Contribution of Forestry to Poverty Alleviation - APFNet

From 2003-04 until 2004-05, revenue generated from the sale of wood products to rural residents was
slightly higher than revenue from wood products sold to urban residents (Table I.2). However, in 2005-
06 and 2006-07, the revenue from the supply of wood products to urban users was around 60% and
92%, respectively, while revenue from the supply of wood products to rural users was about 17% and
8%, respectively. Although demand is higher in rural areas, more revenue is being generated from the
sale of wood products to the urban consumers. This is because, at a subsidized rate, rural residents can
buy timber at a much lower price than the amount urban residents pay for the same amount of timber.
The total government revenue generated from supply of wood and wood products to rural and urban
consumers from 2003-04 to 2006-07 amounted to Nu 85.93 million, which went to the government
exchequer.
Table I.2. Revenue generated (Nu. in million) from supply of wood products.
User Year
2003-2004 2004-2005 2005-2006 2006-2007
Rural 3.98 3.75 4.57 2.33
Urban 0.46 2.22 17.43 27
Monasteries 0.28 1.65 0.11 -
Government
institutions
7.61 8.39 6.15 -
Total 12.33 16.01 28.26 29.33
Source: Department of Forests.
Government plantations
Commercial plantations in Bhutan date back to 1947 with the establishment of plantations along the
sub-tropical foothills of Bhutan. Clear-felling followed by artificial planting of exotic and local species,
such as teak (Tectona grandis), sal (Shorea robusta), champ (Michelia champaca), and other valuable
species, was practiced. Since the 1960s, the plantation program expanded to other parts of the country
to reforest degraded, denuded, and barren areas and to arrest forest degradation and forest cover loss,
particularly in sub-tropical zones where high human population and cattle population co-exist. A total
of 21,516 ha have been planted as of June 2008.
Although plantation has been an annual event throughout the first to the ninth FYP with the participation
of government agencies and private and wood-based industries, progress has been slow. This is because
of the country’s dependence on the natural forests, which supply the bulk of the forest resource demand,
lack of clear-cut plantation directions and strategy, lack of funding support, and other institutional gaps.
Conifer and broadleaf plantations constitute about 2% of Bhutan’s total forests cover. Rural people
are employed on a daily wage basis as plantation laborers for planting in government land. Very little
benefits are derived.
Wood-based industries plantation
Industrial and commercial forestry operations are carried out by a few wood-based industries such as
the Bhutan Board Product Ltd. (BBPL), Natural Resources Development Corporation Ltd. (NRDCL)
and Bhutan Chemical Carbide Ltd. (BCCL) for charcoal production. Out of the total plantations planted
by various agencies, commercial plantations of short rotation-high density forests account for only
18.7%. As in government plantations, the rural poor are hired by the wood-based industry on a daily
wage basis as workforce for planting, harvesting, wood processing, and marketing tasks. BBPL has
two nurseries for supplying production and planting materials, NRDCL has 10 nurseries, while private
individuals have 27 nurseries.
The constraints faced by industrial forestry are unclear legislation and regulation on leasehold
government reserve forests, limited forest resources, and the need for accommodation of biodiversity
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