Himalayan Bioresources: Volume 2, Issue 2

Volume 2, Issue 2: August-September-October-November 2011

REDD+ pilot project: Initiation of Forest Carbon Trust Fund in Nepal

A pioneering approach by Asia Network for Sustainable Agriculture and Bioresources (ANSAB) along with two other partners International Centre for Integrated Mountain Development (ICIMOD), and Federation of Community Forest Users, Nepal (FECOFUN) has resulted to the establishment of the first Forest Carbon Trust Fund (FCTF), and distribution of the performance-based financial incentive to local communities in Nepal.  The pilot FCTF has been established under a NORAD funded REDD+ project being implemented since 2009 in 104 community forests in three watersheds – Kayarkhola of Chitwan district, Charnawati of Dolakha district and Ludhikhola of Gorkha district of Nepal.

FCTF was initiated in 2010 to explore how governance systems can be adapted to implement performance-based REDD+ at the local level within a community forestry setting. The aim is to harness learning that can be applied by policy decision makers and practitioners, and to develop capacity-building systems that can be used to implement REDD+ at the national level. Priority is given to ensuring that payment mechanisms are equitable, respect the rights of indigenous peoples and local communities, and are sustainable in the long run. On June 14, 2011, FCTF was formally established with a US $100,000 seed grant from NORAD by a multi-stakeholder task force that comprised the members from Government’s REDD Forestry and Climate Change Cell, Ministry of Forests and Soil Conservation, Nepal Federation of Indigenous Nationalities (NEFIN), ANSAB, ICIMOD, FECOFUN, and Joshi and Bhandari Company.

Structure of the FCTF

FCTF governance system and functions are designed by the multi-stakeholder task force and approved by national and local stakeholders through a consultative and feedback process.  Structurally FCTF consists of three layers; i) Community forest users’ groups (CFUGs) are functional at the ground level, ii) watershed REDD network (WRN), watershed level FCTF advisory committee (WLFAC) and watershed level FCTF monitoring committee (WLFMC) are functional at the second level; and iii) Project management unit and Central FCTF advisory committee are functional at the central level. Each CFUG fills up the claim invoice form after completing their forest carbon survey with details on forest carbon, social data, and tentative plan for utilizing the claimed fund. The CFUGs then submit their claim to the watershed REDD Network. Watershed REDD network then compile details from every CFUGs of watershed and prepare watershed level claim invoice. After preparing watershed level claim invoice it is presented to the WLFAC. Data supplied by WRN is approved by WLFAC after verifying whether data is correct either by direct monitoring or from recommendation of WLFMC. The approved watershed level claim invoice is then processed at project management unit (PMU) at central level. The PMU collects claim invoice from all watersheds and prepares payment slip, stating the amount of fund that should be released to each watershed. This payment slip is passed to Central FCTF advisory committee (CFTA). CFTA then approves payment slip after ensuring that data submitted by each watershed is correct either from recommendation of verifying agency and/or direct monitoring. The approved payment slips are then forwarded to each watershed. After receiving fund, WLFAC distributes the fund as per the criteria developed and data submitted by CFUGs. Thus, each CFUG receives the amount as per their carbon stock data and social data.

Performance-based payment under the Fund

Last June, FCTF distributed US $95,000 among the three watersheds based on four basic elements established by the task force:  1) the quantity of forest carbon saved above the baseline, 2) the number of households of indigenous peoples and minority groups, 3) the female population and women, and 4) the number of poor households within the project area. Based on these elements, Charnawati watershed received $ 45,534.93, Kayarkhola received $21,904.94 and Ludikhola watershed received $27,560.13. Once the fund was released to each of the watersheds, the amount of the reserve fund at each watershed was determined by the watershed level FCTF advisory committee decided the amount of reserve fund (Ludikhola kept a reserve fund of NRs. 150,000 (US $2,142.86), Kayarkhola NRs. 100,000 (US $1,428.57) and Charnawati kept NRs. 100,000 (US $1,428.57)). Remaining money has been distributed among CFUGs in Ludikhola, however, Kayarkhola FCTF advisory committee has retained half of the money and distributed only half fund. Major reason for retaining half of the distributable fund was to ensure that CFUGs performed activities as per the plan. The CFUG has to spend the money on activities that reduce deforestation and forest degradation. The activities should include alternative energy promotion, conservation of forest carbon stocks, Sustainable management of forest, biodiversity conservation, enhancement of forest carbon stocks, poverty reduction/livelihood improvement activities, forest carbon monitoring, awareness raising and capacity building on REDD and climate change, and auditing of FCTF and verification of data.

