policy brief

Ministry of Forests and Soil Conservation

REDD-Forestry and Climate Change Cell, Nepal
October, 2013

Is demand and supply of wood a Key messages

factor for redd+ project in Nepal?
• Sustainable management of forest in Nepal
could not only increase and stabilize the
T he demand for forest products mainly fuel wood and timber for both
subsistence and commercial use has been identified as one of the
main drivers of deforestation and degradation in Nepal.
supply of forest products, but it would also help
in contributing the livelihood of the 17, 685
CFs and CFUG1s and 2.18 million households
The country has been selected as a FCPF country to design a readiness involved in community forest management
plan to access external finances to reduce carbon emission and to (DoF, 2012).
enhance the carbon removal potentiality of the forests. A robust analysis
of demand and supply of forest product over a long period of time is • There is a marked change in the collection
therefore necessary to project the forest carbon removals from or storage and gathering activities affecting the demand
in the forests. A study on the demand and supply of Wood Products in
and supply of forest products in Nepal. The
Different Regions of Nepal to assess the future projection of demand and
supply of wood (fuel wood and timber) in Nepal was done. forests of Terai are increasingly vulnerable to
population growth, infrastructure development,
The study undertook a critical assessment of the existing and future and illegal harvesting for commerce and trade.
demand of fuel wood and timber and supply potential of these products Significant amount of timber is also transported
in the Terai and Mid-hills of Nepal. Its focus was on the Terai landscape to urban centers.
from east to west (20 districts of Terai).
• The demand and supply of forest products
The information from the study informs the further advancement of
depends not only on biophysical factors
the REDD readiness process, and the formulation of a broad national
strategy framework by feeding the findings into establishing sub-national inherent in different ecological regions of
level forest reference emission level (FREL) and MRV2 framework at the Nepal, but also on the policy regimes perused
Landscape level. The information is practically useful for sustainable and implemented by the Government of Nepal.
forest management in Nepal.
1
Forest Carbon Partnership Facility
2
Measurement, Reporting and Verification

REDD-Forestry and Climate Change Cell, Ministry of Forest and Soil Conservation (MFSC), Babarmahal, Kathmandu www.mofsc-redd.gov.np
policy brief
Forest and land use areas of Nepal

40% of land area in Nepal is under forests and

shrub land. There are three major types of forest
management regimes in the Terai region of Nepal;
• Government Managed Forests
• Community Managed Forests
• Private Forests/Trees on Farm.

The total forest area is 12873 thousand ha. in Terai

while forests and shrub land in the mountains
is about 3964 thousand ha. The Non-Cultivated
Inclusions (NCI) in the mountains and area under Figure 1: Land use in Nepal (DoF 2011)
agriculture in the mountains is reported to be 517
and 211 thousand ha respectively.

Demand and supply of wood products scenario in Nepal

The supply of fuel wood was estimated at 2.58

million tons, 5.44 million tons and 0.94 million tons Fuel Demand=f (No. of HH,
for Terai, hills and mountains respectively in 2011. percentage using fuel wood, per
The supply would increase to 3.72 million tons, 6.96 capita consumption)
million tons and 1.13 million tons in 2020 and 5.07
million tons, 9.60 million tons and 1.51 million tons
in 2030 for Terai, hills and mountains respectively. are increasingly vulnerable to population growth,
infrastructure development, and illegal harvesting
There is a marked change in the collection and for commerce and trade. Significant amount of
gathering activities affecting the demand and supply timber is also transported to urban centers of hills.
of forest products in Nepal. The forests of Terai

Projections of forests products demand in terai, hills and mountain areas

The government of Nepal is the predominant The demand for fuel wood will continue to increase
supplier of wood products in Nepal. In other words, significantly due to mainly population increase in
it has a monopoly market mainly in the timber the Terai. The demand in the Hills and Mountains
products.
will increase but at a slower rate. The share of the
The demand for timber and fuel wood from Terai total population in the mountain is very small.
(productive area) currently is way above the supply
of the products in the 20 districts of the region. The projected demand for timber is significantly
different in different physiographic regions of Nepal.
The total current fuel wood demand for Nepal is From Figure-2, it is obvious that the projected
about 10.5 million tons per year. The demand would Timber demand is highest in the Terai and lowest
increase to 11.7 million tons in 2020, and to about
in the mountain.
13 million tons by 2030.

