Feasibility Study for Different Model Enterprises for Dolakha

8/14/2019 Feasibility Study for Different Model Enterprises for Dolakha

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Feasibility study of different models of

NTFPs based enterprise/ cooperative/public private partnership company thatcan be set up in programmed VDCs of

ECARDS-Dolakha

A Report Submitted To

Ecology, Agriculture and RuralDevelopment Society (ECARDS)

Charikot, Dolakha

Submitted By,Khilendra Gurung

2006


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Acronyms and Abbreviations

ANSAB: Asia Network for Sustainable Agriculture and BioresourcesCFUGs: Community Forest User GroupsDFO: District Forest Office/OfficerECARDS: Ecology, Agriculture and Rural Development Society, DolakhaNSCFP: Nepal Swiss Community Forestry ProjectNTFPs: Non Timber Forest Products

VDCs: Village Development Committees


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Table of Contents1. Introduction 12. Objectives 13. Study Area 23.1 Location 23.2 Forest types 23.3 Ethnic composition 34. Study Methods 35. Findings 45.1Different Models of NTFPs Based Community Enterprises to be set up 46. Outcomes and Indicators of the Program 57. Challenges for Initiating Community Based Forest Enterprises 68. Lessons Learned after Conduction of the Program 6

9. Future Strategy 710. Strategic Planning 7

Annex


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1. IntroductionSouthern part of Dolakha district is physiographically remote. Due to theremoteness people living there still depend on traditional agriculture practicesand nearby forest resources for their subsistence. They are deprived ofincome generating opportunity by utilizing the available resources in asustainable way. Moreover, they have been collecting Non Timber ForestProducts (NTFPs) for decades for their livelihood support. A traditionalcollecting practice of NTFPs in unsustainable way has posed a threat to theresources. However, the only medium of their livelihood support is by tradingNTFPs collected from the forest and adjoining areas. But, they have noaccess to the market and always been exploited from the traders for notgetting the fair price.In order to address the current situation, it would be the best option to

establish different models of forest based communityenterprises/cooperatives and public private company participating poor anddisadvantaged people and community forestry user groups (CFUGs) throughsustainable use of the resources.In this scenario, Ecology, Agriculture and Rural Development Society(ECARDS)-Dolakha had facilitated in the establishment of essential oilprocessing unit in Hawa VDC with the financial support of Action Aid Nepal.ECARDS handed over the M/S distillation unit with capacity of 2000L. toShree Setidevi NTPF Production and Processing Cooperative Limited in which2 cooperatives (Deudhunga Cooperative and Bhimeshwor Cooperative), 7Community Forestry User Groups (CFUGs) and 35 pro-poor user groups from7 CFUGs are the members.Realizing the fact, an attempt has been made to study the feasibility ofdifferent models of NTFPs based enterprise/cooperative/ public privatepartnership company that can be set up in programmed VDCs of ECARDS-Dolakha. The study was conducted with the financial support of Action AidNepal.

2. ObjectivesThe specific objectives are as follows: To study the feasibility for the establishment of different models of NTFP

based enterprises in the study area. To facilitate enterprise development by assisting the other programs of

the project in the study area. To create the sound environment for the rural communities to be

entrepreneur through their capacity building. To clarify the aims on why and how to be entrepreneur with proper action

plan


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3. Study Area3.1 Location:The study area lies in the southern part of Dolakha district which comprisesof Jiri, Gairimudi, Mirge, Thulopatal and Hawa VDCs.

