Sustainability of ABS and biotrade in Nepal

Sustainability of ABS and Biotrade in NepalFinal Report-2014

CEPRUD

Sustainability of ABS andBiotrade in NepalFinal Report-2014

Center for Policy Studiesand Rural Development

(CEPRUD)Kalimati, Kathmandu, Nepal

Sustainability of ABS and biotrade in Nepal I

Co-ordinated byHari Shankar Bhattarai

English Proof ReadingJackie Taylor

Cover photo: Satuwa Plant

II Sustainability of ABS and biotrade in Nepal

Acknowledgment

We are very grateful to the Swiss National Science Foundation who made this project possible through its remarkable grant.

Sustainability of ABS and biotrade in Nepal III

AcronymsABS Access and Benefit Sharing

AEC Agro Enterprise Center

BGL Bonn Guidelines

CBD Convention on Biological Diversity

CEPRUD Center for Policy Study and Rural Development

CF Community Forest

CFUG Community Forest User’s Group

DFO District Forest Office

FNCCI Federation of Community Forest Users Group Nepal

FSC Forest Stewardship Council

GC-MS Chromatography-mass Spectrometry

GoN Government of Nepal

GR genetic resources

ICIMOD International Center for Integrated Mountain Development

IUCN The International Union for Conservation of Nature

MAP Medicinal and Aromatic Plants

MAT Mutually Agreed Terms

NGO Non Government Office

NTFP Non Timber Forest Product

OP Operation Plans

PIC Prior Informed Consent

R&D Research and Development

TK Traditional Knowledge

UNCTAD United Nations Conference on Trade and Development

UNEP United Nations Environment Program

VDC Village Development Committee

IV Sustainability of ABS and biotrade in Nepal

GlossaryBonn Guidelines (BGL) — The guidelines adopted by Decision VI/24 of the 6th Conference of the Parties to the CBD in 2002; the aim of the Bonn Guidelines is to clarify regulations on ABS contained in the CBD. They provide guidance for drafting national legislation and for negotiating ABS agreements in the absence of national legislation. The BGL are an interpretative instrument and are not binding in themselves.Biological diversity – Variability among living organisms from all sources including, inter alia, terrestrial, marine, and other aquatic ecosystems and the ecological complexes of which they are a part; this includes diversity within species, between species, and of ecosystems.

Human Wellbeing — Against the backdrop of Sustainable Development (SD), in our understanding human wellbeing is the prime concern of any development initiative. Our theoretical understanding of human wellbeing is based on the Capability Approach (CA). By putting the CA in the center of valuation, a new understanding in terms of improving life quality is being highlighted. In contrast to classic welfare approaches, the CA focuses on capabilities and not on income and resources as ends for human wellbeing. Resources are understood as means for a person´s achievements.

Mutually agreed terms — The terms and conditions agreed by the contracting parties at the time of entering into a contract; various types of authorisations defining the conditions of access and benefit sharing by means of which users obtain access to/permission to collect, study and utilise genetic resources commercially.

Prior informed consent (PIC) — Prior informed consent is not defined within the Convention on Biological Diversity, but authors have commonly identified the key elements as: (a) prior: before access to knowledge or genetic resources takes place, (b) informed: based on truthful information about the use that will be made of the knowledge or genetic resources that is adequate for the authority to understand the implications, and (c) consent: the explicit consent of the government, and stakeholders or rights holders according to national

Sustainability of ABS and biotrade in Nepal V

law. Thus, prior informed consent is an approval in advance for the use of one’s genetic resources and any associated traditional knowledge.

Sustainable use — The use of components of biological diversity in a way and at a rate that does not lead to the long-term decline of biological diversity, thereby maintaining its potential to meet the needs and aspirations of present and future generations

Traditional knowledge — Refers to the knowledge, innovations, and practices of indigenous and local communities around the world; developed from experience gained over the centuries and adapted to the local culture and environment, traditional knowledge is transmitted orally from generation to generation. It tends to be collectively owned and takes the form of stories, songs, folklore, proverbs, cultural values, beliefs, rituals, community laws, local language, and agricultural practices, including the development of plant species.

VI Sustainability of ABS and biotrade in Nepal

Contents

1 The Valuation of Biological Resources and Sustainability of Biotrade in Nepal

Paul Burger, Sri Ram Poudyal1

2 Drivers and Barriers of Herbs Cultivation in Rural Nepal

Hari Shankar Bhattarai5

3 The Valuation of Biological Resources – Improvement of Human Well-being and Sustainability

Juri Lienert, University of Basel13

4 Local Governance of Valuation of Biological Resources

Laxman Neupane23

5 Establishing Biotrade Activities in Rural Nepal

Martina Patscheider, Vera Schulhof31

6 Two Botanical Studies on Chiuree and Satuwa in Western Nepal

39

6.1 Comparative Study of Seed Constituents of Chiuree in Western Nepal

Sunil Kumar Gaire41

Sustainability of ABS and biotrade in Nepal VII

6.2 Identification of Secondary Metabolites Present in Medicinal Herb, Paris polyphylla Sm. (Satuwaa)

Sirjana Sharma45

7 Generating Benefits for the Local Population: Comparison of the CBD’s Access and Benefit-Sharing System and the UNCTAD BioTrade initiative

Susette Biber-Klemm

49

8 Summary


VIII Sustainability of ABS and biotrade in Nepal

The Valuation of Biological Resources and Sustainability of Biotrade in Nepal

Nepal, a country of remarkable diversity and abundance of biological resources, is confronted with many development challenges arising from the growth in population and from the pressure for poverty alleviation. One of these challenges concerns the strong tie between use and protection of the biological richness of the country. On the one hand, biological resources, especially Non-Timber-Forest Products (NTFPs) and Medicinal Aromatic Plants (MAPs), offer an extraordinary opportunity to Nepal´s people – particularly on the livelihood level in rural and marginal areas – to contribute to their daily needs and to create income. On the other hand, Nepal’s forests suffer from a depletion of natural resources and a decline of biodiversity; the long term effect not only being a dramatic loss of the biological richness but also loss of the related income generation opportunities. Such challenges are nowadays typically treated as sustainable development issues. The related debates centre on “sustainability of using biological resources” with the goals of conserving known and unknown natural “treasures,” at the same time using its potential for economic development.

1 Prof. Dr. Paul Burger, University of Basel, Head Sustainability Research GroupProf. Dr. Sri Ram Poudyal, Chairman, Centre of Policy Studies and Rural Development (CEPRUD).


1

Sustainability of ABS and biotrade in Nepal 1

Sustainable Development means far more than nature protection.2 Following the intentions of the famous Brundtland Report (World Commission on Environment and Development: Our Common Future), taken up by the equally famous Rio-Conference in 1992, and subsequently confirmed in Johannesburg 2002 and Rio 2012, sustainable development strives to improve or safeguard human well-being by considering scarcity of ecological resources and fragility of ecosystems in accordance with development strategies. Accordingly, when considering strategies to use Nepal’s rich natural resources as a great opportunity field to fight against poverty and to improve the livelihood conditions of Nepal´s people, such strategies should include means to use the resources in a sustainable way. It should not only improve people’s well-being, but the richness of Nepal’s biodiversity should also be ensured.

Unfortunately, this is more easily said than done. In order to realise an improvement of human well-being, particularly by enhancing the livelihood conditions of Nepal´s population in rural and marginal areas, by at the same time ensuring the richness of biodiversity, many aspects have to be taken into account. First, there are a dozen of regulations, be it in terms of national policy rules, unwritten or explicitly fixed community rules or traditional habits that shape people´s opportunity spaces for using biological resources. Second, there are many factors such as infrastructure, market and information access, or the way resources are used (e.g. collection or cultivation) that have to be considered especially in regions with complex ecosystems such as Nepal´s mountainous and hilly areas. Third and absolutely not least, the perspective of the users (both in terms of consumption and in terms of business activities such as collection, cultivation, processing and trade) of biological resources on a livelihood level must be taken into account. It has become a standard in recent research on well-being that income is but one of many criteria for assessing human life quality and that knowledge on subjective criteria, such as perception and satisfaction, should accompany objective criteria such as income. Finally and importantly, there is little scientific knowledge on the interplay of all these factors.

Against that backdrop our project on “The Valuation of Biological Resources

2 Cf. Proceedings of the first national workshop Sustainability of ABS and Biotrade in Nepal, January 30, 2012, Lalitpur.

2 Sustainability of ABS and biotrade in Nepal

and Sustainability of Biotrade in Nepal,” financed by the Swiss National Science Foundation and carried out from February 1st 2011 to May 2014, has strived to contribute to a better understanding of our topic ‘sustainable use of biological resources in Nepal’. Given the complexity and multidimensionality of the issue in question, we decided to take an approach that particularly takes the perspective and livelihood situation of rural people and local governance arrangements into account. In addition, two biological case studies, a study on the national regulations3 and a study for comparing international regulations regarding the use of genetic (ABS) and the use of biological resource (Biotrade), have been carried out. In total, two PhD theses (one Nepalese, one Swiss), six Master’s theses (three at Tribhuvan University and three at the University of Basel), and three additional studies have been completed. In the following, we present our major findings:

In the first article, Hari Shankar Bhattarai (CEPRUD) presents findings regarding the impact of MAPs on the socio-economic situation of people in Western Nepal. These findings are based on data collected by the second ancillary study of CEPRUD and a Master’s thesis from Mitra Dhakal, a Master´s student at the Central Department of Economics at Tribhuvan University. The second contribution by Swiss PhD student Juri Lienert, takes a broader look at people´s state of well-being and their corresponding livelihood situation and captures essential influences between biotrade-activities and livelihood assets.

While Juri Lienert’s contribution already took local institutional conditions as a factor for livelihood strategies into account, the third and fourth sections explicitly analyze local governance arrangements. Their concern is in what respect sustainable use of biological resources can be achieved, where “sustainable” refers to both conservation of biodiversity and improvement of well-being.

Laxman Neupane, Nepalese PhD student and senior researcher, presents his findings on favourable governance arrangements for local stakeholders concerned with the use of biological resources. His focus is, among others, on participatory inclusion, benefit sharing mechanisms, and local regulations. In addition, Martina Patscheider and Vera Schulhof present findings on

3 As this paper is already published, Biological Resoirces of Nepal, Survay of Plants, Policies Institutions and Act, it will not be included here.


governance structures in terms of according to social-ecological regimes of two NTFP products, the collection of Chiuree seeds and its processing in Surkhet and Pyuthan, and the cultivation of Satuwa in Rolpa. Both contributions point forcefully to substantial barriers for sustainable valuation of biological resources stemming from prevailing institutional settings.

The next chapter contributes to our topic from a different angle. It takes a closer look to Chuiree seeds and Satuwa from a biological perspective. Two master students of the Central Department of Botany under the supervision of Prof. Bijaya Pant have outlined their pharmaceutical importance, one by identifying secondary metabolites present in Satuwa, the other by elaborating a chromatography-mass spectrometry (GC-MS) analysis of seed fat of the Chiuree seed. This chapter points out that promoting processing or cultivating should be based on sound biological knowledge of the plants in questions, in order that strategies can be based on a solid biological basis.