3
2011 Department of Forest Nepal reference
4
2011 Community Forest Division report

REDD-Forestry and Climate Change Cell, Ministry of Forest and Soil Conservation (MFSC), Babarmahal, Kathmandu www.mofsc-redd.gov.np
 policy brief

Changing Nepali economy and its effect on

forests of Nepal

The economy of Nepal is transferring from

subsistence farming to cash economy. The share
of non-agricultural sector in wage employment has
increased from 47 to 65% and that of farm income
in total household income has declined by more
than 33% over the last 15 years. People engaged
in overseas employment have also significantly
increased over time. 23.4% of households received
overseas remittance in 1995/96, 55.8% in 2010/11.
The remittance per household has increased from
NRs 15,160 to NRs 80,436 within the last 15 years
since the transition to cash economy has led to
increase per capita income of Nepali people as well
(CBS, 2010). This significantly changes the growth
and distribution of population, and consumption
pattern of fuel wood and timber in Nepal.

From Figure-3, it is evident that the fuel-wood Population increase and the demand of wood
demand for Terai will rise from 5.3 million tons to products from the forests
7 million tons over a period of 20 years due to high
The population of Nepal was 26.6 million out of
population growth.
which 17 percent reside in urban areas in 2011.
For the hills, the total demand would rise from 4.4 to The population is estimated to increase to 28.2
5.2 million tons while in the mountain is estimated to million in 2015, to 30.2 million in 2020 and 34.5
increase from 0.8 to about 0.9 million tons in 2030. million in 2030. Similarly, the total number of
household is estimated to increase to 6.41 million
In 2030 there will be a gap in timber supply for in 2015, to 7.35 million in 2020 and to 9.73 million
increased demand for house construction. Likewise in 2030 (CBS 2011). The increase in demand for
fuel wood production in Terai region would be wood products is dictated by the population growth,
negative due to high demand of fuel- wood related increase in household numbers and the type of fuel
with different socio-economic conditions. The and construction materials used at household level.
projected demands are however counteracted by
rise in price of timber and use of alternative energy
sources.

REDD-Forestry and Climate Change Cell, Ministry of Forest and Soil Conservation (MFSC), Babarmahal, Kathmandu www.mofsc-redd.gov.np
policy brief
Impact of demand and supply of wood products on Nepal’s REDD+ program

Deforestation and over-exploitation of forest and timber affects the growing stock and the area of
resources is the most important sources of carbon forests and hence the carbon storage in the forests.
emission in Nepal. The high consumption of
The increased demand for timber and fuel-wood is
forest product, mainly in fuel wood and timber, for
due to increased demand in Terai. By the year 2030,
subsistence and commercial purpose is one of the there will be an excess demand of 562 and 202
main drivers of deforestation and degradation in thousand cubic meters timber and fuel respectively.
Nepal. Harvesting and removal of biomass from the This implies increased pressure on the forests in
forests for meeting the domestic needs of fuel wood the area.

Policy reform actions

The Ministry of Forests and Soil Conservation itself Box 1: Enabling policies in place:
has identified gaps in present policy implementation • Objectives of Forest Act 1993; Stipulates
of community forests and has proposed amendment Industrial, Community and Leasehold Forests,
in the present forest act (Practical Action, 2011),
which include: • Government is committed to extend forest cover in
40 percent land mass of the country;
• Providing joint responsibility to DFO staff • Highly educated forestry professionals and
and user groups in preparing, implementing, improving Infrastructure/ Facilities.
harvesting and selling of CF products.
• Devolved Forest Tenure and Governance practice in
• Optimum (viable) area per household in place.
allocating Community Forest
• The forest act of 1993 and forest regulations
• Institute and implement a service charge of 1995 Policy need to be consistent so that
when timber is collected, commercially sold decisions on hand over, harvest and sales
and distributed. This will increase investment of forest products can be made based on the
for effective planning, management and written and formal legal provisions.
monitoring of forests to enhance production
• The prices of timber bidding and harvest plan
capacity of the forests.
should also be made public and timely by
Sustainable management of forest could, thus, the Department of Forests to enable loggers
not only increase and stabilize the supply of forest and timber traders to plan accordingly. Use of
products, but it would also help in contributing the Information Communication Technology could
livelihood of the 17, 685 CFs and CFUGs and 2.18 facilitate transparency in the sale of the forest
million households involved in community forest products.
management (DoF, 2012). • The compensation (payment mechanism) for
REDD+ should entail better management and
Based on the demand and supply analysis, the reduced harvesting of forest products. This will
following reforms in policies are necessary: certainly reduce forest product harvesting from
the national forests including community forests
of Nepal.

Contributors:
Joyce V. Engoke: VSO Volunteer, Nepal
Resham Bahadur Dangi: Chief, REDD Forestry and Climate Change Cell, Ministry of Forest and Soil Conservation
Shobha Subedi: Assistant Forest Officer, REDD Forestry and Climate Change Cell

REDD-Forestry and Climate Change Cell, Ministry of Forest and Soil Conservation (MFSC), Babarmahal, Kathmandu www.mofsc-redd.gov.np