Poverty Impact Assessment

Poverty Impact Assessment (PIA) of proposed Trade Support Measures in Nepal’s Medicinal and Aromatic Plants Sector

Medicinal and Aromatic Plants

implemented by:

Published by:Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Dag-Hammarskjöld-Weg 1-565760 Eschborn, Germany

T +49 61 96 79-0F +49 61 96 79-11 15E [email protected] www.giz.de

Place and date of publication: Nepal, December 2011

Authors:Dr. Thomas Jenisch (TOM-Consult) and Thomas Probst (GIZ)

with contributions by: Himadri Palikhe (GIZ), Moheindu Chemjong (MoCS), Phaindra Pandey (FNCCI/AEC), Vidha Pradhan (GIZ), Buddhi Upadhyaya (MoCS), Matthias Bresser (GIZ), Christina Hackmann (GIZ), Silke Woltermann (GIZ)

Photos:Himadri Palikhe (GIZ)Thomas Probst (GIZ)Julian Tresowski (www.julian-tresowski.com)Carolin Weinkopf (www.carolinweinkopf.de)

Layout: Kazi Studios (www.kazistudios.com)

Responsible Editor: Philipp Kruschel (Team Leader)GIZ WTO/EIF-SPDeutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbHNarayani Complex, 4th floor, P.O. Box 1457Kathmandu, NepalT +977 1 55 552 89F +977 1 55 217 12E [email protected] www.giz.de/nepal

In Partnership with:Government of NepalMinistry of Commerce and SuppliesSingha DurbarKathmandu, NepalT +977 1 42 116 31F +977 1 42 111 67E [email protected] www.mocs.gov.np

This study was financed by the GIZ Sector Project Trade Policy, Promotion of Trade and Investment on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

Imprint

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Poverty Impact Assessment (PIA) of proposed Trade Support Measures in Nepal’s Medicinal and Aromatic Plants Sector

Medicinal and Aromatic Plants

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This study has been implemented as part of the activi-ties of the GIZ/WTO Enhanced Integrated Framework (EIF) – Support Program (SP) in Nepal in cooperation with the Ministry of Commerce and Supplies (MoCS) of the Government of Nepal (GoN). The Ministry of Commerce and Supplies is the main responsible gov-ernment body for the coordination of the planned trade support measures in Nepal’s Medicinal and Aromatic Plants sector.

This study is financed by the Sector Project Trade Policy, Promotion of Trade and Investment of GIZ ([email protected]). This Sector Project is implemented by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

The authors and editors of this study wish to acknowl-edge the help of everyone who participated in this study and provided us with invaluable information. The team is grateful and for and highly appreciates their spirit of cooperation and openness.

Acknowledgement

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Photo: Carolin Weinkopf

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As part of the activities of the GIZ WTO/Enhanced Integrated Frame-work Support Program (WTO/EIF-SP) a Poverty Impact Assessment (PIA) was conducted in order to analyse the expected effects of pro-posed trade support measures in the medicinal and aromatic plants sector of Nepal. Together with the Ministry of Commerce and Sup-plies and representatives from the public and private sectors as well as NGOs, the medicinal and aromatic plants value chain was analysed. Jointly, the group developed an action plan with measures in the areas of collection, cultivation, processing, and manufacturing of medicinal and aromatic herbs and related products; environment; research and development; data validation as well as measures directly supporting exports in this value chain. Medicinal and aromatic plants are one of the 19 sectors which have been identified by the Government of Nepal as having a significant export potential that would enable the country to diversify its exports.

The team conducting the Poverty Impact Assessment analysed the 33 proposed measures from the action plan according to the following five steps of the PIA framework:

• Module 1: The general poverty situation in Nepal and national policies;

• Module 2: Stakeholders and institutions that influence or are influ-enced by the measures;

• Module 3: The transmission channels along which the measures affect and influence the stakeholders;

• Module 4: The stakeholders’ and target groups’ capabilities;

• Module 5: The Millennium Development Goals.

The PIA study has confirmed positive impacts on poor households. It was found that: (1) while the medicinal and aromatic plants value chain has a medium export potential, it is expected to have a high socioeconomic impact; (2) medicinal and aromatic plants are predom-inantly collected and processed in hilly and mountainous areas that have a large number of deprived people and are strongly affected by outbound male migration, the latter leading to a significant number of women-headed households; (3) the collection and processing of medicinal and aromatic plants and related products (e.g. essential oils) is labour-intensive and therefore offers a significant number of peo-ple a welcome opportunity for additional income. Two factors greatly enhanced the acceptance of the findings of the study, namely (a) the WTO/EIF-SP chose a participatory approach with having a Project Advisory Group (PAG) consisting of a variety of stakeholders and (b) all activities are based on the nationally agreed Nepal Trade Integration Strategy (NTIS).

A number of recommendations are made in the PIA study: (1) In order to reduce information gaps and to better address risks arising from the implementation of the proposed measures, poverty impact and identi-fied risks (e.g. unsustainable harvesting/cultivation methods) should be monitored regularly; (2) An improved monitoring system regarding pro-poor (and environmental effects) that take into account geograph-ical poverty data and is based on baseline data should be established; (3) The project’s stakeholder management can be further strengthened, e.g. by involving the grass roots level and reflecting the role of vil-lage and district level authorities and political parties in the action plan. Among others, further recommendations are: (4) To establish improved credit services for CFUGs, smallholders and landless house-holds; and (5) To promote product diversification within the sector to reduce dependencies on a few products.

Executive Summary

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Imprint............................................................................................................................................................................................2Acknowledgement.....................................................................................................................................................................5Executive Summary..................................................................................................................................................................71. Introduction and Background..............................................................................................................................101.1. Background...............................................................................................................................................................................................................................................10

1.2. The Medicinal and Aromatic Plants Sector (MAPs).............................................................................................................................................................12

1.3. Basic Structures and PIA’s Role in the Procedure...............................................................................................................................................................14

What is PIA?............................................................................................................................................................................................................................................15

2. General Poverty Situation in Nepal and National Policies...................................................................212.1. General Poverty Situation in Nepal..............................................................................................................................................................................................21

2.2. Specific Observations on Political, Socio-Cultural and Protective Dimensions of Poverty.............................................................................22

2.3. Production of MAPs, Role of Community Forest User Groups (CFUGs) and Household Situation................................................................22

2.4. Existing National Strategies and Programs relevant to the Intervention................................................................................................................24

2.5. Current Policies on MAPs and Essential Oils..........................................................................................................................................................................26

2.6. The Intervention and how it aligns with National Strategies........................................................................................................................................26

2.7. PIA Matrix 1: General Poverty Situation and Relevance to National Strategies and Plans............................................................................28

3. Stakeholders and Institutional Analysis........................................................................................................313.1. Overview of Stakeholders and Institutions relevant for the MAPs Value Chain..................................................................................................31

3.2. Poverty Orientation and Influence of Stakeholders and Institutions..........................................................................................................................32

3.3. Smallholder MAPs Farmers, Community Forest User Groups (CFUG) Members and export-oriented companies...............................32

Federation of Community Forestry Users (FECOFUN).........................................................................................................................................................35

Excerpt of interview with harvesters of Wintergreen........................................................................................................................................................36

3.4. Participation and Planning Procedures......................................................................................................................................................................................38

3.5. PIA Matrix 2: Stakeholder and Institution Analysis............................................................................................................................................................39

4. Analysis of Transmission Channels and Results......................................................................................464.1. The Price Channel.................................................................................................................................................................................................................................46

4.2. The Employment Channel..................................................................................................................................................................................................................47

4.3. The Productivity Channel...................................................................................................................................................................................................................47

4.4. The Access Channel.............................................................................................................................................................................................................................48

History and Status of the Certification Status for MAPs..................................................................................................................................................49

4.5. The Assets Channel..............................................................................................................................................................................................................................52

4.6. The Authority Channel........................................................................................................................................................................................................................52

4.7. Transfers...................................................................................................................................................................................................................................................53

4.8. PIA Matrix 3: Transmission Channels used and Overall Results by Channel........................................................................................................54

5. Analysis of Stakeholders and Target Groups Capabilities..................................................................585.1. Smallholders (Extremely Poor and Poor).................................................................................................................................................................................58

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5.2. Other Stakeholder and Intermediaries.......................................................................................................................................................................................58

5.3. PIA Matrix 4: Assessment of Stakeholders and Target Groups Capabilities..........................................................................................................59

6. Analysis of the Expected Results in Relation to the MDGs and National Level Strategic Goals.............................................................................................................................................606.1. Contribution to MDG 1........................................................................................................................................................................................................................60

6.2. Contribution to MDG 3........................................................................................................................................................................................................................60



6.5. PIA Matrix 5 A: Aggregate Impacts in Terms of MDGs, and Other Strategic Goals............................................................................................61

6.6. PIA Matrix 5 B: Details & Risks related to Impacts............................................................................................................................................................64

7. Conclusions and Recommendations................................................................................................................657.1. Conclusions..............................................................................................................................................................................................................................................65

7.2. Potential Risks and Information Gaps........................................................................................................................................................................................66

7.2.1. Global Risk..............................................................................................................................................................................................................................................66

7.2.2. Systemic Risks......................................................................................................................................................................................................................................66

7.2.3. Structural Risks....................................................................................................................................................................................................................................66

7.2.4. Environmental Risks..........................................................................................................................................................................................................................66

7.3. Monitoring and Baseline Data Required....................................................................................................................................................................................67

7.4. Assessment of GIZ WTO/EIF-SP Strategy.................................................................................................................................................................................68

7.5. Recommendations.................................................................................................................................................................................................................................68

7.5.1. Information Gaps and Monitoring...............................................................................................................................................................................................68

7.5.2. Orientation to a Successful Poverty reduction...................................................................................................................................................................68

7.5.3. Stakeholder Management................................................................................................................................................................................................................68

7.5.4. Structure...................................................................................................................................................................................................................................................69

7.5.5. GIZ WTO/EIF-SP Programme Philosophy and Capabilities..........................................................................................................................................69

ANNEX..........................................................................................................................................................................................70Annex 1: List of Acronyms...................................................................................................................................................................................................................................70

Annex 2: Table of Figures.....................................................................................................................................................................................................................................72

Annex 3: List of MDG Indicators.......................................................................................................................................................................................................................73

Annex 4: Chapter 7 of the NTIS – Medicinal Herbs and Essential Oils.........................................................................................................................................75

Annex 5: Action Plan of the MAPs Sector proposed and elaborated by the Project Advisory Group of GIZ/WTO/EIF-SP..................................77

Annex 6: Results Chain Graph – Supporting Nepal’s implementation of its WTO commitments and the Enhanced Integrated Framework (WTO/EIF-SP) (June, 2011)....................................................................................................................................................................................80

Annex 7: List of Interview Partners.................................................................................................................................................................................................................82

Annex 7: References................................................................................................................................................................................................................................................82

In 2004 Nepal became the 147th member of the World Trade Organization (WTO). Despite weak insti-tutional capacities, limited technical know-how and financial resources, Nepal was able to negotiate a fairly respectable accession package. For Nepal to benefit fully from existing and new market access oppor-tunities coming with WTO membership, it is not only pivotal to work towards an enabling regulatory environment for producers and exporters, but also to strengthen the relatively weak supply capacity of Nepal’s potential export sectors through combined Government of Nepal (GoN) and development partner efforts.

To that effect, GoN and its respective trade-related implementation structures within the Enhanced Inte-grated Framework (EIF) are increasingly tasked with mobilizing trade-related technical assistance (TRTA) and Aid for Trade (AfT) to be provided by multilateral and bilateral donors, and with managing and coordinating such activities effectively and efficiently. To facilitate this, in 2010 the Nepal Trade Integra-tion Strategy (NTIS) was developed jointly by the Ministry of Commerce and Supplies (MoCS), together with international and bilateral development partners. The NTIS charts a possible course of action for the development of Nepal’s export sector over the next five years, together with recommended capacity development actions and selected short- to medium-term priorities that are supportive of trade-induced inclusive growth.

Nepal’s accession to the WTO in 2004 offers significant opportunities for the country to foster trade for development and improve the investment climate and good trade governance. During the process of acces-sion Nepal has however also entered into significant obligations when it committed to comply with WTO rules and commitments, to adjust its laws and to create and strengthen the necessary institutions. Moreo-ver, for Nepal to benefit fully from existing and new market access opportunities coming with WTO membership, it needs to strengthen the relatively weak supply capacity of its potential export sectors.

Therefore, both Nepal’s WTO membership as well as the EIF/NTIS have so far, not been used as an effec-tive lever to enhance the competitiveness of the private sector by promoting substantive regulatory reform and strengthened supply capacities of potential export sectors (core problem).

By accepting to act as EIF Donor Facilitator in Nepal until 2012 and potentially beyond, Germany has made a strong commitment to support GoN in its efforts to implement the EIF and the NTIS. The GIZ WTO/EIF-SP’s objective is to improve capacities of the Nepalese Government to enhance the business environment by strategically using and implementing WTO commitments and the EIF. Its activities focus on four main areas of support:

1. strengthening capacity of WTO related agencies in Nepal to implement WTO rules and commit-ments (TRIPS, TBT);

2. fostering effective coordination between the public sector and the business community;

3. strengthening capacity of private sector and service providing organizations to upgrade selected value chains by introducing new marketing strategies, such as certification, trademarks or geographical indica-tions and

4. supporting GoN in mobilising funds for projects implementing NTIS and in their management and overall coordination. The modes of delivery include short and long term advisory services, studies, trainings, workshops, coaching, information dissemination and local subsidies to support civil society and sector associations. The target group includes owners and employees of Small and Medium Enter-prises (SME), suppliers and producers in selected value chains, including women and possibly traditional knowledge-holding local groups that benefit from the enhanced business environment and better trade opportunities. The measures target the entire country.

As part of these activities, GIZ WTO/EIF-SP works jointly with GoN, the private sector and national and international agencies on improving the regulatory framework and increasing supply capacities that allow exporters from selected value chains to make more profits with their products (indirect results). This report focuses on the potential poverty impact of interventions (the “Action Plan”) in the Medicinal and Aromatic Plants (MAPs) value chain that were proposed by the related Project Advisory Group (PAG). The MAPs value chain serves as a pilot for future interventions in other sectors. It is expected that on a highly aggregated impact level this will lead to employment generation, higher incomes and inclusive growth that are prerequisites for poverty reduction. A detailed results chain of the whole GIZ WTO/EIF-SP programme can be found in Annex 6.

1. Introduction and Background1.1. Background

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1.2. The Medicinal and Aromatic Plants Sector (MAPs) The Nepal Trade Integration Strategy 2010 (NTIS 2010) emphasises that poverty reduction will require ‘inclusive growth’, which is predicated in part on improvements in political stability and good governance. But inclusive growth is itself a prerequisite to consolidating peace and security. The NTIS 2010 charts a possible course of action for the development of the country’s export sector over the next three to five years, together with possible capacity development actions and selected short- to medium-term priorities that support inclusive growth.

To meet the above-mentioned objectives, 19 goods and services sectors were identified based on an initial assessment of export performance and some extensive discussions with the Nepalese business community and government officials, including representatives of MoCS. With the exception of health and education services, the identified sectors have either medium or high export potential or medium or high socio-eco-nomic impact or both.

Among those sectors are also Medicinal and Aromatic Plants (MAPs). The Himalayan use of medicinal and aromatic plants has directly contrib-uted to the livelihoods of people in Nepal’s mountainous areas for many centuries. Nepal’s biodiversity exists due to its unique climatic conditions, and many isolated topographical locations that host around 7,000 species of plants. About 1,800 species are currently in use for the production of Ayurvedic, Unani, and Siddha medicines and also for essential oils. A recent report counted 701 species of medicinal plants in Nepal. At present, the processing of MAPs is limited to the distillation of essential oils. The major part of collected plants is exported to India in raw form. A smaller part is processed into essential oils or used in the manufacturing of traditional Ayurvedic medicines. Essential oils are exported to overseas markets and then used in the manufacturing of cosmetics, perfumes, and pharmaceuticals. Local production of such items for export is very limited. At present, two regions (Mid-Western and Far-Western) contribute together more than 85% of the total collection of herbs in Nepal. Both these regions are also significantly affected by poverty, as Figure 4 on page 21 shows.

The sector has the potential to contribute more than to poverty alleviation alone as it provides employment in remote areas where the harvest takes place. There is a surging global market and growing consumers’ preferences for natural food and natural health care and herbal products.

More than 95% of commercially used herbs are wild, organic and natural. In general, herbs collectors are using traditional knowledge for pre- and post-harvesting operations and processing. There is scope for reducing wastage and improving quality through proper training and the introduction of information management systems.

As the analysis by the Geneva-based International Trade Center (ITC) showed, MAPs and essential oils have medium export potential, but high socioeconomic impact. The assessment is based on the products’ export potential as well as their socio-economic impacts, the current export performance, the conditions of markets in Nepal and abroad, Nepal’s access to international markets, domestic supply conditions as well as the expected impact on employment.

With an ever increasing number of supportive donors and environment conscious customers who have a preference for organic and herbal based products the MAPs and essential oils sector has a significant growth potential even against the background of problems on the technical level and in trade. The sector has the potential to benefit Nepal further due to a number of other factors:

• potential to expand production;

• availability of collectors and intermediary workers in wild herbs and organized human resources for production of essential oils;

• proactive policies, directives and regulations; and

• organic certification from internationally recognized organizations of different countries such as ECOCERT, NASAA, IFEAT, EFFEO etc.

Various measures have been suggested to further promote the export of MAPs and essential oils, e.g. to improve production technologies, market access and the products themselves. Al- though Nepal’s export of MAPs in value terms is not that substantial when compared to that of the top 10 exporters in this sector, there is ample room for further growth. The Mirror data available from Trade Map shows that Nepal exported about US$3 million worth of MAPs to the world in 2008. According to TEPC, in 2009, exports were about US$9.8 million, which fell to about US$6 million in 2010. Singapore, which did not featurein the top 10 export destinations in 2008, became the largest export destination for Nepal in 2009 and third largest in 2010. But in volume terms, India has always been the largest im- porter of MAPs exported from Nepal. In 2009, exports of MAPs from Nepal to India and Singapore were 4,950,679 kg and 206 kg respectively and in 2010 the figures were 6,641,877 kg and 117 kg respectively.

Three South Asian countries featuring in the list of top 10 export destinations for Nepal in 2009 and 2010 indicate that there is scope to expand regional trade in MAPs in South Asia, too. The total import of MAPs was worth about US$528,000 in 2009 and about US$1 million in 2010. Therefore, Nepal has a positive trade balance in MAPs.

Photo: Himadri Palikhe

1.3. Basic Structures and PIA’s Role in the Procedure

Export Value of Medicinal Herbs and Essential Oils, 2005 - 2009 (US$1,000)

As part of GIZ WTO/WIF-SP’s support for selected value chains (see above), it plans activities in two of the 19 NTIS sectors: silver jewel-lery and MAPs. The intention is to strengthen capacities of private sector actors and service providing organizations in order to upgrade selected value chains through new marketing strategies (e.g. by being able to use certifications, trademarks or geographical indications) and to foster effective coordination between public sector and the business community.

To ensure that the measures in the MAPs sector supported by the Min-istry of Commerce and Supplies and project are based on the real needs of the stakeholders, a Project Advisory Group (PAG) was established, where the public sector and the business community as well as repre-sentatives of associations of the poorer parts of the target group are involved. Thus, representatives of more or less the entire Value Chain of the MAPs Sector were addressed according to the information and knowledge available at the moment of creating the PAG.

One of the first and major tasks of the PAG is to develop an Action Plan (AP) for further steps with a high likelihood of success to promote the MAPs sector based on experience and knowledge of the stakehold-ers, information and analysis provided by the NTIS (see Annex 5) and sector-specific studies (e.g. SATWEE’s 2011 study on trade in the MAPs sector). The planned and scheduled sequence of activities is shown in Figure 2.

As shown in the sequences of activities, assessing the poverty orienta-tion is part of developing the Action Plan and also part of the decision making process (step 4). The Poverty Impact Assessment (PIA) thus focuses on the Action Plan developed for the MAPs value chain and is supposed to serve as a basis for decisions by the Government of Nepal (GoN) on the implementation of NTIS in this particular sector. It is envisioned that GoN could apply further PIA studies in some of the other 18 NTIS sectors and other relevant areas. The Action Plan as developed by the PAG (see page 16):

Figure 2 Sequence of activities in the MAPs Value Chain

2005 2006 2007 2008 2009

Medicinal Herbs (1211.90)* 2,143* 1,314* 1,802* 2,991* n/a

Essential Oils (3301) 379 491 586 963 n/a

Note: *Export values above are based on official important statistics from third countries.

The above-mentioned numbers that were collected by SAWTEE were received ambiguously and critically by the Project Advisory Group (PAG). There was no agreement with regards to their validity and it remains difficult to make any statement regarding the overall vol-ume of (exported) medicinal and aromatic plants and essential oils. Because of this, it is also impossible to break down the income gener-ated through MAPs and related to each level in the value chain.

Figure 1 Export value of Medicinal Herbs and Essential Oils, 2005-2009 (US$1,000)

It remains an open question, what the revenues and profit margins on each of those levels are.

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What is PIA? PIA is a harmonized approach to analyse the poverty and distri-butional impacts of policies and programs. PIA was developed by OECD-DAC´s Network on Poverty Reduction (POVNET). It aims at facilitating greater harmonization in donors’ assessment procedures and can be applied by donors or partner countries. It is based on a multi-dimensional defini-tion of poverty. PIA draws mostly on readily available information sources, trying to balance qualita-tive with quantitative information where possible.


