Economic Contribution of Forestry Sector to National Economy in Nepal

Forests are major sources of energy, timber and non-timber forest products, medicinal and aromatic plants, hydrological functions, biodiversity conservation, and also fundamental sources of revenue collection to the nation. Studies indicate that forests could significantly enhance economic growth and create employment opportunities for local communities under intensive management. This paper aims to predict the contribution of the forest sector to the national economy. The economic facets of forestry considered in this paper are revenue generated from timber, non-timber forest products (NTFPs) and medicinal and aromatic plants (MAPs), and protected areas. The ARIMA model was used to forecast the economic contribution of the forestry sector. The study found that the total revenue generated from the selling of timber and fuelwood (USD 50.19 million) was higher than the total revenue collected from protected areas (USD 37.58 million) and NTFPs/MAPs (USD 6.9 million) in the past 15 years. The model projected that the mean revenue for the timber and fuelwood sale will USD 3.5 million for the next ten years. Similarly, the mean revenue will be generated about USD 0.5 million and USD 6.2 million from NTFPs/MAPs and protected areas, respectively, for the next ten years. The study limits to take account the in-kind use of forest products such as timber, fodder, fuelwood, etc., as used by community people within a forest users’ groups. Thus, practicing sustainable forest management, enabling policy documents, establishing forest-based industries, establishing forestry nurseries, conducting agroforestry practices, and tenure security could enhance the forestry sector's economic aspects.