3.2 Forest types:According to the study conducted by ECARDS (2005), the vegetation andforest types of the study area comprises as follows:1. Altitude between 1500m-2500m: In this region, the vegetation isdominated by Schima- Castanopsis forest type with the associated species ofBakle (Cleyerajaponica) followed by Mahuwa (Engelhardtiaspicata).2. Above 2000m in the southern slope: In this region, the vegetation type isdominated by mountain oak forest, major components of Kharsu (Quercus

semecarpifolia) and associates as Kholme/Kharane (Symplocospyrifolia/Symplocosramosissima), Gurans (Rhododendronarboreum) andLaurels.3. North, North East and North West part above 2000m: The vegetation isdominated by East Himalayan Oak-Laurel forest, major component of which isPhalant (Quercuslamellosa) in which the major associates are Laurels andDabdabe.

3.3 Ethnic composition:Majority of the population of Jiri VDC constitutes of Jirel followed by Chhetriesand Sherpa. Whereas in other VDCs of the study area, the populationcomprises of Tamang, Sunuwar, Chhetries, Brahmins and underprivilegedcastes.

4. Study MethodsThe following methods were employed during the study period: Interaction program was held to identify the Village Development

Committees (VDCs), Community Forestry User Groups (CFUGs), forestproducts based entrepreneurs, traders and disadvantaged pro-poor to beincluded in the program.

Orientation workshop was held with VDC representatives, entrepreneurs,traders, social workers, representatives from CFUGs.

The following are the objectives for the conduction of orientationinteraction program:o To introduce and coordinate with FUGs and forest products based

entrepreneur/traders/collectors from the study area

o To search for the possible opportunities from the current status ofFUGs and forest resources of the area


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o To identify the NTFPs based different models of enterprises that canbe set up

o To assess about the network between individual entrepreneur andFUGs and initiate for the cooperative work

o To assess the need based as to establish the forest based communityenterprises

After the interaction, altogether 17 CFUGs with similar resources, 5 VDCs,local traders, forest products based entrepreneurs and private sectorswere identified.

The workshop concluded that:o The identified resources were deforested day by day due to the

unhealthy competition between the collectors/traders.

o The unidentified forest resources were underutilized.o The poverty level of the people remains unchanged.

A network was formed to facilitate the establishment of different modelsNTFPs based community enterprises in the area.

Work division was divided among the members of the network and actionplan was prepared.

Facilitators were selected on the basis of their facilitating capability andthe time they could contribute.

Worksheet was prepared in order to train the facilitators. Orientation program was held for the facilitators with necessary tasks to

educate them on:

o Why to facilitate?o How to facilitate?o Whom to facilitate?o For how long to facilitate?

Other necessary action plans were prepared according to the prevailingsituation.

5. Findings5.1Different Models of N TFPs Based Community Enterprises to beSet Up

Altogether 7 cottage/small scale pro-poor focused enterprises in collaboration

with CFUGs and other cooperatives/companies can be established in thestudy area. Similarly 2 household level enterprises can be set up in the studyarea. The following enterprise development steps/stages should be followedfor undertaking inclusive and different models of NTFP based enterprises tobe set up.1. Feasibility studies in detail2. Identification of products3. Development of enterprise concept


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4. Formation of Community Forest User Groups network5. Identification of poor households6. Identification of private entrepreneurs/ cooperatives working in the similarmodel and products7. Identification of the resources8. Initiation for structuring the enterprise9. Preparation of the statute10. Registration of the enterprises/ cooperative/ company

The different models of NTFPs based enterprises/cooperatives/company to beregistered set up in different locations of the study area are presented in thefollowing table:

SN Enterprises/ cooperatives/ Company VDCs/ Locations

1 Essential oil (Wintergreen oil) processingcooperative

Hawa and Gairimudi

2 Essential oil (Artemisia, Juniper and Abiesoils) processing cooperative/company

Jiri

3 Essential oil collection and marketingcooperative/company

Jiri

4 Handmade paper (from Lokta and Argeli)manufacturing enterprise/company

Jiri

5 Allo/Hemp processing enterprise householdlevel

Hawa, Jiri, Thulopatal,Mirge

6 NTFPs cultivation enterprises/cooperatives Jiri, Thulopatal,Gairimudi, Hawa, Mirge

7 Jhyau processing enterprises Jiri, Hawa

8 Brandy production (From Chutro and Aiseluand Gurans) enterprises

Jiri, Thulopatal,Gairimudi, Hawa, Mirge

9 Jam and pickle (from chutro) makingenterprises at household level

Jiri, Thulopatal,Gairimudi, Hawa, Mirge

After the registration of those different inclusive models of enterprises invarious locations of the study area, the following steps are to be adopted:1. Training and capacity building