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SN Challenge Goal/Activity

COLLECTION AND CULTIVATION + PROCESSING/MANUFACTURING

Collection

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Unsustainable/Haphazard collection of MAPs

Capacitate/strengthen collectors on proper time and sustainable ways of collection

2 Sustainable harvesting method to be introduced and enforced.

3 Promote organic certificate for wild MAPs

4Promote/develop domestication of selected MAPs ensuring affordability for the poor

5Institutional framework to handle collection to marketing aspects of MAPs and Essential oil at local level should be developed using existing channels

6 Resource InventoryPrepare a resource inventory using local knowledge about species, dissemination and capacities

Cultivation

7 Lack of documents on cultivation

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Lack of Research and Development on cultivation

Research and Development on new varieties (Seed, plant material, etc.)

9Promote adaptive research on cultivation including socio-economic questions in regard to using land/land rights to ensure pro poor growth

10 Introduce best variety of MAPs

11Farmers, producers and traders are una-ware of importance of quality production

Awareness raising among farmers on cost and benefit of cultivation

Processing

12Inadequate knowledge on post harvesting management, processing, storage, etc.

Define what level of “processing” is actual processing

13 Promote processing at local level

14 Upgrading technology of distillation unit at local level

Manufacturing

15Manufacturer needs to depend on Indian market for the raw material even though it grows in Nepal

Public Private Partnership (PPP) projects to be developed

• Contract farming

• Vertical linkages

ENVIRONMENT + R & D + DATA VALIDATION + OTHERS

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Collection permit related to IEE/EIA

Below 5 ton, can get IEE from GoN.

For more than that, need EIA.

Policy amendments:

• Up to 10 tons SHP (Sustainable Harvesting Plan) should be approved by DFO

• IEE requirement from 10 tons up to 50 tons

• EIA requirement for more than 50 Tons

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2Lack of sophisticated equipment and trained manpower in labs

Fully equipped DPR lab with trained staff

3No internationally accredited laboratory in MAPs sector

Establishment of accredited lab

4No database for PRA (Pest Risk Assessment)

Develop database on PRA

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Data validation

Develop HS Code to eight digit (currently six digit)

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Representative from DPR at major custom points (6 – 7 points) to ensure proper classification of MAPs and essential oils

Or

Train custom officials themselves

EXPORTS

1Transit permit for the products to be exported in Uttarpradesh and Uttarakhand (India)

Government to government dialogue to be held to respect Indo-Nepal Treaty of Trade which does not have such restrictions

2Multiple taxation imposed by DFO, DDC , Export duty, FUGs, etc.

Single window tax collection system to be adopted

3Hassle during domestic transportation (non-formal fees)

Sealed containerised vehicle system should be introduced nationwide

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Standards and Certification (quality, organic, wild active ingredients)

Analytical lab with quantitative analysis facility to be established

5 Awareness/training on organic farming opportunities

6 Certification for wild harvesting through internationally accredited bodies

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NTBs

(CITIES, SPS, PRA, Heavy Metal Analysis)

Nepal government certificate on CITES has to be recognised

8 Quarantine posts at various custom points have to be established

9Govt. and private labs have to be strengthened in terms of quality of service, human resource, accreditation (govt. to take lead)

10 Market information and market dynamicsEstablish market information service

(To be communicated through radio programs also)

11 Unavailability of market for productsDevelop market linkages for export promotion (also to assist market diversifica-tion for risk minimising)

12Intellectual Property Rights (IPR)

- Traditional knowledge

Access Benefit Sharing

Document traditional knowledge in MAPs. (e.g. India has developed a digital library for their traditional knowledge)

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The objective of the PIA is to analyse the poverty and distributional impacts of the activities listed in the Action Plan for the MAPs Value Chain. It will examine the intended and unintended effects of inter-ventions made in those areas, analyse how the intervention may affect different socio-economic groups in different ways and identify possible risks and constraints that may hinder the different groups from fully benefiting from the project.

The PIA will highlight critical aspects that will help to verify the hypotheses and assumptions with regard to poverty impacts. The iden-tified risks, constraints and possible unintended negative effects will also provide important input for the prioritization of activities.

Specifically, our assessment focused on the following issues:

• To understand the relationship between the intervention and the poverty context of the project regions, dealing specifically with the five dimensions of poverty (economic, human, political; socio-cultural and protection);

• To understand how the target groups can be differentiated into important groups by income, gender, age, land tenure, assets etc.;

• To understand the different interests of stakeholders and their pro-poor agenda and the institutions and rules that influence and are influenced by the project’s interventions;

• To understand primary and secondary effects of the interven-tion through the different transmission channels such as prices,

employment, access, authority, assets, and to understand the interrela-tionship between these transmission channels;

• To assess the qualitative and/or quantitative outcomes for dif-ferent groups;

• To assess the key assumptions and identify potential risks that should be monitored;

• To assess the reliability of data and information used in the PIA process and identify key knowledge gaps;

• To provide a framework for improving baseline data and moni-toring of the impact hypotheses during implementation;

• To recommend possible improvements in the project’s interven-tions aimed at increasing its pro-poor impact and mitigating possible negative impacts on the MAPs Sector.

The recommendations that will be drawn from the PIA results should help to improve the project’s poverty focus and reduce or mitigate risks and constraints. Furthermore, the PIA provides information that could help in formulating recommendations for future poverty focused mon-itoring and evaluation systems.

It is foreseen that the government partner will also oversee the implemen-tation of the recommendation of the PIA and actively lead PIA processes in future. An overview of the PIA Process as it was realized is given below.

Figure 3 PIA process overview

Method Initiation Phase

• A two-day workshop was held on June 21 and 22, 2011, at which a core group and two additional members of the MoCS were introduced to the PIA method. The group of analysts was formed and organized in a modular manner, assigned to each of the five PIA modules.

• Members of the Project Advisory Group (PAG) of the MAPs sector attended a meeting to define the project’s Action Plan on June 23, 2011. This meeting was used also as the kick-off event for the PIA process.

Analytic Phase

• Documents were gathered and preparations were made for the initial module-by-module PIA analysis.

• Interviews were held with selected stakeholders in Kathmandu and Charikot.

• Regular group meetings were held to clarify roles and responsibilities and modify the process as required.

• Several sessions were held in Charikot on July 3 and 4, 2011 to share the initial findings and obtain reactions and contributions from the project team.

Consolidation and Finalization Phase

• A presentation of the preliminary findings of the PIA, the assessment of the Action Plan in the light of its poverty impact as well as recommendations were given on the occasion of the 3rd PAG Meeting held in Kathmandu July 6, 2011.

• The preliminary report was sent to GIZ on July 19, 2011.

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2. General Poverty Situation in Nepal and National PoliciesThis module is intended to provide basic information on the circumstances within which the proposed intervention is to be introduced. It will also provide an assessment of the relevance of the intervention for the national strategies and plans, e.g. poverty reduction strategies.

2.1. General Poverty Situation in Nepal The poverty reduction efforts in Nepal have brought about significant improvements in the economic and social indicators in the past two decades. According to the World Bank report (2005), the poverty rates declined across all of Nepal’s devel-opment regions and ecological belts: headcount poverty rate declined from 42% to 31% between 1995 and 2004, urban poverty declined from 22% to 10%, rural poverty declined from 43% to 35% (although it remains higher than in urban areas). Likewise, the standard of living improved alongside an increase in agricultural wages, ownership of durables and a rise in the actual consumption of ‘luxury’ foods. Moreover there was a decline in the proportion of households reporting inadequate food consumption and ratings in self-assessments about the adequacy of housing, clothing, health care and children’s schooling improved, as well.

But despite some progress in recent decades, Nepal remains one of the poorest countries in the world with widespread poverty across the country. It ranks as the twelfth poorest country in the world. Nepal was one of the countries in Asia that recorded a significant improvement in the Human Development Index (HDI) over the decade but still the level of indica-tors is low, even by South Asian standards. The level of absolute poverty is among the highest in Asia and the majority of the population depends on subsistence farming for their livelihoods. The national poverty line, has been set at about Nepa-lese Rupees (NPR) 4,400 (ca. 44 EUR) per capita per annum and based on calorie intake, housing, and various non-food standards. As against the target of reducing the population below the poverty line to 24% during the plan period, it could be reduced to 25.4%. Despite few positive achievements, the structural reform and development efforts have not been rural income-oriented, poverty has still been pervasive, employment and income generating programs have not been effective in the rural areas, infrastructure development has not been widespread, economic growth has not been balanced across the regions, and the distribution of economic welfare has not been equitable.

The progress review of the MDGs done in 2009/10 and therefore the latest available data has shown that even in the adverse situation remarkable achievements have been made with a 11% reduction in poverty between 1996 and 2004 (from 42 to 31) and a 6% reduction (from 31 to 25.4) between 2005 and 2009 (Proportion of population below $1 (PPP) per day).

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Figure 4 Human poverty status by district (UN Nepal information portal, 2004)

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Poverty in Nepal is a complex phenomenon. In terms of geography (see figure next page) and culture, Nepal is diverse and large dispari-ties exist across geographical regions, and between excluded and less excluded groups. The people who tend to remain poor are households of agricultural wage earners, the landless or those with small land hold-ings, illiterate household heads, and the ones living in large house-holds (with seven or more members). In terms of different castes and ethnic groups, Hill and Terai Dalits represent the poorest segment of the population, despite a decline in poverty from 58% to 46%. Child malnutrition and maternal mortality remain high and the prospects of achieving these Millennium Development Goals are unclear.

According to a report published by UNDP, poverty has persisted in Nepal because of low economic growth, inadequate social and eco-nomic infrastructure, relatively high population growth, low access to

land, low access to non-agricultural income, and deep-rooted cultural and historical practices like the caste system, for instance. In addition, institutional weaknesses at both the government (central and local) and non-government level and the general lack of good governance are major reasons for the perpetuation of poverty.

Notwithstanding the declining rates of urban poverty, the problem still remains widespread with indicators suggesting a rise in rural poverty. Most households have little or no access to basic social services such as primary health care, education, clean drinking water and sanitation services. Rural poor people generally have large families, are landless or have very small landholdings, with high rates of illiteracy and are also concentrated in specific ethnic, caste and minority groups, particularly those of the lowest caste (Dalits) and indigenous peoples (Janajatis).

2.2. Specific Observations on Political, Socio-Cultural and Protective Dimensions of PovertyAs mentioned above, there are a number of factors that contribute to the chronic poverty in Nepal. One of the principal ones is the difficult terrain of Nepal which affects the political, socio-cultural and protec-tive dimensions of poverty. The rugged terrain makes it difficult to promote economic activities and deliver services. Many areas are physi-cally isolated, with poor communication and transport infrastructure and are ecologically fragile. Population growth leads to unsustainable pressure on natural resources, including overgrazing and deforestation. Likewise, erosion in the uplands causes floods in the lowlands that can devastate crops.

Some experts claim that poverty in Nepal is the result of violence and the fact that its leaders have not been able to bring about major social transformations and social reforms. Some argue that abject poverty and rampant social discrimination in the country led to the decade long armed conflict (see figure next page). In spite of the signing of the peace accord in 2006 and peace process efforts, the political situation in the country remains relatively stable, yet dismal. Frequent changes in the political set-up severely hamper the country’s development and hence, the poverty alleviation efforts have not been optimal (PAF 2010).

Social discrimination plays a huge role in keeping the most disad-vantaged people in rural Nepal poor and marginalized. The excluded groups include smallholder farmers, landless labourers, lower castes, indigenous people and women. Caste-based discrimination is officially

illegal in Nepal but is in fact widespread, especially in rural areas (see figure next page). Members of the lowest caste (Dalits, or untoucha-bles) are the most disadvantaged group. Many lower caste Dalits work as wage labourers for higher-caste farmers.

In the patriarchal and patrilineal society of Nepal, there is also a wide gap between women and men when it comes to access to health, nutri-tion, education and participation in decision-making. Infant mortality is much higher for girls, and illiteracy (see figure next page) is far more common among women than men. Many rural women live in severe poverty, without any means of improving conditions for themselves and their families. Within households women often have less to eat than men. Insufficient calorie intake can lead to chronic malnutrition in infants they feed.

Lack of economic opportunities (see figure next page) and the recent conflict result in many of the most productive members of households migrate and leave the villages. As a result more and more women have been heading households alone and taking on the burden of running the rural economy. Women constitute more than 60% of the agricul-tural labour force but have little access to land, production technology and training. Poor families are often forced to send their children to work rather than to school. In this way the poverty is perpetuated into the next generation. It is estimated that about one quarter of the chil-dren in Nepal are engaged in some kind of family or wage labour.

The agricultural sector employs about 66% of Nepal’s population and contributes about 36% to GDP. Community forests play an important role in covering people’s basic needs and granting and rural population access to natural resources, such as MAPs. The National Forestry Plan from 1976 has paved the way for the promotion of community forestry in Nepal. It created an environment that was conducive for people's participation in forestry activities. From 1991, after the reintroduction of multiparty democracy, the government pursued a policy of handing over forest resources directly to the villagers so that they could use it for rural development. The Department of Forests started to identify villagers and organized them in forest user groups. Forest regulation was further detailed in 1995 with policies on protection, management and utilization of community forests. It prioritized the utilization of

fuel wood and timber in order to meet the needs of rural households. About 60% of the national forests (3.9 million hectares) are desig-nated to be handed over to communities (Anonymous, 1991). So far, 662,000 hectares of national forest have been handed over to forest user groups (FUG), encompassing more than one million households. More than 16,000 such groups are formally entrusted with forest management responsibilities, including the authority to fix prices of the forest products generated from the community forest. The high-est numbers of FUGs (73.3%) are concentrated in the Middle Hills, followed by High Mountain (18.6%) and least in the Terai and Inner Terai (8.1%).

2.3. Production of MAPs, Role of Community Forest User Groups (CFUGs) and Household Situation

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The average size of a community forest is 82.7 hectares, with 116 house-holds as beneficiaries. That means that 0.713 ha of land is available for each household, which complements these households’ farmland and other assets. Community forestry has opened an avenue for the eman-cipation of women and poor. The overall participation of women in FUG committees is around 25% throughout the country. The average annual income of a community forest is NRs 17,887 while the average expenditure is NPR 12,038. The FUGs are authorised to take decisions regarding the use of their funds. The estimated total annual income from the sale of products from community forests is NPR 246 million while the expenditures are NPR 166 million. Almost one-fourth of such expenditures can be related to poverty alleviation measures in the communities (Sharma 2010 [DoF database 2004]).

Figure 5 Land use by ecological belts

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Figure 6 Number of beneficiary households by ecological belts

Over the narrow time-span, community forestry has become extensive but qualitative achievements are more in the focus than quantitative ones: intensive and sustainable management, democratization, social justice, equity and proper institutionalization being the essences.

The government is blamed for neglecting the commercial aspects of community forestry as the rural people are increasingly engaged in off-farm cash earning activities. Yet, such aspects are not recognized in the community forestry policies. The latter focuses largely on meeting the rural people's subsistence needs for fodder, firewood, and timber and the rural agrarian societies in Nepal, are rapidly transforming under market influences. The subsistence economy is thus transformed into an open market economy. The community forest income contributes to the farm-household income of poor and rich households respectively but there is still a need to strengthen the linkages of poor households with community forest.

The objective of Community forestry has gradually evolved from pro-ducing forest products to a process of social mobilization for com-munity development. But, community forestry is often subjected to criticism due to the dominance of elite and high caste individuals in the user groups, threatening its potential as a viable development strat-egy for securing the basic needs. The interests of women and mar-ginalized people living below the poverty-line need to be emphasized and safeguarded both in the constitution and operational plan of the community forests. For each household a female and a male member should be registered as members of the group and have equal rights and obligations. Moreover, the issue of exclusion and discrimination is to be properly addressed.

The disparity in land ownership, especially of low land for paddy cul-tivation, influences farm income accrued through cereals. 24.44% of households are landless. The highest percentage of households are mar-ginal cultivators (27.59%) followed by the small cultivators (20.15%). According to Anuja Raj Sharma (2010), the poor and “rich”1 house-holds receive 17 and 58% of income of cereal crops respectively. The rich also reap more than four-fifth of the income from animal hus-bandry. Nearly, one-third of monthly income of the rich households is in the form of salary from formal sector employment. Wage earning is a crucial source of supplementary income for the poor households. The income from private trees and community forest is almost equally shared in absolute terms, nevertheless these sources have are signifi-cant for poor households. Community forest income in terms of sub-sistence uses of forest products and wage earnings in forestry works accounts 12 and 3% of monthly income of poor and rich households respectively. Various sources of farm-household income by wealth class are summarized in the following table.

Households Farm Income Off-Farm Income Total

Cereals Trees Animals Forest SalarySelf-

employmentWage-earning

Poorest 395 157 112 166 783 1349 349 3311

Middle 568 235 118 143 1267 1492 224 4047

Rich 1298 267 1491 194 2374 1404 32 7058

Average 754 219 574 168 1474 1415 202 4805

Figure 7 Average monthly farm household income by source of income

63% of the households have access to community forests of less than 100 hectares, which constitute only 29% of the total area of commu-nity forest. The remaining 37% of the households have community forests larger than 100 hectares and such forests constitute 71% of the total area of the community forest. This suggests high inequal-ity in the handing over of community forests to the local FUGs and consequently the Gini coefficient of community forests distribution is 0.445. The larger-sized community forests are in the hand of fewer households in comparison to smaller-sized community forests in which a larger number of households are accommodated in the FUG (see fig-ure 8, page 24).

Community forestry income constitutes only about 4% of the total households incomes (some studies also mention amounts of 7 to 13%). The households in the lowest income group (<NPR 50,000) nearly cap-ture 29% of the total available income from community forestry while the households in the second highest income group (>NPR 100,000) receive some 40% of the total forestry income. The group in the highest income bracket (>NRs 150,000) only receives 5%. Community forestry provides additional income opportunities and a diversification of income sources for those households with otherwise limited income opportuni-ties. On average, households receive an additional income of NPR 3,955 thanks to community forestry.

Community forestry contributes to reducing income inequality and thus helps to reduce the Gini coefficient from 0.265 to 0.242. This observation is based on a case study where the poor and deprived groups of the society are included in the community forestry process.

Pokharel (2007) has also carried out a study to find out who benefits from pro-poor programs of Nepal’s community forestry. The study shows that the generated income through community forestry is being distributed across different development areas. The pro-poor programs receive one-third of the annual investment of the community forestry user groups, which is significant. Although the investment in pro-poor programs has increased significantly, poor households are not benefit-ing from it as expected. Non-poor are benefiting more from the flow of loan – a major activity of pro-poor programs – suggesting that a pro-poor program is not really pro-poor.

1 Households considered “rich” are those earning NPR 10,000 or more per month.

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Figure 8 Calculation of Gini coefficient for CF distribution by size of forests

2.4. Existing National Strategies and Programs relevant to the Intervention

Any meaningful poverty reduction approach in Nepal must address the following three key concerns: firstly the emphasis should be placed on improving the poor’s’ access to resources, and in particular, those resources most vital to reducing poverty. Secondly, institutional constraints that currently bar the poor from accessing these resources should be removed and finally, strong economic growth that outpaces population growth is necessary.

The Three Year Interim Plan has given priority to the reconstruction and rehabilitation of physical infra-structures, relief to conflict affected people, rehabilitation, social integration and adaptation, and inclusion of deprived communities, regions, and gender in all the structures, sectors and processes of development.

The main source of income in the rural areas is remittances, which is 18% of total GDP. In spite of the transitional situation, political instability and other challenges and compulsions, Nepal is likely to achieve six MDGs out of eight by 2015.

The Three-Year Plan (2009/10 - 2012/13) has a vision to create a prosperous, peaceful and just Nepal through transforming Nepal from a least developed country (LDC) into a developing nation within a two-decade period. One of the chief goals of the plan is to reduce poverty to 21% according to the definition used by the MDG progress review, and achieve MDGs by 2015 through sustainable economic growth, generating digni-fied and gainful employment opportunities, reducing economic inequalities, achieving regional balances, and eliminating social exclusion.

In order to fulfil the goals, the GoN has agreed on six strategies, which are as follows:

1. To achieve employment-centric, poverty alleviation-oriented, sustainable and broad-based eco-nomic growth with the joint efforts of the government, private and community/cooperatives sectors: The emphasis will be on enhancing the employment situation with the joint efforts of the government, pri-vate and community/cooperative in all the sectors of the economy to create internal and external employment opportunities and to improve living standard of the people living below the poverty line such that the eco-nomic growth rate will be made sustainable, broad-based and poverty alleviation-oriented by giving priority to the development of more employment generating sectors. To achieve such economic growth, agriculture, tourism, industry and trade sectors will be taken as prime sectors.

2. To develop physical infrastructure to support both the future federal structure of the nation and regional economic development: The decision to adopt a decentralized governance system with federal structures has already been made by transferring existing centralized unitary governance system in the

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country. Therefore, while developing physical infrastructure support to economic growth of probable states and promoting regional balance will also be considered.

3. To emphasize inclusive and equitable development to achieve sustainable peace: Inclusive and equitable development strategies will be adopted to uplift the living standard of the excluded groups, Dalit, Madhesi, Adibasi/Janajati, women, people with disabilities and remote geographical areas and poor people of the various regions of the country from the prevailing discriminatory practices in the society. The strategy will be adopted to create a supportive environment for investments in the country, emphasizing inclusive and equitable devel-opment and supporting lasting peace.

4. To contribute to socioeconomic and social services: Strategies will be adopted to speed up the development momentum by strength-ening economic and social services that need to be provided to the people of the country by the government, private, cooperative and nongovernmental organizations and through transformation of exist-ing economic and social situations.

5. To make development works result-oriented through ensuring governance and effective service delivery: Strategies will be adopted

to make development result-oriented by emphasizing people's partici-pation, transparency, accountability and the fight against corruption through the establishment of a rules-based state that fosters good gov-ernance as well as improves effectiveness of service delivery of the gov-ernment and the private sector.

