35th Sharing Meeting of NNN

Asia Network for Sustainable Agriculture and Bioresources (ANSAB) organized the 35th Nepal NTFP Network (NNN) meeting on present policy provisions and practices related to SMFE sector in Nepal on November 3, 2011 at ANSAB Office, Kathmandu. The meeting was organized to share ANSAB’s brief analysis of national policy issues related to SMFE sector among stakeholders, work on the issues with the stakeholders, and to talk on the way forward for the effective policy practices in Nepal. A total of 29 participants including entrepreneurs, journalists, development persons and representatives from different associations and Federation of Nepalese Chamber of Commerce and Industries (FNCCI) participated in the meeting. The meeting started at 8.30 am with the registration of the participants.

The meeting was organized in three parts – the first part included the brief overview of the policy issues and framework for group discussions; the second part included the group discussions among the stakeholders; and the third part included the discussion on way forward.

1. Brief overview of the policy issues and framework for group discussions:

Dr. Bhishma P. Subedi, Executive Director of ANSAB presented on the brief overview of the policy issues that ANSAB prepared during last August. He listed the existing policies and a range of stakeholders that interact to regulate and set the context for SMFE policy. He then presented on the impacts and implications of the policies on growth, conservation, equity and poverty. Listing the untapped potential in the sector, he concluded that there is a vast scope to improve the policy and regulatory environment. He provided the framework for group discussion to identify important policy issues under important policy headings, prioritize them and suggest policy reform options and their implications. He also provided the important policy headings to consider for the group discussion.

2. Group work and presentation:

Three groups were formed to discuss on the important headings presented by Dr. Subedi. The three groups worked on the following issues:

Group A

Group B

Group C

Property rights & access to resources
Lack of clear policy re traditional knowledge & IPR
Enterprise registration and establishment

Bans & restrictions
Unnecessary hurdles & trade barriers
Royalties and taxation

Development Support
Distorted implementation practices

After working in the group, each group presented their findings with issues, reform options and justification.

Group A:

Issues

Reform Options

Justification

Property rights and access to resources

No separate policy for property rights and lack of implementation of those policy which have slightly touched the issue
No access to resources (excess resource, renewable resources )of local people within all Conservation Area
Lack of compensation for the damage done by wildlife to the private areas nearby the Conservation Areas

Lack of clear policy re traditional knowledge and IPR

Disappearance of traditional knowledge
Lack of proper utilization of traditional knowledge
Legitimacy of traditional healers
Lack of implementation of Access to Benefit Sharing (ABS) bill
Patent of indigenous skill, knowledge, technology and resources

Enterprise registration and establishment

Government rule of 3 km (hills) and 5 km (terai)
Company registered in cooperative not required to be registered in industry but while issuing the Certificate of Origin, FNCCI demands for industry registration thus hurdling the trade
IEE (Initial Environment Examination) and EIA (Environment Impact Assessment) for more than 5 tons; centralization (Should be certified by Ministry staffs);
IPR also in draft form

A separate policy required for property rights; Revision of Agribusiness Promotion Policy 2063 incorporating property rights
National Park and Protected Area Act 2029 should be revised to address the rights of local people to resources
Included above
Identification, registration, documentation, utilization
Registration and license issuance
Endorse from Parliament with mechanism and quantifiable
Public private partnership for identification, registration and protection
Abolishment of the rule in Hills area and revision in Terai region according to landscape
Cooperative should be incorporated while issuing CO from FNCCI
Threshold should be increased from 200 Ha to 750 Ha; IEE and EIA implementation should be according to Local self government act 2055 and regulation 2056
Should be endorsed and implement

Conservation and sustainable use of biodiversity
Well governed value chain, esp. distributional equity
Economic growth and social justice, esp. poverty alleviation

Specific:

Ownership
Better access to resources to local people
Compensation mechanism to local people
Revitalization and protection
Maximize utilization and increase benefits
Enterprise development and business promotion
90% CFUGs less than 750 Ha Area

Group B:

Issues

Reform Options

Justification

Bans and Restrictions:

Royalty on banned product (Ban should be imposed on tree bark only)

No royalty on ban item. It should be indicated in separate table. No ban on fruit husk of Juglans

There is confusion if royalty on banned item is indicated in the same royalty table.

Fruit husk has no any adverse impact on conservation.

