Document of the World Bank

Report No: ACS13613

Kyrgyz Republic Communities Forests and Pastures

April 30, 2015

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EUROPE AND CENTRAL ASIA

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Document of the World Bank

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CURRENCY EQUIVALENTS Currency Unit = Kyrgyzstani Som (KGS)

(Exchange Rate Effective February 1, 2015) USD1 = 60.5 KGS

FISCAL YEAR January 1 – December 31

ACRONYMS AND ABBREVIATIONS

Aiyl aimak (AA) rural municipality area

Aiyl okmotu (AO) local government of aiyl aimak

Aiyl kenesh (AK) local council of aiyl aimak

asl above sea level

AISP Agricultural Investment Support Project

ASSP Agricultural Services Support Project

CBFM Community Based Forest Management

CFM Collaborative Forest Management

CPMP Community Pasture Management Plan

FE State forestry enterprise, Leskhoz

FGD focus group discussions

GOSREGISTER State Agency for Registration of Rights to Land and Immovable Property

IFEMP Integrated Forest Ecosystem Management Project

IFI International Financial Institution

IREI Inter- Regional Environmental Inspection

ISF The Irrigation Service Fee

Jaiyt Committee (JC)

Jaiyt or Pasture Committee – executive body of the Pasture Users’ Association

JICA Japanese International Cooperation Agency

KAFLU Kyrgyz Association of Forest and Land Users

KGS Kyrgyz som

Kolkhoz State collective farm

Leskhoz State forest enterprise

LFEPDFS Local Funds of Environmental Protection and Development of Forestry Sector

LRF Land Redistribution Fund

MoA Ministry of Agriculture

NAP National Action Plan

NFEPDFS National Fund of Environmental Protection and Development of Forestry Sector

NGO Nongovernmental organization

NTFP Non-timber forest products

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Oblast Region

PD Pasture Department

PUA Pasture Users’ Association

Rayon District

RDF Rural Development Fund

SAEPF State Agency for Environment Protection and Forestry

Sovkhoz Soviet farm

SFM sustainable forest management

SLF State Land Fund

SFF State Forest Fund

SRF State Reserve Fund

TDEPDFE Territorial Division of Environmental Protection and Development of Forestry Ecosystems

TF Trust Fund

UNDP United Nations Development Program

UFF Unified Forest Fund includes all forests and forest lands of the country

WB World Bank

WUA Water Users’ Associations

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Table of Contents

ACRONYMS AND ABBREVIATIONS ................................................................................................................. i

ACKNOWLEDGEMENTS ................................................................................................................................. v

EXECUTIVE SUMMARY ................................................................................................................................. vi

1 INTRODUCTION ..................................................................................................................................... 1

1.1 Background .................................................................................................................................................. 1 1.1.1 Land Use and Livelihoods ................................................................................................................................ 1 1.1.2 Climate Change Threats to Land and Livelihoods ........................................................................................... 2 1.1.3 Agriculture, Livestock and Pasture Land ......................................................................................................... 3 1.1.4 Pasture Management, Land Management History and Reform ..................................................................... 4 1.1.5 Forest Ecosystem Services and Contribution to the Kyrgyz Economy ............................................................ 5 1.1.6 Forests and Pastures in a mixed-use Landscape ............................................................................................. 7 1.1.7 Progress and Potential for Forest Sector Reform............................................................................................ 8

1.2 Objectives and Scope ................................................................................................................................... 9

1.3 Methodology ............................................................................................................................................... 9

2 THE HISTORY OF REFORMS IN NATURAL RESOURCE MANAGEMENT ................................................ 11

2.1 Water Resource Management and Governance Reform .......................................................................... 12

2.2 Pasture Management Reform ................................................................................................................... 13

2.3 Forest Resource Management and Opportunities for Reform .................................................................. 15

2.4 Land Sector Reform Policies and Progress ................................................................................................. 17

2.5 Major findings from a rapid review of reforms in land, forest and water management .......................... 18

3 ORGANIZATIONAL STRUCTURES AND MANAGEMENT OF FOREST RESOURCES ................................ 20

4 SECTOR CAPACITY ............................................................................................................................... 23

4.1 Financing .................................................................................................................................................... 23

