared that, when working with community enterprises, it is essential to have staff who are
dedicated to social and environmental goals, as this is not a sector with fast or easy profits.
Himalayan Bio Trade Pvt. Ltd. sells a variety of natural products in
Nepal and internationally, including essential oils, paper goods,
and soaps. It sells high-quality handmade paper purchased from
Malika Handmade Paper Company, a community enterprise, to
the international cosmetics company AVEDA. The paper is made
from lokta (Daphne bhoula and Daphne papyracea) harvested in a
block rotation with a set allowable harvest in CF operational plans.
This harvesting method is certified as sustainable by the Forest
Stewardship Council (FSC). The community businesses they work
with have various fair trade, organic, and sustainable
certifications.
The Terai
There are relatively few CFs in the Terai as compared to the middle hills, and both
establishment and management of CFs face distinct challenges. Establishment of CFs in the
Terai has been hindered by its history, demography, and the high value of its sal (Shorea
robusta) forests. The Forest Department prefers collaborative forest management (CFM)
instead of CF in the Terai, and 19 CFM blocks have been established to date. These CFM blocks
are larger than CF, include distant communities, and allow the government to maintain more
control over forest use and revenue. In CFM, half the revenue from timber sales is collected by
the Forest Department and the other half goes to participating communities. With FECOFUN
leading the establishment of CFUGs in the Terai through strong national advocacy and local
awareness raising and technical support, around 5,000 CFUGs have been established to date.
While sal forests provided the sleepers for India’s railway system, high levels of malaria
prevented settlement in the region by any but the indigenous Tharu. After the National Malaria
Eradication Program in the late 1950s substantially decreased malaria risk, however, an influx
of migrants from the middle hills settled in the Terai. Now the Terai contains over 50% of
Nepal’s population but only 20% of its forests. Clearance for agriculture and new settlements
are major drivers of deforestation, along with illegal logging. Settlements are often distant
from blocks of forest, which makes them difficult to engage in forest management, including
patrolling against illegal timber extraction. In the middle hills, CF can reflect traditional
management of surrounding forest, but recent migrants to the Terai have no similar historical
use rights or relationships with the land for CF to build upon. The high value of timber in the sal
forests, as an attractive source of revenue for the Forest Department, has also hindered the
Essential oils at Himalayan Bio Trade Pvt. Ltd.
expansion of CF. Timber
concessions to foreign companies
have been blocked in the past
through advocacy by FECOFUN.
The Terai contains large blocks of
contiguous forest that serve as a
corridor for migrating wildlife,
including increasing tiger and rhino
populations. Landscape level
management is essential to
maintain these wildlife corridors,
and the Forest Department asserts that the larger blocks of CFM with greater government
control are more appropriate for wildlife conservation than the small and more autonomous
blocks of CFs. CFUGs, meanwhile, have the advantage of allowing communities to directly
benefit from wildlife by generating income from tourism to protected areas.
The group visited a CFUG in Kankali village near Chitwan National Park. Chitwan, Nepal’s first
protected area and a major tourism destination, was established in 1973 and covers over 900
km2. Kankali CFUG consists of 2,215 households from 9 different wards and manages 750
hectares of sal forest. The surrounding hills were bare when the CFUG was formed 25 years
ago and are now forested through a combination of enrichment planting on 85 ha and natural
regeneration in the remaining area. Timber sales generated an income of around $90,000 USD
in 2013 and ecotourism generated an additional $40,000. About one third of timber sold was
harvested from the CF, and the remaining 2/3 was first purchased by the CFUG and resold. The
CFUG has used this timber revenue to pay members for working on CF management, granting
zero-interest loans, supporting livestock and fisheries development for the poorest members,
and building village infrastructure, including a swimming pool. The CFUG has 7 subcommittees
to manage these activities, including ones focusing on conservation, ecotourism, and village
development. The group employs 10 community members as paid staff, including security
guards, and each CFUG member is paid for the mandatory 4 days of work they must contribute
to the CF each year. The finance subcommittee releases regular statements to promote
transparency.
During a visit to the Chitwan District Forest Office, the group learned about policy and
implementation of leasehold and collaborative forest management. Leasehold forest
management is designed for poverty alleviation and grants 40 year leases of degraded land to
groups of 5-15 people, with 1 hectare or less for each household. The Assistant Forest officer
Kankali Community Forest
also described the process of establishing collaborative forest management (survey and
mapping, inventory, operational plan development). He discussed the challenge of preventing
illegal timber extraction in government forest and how the District Forest Office has the
authority assign fines and jail time if the value of the illegal timber is under 10,000 rupees
(about $100 USD), while penalties are determined by the court system if the value is higher.
The presentation also described the Forest Department’s efforts to mitigate human-wildlife
conflict, including building fences and trenches.
The workshop
Dr. Annpurna Nand Das, Chief Foreign Aid Coordination Division, Ministry of Forests and Soil
Conservation emphasized that community involvement is essential for forest conservation and
CF needs strong government support to be successful. He also explained that forests are
essential for agriculture, tourism, biodiversity conservation, sustaining the hydrological system,
and mitigating climate change. He described how CF in Nepal has increased forest area,
clarified tenure rights, improved forest health, generated income, provide a safety net for the
poor, and developed local leadership.