2. Infrastructure setting3. Product design and development4. Business plan preparation5. Operation of enterprises6. Quality control and standardization7. Marketing linkage of the products8. Sharing of benefits


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9. Review and analysis10. Diversification of the products11. Creating goodwill (image) of the enterprises

6. Outcomes and Indicators of the Program Representative from VDCs and CFUGs, local traders, forest products based

entrepreneurs, social workers, DFO/DFO staffs, representative fromECARDS and concern stakeholders were participated in the interactionprogram.

A network "NTFPs Based Enterprise Management and CoordinationCommittee" inclusive of all walks of lives from the community was formed.

Facilitators were selected as per the recommendation of the network. The entry point of the project was formed after the development of local

facilitators and focal persons to conduct the further programs and thelocal inhabitants could follow-up the project with their demands/proposals.

People have started advocating/discussing/interacting about theestablishment of regional level forest based community enterprise (aninclusive model) in Jiri; a centre of Southern Dolakha; which has assistedto search for various options to be implemented.

Identification of NTFPs, prioritization of NTFPs and identification ofpotential enterprises utilizing the NTFPs resources in Community Forestsof the selected VDCs.

Publicity/interaction/advocacy of inclusive model ofenterprise/cooperative/company in the rural areas of the SouthernDolakha.

Inspiration for the amendment of the operational plan of CFUGs tobecome an entrepreneur.

A local level "Forest Based Community Enterprise Promotion Committee"was formed in Jiri, Gairimudi, Hawa, Thulopatal and Mrige VDCs.

A joint committee was formed between Gairimudi and Hawa VDCs fordistilling the essential oils from wintergreen plant.

The user groups including pro-poor residing in Southern Dolakha startsenjoying the program supported by ECARDS/Action Aid Nepal afterimplementing the program.

With support from ECARDS/Action Aid Nepal, the unsuccessfulentrepreneur and the registered enterprise unable to run could have theprivilege to be a successful entrepreneur and run the enterprise smoothly.

The implementation of this program has created the prospects for thesustainable enterprise development in Southern part of Dolakha.


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7. Challenges for Initiating Comm unity Based Forest EnterprisesThe following are the identified challenges for initiating community basedforest enterprises: It is an extremely difficult task for the community mobilization process. It is a hard task to convert the NTFPs based proprietorship enterprises

running in traditional fashion to the community owned enterprises. The illiterate society cannot accept the new concept; they believe in the

thoughts of the persons who work for their own interest. It is a challenging task to break through the traditional networks of

proprietorship entrepreneurs. The rural people and even the local entrepreneurs' doubt that the

community based enterprise could run smoothly. The local people have a tendency to protest on each others matter and

that they hardly accept the leadership of others leading to trustlessenvironment.

The local entrepreneurs have the calculation that the community basedenterprises are not profitable.

The local people are engaged in traditional agrarian practice and cannotcontribute their time for such enterprises, due to the lack of trustworthyenvironment.

The local people are not aware about the marketing linkages andinformation of the products to be manufactured by the enterprises.

8. Lessons Learned after Conducti on of the ProgramThe following are the lessons learned after conducting the programs: It is absolutely an ambitious planning to set up different models of

community enterprises in the area. Without the initial feasibility study and infrastructure development, the

direct implementing strategic program will not succeed. The conclusion and the programs made by the participants of the

workshop/interaction program cannot be implemented in the communitylevel.