6. To strengthen economic growth and stability by developing private and community/cooperative sectors and mainstreaming industrialization, trade and service sector in the national develop-ment endeavours: Special attention will be given in the development of private and community/cooperative sectors in the country. With the support of these sectors industrialization, trade and service sector will be mainstreamed in the national development endeavours. Developing exportable goods and services that have comparative advantage will reduce the trade deficits. The opportunities created by the bilateral, regional and multilateral trading systems will be utilized optimally. To this end, emphasis will be given to industrialization, maximum mobi-lization and use of internal and external resources, development of pri-vate, community and cooperative sectors and promotion of exportable goods and services in partnership with the private, community, coop-erative and public sectors.

2.5. Current Policies on MAPs and Essential OilsThe currently valid Three-Year Plan Approach Paper (2010–2013) includes some elements for the development of the MAPs sector. One of its working policies is to encourage programs that foster the pro-duction and processing of MAPs through public-community-private partnerships and to push policies to develop special zones for the pro-duction and management of different species of MAPs. In the context of Nepal's WTO accession in 2004, there is need to identify and pro-mote sectors in which the country has relative comparative advantages. Being a biodiversity rich country, one such sector is MAPs. With that in view and also because the existing Forest Act and Rules did not have clear-cut provisions for the conservation and utilization of herbs and NTFPs, the Herbs and NTFP Development Policy (HNDP) was introduced in 2004. The long-term vision of HNDP is the conserva-tion of herbs and NTFPs so as to contribute to the national economy,

and hence introduce Nepal as a huge depository of herbs and NTFPs at the international level by 2020. In order to increase the competitive-ness of herbs and NTFPS, HNDP aims at:

• encouraging the commercial cultivation of valuable herbs and NTFPs;

• helping to add value to herbs and NTFPs through processing;

• improving access to capital;

• developing infrastructure;

• acquiring technical knowledge and skills.

2.6. The Intervention and how it aligns with National StrategiesAfter the restoration of multi-party democracy in the country, Nepal undertook unilateral trade liberalization as part of its broader reform program, which continued during the 1990s and early 2000s. During its WTO accession, Nepal has made a number of commitments. While it has fulfilled some of those commitments, it has yet to fulfil a number of others. Various agreements of the WTO have special provisions for least-developed countries (LDC) like Nepal. So far, Nepal has not yet been able to reap tangible benefits from its WTO membership.

There are multiple challenges in the trade sector of Nepal including lack of proper infrastructure; lack of capital and most importantly, trade has not yet been mainstreamed into the country’s overall develop-ment strategy. One of the efforts made to mainstream trade in Nepal's development was conducting the Nepal Trade and Competitiveness Study, also called the Diagnostic Trade Integration Strategy (DTIS), in 2003 as part of the Integrated Framework (IF) for Trade Related Technical Assistance. The study was intended to help policy makers, researchers, civil society stakeholders and Nepal’s development part-ners to identify policy and technical assistance requirements to make

the economy more competitive and enabling it to receive greater ben-efits from world trade.

The recommendations were never implemented for a number of reasons and thus, the Ministry of Commerce and Supplies (MoCS) developed jointly with its partners the Nepal Trade Integration Strat-egy (NTIS) 2010. Based on an assessment of export performance and some extensive discussions with the Nepali business community and government officials, NTIS 2010 has chosen 19 goods and service sec-tors with a certain export potential.

For Nepal to benefit fully from existing and new market access oppor-tunities coming with WTO membership, it is pivotal to work towards an enabling regulatory environment for producers and exporters and to strengthen the relatively weak supply capacity of Nepal’s potential export sectors through combined Government of Nepal (GoN) and development partner efforts. To that effect, GoN and its respective trade-related implementation structures are tasked with increasingly mobilising trade-related technical assistance (TRTA) and Aid for Trade

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(AfT) to be provided by multilateral and bilateral donors, and with managing and coordinating such activities effectively and efficiently. The NTIS – as mentioned above – is a central building block of GoN’s efforts to coordinate and manage TRTA and AfT within the Enhanced Integrated Framework (EIF).

In November 2010, GoN and development partners officially appointed Germany as the EIF Donor Facilitator (DF) whose princi-pal role is to work closely with the Nepalese EIF Focal Point and the National Implementation Unit (NIU) at MoCS, to facilitate donor coordination and donor-partner dialogue on trade and AfT issues. This project was restructured in early 2011 from its original objective of supporting WTO accession of Nepal only to also include the support to EIF.

Among other activities, the project intends to strengthen the capacity of private sector and service providing organizations to upgrade the MAPs and silver jewellery value chains by introducing new market-ing strategies, such as certification, trademarks or geographical indica-tions and supporting MoCS and GoN in mobilising funds for projects implementation. The target group includes owners and employees of Small and Medium Enterprise (SME), suppliers and producers,

including women and possibly traditional knowledge-holding local groups that benefit from the enhanced business environment and bet-ter trade opportunities.

As explained in the introduction of this report, a Project Advisory Group (PAG) was established, where the public sector and the busi-ness community are involved. The PAG’s first and main task of was to develop an Action Plan to promote the MAPs sector.

The project objectives of the MAPs intervention of the WTO/EIF-SP are in line with the national strategies of the country that envision Nepal to be a prosperous and peaceful country and will lead the trans-formation from a least developed country (LDC) into a developing nation within a two-decade period. It concentrates not only on socio-economic and social services (S4), inclusive and equitable development (S3), infrastructure development (S2) but is also employment-centric, poverty alleviation oriented, sustainable (S1), and result-oriented (S5) with a focus on private and community/cooperative sectors and helps to mainstream trade and service sector in the national development endeavours (S6). Likewise, it is also in line with the various other national instruments for poverty alleviation in the forestry and MAPs sectors.

Photo: Himadri Palikhe

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Issue Observations“Information source/ quality of Information(high, medium, low)”

General poverty situa-tion (in country, province etc.)

• 12th poorest country in the world

• Depending on the definition used, up to 40% of people live below the poverty line

• Poverty reduction efforts last two decades in FY95/96 and FY03/04 lead to a reduction of poverty incidence

• High complexity of poverty and strong influence through geography a¬nd culture

• Poorest are illiterate, landless smallholder farmers, landless labourers, lower castes, indigenous people and women

• Hill and Terai Dalits are most affected by poverty

• Lack of infrastructure (social and economic), low economic growth, high population growth, deep-rooted cultural and historical practices

• Online sources, secondary data

• Medium,

• High

Specific observations on political, socio-cultural and protective dimen-sions of poverty

• geographical terrain: isolation, poor communication, no infrastruc-ture, ecologically fragile

• poverty due to violence and poor leadership (no social transfor-mation) vs. abject poverty and rampant social discrimination led to conflict

• politically stable, yet poverty efforts have not yielded much results

• Terai belt unrest; insecurity

• lack of social security system

• social discrimination reinforces rural poverty and marginalization

• patriarchal and patrilineal, women subjugated

• infant mortality higher for girls

• illiteracy is far higher among women than men

• lack of economic opportunities and the recent conflict led to migration (males), female-headed households, particularly in rural, hilly and mountainous areas


• Medium,

• High

2.7. PIA Matrix 1: General Poverty Situation and Relevance to National Strategies and Plans

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Existing national strate-gies (programmes) rel-evant to the intervention

• National Forestry Plan, 1976

• Seventh Five-year Plan (1985–1990)

• Master Plan for Forestry Sector (MPFS), 1989

• Eighth Five-year Plan (1992–1997)

• Ninth Five-year Plan (1997–2002)

• Forestry Sector Policy, 2000

• Tenth Five-year Plan (2002–2007), PRSP: MAPs and essential oils

• Three-year Interim Plan (2007–2010)

• Three-year Plan Approach Paper (2010–2013): development of MAPs

• Herbs and NTFP Development Policy (HNDP), 2004


• Medium,

• High

Short description of the intervention and how it aligns to national strate-gies

• 2004-Nepal WTO member

• No tangible benefits from WTO membership including those spe-cific to LDCs

• Challenges in the trade sector: trade not mainstreamed in devel-opment: NTIS 2010

• NTIS 2010: 19 goods and services with export potential including MAPs

• GIZ supported WTO-EIF SP has 5 outputs: develop Action Plan in the MAPs sector

• target group: Small and Medium Enterprises (SMEs), suppliers and producers in selected value chains

• Community Forest User Groups pro-poor and poverty reduction

• MAPs: preference for organic/herbal, production extension pros-pects, availability of collectors and intermediary workers, proactive policies and regulations and the organic certification

• MAPs in line with pro-poor national strategies of the country, MDG 1 and MDG 8, and national instruments in the forestry sector and MAPs for poverty alleviation


• Medium,

• High

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Photo: Thomas Probst

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3. Stakeholders and Institutional AnalysisIn order to assess the potential poverty impacts of an intervention, a clear understanding of the stakeholders and institutions that influ-ence the implementation and that are influenced by the intervention is necessary. Stakeholders consist of agencies, organizations, groups or individuals who have a direct or indirect interest in the development intervention or its evaluation. Target groups are the specific individu-als or organizations for whose benefit the development intervention is undertaken. Target groups are thus a key stakeholder group that need to be considered.

Three types of stakeholders can be distinguished:

i) Those who influence the intervention.

ii) Those who are influenced by the intervention/target group of the intervention.

iii) Intermediary target group.

Stakeholders may be affected positively or negatively by the interven-tion, or may be able to influence the intervention in a positive or nega-tive way. A stakeholder analysis tests assumptions about the interests of these social actors and their possible responses to the intervention.

The group of stakeholders and institutions that implement the pro-posed measures or at least have some sort of influence on it is quite large and includes players from the government, private sector as well as the donor community. The Ministry of Commerce and Supplies (MoCS) – as the main implementing agency of the NTIS – is obviously at the core of all activities related to trade. Additionally the Depart-ment of Agriculture of the Ministry of Agriculture and Coopera-tives (MoAC/DoA) and the Department of Customs of the Ministry of Finance (MoF/DoC) are important too for the formulation of new policies and the implementation of most of the measures of the pro-posed Action Plan (e.g. introduction of eight digit HS code, having DPR representatives at custom points, etc.). Research related activities furthermore depend on the Nepal Academy of Science and Technol-ogy (NAST). FNCCI’s Agriculture Enterprise Center (AEC) is the key stakeholder and representative of the private sector but it has also a strong connection with the grass root level. In addition to the above-mentioned actors from the public and private sectors there are also a number of additional institutions that are relevant for the implemen-tation of the PAG’s Action Plan, like for instance the International Centre for Integrated Mountain Development (ICIMOD), an organisation financially supported by regional member countries and non-regional sponsors such as Germany. (I)NGO’s relevant are Asia Network for Sustainable Agriculture and Bioresources (ANSAB) and the International Development Enterprises Nepal (IDE).

A second group of stakeholders are those who are influenced by the Action Plan. Measures proposed target mainly cooperatives, CFUGs and entrepreneurs working in the MAPs value chain. Should certain measures, as the proposed sealed container transportation system be introduced, this might also have a (negative) impact on so-called infor-mal tax collectors. Furthermore, traders will most likely be influenced by some of the measures, e.g. the introduction of a market informa-tion system, but they might as well also be part of the target group if

for instance trade between Nepal and its single-most important export market India should be made easier in the future, they would surely profit.

Figure 9. Overview of stakeholders and institutions and their role in the intervention

A third group of stakeholders and institutions are the ones that both have an influence on the interventions and are at the same time influ-enced by it. This group consists of the Department of Plant resources of the Ministry of Forest and Soil Conservation (MoFSC/DPR), which is supposed to be significantly strengthened by a number of measures of the Action Plan, e.g. the establishment of a fully equipped lab with trained employees jointly with the Nepal Bureau of Stand-ards and Metrology (NBSM) but at the same it will also have a strong influence on the implementation of some of the other proposed meas-ures (e.g. development of a Pest Risk Assessment database, the place-ment of DPR officials at major customs points, etc.). Both Jadibuti Association of Nepal (JABAN) and Nepal Herbs and Herbal Prod-uct Association (NEHHPA) will have their role in the implementa-tion of some of the measures and will at the same time benefit from improvements in the MAPs value chain.

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3.1. Overview of Stakeholders and Institutions relevant for the MAPs Value Chain

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3.3. Smallholder MAPs Farmers, Community Forest User Groups (CFUG) Members and export-oriented companiesCommunity forests play an important role in supplying the basic needs of Nepalese people. It is estimated that as many as 300,000 families are engaged in medicinal herbs collection in 58 districts. It is also esti-mated that another 100,000 families can easily join the herbs collec-tion jobs when opportunities arise. More than 50% of workers are female. Women are engaged in the collection, cleaning, and grading of herbs. Traditional skills e.g. on species of plants, are passed on to younger generations.

National commitment on poverty reduction demands special pro-grams targeting the poorest households among the Community For-est User Groups (CFUGs). Normally, individuals of the households

are members of the CFUGs and both men and women and also dif-ferent tribes should be equally represented in the CFUGs. Therefore, the Community Forest User Groups represent the lower end of the Medicinal and Aromatic Plants Value Chain, hence they are the key target group of the proposed interventions. According to the Federa-tion of Community Forest Users (FECOFUN), about 30-40% of the CFUGs’ income goes to the poorest households in the communities (which is slightly more than the 29% indicated by Anuja Raj Sharma in his 2010 study (see also section 2.3. on page 22)). The example of a CFUG in Dolakha district shows, that for instance in 2010 seven of the poorest families received NPR 10,000 per household for two years from the CFUG’s poverty alleviation effort, with which they could

3.2. Poverty Orientation and Influence of Stakeholders and InstitutionsFollowing a number of interviews, phone conversations and extensive desk research, we have grouped the above-mentioned relevant actors on a map with two axes: The X-axis reflecting an organization’s pro-poor agenda and the Y-axis showing their influence on the implementation of the PAG Action Plan. For the former, we applied a scale ranging from “-2” (“highly negative”) to “+2+” (“highly positive”) whereas for the latter the scale begins at “0” (“no influence”) and ends at “+2” (“very strong influence”). There were no actors with a negative poverty agenda.

Figure 10 Mapping of relevant stakeholders regarding their influence on the interventions and pro-poor agenda

We found three clusters of stakeholders and institutions that will be particularly important for a poverty-oriented implementation of the Action Plan. The first group is the one which has a strong influence on the implementation and has a poverty orientation of various degrees. All of the previously identified ministries (i.e. MoF, MoCS, MoAC, MoFSC) and almost all institutions that are related to the government (e.g. NBSM, Federation of VDCs/DDCs) can be found in this group. Whereas some of these units are somehow poverty-oriented – like MoCS and MoFSC for example – others naturally do not focus on poverty that much because they are driven by other objectives (e.g.

MoF or NBSM). It remains to be seen whether the latter can be sensi-tized for poverty-related topics during this project. We found that the only organization that is not related to the government (but has close ties to it) with a similarly strong influence is Jadibuti Association of Nepal.

A second cluster of organizations is the one with a very strong pro-poor agenda. Given they are the main target group of the proposed inter-ventions it is obvious, that CFUGs and Cooperatives have to be part

of this cluster. Inter-national Development Enterprises Nepal also has a very poverty-ori-ented agenda but simi-lar to the CFUGs and Cooperatives its influ-ence is rather limited. More influential insti-tutions in this cluster are FNCCI’s Agricul-ture Enterprise Center and ICIMOD who will both also be instru-mental for the imple-mentation of projects in the MAPs sectors. ICIMOD for instance, strictly focuses its activ-ities on mountainous regions, which are the poorest in Nepal.

The third group that is relevant here consists of those institutions that do not only have a strong influence on the success of planned meas-ures in this sector but also have a strong poverty-orientation in their organizations’ DNA. While Federation of community Forestry Users, Nepal (FECOFUN) – as the representative body of the main target group (CFUGs) surely exerts strong political power, Micro-Enterprise Development Programme as a government-related body with UNDP funding has deep-enough pockets to fund activities, the political sup-port required and is through its affiliation with UNDP by definition strongly interested in pro-poor economic development. These are the partners with which the PAG should seek cooperation in the first place.

32

buy cattle or do other substantive business (see also interview on page 36). However, there remain doubts whether community forests are more beneficial for the wealthier among the rural population. Broader consultations and interactions among the stakeholders are required for proper institutionalization and fiscal decentralization of community forestry. It remains also unclear what the revenues and profit margins on each of the Value Chain levels are.

Figure 11 Value Chain Map of Medicinal and Aromatic Plants sector

The Federation of community Forestry Users, Nepal (FECOFUN) is a formal network of Community Forest User Groups (FUGs) from all over Nepal. FECOFUN emerged from the idea that forest users from all parts of the country should be linked in order to strengthen the role of users in policy-making processes. Since its inception in July 1995, FECOFUN has grown into a social movement organization with about 8.5 million people represented all of whom are forest users. It is a national federation of forest users across Nepal dedicated to pro-moting and protecting users' rights. The memberships of FECOFUN

are categorized into two types according to user groups' involvement in natural resource management and use rights. Forest User Groups (FUGs) organized under the Forest Act-1993 of Nepal (provision relat-ing to formation of CFUG) are eligible to become general members of this federation and any other user group based on forest resources at grassroots level are qualified to become elementary member. Of more than 16,000 Community Forestry Users Groups (CFUGs) and other Community Based Forest Management Groups (such as leasehold forestry groups, religious forestry groups, buffer zone and traditional forest management groups) in Nepal, approximately 13,000 are affili-ated with FECOFUN. The mission of FECOFUN is to promote and protect the rights of community forest users through capacity strength-ening, economic empowerment, sustainable resource management, technical support, advocacy and lobbying, policy development, and national and international networking and to uphold the values of inclusive democracy, gender balance, and social justice.

There are also a number of privately owned companies that are active in the production and sale of MAPs and related products. GIZ has worked with nine of them that were deemed capable of exporting MAPs and related products to European and other overseas markets. In the run up to the 2010 organic trade fair “Biofach” in Nurnberg, Germany, GIZ’s Capacity Building for Biotrade (CBBT) project prepared four companies for their active participation at the trade fair (Chaudhary Biosys, Natural Resources Industries, Himalayan Biotrade, Shambala Herbal and Aromatic Industry) and another five were invited as visitors (Gorkha Exim, Herbs Production and Processing Company, Unique Himalayan Herbs International, K.L. Dugar Group, Satya Interna-tional), with the idea of preparing them for their own participation in the coming years. At the trade fair the participating companies were able to make contact with some 170 potential clients and they could also close new contracts. If the 9 companies follow through on the agreed marketing strategy and capacity building measures, they should be in a position to benefit from the expected increase in MAPs produc-tion as currently the availability of harvested products is the major constraint for their further growth in international markets.

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Federation of Community Forestry Users (FECOFUN) The Federation of community Forestry Users, Nepal (FECOFUN) is a formal network of Community Forest User Groups (FUGs) from all over Nepal. FECOFUN emerged from the idea that forest users from all parts of the country should be linked in order to strengthen the role of users in policy-making processes. Since its incep-tion in July 1995, FECOFUN has grown into a social movement organization with about 8.5 million people represented all of whom are forest users. It is a national federation of forest users across Nepal dedicated to promoting and protecting users’ rights. The memberships of FECOFUN are categorized into two types according to user groups’ involvement in natural resource management and use rights. Forest User Groups (FUGs) organized under the Forest Act 1993 of Nepal (provision relating to formation of CFUG) are eligible to become general members of this federation and any other user group based on forest resources at grassroots level are qualified to become elementary member. Of more than 16,000 Community Forestry Users Groups (CFUGs) and other Community Based Forest Management Groups (such as leasehold forestry groups, religious forestry groups, buffer zone and traditional forest management groups) in Nepal, approximately 13,000 are affiliated with FECOFUN. The mission of FECOFUN is to promote and protect the rights of community forest users through capacity strengthening, economic empowerment, sustainable resource management, technical support, advocacy and lobbying, policy development, and national and international networking and to uphold the values of inclusive democracy, gender balance, and social justice.


Excerpt of interview with harvesters of Wintergreen (Gaultheria fragrantissima Wall.; family: Ericaceae)

Interview conducted by Jannu Sherpa and Thomas Jenisch, 3 July 2011 in Kharidhunga, Dolakha district.

Sherpa/Jenisch: At which time of the year is Wintergreen harvested?

Harvesters: Wintergreen is usually harvested during the six months period between June and November. The collectors from the Community Forest Users Groups (CFUGs) gather 50-75 kilograms of Wintergreen per day, and make NPR 2 per kilogram.

What is the quantity of Wintergreen essential oil produced each year?

In a year, 400 kgs of Wintergreen essential oil is produced.

Who are you selling the produce to?

The oil is sold to the Deudhunga Multipurpose Cooperative.

How much are you paid by the cooperative for a 1 litre of Wintergreen essential oil?

Usually, 260-300 kgs of raw leaves yield one litre of the oil. The cooperative pays us NPR 900 per litre. Our price is fixed beforehand. This year, we are getting paid NPR. 900 per litre. However, we have spoken for a raise in the price.

Who does the cooperative sell to?

We assume that the cooperative sells to other bigger companies or exports it.

Do you have any information about the price?

No, we do not have any idea about the price that they sell at.

Is the Wintergreen cultivated or do you find it in the wild?

Ample amount of Wintergreen can be found in the wild and hence there is no need to cultivate it. Furthermore, if one were to cultivate it, the additional cost for land and labour would negatively impact the cost-benefit ratio.

Who are the members of the CFUG? Do you do the collection and processing under the CFUGs? How many CFUGs are there?

All the individuals in each household are members of CFUGs. Yes, the collection and processing is done under these CFUGs. There are four CFUGs, namely, Shikharchuli, Milkharka, Siddhidevi and Dudhila, and seven distillation units under the Deodhunga Cooperative. The CFUGs receive royalty from the Cooperative. The processing, however, is done on private land by members of the CFUGs.

Are the members of this private initiative the same as those of the CFUGs?

Yes, members of this private initiative are the same as those of the CFUGs. If one can invest, one can start a distillation unit.

36

Who are the collectors?

With the younger men opting for better paid jobs in road construction, working as labourers, or leaving for the capital or even the Middle Eastern countries, the collectors basically comprise of household women and the older men. Children are also involved during holidays -weekends and school vacations.