4.2 Human capacity ......................................................................................................................................... 25

5 FOREST SECTOR PERFORMANCE ........................................................................................................ 26

6 GOVERNANCE ARRANGEMENTS AND ACCESS TO FOREST RESOURCES ............................................ 34

6.1 General information .................................................................................................................................. 34

6.2 Use of forest resources by communities ................................................................................................... 35

6.3 Access arrangements ................................................................................................................................. 36

7 MOVING TOWARDS AN INTEGRATED APPROACH TO FOREST GOVERNANCE ................................... 39

7.1 Strategic Relevance .................................................................................................................................... 39

7.2 Improving the policy, legal, and operational framework for forestry management ................................. 39

7.3 Improving capacity and operating procedures .......................................................................................... 42

List of diagrams

Diagram 1. Survey Sample in 4 Pilot FEs .................................................................................................. 11

Diagram 2. Typical Organizational Structure of an FE ............................................................................. 21

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Diagram 3. Expenditures of the DFESPA in 2013 (%). .............................................................................. 23

Diagram 4. Change in shares of various land lease fees in all FE revenues 2009-2013 (%) .................... 24

Diagram 5. FE Budget Approval and Fund Release Process ..................................................................... 25

Diagram 6. Opinion of respondents on three major improvement needed for better forest management .......................................................................................................................... 33

Diagram 7. The major improvements needed for better forest management in 4 Pilot FEs (% of responses) .............................................................................................................................. 34

Diagram 8. Major Sources of Livelihood in Pilot Communities ............................................................... 35

Diagram 9. Five Most Important Activities in 4 FEs ................................................................................. 36

Diagram 10. Use of Forest resources in 4 FE ........................................................................................... 36

List of Figures

Figure 1. Elevation Map of the Kyrgyz Republic ........................................................................................ 2

Figure 2. Forest Types of Kyrgyzstan.......................................................................................................... 6

Figure 3. Organizational Structure of Forest Management ..................................................................... 20

Figure 4. Organizational Structure of DFESPA ......................................................................................... 21

List of tables:

Table 1. Summary of Recommended Interventions ................................................................................. xi

Table 2. Reported changes in livestock (in thousands).............................................................................. 3

Table 3. Production of Fodder in Kyrgyzstan ............................................................................................. 4

Table 4. Kyrgyzstan Land Inventory as of 1 January 2012 ......................................................................... 4

Table 5. Area of major Non-Timber Forest Products ................................................................................. 6

Table 6. Forest area in 2011 ....................................................................................................................... 8

Table 7. Major Characteristics of Pilot FEs ............................................................................................... 10

Table 8. Forest Land by Management Designation ................................................................................. 17

Table 9. Pilot Forest Enterprise Organizational Data ............................................................................... 22

Table 10. Recommended Interventions ................................................................................................... 45

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ACKNOWLEDGEMENTS

The concept for this study has been developed jointly by the World Bank team1

in cooperation with the Kyrgyz Republic State Agency on Environmental Protection and Forestry (SAEPF), local stakeholders as well as with donor partners, including the EU FLERMONECA Project, implemented by the GIZ. The GIZ provided consultative support in designing an appropriate study methodology. The survey, interviews and Focus Group Discussions with key stakeholders were conducted by the Kyrgyz Association of Forest and Land Users (KAFLU).

This report has been prepared under the guidance of Alex Kremer and Jean-Michel Happi, World Bank Country Managers for the Kyrgyz Republic during the preparation of this report, and Kulsum Ahmed Practice Manager for the World Bank’s Environment and Natural Resources Global Practice.

The report was written by Asyl Undeland, a consultant specializing in rural development. It is based on a review of legislation, various documents and reports, and data provided from various sources. The report relied on quantitative data collected in four pilot areas and kindly provided by the KAFLU, as well as data and information kindly provided by UNIQUE forest and land use, which conducted baseline study of pilot areas in the framework of the EU FLERMONECA Project, including those surveyed by the KAFLU.

Special gratitude goes to the Rural Development Fund for help with processing data collected by the KAFLU and for collecting additional data on management of natural resources in Kyrgyzstan. The report reflects comments by the World Bank team following local discussions and peer review by UNIQUE, GIZ and the National Steering Committee chaired by the SAEPF in March, 2015.