Last but not least Dr. Susette Klemm from the University of Basel presents her central findings from her comparative study on the different regulatory frameworks and meanings of “access and benefit sharing” within the two relevant international law agreements: the CBD’s Access and Benefit Sharing system on the one hand, and the UNCTAD BioTrade Initiative on the other. She does not only reveal the substantial differences between them but points to quite different consequences stemming from them in the context of a local livelihood level of communities in Nepal.

Finally we close with an outlook.


Drivers and Barriers of Herbs Cultivation in Rural Nepal4

Hari Shankar Bhattarai5

IntroductionThis chapter presents major findings regarding the contribution of herbs in family income, explores cultivation practices and identifies what barriers exist in cultivation and trading of herbs. The increase in local and international demand for a variety of Non-Timber Forest Products (NTFP/MAPS) has opened opportunities in Nepal for the improvement of local livelihoods, particularly in the hill and mountain regions, which have, in recent years, only limited economic alternatives. The trading of NTFPs/MAPs has become a strong option for low-income people residing in remote parts of Nepal, in order to complement their livelihood strategies and augment their subsistence agriculture. As a result of insufficient agriculture output they face a food deficit every year, thus income from herbs either collected or cultivated, has become a supplementary source of livelihood. There are, however, some remarkable variations in regard of the socio-economic impact. In addition, collection is by far the most widely existing mode of using biological resources causing a lot of environmental stress and rapid depletion of the precious species of herbs. Finally, cultivation as an alternative is only at its beginning and faces some high barriers.

4 This article refers to the ancillary study “Drivers and Barriers for Herbs Cultivation in Rural Nepal” published by CEPRUD, 2014.

5 Hari Shankar Bhattarai, Senior Scientist at CEPRUD.

2


This study is based on a field survey of MAPs cultivation/ collection in three districts encompassing lowland (Kanchanpur), hill (Rolpa) and high hill (Humla) districts in Western Nepal. The study covers Chamomile and Mentha (Kanchanpur), Atis, Kutki and Jatamashi in Humla and Satuwa and Padamchal in Rolpa. The survey techniques used were quantitative surveys as well as qualitative interviews with households, traders and factory owners.

Results(a) Domestic Demand and Export

Nepal is a traditional exporter of crude medicinal and aromatic herbs. More than 700 plant species have medicinal value, of which 238 are actively used in daily life and 100 are traded (Tiwari and Poudel, 2004, AEC/FNCCI, 2004). The Government of Nepal identified 30 species as being top-priority, of which 12 are for commercial cultivation and market promotion (AEC/FNCCI, 2004). The Government of Nepal has also more recently listed medicinal herbs and essential oils as one of 19 potential export products of Nepal (GoN, 2010). There is, however, no database regarding the demand of herbs in the domestic market and the according potential for domestic production. The demand for herbs by Ayurvedic medicine manufacturing companies and by a large number of Ayurvedic medicine shops is scattered across different districts of the country. A ten years old study based on 15 Ayurvedic medicine manufacturing companies in the Kathmandu Valley shows consumption of 214 different types of NTFPs/MAPs. The same study shows that only 20 percent of the demand is met from domestic production and the rest is met from imports (Tiwari and Poudel, 2004). The survey of 11 factories carried out for this study shows again large unmet demand for herbs from domestic sources. Either the missing demand is satisfied by imports or the available production potential is not utilized fully. Factory managers also reported that they import some herbs from India because they are not satisfied with the Nepalese quality. Moreover, some herbs are first exported from Nepalgunj to India and then in the same form re-imported into Nepal at a higher price (Artha Bigyan Weekly, 2013).

The growing amount of herb exports generates growing earnings as displayed in Table 1.


Table 1: Export Earnings (NRs in millions) Calculated from Economic Surveys of Respective Years, Ministry of Finance, Nepal

Year Overseas (NRs)

India(NRs) Total (NRs) Share of

India (%)

1974/75 - 1978/79 31.9 23.0 54.9 41.9

1979/80-1983/84 4.0 50.3 54.3 92.6

1984/85-1988/89 2.2 82.7 84.9 97.4

1989/90-1993/94 15.3 100.3 115.6 86.8

1994/95-1998/99 57.2 217.1 274.3 79.1

1999/2000-2003/04 148.0 420.2 568.2 74.0

2004/05-2008/09 627.1 726.7 1353.8 53.7

2009/10-2011/12 563.0 1434.3 1997.3 71.8

The amount remained almost constant at Rs. 54 million from 1974/75 until 1983/84. Export earnings increased thereafter in each successive five year period. The highest export earning in recent years was Rs. 1,997.3 million. The export of herbs is mainly concentrated to India, because of geographically proximity and familiarity of traders of both sides. Among the overseas countries, Singapore, China PR, and Hong Kong are the major export destinations of Nepalese herbs.

(b) Collection and Cultivation in Survey District

Herbs have a great potential for providing livelihood support to poor people in rural areas. In earlier years the rural poor in hill areas extensively relied on the collection of herbs from forests and mountains. However, more recently, decreasing availability of wild plants forced farmers towards cultivation of herbs on their land. In Kanchanpur, most of the households have been cultivating Chamomile and Mentha. In Humla most of the households collect herbs from the forest and an increasing number of farmers have started cultivating some herbs, such as Atis, Kutki and Jatamashi. In Rolpa, cultivation of economically valuable NTFPs species has not yet started in the study VDCs except some experimental cultivation of Satuwa and Padamchal in Thawang Village. In Rolpa collection of herbs from the forest is the predominant practice.


The farmers normally practice subsistence agriculture, but nevertheless face food insecurity. We observed the following situation in Kanchanpur and Humla Districts:

Table 2: Food Security in Humla and Kanchanpur Districts

Month adequate

District

Kanchanpur Humla

N Percent N Percent

0-3 months 1 1.4 1 3.3

3-6 months 3 4.2 10 33.4

6-9 months 9 12.5 19 63.3

Just enough throughout year 35 48.6 0 0

Sell excess amount 24 33.3 0 0

Total 72 100 30 100

In Kanchanpur more than 80 percent of households have adequate food throughout the year from their own land, but nearly 40 percent of households in Humla face six or more months of food deficit and no household achieves food security (CEPRUD 2014). A similar picture is seen in Rolpa. The households there face food deficit problems every year. Their food production supports their demand for only 150 days a year on average (Adikari, 2014). Against that backdrop herb collection or cultivation (or more generally valuation of existing NTFPs) is an important additional component within rural livelihood strategies to build income for buying the required additional food6.

(c) Income from Herbs

In Kanchanpur, 40 percent of the households have less than NRs. 100,000 annual income and in Humla 37 percent of the surveyed households have less than NRs. 200,000 annual income. Surprisingly, the figures show that the annual income of low-income households in Humla is double that of households in Kanchanpur. However, being a mountainous district the living costs in Humla is much higher in comparison due to transportation costs. The most interesting difference between Humla and Kanchanpur concerns the contribution of herbs to income for the different income groups. In the case of Kanchanpur, the

6 The major contribution for complementing the missing resources is labour force export mainly to India and other countries. However, we excluded labour force export from our analysis.


contribution of herbs is high in lower-income household, whereas in Humla, households having the highest annual income also have the highest share. The reason is that these households are not only involved in the collection and cultivation but also in trading activities (export).

Table 3: Income Range of Households/Contribution of Herbs in Annual Income

Kanchanpur (n=72) Humla (n=30)

Income RangeNrs. N %

Contribution of herbs in Annual

income (%)Income Range Nrs. N %

Contribution of herbs in Annual

income (%)

less than 50,000 14 19 46.9 Less than 50,000 0 0 -

50,000-100,000 16 22 27.0 50,000-100,000 0 0 -

100,000-200,000 28 39 14.8 100,000-200,000 11 37 41.6

200,000-300,000 6 8 4.8 200,000-300,000 11 37 33.7

300,000-400,000 3 4 6.2 300,000-400,000 5 17 18.8

More than 400,000 5 7 3.2 More than 400,000 3 10 71.5

(d) Problems of Herbs Cultivation and Trading

Cultivation of MAPs is a viable alternative to collecting and has the potential to reduce the pressure on biodiversity through overuse. However, the survey sample reveals several severe constraining factors in relation to herb cultivation.

At the production level the main problems relating to herbs farming are lack of irrigation facilities, lack of transportation facilities to sell the product; unavailability or high cost of seeds and saplings, and lack of knowledge about cultivation. These problems appeared in all three districts. Equally important in all three districts is the high volatility of the price of herbs. This has affected farmers, collectors and traders. Farmers in Kanchanpur were, for example, able to sell Chamomile essential oil at NRs. 36,000 in 2011 but the price declined to NRs. 18,000 in 2012. This price fluctuates, together with the other problems mentioned, discouraging farmers to invest in cultivation practices.7 In Humla farmers face a similar situation. However, due to their direct access to border markets in China, Humla farmers are more optimistic about access

7 Compare also Section 4 for drivers and barriers.


to markets and fair pricing. In addition, they trade in their own products, and not through a broker.

Eventually, interviewed traders express their own concerns about an efficient valuation of biological resources. They pointed, in particular, to dissatisfaction with the security checkpoints, high royalty fees, and bureaucratic hurdles in transportation and export. Another major problem regarding trade has already been pointed out in section a) and also concerns the value chain. The concern is that processing factories face inadequate domestic supply of herbs in terms of both the required quantity and the desired quality to the effect that they prefer to rely on imports rather than domestic supplies. Furthermore, there are obvious tensions between the government policy and FNCCI’s listing of priority herbs. The government has banned collection and trading of Kutki, Jatamashi and Panchaule, while the FNCCI has listed these herbs as priority herbs.

ImplicationsHigh demand for herbs in national as well as international markets make them a promising income source for rural farmers. However, the still widely practiced collection method causes a lot of environmental problems due to overuse. The existing potential of cultivation in the hills as well as in the Terai districts is far from being realised today. Problems such as irrigation; availability of seeds and samplings; capacity of market prices, and bureaucratic hurdles mark severe barriers for realising existing potential and, accordingly, for reducing the pressure on Nepal’s biodiversity.

ReferencesAEC/FNCCI(2000): NTFPs/MAPs Business PromotionStrategy

Adhikari, M.(2014) : The role of NTFPs in Economic Livelihood in Rolpa

Artha-Bigyan Weekly, July 2013 , Issue-238, Artha-Bigyan Publications

CEPRUD, 2014.Drivers and Barriers for Herb cultivation in rural Nepal

Edwards, D. M. & Bowen, M. R. [1993]. Focus on Jaributi. In Edwards, D.M. & Bowen, M.R. [Eds.] Proceedings of the Non Timber Forest Products Seminar. Kathmandu: Forest Research and Survey Center.


National Planning Commission [2010]: The InterimPlan

Olsen, C. S. [1994]. Responding to basic needs: income generation from minor forest products in Nepal. Scandinavian Forest Economics, 35: 398–408.