Who are the collectors paid by, and are these collectors also members of the CFUGs?

The local traders mobilize the collectors and processors; the processors pay the collectors on a monthly basis irrespective of whether the oil is sold or not. Everybody is a member of the CFUG, including the collectors.

Is this the main source of income or are there other activities?

No, this is not the main source of income. The collection of MAPs lasts for only six months in a year. Thus, we rely more on agriculture. Moreover, this year the machine that is being used for distillation is not in a good condition. The metal has become thinner because of which it gets heated very fast and cools at the same speed. This hinders the – processing of oil. If the machine is good, then this distillation process could be one of the main sources of income too.

Who provided the machine and who paid for it?

The machine was paid for and provided by the Deodhunga Cooperative.

What will you do now? Will you buy a new machine?

We have to buy a new machine, however we cannot afford it due to financial constraints.

According to the Federation of Community Forest Users, Nepal (FECOFUN), 30-40% of the income benefit goes to the poorest. Is this true?

Yes, the poorest are provided with monetary support by the cooperative every two years. In 2010, seven families received NPR 10,000 per household for two years, with which they could buy cattle or do other substantive business.

Are they under the CFUGs?

Yes, they all are members of the CFUGs.

Tell us something about the collectors?

The collectors are all indigenous people. They get up early and finish their household chores, after which, at around 7-8 am, they go to the forest to collect the leaves. Sometimes they have to travel far, and by the time they get back home, it is late afternoon. These people then go to collect grass for their livestock and return home in the evening.

Do you have money at all times? Is there any food shortage?

When agriculture is not good, men in the village often go to the capital or other places in search of work. Even though alternate source of income may exist, there is never any savings, and what is earned is usually used to purchase food and other basic necessities.

37

3.4. Participation and Planning Procedures The private sector, especially the traders, exporters, local processing companies and retailers, are the driving force among the stakeholders of a value chain. Their cooperation is needed to improve the supply chain. There are many enterprises, producers (smallholders and commercial), processors, policy-makers, institutions (municipal/district assemblies) and development partners (NGOs) who influence the value chain and the project intervention.

Most of them are intermediaries that have significantly contributed to foster the dialogue during the accession process; they are therefore part of the Project Advisory Group (PAG). Nevertheless, it seems that the “voices of the poorest” are still underrepresented in this group, which is the “think tank” of the project.

The target group as it was defined in GIZ’s project proposal includes owners and employees of Small and Medium Enterprise (SME), sup-pliers and producers in selected value chains, including women and possibly traditional knowledge-holding local groups that benefit from the enhanced business environment and better trade opportunities.

Fortunately, with functional structures like CFUGs and FECOFUN in place and other supporting organisations like MEDEP and ICI-MOD, there is a great opportunity for GIZ and the PAG to cooperate closely with the target group.


38

3.5. PIA Matrix 2: Stakeholder and Institution Analysis

Stake-holders (target groups/inter-mediaries),

institutions

Main tasks of stakeholder/ main role of institution

Interests and pro-poor agenda,

aspects that might prevent them having a

pro-poor agenda

Rating of their

pro-poor

agenda (+/-)

Mitigat-ing and/or re-

inforcing measures

Information source and

-quality

(1) (2) (3) (4) (5) (6)

Government Agencies

Department of Forest (DoF)

• Protection, management and utilization of forests and conser-vation of natural resources.

• Planning, implementation and coordination of forestry develop-ment activities

• Support and facilitate the Min-istry on policy formulation

• Increase people’s participation in forest management; particularly in plantation and resource conser-vation in forests.

• Revenue generation from forest products.

• Improve the livelihood of the community through implementation of effective forest.

Pro-Poor orienta-tion is given through governmental strategy which is amended and complemented by strategies of the Ministry of Forestry

+

Interview, Website,

good quality

Department of Plant Resources (DPR)

• Conducting and providing serv-ices in the field of research and development of plant resources in Nepal

• Resource survey and collection of plant materials

• Chemical and biological researches for the utilization of medicinal, aromatic and other valuable plants.

• Biotechnology research, improvement and propagation of plants of economic value.

• Ago-technology development on plants to provide services to the farmers on techniques of com-mercial cultivation of important medicinal and economic plants.

• Conducting trainings on resource Conservation, man-agement and provide garden services.*

Pro-Poor orienta-tion is given through governmental strategy which is amended and complemented by strategies of the Ministry of Forestry

+

Interview, Website,

good quality

39

Nepal Bureau of Standards and Metrology (NBSM)

Formulating draft Standards; - grant the license to use NS Mark on industrial products incompli-ance with relevant Nepal Stand-ards as approved by NCS - provide testing facilities, calibration and laboratory accreditation serv-ices;- - carry out the activities on information dissemination, training and international relation on Standardization, Metrology and Quality Control, Certification as well as Laboratory Accreditation;

No pro-poor agenda recognizable

0

Trade and Export Promotion Center (TEPC)

• Advise the GoN in formulating policies for the development and expansion of trade and export.

• Contribute to strengthening the national economy by developing and expanding trade and export of the country.

• Act as information pool by collecting, disseminating and publishing useful trade-related information.

• Study and identify the problems of foreign trade and advise the GoN with appropriate measures.

• Assist in market test of exportable products.

• Organize buyers/seller meet and conduct training seminar and workshops.

• Simplify the procedures relat-ing quality control, insurance and transport and enhance support services for export transaction.

TEPC is a governmen-tal organisation and therefore acts in the frame of the Nepalese Trade Policy in which Poverty alleviation is a declared objective. No specific gender, ethnicity and caste related goals, although many implemented activities

Support in achieving the goal of poverty alleviation through the development of rural economy by enhancing internal and external market for agro-based and other products.

+Interview, Mails, very high quality of information

Ministry of Finance /Department of Customs (MoF/DoC)

MoF: to help maintain macroeco-nomic stability, through effec-tive and efficient utilization of available financial resources and enhance domestic revenue base. DoC promoting and facilitating legitimate trade, protection of society and collecting the revenue.


0 Website

Ministry of Agriculture and Cooperatives /Department of Agricutlure (MoAC/DoA)

Improve the standard of living of people through sustainable agricultural growth by transform-ing the subsistence farming systen to a competitive and commercial-ized one.

MoAC: they seek to reduce poverty through increased agricul-tural production and productivity.

DoA ; they seek to support poverty alleviation by increas-ing the employ-ment opportunity for small, marginalized and women farmers through agricultural programmes.

+ Interview, Website

40

National Association of Village Development Committees in Nepal (NAVIN)

An umbrella organization to represent and provide support to Nepal’s 3915 VDCs:

• Lobby/Advocacy and promo-tion of democratic, functioning and inclusive local self-governance system and structure

• Representation of VDCs in national and sub-national level, protection and expansion of VDCs rights and interests

• Organizational development, strengthening, and mobilization of all VDCs in line with the principles and practices of local self-govern-ance and multiparty democracy

Pro-poor agenda is anchored -The Forest Act has so far not recognised the role of DDCs and VDCs in land use and development plan. There should be a mandatory provision of consulting the local entities (VDCs/DDCs).

++ Website

Nepal Academy of Science and Technology (NAST)

i) Advancement of science and technology for all round develop-ment of the nation.

ii) Preservation and further mod-ernization of indigenous technology

iii) promotion of research in sci-ence and technology.

iv) Identification and facilitation of appropriate technology transfer.


0 Website

Private Sector Actors

Agro Enterprise Center (AEC)/FNCCI

Policy Advocacy, Value Chain Promotion in inclusive business approach, Collaborating with government and donor agen-cies in public private program promotion and implementation on MAPs, Private sector, Coopera-tive, Association and small and marginal farmer groups capacity enhancement

Strongly interested in poverty reduction and sees MAPs promo-tion as one of the major tool to address poverty. Working in enterprise develop-ment activities through community and private sector partnership. Involved in pro - poor driven projects implementation.

++Interviews, Good quality

Jadibuti Association of Nepal (JABAN)

JABAN is a traders and export-ers/importers association based in Nepalgunj with 1400 members nationwide. Main objectives are: to increase export of Non-Timber Forest Products (NTFP) (especially to India).With CFUGs: Product identification and market linkage.

Pro-poor agenda is not clearly identifiable

0Interview, Good quality

Nepal Herbs and Herbal Product Association (NEHHPA)

National level association of producers’ group and community enterprises by expanding Nepal Herbs and Herbal Products Asso-ciation (NEHHPA)

• Improve the collaboration and coordination between the sup-porting organizations and enhance their linkages with SMFEs and CFUGs.

In build-up phase; significant pro-poor agenda

++

Website,

(FAO Project),

41

Private CompaniesPrivately owned companies who produce and export MAPs and related products

No significant pro-poor agenda

0 GIZ CBBT Project

Federation of Community Forest Users Nepal (FECOCUN)

• promote cooperation and mutual good-will among CFUGs.

• coordinate with Government agencies and NGOs to establish networks among interest-groups

• to keep continued campaign, to ensure inclusiveness, social jus-tice, good governance and deepen democracy in C FUGs

• encourage proper utiliza-tion and equitable distribution of resources.

• sensitize the concerned author-ity for removing practical defaults of Government policies and laws,

• create awareness on existing forestry policy and laws among CFUGs

• support income generation activities

• provide legal and technical consultation, and other essential services to FUG based coopera-tives and companies

• support FUGs for promotion and expansion of forest certifica-tion to meet the requirements of world-wide markets of forest products.

• programs related to basic services like education, health, drinking water scheme, commu-nication, transportation, etc., at community level.

• promotional actions like stud-ies, research, reflections, dia-logues, analysis, etc.

• create awareness among user groups about endangered species and importance of bio-diversity

FECOFUN is the nation-wide asso-ciation of more than 16.000 CFUGs. It is the voice of the CFUG and so far the voice of the poorest in the MAPs Value Chain. FECOFUN has a strong and clear mandate in poverty reduction.

++

Interviews,

Brochures, web-site, good quality

Community Forest Groups (CFUG) /Cooperatives

More than one million households are organized in CFUG, which are formally entrusted with forest management responsibilities, including the authority to fix price of the forest products generated from the community forest.

Strongest pro-poor agenda through the membership of the poor (collectors and smallholder

++Interviews, good quality

42

International donors and NGOs

International Centre for Integrated Mountain Development (ICIMOD)

• assist mountain people to understand the globalization and climate changes, adapt to them, and make the most of new opportunities, while addressing upstream-downstream issues.

• support regional trans boundary

• programs through partnership with regional partner institutions, facilitate the exchange of experi-ence, and serve as a regional knowledge hub.

• strengthen networking among regional and global centres of excellence.

• develop an economically and environmentally sound mountain ecosystem to improve the living standards of mountain populations and to sustain vital ecosystem services for the billions of people living downstream now, and for the future.

The livelihoods of people living in moun-tainous regions are at the focus of ICIMOD’s activities. ICIMOD tries to support farmers/harvesters in MAPs, particularly in high value - low volume niche markets where it is hard to achieve economies of scale. Has also a strong focus on using biodi-versity as advantage for farmers.

ICIMOD addresses the workload of women e.g. by reducing the number of people needed to work in the cooperatives.

++Financial stability

Inteview, high quality of information

International Development Enterprises Nepal (IDE)

In Nepal IDE is active in the development of vegetable and essential oils value chains. It works through the development of market committees, collection centers, processing plants, linking of traders and farmers, etc. Goal is to provide producers/farmers with market access

IDE is implementing 10 projects in more than 24 districts cover-ing the plains, hills and moun-tains. IDE Nepal’s programs have reached more than 170,000 farmers helping them generate an average net additional income of $200 per year.

IDE’s mission is to create income opportunities for poor rural households. It sees itself as a social enterprise and seeks for marked-based solutions.IDE is funded through donations.

Gender: Gender aspects are respected in IDE’s projects and monitored on a district and national level

++Inteview, high quality of information

Micro-Enterprise Development Programme (MEDEP)

Support Nepal’s poverty reduction efforts, by identifying the poor-est of the poor and working with them in the context of creating Microenterprises. Target groups: Women, Dalit, Muslim and other Madhesi groups.

MEDEP is active in the MAPs sector through its activities in “Timber and Non Timber Forestry Products’

Target: poor and hard-core poor

++Interview, Good quality

43

Asia Network for Sustainable Agriculture and Bio-resources (ANSAB)

Implement community based, enterprise oriented solutions that conserve biodiversity and improve the livelihoods of the poorest of the poor while bolstering national economic development and addressing climate change.

Pro-poor Ecnomic Development Programmes:

• Entrepreneurship development

• Enterprise planning and development

• Business develop-ment service

• value chain pro-motion and market linkages

• product certification

++ Website

KEY Matrix 2:Strength/

direction impact

++ + 0 - --

highly positive positive not significant negative highly negative

44


45

4. Analysis of Transmission Channels and ResultsModule 3 provides an overview of the links between the project inter-ventions and the outcomes for the target group by means of trans-mission channels. Thus, transmission channels describe the routes by which the interventions affect and influence the stakeholders. Seven transmission channels have been identified:

• Prices;

• Employment;

• Productivity;

• Access;

• Assets;

• Authority;

• Transfers.

4.1. The Price ChannelNepal’s share in the world market is around 0.1-0.2% for medicinal herbs. Medicinal plants are mostly exported in raw form. A smaller part of the harvest is processed into essential oils. Exports are highly dynamic. The world market for both medicinal herbs and essential oils is growing fast, with annual growth rates of 13-18% (2004-08) for major products. Generally, the outlook for international trade in natural products is very positive. The domestic consumption of MAPs Products in Nepal itself is very low and so far negligible.

According to industry sources, the main barrier to additional exports of essential oils is the lack of supplies of high quality, whereas there is sufficient demand from international buyers for such products. Information from industry sources and data provided by the Trade and Export Promotion Centre suggest that exports of medicinal herbs, which go mainly to India, could be as high as 10 million per year. Add-ing an estimated export value of US$1 million for exports of essential oils, this study uses US$11 million for the calculation of indicators for the sector. A separate estimate cited in ITC (2007a) suggests that overall exports of non-timber forest products (NTFP), of which herbs are a substantial part in Nepal, could be as high as US$35 million. This shows that there are definitely opportunities for local producers and collectors. The better use of well-structured CFUGs and Farmer Cooperative Associations may offer the opportunity to gain bargaining power through bulk selling that should result in price increases. It can be assumed that wages increase due to the expansion of collection, farm and processing activities.

According to FECOFUN, about 30 to 35% of the annual income of a CFUG reaches their poorest members. This is achieved through their work as collectors (paid per weight of collected MAPs species) or by redistribution of the income (see Interview on page 36). As men-tioned earlier, the poorer households generally profit relatively more from community forestry activities than those in higher income brack-ets. Thus, increased activities by CFUGs in the MAPs sector should eventually be more beneficial for the lowest income groups than to the highest income group (also see page 23). But until now this does not stop migration to cities or abroad and the depopulation of rural areas (see chapter 4.7.).

The main risk for collectors is, if resource availability will decrease and hence collectors can collect less than before, thus reducing their

income. It remains an open question, why between 2004 and 2008 the production of MAPs in Nepal decreased. It could be because of climatic conditions but it can also be a result of overharvesting, at least nearby the villages where collectors live.

One risk could be that if the cooperatives are not well organized, there may be negative results due to misappropriation of income through mismanagement, which is according to the Department of Plant Resources one of the most serious problems. “More cost effectiveness”, as it is suggested in the Action Plan for the MAPs Sector, should not mean to react by offering lower wage rates. This would worsen the living conditions of the most vulnerable people in the medium and long term.

Furthermore, an increase in household income through the promotion of economic activity in the MAPs sector also brings along other risks that have to be taken into account by any project in this promising sector:

• The volatility of demand and prices in (export) markets could nega-tively impact MAPs farmers;

• If stakeholders do not act in the interest of the Action Plan;

• If there is a lack of funding for the implementation of the Action Plan (no donors);

• If there is a lack of ownership, responsibility and continuity among implementing partners and stakeholders;

• Insufficient or even negative change of regulation, legislation;

• Lack of sustainable harvesting methods/overharvesting; and

• Lack of supply of harvested MAPs for actors higher in the value chain.

Higher reliability of product quality due to improved testing (labo-ratories) and certification (e.g. organic, wild) should allow harvesters and farmers to fetch higher prices on international markets.

46

4.2. The Employment Channel

As mentioned before, it is estimated that as many as 300,000 families are engaged in medicinal herbs collection in 58 districts. It is also esti-mated that another 100,000 families can easily join the herbs collection jobs when opportunities arise. Therefore, the sector has the potential to contribute more to poverty alleviation as it provides employment in remote areas, although these workers will need training.

The PAG also suggests to promote processing at local level and to upgrade the technology of distillation units at the local level. However, the potential of creating jobs on higher levels of the value chain, like processing, is relatively small given its low labour intensity if compared to the very laborious steps of collecting harvesting, cultivating (where

applicable) and semi-processing. Most of the involved firms are trading companies. Generally, employment effects depend on the extended use of natural herbs and the overall growth of domestication of MAPs. The technology choice will determine the employment effects and demand of unskilled labour. Small farmers may produce MAPs in their own land. But, availability and access of cultivable land is limited – espe-cially in the western and far-western region.

Since the availability of natural resources has decreased, a collector can only collect smaller amounts than before, hence needs a higher salary. Also, labour is scarce due to migration; hence the price of labour has increased further.

4.3. The Productivity Channel

Estimates based on collection permits issued in 58 districts (out of the 75 districts in Nepal) by the Department of Forestry indicate that annually about 50,000 MT of MAPs could be harvested. Out of this, currently only 20-30% are collected, processed, and traded. In 2007/08, a total of NPR 29 million was recorded as royalties from the collection of 3,381 MT. Attaria and Tanakpur in the Far-Western Region (30%), Nepalgunj in the Mid-Western Region (50%), Butwal in the Western Region (4%), Trishuli and Kathmandu in the Central Region (9%), and Basantpur in the Eastern Region (7%) are the collec-tion and marketing centres for herbs in Nepal. There has been a drastic reduction in herbs collection against an annual average of 8,400 MT for the previous five years (2002/03 to 2006/07). Reasons for this dras-tic reduction are not clear. However, the situation has recently been changing with exports of 5,540 MT of 40 species of crude herbs valued at NPR 400 million. Data from Nepalgunj customs in 2008/09 indi-cates that total exports could have surged to about 10,000 MT. More than 90% of the collected crude herbs are exported to India without processing and some of the restricted species are smuggled. Informal and unrecorded exports to India from porous borders are also thought to be of a substantial amount. Promoting local processing would allow the Nepalese MAPs sector to keep a bigger part of the value chain at the local level.

More than 95% of commercialized herbs are wild, organic, and nat-ural. In general, herbs collectors are using traditional knowledge for pre- and post-harvesting operations and processing. There is scope for reducing wastage and improving quality through proper training and the use of information management systems. The Department of Plant Resources (DPR) has also started developing quality standards for medicinal herbs. The DPR also provides services for testing and certifying the quality and composition of essential oils.

In the case of collecting wild herbs, it can be assumed that the nega-tive environmental impact is minimal, except for the possible harm to endangered species and if harvesting methods are unsustainable. Due to the risk of overharvesting suppliers of MAPs cannot guarantee deliv-eries over multi-year periods.

With less than 5% of commercially used MAPs being cultivated, culti-vation of herbs plays an insignificant role in Nepal. Therefore, there are two ways to increase production of MAPs: First: The improvement of the existing production system – based on the collection of wild herbs. Secondly: The introduction of new cultivation systems for MAPs. Most of the proposed interventions of the PAG intend to increase MAPs production through cultivation.

Proposed measures are for example to produce MAPs through contract farming. And indeed, it can be assumed that contract farming and sub-sidies can help resource poor farmers to enter the business. But there is currently no contract-farming act in Nepal and whether contract farm-ing would be successful remains questionable. Again, cultivation is a new way of producing MAPs for Nepal and has to be analysed and well prepared to avoid disadvantages for the poor, which are mainly collec-tors (heads of poor households, small farmers, women of poor house-holds and children in poor households). The proposal of the PAG to raise the awareness among farmers on cost and benefit of cultivation is thus not likely to have any significant impact in the short to mid-term, let alone any noteworthy poverty impact.

Cultivation is routinely promoted as the preferred (and sometimes only) solution to the problem of dwindling supplies and over-harvesting of wild MAPs, resulting in investments in research and cultivation efforts. Much less emphasis is being put on the development and promotion of sustainable wild collection practices. It might be expected that infor-mation about the cultivation of medicinal and aromatic plants would be readily accessible given the strong interest in this topic and the fact that this method is widely distributed. However, this is not the case and information about cultivation of MAPs is similarly scattered, rel-evant for specific regions only and after all inconclusive.

Nevertheless, in the international context cultivation is contributing an increasing share - possibly the majority - of pharmaceutical com-pounds extracted from Taxus, Dioscorea and Rauvolfia species. How-ever, it appears that cultivation almost limited to these species. For instance, Diosgenin can be extracted from a number of Dioscorea spe-cies. In the case of Dioscorea deltoidea there is conflicting information regarding the scale of cultivation. Although it appears to be relatively easy to cultivate this species, cultivation was said to be unprofitable for farmers owing to the long growing time (several years) between plant-ing and commercial harvest. At least one pharmaceutical company was said to be growing this species, but also several non-native Dioscorea species, on a commercial basis in India. Cultivation in India, and pos-sibly imports of diosgenin from Dioscorea cultivated in China and Mexico, seems likely to be linked to reduced demand for wild-collected D. deltoidea from Nepal. It seems likely that the role of cultivation in meeting pharmaceutical demand will continue to grow in the future, including through the selection of cultivars producing higher concen-trations of the target compounds.

