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Sustainable trade in nature-based products for economic development

Janita Gurung & Paras Kharel

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Almost 60 percent of Sudurpaschim Province is forested, and the collection and sale of non-timber forest produce is an important means of livelihood. Photo: Jitendra Bajracharya/ICIMOD

The three northern-most districts of Sudurpashchim Province (Far-Western Province) of Nepal, Baitadi, Bajhang and Darchula, lie within the Kailash Sacred Landscape. The province is one of the poorest in Nepal and has the second highest unemployment rate in the country at 11.5 percent. Migration is a major livelihood strategy and the province reports high work-related outmigration – an estimated 425,000 people (i.e. 17 percent of the total population) work abroad, the majority of whom are in India.

Sudurpashchim has immense trade potential, especially of non-timber forest products, as collection and trade of these products is an important source of household income in some districts. Trade, particularly export trade, can serve as an avenue for income generation and employment creation in the province. In 2018, goods worth NPR 771 million were exported through Sudurpaschim customs points.

In 2020, ICIMOD and South Asia Watch on Trade, Economics and Environment (SAWTEE), carried out an exploratory assessment of the export potential of Sudurpashchim Province. The analysis focused on three clusters of products: medicinal and aromatic plants (MAPs); handicraft items made from non-timber forest products (NTFPs); and forest-based industrial inputs, such as resin. On 24 December 2020, the findings of the assessment were shared with the Ministry of Industry, Tourism, Forests, and Environment (MoITFE), Sudurpaschim Province, and other stakeholders at a meeting organised in Dhangadhi, Kailali District, Nepal.

Workshop participants highlighted the potential for trade in nature-based products and its contribution to the economic development of the province. Some 95 percent of the exports, as recorded in major customs points of the province, consists of nature and forest-based products: resin/rosin and turpentine from pine trees (Pinus sp.), kattha (catechu) from khair trees (Acacia catechu), and fats and oil (including clarified butter). Most of these products are sold in raw form with minimal processing or value addition. MAPs are an important part of overall exports from the region, contributing to a significant volume of the total MAPs traded from Nepal.

Resin, which is tapped from pine trees
Resin, which is tapped from pine trees, is the highest traded non-timber forest product from Sudurpashchim Province. Photo: Kamal Mohan Ghimire/RECAST-TU


The significance of forest-based products in international trade was also emphasized by the Chief Guest, Maya Bhatta, Honourable Minister of Industry, Tourism, Forest, and Environment. Bhatta indicated that with price assurance being one of the major challenges, identifying and ensuring markets for these products is a priority in achieving and maintaining long-term trade. Bhatta called for implementing an appropriate model that facilitates sustainable trade and provides incentives for local producers.

Maya Bhatta, the Honourable Minister of Industry, Tourism, Forest and Environment
Maya Bhatta, the Honourable Minister of Industry, Tourism, Forest and Environment, highlighted Sudurpashchim’s immense but untapped potential for sustainable trade. Photo: Shyam Shrestha/ICIMOD


Yajna Nath Dahal, Secretary of MoITFE, Sudurpashchim, who also chaired the event, focused on the need to consider several important dimensions of trade – investment, private sector involvement, technology, stakeholder capacity, market, innovation, quality production and government policy. He also emphasized multi-sectoral coordination to facilitate and enhance sustainable trade.

Interactions with stakeholders representing the government, private sector, development organizations, and academia, revealed several impediments to trade of nature-based products in Sudurpashchim. These include the lack of quarantine and quality-testing facilities, information gaps between the producers and markets, inadequate infrastructure for collection and storage, and unstable government policies.

Some of the recommended actions from the workshop are as follows:

These actions will be taken forward by ICIMOD’s Kailash Sacred Landscape Conservation and Development Initiative with support from SAWTEE, and in coordination with MoITFE, Sudurpaschim Province.

Janita Gurung is the Programme Coordinator for the Kailash Sacred Landscape Conservation and Development Initiative (KSLCDI) at ICIMOD. Paras Kharel is a Research Director at SAWTEE.


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