REDD working group with Watershed members

REDD working group with members from three watershed after payment (Photo: Nabin Baral, ICIMOD)

Till now the pilot project has completed one cycle of fund flow, and there is need to monitor for the proper utilization of the fund. As this fund is established for rewarding CFUGs for their forest conservation, deforestation reduction and forest carbon stock enhancement, it is important that CFUGs use the fund for encouraging these activities. For this proper and timely monitoring of their plan and activities are important. The learning from the FCTF, which has been currently taken into consideration only for community forests, can be utilized by government and other stakeholders for other forest management regimes. This will encourage scientific management of government managed forests as well as other forest management regimes.

Read ANSAB’s press release on distribution of the fund to the CFUGs >>>

Know more about the project >>>

Malikarjun Natural Products Pvt. Ltd.: An example of a successful Community based marketing model

A marketing company – Malikarjun Natural Products Pvt. Ltd (MNPPL) established in Darchula has shown that the community based marketing model can be successful in addressing the major challenges to obtain benefit from Non-timber forest products (NTFPs), link producers and traders and increase income at local level.

While NTFPs have been widely regarded as the income source for the local people and especially poor, there are major challenges in obtaining substantial benefits from NTFPs at local level. Some of the challenges at local level are lack of practices on value addition and product diversification, low knowledge on quality parameters, limited input supply, lack of reliable market information, unorganized market, limited access to finance, and lack of proper infrastructure. These challenges have caused disorganized trade, unfair competition among traders because of less market centers, disorganized trade, loss due to lack of quality segregation, high business risk, not fair price for producers  and low trust among the actors of the chain. These constrains have social, economic and physical impacts to the rural livelihood especially to poor and ultra poor who are highly dependent on these natural resources for income and other requirements.

With a project Enhancing Livelihoods and Reducing Poverty of Mountain People by Linking High Value Products and Services to Value Chain Development, funded by FORD Foundation and in partnership with ICIMOD,  ANSAB considered the challenges at the local level. The project performed a thorough sector review in two far western remote districts, Darchula and Baitadi that were selected on the basis of high abundance of natural resources and the prevailing high poverty rate. The project identified Ritha as major high value product and prepared participatory upgrading strategies targeting to benefit the actors along the value chain through product upgrading, process upgrading, functional upgrading, market upgrading and governance interventions. These strategies incorporated various activities from initial resource management and harvesting to final stages of creating market linkages. The major part of the project was in formation of community based marketing company – Malikarjun Natural Products Pvt. Ltd (MNPPL)- which has equal participation and shareholding from producers and local traders.

MNPPL

The members of MNPPL in a meeting, inset is the building of MNPPL

The  company became successful in certain extent in achieving its main objectives to organize trade, capacitate producers, traders and locals, increase and contribute to local economy by reaping benefits of economies of scale in natural products trade,  increased bargaining power of locals, providing fair price to producers, conduct value addition activities etc. The local producer and traders were strengthened in the NTFP trade from their locality and were placed in better position in the value chain. In its first year of operation, MNPPL was able to organize the trade and channelized 162 MT of Ritha through it. The company generated Rs 162,000 (US $2,314) as profit from this transaction, part of which later was distributed to 8 sub-groups each with Rs 3,000 (US $42.85) and to 5 CFUGs each with Rs 2,000 (US $28.57). For the first time, the company was able to create a market linkage with Kathmandu based exporting company, which provided premium price for their Ritha. This opportunity provided them with extra income and alternative market for their product as well as created awareness among local producers and traders on issues of quality and value addition. MNPPL was able to generate several employments who are directly and indirectly involved with it including 1 permanent staff, 2 seasonal staffs, 40 women for sorting and grading activities and 85  people for weighing, packaging and transportation. Similarly, the company also provided producers with Rs 2 extra for the better quality Ritha.

The trust relationship between producers and traders has also strengthened after the establishment of the company. A local trader, Mr. Lokendra Bam, expressed his satisfaction after a good business of Ritha last year. He added that “the establishment of the similar type of the company on other parts is also necessary for assuring people for their safe investment, build trust among producers and traders and for greater access to market information.” A local Ritha producer, Mrs. Manmati Bohora, on the similar way, was very content on the price she received for her product and mentioned that “After sorting I found more than 90% of Ritha were of high grade and I was able to sell those in higher price to the company”.