Pradhan, J. and Maharjan, P. [1994]. Valuation of commercial Central Himalayan medicinal plants. In Proceedings of the National Seminar on Non-Timber Forest Products: Medicinal and Aromatic Plants, [September 11–12, 1994]. Kathmandu: Ministry of Forests and Soil Conservation and Herbs Production and Processing Co.

Tiwari&poudel, 2004: Study on Domestic Market of Medicinal and Aromatic Plants (MAPs) in Kathmandu Valley.Winrock International BDS/MaPSBukhundole, Lalitpur


The Valuation of Biological Resources – Improvement of Human Well-being and Sustainability8

Juri Lienert9

IntroductionThis chapter presents findings on how the use and the valuation of NTFPs and MAPs contributes to existing livelihood strategies, available livelihood resources (assets), and the well-being outcomes (human capabilities) of local people in rural Western Nepal.

The focus here is on the non-monetary aspects of livelihood impacts. This chapter provides insight on existing and prospective local livelihood resources, livelihood strategies and outcomes for people’s well-being related to their biotrade activities of NTFPs and MAPs. Case studies in Jumla, Bahjang and Surkhet have been carried out regarding the use and trade of different wild collected NTFPs and MAPs on a local level. Following the requirement to take into account the perspective of the people in question, we present a bottom-up oriented micro-perspective on biotrade issues regarding access, collection, land use and according cultivation, processing and trade aspects.

8 This article is based on a PhD dissertation with the title “The Valuation of Biological Resources Improvement of Human Well-being and Sustainability” at the University of Basel, Sustainability Research, which will be published in 2015.

9 Juri Lienert is a PhD student at the University of Basel.

3


(a) Framework: Capabilities and LivelihoodsWhat impact has the use and valuation of MAPs and NTFPs on the well-being of people at a local level? In contrast to those approaches focusing mainly on monetary benefits but in line with recent developments in scientifically analyzed well-being, we want to fill the term valuation of NTFPS and MAPS and its impact on a livelihood level with an understanding that covers both objective material conditions and non-material, subjective values, of human well-being. Accordingly, our goal was to identify local life quality-and benefit-criteria generated by the valuation of NTFPs and MAPs. To achieve that goal we first needed to have a causal model of the possible impacts and, secondly, needed a set of criteria for capturing life-quality. As the latter should include objective and subjective features beyond only income, we decided to use the capability approach.10 To capture the conditions for the users’ opportunity spaces (or ‘freedoms’ in terms of Sen) by at the same time providing a basis for the causal model, we broadened our scheme with a livelihood perspective11. The use of NTFPs and MAPs influence in one way or another the livelihood assets people have that in turn create or diminish opportunity spaces for the users. Additionally, the latter are also influenced by local institutional frame conditions (e.g. rules for collecting defined by their CFUG, cf. Section 3) and by the people’s /households’ own strategies. Against the backdrop of these considerations we used the following framework for analyzing the impact of biotrade in NTFPs and MAPs:

Figure1: Impact of the use of NTFPs on a Livelihood Level

10 Based on Armartya Sen’s famous Capability Approach (Sen 1979,1983, 1999).

11 Based on the Sustainable Livelihood Approach (Chambers and Conway 1992).


Accordingly, there is a twofold relation between biotrade and livelihood assets. First, biotrade activities can influence the assets. Second, assets can influence biotrade via the different livelihood strategies. In addition, the assets together with the local institutional frame conditions and the individual strategies build the opportunity spaces for the individual to decide on their way of living.

(b) Case Studies and MethodsThe case study sample consists of villages located in Mid-Western and Far-Western Nepal in the districts of Jumla (Patmara VDC), Bahjang (Masta VDC) and Surkhet (Bidhyapur VDC, Babiya Chaur VDC and Kunathari VDC), located between 400 and 3,100 metres a.s.l. We investigated two different forms of biotrade, namely, in Jumla and Bahjang we considered all forms of wild collected NTFPs and MAPs, while in Surkhet we concentrated on products of the Chiuree tree. The data collection was conducted using qualitative in-depth interviews, qualitative participatory methods and quantitative surveys.

(c) Results Our analysis reveals that respondents generally lack some of the central capabilities in terms of life quality indicators. Accordingly, we observed deprivation as a central issue regarding people’s state of human well-being. However, this is not the main focus of the results presented here.

Our analysis also reveals that the use of MAPs and NTFPs build very central assets for the individual’s livelihood in terms of food and nutrition, livestock, energy, income, health etc. However, their relevance today is far from creating enough capital to sustain their livelihood. In the following, we focus particularly on this use of MAPs and NTFPs and its current contribution to people´s livelihoods as well as its potential impacts on prospective livelihood conditions.

(d) Results from Jumla and BahjangBiotrade with NTFPs and MAPs display an extraordinary important livelihood strategy for people in the study villages in Jumla and Bahjang. People collect different types of herbs in the forests. The main collected products were


Satuwa, Haedei and Nutgrass (CyperusrotundusL.), Hatuwa, Katuko, Bhulte and Thunga. Especially the collection of Satuwa displays a highly valuable income chance for people. For example, in Badegoan Village, in total 1.5 million rupees have been generated by collecting Satuwa. All biotrade products are only collected; cultivation does not take place. Apart from biotrade activities, people sustain their livelihoods mainly by subsistence agriculture, livestock breeding and labour work outside the villages. There are very few income generating opportunities and unemployment rates are extraordinary high. In Badegoan, there were 12 job holders among 160 households.

People emphasized the support by prevailing local institutional frame conditions for biotrade activities, but also reported about many issues standing in connection with the local resource management system, such as the lack of monitoring of licenses leading to overuse and misuse. In Badegoan, however, management of the local community forest by the Community Forest User Group (CFUG) was reported as very successful in terms of forestation and according business activities such as biotrade. As a certified Forest Stewardship Council (FSC) forest, legal provisions helped the community to carry out profitable business activities of timber and non-timber forest products.

According to our scheme, the relation between biotrade and assets can be at least twofold. Biotrade can improve assets. Assets can function as drivers or barriers for biotrade through individuals’ livelihood strategy. Based on the respondents’ answers, we obtained the following results on this twofold relationship:

Table 4: Livelihood Dimensions of the Respondents

Livelihood Capital Assets

Collection of NTFPs and MAPs

Human Capital • Low level of knowledge and education regarding biotrade• No knowledge about market prices beyond the local level• Traditional knowledge exists but it is not in use for

biotrade • Working conditions in NTFP collection are very hard




Financial Capital • Collection of NTFPs is one of the few income opportunity and hence is very important

• Households need money and go for labour work – biotrade alone is not suffi cient

Natural Capital • High dependency on natural resources for sustaining livelihoods

• The need to protect and re-cultivate the forest is highly recognised, also in order to sustain the future availability of herbs for biotrade

Physical Capital • Bad infrastructure, especially in terms of transportation of products to markets

• Lack of basic infrastructure (e.g. no electricity in Badegoan) makes it very diffi cult for the interviewees to develop any business activities related to processing and the enlargement of local additional economical value

Social Capital • Group membership is central in order to take part in a network where general forest and biotrade issues are discussed

• People rely on social capital due to the lack of other missing capitals

• By participating in the CFUG, people develop a stronger ownership mentality for the forest

Prospective Livelihood Improvements

When asking for improvements respondents especially expressed their need for better training and education to create income opportunities. For biotrade activities, improvements are needed in terms of use, trade and protection. Respondents argued for the creation of a community-based collection and trade-system: revenues could partly go into a fund working as a safety net for people in emergency situations. With such a collective system, inequalities regarding the benefit and the overuse of biotrade products as common pool resources could be avoided as well. Better knowledge should also capture the value chain at a local level.

People know the possibility for cultivating some of collected plants such as Satuwa. Apart from conserving the wild species, cultivation would improve


productivity. However, many respondents said that they do not have enough land available or that their limited available land used for agriculture. To overcome that restriction a solution put forward consists of encouraging the CFUG’s or other groups to cultivate herbs in a communal setting.

(e) Results from Surkhet Related to Chiuree (Including Honey)Chiuree trees and their products contribute in a many-fold way to people’s livelihood strategies. Seeds from (wild growing) trees are collected. These seeds are then either used for the traditional production of Chiuree oil (which is used mainly for cooking) or sold, mainly to cooperatives. Chiuree tree products serve as food (fruit, oil, honey); for producing local medicinal product (the fat is used as an ointment and as a cream), and as a source of income (sale of seeds, oil, honey, and by-products). The amount collected per household is relatively low, being approximately 50 kg per household, per year, on average.

Honeybee hives for producing Chiuree honey are cultivated only by a few households. Apart from Chiuree tree products, the collection of other wild NTFPs and MAPs is only for self-consumption and for local health services. Most of the interviewees have experience only with the collection of Chiuree seeds; they don’t consider the collection of other NTFPs and MAPs or cultivation as an alternative livelihood strategy12. Based on the respondents’ answers, we obtained the following results on the relationship between biotrade and assets:

Table 5: Livelihood Assets and Generated Capability Dimensions



Human Capital • Collection as well as extraction in its traditional form is hard work.

• Low state of technology related to the processing of Chiuree with primitive drying systems and traditional grinding mills.

• Only a low level of knowledge about value chain activities of Chiuree apart from collection, (simple) drying and traditional extraction.

12 Cultivation is considered as difficult for several reasons: firstly, people have no expertise for cultivation and training is not given. Secondly, cultivation is labour intensive and there is not sufficient manpower available and financial means are not sufficient to hire manpower. Thirdly, cultivation demands agricultural land, and hence is in competition with the cultivation of other needed agricultural products. Finally, financial means for investments do not exist. Only households with a high set of (financial) capital assets can afford to cultivate MAPs.




• Chiuree collection is considered a pleasurable task, particularly by women, since most of the time they go in groups and thereby meet and talk.

• The labour investment for honey production is relatively low.

Financial Capital • Only a little income can be generated with the collection of Chiuree seeds. The income from selling Chiuree seeds or Chiuree ghee is not central for people’s overall livelihood and income generation.

• Chiuree seed collection is seen as a side business. Accordingly, the generated income is seen as an extra source of income that can be saved or invested in livelihood activities.

• Production of honey is very profi table. There is high market demand and high revenues. Chiuree honey is sold as a medicinal product for a high price.

• Missing income opportunities in the observed marginal area of Surkhet leads to labour work in the region, in Kathmandu, in India or overseas

Natural Capital • The Chiuree business is considered as a “free gift” of nature: Chiuree trees provide food items such as fruit, cooking oil and honey. It contributes to people’s livelihood outcome regarding the availability of natural resources and the opportunity of its use.

• Working with Chiuree and obtaining benefi t from its wild collection increases people´s awareness of the value of nature and its resources.

Physical Capital • No incentive for people to collect more: distances to selling point are long (high effort of transportation) and margins are small.

• Missing infrastructure in the villages: this delimits opportunities regarding an extension of local value chains (in terms of local processing).

Social Capital • Cooperatives and CFUGs are the institutionalised organisations to campaign for collective interests in order to improve the conditions for Chiuree business.


