Nepal is rich in NTFP resources, which present a unique economic opportunity for the poorest of the poor farmers living in the mountains where agricultural expansion is limited. NTFP offers both cash income for farmers and an important source of many items used for consumption, including foods, medicines, clothing, household implements, ritual materials and so on. However, unsustainable exploitation of these resources has led to a decline in quantity and in the number of species available. In addition, the forest collectors are getting only a small percentage of the total income potential of these products.

Drawing from the lessons learned from over 18 years of experience in enterprise development (including the initiation of Gorkha Ayurvedic Company) and applied to small, natural resource-based enterprises, a methodology called Market Analysis and Development (MA&D) has been developed by trainers at the Regional Community Forestry Training Centre (RECOFTC) in Bangkok, Thailand (Lecup I. et al 1998). This methodology uses a step by step process  for decision making and planning of viable tree and forest product enterprises, within the context of sustainable forest utilization and equitable distribution of benefits. A major emphasis of the process is the use of a set of inter-related social/institutional, economic/ market, resource management/ environmental and technological criteria in the selection and development of products for marketing.

MA&D is different from conventional business and enterprise planning. Rather than considering only commercial aspects of the enterprise, in the MA&D approach, the environmental (level of harvesting etc.), social (gender and disadvantaged groups, local capacity, policy etc.) and technological (type of technology needed, etc.) are also considered in the development of the enterprise.

This methodology can be used by project staff or enterprise managers in order to help them select products, which can be marketed sustainably. It can also be used in an action-research approach in order to involve the farmers and entrepreneurs themselves and build their capacity to select appropriate products and test them in a pilot phase.

The methodology is now being taught in Nepal through projects such as SNV, and at the Institute of Forestry in Pokhara. It is currently also increasingly used in Vietnam, Laos and China. Within  SNV,  the methodology is being applied in projects in Chitwan (The Praja Community Development Programme, PCDP) and in the Karnali Local Development Programme (KLDP). In PCDP, SEACOW (an NGO) is implementing  MA&D, which has been useful as a pilot for using the methodology in other districts. SEACOW is developing participatory tools in order to ensure that the local people be involved at every stage of the analysis and decision making. Issues which have come up are subsistence versus income generation uses of a product; women’s roles in the product; control of tree products which are not in community forests; roles of middlemen, financing needs and so on.

MA&D also uses sub-sector analysis in order to carry out a feasibility study once a product has been selected. The market chain for a product is surveyed and weaknesses or bottlenecks are identified and strengthened with project activities. Common project strategies include building storage sheds, processing technology, cultivation or harvesting technology, management systems for common property resources, group formation of entrepreneurs, workshops and coordination with other stake holders such as line agencies, private sector businesses and banks, market information systems and study tours.

As MA&D is used more and more in Nepal and the techniques are implemented in the field there is an opportunity to develop case studies documenting the experiences in order for others to be able to build on them. There have been suggestions put forward for the Nepal NTFP Network to assist in the sharing of experiences amongst projects implementing these activities. Readers are encouraged to begin this process by formulating their field experiences using this method and providing suggestions for improvements.
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Mr. Nicholson is working as NTFP Development Specialist at SNV.

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A study was undertaken to 1) generate sufficient information to identify opportunities and constraints to developing businesses based on sustainable utilization of identified forest products within the Environment and Forest Enterprise Activity (EFEA) project area, and 2) transfer marketing study skills to the EFEA project team to apply throughout the life of the project. The study was conducted during February - July of 1997 by ANSAB together with representatives from New ERA, Biodiversity Support Program (BSP) and EnterpriseWorks Worldwide (formerly ATI).

Based on the product selection criteria, 11 products found in three different geographic zones were studied in detail.  Other products are noted in the recommendation section.  Five districts within the three zones were included in the market study. The different geographic areas represent three of the major climatic and altitudinal zones of Nepal –

1) the inner Terai consisting of the Dang valley;
2) the mid hills, represented by the districts of Salyan, Rolpa, and Pyuthan; and
3) the mountain areas, specifically the district of Dolpa.

The study used techniques borrowed from subsector analysis (SSA) to explore potential enterprise options (see Haggblade and Gamser 1991). Subsector analysis looks at all the functions, players, and potential hard and soft technologies associated with a given product. These are arrayed in relationship to market conditions.  Opportunities and constraints are identified and a range of potential enterprise options are generated.  The study also incorporated conservation and social forestry issues.