Rajendra Khanal from IUCN Nepal explained progress and structure of the Forest and Farm
Facility in Nepal.
Ganesh Karki, Chairperson of FECOFUN, discussed how they support CFs as a national
federation of CFUGs. FECOFUN advocates for CFUGs in policy dialogues, acts as a watchdog to
protect CFUG rights, and provides training and raises awareness to promote new CFUGs.
Challenges identified were an unstable political situation, delayed rollout of CF in the Terai, and
need for training to support sustainable community enterprise.
Jaganath Poudel of the Federation of Nepal Cottage and Small Industries (FNCSI) discussed the
challenges of community enterprise, including a need for infrastructure, business training,
policy support, and marketing strategies. FNCSI has 40,000 members and chapters in 74 of
Nepal’s 75 districts.
Puspa Ghimire shared ANSAB’s experience supporting community-based businesses. Their
success with handicraft paper, bio-briquette, essential oils, and other businesses has shown
that market-oriented management of CFs is a viable method for conserving forests and
generating income. This approach takes considerable investment and commitment, but there
is no short-cut or substitute.
Lessons Learned
Participants from Myanmar were most impressed by the evident cooperation between the
government, NGOs, FECOFUN, and communities. Each of these groups has played an important
role in expanding CF in Nepal, with additional assistance from international donors. Trip
participants from government, NGOs, and communities all recognized that similar cooperation
will be essential for Myanmar to meet its CF target. This cooperation can only occur as trust is
built up between the forest department and communities, a process which may be facilitated in
party by NGOs assisting communities to gain CF certification.
Policy
Nepal’s most significant piece of legislation for CF, the Forest Act of 1993, established CFUGs as
legal entities and provided the legal framework upon which CF could grow. Subsequent
legislation, including the Forest Regulations of 1995 which required District Forest Offices to
provide technical support to CFUGs, further strengthened the legal basis of CF.
Myanmar’s Community Forestry Instruction was adopted in 1995 and remains the primary
document on CF in Myanmar. Based in part on Nepal’s Forest Act passed just two years before,
it lacks the government support and strength of law enjoyed by CF in Nepal. A group of NGOs
have submitted recommendations to strengthen community forestry policy, and the revision of
Myanmar’s Forest Law currently in progress is expected to strengthen the legal framework for
CF. The establishment of a Community Forestry Unit within the Forest Department
demonstrates an increased focus on CF within the government. Community Forestry can also
be advanced through the recently formed Community Forestry National Working Group, which
facilitated by RECOFT and whose members include representatives from multiple ministries and
NGOs.
In Nepal, the District Forest Office has both the authority and responsibility to establish and
support CFUGs, but the highly centralized government system in Myanmar has prevented such
devolution of power. When CF was started in Myanmar, the District Forest Officer held the
authority to issue CF Certificates while having to inform the Forest Department headquarters.
In response to instances of corruption, the authority to grant CF certificates was shifted to the
Director of a Division or State, who also needed approval from the Director General of the
Forestry Department for each certificate. The need for high-level permission slowed the
establishment of new CFs. In late 2013 the policy changed again, and now the Director of a
State or Division can issue a CF certificate and only needs to inform Forest Department
headquarters instead of needing to secure approval. While this may be more efficient than the
previous arrangement, communities report that it is difficult to know how to follow up at
district or state levels if their application is being processed slowly.
The most rapid expansion of CF in Nepal coincided with post-conflict government
decentralization and democratization in the 1990s. CFUGs supported these processes by
training local leadership, strengthening civil society, and promoting more inclusive and
transparent local decision-making. CF has the potential to play a similar role in Myanmar.
Advocacy
FECOFUN has been essential for the success of CFs in Nepal, generating local awareness of
community forestry, providing training and advice to communities, advocating for policy
changes, and now supporting community-based businesses. FECOFUN’s strong advocacy for
CFUGs at a national level, including success at reducing taxes on timber from CFs and
promoting CFs in the Terai, has been critical for CF expansion. FECOFUN leads public campaigns
and demonstrations when dialogues with government are unproductive, but always with the
intention of renewing a more productive dialogue. This advocacy role is accepted by the
government as part of the consultation process that is essential to policy-making in Nepal.
FECOFUN’s local chapters and NGOs both support CFUGs in ways that the department of
forestry has neither the capacity nor the staff hours to provide directly. They play an extension
role by raising awareness about community forestry and providing training as well as legal and
technical support. Nascent associations of CFUGS at the township level in Myanmar may play a
role in CF extension in their area and facilitate communication between CFUGs and the Forest
Department.
In Myanmar, the Forest Department has increasingly recognized the role that NGOs can play in
conservation and forest management. There has also been increased support for community
based management of forests and protected areas from high levels of the Ministry of
Environmental Conservation and Forestry. This may open a space for NGOs to advocate
effectively for changes in policy and implementation in the future.