Other technologies, e.g. plant cell fermentation technology, which is being used to produce paclitaxel (drug used in cancer therapy), are

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also likely to replace wild collection as a source of pharmaceutical products. Cultivation is also increasing for species used primarily in traditional medicine. Although it was considered difficult to cultivate until recently, owing to it being a parasite, an estimated 60-70% of Cistanche deserticola is now said to come from the wild, with cultiva-tion increasing rapidly and considered as likely to overtake wild collec-tion. Efforts to cultivate Pterocarpus santalinus have been underway since at least the mid-1960s, however information varies with regard to whether cultivation efforts have been successful, and it appears that the majority of demand is still met with wild-collected materials. Cultiva-tion is in the early stages of development for Picrorhiza kurrooa and Nardostachys grandiflora, although it appears to hold strong promise for Picrorhiza kurrooa (Mulligan and Crofton 2008).

However, cultivation of MAPs and/or contract farming requires land ownership. Collectors, as the poorest group in the value chain of MAPs, do not normally own land. Therefore, they are usually excluded or not directly involved and whether an increase of the income can be materialized will depend on a number of factors, which are not directly related to the market for MAPs. A conceivable way to overcome the barriers to profit from the cultivation of MAPs would be to act through CFUGs. The use of land can be shared by small farmers and collectors and it could be promoted and steered by the government and local authorities. An example are Bangladesh’s Chittagong Hills, where the collection and the production of MAPs is mainly based on community activities and an enabling environment is provided through the local and national governments (IUCN Bangladesh 2005).

As shown above, there is a high potential of unused wild and natural (and so far organic) herbs. In general, in the short and mid-term the “collecting system” should be preferred to increase MAPs production. The production system is known and based on traditional knowledge, the CFUGs, commonly used land and forests. Particularly small land-owners and poor village member are benefitting from this system.

Crude herbs are being processed with rudimentary techniques. Essen-tial oils are produced through a distillation process. According to a SAWTEE report (2011) there is need to introduce more modern and functional processing systems (see also interview page 36), as also the PAG suggests. Critical pressure through carbon dioxide and fractional distillation are the most modern technologies that could be introduced for oil extraction. It can be assumed that this processing system can-not be financed by the CFUGs itself, but probably by cooperatives or private companies.

Out of about 300 firms, only 28 are directly involved in processing, while the others focus on trading alone. Nepal Herbs and Herbal Prod-ucts Association (NEHHPA) has 33 members and Jadi Buti, the Herbs Entrepreneurs Association of Nepal (JABAN) has 225 members (of which only three are involved in essential oil processing).

There is a lack of scientific knowledge and consciousness on the conser-vation, propagation, and cultivation of herbs. Further investments in technology, training on product development, production and market-ing are needed to achieve diversification and growth.

4.4. The Access ChannelThis channel covers people’s access to private and public goods and services. This may involve financial (e.g. establishing credit services) services or improvements to the quality of the goods and services available.

Increased access to markets is positive in the short to medium term for national processing companies or cooperatives. But, as mentioned above, only 28 companies and cooperatives are directly involved in the processing. The exact number of employees in these companies is not known. However, it can be assumed that the increased access to markets will have positive secondary effects on employment and on prices for MAPs. There are studies available that show to what extent these companies can fulfil WTO criteria and standards (see the last paragraph in this chapter). This is also the reason, why these companies and more generally all members of MAPs Value Chain should be part of the PAG.

Existing markets are fragile, as changes in quality, prices and currency rates may easily diminish competitiveness on the world market and result in a withdrawal of international traders. National processing schemes and the proposal of the PAG to promote processing at the local level and to upgrade the technology of distillation units would contribute to reducing vulnerability to these international fluctuations also, especially for small processing companies.

The availability of information on prices and quality requirements will contribute to improved living conditions. Access to income dur-ing the lean season will improve the livelihood strategies of vulnerable poor farmers.

Access to credit could help farmers acquire farm inputs and hire labour. For example, when intensifying the agricultural practices in MAPs pro-duction, more financing is needed for seedlings, pesticides and quality management equipment. None of the interventions proposed by the

PAG foresees this way of support, but it could be taken into account for further planning procedures.

Nevertheless, to intensify the Research on producing clones of impor-tant MAPs, as it is proposed in the Action Plan of the PAG, might prove to be difficult. This does not exclude R&D in breeding to improve varieties. If such research also includes socio-economic ques-tions with regard to land rights and land use rights (as proposed by the PAG), it can also be ensured that growth is pro poor. Until now, even chemical analysis in order to standardise products and processes and to ensure high quality and good prices in international are not available in Nepal. That is why the improvement of labs is one of the proposed interventions of the PAG). Genetic labs need even a much higher standard and are more costly. Another aspect is the (lack of ) qualifica-tion of staff. In recent years, a bigger problem than equipping labs has been to attract qualified staff that accepts the given working conditions in public services (see next paragraph). However, there is a significant risk that improved varieties, also for breeding, as result of such efforts might not be affordable for the poor. Seedlings of improved varieties are costly. Furthermore, for the majority of the involved people in the MAPs sector cultivation of MAPs is still a new field of activities.

Anyway, the public service will benefit through an improved laboratory system thanks to better equipment made available. But, as was men-tioned by PAG members, the major challenge for governmental labs is to gain and retain qualified staff. Moreover the private sector should also be involved in research activities in relevant areas.

Market Access Conditions (Tariffs and NTBs): Tariffs are relatively low for such products in major markets. However, numerous other barriers exist, such as Sanitary and Phytosanitary (requirements). Requirements are stricter for final products (such as cosmetic products, perfumes, pharmaceuticals) than for the raw materials which Nepal currently exports; so, adding further value to raw materials could be

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challenging in terms of fulfilling standards of destination markets. Industry sources suggest that there have not been significant problems in fulfilling exports requirements, with one exception being difficulties in obtaining ‘organic product’ certification.

Wild collection for commercial trade, whether domestic or interna-tional, is highly regulated, generally involving a series of collection and transport permits. However, implementation of collection and trade controls is generally ineffective and so far not acceptable for an ‘organic certification’. Controls appear to be minimal and/or ineffective in Nepal, better in India but with illegal collection believed to be wide-spread. Exports of wild MAPs are also highly regulated and in some cases even banned, particularly if in unprocessed form. International trade controls by both exporting and importing countries are also required by the species list of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) Appendix II.

Thus far, CITES controls have had little impact on the trade, both because the main products in trade for some species, e.g. extracts, are

not currently covered by the Convention, and because implementation efforts have been very limited. Of particular concern is the apparent lack of CITES implementation for imports into India, a key con-sumer, with imports apparently not required to be accompanied by CITES export permits or recorded in India’s CITES annual reports. The February 2006 decision by the Government of India to implement import controls for Rauvolfia spp. and several other species, including agarwood Aquilaria spp. and cacti, indicates a shift towards a more comprehensive CITES implementation in that country. The only major evidence of successful CITES enforcement relates to the trade in Pterocarpus santalinus timber, with numerous seizures reported within India and in destination countries. The failure to implement either wild collection or trade controls seems likely to reflect the sheer enormity and complexity of the medicinal plant collection and trade throughout the region, and the lower importance given to addressing issues of illegal or unsustainable collection of plants. The low level of awareness among enforcement agencies and their personnel is another challenging factor.

History and Status of the Certification Status for MAPs

Kathe (2011) has worked out a description of the recent status of the certification of MAPs which was published in the 14th Newsletter of the Medicinal Plant Specialist Group of the IUCN Species Survival Commission. The following paragraphs are based on this paper and will give an overview about the current status of the certification of MAPs.

In August 2010, the FairWild Foundation published version 2.0 of the FairWild Standard (FairWild 2010a). FairWild originates from an initiative started by the IUCN-SSC Medicinal Plant Specialist Group, WWF, TRAFFIC and the German Federal Agency for Nature Conservation (BfN). These four organizations decided, in 2004, to take action to address the increasing threat to medicinal plant populations world-wide. Very rough estimates show that about 70,000 plant species are used for medicinal and/or aromatic purposes, the majority of which are still collected from the wild. About 15,000 of these species have become threatened in at least parts of their natural habitats (Schippmann et al. 2006). Amongst other factors, habitat destruction through land conversion, unsustainable land management and over-collection contribute to this negative development. As a first step, the International Standard for Sustainable Wild Collection of Medicinal and Aromatic Plants (ISSC-MAP) was developed between 2005 and 2007 (IUCN & MPSG 2007). This standard focused on conservation aspects and ecological parameters that are influenced by wild col-lection and its management. Some basic social and cultural principles and criteria, such as the respect of customary rights, were included from the beginning. Certification was not the main aim of the standard, but one of several options for implementation. Others were resource management guidance for collection managers and companies, influencing private sector good practices and informing the regulatory and legislative processes of countries, states, or other political entities.

In 2007, the Swiss Import Promotion Programme SIPPO (a mandate of the Swiss State Secretariat for Economic Affairs SECO), the Institute for Marketecology (IMO) and Forum Essenzia, which had also been part of the ISSC-MAP development process, decided to widen the scope of application by developing a fair trade standard for the wild collection of plants. Wild collected commodi-ties had been insufficiently covered by other fair trade standards, such as those of the Fairtrade Labelling Organization (FLO) or organic standards for wild collection. The charismatic name of the new standard – and later on also the name of the foundation - combined the core aspects (fair trade and wild collection) into a single, catchy word: FairWild.

The first FairWild certifications started in 2008. After the successful testing and implementation of both ISSC-MAP and FairWild the participating organizations, namely the IUCN-SSC Medicinal Plant Specialist Group, WWF, TRAFFIC, BfN, IMO, SIPPO, Forum Essenzia, the Indian Foundation for Revitalization of Local Health Traditions (FRLHT), and Traditional Medicinals came together in 2009 to discuss potential synergies of the ISSC-MAP and FairWild. It soon became clear that both initiatives would hugely benefit from joining forces. The ultimate advantage: this would offer the chance to develop a true sustainability standard for the wild collection of medicinal plants, but also other plant, lichen and fungi species. Consequently, both initiatives merged in early 2010 under the umbrella of the Swiss FairWild Foundation. The mission of this foundation is “to provide a worldwide framework for implementing a sustainable, fair and value-added management and trading system for wild-collected natural ingredients and products thereof” (FairWild Foundation 2010b).

The integrated FairWild Standard version 2.0 published in August 2010 combines the two original standards (ISSC-MAP and FairWild); the new standard constitutes the FairWild Foundation’s main asset. The foundation offers a comprehensive portfolio

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of services. These range from certification according to FairWild (through accredited third party certification organizations) to pro-viding training to companies and wild collection operators on how to best implement the standard and transform their sourcing prac-tices into sustainable enterprises. Public information and PR as well as advocacy work influencing national and international policy makers to consider the principles of FairWild in guidelines, regula-tions and good practice documents are further key activities and functions of the FairWild Foundation.

Eleven principles form the framework of the new FairWild standard. These principles are further defined by criteria and performance indicators. They provide guidance and set control points on:

1) Ecologically sound collection;

2) Social responsibility of the operation;

3) Economically viable business practices;

4) Respect of customary rights;

5) Fair trade relationships, including the payment of a fair price and a FairWild Premium for social community investment.

The FairWild Foundation and IMO are particularly active in Central Asia and the Caucasus region, where projects on FairWild train-ing and implementation are being carried out together with GIZ and the private sector. Meanwhile, several projects are certified according to FairWild, mostly in East and Southeast Europe. While FairWild implementation has shown, within only about three years, that it is a very valuable and promising tool to make wild col-lection sustainable, there are a number of challenges that will have to be overcome in the future. Of course it is great to have a comprehensive sustainability standard available, but not all opera-tors will be interested in, or have a market for, fair trade products. An operator may fulfill the social responsibility requirements but may not necessarily be able to cover above-market (fair trade) prices and premiums because clients will not pay a higher price if certification does not result in added market value. This poses a hurdle, particularly to small companies that may not have the financial means for extra investment based on ethical principles alone. Standard implementation may meet resistance if wild col-lection is undertaken in a region or a social environment in which a fair trade system cannot reasonably be applied because the poten-tial beneficiaries (collectors, workers) are comparatively rich and further financial support would be perceived as unfair. In such cases, the ecological principles of the FairWild Standard can still be implemented, but certification will currently not be possible because compliance with the entire standard is required. While the uniqueness of FairWild with its exclusive focus on wild collection is an asset highly appreciated by some operators, it can become a disadvantage for companies that manufacture products based on raw material sourced from both wild collection and cultivation (e.g. tea or spice mixtures). Usually, companies prefer to work with as few certification schemes as possible, because each new scheme requires extra capacity and investment. This can be overcome to some degree if FairWild manages to establish cooperation and mutual equivalency agreements with other organizations holding important and meaningful fair trade or ecological sustainability standards. Despite these limitations, FairWild is an interesting and promising initiative that is unique in its combination of care for nature and humans.

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Photo: Julian Tresowski

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4.5. The Assets ChannelImpact on development of disadvantaged regions: Further develop-ment and commercialization of wild as well as cultivated herbs in Nepal has a direct and positive economic impact on the livelihoods of people in the regions where they grow. At present, two regions (Mid-Western and Far-Western) together amount to more than 85% of the total collection of herbs in Nepal (see also Chapter 1). Both regions also face the highest poverty levels in the country.

The Village Development Committees (VDCs)/District Development Committees (DDCs) may benefit slightly in the medium term through an increased production in the MAPs sector. At the political capabil-ity level, the internally generated revenue from this source should be utilized to provide infrastructure to support the agricultural sector, e.g. establishing district markets.

Environmental impact: An advantage is that collection of wild herbs or cultivation of other herbs does not require intensive irrigation systems. Energy consumption is minimal, except for the production of essen-tial oils. In the case of collecting wild herbs, it can be assumed that the negative environmental impact is minimal, except for the possible harm to endangered species and if harvesting methods are unsustaina-ble. The discussion on Environmental Impact Assessments (EIA) is still

in progress. Some industry participants, such as FECOFUN, consider the current EIA procedures as too burdensome and request simplified and less costly procedures.

In any case, environmental sustainability is a crucial aspect for the long-term success of the MAPs sector. So far this very sensitive aspect has not yet received the attention it deserves. Beside the general negative impacts of overharvesting like reduction of biodiversity there are also productivity risks and so far existential risks for collectors and members of the CFUGs. So, suppliers of MAPs cannot guarantee deliveries over multi-year periods due to overharvesting. In this sense, the cultivation of herbs has the potential to contribute positively to the environment through a reduced use of natural resources. Permanent cultivation can increase the production capacity of the available lands and forest with-out foregoing other production.

We think that additional skills are needed to help to diversify pro-duction and contribute to additional income or higher wages. One of the risks is that the target group is not utilizing the transferred and acquired knowledge because of “income generation pressure”.

4.6. The Authority ChannelThe term authority is used to address issues relating to formal and infor-mal institutions, organizations, relationships and power structures.

The Ministry of Commerce and Supplies (MoCS) developed the Nepal Trade Integration Strategy (NTIS) jointly, together with international and bilateral development partners. The NTIS charts a possible course of action for the development of Nepal’s export sector over the next five years. The Ministry of Commerce and Supplies (MoCS), has the leading role for the implementation of the Nepal Trade Integration Strategy (NTIS) and in that for the coordination of the Action Plan for the MAPs Sector.

During the process of accession Nepal has however also entered into significant obligations when it committed to comply with WTO rules and commitments (TRIPS, TBT), to adjust its laws and to create and strengthen the necessary institutions. Moreover, for Nepal to benefit fully from existing and new market access opportunities coming with WTO membership, it needs to strengthen the relatively weak supply capacity of its potential export sectors

At the local level the collaboration with CFUGs and cooperatives is to be ensured. Well-organized cooperative associations give MAPs groups bargaining power for their negotiations with traders and processors and strengthen their position on the District level. However, abuse of power in the cooperatives could jeopardize such positive effects. This option has to be observed, but the influence of projects is usually low. Nevertheless, there a system which can be used and which is based on democratic and poverty oriented targets – this is much better than projects in international cooperation sometimes have to deal with. The direct relationship between CFUGs and processing companies appears not to have created dependency, but has rather increased the CFUGs’ bargaining power in the market.

Furthermore, Village Development Committees (VDCs)/District Development Committees (DDCs) and local political parties are neglected in the current version of the Action Plan. They are certainly

needed to complete the harmonization of structures on the local level. To exclude them may have a negative influence on the effectiveness of the interventions’ transmission channels.

A very important authority on the non-formal level at this point in time is the Project Advisory Group (PAG). It is primarily active as a facilitator and as an "engine" for the start of new processes and sup-ports the harmonization of activities among stakeholders. It further-more functions as platform for the exchange of information and ideas and works as a competence centre for the MAPs sector. The future role of the PAG could include consultancy services for the National Imple-mentation Unit (NIU). However, for this purpose a clear mandate is still absent. In order to stabilize the PAG, a clearer defined mandate would be beneficial in any case.

The effects of MAPs promotion through cultivation of land are ambig-uous. The general commercialization of agriculture and increased prof-its of some farmers could however increase pressures on land and in the long term reduce access to land for women and vulnerable groups (see chapter 4.3.). The development in this crucial part of Interventions should be observed.

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4.7. TransfersThe NTIS recognises that all district development taxes imposed on movement of herbs within Nepal should be removed. This suggestion is also part of the action plan of the project. This will simplify the trans-port and trade of MAPs (within Nepal) but will reduce tax revenues of districts.

It is also recommended by the NTIS and the Action Plan of the project to review, simplify, and improve current procedures for collection, roy-alties, restrictions, EIA, IEE, processing, customs tariffs on inputs, and

exporting of herbs and herb products. For example, if a laboratory is set up in Nepalgunj, the Department of Forestry should allow exports on the basis of laboratory test and certification in Nepalgunj itself without sending the goods again for tests to Kathmandu.

An improved situation in the MAPs Sector can contribute to provide employment in Nepal and people, especially young men, will probably be less inclined to seek job opportunities outside of Nepal if there are alternative labour opportunities at home.

Photo: Julian Tresowski

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4.8. PIA Matrix 3: Transmission Channels used and Overall Results by Channel

Transmission Channels &

Details

Details of the change initiated by the

intervention Details & risks that may influence effec-tiveness of this chan-nel for intervention

Results by Transmission Channel

Source of info

Short Term (+/-)

up to 1 yr

Medium Term (+/-)

up to 5 yrs

Details & risks that the results will not be achieved

(1) (2) (3) (4) (5)

Prices

Produc-tion

The project intends to enhance the production of MAPs through jointly devel-oped Action Plan

0 0

• Higher reliability of product quality due to improved testing (laboratories) and certification (e.g. organic, wild) should allow harvesters and farmers to fetch higher prices on international markets

• High risk on sustainability of collection and preservation

• Contract farming and subsidies will help resource poor farmers to enter into business

• Cultivation losses partially covered by subsidies

• No contract farming act to monitor thus the success of contract farming is questionable

PAG

Con-sumption

Domestic consumption 0 0 MoFSC

International consumption 0 0• Reliable quality and supply, hence price will rise

MoFSC

Wages

Wages of labour increases due to expansion of farm and collection and processing activities

0 0

• Generally, the poorer households profit relatively more from community forestry activities than those in higher income brack-ets. The households in the lowest income group (<NPR 50,000) nearly capture 29% of the total available income from community forestry while the households in the second highest income group (>NPR 100,000) receive some 40% of the total forestry income. The group in the highest income bracket (>NRs 150,000) only receives 5%. Thus, increased activities by CFUGs in the MAPs sector should be more beneficial for the lowest income groups than to the highest income group.

• Risks: Resource availability has decreased, a collector can collect less amount than before, hence demands more wages. Also, rural exodus causes in some places scarcity of labour.

FECOFUN (Inter-view), MOF

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Employ-ment

Public formal

DPR and Lab staffs 0 +• If activity is realised, only very few jobs will be created DPR

Private formal

Some farmers might find employment in (local level) MAPs processing industries

0 +

• Employment effects depend upon the expansion of collection and the overall growth of domestication of MAPs

• The technology choice will determine the employment effects and demand of unskilled labour

• Criteria of a formal contract and mini-mum wage should be met.

PAG

Informal

Demand Demand for daily wage labour will rise through increased production

Small farmers may produce MAPs in their own land daily wage labour will rise through increased production

Small farmers may produce MAPs in their own land

0 +

• Demand for unskilled labour will provide opportunities for landless poor - it is also estimated that another 100,000 families can join the herbs collection jobs when opportu-nities arise.

• Risks: Labour unavailability, be confined to informal sector.

• Availability and access of cultivable land is limited – especially in the western and far-western region.

Inter-views, Publica-tions

Product-ivity

Wild collection

Increased productivity due to better harvesting and processing methods

0 +

• Wild collection potential not yet exhausted.

• Collection system is known and based on traditional knowledge. Through use of CFUGs Particularly small landowners and poor vil-lage member can benefit.

• Local processing would also allow keep-ing a larger part of the value chain on the local level.


Cultiva-tion

Increased productivity due to newly introduced cultivation and awareness raising among farmers on cost and benefit of cultivation

0 0

• Cultivation is a new way of producing MAPs and has to be analysed and well pre-pared to avoid disadvantages for the poor, which are mainly collectors and might have difficulties to access new breeds/clones.

• The proposal of the PAG to raise the awareness on cost and benefits of cultiva-tion is not likely to have any significant impact in the short to mid-term


Transfers

TaxesReducing royalty on wild collected MAPs and zero duty on export of MAPs

0 +

• Provides a competitive edge for MAPS

• Government can scrap all taxes and export duties

NTIS/PAG

Public welfare/ subsidy

0 0

Private remit-tances

0 +• If employment opportunity is available in Nepal, people will refrain from foreign employment

Publica-tions

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Access

Public services

R+D to develop improved varieties and promote adap-tive research on cultivation including socio-economic questions in regard to using land/land rights to ensure pro poor growth

Technology transfer on proper processing

Improved laboratory

0 -

• Public service will benefit through an improved laboratory system thanks to better equipment made available.

• Risks:

• Might not be realistic to have new clones at all. Better to focus on improvements of varieties (breeding) and to take into account socio-economic questions in order to pro-mote pro-poor growth

• Poor are unlikely to have access to improved varieties (affordability)

PAG

Other

Increased access to markets is positive in the short to medium term for national processing companies or cooperatives

0 +

• It can be supposed that secondary effects on employment and on prices for MAPs are positive.