Recommendations
Two sets of recommendations are made. The first set of recommendations is product, location and enterprise specific. The second is a set of general recommendations and have implications for all EFEA enterprise work.

Enterprise Options. Based on the 11 main products and the three geographic zones, the study team came up with several enterprise options that are explored in detail and profiled. The main recommended options include:

* Organize collector groups and forest user groups in preparation for processing and improved trading enterprises

* Establish a distillation enterprise to process aromatic plants starting with Jatamansi (Nardostachys grandiflora) and Sugandhwal  (Valeriana jatamansi) as an example of a buffer zone commercial activity in Dolpa (mountains) before a Dang-based (mid hills) enterprise to process Sugandhwal and Timur (Zanthoxylum armatum) that would be supplied from Pyuthan, Rolpa and Salyan

* Establish an improved trading and minor   processing (mid hills) enterprise for Timur, Sugandhwal, Dalchini (Cinnamomum tamala), Chiraito (Swertia chirayita) and Ritha (Sapindus mukorossi) as a model for EFEA project enterprise work

* After proving the model in mid hills, pursue improved trading and minor processing (mountains) of Atis (Delphinium himalayai), Jatamansi, Sugandhwal, Guchichyau (Morchella conica) and Kutki (Picrorhiza scrophulariiflora) as an additional enterprise activity to a distillation enterprise in Dolpa

General Recommendations
The following recommendations are made for the enterprise sustainability and social equity:

* Increase awareness on NTFP issues and prospects  in community forests
* Gauge community interest in proposed commercial activities and finalize criteria for enterprise selection of demonstration and development sites
* Monitor land status (including community forests) as a key factor in sustainability of NTFPs
* Promote recognition of Nepal’s community forest model and potential as a major vehicle of  NTFPs management.
*Organize domestic NTFP trade association & set up market information system
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Mr. Subedi is Coordinator of ANSAB
 

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In the northern part of Nepal, per capita distribution of forest and highland meadows including valuable Non-Timber Forest Products, is comparatively higher than in the South. The collection and sale of NTFPs plays an important role in subsistence livelihood of the people living in these remote districts.

Recently, a small study conducted by CARE Nepal in Bajura district recorded over 80 species of NTFPs, which are categorised into the following nine groups as per their utility:
 

Plants of medicinal value:	46 species	Plants used for spice:	3 species
Essential oil bearing plants:	13 species	Plants used for dye:	5 species
Fatty oil bearing plants:	7 species	Plants used for resin tapping:	2 species
Fibre bearing plants:	6 species	Plants for miscellaneous value:	8 species
Plants of food value:	13 species

Besides medicinal and aromatic and edible NTFPs, fibre plants like Bhango and Allo are playing a significant role in the village economy in most of the hill districts of Nepal. Many items such as cloth, bags, hats, rope, namlo, and damlo are produced from the fibre of these species. In the Far West, Bhango is cultivated in the private land while Allo is collected from the wild state. In these districts, Lokta plant is also important for making paper although in limited quantity.

High altitude forests and meadows are the most important places for potent and valuable NTFPs. These places are under the jurisdiction of forest department. Because of high altitude, the area is isolated and the systematic management is not being practised either by the government or from users. The villagers living near such areas and local middlemen are running to grab as many benefits as they can. Due to unorganised collection and legal confusion, local collectors do not have bargaining power.
 

The study identified that five tiers of middlemen are associated with NTFPs trade ranging from primary collectors to Indian traders. The local traders, who obtain permission from District Forest Offices for the collection, are the most benefited layer among the middlemen. Looking at the whole range of NTFP trading and listening to the problematic histories of various levels of stakeholders, it is a business of uncertainty with high risk.

The time is ripe to adopt a workable management model and policy for such land and resources. Sustainable management of NTFP are only possible if we can involve local villagers and communities within an effective policy umbrella. The basic challenge is how to increase the business margin of local collectors from NTFP trading while maintaining sustainability of the products in the area. Promoting community based NTFP income generating activities can be helpful for the poverty alleviation battle in the country.
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Mr. Subedi was formerly affiliated with CARE Nepal