Prospective Livelihood Improvements

Regarding potential livelihood improvements through biotrade, four aspects were mentioned as being essential: One: better access to markets is considered as the key for really utilizing the potential of natural resources. Two: cultivation of other NTFPs such as, for example, Satuwa, is looked upon as a future income opportunity, although people know the hurdles of its implementation. Three: technology has to be improved both for processing and the cultivation of different NTFPs. This would improve the quality of the products as well. Four: better ways to transport the products would improve working conditions a lot.

(e) ImplicationsThe use of MAPs and NTFPs create central assets for people´s livelihood conditions regarding health and nutrition, income, energy and many other dimensions. This emphasises the importance of its current use for the rural population in Nepal. At the same time, our analysis reveals that people today cannot build enough capital – even when including the use of NTFPs and MAPs – to sustain their livelihood. However, and due to missing alternative livelihood strategies, the use and trade of MAPs and NTFPs anyhow displays one of the most important livelihood options. Accordingly, respondents have a very specific notion of how they would form their future prospective livelihood opportunities regarding biotrade. The successful management (use and protection) of CFUGs, as shown by the example of Badegoan Village in Bahjang, can have various positive impacts on people’s livelihood dimensions: the better the condition of the community forest the better the opportunity to collect highly valuable herbs and plants such as Satuwa in order to generate income. Furthermore, collective revenues of the CFUGs can be used for community development and for social security mechanisms, which are not available from the public side. Particularly, community development is very much needed in order to improve the necessary infrastructure for biotrade.

Interviewees stated that existing livelihood strategies – not only in terms of biotrade – are significantly unsatisfactory. Hence, people expressed their demand to extend their range of opportunity space by generating new


possibilities to enhance their livelihood situation and most importantly, to fight deprivation and poverty.

ReferencesChambers, R., and G.R. Conway, 1992, Sustainable Rural Livelihoods: Practical

Concepts for the 21st Century. IDS Discussion Paper 296. Institute of Development Studies, University of Sussex, Brighton, UK.

Sen A.K. 1979, Equality of What? The Tanner Lectures on Human Values. Stanford University, USA.

Sen A.K. 1983, Poor, Relatively Speaking. Oxford Economic Papers. 35, 69-153.

Sen, A. K. 1999, Development as Freedom. Oxford University Press, Oxford, UK.


Local Governance of Valuation of Biological Resources13

Laxman Neupane14

IntroductionThe preceding chapter already pointed to the relevance of local governance. Most NTFP’s and MAPs are collected out of related Community Forests (CF). They provide the biological resources (as well as ecosystem services) for livelihoods. For quite some time, CFs have been managed by Community Forest User Groups (CFUG). As of 2014, a total of 2,177,858 households, about 40 percent of the country’s total households, through 17,658 Community Forest User Groups (CFUGs) were managing 1,652,654 ha area of forest as community forest (retrieved from www.dof.gov.np, July 1, 2014). Accordingly, CFUGs take a prominent role. Despite, however, their positive role in developing rural regions, CFUG governance has not yet been successful enough to prevent people from overusing the existing biological resources. Notwithstanding, respondents expect CFUGs to play an important role for developing MAP cultivation. Their positive role is more or less unquestioned. Against that backdrop, a number of questions emerge such as: What form does the current governance by CFUGs talk? In what respect does it promote or hinder improvement of well-being, and in what respect does it promote or hinder sustainable use of resources?

13 This article is based on a PhD dissertation by Laxman Neupane.

14 Senior Researcher, Governance, Human Development & Sustainability, CED Nepal

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This chapter will provide information for a better understanding of the local governance situation in rural and remote regions in Nepal and will, in addition, argue that the exiting mode of local governance is still too narrowly shaped to address the emerging or already existing challenges. The results are not only thought to contribute to a better understanding of local governance but to identify possible intervention points for improving it.

(a) Framework: Governance of Common Pool ResourcesWhen looking at collection as the widespread mode of using NTFPs and MAPs, the problem needing to be tackled is well known; that is, how to appropriately manage the common pool resources. Nepalese forests are extremely important habitats in terms of biological diversity; they are home to many biological resources and provide many ecological services. We have already seen how important these resources are as possible inputs in livelihood strategies. At the same time, the resources as well as the ecological service are common goods; meaning common pools. They are not private property and given the importance for households’ livelihoods, households cannot be excluded from using them. The risk lurking behind common pools is known as the tragedy of the commons – not being able to exclude households from use leads potentially to overuse that causes loss of resources and forest degradation.

However, and against the backdrop of Elenor Ostrom’s famous work, overuse of common pool resources is not unavoidable. Ostrom studied success-factors of local (sustainable) common pool resource management for years. There are also other major causes of forest degradation such as clearance of forestland for expanding settlements and infrastructures, agriculture, or use of timber. Moreover, cultivation as an alternative to collection might also call for community (CFUGs) involvement according to our previously exposed results. Accordingly, Ostrom’s categories for successfully managing common pool resource issues were used to analyze more generally the prevailing governance arrangements for managing Community Forests. Accordingly we assume that governance includes institutional components (such as the CFUGs or partnerships and networks), procedural components (such as decision making process and participation), and steering components (such as laws, rules,


regulations, distributional criteria etc.). Success, i.e. sustainably managing common pools and related issues such as infrastructure or cultivation, asks for setting up not only common goals but also for coordinated action among the users. In addition, sustainable valuation of biological resources implies always, at the same time, conservation and utilisation of the resources. Against this backdrop, three expectations can be put forwards, namely (a) that a fair access and benefit sharing mechanism potentially promotes the establishing of pro-sustainable value chains (rule following harvesting, cultivation, semi-processing, processing, packing and marketing/export), (b) local governance arrangements can establish favourable conditions for sustainable use of biological resources, and (c) that the resulting sustainable biotrade leads to local people’s livelihoods being improved. However, in what follows, it will be argued that the existing modes of local governance, i.e. the prevailing mode of managing sustainable valuation of biological resources are not yet fully developed to meet the success criteria.

(b) Case Studies and MethodsThe community forests with their related governance by the CFUGs were chosen because Nepal has established a regime for CF and CFUGS over the last 20 years. Although there are also Leasehold Forests, CFUGs are the dominant type of rural local governance forms.. The motives for including Mid-Western and Far-Western districts into the sample are the same as above. The study sample includes CFUGs from Dang, Pyuthan, Surkhet, Jumla and Bajhang Districts. Data on participation, local governance, access and benefit sharing, and knowledge and awareness was collected through focus group discussions, key informant interviews, and surveys.

(c) FindingsThe state of local governance is an important constituent factor when addressing the valuation of biological resources and sustainable biotrade. According to the framework, one should expect local governance to be directed to conservation, utilization, and development, while considering social factors at the same time, for example ensuring legitimacy of decisions. In what follows we present findings along the following criteria: (1) participation (2) access


and benefit criteria; (3) gender; (4) implementation of regulation, and (5) awareness/knowledge. The findings will be presented in terms of strengths and weaknesses representing our orientation on sustainable use of biological resources.

Participation

Formally, all members have equal rights to access and possible benefits of the forests. Moreover, they have equal duties and all members of the household are entitled to participate in the CFUGs and their activities. CFUGs hold general assemblies, and executive committee and sub-committee meetings, which offer users opportunities to participate and to make decisions on future activities related to forest management, harvesting, and distribution of benefits. The general regulation of CFUGs also includes rights to prioritise poor households or victims of natural disasters (e.g. through subsidising prices) and duties for users’ empowerment.

The CFUGs are expected to agree upon rules, regulations or initiatives through meaningful or equal participation, be it in terms of decision-making procedures or be it terms of fair burden and benefit sharing. However, we couldn’t find much evidence regarding clear local policies on participation. First, the sizes of the families and their economic status are rarely taken into consideration. Secondly, no fair criteria for distribution of burdens (e.g. in kind contributions) or for benefit sharing were found. We found that smaller sized households often took the burden of (financial or social) costs. Socially and economically deprived user groups are often left out from decision-making processes; this means their needs and concerns are not reflected by the operation plans (see below). Many of these groups are ignored in decision-making and their rights are denied, leading to distrust and disinterest in the process.

Access and Benefit Sharing

Regarding participation, the formal requirement to take into account fair and equitable sharing of benefits among all forest users is well established. The existing rules and regulations for community forests have well provisioned inclusion and participation of all social and ethnic groups at the decision-making process and management levels, as well as access to resources and


sharing benefits.

However, in reality, socially and economically deprived forest users stay far behind in having access to resources, as well as deriving benefits out of it. There are numerous barriers, for example regarding transportation or trading of products. Moreover, the existing rules and regulations on pricing, taxes, licensing or registration processes and marketing do not have an explicit “pro-poor orientation” but rather supports agents and brokers.

Gender

Findings related to gender issues related to local forest governance are quite similar to those already presented. The policy has a clear set criteria for the role of gender in the meaningful engagement in resources conservation and utilization; however, implementation mechanisms are rather poor. There are no special promoting activities for engaging women in management of the resources and no monitoring.

Implementation of Local Regulations

The management of community forests through CFUGs is thought to provide autonomy to users that in turn should lead to promoting local efforts for establishing conservation as well as utilisation rules. CFUGs prepare operation plans (OP) in coordination with the related District Forest Office (DFO) and their subordinate Range Posts (annual, three years plan, or five years plan). When approved the CFUGs are committed to manage all activities autonomously according to the OP. An OP offers, accordingly, the opportunity for regulating sustainable use of biological resources and biotrade and thereby promoting responsibility and accountability towards forest management.

In addition to the problems already stated in relation to “participation,” there is evidence of further problems hindering sustainable forest management. First, there are asymmetrical power relations between the DFO system and CFUGs such that tensions emerge between users and authorities. There is evidence that the DFOs create new requirements, be it for collection, selling or transportation, not included in the OP or going beyond approved regulations, thereby undermining conservation efforts. Second, the DFOs right to draw


the borderlines between community forests often creates tensions between de facto practices (traditional access) and de jure defined areas. Thirdly, governance of community forestry very often addresses only the conservation or protection side, whereas little is done regarding improved utilisation (e.g. processing). Fourthly, and somewhat in contradiction to the third point, there are many institutional actors at different levels that collect revenues from the forest user and their traders, thereby creating pressure on them. There are also procedural barriers for registration of small enterprises. Fifthly, there are only limited programmes to enhance knowledge, skills and awareness of CFUGs to appropriately manage the forests sustainably.

Awareness/Knowledge

Again, we find a huge discrepancy between stated laws and declarations and existing activities. Empowerment and knowledge dissemination at user level are formally promoted. The times when CFUG’s operation plans are being prepared would be ideal in providing repeated opportunities for CFUGs providing knowledge such as, for example, technical assistances or information on possible market developments. However, we did not observe any initiatives being given at the user level. Related programmes rather benefit the elite users or executive members.