• The availability of information on prices and quality requirements will contribute to improved living conditions. Access to income during the lean season will improve the livelihood strategies of vulnerable poor farmers

• Industry sources reckoned that there are challenges in obtaining ‘organic’ certificates

• Promoting processing at the local level and upgrading distillation technology would contribute to reducing vulnerability to fluc-tuations on international markets for crude products, especially for small processing companies

Publica-tions

Authority

Formal organi-sations

• The Ministry of Commerce and Supplies (MoCS), has the leading role for the imple-mentation of the Nepal Trade Integration Strategy (NTIS) and in that for the Action Plan for the MAPs Sector.

• Village Development Committees (VDCs)/District Development Committees (DDCs) and local political parties are neglected in the current version of the Action Plan.

• Strengthening existing action oriented local coop-eratives and CFUGs

0 +

• The Nepal Trade Integration Strategy 2010 (NTIS 2010) emphasises that poverty reduction will require ‘inclusive growth’, which is predicated in part on improvements in political stability and good governance.

• Risk: MoCS is not active in adjusting its laws according to WTO-Rules and standards (TRIPS, TBT) and to create and strengthen the necessary institutions or working groups like the National Implementation Unit (NIU).

• To exclude VDC/DDC may have a negative influence on the effectiveness of the inter-ventions’ transmission channels

• Increased bargaining power for their negotiations with traders and processors and strengthen their position on the District level through capacity building and forma-tion. Risk: Abuse of power in the coopera-tives could jeopardize such positive effects.

PAG/ Publica-tions

Informal relations

Through PAG informal rela-tions between stakeholders are improved

+ +

• The PAG is representing all members of the value chain – It is active as a facilita-tor and as an “engine” for the start of new processes and supports the harmonization of activities among stakeholders. Fostering effective coordination between public sector and the business community.

• Risk: Commercial interest can endanger social targets.

PAG

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Assets

Physical 0 0

Natural

Further development and commercialization of wild as well as cultivated herbs in Nepal has a direct and positive economic impact on the livelihoods of people in the regions where they grow. At present, two regions (Mid-Western and Far-Western) together to more than 85% of the total collection of herbs in Nepal. Both regions also face the highest poverty levels in the country.

0 +

• It can be assumed that the negative environmental impact is low, except for the possible harm to endangered species and if harvesting methods are unsustainable. Another risk is using land for MAPs Produc-tion, which is usually required for food production.

Publica-tions

HumanKnow-how transfer through capacitation of collectors, processors, farmers

+ +

• Additional skills help to diversify produc-tion and contribute to additional income or higher wages

• Risk of target group not utilizing newly acquired knowledge.

PAG

SocialNetworking farmers and exposing beneficiaries to other MAPs s project

0 0

• Formation of various working groups and cooperatives

• The project exposure might be dominated by influential personalities during project period. The effectiveness after the project may diminish.

PAG

Financial

Increase of household income through promotion of eco-nomic and international trade activities. (Global growth: 13-18% annually)

0 +

• Generally, the poorer households profit relatively more from community forestry activities than those in higher income brack-ets. Thus, increased activities by CFUGs in the MAPs sector should be more beneficial for the lowest income groups than to the highest income group (also see “Wages” in “Prices” Transmission Channel).

Global Risks for Project:

• Volatile demand/prices in (export) mar-kets for MAPs.

• Stakeholders do not act in the interest of the Action Plan.

• Lack of funding for implementation of Action Plan (no donors).

• Lack of ownership, responsibility and continuity among implementing partners and stakeholders.

• Insufficient or even negative change of regulation, legislation.

• Lack of sustainable harvesting methods/overharvesting.

KEY Matrix 3:Strength/

direction impact

++ + 0 - --


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5. Analysis of Stakeholders and Target Groups CapabilitiesThe stakeholders and target groups have all been reviewed and the pos-itive results of the project regarding their various capabilities have been evaluated. According to the OECD/DAC capability framework there are five capabilities that are required to avoid poverty.

These are:

• economic capabilities to use assets to attain and pursue a sustain-able livelihood

• human capabilities (i.e. including health and participation in com-munity life)

• capabilities to participate politically

• socio-cultural capabilities for inclusion in social and cultural life

• protective/security capabilities to lessen vulnerability and to with-stand economic shocks.

The following main outcomes can be expected with regard to stake-holder and target group capabilities.

5.1. Smallholders (Extremely Poor and Poor)As can be seen in the fourth PIA matrix, particularly the national organi-sation of the CFUGs could benefit from the measures related to capa-bilities. If FECOFON is willing to cooperate and has the necessary "absorption ability", this association will benefit significantly in terms of additional capacities built. FECOFUN’s political weight and leverage on "protective security" and "sociocultural” issues enables it to defend the interests of the target groups on the national level and to lobby in their favour.

The impact of the proposed measures on the Community Forest User Groups themselves is less obvious. CFUG’s have very limited political clout and their socio-cultural and Protective Security capabilities are rather low and limited to the local context. For the actual target groups of the project at the grass root level – i.e. different ethnic groups, women, young men, landless groups and (members of ) cooperatives – that are all strongly interlinked with CFUG’s or even part thereof, it is currently not clear how the proposed measures will effectively influence them. How-ever, one could argue that impacts should be similar to those seen for the CFUG’s which are immediately affected. Due to these uncertain-ties, further research in this field is highly recommended. A monitoring system for developments along these socio-economic lines is necessary to

understand what effect on the target group the proposed PAG measures will eventually have.

The various categories of hired labour will profit in the short to medium term from the growth of the MAPs sector (see Chapter 4.1. – The Price Channel), thus strengthening their economic capabilities through sea-sonal employment on MAPs farms and more regular work at processing companies. As envisioned by the Action Plan, they would also receive further training to increase productivity and income.

The Village Development Committees/District Development Committees may benefit slightly in the medium term through an increased production in the MAPs Sector. At the political capability level, the internally gener-ated revenue from this source should be utilized to provide infrastructure to support the agricultural sector, e.g. establishing district markets. None-theless, the budget could also take a hit if the targeted producers are not as successful as expected due to insufficient infrastructure, lack of enabling environment and insufficient market information. The project should dis-cuss rural development aspects with village and district committees and debate their respective roles in the value chain approach.

5.2. Other Stakeholder and IntermediariesFor the other stakeholders, namely important intermediaries and imple-menting partners, it can generally be assumed that the planned measures could have a mobilizing effect through involving them in the political process. Depending on the realization of direct capacity development measures, experiences made during the project implementation and the

availability of funds (from donors), these institutions could also see posi-tive impacts on their human and financial (economic) resources. Over-all the effect on the stakeholders’ capabilities will be rather limited and largely depend on the acceptance of the proposed measures in the imple-mentation communities.

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5.3. PIA Matrix 4: Assessment of Stakeholders and Target Groups Capabilities

Outcomes in terms of capabilities

Details &

risks

Infor-mation sources

and quality

Mitiga-tion or rein-

forcing meas-ures

Economic

(+/-)Human (+/-)

Political

(+/-)

Socio-cultural

(+/-)

Protective Security

(+/-)

Stakeholder/ Target groups

short

term

medium

term

short

term

medium

term

short

term

medium

term

short

term

medium

term

short

term

medium

term

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)

Agro Enterprise Center (AEC) 0 0 0 0 + + 0 0 0 0

Department of Forest (DoF) 0 0 0 0 0 + 0 0 0 0

Department of Plant Resources (DPR)

0 0 0 0 0 + 0 0 0 0

Federation of Community Forest Users Nepal (FECOCUN)

0 + + + + + + + +

Community Forest User Group (CFUG) [According to the constitution and rules of CFUGs: Vulnerable groups are represented: Dalits a lowest caste and indigenous groups like Janajatis, women-headed households, landless groups)

0 + + + 0 0 0 + 0 +

Different ethnic groups (0) (+) (+) (+) (0) (0) (0) (+) (0) (+)

Women (0) (+) (+) (+) (0) (0) (0) (+) (0) (+)

Young men (0) (+) (+) (+) (0) (0) (0) (+) (0) (+)

Landless groups (0) (+) (+) (+) (0) (0) (0) (+) (0) (+)

Cooperatives (0) (+) (+) (+) (0) (0) (0) (+) (0) (+)

Village Dev. Com./ District Dev. Com.

0 - 0 0 0 0 0 0 0 0

International Centre for Inte-grated Mountain Development (ICIMOD)

0 0 0 0 0 0 0 0 0 0

International Development Enterprises Nepal (IDE)

0 0 0 0 0 0 0 0 0 0

Jadibuti Association of Nepal (JABAN) and other trades

0 + 0 0 0 + 0 0 0 0

Micro-Enterprise Development Programme (MEDEP)

0 0 0 0 0 0 0 0 0 0

Nepal Bureau of Standards and Metrology (NBSM)

0 + 0 + 0 0 0 0 0 0

Nepal Herbs and Herbal Prod-uct Association (NEHHPA)

0 0 0 0 + + 0 0 0 0

Trade and Export Promotion Center (TEPC)

0 0 0 + 0 + 0 0 0 0

KEY Matrix 4:Strength/ direction impact

++ + 0 - --


Brackets () indicate significant uncertainties regarding the expected impact. More research and close monitoring of impacts are recommended.

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6. Analysis of the Expected Results in Relation to the MDGs and National Level Strategic GoalsIf properly implemented, the Action Plan could contribute positively to achieving four of the eight Millennium Development Goals (MDGs). Obviously, the project does not address MDGs 2 (“Achieve universal primary education”), 4 (“Reduce child mortality”), 5 (“Improve mater-nal health”) and 6 (“Combat HIV/AIDS, malaria and other diseases”). It does, however, contribute to achieving MDG 1 (“Eradicate extreme poverty and hunger”) and MDG 8 (“Develop a global partnership for development”. To a smaller degree, the project also touches upon MDG 3 (“Promote gender equality and empower women”) and MDG 7 (“Ensure environmental sustainability”). The proposed GIZ WTO/EIF-SP component is further in line with the EU’s ‘Aid for Trade Strategy’.

6.1. Contribution to MDG 1The project addresses two of the three targets under MDG 1: Target 1a “Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day” and Target 1b “Achieve full and pro-ductive employment and decent work for all, including women and young people”. The creation of wealth through the employment, price and productivity transmission channels will promote pro-poor growth, income and employment. As the production of MAPs and related products is very labour intensive, it has the potential to create jobs and reduce poverty in rural areas. Essentially, it increases the income of those who live just above or below the poverty line. The project does not address food farmers, but promotes export-oriented products.

6.2. Contribution to MDG 3As the planned measures focus on hilly, mountainous areas that are affected by significant outbound migration of mainly men, the inter-vention automatically benefits more women than men. At least 50% of CFUG members are women and most of the collectors are women. Thus, empowering women will be an important impact of the project in the future. There is no direct relationship to Target 3.A, which focuses on the elimination of gender disparity in primary and second-ary education.

6.3. Contribution to MDG 7There is a strong expected contribution to Target 7.A, “Integrate the principles of sustainable development into country policies and pro-grammes and reverse the loss of environmental resources”. The pro-posed measures foresee the implementation of policies and institutions for the issuing of organic certificates. This should help to promote the production of organic MAPs products, and thus lead to reduced pressure and negative impacts on the environment. Introducing more

efficient and sustainable harvesting methods, which produce less wast-age and reduce pressure and negative impact on environment, will fur-thermore contribute to Target 7.B, “Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss” and the overall goal to ensure environmental sustainability. It is also not planned, to harvest or even cultivate MAPs in protected areas and national parks.

6.4. Contribution to MDG 8There are a number of targets under MDG 8 that are relevant in the context of the proposed Action Plan. Firstly, there is a strong link with Target 8.A that aims at developing an open, rule-based, predictable, non-discriminatory trading and financial system. One of the main goals of both the Action Plan and the NTIS is the strengthening of bilateral negotiations with India, which should eventually reduce trade barriers and allow more reliable trade relationships between Nepal and its most important export market. Furthermore, the strengthening of Sanitary and Phytosanitary infrastructure in Nepal should also create a more predictable trade environment for Nepal’s exporters. Secondly, Target 8.F, which is pushing for a better involvement of the private sec-tor, is addressed through a number of measures that promote a better business environment and the involvement of private sector actors (e.g. FNCCI/AEC) in the Project Advisory Group and at later stages. For instance, the plan includes Private-Public-Partnership (PPP) elements and carries the intention to foster private sector investment in the MAPs sector (e.g. on farming, processing, testing levels). INGOs and NGOs are also expected to follow market-based approaches in order to support technological improvements. Investors will have confidence in investing in the economy since an enabling environment will be cre-ated to conduct business without fear and codes are supposed to ensure fairness and justice. Thirdly, the requirements for targets 8.B and 8.C are fulfilled by definition as Nepal fulfils both the criteria of being an LDC and being a landlocked country.

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6.5. PIA Matrix 5 A: Aggregate Impacts in Terms of MDGs, and Other Strategic Goals

Strategic Development GoalsImpacts

Details & risksInformation sources and

qualityShort term (+/-) Medium Term (+/-)

(1) (2) (3) (4) (5)

MDG1: Eradicate extreme poverty and hunger

+ D1Action Plan/ Group discussion

Target 1.A: Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day


Target 1.B: Achieve full and productive employment and decent work for all, includ-ing women and young people


Target 1.C: Halve, between 1990 and 2015, the proportion of people who suffer from hunger

no impactAction Plan/ Group discussion

MDG2: Achieve universal primary education no impactAction Plan/ Group discussion

Target 2.A: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling


MDG3: Promote gender equality, empower women


Target 3.A: Eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015

D2Action Plan/ Group discussion

MDG4: Reduce child mortality no impactAction Plan/ Group discussion

Target 4.A: Reduce by two thirds, between 1990 and 2015, the under-five mortality rate


MDG5: Improve maternal health no impactAction Plan/ Group discussion

Target 5.A: Reduce by three quarters the maternal mortality ratio


Target 5.B: Achieve universal access to reproductive health


MDG6: Combat HIV/AIDS, malaria and other diseases


Target 6.A: Have halted by 2015 and begun to reverse the spread of HIV/AIDS


Target 6.B: Achieve, by 2010, universal access to treatment for HIV/AIDS for all those who need it


Target 6.C: Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases


MDG7: Ensure environmental sustainability + D3Action Plan/ Group discussion

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Target 7.A: Integrate the principles of sus-tainable development into country policies and programmes and reverse the loss of environmental resources

+ + D3Action Plan/ Group discussion

Target 7.B: Reduce biodiversity loss, achiev-ing, by 2010, a significant reduction in the rate of loss


Target 7.C: Halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation


Target 7.D: By 2020, to have achieved a sig-nificant improvement in the lives of at least 100 million slum dwellers


MDG8: Develop a global partnership for development

+ + + D4Action Plan/ Group discussion

Target 8.A: Develop further an open, rule-based, predictable, non-discriminatory trad-ing and financial system

+ + D4Action Plan/ Group discussion

Target 8.B: Address the special needs of least developed countries

+ + + + D4Action Plan/ Group discussion

Target 8.C: Address the special needs of landlocked developing countries and small island developing States


Target 8.D: Deal comprehensively with the debt problems of developing countries


Target 8.E: In cooperation with pharmaceuti-cal companies, provide access to affordable essential drugs in developing countries


Target 8.F: In cooperation with the private sector, make available benefits of new technologies, especially information and communications


Other strategic development goals

Pro-poor Growth + D5Action Plan/ Group discussion

Protecting the vulnerable no impactAction Plan/ Group discussion

Peace, security and disarmament no impactAction Plan/ Group discussion

Human rights, democracy and good governance


Protecting the global environment + D3Action Plan/ Group discussion

KEY Matrix 5:Strength/ direction impact

++ + 0 - --


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6.6. PIA Matrix 5 B: Details & Risks related to Impacts

Significance Quality of Information

D1• Increased productivity (trough reduced wastage) at level of farmers and potentially processing (distillation) should increase income of households in mountainous regions.

• Higher reliability of product quality due to improved testing (laborato-ries) and certification (e.g. organic, wild) should allow harvesters, farmers to fetch higher prices on markets.

+

D2• Focus on hilly, mountain areas that are affected by significant outbound migration of mainly men. Therefore, scope of intervention automatically benefits more women than men.

• Thus, small empowering impact for women.

• At least 50% of CFUG members are women.

• No direct impact on Target 3.A. since no focus on education.

+ +

D3• Target 7.A. and B: Introduction of more efficient and sustainable harvest-ing methods which produce less wastage, reduce pressure and negative impact on environment.

• Implementation of policy and institutions for issuing of organic certifi-cates promotes organic MAPs production and thus reduces pressure and negative impact on environment.

• Protected areas/national parks will not be used for MAPs harvesting, cultivation.

• Risk of unsustainable harvesting to be addressed.

8 Mitigant: In worst case of overharvesting renaturalization could occur over time.

+

D4 8 Target 8.A.: Strengthening of bilateral negotiations with India should reduce trade barriers and allow more reliable trade relationships between Nepal and its most important export market. Strengthening of SPS infra-structure in Nepal should also create a more predictable trade environment for its exporters.

• Target 8.B.: Support measures focused on Nepal, an LDC.

• Target 8.C: Support measures focused on Nepal, a landlocked country.

• Target 8.F.: PPP elements and goal, to foster private sector investment in the MAPs sector (e.g. on farming, processing, testing levels). Market-oriented approach for INGOs and NGOs in order to support technological improvements.

+ +

D5• Focus on hilly, mountain regions of Nepal with a large population of deprived, poor people. Interventions in MAPs sector focusing on additional income generation for subsistence farmers.

+ +

KEY Matrix 5: ++ + - --

Significance highly positive positive moderate high extremely

Quality of information & analysis excellent good adequate some use poor

63

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7. Conclusions and Recommendations7.1. ConclusionsPoverty reduction is a political task. The starting point for successful poverty reduction is the necessary social consensus and political will. This also always entails a process of negotiating social and political interests and power relations at the international, national and local levels. Building on that consensus and will, structural poverty reduction can help shape the political-institutional and economic frameworks. This affects the poverty situation indirectly and systemi-cally, e.g. through successful negotiations for the WTO accession.

The Ministry of Commerce and Supplies (MoCS) together with GIZ’s Supporting Nepal’s implementation of its WTO commitments and the Enhanced Integrated Framework Support Programme (WTO/EIF-SP) intend to strengthen the MAPs sector in a pilot phase and other export sectors thereafter. The projects try to promote the sector through activities along the entire value chain including the international trade. This increases the complexity of the project, but it also increases the probability of a successful project implementation.

As a matter of principle the recent situation or the point of departure, partly created by the project itself, couldn’t be much better:

A Project Advisory Group (PAG), which represents the involved public and private institutions and aid agencies, ensures that future measures are planned in a participatory way and can be influenced by those most affected. The Action Plan is the jointly developed ground for further activities.

The Government of Nepal (GoN) and development partners officially appointed Germany as the EIF Donor Facilitator (DF) whose principal role is to work closely with the Nepalese EIF Focal Point and the National Implementation Unit (NIU) at MoCS, to facilitate donor coordi-nation and donor-partner dialogue on trade and Aid for Trade (AfT) issues.

Community forest user groups (CFUGs) and Cooperatives, as the nuclei of economic develop-ment on the local level, are existent and mostly functional. They are effective vehicles to involve poor farmers.

The MAPs sector has – according to an economic analysis – a high potential to participate in growing international trade. The Nepal Trade Integration Strategy (NTIS 2010) has recognized this sector as having export potential and identified some major international markets that allow Nepal to diversify its exports.

However, economic growth will only help reducing poverty rapidly if it is large enough and broad-based, i.e. if poor people are able to make their own contribution towards economic growth and derive direct benefits from that participation. Pro-poor growth is a strategic approach in which economic growth is carefully harnessed in order to reduce poverty. It focuses on promoting the economic potentials of (extremely) poor and disadvantaged groups of the population.

It is estimated that as many as 300,000 families are engaged in medicinal herbs collection in 58 districts. It is also estimated that another 100,000 families can easily join the herbs collection jobs when opportunities arise. Therefore, the sector has the potential to contribute more to poverty alleviation as it provides employment in remote areas, although these workers will need training.

It is estimated that more than 50% of workers are female. Women are engaged in the collec-tion, cleaning, and grading of herbs. Traditional skills are passed on to younger generations, but further training is needed for waste minimization, improvements in the value chain and natural resources conservation.

As mentioned in Chapter 3.3., as many as 300,000 families are engaged in medicinal herbs col-lection, mainly in the hilly regions of western Nepal, are engaged in the collection of MAPs for their livelihood. Therefore, if developed well, the MAPs and essential oils sector can contribute immensely in uplifting the socio-economic status of those people. Different laws, regulations, plans and policies put in place by the Government of Nepal have also encouraged the develop-ment of this sector. However, it is commonly understood that those plans and policies have not been implemented very effectively.Photo: Carolin Weinkopf

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7.2. Potential Risks and Information GapsGiven that the project includes interventions on all levels from micro level up to the macro level and involves technical and sociocultural aspects, there are a number of risks that arise on all levels and have the potential to derogate the success and the envis-aged results of the project.

7.2.1. Global Risk• Volatility of market prices – MAPs prices tend to fluctuate depending on world market prices, which can destabilise the entire value chain.

• Price erosion alongside productivity gains – With increasing productivity and growing supply on the MAPs market, prices may decline. Even if buyer competition for the raw product increases, there is need for good bargaining power of farmers and cooperatives.

7.2.2. Systemic Risks• Affordability of farm inputs (e.g. seedlings).

• Uneven distribution of price gains – Processing companies normally have small margins from their operations and it is possible that producers may not obtain appreciable shares of the profit, leading to reduced motivation among farmers.

• Unclear situation of land tenure system – Com-mercialisation of agriculture may reduce vulnerable groups’ access to land (information gap).