Community Enterprise
Community enterprise requires substantial investment, including training community members
in business and technical skills, providing appropriate technology, and ensuring sustainable
harvest. These investments are usually made by donor-funded projects, and many businesses
set up in this way remain dependent on some outside funding. Linking communities with
interested buyers and private sector investors may help to reduce the current dependence on
donor projects, and efforts to mobilize private capital for community business are being
pursued.
In Nepal, even the most successful community enterprises are dependent on other businesses
to conduct market research, run marketing campaigns, link them with buyers, make
innovations on product design, and support certification. The business and market knowledge
that these groups provide are invaluable. In Myanmar, the number of social enterprises has
been increasing and some may fill this niche in the future.
Communities in Myanmar use many forest products that could be commercialized within a CF,
including bamboo, rattan, elephant-foot yam, and timber. There is traditional paper production
in Myanmar, but the industry is much less developed than it is in Nepal. Bio-briquettes are also
made in Myanmar, mostly through NGO-led conservation and livelihood projects. These groups
sell the briquettes to tea shops, which need to boil large volumes of water over long periods of
time. The group purchased bio-briquette stoves from Himalayan Naturals and noted the design
to see how they might modify it to fit the Myanmar market.
Businesses need both economic incentives and secure tenure in
order to be sustainable. Higher quality products that provide
higher revenue can provide the necessary economic incentive.
This may require training of skilled workers and the provision of
machines (e.g. charcoal grinders) to standardize quality.
Mechanized processes that produce a uniform, high-quality
product may be slow to be adopted in Myanmar, as rural
electrification is limited and even towns and cities suffer from
unreliable power supply. Certification of products can both
promote sustainability and help market high quality products,
especially in international markets.
While the group only visited successful enterprises, they can also learn from the many failed
community businesses in Nepal. During the workshop, groups discussed a few lessons from
these experiences. In order to increase the chance of success, the group was told to consider
the market situation of the product, the market accessibility of the community, and whether
there is access to appropriate technology and investment. A value chain approach can help
determine suitable products. Balancing the business structure between inclusion and allowing
for efficient everyday operation can be a challenge. Having many shareholders at the initial
stages of the project can increase the chance of failure.
Bio-briquette mold
Inconsistencies in the regulatory framework and taxation of CF products have been obstacles to
community businesses in Nepal. In Myanmar, a pathway to certify timber harvested from CFs
for legal sale outside of townships could increase income generation from CFs. Changes in the
regulation of restricted tree species and increased clarity of CF policies would also facilitate CF
expansion.
Aashapuri Organic Farm
Participants
Sr. Name (as per PP) Designation Organization
1 Aung Thant Zin CEO MERN
3 Jake Brunner Programme Coordinator (Myanmar, Vietnam, Cambodia)
IUCN
2 Julia Recatta Fogerite Project Officer (Myanmar) IUCN
3 Aung Khin Project Manager MHDO
4 Wai Lin Maw Project Manager MCS
5 Tun Lay Local Community MCS-FFF Project
6 Thet Paing Hmu Project In-charge FOW
7 Maung Myint Local Community FOW-FFF Project
8 Kyaw Sint Project In-charge SDF
9 Zaw Moe Local Community SDF-FFF Project
10 Aung Htoo Myaing Project Manager ECCDI
11 Ba Aung Local Community ECCDI-FFF Project
12 Naung Zin Latt Project Manager SVS
13 Myint Myat Khaing Local Community SVS-FFF Project
14 Myint Thein Khaing Assistant Director Forest Dept.
15 Kan Htun Staff Officer FD (Bogalay)
16 Htay Lwin Staff Officer FD (Nyaung Shwe)
17 Zaw Min Htun Staff Officer FD (Pathein)
18 Zaw Lin Than Staff Officer FD (Gwa)
19 Thein Than Htike Range Officer FD (Ywanyan)
20 Myint Kyaw Deputy Chairman Kachin Parliament
21 Ding Hkang Dar Wi MP & Chairman of Forest, Mine, Environment, Livestock & Agriculture Committee
Kachin Parliament
22 Joseph Siing Khan Pum
Office Staff Kachin Parliament
23 Brang Shaung Project Officer Shalom Foundation
24 Maw She Local Community Wai Maw CF
25 San Lwin Translator Freelance
Participants from Nepal
Agenda
Date Activities
June 9 Arrival of participants at Kathmandu, Nepal
June 10 Travel to Sikre, Sindhupalchok
Visit Sikre Briquette Enterprise and Sikre Wintergreen Enterprise
Night stay at Dhulikhel
June 11 Visit FFF pilot site in Ugachandrinala VDC, Kavrepalanchok
Visit Aashapuri Organic Farm in Kavrepalanchok
Visit briquette marketing company Himalayan Naturals (HN) in Kathmandu
Visit forest product processing company Himalayan Bio Trade Pvt. Ltd. (HBTL) in Kathmandu
June 12 Travel to Chitwan
Meet with Chitwan District Forest Office
Meet with Kankali CFUG
June 13 Visit Lumbini
June14-15 Workshop to exchange experiences and lessons learned at Hotel Himalaya in Kathmandu
June 16 Departure of participants