Ban on Panch aaule (Orchidaceae)

Ban should be released for national consumption and trade. Royalty should be reduced to Rs 500.

To promote national trade and industries

Ban on Lichens (Jhyau)

Ban has to be lifted as collection of lichen has minimal effect on conservation and forest ecosystem

To promote national trade and industries

Orchids

(It is generalised and there is a confusion in the identification of traded species)

Traded species should be identified, and roylaty has to be fixed according to the species (trade volume, availability, phenology, regeneration etc)

There is growing market for selected orchid species. Releasing ban and fixing proper royalty helps collectors to earn substantial income at local level.

Timber harvesting and collection (periodic ban and release)

Consultative action with concerned stakeholders have to be performed before or after imposing/releasing ban

To promote domestic trade and industry of timber

Kaulo Bokra

Collection ban has to be inforced/ no tree should be allowed to collect

Conserves the spp.

Trade Barriers:

Hassles on transportation (check post, local government, parties etc…)

Permit given by one government agency on the origin of collection has to be respected by another government agency/ Double taxation should be removed

Price will be competitive and allows smooth business transaction to the traders and manufacturers and finally consumers

NTFP business considered as illegal

Awareness campaign at different level

Encourages the trade and industry of forest based products

Export barriers specially on international marketing

Bilateral dialogue with concerned nations such as India, EU.

Increase the export trade

Product analysis and QA

Capacity enhancement of existing lab with accreditation with international lab

Enhances export trade at international level

Royalty and Taxation:

Royalty revision based on scientific criteria

Set and criteria with intensive stakeholder consultation

Enhances national trade

Inappropriate royalty rate:

( Eg. Satuwa Rs. 15, market price 3000)

Royalty rate could be increased up to Rs. 100

Supports national treasury

Double taxation (local government, DFO etc..)

Should be one window taxation only

Encourages small traders/ farmers to trade.

Group C:

Issues

Reform Options

Justification

1. Institutional

Coordination mechanism – national and district level strategies , integrated planning

Coordination, BDS, Synergy in terms of human and financial resource

2. Knowledge, R & D

Investment

Only this can address enterprise issue

3. National and District priority in enterprise sector

Policy on priority sector

Local government bylaws

4. Approach – holistic or subsistence

Holistic

For better planning and implementation

5. Lack of trust between development sector and private sector, different motives

Dialogue

PPP model, and also to attract private sector investment

6. Technology and resource assessment

Investment

Sustainable resource management, technology dissemination

7. Inadequate and untimely dissemination of research findings

Knowledge hub

Research findings dissemination and adoption

3. Discussion on way forward:

After the group work and presentation, there was a plenary discussion on further issues and the way forward. Participants discussed on the major issues and provisions related to SMFE sector in Nepal and formed a policy working group to work on the findings and make recommendations to the Government.

The pertinent issues raised by the participants are briefly summarized as below:

Nepal possesses policies in good shape and in favour of the community forests, CFEs and other sectors, however they are distorted during implementation. Both the government and private sectors are involved in misinterpretation and distortion of policies according to their interest. The policy provision and system should be very specific and systematic for implementation.
Certain legal requirements as Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA) are often deterring the establishment of CFEs in the country, because CFUG member are not technically equipped, and the assessment procedure are costly and time consuming. Most of the environmental examinations as provisioned by IEE are already there in the operational plan of the Community Forest. So, the provision of IEE should be taken out from the forest enterprises at CFUG level, unless EIA is required. Moreover, these impact assessment methods can locate the suitable position of CFEs, and the distance parameter (e.g. 5 km in Terai and 3 km in the Hills) should not be taken into account during enterprise registration process.
The royalty rates for some species are confusing. The tree of okhar (Juglans sp.) is listed with royalty, but the bark of the tree is banned. For orchid family, all the species are treated as orchid irrespective of their biology and market. The attitude and governance in the forestry sector is quite confusing because during last some years the decisions to ban or open the species for trade are taken by the Government in interests of limited persons or business.
Royalty rates has not been rationalised for several years. For example, the royalty rate of Satuwa should be increased and that of wintergreen should be decreased.
The taxation policy is also not in favor of the SMFEs in Nepal. Entrepreneurs have to pay 10-15% tax to import packaging materials, whereas the similar finished product has less or no tax if they are imported from other countries to Nepal.
The country also faces issues on quality and standards with respect to the import regulations and standards at international level. The country lacks international accredited testing laboratories, and standardised methodologies in the harvesting and processing of NTFPs. The cost of investment thus is more for the producers and exporters for international accredited standards. The different standards for different target markets make the export of the products more worrisome. These issues have caused Nepal forced to export unprocessed forest products.
Organic Certification Cost is also a major issue in Nepal. There is need to work collectively as a team for organic certification so that negotiation can be made for less cost.
There is need of sufficient effort from the government to facilitate required services for promotion of CFEs. CFE sector lacks supportive schemes from the financial institutions. Hence, access to microfinance and financial institutions should be incorporated within the government policy and importance should be given towards linking the CFE sector with these services such as trade support services and building institutional framework.
There is less awareness among the public in Nepal about NTFP business; many people consider it as illegal. So, campaign and related program are required at different level to promote awareness to the general public about the sector.
There are other issues in the CFE sector as gap between research findings and their dissemination to concerned stakeholders, duplication of studies on the sector, less coordination among the government agencies, insignificant market linkages of the producers at local level, and the dissemination of the findings of the meeting to the policy making institutions.