• Capacity gap – Limited qualified staff in the field to foster productivity.

• Financing risks – Insufficient supply of loans to processors for crucial investments in processing units.

• Intensification of cultivation.

7.2.3. Structural Risks• Limited human capital.

• Lack of funding for the implementation of the Action Plan (donors).

• Lack of ownership, responsibility and continuity among implementing partners and stakeholders - stakeholders are not committed and/or do not act in the interest of the Action Plan.

• Insufficient or even negative change of regula-tion, legislation.

7.2.4. Environmental Risks• Lack of sustainable harvesting methods/overharvesting.

• Unsustainable cultivation methods.

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7.3. Monitoring and Baseline Data RequiredResults-based monitoring focuses on the benefits gener-ated by a project. This includes both the direct benefit that can be clearly ascribed to the project and is defined as its objective, and the indirect benefit that emerges from the project in the course of the achievement of objectives, and that can no longer be unequivocally ascribed to the project.

The project monitoring should include poverty outcomes and impacts of socio-economic groups, reflecting eco-nomic as well as non-economic dimensions of poverty. Only if the most effective mechanisms that break up rigid-ities that perpetuate poverty can be identified, a structural impact on poverty reduction can be expected.

The project should especially monitor the risks and criti-cal components that might jeopardise its success. These include the situation of the poorest farmers, migrants, employment opportunities (for the landless, migrants, women), gender bias, land distribution, processing prob-lems (efficient technology and equipment, efficiency of labour), cooperatives and market development. The fol-lowing facts and figures should be established through a baseline survey to assess poverty impacts and are recom-mended to be monitored during the project duration:

• Poverty status of MAPs collectors and producing farm-ers disaggregated by farm size and productivity level and other socioeconomically relevant variables (such as age, gender, sex of household head, education level, proxim-ity to roads and markets, migration, form of land tenure, etc.) and comparison of these MAPs producing farmers with the other farmers in this region.

• Effects of MAPs production on the workload of women and on other agricultural activities on their own farms.

• Employment effects of casual labour for collectors, on farms and in processing before, during and after the project period; disaggregated by key socioeconomic vari-ables such as gender, age, background, education, place of permanent residence and of origin, poverty status of the labourers, wages, regularity of payment, job security, etc.

• Price margins and their distribution along the value chain and the different marketing channels.

The general impact monitoring should ensure that the data is collected, processed and reported by sex, geograph-ical area (region, district, and accessible versus remote areas) and socioeconomic groups (poor, medium, rich) and with regard to the type of land ownership. There should be a special focus on the effects on and opinions of women. The secondary poverty effects of employment in MAPs processing companies should be further explored. It is recommended that a Poverty Impact Assessment be conducted during the mid-term evaluation or at the final evaluation at the end of the project’s first phase. This is to evaluate (based on the real data gathered by the M&E system) the project’s poverty outcomes and to verify the judgements and hypotheses of this ex-ante assessment.


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7.4. Assessment of GIZ WTO/EIF-SP StrategyA successful technical cooperation portfolio typically combines ele-ments of structural and direct poverty reduction. Usually the GIZ key contributions are:

A systemic, multi-level and multi-stakeholder approach: In poverty reduction, the WTO-WTO/EIF-SP links technical, organisational and in-process consultancy and advisory activities at various levels of deci-sion- and policy-making, mainly at the national level. In this context the project pursues a multi-stakeholder approach that seeks to pro-mote close interaction between the public sector, the private sector and civil society. Nevertheless, this task should be taken over by the MoCS through the NIU as soon as possible.

Capacity development: Structural poverty reduction tackles the roots of the problem, moving beyond one-off solutions and generating sus-tainable impacts. To successfully achieve this, certain institutional and political frameworks, like the NIU, must be in place.

Negotiation processes: GIZ in general and the GIZ WTO/EIF-SP in particular, see the process of the economic, social and cultural inte-gration of poor segments of the population from a realistic perspec-tive. Neither are objectives always mutually complementary, nor do

all stakeholders always pull in the same direction. Working within this realistic perspective the project seeks to facilitate a fair reconciliation of interests for all stakeholders, be it at the international, regional, national or local level.

Managing for development results: Since the MDGs and the Paris Declaration were formulated, the need to demonstrate poverty impacts has grown further in importance. With a stronger focus on pro-poor growth, the project supports partners in analysing the key causes of poverty, formulating strategies to overcome them, implementing them, and assessing their anticipated impacts. At project level it has become highly relevant to align with poverty-oriented monitoring systems of partner countries. Poverty impact assessment and monitoring are important components of self-evaluation and external evaluation.

To sum up, the approaches and attempts of the project are to be con-sidered very comprehensive. In their totality they do meet the require-ments of modern development cooperation. It is unfortunate, however, that the financial volumes as well as the timeframe are too limited at the present time to achieve strong results in the long term. It is because of these limitations, that the success of the agreed upon Action Plan essentially depends on the availability of additional funds.

7.5. RecommendationsThe recommendations presented here below are the result of the analy-sis of the five Poverty Impact Assessment (PIA) modules, the consider-ation of the project approach and the valuation of the Project Advisory Group’s action plan for the MAPs sector. In line with the agreed PIA process (see Figure 3 on page 18), the findings were discussed in the PIA team as well as with representatives of the Ministry of Commerce and Supplies, the GIZ WTO/EIF-SP management and the Project Advisory Group.

The following recommendations have to be considered in conjunction with previously made suggestions, like for instance in the NTIS 2010 and the SAWTEE report “Promoting of export of Medicinal and aro-matic Plants (MAPs) and essential Oils from Nepal (June in 2011)”. SAWTEE mentioned a number of steps that could be taken in areas such as collection and cultivation, processing, export as well as research and development.

As increased productivity is expected to have major effects on house-hold incomes of MAPs farmers, this will – besides environmental ques-tions – play a critical role for the project’s poverty outcomes.

7.5.1. Information Gaps and Monitoring• Complete baseline data for sector, to be able to monitor progress and poverty impact of proposed measures (see chapter 7.2. Potential Risks and Information Gaps and the GIZ “Guideline for Baseline-studies”).

• Close information gaps: As of today, there is already a sound information base available on marketing aspects of the MAPs sector. However, further data should be collected as for example there is still not much known about production terms or the availability of farm land that could be used for MAPs cultivation. Also, further informa-tion about the actual cultivation potential of MAPs is required. It is for instance not yet clear to what extent MAPs cultivation could be integrated in the existing systems. There are also gaps regarding land use and land rights in view of their use by small farming systems and the different forest types in Nepal (e.g. leasehold forests, governmental

forests). Only 15% of the forests are used as Community Forests by CFUGs. It also remains to be proved, how an increase in productivity can sustainably be achieved.

• Implement monitoring on pro-poor and environmental effects to control for identified risks, such as unsustainable harvesting/cultiva-tion methods, effects on employment and income, migration, role of women (workload), etc. (see chapter 7.3. Monitoring and Baseline Data Required).

• One or more indicators of the indirect impacts on poor population segments should be formulated. The long results chain must demon-strate a plausible link to poverty alleviation. Here it would be helpful to create links to indicators of national monitoring systems (e.g. within the scope of PRS monitoring).

7.5.2. Orientation to a Successful Poverty reduction• Take into account geographical poverty data to plan further actions (poorest districts first).

• Establish improved credit services for CFUGs, smallholders and landless households.

• Favour CFUGs that manage less than 100ha of forests.

• No focus on technologically advanced activities in initial phase because of low affordability for poor farmers.

• Promote product diversification within sector to reduce depend-ency on few products.

7.5.3. Stakeholder Management• Involve additional stakeholders in PAG. Namely more representa-tives of the grass-roots level (CFUGs and Cooperatives) should be included in order to develop a strategy and criteria on how to include

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the poorer farmers and collectors. Other stakeholders that could be involved are for instance the Department of Agriculture (DoA) as it covers agricultural cultivation topics as well as MLD and the customs authorities.

• Reflect role of village and district level authorities and political parties in the Action Plan: The federations of VDC/DDC and local political parties are neglected in the current version of the Action Plan. As “lessons learned” from previous projects show, strengthening the capacities of local government institutions is an important prerequisite in order to achieve structural impacts. Only then can they effectively function as institutions for local decision making and development. In addition, it is important to improve the capacities of service providers so that they can deliver quality services to rural people.

• Gender Sensitivity: Ensure during implementation that women and children collecting MAPs and female-headed households are not marginalised. The PAG should define a process as well as impact indi-cators to ensure that women are included and will benefit from the project.

• Fostering awareness on poverty issues is an essential target of GIZ WTO/EIF-SP (see Annex 5) and should therefore also be reflected in the PAG’s Terms of Reference.

• Further improvement of cooperation and communication among donors and between donors and stakeholders (i.e. harmonization of activities).

• The stakeholder map should be updated in order to reflect recent learning.

7.5.4. Structure• MoCS: Contribute to the successful implementation of the Action Plan by running a fully functioning NIU and having the full owner-ship for the coordination of the Action Plan’s implementation.

• GIZ WTO/EIF-SP: Stabilize the PAG through clarifying the man-date and defining its long-term role.

7.5.5. GIZ WTO/EIF-SP Programme Philosophy and Capabilities• Given the programme’s focus on poverty alleviation, the pro-gramme classification should be adjusted upwards to “Comprehensive Poverty Reduction (CPR)” from currently “General Development Approach (GDA)”.

• Exploit further potential of the project besides being the facilitator of the process and realign expectations of MoCS and Stakeholders with the actual role that is foreseen for the programme.

• Apply PIA approach for planned interventions in other 18 priority export sectors of Nepal (as defined in NTIS 2010) and use this PIA as an example, in order to orient future activities towards pro-poor growth.

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ANNEXAnnex 1: List of Acronyms

AEC Agro Enterprise Center

AfT Aid for Trade

ANSAB Asia Network for Sustainable Agriculture and Bioresources

AP Action Plan

BfN Federal Agency for Nature Conservation (Germany)

BMZ Federal Ministry for Economic Cooperation and Development (Germany)

CBBT Capacity Building for Biotrade

CFUG Community Forest User Group

CITES Convention on International Trade in Endangered Species

DAC Development Assistance Committee

DDC District Development Committee

DF Donor Facilitator

DFO District Forest Office

DoA Department of Agriculture

DoC Department of Customs

DoF Department of Forestry

DPR Department of Plant Research

EIA Environmental Impact Assessments

EIF Enhanced Integrated Framework

EU European Union

FECOFUN Federation of Community Forestry Users, Nepal

FNCCI Federation of Nepal Chambers of Commerce

GDP Gross Domestic Product

GIZ WTO/EIF-SP GIZ WTO/EIF-Support Programme

GoN Government of Nepal

HDI Human Development Index

HNCC Herbs and NTFP Coordination Committee

HNDP Herbs and NTFP Development Policy

ICIMOD International Centre for Integrated Mountain Development

IDE International Development Enterprises Nepal

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IEE Initial Environmental Examination

IFEAT International Federation of Essential Oils and Aroma Trades

IMO Institute for Marketecology

INCLUDE Inclusive Development of the Economy

IPR Intellectual Property Rights

ISSC-MAP International Standard for Sustainable Wild Collection of Medicinal and Aromatic Plants

IUCN International Union for Conservation of Nature

JABAN Jadi Buti Association of Nepal

LDC Least Developed Countries

MAPs Medicinal and Aromatic Plants

MDG Millennium Development Goals

MEDEP Micro-Enterprise Development Programme

MoAC Ministry of Agriculture and Cooperatives

MoCS Ministry of Commerce and Supplies

MoE Ministry of Environment

MoFSC Ministry of Forest and Soil Conservation

MPFS Master Plan for Forestry Sector

MPSG Medicinal Plant Specialist Group

NASAA National Association for Sustainable Agriculture, Australia

NAST Nepal Academy of Science and Technology

NAVIN National Association of Village Development Committees in Nepal

NBF Nepal Business Forum

NBSM National Bureau of Standards and Metrology

NEAT Nepal Economic, Agriculture and Trade

NEHHPA Nepal Herbs and Herbal Product Association

NIU National Implementation Unit

NPR Nepalese Rupees

NTBs Non-Tariff Barriers

NTFP Non-Timber Forest Products

NTIS Nepal Trade Integration Strategy

71

Annex 2: Table of FiguresFigure 1 Export value of Medicinal Herbs and Essential Oils, 2005-2009 (US$1,000)............................................................................................14

Figure 2 Sequence of activities in the MAPs Value Chain.........................................................................................................................................14

Figure 3 PIA process overview..................................................................................................................................................................................18

Figure 4 Human poverty status by district (UN Nepal information portal, 2004)....................................................................................................21

Figure 5 Land use by ecological belts........................................................................................................................................................................23

Figure 6 Number of beneficiary households by ecological belts ................................................................................................................................23

Figure 7 Average monthly farm household income by source of income...................................................................................................................23

Figure 8 Calculation of Gini coefficient for CF distribution by size of forests...........................................................................................................24

Figure 9. Overview of stakeholders and institutions and their role in the intervention..............................................................................................31

Figure 10 Mapping of relevant stakeholders regarding their influence on the interventions and pro-poor agenda.....................................................32

Figure 11 Value Chain Map of Medicinal and Aromatic Plants sector......................................................................................................................33

OECD Organisation for Economic Cooperation and Development

PAG Project Advisory Group

PIA Poverty Impact Assessment

POVNET Network on Poverty Reduction

PPP Private-Public-Partnership

PRA Pest Risk Assessment

R&D Research and Development

SAWTEE South Asia Watch on Trade, Economics and Environment

SME Small and Medium Enterprise

SPS Sanitary and Phytosanitary Measures

TBT Technical Barriers to Trade

TEPC Trade and Export Promotion Center

TPN Trade Promotion Network

TRIPS Trade-Related Intellectual Property Rights

TRTA Trade-Related Technical Assistance

UNDP United Nations Development Programme

VC Value Chain

VDCs Village Development Committees

WTO World Trade Organization

WWF World Wildlife Fund

72

Annex 3: List of MDG Indicators All indicators should be disaggregated by sex and urban/rural as far as possible.

Effective 15 January 2008

Millennium Development Goals (MDGs)

Goals and Targets (from the Millennium Declaration)

Indicators for monitoring progress

Goal 1: Eradicate extreme poverty and hunger

Target 1.A: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day

1.1 Proportion of population below $1 (PPP) per day

1.2 Poverty gap ratio

1.3 Share of poorest quintile in national consumption

Target 1.B: Achieve full and productive employ-ment and decent work for all, including women and young people

1.4 Growth rate of GDP per person employed

1.5 Employment-to-population ratio

1.6 Proportion of employed people living below $1 (PPP) per day

1.7 Proportion of own-account and contributing family workers in total employment

Target 1.C: Halve, between 1990 and 2015, the proportion of people who suffer from hunger

1.8 Prevalence of underweight children under-five years of age

1.9 Proportion of population below minimum level of dietary energy consumption

Goal 2: Achieve universal primary education

Target 2.A: Ensure that, by 2015, children eve-rywhere, boys and girls alike, will be able to complete a full course of primary schooling

2.1 Net enrolment ratio in primary education

2.2 Proportion of pupils starting grade 1 who reach last grade of primary

2.3 Literacy rate of 15-24 year-olds, women and men

Goal 3: Promote gender equality and empower women

Target 3.A: Eliminate gender disparity in pri-mary and secondary education, preferably by 2005, and in all levels of education no later than 2015

3.1 Ratios of girls to boys in primary, secondary and tertiary education

3.2 Share of women in wage employment in the non-agricultural sector

3.3 Proportion of seats held by women in national parliament

Goal 4: Reduce child mortality

Target 4.A: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate

4.1 Under-five mortality rate

4.2 Infant mortality rate

4.3 Proportion of 1 year-old children immunised against measles

Goal 5: Improve maternal health

Target 5.A: Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio

5.1 Maternal mortality ratio

5.2 Proportion of births attended by skilled health personnel

Target 5.B: Achieve, by 2015, universal access to reproductive health

5.3 Contraceptive prevalence rate

5.4 Adolescent birth rate

5.5 Antenatal care coverage (at least one visit and at least four visits)

5.6 Unmet need for family planning

Goal 6: Combat HIV/AIDS, malaria and other diseases

Target 6.A: Have halted by 2015 and begun to reverse the spread of HIV/AIDS

6.1 HIV prevalence among population aged 15-24 years

6.2 Condom use at last high-risk sex

6.3 Proportion of population aged 15-24 years with comprehensive correct knowledge of HIV/AIDS

6.4 Ratio of school attendance of orphans to school attendance of non-orphans aged 10-14 years

Target 6.B: Achieve, by 2010, universal access to treatment for HIV/AIDS for all those who need it

6.5 Proportion of population with advanced HIV infection with access to antiretroviral drugs

Target 6.C: Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases

6.6 Incidence and death rates associated with malaria

6.7 Proportion of children under 5 sleeping under insecticide-treated bednets

6.8 Proportion of children under 5 with fever who are treated with appropriate anti-malarial drugs

6.9 Incidence, prevalence and death rates associated with tuberculosis

6.10 Proportion of tuberculosis cases detected and cured under directly observed treat-ment short course

73

Goal 7: Ensure environmental sustainability

Target 7.A: Integrate the principles of sustain-able development into country policies and programmes and reverse the loss of environ-mental resources

Target 7.B: Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss

7.1 Proportion of land area covered by forest

7.2 CO2 emissions, total, per capita and per $1 GDP (PPP)

7.3 Consumption of ozone-depleting substances

7.4 Proportion of fish stocks within safe biological limits

7.5 Proportion of total water resources used

7.6 Proportion of terrestrial and marine areas protected

7.7 Proportion of species threatened with extinction

Target 7.C: Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation

7.8 Proportion of population using an improved drinking water source

7.9 Proportion of population using an improved sanitation facility

Target 7.D: By 2020, to have achieved a signifi-cant improvement in the lives of at least 100 million slum dwellers

7.10 Proportion of urban population living in slums

Goal 8: Develop a global partnership for development

Target 8.A: Develop further an open, rule-based, predictable, non-discriminatory trading and financial system

Includes a commitment to good governance, development and poverty reduction – both nationally and internationally

Target 8.B: Address the special needs of the least developed countries

Includes: tariff and quota free access for the least developed countries’ exports; enhanced programme of debt relief for heavily indebted poor countries (HIPC) and cancellation of offi-cial bilateral debt; and more generous ODA for countries committed to poverty reduction

Target 8.C: Address the special needs of land-locked developing countries and small island developing States (through the Programme of Action for the Sustainable Development of Small Island Developing States and the out-come of the twenty-second special session of the General Assembly)

Target 8.D: Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term

Some of the indicators listed below are monitored separately for the least developed coun-tries (LDCs), Africa, landlocked developing countries and small island developing States.

Official development assistance (ODA)

8.1 Net ODA, total and to the least developed countries, as percentage of OECD/DAC donors’ gross national income

8.2 Proportion of total bilateral, sector-allocable ODA of OECD/DAC donors to basic social services (basic education, primary health care, nutrition, safe water and sanitation)

8.3 Proportion of bilateral official development assistance of OECD/DAC donors that is untied

8.4 ODA received in landlocked developing countries as a proportion of their gross national incomes

8.5 ODA received in small island developing States as a proportion of their gross national incomes

Market access

8.6 Proportion of total developed country imports (by value and excluding arms) from developing countries and least developed countries, admitted free of duty

8.7 Average tariffs imposed by developed countries on agricultural products and textiles and clothing from developing countries

8.8 Agricultural support estimate for OECD countries as a percentage of their gross domestic product

8.9 Proportion of ODA provided to help build trade capacity

Debt sustainability

8.10 Total number of countries that have reached their HIPC decision points and number that have reached their HIPC completion points (cumulative)

8.11 Debt relief committed under HIPC and MDRI Initiatives

8.12 Debt service as a percentage of exports of goods and services

Target 8.E: In cooperation with pharmaceuti-cal companies, provide access to affordable essential drugs in developing countries

8.13 Proportion of population with access to affordable essential drugs on a sustainable basis

Target 8.F: In cooperation with the private sector, make available the benefits of new technologies, especially information and communications

8.14 Telephone lines per 100 population

8.15 Cellular subscribers per 100 population

8.16 Internet users per 100 population

The Millennium Development Goals and targets come from the Millennium Declaration, signed by 189 countries, including 147 heads of State and Government, In September 2000 (http://www.un.org/millennium/declaration/ares552e.htm) and from further agreement by member states at the 2005 World Summit

(Resolution adopted by the General Assembly - A/RES/60/1, http://www.un.org/Docs/journal/asp/ws.asp?m=A/RES/60/1).

The goals and targets are interrelated and should be seen as a whole. They represent a partnership between the developed countries and the developing countries “to create an environment – at the national and global levels alike – which is conducive to development and the elimination of poverty”

74

Annex 4: Chapter 7 of the NTIS – Medicinal Herbs and Essential Oils

Strengths Weaknesses

• Availability of collectors and intermidiary workers in wild herbs and organized human resources for production of essential oils

• Biodiversity in Nepal offers possibility to explore new and high-value products

• Proactive policy, directives, and regulations

• Production extension prospects through contract farming system and purchase assurance to farmers

• Cultivation and processing centres in more than 15 districts

• Organic certification from internationally recognized organiza-tions of different countries having accreditation such as ECOCERT, NASSA, IFEAT, EFFEO, etc.

• Labour problems, in particular high wages compared to productivity

• High collection charges

• Weak knowledge of scientific agronomical practices and post-harvesting technologies within the sector

• Inability to target attractive markets due to lack of exposure and lack of knowledge of international marketing practices

• High cost of suitable packing materials

• Lack of technical and policy support for processing and export-ing of herbal products and essential oils

Opportunities Threats

• Increasing environment- and nature-conscious buyers

• Growing preference for organic and herbal-based products over synthetic products

• Gradual shifting from crude export to processing of herbal products and essential oils

• Strong government and donors

• Competition from India and China

• Low-price markets for chemical/synthetic substitutes

• High technical entry barriers with stringent rules for processing materials

• Question of sustainability of some raw materials

Actions

Product and Technology

• Support technology such as fractional distillation and steam processes for oil extraction to reduce material wastage and to lower the production costs.