(d) ImplicationsGenerally speaking, CFUGs as a major component of local governance, have great potential for realising a sustainable valuation of the forest’s biological resources and, accordingly, to tackle the threatening tragedy of commons. In addition, they are possible bearers of a pro-active policy of valuation of biological resources, for example regarding processing or cultivation. Through their operation plans CFUGs could regulate use, and strive for marketing products or to optimise the productivity of forestland through cultivating MAPs. They could also establish enterprises, trying to improve profit sharing stemming from the use of biological resources. CFUGs can fix punishments for members who break the rules made by themselves; they can ensure information flow and awareness raising, and they can define pro-poor or pro-deprived means to better include them into the community and to grant them access and benefit


sharing. In sum, GFUGs could contribute significantly to local development including building social and human capital through training and networking, management of natural capital (forests) to optimise productivity; development of physical capital such as rural development infrastructure like roads, drinking water, rural electrification, telecommunications, support schools, building irrigation facilities, and so on.

However, the existing mode of local governance, by far, does not tap into that potential. Although the rising loss of biological resources affects livelihoods more and more, CFUGs are to a minor degree really oriented to mitigating the tragedy of commons and to developing pro-active strategies of valuation of biological resources. Existing practices often fail in setting up a legitimate institution, in the sense of including all and especially also the poor and deprived.

ReferencesAG, 2005. Making Valuation Work for Biodiversity Conservation, Biological

Diversity Advisory Committee, Department of Environmental and Heritage, Australian Government. Canberra ACT 2601.

Alessa, L., Kliskey, A. & Altaweel, M. 2009. Toward a Typology for Social -Ecological Systems. Sustainability: Science, Practice and Policy. http:/ejournal.nbii.org (retrieved April 12, 2014)

Daly, H .1995. On Wilfred Beckerman’s Critique of Sustainable Development. Environmental, Val. 4 (1): 49-55

Neupane, L, Lienert, J. and Klemn, S. B. 2012. Sustainability of ABS and Biotrade in Nepal: An Overview: Sustainability of ABS and Biotrade in Nepal, proceeding report, University of Basel and CEPRUD, January 2012, Lalitpur, Nepal. (Theme paper)

Kerry T., Gerogious, S. Clark, R., Brouwe, C & Burke, J. 2004. Economic Valuation of Water Resources in Agriculture- from the sectoral to a functional perspective of natural resource management, FAO Land and Water Development Division

Neupane, L. 2011. Biotrade Initiative: Enhancing Livelihood Systems in Nepal Hill. The Nepal Journal of Forestry. Vol. XIV, No1. Nepal.


Ostrom, E. 2007. Sustainable Social -Ecological Systems: An Impossibility? Centre for the Study of Institutions, Population and Environmental Change; Workshop in Political Theory and Policy Analysis, Indiana University and Centre for the Study of Institutional Diversity, Arizona State University, USA.

-------1999. Self-Governance and Forest Resources, Occasional Paper No. 20. CIFOR, Indonesia.

Ruggie, J.G. (2004). Reconstituting the Global Public Domain: Issues, Actors and Practices. European, Journal of International Relations, 10(4), 499-531.


Establishing Biotrade Activities in Rural Nepal15

Martina Patscheider, Vera Schulhof16

IntroductionAs displayed in the previous contributions, using NTFPs and MAPs has the potential to improve the well-being of Nepalese people, particularly those living in remote areas. There are, however, two major challenges to realising this potential, both today and in the future: First, as mentioned above, the rising demand has led to over-harvesting and degradation which is why some species of NTFPs and MAPs have become endangered. Second, and despite the impacts shown in Section 1 and 2, the benefits for the rural population are still limited. An important reason for this limited benefit is that NTFPs are usually only collected and then immediately traded in unprocessed form and thus do not sell at a high market price. Integrating both further upstream (i.e. cultivation) and downstream (i.e. processing) value chain activities into the local level are generally considered as promising approaches to overcome these two challenges of degradation of resources and limited economic benefit. However, establishing such biotrade activities calls for further governance changes. This is what will be demonstrated in the following: cultivation and

15 The article is based on two Master´s theses with the titles: ‚“Valuation of Non-TimberForest Products through Value Chains” by Martina Patscheider and Cultivation of Medicinal Plants in a Social-Ecological Context‚ by Vera Schulhof written at the University of Basel, Sustainability Research.

16 Martina Patscheider and Vera Schulhof are former Master’s degree students in Sustainable Development at the University of Basel.

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processing imply what we understand as a substantial regime change.

(a) FrameworkFollowing Baerlocher (2013), we understand a social-ecological regime as a coordinated set of actions connecting the social and the natural world. Such a regime consists of three constituting elements: (1) individual actors with individual actions, means and attitudes; (2) institutionalised actors (e.g. a cooperative) with aggregated actions on various levels (including e.g. infrastructure); and (3) the biophysical system with its frame conditions for both individual and collective actions. Applying this framework to analyze value chain issues allows us to reveal the vast difference of the constellations between actors, the social system and the environment and in what way this difference between the constellations represents barriers for shifting the traditional regime of collection to one with cultivation or processing.

(b) Case Studies and MethodsTwo case studies were conducted. The first case study was on the collection and (potential) processing of Chiuree in Surkhet and Pyuthan, representing the challenge of limited economic benefit of the unprocessed raw product. The second one was on the collection and (potential) cultivation of Satuwa in remote Liwang area of Rolpa, referring to the challenge of endangered MAPs.

Case 1

For centuries, people have collected Chiuree for self-consumption. Recently, 11 cooperatives in Surkhet District began to commercialise Chiuree. They buy seeds and extract ghee at the district level (however, they face technical problems with the extraction machine). To explore more value chain aspects in establishing biotrade activities, a micro-enterprise in Pyuthan District, which produces herbal soaps from Chiuree ghee and exports them with the help of an NGO to Japan, was additionally included in the sample.

Case 2

Liwang, situated in the mid-hills in the remote Rolpa District, consists of isolated villages which used to be the headquarters of the Maoist party during


the Maoist/government armed conflict. Due to its high value, Satuwa is being overharvested which is why people have started to cultivate it. In the studied village area of Liwang, there are four or five small-scale private cultivations and one medium-scale communal cultivation site. MAP collectors and traders were also included in the study sample.

The exploratory research designs in both cases mainly included qualitative data analysis of household and stakeholder interviews as well as of documents and observations.

(c) FindingsThere are substantial differences between the current regimes of traditional collection of NTFPs/MAPs and a potential biotrade regime. Especially when further classifying the three main categories of a social-ecological regime into various sub-elements, critical aspects with regard to regime change become apparent. However, as shown in Table 6 not all aspects are equally relevant in both cases of potential regime changes.

Table 6: Critical Aspects with Regard to Regime Change of Value Chain Activities in Two Cases in Rural Nepal (- aspect not relevant/applicable; x aspect relevant; xx aspect highly relevant)

Regime Element Critical Aspect

Chiuree in Surkhet and

PyuthanSatuwa in Rolpa

Current regime:

collection

Biotrade regime:

processing

Current regime:

collection

Biotrade regime:

cultivation

Biophysical System

Biophysics of Product x - x xx

General Biophysical Structure

x x x xx

Value of Product x x xx xx

Actor Land - - - x


Regime Element Critical Aspect

Chiuree in Surkhet and

PyuthanSatuwa in Rolpa

Current regime:

collection

Biotrade regime:

processing

Current regime:

collection

Biotrade regime:

cultivation

Capital - xx - xx

Knowledge and Skills - xx - xx

Access to Markets x xx x x

Personal Attitude - x - xx

Social System

Community Organisation x - - xx

Infrastructure x xx x x

Technology - xx - -

Legal Framework x x - x

Power Relations x x x x

Third Sector x x - x

There are many components, such as capital needed; knowledge and skills; technology, and personal attitude that require fundamental changes and can be accordingly regarded as barriers. It is difficult to shift from current traditional subsistence farming and collection of NTFPs and MAPs to either collection or processing. In the following, we highlight some of these features along the lines of the three main categories of a social-ecological regime for the two cases.

Case 1: Chiuree

Chiuree (botanical name: Diploknemabutyracea Roxburgh) is a multipurpose plant. The sweet fruit can be eaten and butter (ghee) can be extracted from the oily seeds and used for cooking, medicinal purposes or cosmetics. This multipurpose use makes collectors independent from markets to a certain


degree, as they can choose if they want to sell Chiuree products and in which form. The fruit can be harvested from mid-June to the end of July.

Chiuree trees are widely abundant. Being a relatively undemanding plant, Chiuree grows in rocky areas at altitudes between 700 and 1,500 metres a.s.l. Since only the fruit are harvested, Chiuree is not prone to being overharvested. The price for raw Chiuree seeds, however, is low (between 20 and 25 NRs per kg). Hence the income from Chiuree collection is marginal compared to the annual household income (about 5%). Processed goods such as ghee or herbal soaps achieve a better price. Chiuree is mostly collected on community forestland. Land is not a critical issue, neither for collecting nor for processing Chiuree. However, the latter requires relatively high investment costs together with knowledge and skills. The current high interest rates from bank loans as well as missing financial resources are two major hindering factors for the establishment of (processing) value chain activities in rural areas. Although soap manufacturing does not need expensive machines, lack of capital nevertheless complicates the procurement of raw material (Chiuree and other ingredients). On the contrary, no investment and no knowledge is needed (except for time and effort) for collecting Chiuree. Drying the seeds, however, can be a challenge. Since they rot easily, knowledge and skills with regard to drying them are important. Overall, engaging in processing is a fundamental and far reaching decision, striving to gain benefits in the future rather than immediately.

Since 2011, 11 cooperatives in Surkhet District have been buying Chiuree seeds. For people who live in the vicinity of the cooperative, this opens up a new option for income generation. However, the market access via cooperatives is not yet completely established. For the micro-enterprise in Pyuthan, market access is facilitated by an NGO. For all Chiuree products (seeds as well as ghee or soap), demand is limited.

Access to markets, which was mentioned in the previous section, is closely linked to infrastructure, a factor that belongs to the social system. Better roads would facilitate market access for Chiuree collectors. In terms of processing, the energy supply and testing facilities are crucial. The latter are indispensable


for meeting the quality standards of the international markets. Technology is particularly relevant with regard to machines for ghee extraction. The cooperatives have not yet found an extraction machine that runs properly.

Although commercialisation of NTFPs plays an important role on the political agenda in Nepal, the legal framework is rather hindering than favouring the establishment of value chain activities in rural areas. Laws aim at the protection of biodiversity rather than promoting business. Moreover, the system of licenses and royalties is complicated, not transparent and prone to corruption.

The findings show how difficult it is for people in rural areas to start the commercialisation of NTFPs. Accordingly, the third sector, development agencies or NGOs, plays an important role as an ‘outside force’ to trigger commercialisation. However, it is recommended that they take the multi-dimensional requirements as sketched above into account and strive for establishing long-term oriented projects based on mutual trust.

Case 2: Satuwa

Satuwa (botanical name: Paris polyphylla) is a medicinal herb. Its rhizomes have been used as an antibacterial and antispasmodic during childbirth and to treat a variety of symptoms such as diarrhoea, fever, and headaches in Nepal as well as being used in Traditional Chinese Medicine for centuries. Recently, its anti-cancer potential has gained attention in Western medicine. Due to these properties, Satuwa is one of the most valuable MAPs in Nepal. The unprocessed rhizome can realize a market price of NRs 3,300 per kg. Satuwa grows in moist, shady and sloped forests above an altitude of 2,000 metres a.s.l. Harvesting takes place throughout the year, but only after a plant life span of two to five years. However, since it is the rhizomes, which are harvested, the wild populations are dwindling fast. The plant is listed as vulnerable by IUCN. This encourages people to engage in cultivating it.