Special News: ANSAB forms Advisory Board

Last May ANSAB formed an Advisory Board with international experts and practitioners from different geographical regions in the fields most relevant.  The advisory board provides strategic input to both the Board of Directors and the management team to maintain the organization’s achievements and improve its effectiveness, outreach and impact. Currently the Board consists of six international experts and practitioners in the fields most relevant to our work. Current  Advisory Board members are Dr. Bill Carmichael (Independent Consultant, USA), Dr. Michael A. Rechlin (Dean, Future Generations Graduate School, USA), Mr. Peter deMarsh (Vice Chair, International Family Forestry Alliance (IFFA), Canada), Mr. Martin Simard (Senior Communication Advisor, Department of Canadian Heritage, Canada), Dr. Uday Raj Sharma (Expert, Biodiversity Conservation and Policy, Nepal) and Dr. Utz Dornberger (Program Director, Small Enterprise Promotion and Training, Universität Leipzig, Germany).

ANSAB believes that the expertise of all the members of the Board will continue to immensely contribute to the organization’s success in achieving its dual mission of pro-poor economic development and biodiversity conservation.

Know more about ANSAB Advisory Board Members >>>

MARKET PRICES

Nepal

India

Chiretta
425
550
Up
Cinnamon
57
Up
80
Down
Dried Ginger
237.5
Down
276
Down
Himal. Rhubherb
105
Up
136
Indian Gooseberry
97.5
Up
112.75
Up
Indian Mastiche
275
Up
482
Indian Valerian
155
Down
300
Madder
72.5
140
Down
Prickly Ash
190
Up
130
Down
Rock Foil
30
Down
41.5
Down
Soap Nut 20
Down
38.75
Down
Soap Pod
24.5
Up
32
Up
Spikenard
412.5
Up
730
Sweet Flag
47.5
Down
86

July 2011 prices in NRs./Kg. Average of six markets (Kathmandu and Nepalgunj for Nepal; Delhi, Tanakpur, Lucknow and Kolkata for India). Variations calculated from the previous month.

Consult the price list of 32 products in six different cities in Nepal and India >>>

Find price trend of 31 NTFPs in different cities of Nepal and India for 2010 >>>

EVENTS

UNEP biotrade participants

ANSAB hosts UNEP Biotrade and Green Economy Week in Nepal

ANSAB in partnership with the United Nations Environment Programme (UNEP), Nepalese Ministry of Commerce and Supplies (MOCS), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), and International Center for Integrated Mountain Development (ICIMOD) organized Biotrade and Green Economy week in Nepal from May 31 to June 3, 2011 as part of UNEP’s Capacity Building for Biotrade Project (CBBT). The Biotrade and Green Economy week included two workshops, two consultation meetings and a public forum to identify the potential of biotrade for catalyzing a shift to a green economy, and recognize the potential areas of investments and relevant policies for sustainable and profitable trade of natural products.  An exhibition stall of the bioproducts that are produced by the Nepalese private sectors was also organized for two days during the Biotrade and Green Economy Week in Nepal.

For more information >>>

For workshop materials in UNEP site >>>

PSDM meeting

ANSAB organizes Private Sector Dialogue Meetings on agricultural commodities

ANSAB organized four Private Sector Dialogue Meetings (PSDMs) on four agricultural commodities – Orthodox Tea, Ginger, Lentils and Offseason vegetables – to present the organization’s findings of the study on value chain/market analysis on these commodities. Each meeting included representatives from private sectors (lead traders, processors, traders and exporters) involved in each commodity subsector, government agencies at central, regional and district level, and national and international organizations.  The meetings discussed on the findings of each study among the stakeholders and identified constraints and opportunities in each subsector. ANSAB is supporting the USAID’s Nepal Economic Agriculture and Trade (NEAT) Activity to carry out in-depth value chain/market assessments of the four agricultural commodities and provide insights into the Program for intervention designing and program implementation.

Know about the NEAT Program >>>

IN BRIEF

Value chain book cover

ANSAB’s Pro-Poor Economic Development Program Manager publishes a book

Lambert Publication has recently published a book on ‘value chain analysis of Ginger sector of Nepal’ by ANSAB’s Pro-Poor Economic Development Program Manager Puspa Lal Ghimire. The book provides insights into upgrading activities and governance structure of agriculture value chain with a case of Ginger- one of the important spice crops in Nepal- and provides the ways forward to improve the situation of agriculture value chain in Nepal. The book is targeted for the practitioners of value chain development, development agencies, donor communities, professionals of marketing and SME development, researchers and the policy makers.

Find link for the book in amazon.com >>>

carbon measurement guideline

Guidelines for Measuring Carbon Stocks in Community-Managed Forests

ANSAB published the guidelines for measuring carbon stocks in community managed forests in 2010 that describes the methods, procedures and steps for measuring carbon stored by forestry land use system. The guidelines introduce globally accepted equipments, instruments, methodologies, procedures and standards in forest carbon measurement and offer a detailed recipe to use them more efficiently and effectively in Nepal’s specific context.

Learn more and download >>>