• Encourage private sector investment in farming, processing, and production of forestry and herbal products for better use of resources.

• Facilitate internationally recognized product certification.

• Coordinate efforts of INGOs and NGOs in supporting production development and technological improvement. Emphasize a market-oriented approach.

• Initiate R&D efforts towards processed products such as perfumes, food flavouring elements, and fragrances.

Market Access

• Promote use of better packaging materials such as certified aluminium containers.

Institutional and Human Resource Development

• Establish specialized institutions in the Mid-Western Region to support economically deprived people from mountainous regions through devel-opment of herbs and aromatic plants and plant products. Collaboration with the Jadi Buti Association of Nepal (JABAN), Nepalgunj might be appropriate.

Business Environment

• Set up a national laboratory through public-private partnership (PPP) that issues internationally recognized product certificates. Such a laboratory should be supplemented by a branch in Nepalgunj.

75

• Review, simplify, and improve current procedures for collection, royalties, restrictions, EIA, IEE, processing, customs tariffs on inputs, and export-ing of herbs and herb products. For example, if a laboratory is set up in Nepalgunj, the Department of Forestry should permit export on the basis of laboratory test and certificate it in Nepalgunj itself without visiting Kathmandu.

• Implement a policy and institutional system for issuing an internationally recognized organic certificate developed by the MoAC.

• Introduce a policy to intensify the use of raw herbs in production of essential oils and herbal products.

• Introduce collective patent rights to cover species of Nepali origin like Timur and others.

• Remove all district development taxes imposed on movement of herbs within Nepal.

• Strengthen bilateral negotiations with India and request the Government of India to (a) incorporate selected herbs in the list of importable items of Department of Plant Quarantine and (b) issue open transit movement permit to Nepalese herbs from one state to another.

2008 Export Values of the 19 Export Potentials

SN SectorNepal’s exports to world

(2008,US$ 1,000)Share of goods exports in 2008

Source

7 Medicinal Herbs/Oils 11,000 1,2% ITC estimate

HS-6 for Individual Goods Export Potentials

# Industry HS 2002 Product DescriptionExports Nepal

2008 (US$ 1,000)

Remarks

8Medicinal Herbs/Essen-tial Oils

121190Plants & pts of plants (incl. seed and fruit) usd in pharm, perf, insect, etc.

2,991

330119 Essential Oils of citrus fruits, nes 36

330125 Essential Oils of other mints 16

330129 Essential Oils, nes 847

330130 Resinoids 3

330190 (other Essential Oils) 34

76

Annex 5: Action Plan of the MAPs Sector proposed and elaborated by the Project Advisory Group of GIZ/WTO/EIF-SP

GROUP 1 - COLLECTION AND CULTIVATION + PROCESSING/MANUFACTURING

SN Challenge/Problem Goal Responsibility Pro-poor

Collection

1

Unsastainable/haphazard collection of MAPs

Capacitate/strengthen collectors on proper time and sustainable way of collection

DFO ++

2 Sustainable harvesting method to be introduced and enforced DFO/FECOFUN ++

3 Promote organic certificate for wild MAPs +

4Promote/develop domestication of selected MAPs ensuring afford-ability for the poor

+

5Institutional framework to handle collection to marketing aspects of MAPs and essential oil at local level should be developed using existing channels

++

6 Resource InventoryPrepare a sesource inventory using local knowledge about species, dissemination and capacities

+

Cultivation

7Lack of documents on cultivation

8

Lack of research and development on cultivation

Research and development on new varieties -

9Promote adaptive research on cultivation including socio-economic questions in regard to using land/land rights to ensure pro-poor growth

+

10 Introduce best variety of MAPs +

11

Farmers, producers, traders are unaware of importance of quality production

Awareness raising among farmers on cost and benefit of cultivation

+/-

Processing

12Inadequate knowledge on post harvesting manage-ment, processing, stor-age, etc.

Define what level of “processing” is actual processing +

13 Promote processing at local level +

14 Proper technology for distillation of Essential Oils +

Manufacturing

15

Manufacturer needs to depend on Indian market for the raw material even though it grows in Nepal

Public Private Partnership (PPP) projects to be developed

• Contract farming

• Vertical linkages

+/-

77

GROUP 2 - ENVIRONMENT + R & D + DATA VALIDATION + OTHERS


1

Collection permit related to IEE/EIA

(below 5 tons can get IEE from GoN, for more need EIA)

Policy amandments

• Up to 10 tons SHP (Sustainable Harvesting Plan) should be approved by DFO

• IEE requirement from 10 tons up to 50 tons

• EIA requirement for more than 50 tons

Parliament/MoE +/-

2Lack of sophisticated equipment antrained manpower in labs

Fully equipped DPR lab with trained staff DPR +/-

3No internationally accred-ited laboratory in MAPs sector

Establishment of accredited lab NBSM/DPR +/-

4No database for PRA (Pest Risk Assessment)

Develop database on PRADPR/ DoA-(Plant quarantine)

+/-

5

Data validation

Develop HS Code to eight digit (currently six digits) DoC +/-

6

Representative from DPR at major custom points (6 - 7 points) to ensure proper classification of MAPs and Essential Oils

or

Train custom officials themselves

DPR +

GROUP 3 - EXPORTS


1

Transit permit for the products to be exported in Uttar Pradesh and Uttrakhand (India)

Government to government dialogue to be held to respect Indo-Nepal Treaty of Trade which does not have such restrictions

+

2Multiple taxation imposed by DFO, DDC, Export duty, FUGs, etc.

Single window tax collection system to be adopted DFO/DDC +/-

3Hassle during domestic transportation (non-formal fees)

Sealed containerised vehicle system should be introduced nationwide

+/-

4

Standards and Certifica-tion (quality, organic, wild active ingredients)

Analytical lab with quantitative analysis facility to be established +/-

5 Awareness/trainng on organic farming opportunities +

6Certification for wild harvesting through internationally accredited bodies

+

7NTBs (CITES, SPS, PRA, Heavy Metal Analysis)

Nepal government certificate on CITES has to be recognised +/-

8 Quarantine posts at various custom points have to be established +/-

9Govt. and private labs have to be strengthened in terms of quality of service, human resource, accreditation (govt. to take lead)

+/-

78

10Market information and market dynamics

Establish market information service Govt. +

11Unavailability of market for products

Develop market linkages for export promotion (also to assist market diversification for risk minimising)

+

12

Intellectual Property Rights (IPR)

• Traditional knowledge

Access Benefit Sharing

Document traditional knowledge in MAPs. (e.g. India has developed a digital library for their traditional knowledge)

++

Abbreviations

DDC District Development Committee

DFO Department of Forest

DoC Department of Customs

DPR Department of Plant Resources

FECOFUN Federation of community Forestry Users, Nepal

FUGS Forest User Groups

MoE Ministry of Environment

NBSM National Bureau of Standards and Metrology

NTBs Non-Tariff Barriers

PRA Pest Risk Assessment

SPS Sanitary and Phytosanitary measures

Impact on pro-poor growth

++ + +/- - --

Direct and positiveIndirect and

mid-term only

Special risks and circumstances have to be considered and

monitored

negative Highly negative

79

Anne

x 6:

Res

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struc

ture

of AP

2

for

VC 2

4.5

Faci

litat

e MoU

bet

wee

n MoC

S-PI

TCD

and

rele

vant

st

akeh

olde

rs to

ensu

re

cont

inua

tion

of p

latfor

m

5.5

De

velo

p an

d im

plem

ent ca

paci

ty

deve

lopm

ent pa

ckag

es for

PITCD

/NI

U

1.6

Repo

rt W

TO p

rogr

ess

to N

SC

2.6

Prep

are

surv

ey o

n or

gani

zatio

nal

bottle

neck

s fo

r th

e im

plem

enta

-tio

n of

WTO

com

mitm

ents

3A.6

Cond

uct PI

A an

d pr

ioritis

e ac

tivi-

ties

unde

r th

e AP

3B.6

Cond

uct PI

A an

d pr

ioritis

e ac

tiviti

es

unde

r th

e AP

2.7

Impl

emen

t ag

reed

GIZ

pilo

t ac

tiviti

es

3A.7

Prop

ose

divisi

on o

f la

bour

for

th

e im

plem

enta

tion

AP 2

am

ong

stak

ehol

ders

of VC

1

3B.7

Prop

ose

divisi

on o

f la

bour

for

the

im

plem

enta

tion

AP 2

am

ong

stak

e-ho

lder

s of

VC

2

3A.8

Impl

emen

t GI

Z/PI

TCD/

PTB

pilo

t ac

tiviti

es

3B.8

Impl

emen

t GI

Z/PI

TCD/

PTB

pilo

t ac

tiviti

es

80

Indi

rect

Re

sult

s

Incl

usive

grow

th, p

over

ty r

educ

tion

Mor

e jo

bs/inc

ome

Impr

oved

reg

ulat

ory

fram

ewor

k/su

pply

ca

paci

ty for

VCs

and

exp

orts

Attr

ibut

ion

Gap

Dire

ct

Resu

lts

Impr

oved

cap

aciti

es o

f Go

N to

enh

ance

the

bus

ines

s en

viro

nmen

t by

strat

egic

ally

usi

ng a

nd im

plem

entin

g its

WTO

com

mitm

ents

and

the

Enh

ance

d In

tegr

ated

Fra

mew

ork

Risk

sPI

TCD/

NIU

is n

ot ful

ly o

pera

tiona

lRe

leva

nt G

oN b

odie

s d

o no

t co

oper

ate

in im

plem

enta

-tio

n of

the

pro

cess

DPs

do n

ot a

dequ

atel

y su

ppor

t th

e NT

IS im

plem

enta

-tio

n pr

oces

s

Use

of

out

puts

MoC

s op

erat

es/r

uns

M+E

m

echa

nism

MoC

s co

ordi

nate

s th

e im

plem

en-

tatio

n of

WTO

com

mitm

ents

Publ

ic a

nd p

riva

te s

take

hold

ers

of A

P2 im

plem

ent pa

rts

of d

efine

d AP

s

Civil so

ciet

y an

d m

edia

use

of in

for-

mat

ion

on W

TO to

reco

gnize

WTO

m

embe

rshi

p po

tent

ial

PITC

D/NI

U ef

fect

ivel

y co

or-

dina

tes

exis

ting

TRTA

/Aft

oppo

rtun

ities

and

sec

ures

ne

w fun

ding

for

NTIS

impl

emen

tatio

n

PITC

D/NI

U fo

lfills

rol

e as

ove

rall

coor

dina

tor

of T

RTA/

Aft pr

ojec

ts

impl

emen

ting

the

NTIS

Rele

vant

: Gov

ernm

ent bo

d-ie

s im

plem

ent th

eir

WTO

co

mm

itmen

ts

Outp

uts

O-1

M+E

mec

hani

sm is

deve

lope

d an

d in

trod

uced

O-2

Actio

n Pl

an 1

to

impl

emen

t W

TO

com

mitm

ents

dev

elop

ed a

nd

partia

lly p

ilote

d

O-3a

Ac

tion

Plan

2.1 to

impl

emen

t se

c-to

r ap

proa

ch for

VC

of o

ne p

rior

ity

prod

uct of

NTIS

deve

lope

d an

d pa

rtia

lly im

plem

ente

d with

foc

us

on T

RIPS

/TBT

s

O-3b

Ac

tion

Plan

2.2 to

impl

emen

t se

c-to

r ap

proa

ch for

VC

of o

ne p

rior

ity

prod

uct of

NTIS

deve

lope

d an

d pa

rtia

lly im

plem

ente

d with

foc

us o

n TR

IPS/

TBTs

O-4

Advo

cacy

strat

egie

s fo

r PP

D de

velo

ped

and

impl

emen

ted

O-5

Incr

ease

d ca

paci

ties

of P

ITCD

/ NI

U an

d its

sta

ff m

embe

rs to

coor

dina

te a

nd m

anag

e TR

TA a

nd

AfT

to im

plem

ent th

e NT

IS

Activ

ities

1.1

Anal

yse

exis

ting

WTO

M+E

m

echa

nism

2.1

Crea

te W

TO tec

hnic

al c

omm

ittee

s

3A.1

Deve

lop

a lis

t of

crite

ria

for

the

sele

ctio

n of

VC

1

3B.1

Deve

lop

a lis

t of

crite

ria

for

the

sele

ctio

n of

VC

2

4.1

Faci

litat

e in

terfac

e fu

nctio

n fo

r in

form

atio

n ex

chan

ge o

f MoC

S-PI

TCD

in N

BF T

WG

on

Expo

rt P

rom

otio

n an

d Tr

ade

Faci

litat

ion

5.1

Cond

uct Ca

paci

ty A

sses

smen

t of

NIU

1.2

Desi

gn M

+E m

echa

nism

inc

ludi

ng

succ

ess

indi

cato

rs

2.2

Mod

erat

e an

d fa

cilit

ate

WTO

fo

cal po

int m

eetin

gs a

nd tra

in

PITC

D to

tak

e ov

er s

tartin

g in

20

12

3A.2

Supp

ort PI

TCD

in the

dec

isio

n on

th

e se

lect

ion

of the

VC1

3B.2

Supp

ort PI

TCD

in the

dec

isio

n on

the

se

lect

ion

of the

VC2

4.2

Desi

gn c

once

pt for

adv

o-ca

cy p

latfor

m to

addr

ess

gene

ral pu

blic

, int

eres

t gr

oups

, and

cha

nge

agen

ts

thro

ugh

all su

itabl

e fo

rms

of m

edia

5.2

Faci

litat

e co

ntin

uous

par

tner

-do

nor

dial

ogue

1.3

De

velo

p Im

pact

Cha

in o

f PI

TCD

for

NTIS

im

plem

enta

tion

and

WTO

co

mm

itmen

t im

plem

enta

tion

2.3

Anal

yse

exis

ting

AP m

odel

s

3A.3

Orga

nize

and

im

plem

ent st

ake-

hold

er m

eetin

gs o

f VC

1 to

iden

tify

chal

leng

es

3B.3

Orga

nize

and

im

plem

ent st

ake-

hold

er m

eetin

gs o

f VC

2 to

iden

tify

chal

leng

es

4.3

Impl

emen

t 2

advo

cacy

pla

t-fo

rm e

vent

s pe

r ye

ar

5.3

Supp

ort PI

TCD/

NIU

in for

mul

atin

g an

d ap

prai

sing

TRT

A pr

opos

als

1.4

Offic

ially

int

rodu

ce im

prov

ed a

nd

func

tiona

l M+E

mec

hani

sm

2.4

Desi

gn a

nd d

ecid

e on

AP

1 st

ruct

ure

3A.4

A st

udy

on T

BT/T

RIPS

iss

ues

and

reco

mm

ende

d ac

tions

for

the

se

lect

ed V

Cs b

y SA

WTE

E

3B.4

A st

udy

on T

BT/T

RIPS

iss

ues

and

reco

mm

ende

d ac

tions

for

the

se

lect

ed V

Cs b

y SA

WTE

E

4.4

Initi

ate

radi

o (2

4 ep

isod

es)

and

TV (10

epi

sode

s)

prog

ram

me

5.4

Deve

lop

a co

mm

unic

atio

n st

rate

gy

for

WTO

/EIF

-SP

and

„Nep

aTra

de“

1.5

Prep

are

quar

terly

and

annu

al

WTO

pro

gres

s re

ports

2.5

Prop

ose

divisi

on o

f la

bour

for

im

plem

enta

tion

amon

g st

ake-

hold

ers

(GoN

and

don

ors)

3A.5

Desi

gn a

nd d

ecid

e on

struc

ture

of

AP 2

for

VC

1

3B.5

Desi

gn a

nd d

ecid

e on

struc

ture

of AP

2

for

VC 2

4.5

Faci

litat

e MoU

bet

wee

n MoC

S-PI

TCD

and

rele

vant

st

akeh

olde

rs to

ensu

re

cont

inua

tion

of p

latfor

m

5.5

De

velo

p an

d im

plem

ent ca

paci

ty

deve

lopm

ent pa

ckag

es for

PITCD

/NI

U

1.6

Repo

rt W

TO p

rogr

ess

to N

SC

2.6

Prep

are

surv

ey o

n or

gani

zatio

nal

bottle

neck

s fo

r th

e im

plem

enta

-tio

n of

WTO

com

mitm

ents

3A.6

Cond

uct PI

A an

d pr

ioritis

e ac

tivi-

ties

unde

r th

e AP

3B.6

Cond

uct PI

A an

d pr

ioritis

e ac

tiviti

es

unde

r th

e AP

2.7

Impl

emen

t ag

reed

GIZ

pilo

t ac

tiviti

es

3A.7

Prop

ose

divisi

on o

f la

bour

for

th

e im

plem

enta

tion

AP 2

am

ong

stak

ehol

ders

of VC

1

3B.7

Prop

ose

divisi

on o

f la

bour

for

the

im

plem

enta

tion

AP 2

am

ong

stak

e-ho

lder

s of

VC

2

3A.8

Impl

emen

t GI

Z/PI

TCD/

PTB

pilo

t ac

tiviti

es

3B.8

Impl

emen

t GI

Z/PI

TCD/

PTB

pilo

t ac

tiviti

es

81

Annex 7: List of Interview Partners

Anu Joshi Shrestha International Centre for Integrated Mountain Development (ICIMOD)

Anuj Sharma Department of Forest

Bhim Prakas Khadka Federation of Community Forest Users Nepal (FECOCUN)

Bijaya Bajracharya Micro-Enterprise Development Programme (MEDEP)

Brikha Bahadur Shahi Federation of Community Forest Users Nepal (FECOCUN)

Gabrielle Schlaeger Trade and Export Promotion Center (TEPC)

Madhukar Thapa Jadibuti Association of Nepal (JABAN)

Members in Charikot Community Forest User Groups

Pankaj Das Department of Plant Resources

Phaindra Pandey Agro Enterprise Center (AEC)/Federation of Nepal Chambers of Commerce (FNCCI)

Puspa Sharma South Asia Watch on Trade, Economics and Environment (SAWTEE)

Vijaya Sthapit International Development Enterprises Nepal (IDE)

Ram Krishna K.C. Dirstrict Forest Office, Charikot

Annex 8: References1. ADB 2003 Poverty Analysis2. http://www.ruralpovertyportal.org/web/guest/country/home/tags/nepal3. http://www.undp.org.np/uploads/news/200511101700531.pdf4. http://www.un.org.np/sites/default/files/report/tid_70/Nepal-HPI-districts-2004.png5. Source: IFAD6. Harvard Business Review-Geography, Poverty and Conflict in Nepal7. http://www.saceps.org/upload_file/papers_pdf/Chapters8.pdf8. http://microdata.worldbank.org/lsms/index.php/ddibrowser/2/download/129 (2005)9. http://www.adb.org/Documents/Reports/Poverty_Reduction_Nep/poverty_analysis.pdf (2002)10. WTO SP documents11. Community Forest development Programme, Abstract “Hambro”12. Farmers’ new strategy: myth or reality by A. R. Sharma13. Glamour and gripes of community forestry: impact on income distribution by Anuja Raj Sharma14. Promoting Exports of Medicinal and aromatic Plants (MAPs) and essential Oils from Nepal by Puspa Sharma and Niraj Shrestha, South Asia Watch on Trade, Economics and Environment (SAWTEE), Kathmandu / German International Cooperation (GIZ), Kathmandu (June, 2011).15. Poverty Alleviation Fund (PAF) – Nepal - Annual Progress Report (2009/2010)16. Three Year Plan Approach Paper (2010/11 - 2012/13) -Government of Nepal, National Planning Commission - August, 201017. Remittance Income in Nepal: Need for Economic Development by Yadav Sharma Gaudel. The Journal of Nepalese Business Studies Vol. III No. 1 Dec. 2006.18. Migration and Remittances Factbook, Worldbank. www.worldbank.org/prospects/migrationandremittances19. Community Forestry: A Challenge to the Millennium by Anuja Raj Sharma and Keshav R. Kanel, Ph. D.20. Larger forests into fewer hands: how equitable is Community forestry in Nepal? by Anuja Raj Sharma21. Impact of Community Forestry on income distribution: with case studies from Nepal. By Anuja Raj Sharma (2010).22. A practical guide to ex-ante Poverty Impact Assessment –promoting Pro-Poor-Growth. Paris OECD DAC (2007).23. Fighting Poverty - Guidelines for Successful Poverty Reduction in the Work of GTZ. Eschborn, (2007).24. DAC Guidelines on Poverty Reduction. www.oecd.org/dac/poverty.25. Pro-poor programs of Nepal’s community forestry: Who benefits ? Pokharel, R. K. (2007). http://dlc. Indiana.edu/archive/00004062/01/pokharel_223101.pdf 26. Mulliken, T. and Crofton, P. (2008): MuReview of the Status, Harvest, Trade and Management of Seven Asian CITES-listed Medicinal and Aromatic Plant Species. Results of the R+D Project FKZ 804 86 003. Publisher: Bundesamt für Naturschutz (BfN) Federal Agency for Nature Conservation, Bonn.27. IUCN (International Union for Conservation of Nature) Nepal (2000): National Register of Medicinal Plants. Kathmandu.28. IUCN Bangladesh 2005: Medicinal Plant Conservation through Community Participation. Dhaka.29. Kathe, W. (2011): The new FairWild standard – a tool to ensure sustainable wild-collection of plants. In: Medicinal Plant Conservation. 14.Newsletter of the Medicinal Plant Specialist Group of the IUCN Species Survival Commission.30. IUCN & MPSG (2007): International standard for sustainable wild collection of medicinal and aromatic plants ISSC-MAP). Version 1.0. BfNSkripten 195, Bundesamt für Naturschutz, Bonn, Germany. 36 pp.

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83

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