This report builds on the results and analysis of the PROFOR supported study, the Development Potential of Forests in Kyrgyz Republic completed in 2012. Many of the recommendations and conclusions of this report remain valid.

The conclusions and recommendations from this report will be used to inform World Bank lending operations in the Kyrgyz Republic including the forestry components of the Pasture and Livestock Management Improvement Project (P145162) and the Integrated Forest Ecosystem Management Project (P151102).

1 The Team was led initially by Malcolm Childress and then subsequently by Andrew Mitchell (World Bank, Task Team Leader,

Sr. Forestry Specialist), and included Nathalie Weier Johnson (World Bank, Sr. Environment Specialist), Joanne Gaskell (World Bank, Natural Resources Management Specialist) and Gillian Ann Cerbu (World Bank, Natural Resources Management Specialist)

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EXECUTIVE SUMMARY

1. The objective of this study is to enhance the knowledge and capacity for understanding the institutional, legal, and operational issues involved in integrated forest governance. The study aims to support the Kyrgyz Republic in their reform efforts through identifying opportunities to improve forest management and address gaps which create conflicts, contribute to environmental degradation and limit livelihood opportunities. It also analyzes prior reforms and their impacts to provide lessons for future reforms. The study is based on the review of national legislation, statistical data and information provided by the State Agency for Environmental Protection and Forestry (SAEPF). It utilizes field-level data from a study involving a survey and key expert interviews conducted in four study areas which reflected either piloting of different forms of community based forest management or the country’s typical governance framework.

2

2. With less than 6 percent forest cover, forestry resources are scarce. From the 1930s to the mid-1960s Kyrgyzstan lost approximately half of its forest area. Since then the forest area has increased somewhat with a greater management emphasis placed on preservation and afforestation. Almost 90 percent of the country lies at an altitude higher than 1,500 meters above sea level; 15 percent of the total land area is covered by glaciers, snow fields and rocks, and more than 30 percent is located in high montane ecosystems. Overall, the terrain, climate and soil, as well as a shortage of water in some areas, do not create favorable conditions for growing trees.

3. The level of poverty in Kyrgyzstan remains high, especially in remote and mountainous areas. In 2013, more than one third of the country’s population (37 percent) were classified as poor and 4.4 percent extremely poor. The incidence of poverty in rural areas (41 percent) is significantly higher than in urban ones (29 percent). The level of poverty in mountainous areas is even greater (51 percent)

3. 65% of the population is rural, living in

approximately 1,800 villages spread throughout the lowlands and mountainous valleys along rivers and streams. Kyrgyzstan’s population continues to grow (average rural population growth 1.39% 2009 to 2013 in comparison to urban growth of 1.56% for the same period)

4. Unlike some other countries in the region there is currently no

significant out-migration of the rural population. Population in both rural and urban areas has been growing continuously since the mid-1990s. The potential for this situation to change significantly is considered fairly unlikely. Policy design therefore needs to reflect the needs of increasing rural population in an increasingly resource constrained environment.

4. Approximately 2.4 million people live near forests, with a major concentration situated adjacent to walnut-fruit forests. More than 200,000 people live directly in State Forest Enterprise

5 territory, and more than

1.8 million people or approximately 31 percent of the total population live near forests and rely on forest resources to varying degrees for their livelihoods. Forests that provide Non-timber Forest Products (NTFPs) play a crucial role in the livelihoods of these communities both for subsistence and additional income.

5. The demand for timber in the country, especially near forest communities, far outstrips supply and current trends predict that this gap will continue to increase. Commercial felling is prohibited under current legislation

6, with only very low volumes of wood derived from maintenance/sanitary cutting. During the Soviet era,

2 The study is based on data obtained in the four pilot areas conducted by the Kyrgyz Association of Forest and Land Users

(KAFLU) and UNIQUE, which implemented baseline data collection within the FLERMONICA Project of the GIZ in 2014. The study also builds on the previous studies covering the Kyrgyz Republic’s forestry governance issues and walnut value chain study, funded by PROFOR in 2011. 3 Livelihood of Kyrgyzstan’s population in 2008-2012. National Statistics Committee of the KR.