The pro-poor focus model of community enterprise is ambitious which isdifficult to implement in practice.

The enterprise development facilitators are unable to provide the totalenterprise development package (raw materials inventory, efficienttechnology transfer, production scheme, management, cost/profit analysisand marketing linkage) during the motivation to local people to establishthe model enterprises. The principle of model enterprises is not sufficientat the initial stage.

The pro-poor, identified during the well being ranking process, are notphysically and mentally sound who are mostly isolated from their families.


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Such persons if included in the enterprise are not expected to contributefor the betterment of the enterprise.

Micro-credit facility should be provided to the rural entrepreneurs in orderto initiate the enterprises in the rural areas.

9. Future StrategyECARDS' future strategy seeks to transform the traditional occupation(subsistence agriculture and NTFP collection) of the poor community living inremote Southern part Dolakha to the forest based community enterprisesdevelopment for their livelihood upliftment.The following are the future strategies to be conducted: Identification of other possible different models of enterprises. Marketing management of the products produced by different levels of

forest based enterprises; establishing Jiri or Charikot as a marketingcentre.

Conduction of research on the use of local NTFPs for various purposes inlocal level. For example: establishing natural treatment centre in Jiri fortreating various ailments and producing different items of foodsupplements.

Motivation to rural people to be entrepreneur with coordination from allsectors of the society.

Development of skilled manpower to lead/motivate rural people to beentrepreneur and run different models of enterprises in Southern part ofDolakha.

10. Strategic PlanningThe strategic plans for the follow up of the program are as given in the tablebelow:

SN Activit ies Responsibil ity Strategy

1 Capacity building/skilldevelopment to enterprisefacilitator andentrepreneurs

ECARDS Collaboration withNSCFP/ANSAB

2 Infrastructure setting of

the registered enterprises

ECARDS/Deudhunga

Cooperative

Collaboration with

FUGs, other usergroups andNSCFP/ANSAB

3 Training on Productdesign and development

ECARDS/DeudhungaCooperative

Collaboration withNSCFP/ANSAB

4 Training on quality controland standardization andcertifications

ECARDS/DeudhungaCooperative



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5 Preparation of businessplan

ECARDS ECARDS willcontribute incollaboration withNSCFP/ANSAB

6 Operation of theenterprises

Owners of theconcernedenterprises

Company itself willinvolve withsupport fromECARDS andDeudhunga

7 Marketing linkages of theproducts produced by theenterprises

DeudhungaCooperative

Company itself willinvolve with supportfrom ECARDS andDeudhunga

cooperative8 Formation of collective

marketing centerECARDS andDeudhungaCooperative


9 Identification andextension of otherpossible models ofenterprises

ECARDS FUGs and other usergroups incollaboration withNSCFP/ANSAB

10 Conduction of research onthe use of local NTFPs for

various purposes

ECARDS ECARDS willcontribute in

collaboration withNSCFP/ANSAB


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Annex

Annex-1: Identification of potential NTFPs in the study areaSN VDCs Potential NTFPs

1 Thulopatal andHawa

Lokta, Machhino, Chutro, Kukurdaino, Angeri, Bilaune,Argeli, Kurilo, Nigalo, Allo, Chirayito, Jhyau

2 Jiri Lokta, Machhino, Kukurdaino, Allo, Chutro, Argeli,Jamane mandro, Nagbeli, Aiselu, Nigalo, Kurilo,Chirayito, Jhyau, Titepati

3 Gairimudi Lokta, Machhino, Chirayito, Kukurdaino, Argeli, Aiselu,Chutro, Jhyau, Kurilo, Majitho, Ngbeli, Allo, Ban tarul

4 Mirge Lokta, Nagbeli, Chirayito, Allo, Majitho, Kharane,

Kukurdaino, Chutro, Argeli, Aiselu, Nigalo, Jhyau,Titepati

Feasibility Study for Different Model Enterprises for Dolakha

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