Unfortunately, there are some remarkable barriers to cultivation. While collection of wild Satuwa does not require any capital, cultivation does. The practice itself is not very capital-intense and manual labour is sufficient. However, the first return of benefit, only after five years of growing, requires a financial


buffer and long-term orientation which most people do not possess. In lacking access to micro-credits or other income opportunities, they cannot sustain themselves while waiting for their return on investment. The same tension exists regarding knowledge. While knowledge about collection and use is widely dispersed, cultivation is an entirely new practice for which knowledge and skills are lacking, especially since Satuwa has never been domesticated before. Basic marketing and accounting skills together with knowledge, on and access to, markets are also missing. This lack of knowledge is one of the most crucial hindrances to cultivating Satuwa. Availability of appropriate land is a minor issue. The traditional arable land in the vicinity of the villages is not suitable for cultivating Satuwa due to a lack of shade and slope; appropriate land is often too far from villages to be easily looked after. A pioneering spirit and a willingness to experiment and to take a risk are needed. In traditional communities, encouraging people to engage in untested practices requires significant leadership qualities in order to pursue uncharted terrains.

Several factors in the social system play a relevant role. First, cultivation activities should be accompanied by relevant conservation activities. As seedlings are sourced from the forest and cultivation is partly motivated by conservation interests, the community organisation has to protect, with rules, the wild Satuwa populations. In our case, this also includes regulating or even out-lawing the traditional open grazing system, which poses a threat to young seedlings due to trampling, together with carrying out appropriate monitoring. Road access and transportation facilities are an additional issue. When medium-scale or several small-scale cultivation activities take place in one village, the resulting amount of herbs need to be brought to local market hubs. While herb horticulture does not require very elaborate technology, basic irrigation opportunities and plastic tunnels are additional minimum requirements. Laws and the payment of royalties do not play a big role for cultivating Satuwa. However, the difficulty of distinguishing between collected and cultivated Satuwa might become a problem in the future when wild collection could become regulated or even banned. In contrast, the currently consistent and very high market price could be a driving factor. Since Satuwa is mainly sold and consumed unprocessed and since it is getting harder to purchase Satuwa due to its decreasing quantity,


the brokers’ negotiation power does not seem to exceed the suppliers’ power by far and the prospect for selling it are good.

The findings again point to major obstacles in changing the practice from collection to cultivation. In the studied area of Liwang, there was no interference and mp presence of NGOs or development programmes. The communities are rather independent and have managed to start pioneering Satuwa cultivations on their own. However, there is a need for external support in terms of providing knowledge, seedlings, and capital, to make use of Satuwa’s immense potential.

(d) Implications Establishing biotrade activities which enable people to benefit from using natural resources without depleting them appears to go along a fundamental regime change in both cases. Although the cases are different (they call for quite different protection measures, for example), they display similar critical factors when looking at the required transition: capital, knowledge and skills (including access to markets), technology and infrastructure, as well as personal attitudes, and the social organisation plays a crucial role, although in different ways within the cases. Legal frameworks can promote or hinder innovation in valuation of biological resources, for example through appropriate incentives or inappropriate royalties. Regime changes towards more equitable value chains bear a potential for sustainable development but are difficult to implement. It will be decisive whether pioneer biotrade projects like the two described in this article can gain ground.

ReferencesBaerlocher, B. (2013), Natur Und Soziales Handeln. Ein Sozialtheoretisches

KonzeptFü r Die Nachhaltigkeitsforschung, Campus Forschung Bd. 964. Frankfurt, Campus Verlag.


This section presents the natural science part of the overall project and highlights the botanical characteristics of two important NTFPs used for biotrade in Nepal, namely Diploknemabutyracea (Roxb.) H. J. Lam, better known as Chiuree or butter tree and Paris polyphylla Sm., better known as Satuwaa. We thereby enlarge the perspective on these central NTFPs products, which have been elaborated on from a socio-economic, a well-being related, and a value chain viewpoint in the previous articles, to a botanical study in order to embrace the potential and the importance of these plants.

Two Botanical Studies on Chiuree and Satuwa in Western Nepal

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Sunil Kumar Gaire18

IntroductionChiuree is widely used in Nepal for its medicinal properties and as a source of fat extracted from the seeds. Two main purposes of this study are the comparison of nutrient constituents present in seeds and the gas chromatography-mass spectrometry (GC-MS) analysis of seed fat of Diploknemabutyracea from three localities. The study shows the significance of Chiuree seeds regarding its high nutritional value and various bioactive compounds, which shows the importance of the plant and its products for various purposes by traditional as well as modern practitioners.

Relevance of Chiuree in Nepal and Objectives of the StudyDiploknemabutyracea, Nepali name Chiuree, is a medium size deciduous tree with a straight trunk, attaining a height of 15-22 m and girth of 1.5-1.8 m. The fruit is sweet and good to eat. From the seeds, butter (ghee) can be extracted which is used for cooking, for medicinal purposes or for cosmetics. The seed

Comparative Study of Seed Constituents of Chiuree in Western Nepal17

17 The contrbution is based on a Master´s thesis, ‘Comparative Study of Seed Constituents of Diploknemabutyracea (Roxb.) H. J. Lam of Western Nepal‘ by Sunil Kumar Ghaire at the Central Department of Botany, Tribhuvan University, Kathmandu.

18 Former Master student of the Central Department of Botany, Tribhuvan University, Kathmandu.

6.1


fat is applied for headaches, rheumatism, boils and pimples. The oil extracted from the seed is used for cooking and lighting lamps. Because of its medicinal uses, Chiuree is also classified as a MAP (Bhattarai & Ghimire 2006; Pyakurel & Baniya 2011). Furthermore, the seed cake serves as fertiliser, fish poison or insecticide. Chiuree wood is used as firewood, its leaves are a good animal fodder, and bees collect nectar from the Chiuree flowers to make honey. Chiuree flowers are a rich source of sugar and are utilized for fermentation (alcohol).

Various parts of the Chiuree plant are used by different ethnic groups of Nepal and India for medicinal and other purposes. Research has proved the potential of Nepalese seed oil from DiploknemaButyracea (Chiuree) and Jatrophacurcas (Sajiwan) in tests and found them a suitable alternative to diesel (Parvaiz, 1997; Francis, 1997).

The demand for edible oil is continuously on the rise due to increasing population, changing food habits, rising incomes and other reasons. Due to the decreasing productivity of vegetable oil, there is a gap between demand and supply. Therefore, there is a need to utilise and explore the existing potential of alternative sources of oil like Chiuree. Being a multipurpose tree, Chiuree is still under-utilised and needs to be promoted. The result based on technical information (nutritional and GC-MS analysis) can boost the potential of this plant, resulting in income generation by commercialisation.

Therefore the study has the following objectives:

• To compare the seed constituents of Chiuree collected from the study area (Pyuthan, Surkhet and Palpa).

• To compare the percentage of nutrient constituents of Chiuree seeds in the study area.

• To analyze and compare the chemical constituents of fat extracted from seed samples using GC-MS.

• To explore the fat of Chiuree as a substitute for other edible vegetable oils.


Seed CollectionChiuree seeds were collected from three different study districts of Western Nepal. Sample seeds were collected from local households. Then, all sample seeds were sun dried for a week. Sample A was collected from Pyuthan District, Dharmawati Village Development Committee 4, Chautara (altitude 1,343 m a.s.l.). Sample B was collected from Surkhet District, Pokharikanda Village Development Committee 9, Upallo Syaule (altitude 1,197 m a.s.l.). Sample C was collected from Palpa District, Telgha Village Development Committee 6, (altitude 928 m a.s.l.).

ResultsWithin the seed samples we found the following nutrient composition:

Table 7: Nutrient Constituents Present in Seed Samples

S.N. Test ParameterResult

Sample A (Pyuthan)

Sample B (Surkhet)

Sample C (Palpa)

1 Moisture (%) 4.7 3.7 4.7

2 Crude Fat (%) 65.5 67.9 60.5

3 Crude Protein (%) 7.9 7.7 6.59

4 Total Ash (%) 2.5 2.8 4.2

5 Crude Fibre (%) Not detected Not detected Not detected

6 Carbohydrate (%) 19.4 17.9 24.01

7 Energy (Kcal/100gm) 698.7 713.5 666.9

Moreover, we found the following bioactive constituents present in the seed fat: GC/MS analysis of fat of Diploknemabutyracea showed twenty major compounds from each sample. Major constituents in sample from Pyuthan were methyl oleate (43.65%); methyl palmitate (27.18%); heptadecanoic acid (5.98%); cosanoic acid (3.38%); icosenoic acid (3.27%); triacontanedioic acid (3.11%); methyl linoleanate (2.79%), and hexadecanoic acid (2.44%).

Major constituents in sample from Surkhet were tetradecanoic (myristic) acid (43.65%); methyl oleate (32%); methyl palmitate (10.95%); triacontanedioic


acid (3.73%), and icosatrienoic acid (2.1%).

Major constituents in sample from Palpa were tetradecanoic (myristic) acid (40.4%); methyl oleate (24.7%); icosatrienoic acid (9.72%); eicosatetraenoic acid (6.52%); methyl palmitate (4.99%); triacontanedioic acid (4.28%), and cosanoic acid (3.57%).

In comparison, eight major constituents (butanoic acid, methyl palmitate, methyl oleate, tetratriacontanedioic acid, icosenoic acid, heptacosanoic acid, tetradecanoic acid, hexadecanoic acid) were common among all samples.

ConclusionIn this work, the presence of good nutritional value and various bioactive compounds justifies the use of the plant and its products for various purposes by traditional as well as modern practitioners. A comparative study of the seed constituents of Diploknemabutyracea collected from Pyuthan, Surkhet and Palpa Districts of Nepal was performed. Nutritional analysis showed that the Diploknemabutyracea seed has high nutritional value including carbohydrate, protein, fat, total ash, and energy. Fat content in the seed is high (60-68%) and almost in equal proportion among the three samples. This fat can be used as a substitute over other fat sources.

GC-MS analysis of seed fat showed the existence of various compounds (fatty acids) with variable chemical structures. Seed fat contains a high concentration of palmitic acid methyl ester, oleic acid methyl ester, myristicacid methyl ester, stearic acid methyl ester, linoleic acid methyl ester. These saturated and unsaturated fatty acids could be the proper biological source for pharmaceuticals, cosmetics and other industries.


Sirjana Sharma20

IntroductionDifferent groups of secondary metabolites are tested for their presence or absence in rhizome extract of Paris polyphylla Sm., better known as Satuwaa, collected from Banau VDC of Parbat District. The study shows the presence of alkaloids, flavonoids, saponins, tannins, polyphenols and glycosides and the absence of terpenoids among the seven tested categories of secondary metabolites.

