The Welfare Impacts of Leasehold Forestry in Nepal
The study analyzes the role of the leasehold forestry (LHF) program in improving household welfare in Nepal. We estimate both the time saved in biomass collection and the addition to income through increases in biomass availability from LHF. The findings reveal that a household participating in the LHF programs saves 33 workdays in biomass extraction while the contribution to household income from biomass from LHF plots is approximately 5 percent of household income. The study concludes that the restructuring of the LHF regime could increase efficiency and improve welfare. A change in policy, re-allocating LHF plots now held on a group basis as individual household parcels, would provide greater economic incentives for those involved in the LHF Program. Moreover, providing participating households with LHF plots at a shorter distance from the homestead and compensating for very poor quality soil by providing other inputs would further improve welfare gains from the LHF program.