After the plenary discussion, the participants of the meeting unanimously proposed a seven-member policy advocacy group with following members:

Govinda Ghimire, President, Nepal Herbs and Herbal Products Association (NEHHPA)
Pradeep Maharjan, CEO, Agro-Enterprise Center, Federation of the Nepalese Chamber and Commerce (FNCCI)
Devendra P. Dhakal, Chairman, Herbal Entrepreneurs Association of Nepal (HEAN)
Ramu Subedi, Services Support Unit Management Team Leader at Multi Stakeholder Forestry Program, Swiss Agency for Development and Cooperation (SDC/SSU)
Bal Bahadur Rai, National Executive Committee member- Eastern Development Region, Federation of Community Forestry User Groups, Nepal (FECOFUN)
Harihar Sigdel, Head, Planning Division, Department of Forest, Government of Nepal
Puspa Lal Ghimire, Manager, Pro-poor Economic Development Program, ANSAB

The policy advocacy group will work on the issues raised above, disseminate the issues to the relevant stakeholders, prepare policy briefing with specific recommendation, and lobby for policies that safeguards the interest of community based, environmentally friendly SMFEs.

Agenda of the meeting

Date: November 3, 2011, Thursday

Venue: ANSAB Conference Hall, Kathmandu

Time

Agenda

8:30 - 9:00

Registration, Tea with Cookies

9:00 - 9:15

Welcome

Introduction of the participants

9:15 – 10:00

Objectives and expected outputs of the meeting
Brief overview of policy issues and framework for group discussions (by Dr. Bhishma P. Subedi)

10:00 - 10:30

Floor discussion

10:30-10:45

Tea/Coffee break

10:45 - 11.30

Group work

11:30-12:15

Presentation of Group Work

12:15-12:45

Plenary discussion on Way Forward

12:45-13:00

Closing remarks

13.00-13.45

Lunch

List of Participants

S.No.

Name

Organizations

Anil K. Acharya

HVAP

Govinda Ghimire

NEHHPA

Bal Bahadur Rai

FECOFUN

Bharat Basnet

Gafurmukhi Herbs

Mohan Manandhar

HANDPASS

Ishwor Aryal

Discover Nepal

Khilendra Gurung

Himalayan Bio Trade Limited

Dipesh Pyakurel

BARDAN

Bhesh Raj Oli

BARDAN

Lalku Lama

NEHHPA

Dipak B.K.

Forest Action

Vijay Sthapit

IDE-Nepal

Debendra Pd. Dhakal

HEAN KTM

Amar Kant Das

HEAN KTM

Baburam Dhakal

Hipat Monthly

Sagun Bista

CECI

Stuti Maskey

SDC-SSU

Sushil Gyawali

Himalayan Naturals P. Ltd

Bhishma Subedi

ANSAB

Ram H. Subedi

Gorkha Ayruved P. Ltd

Raja Ram Poudel

CFUG member, Lamatar – 7

Puspa Ghimire

ANSAB

Sudarshan Khanal

ANSAB

Shila Thapa

AEC / FNCCI

Kabir R. Sthapit

ANSAB

Narendra Rasaily

MEDEP

Kumud Shrestha

MEDEP

Laxmi Bhatta

SNV

Kiran C. Adhikary

ANSAB