Nature is a treasure house of potential drugs and in recent years there has been an increasing awareness about the importance of medicinal plants. Many products of medicinal plants prove to be very useful in prolonging longevity and achieving a positive health care system (Kaushik et. al., 2002). They contain some organic compounds which provide definite physiological action

Identification of Secondary Metabolites Present in Medicinal Herb, Paris polyphylla Sm. (Satuwaa)19

19 The contribution is based on a Master´s thesis ‘Identification of Secondary Metabolites Present in a Medicinal Herb, Paris polyphyllaSm‘. by Sirjana Sharma at the Central Department of Botany, Tribhuvan University, Kathmandu.

20 Former Master‘s student of the Central Department of Botany, Tribhuvan University, Kathmandu.

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on the human body and these bioactive substances include tannins, alkaloids, carbohydrates, terpenoids, steroids and flavonoids (Edoga et.al. 2005). These compounds are synthesized by primary or rather secondary metabolisms of living organisms. Secondary metabolites have impressive anti-microbial, insecticidal, hormonal biological activities. They are widely used in human therapy, veterinary, agriculture, scientific research, and countless other areas.

Paris polyphylla Smith, Synonym - Daiswapolyphylla (Sm.) Raf., Family: Liliaceae., local name Satuwaa, is an important perennial (herb) medicinal plant growing under the canopy of moist temperate forests in Nepal. It belongs to the family Trililiaceae and in Nepal it is found within an altitudinal range of 1,800- 3,500 m a.s.l.

Rhizome paste of Paris polyphylla can be applied to wounds for rapid healing and as an antidote for poisonous snake bites, insect bites, and also for fever, headache, and stomach problems of both man and animals. It is an important Chinese folk medicinal herb and is used as a primary herb in the treatment of liver, stomach, nose, lung, throat, and breast cancer in traditional Chinese medicine.

In the last few decades the rate at which new antibiotics are being produced is slowing. Thus, the research for novel anti-microbial agents is of great importance. Knowledge of the chemical constituents of plants is desirable because such information is valuable for the synthesis of complex chemical substances. In the present study the rhizome portion of Satuwaa has been selected as a substrate for chemical tests. Methanolic and aqueous extract were prepared and different tests have been carried out for the presence or absence of different categories of secondary metabolites.

MethodsPlant material was collected from the Banau VDC of Parbat District. Material was air dried, and powdered. Methanolic and aqueous extract was prepared by dissolving 10g of powder in 100 ml of solvent (1:10 v/v) and the extract was prepared by following the maceration process. Chemical tests were carried out on the aqueous and methanolic extracts using standard procedures to


identify the constituent as described in literatures (Harborne 1973, Somolenski et. al., 1974, Rizk 1982, Salehi et.al., 1992).

ResultsA number of chemical tests were carried out on methanolic and aqueous plant extracts, which was positive for alkaloids, saponins, flavonoids, tannins, glycosides and polyphenols, whereas it tested negative for terpenoids among the seven different chemical tests carried out for the detection of presence or absence of some category of secondary metabolites – see Table 8.

Table 8: Chemical Tests for the Detection of Secondary Metabolites

SN Secondary metabolites Type of tests Remarks

1. Alkaloids Hager's test Positive

2. Flavonoids Ferric chloride test Positive

3. Saponins Froth test Positive

4. Tannins Ferric chloride test Positive

5. Glycosides Fehling's test Positive

6. Polyphenols Ferric chloride test Positive

7. Terpenoids Salkowski test Negative

DiscussionPhytochemical analysis conducted on the plant extracts revealed the presence of constituents, which are known to exhibit medicinal as well as physiological activities (Safowra, A.1993). Analysis of the plant extracts revealed the presence of phytochemicals such as phenols, tannins, flavonoids, saponins, glycosides, and alkaloids.

The phenolic compounds are one of the largest and most ubiquitous groups of plant metabolites (Singh et. al., 2007). They possess biological properties, anti-ageing, anti-carcinogen, anti-inflammation properties and improve endothelial function, as well as inhibition of cell proliferation activities. Natural antioxidant come from the plant in the form of phenolic compounds such as flavonoids, phenolic acids etc. Tannins bind to proline rich protein and interfere with protein synthesis. Flavonoids are hydroxylated phenolic substances synthesized by


plants in response to microbial infection and they have been found to be anti-microbial substances against a wide array of microorganisms in vitro. They also are effective antioxidant and show strong anti-cancer activities (Salah et. al., 1995, Okwu, 2004). The plant extracts were also revealed to contain saponins, which are known to produce an inhibitory effect on inflammation. Some of the characteristics of saponins include formation of foams in aqueous solutions, cholesterol binding properties and bitterness (Okwu, 2004). Alkaloids have been associated with medicinal uses for centuries and one of their common biological properties is their cytotoxicity. According to many reports, glycosides are known to lower the blood pressure.

Conclusion and RecommendationsThe results obtained in this study show that Satuwaa is a valuable reservoir of bioactive compounds of substantial medicinal value. Beside its use as traditional medicine, it is suggested that further work should be carried out to isolate, purify, and characterise the active constituents responsible for the activity of Paris polyphylla. Also additional work is encouraged to elucidate the possible mechanism of action of these different categories of secondary compounds present in the rhizome section of the herb, Paris polyphylla.


Susette Biber-Klemm22

IntroductionWithin the project and throughout the broader debate on sustainable valuation of biological resources the notion of “access and benefit sharing” has become ubiquitous. As “sustainable” points to improving well-being as well as to safeguarding the rich biodiversity, a topic like “sustainable valuation” is obviously intrinsically related to questions such as who profits (or who has access to profits) and who has access to the resources.

The legal concept of benefit-sharing has been significantly developed in international environmental law, particularly under the Convention on Biological Diversity (CBD), as a tool to operationalise equity among and within States. It

Generating Benefits for the Local Population: Comparison of the CBD’s Access and Benefit-Sharing System and the UNCTAD BioTrade initiative21

21 The article is a compilation of an upcoming ancillary study by Susette Biber-Klemm published as a part of the SNF project ‘Access to Genetic Resources and Associated Traditional Knowledge in Nepal: Proactive Implementation Sstrategy on Access and Benefit Sharing under Special Consideration of Stakeholder Participation and Capabilities’.

22 Susette Biber-Klemm, Dr. iur., MAE is a consultant for international environmental and biodiversity law in the Program Sustainability Research, University of Basel, Switzerland.

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has subsequently been taken up by the BioTrade Initiative.

Whereas the prime rationale of the CBD benefit-sharing is to create incentives for the conservation of biological diversity, the BioTrade Initiative additionally aims at enabling biodiversity-rich countries to achieve some of their development objectives through the sustainable exploitation of their biological resources (UNCTAD/UNEP2010; UNCTAD 2011). In what follows, we describe the two instruments most important features and point to their relevance from an international law perspective.

1. Benefits from ABS and from Biotrade/BioTrade

The CBD and its System on Access and Benefit-sharing

The sharing of benefits is an essential element of the CBD; the basis is the sovereignty of States over their genetic resources (GR). Details of the system are, since 2010, regulated in the Nagoya Protocol (NP)23. According to the NP, accessed resources fall under the ABS regulations if they are utilised in research and development (R&D) on their genetic or biochemical composition (Art. 2 NP). “Utilisation” covers R&D for commercial ends as well as academic, non-commercial research. Resulting benefits can be both, monetary and non-monetary. It is important to be aware that in both types of research, non-monetary benefits are, as a rule, more significant. Bioprospecting for commercial R&D generates monetary benefits only if the research leads to a successful commercialised product. Academic research, normally leads to non-monetary benefits.

Benefits are to be agreed upon in the Mutually Agreed Terms (MAT) – a bilateral contract between provider (the competent authority) and user (e.g. the company seeking access) on a case-by-case basis. Local communities have a right to share benefits resulting from the utilisation of resources held by them according to national legislation. Also the mode of access and benefit-sharing with the local communities, including regarding traditional knowledge (TK), is subject to national legislative, administrative and policy measures. Results from academic research, such as enabling knowledge for the responsible and sustainable use of the natural resources may accrue at community level if duly shared by

23 Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity; adopted on 29 October 2010 in Nagoya, Japan.


researchers; and/or communicated by national (research) institutions. In cases where research takes place in the region of local communities, some benefits might accrue by involvement of the local communities in the research.

Nepal has – under the lead of the Ministry of Forests and Soil Conservation - been working on a Bill on Access to Genetic Resources and Benefit Sharing since 2000 (Tamang 2006; Joshi 2005). Both authors identify bioprospecting as one way to commercially exploit Nepal’s rich biological resources and to improve the livelihoods of remote communities. Bhattari, Jha and Chapagain (2009) point to the supportive potential of Community Forest User Groups (CFUG).The bill has not (yet) been adopted due to other political priorities (Oli 2012; Oli 2009).

It is important to understand that the generation of monetary benefits through commercialisation of a product is highly uncertain and takes place in long time-spans only: the industrial product development process takes roughly 10 to 15 years and about one in 10,000 compounds screened are commercialised (Secretariat of the CBD, 2008). Benefits accruing during the R&D process, such as up-front and milestone payments, research funding, payments per provided sample, might be more significant. In addition to uncertainty and long time spans, the natural products oriented R&D in industry is currently declining, even if the global market in products based on natural resources is increasing. One factor is the legal and public relations uncertainties associated with gaining access to genetic resources as a result of the CBD. Industrial companies are rather licensing in from, or forming partnerships with, small companies and universities that generate interesting leads in their natural products discovery research (Secretariat of the CBD, 2008).

Non-monetary benefits, such as training in technology, joint publications, and capacity-building may be generated by both academic research and research in industrial R&D processes. In addition, academic biodiversity research provides information in the public interest, for instance for conservation and sustainable use of biodiversity, and adds value to the genetic resources by assessing the potential for using them or creating services and products useful for society.


Moreover, cooperation of foreign with local research institutions may generate a vast array of advantages by integrating local researchers in scientific and practical work and sharing academic benefits such as co-publication; data; access to ex-situ facilities; invitation to conferences; education and capacity-building,and technology transfer (Biber-Klemm et al. 2014; SCNAT 2008).

Biotrade and the BioTrade Initiative

Biotrade basically means the national and international trade of physical goods derived from biodiversity. It is a globally significant industry, and due to increasing demand in globalized markets, trade volumes are rising. In turn, biotrade bears the risk of being heavily detrimental to goals of sustainability if not adequately managed (UNEP, 2013) (UNEP 2012). To promote sustainable biotrade, the United Nations Conference on Trade and Development (UNCTAD) launched the BioTrade Initiative that is inspired by the objectives of the CBD. Besides the fair and equitable sharing of the benefits (margins) resulting from trade, it includes principles of socio-economic sustainability24.

