Financial assessment of forest management systems in the community forests: A case study from the midhills of Nepal

Abstract

In Nepal, forest management priority is shifting to scientific management from conventional management. Though, the forest officials claims that scientific management is beneficial to the forest user groups, comparative financial assessment with conventional management remains unexplored. Following a case study approach, this study compares financial efficiency of two forest management systems in the community forests, focusing on benefit-cost ratio. The study conducted documents review, focus group discussions, and rapid survey to quantify costs and benefits from each forest management system. Conventional management gave a higher benefit-cost ratio to the forest user groups, irrespective of whether forest products are sold at a subsidized price or par with the market price. However, scientific management required high forest management costs and thus had a lower benefit-cost ratio. Sensitivity analysis between two systems revealed that conventional management gave a higher benefit-cost ratio in all cases. The study concludes that forest user groups would bear financial loss if they do not fix the price of the timber at par with the market in scientific management, and in such a case, the tagged price will be beyond affordability of the forest users. Furthermore, scientific management has discouraged kind contribution of users in managing forest. Besides, social and environmental consequences of scientific management cannot be ignored. Hence, the study argues for reconsidering current scientific management considering likely economic and social consequences to the forest user groups.