Considering the benefits for the local communities, ABS and biotrade are fundamentally different: trade in MAPs is an ancient business belonging to people’s livelihood strategies. ABS in turn is a novel development – meant to create incentives and means for the conservation and sustainable use of biological diversity. In trade in MAPs, benefits accrue directly to the producers, whereas most benefits resulting from ABS are of indirect value to the communities. Yet both systems may contribute to the valuing of biological resources, and have a complementary potential. Results from research provide information and knowledge to enable and empower communities to sustainably use their resources. Monetary ABS benefits may provide the funds that are necessary to improve the MAP value chain in the sense of the BioTrade initiative. In turn, BioTrade is an essential brick in the endeavour to improve the livelihoods of the local people.

2. Governance Activities Required to Assure Sustainable “Access to Benefit-sharing” by Local Communities The question emerges as to how can the according potential be activated

24 http://www.biotrade.org/index.asp


through appropriate governmental means. Obviously, the different settings ask for different approaches.

ABS

ABS is a new system. Parties to the CBD (and the NP) are to implement the system. Respective institutional and organisational requirements are now specified in the NP (see Arts. 6, 7, 12, 13,and 17). The implementation of the system encompasses measures by the national government, such as legislation and administrative management, creating institutions and procedures for access and monitoring as well as awareness-raising and capacity-building on different levels. Important for access is the creation of an ABS focal point as an information hub for researchers and bioprospectors seeking access (see Bonn Guidelines25 (BGL) Art. 13) and possibly a competent national authority (Art. 14 BGL). According to CBD and the NP, access to GR needs to be facilitated for users (research, commercial bioprospecting).This obligation is counter-balanced by the benefit-sharing obligation.

In practice, designing a national ABS system is a complex, crosscutting, and multi-stakeholder enterprise. It involves a series of ministries (such as, for instance, environment/forest/resources, trade, and science) including their decentralised entities (district forest offices; customs) and addresses a range of stakeholders: industry and its associations; research/universities; NGOs, and local and indigenous communities. This situation calls for a well-designed integrative and transparent approach, led by the/a lead agency at national level. Nepal indeed decided to go along that path in its legislatory process (cf. Tamang 2004, Joshi 2005).

In designing the system it is important to understand that access for research and bioprospecting is subject to competitive market mechanisms. In order to save transaction costs (time, finances, risks), industry and researchers choose countries offering legal security and smooth procedures. Unclear, overly bureaucratic, time consuming and expensive procedures are counter-productive (Richerzhagen and Holm-Mueller, 2005). A bioprospecting-friendly climate is characterised by a regime regulating, but not restricting, access and ensuring legal security. This includes clear property rights, including

25 Bonn Guidelines on Access to Genetic Resources and Fair and equitable Sharing of the Benefits Arising out of their Utilization.


rights to TK, and providing for competent, legally and technically capable, multifunctional institutions.

Accordingly, establishing a functioning and profitable ABS mechanism proves to be a challenging endeavour. One of the most important open question in Nepal’s legislatory process concerns the definition of the property rights and the right to grant access to resources and TK of the indigenous and local communities (Oli, 2009). As genetic resources are not identical with biological resources - i.e. the plant as a whole - the right to use genetic resources does not automatically follow the property/use rights of the plants. Therefore, the right of local communities to give Prior Informed Consent (PIC) for access to GR and possibly negotiate MAT needs to be clearly assigned. Regarding TK, it is important to define under what condition it is in the public domain and therefore accessible without PIC and MAT. If TK is not public, the question is, who is competent to grant access: several communities, one community, or an individual as holder of the TK? All these issues need to be considered and balanced to find an equilibrium between facilitating access and ensuring control over benefit-sharing.

Against this backdrop it can be taken for granted that successfully implementing ABS in Nepal will only be possible by including the most important stakeholder groups (research; indigenous peoples; local communities; industry; civil society) into ABS-governance

BioTrade

In Nepal, there exists a long lasting political agreement on the potential of trade in MAPs. Over the years a positive, pro-active policy framework has been created with the goal to alleviate poverty and to improve livelihoods (Sharma and Shrestha 2011). However, and in line with what has also been presented above, the current governmental policies together with the related legal and institutional frameworks are not very supportive. Some authors even claim that the present legal and administrative framework is counter-productive: the regulations are more concerned with the control of harvesting and exportation of MAPs than about promotion of business (Maharajan 2012). The focus of the legislation results in bureaucratic hurdles (UNEP 2012).The distribution


of competencies between local, district and state authorities is intricate and demands for a high level of understanding and knowledge among user groups (Neupane, this volume).

Considered from the viewpoint of improving the livelihood of the communities (access to fair and equitable benefit sharing), the most important (and interlinked) points are: 1) to assure and facilitate participation of MAP collectors and producers in the national and international markets; 2) to add value to the collected or produced resources, and 3) optimise profits for the producers’ community level. This entails a multifaceted approach, as laid out in the national policies, creating an enabling framework, and initiating a pro-active inclusive strategy. This ought to include not only building up information, training and capacities for the producers to level the value-chain playing-field, but, for instance, also information to enable legislators and governmental agents to understand the context, and the application of alternate governance instruments such as devising incentives for processing and cultivation of MAPs, but also for the creation of Public Private Partnerships to promoting intra and upstream value-chain cooperation (ICIMOD 2011; UNEP 2012).

Implications

ABS and biotrade have several governance relevant characteristics in common, both systems have a complex structure; they are inter-institutional in the horizontal and multi-level in the vertical, as regards involved agencies and stakeholders and, accordingly, ask for cooperation among different actors and levels. In addition, both, biotrade and ABS, are operating in international competitive markets. The challenge is to make good use of the existing competitive advantages such as the high biological diversity and to ensure reaping equitable benefits.

However, there are important differences that can be characterised as low-hanging in comparison to high-hanging fruit. For the implementation of the ABS system, a basic question is, how benefits can be generated, i.e. how incentives for access by users (academic research, industrial bioprospecting), can be created. However, although non-monetary benefits are possible in the short-term perspective, monetary benefits possibly only emerge in the further


future. In contrast to ABS, trade in MAPs (some) benefits accrue directly to people at community level. Yet, their share of the profit needs to be optimized. This entails changes in the existing, established system along the entire value chain. In particular as regards legislation and its implementation, a fundamental change in the mode of governance from control to support is needed.

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creating exclusive Rights to the Poor Groups in Community Forest Management. Journal of Forest and Livelihood 8(2), 1-15.

Biber-Klemm S. et al (2014) : Access and Benefit-Sharing in Latin-America and the Caribbean: A Science-Policy Dialogue for Academic Research (in print).

ICIMOD (2011): Pro-Poor Value Chain Development for High Value Products in Mountain Regions: Indian Bay Leaf.

Joshi, O. (2005): Convention on Biological Diversity and access to genetic resources: International regime and our experiences. BankoJanakari, Vol. 15, No. 2 (2005) 48-52.

Maharajan, P. (2012): Biotrade and Green Economy: A Business Perspective of Nepal. In: SriramPoudyal, Paul Burger, LaxmanNeupane (eds.) Sustainability of ABS and Biotrade in Nepal. Proceedings of a National Workshop. January 30, 2012. Lalitpur, Nepal .

Poudyal S., Burger P., and L. Neupane (2012): Sustainability of ABS and Biotrade in Nepal. Proceedings of a National Workshop. January 30, 2012. Lalitpur, Nepal.

Prasad, O.K. (2012): ABS from Biological Resources Prospects: Key Challenges in the HKH Region. In: SriramPoudyal, Paul Burger, LaxmanNeupane (eds.) Sustainability of ABS and Biotrade in Nepal. Proceedings of a National Workshop. January 30, 2012. Lalitpur, Nepal.

Prasad O.K. (2009): Access and benefit sharing from biological resources and associated traditional knowledge in the HKH region – protecting


community interests. International Journal of Biodiversity and Conservation 1(5), 105-118.

Richerzhagen C. and Holm-Mueller K. (2005): The effectiveness of access and benefit sharing in Costa Rica: Implications for national and international regimes. Ecological Economics 53, 445-460.

SCNAT (2008, 2012): Access and Benefit Sharing – Good practice for academic research on genetic resources. Biber S, Martinez S, Swiss Academy of Sciences SCNAT, Bern.

Secretariat of the Convention on Biological Diversity (2008): Access and Benefit –Sharing in Practice: Trends in Partnerships Across Sectors. Montreal, Technical Series No. 38.

Sharma P. and Shresta, N. (2011): Promoting Eperots of Medicinal and Aromatic Plants 8MAPs) and Essential Oils from Nepal. SAWTEE Kathmandu, Nepal.

Tamang P. and Singh, B.K. (2004):An Assessment of the Implementation of the Nepalese Government’s International Commitments on Traditional Forest Related Knowledge (TFRK) from the Perspective of Indigenous Peoples. A Case Study Paper prepared for presentation at the International Expert Meeting on the Implementation of Proposals for Action under the IPF/IFF/UNFF jointly organised by the International Alliance of Indigenous and Tribal Peoples of the Tropical Forests and the United Nations Forum on Forests and hosted by the Government of Costa Rica to be held in San Jose, Costa Rica.

UNCTAD (2011): Implications for BioTrade of the Nagoya Protocol on Access to genetic Resources and the fair and Equitable Sharing of Benefits Arising from their Utilization. United Nations, New York and Geneva. http://www.biotrade.org/ResourcesPublications/UNCTAD_DITC_TED_2011_9.pdf (accessed 1 July 2014)

UNCTAD/UNEP (2010): Biotrade Potential for Growth and Sustainability. Geneva. http://www.biotrade.org/MeetingsEvents/geneva/BT%20potential%20for%20growth%20and%20sustainab_vsent2.pdf (accessed


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Paul Burger, Sri Ram Poudyal

Sustainable valuation of biological resources is a serious development opportunity for Nepal. Our studies revealed that NTFPs and MAPs already have an important role in people’s livelihood strategies. However, the current mainstream valuation practice is unsustainable in two respects. First, its dominant mode of collecting from community forests leads to overharvesting and consequently to depleting the resources. Second, the potential of benefits for improving well-being in the rural and remote parts of Nepal is far from being exploited. These two respects are also strongly interlinked. Collection stands at the bottom of the value chain and goes with the risk of creating the tragedy of commons.

The reasons for the current unsustainable valuation of biological resources are manifold. Our studies pointed to some of them. At the state level, there is a policy of command and control rather than a policy of innovation and incentives. At the local level, governance so far has been only to a minor degree oriented towards sustainable management of the resources. The livelihood analysis together with the comparative analysis of the different socio-ecological regimes of collecting, cultivating and processing revealed that preconditions for stepping towards cultivation and processing are by far not easy to fulfil (for example regarding financial capital and knowledge). There seems to be a long

Summary8


way to go.

However, there are remarkable bottom-up initiatives, like the soap enterprise processing Chiuree, the cultivators of Satuwa in Rolpa, or people in Humla who also control the trade of their products and switch slowly from collecting to cultivation. It is not speculation when we claim that strategies towards sustainable valuation of biological resources should learn from these already existing promising cases. Given the needed investments in training, local governance, management and access to market and finance, to name a few, there is a long way to go. However, there is hardly an alternative in sight, given that today’s practice will most certainly lead to a substantial loss of biodiversity through the depletion of the resources and, accordingly, to the loss of these resources for livelihood strategies.


Documents

Sustainability of ABS and biotrade in Nepal