4 WDI Data 1960-2013

5 State Forest Enterprises (or Leskhozes) are the local level state forest management entities responsible for managing the State

Forest Fund (SFF). The SFF is the land officially designated as forest and includes land allocated for afforestation. Only 26 percent of the SFF is actually covered by forest, 34 percent is grassland, with the balance comprising hayfields, arable lands, gardens and orchards, settlements, and other type of lands. 6 The Forest Code specifies that forests have ‘environmental, sanitary, recreation and other protective functions’, meaning that

commercial felling is prohibited. Sanitary felling (felling and removal of damaged or diseased trees to protect the remaining forest) is also prohibited in the walnut and juniper forests.

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Kyrgyzstan imported around twenty times the current official level of timber production. Timber continues to be imported from Russia, but at much lower levels. Estimates of the volume of legal imports and production, combined with estimates of illegally smuggled timber are four or five times less than the estimated annual minimum demand. The cost of timber at the local market is high at 10,000-15,000 KGS/m

3 (US$ 160-250/m

3), and

not affordable for most households. This limited supply, in combination with the much higher demand due to the widespread use of wood for construction and energy indicates that illegal logging is prevalent in the country. With roughly half the rural population under the age of 19 this demand will only increase with the increasing need for timber in housing construction and fuelwood. The official reported contribution of timber production to the economy in 2013 was 265,200,000 KGS, just 0.2 percent of the total agricultural output in Kyrgyzstan, although unofficial wood product demand is estimated as being much higher (National Statistics Committee).

6. More than one third of houses in Kyrgyzstan rely only on coal and fuelwood for heating and cooking7.

However, there are many households which use more than one source of heating or cooking, such as electricity in combination with coal/fuelwood. With the rising cost of electricity and gas, as well as supply shortages, many public institutions such as schools and hospitals have been switching to coal/wood-based stoves.

7. Kyrgyzstan’s landscapes provide a wide range of values, goods and services. Forest landscapes support livelihoods in many ways, including through providing arable lands for cropping on State Forest Fund Land, grasslands for livestock grazing and hay making, nut and fruit trees for commercial harvesting, beekeeping, and collection of berries, medicinal plants, and mushrooms. Stunning landscapes attract local and international tourists. Forests contribute to the prevention of natural disasters such as landslides, mudflows, and avalanches. Forests regulate water flow in rivers, reducing riverbank erosion and evaporation. Communities depend on forests to ensure the volume and quality of potable and irrigation water. Forests are important for local biodiversity serving as a home for many endemic trees and bushes and are an important source of genetic diversity.

8. Kyrgyzstan’s forests and pastures and the communities that depend on them will be disproportionately affected by the risks associated with a changing climate. Average annual temperatures have increased since the mid-20th century by 0.5°C in the south to 1.6°C in the north. Impacts are already being observed, from melting glaciers in upland areas to droughts and floods in the lowlands. Warming in the Central Asian region is projected to be above the global mean land warming. Clearly climate change will place additional pressure on the already fragile ecosystems and there will be a need to develop climate smart and adapted approaches to landscape management.

9. Grasslands within the State Forest Fund provide communities with livestock grazing and hay. One-third of the SFF lands are sub-alpine and alpine meadows and steppe grasslands. Being within protected forest areas, they are noticeably less degraded than municipal rangelands. These pastures are often located at the nexus between winter and summer pastures. In some localities it is impossible to avoid Forest Enterprise pastures when accessing alpine summer grazing lands. Grasslands within the SFF are often leased out for making hay.

10. Livestock are not only an important contributor to the livelihoods of 90 percent of the rural population; they also play a prominent cultural role and help households respond to sudden needs and financial shocks. Livestock output makes up almost half of the total agricultural output. Livestock are used for various traditional ceremonies and events as well as functioning as rural savings accounts where animals are kept to cope with unanticipated crises. Livestock numbers have been increasing rapidly during the last decade.

11. Forests outside of the SFF play an important role for communities, but are effectively under an open access regime. There are 277,000 ha of forests on municipal lands. These are mostly riparian forests and poplar plantations, which play an important environmental and economic role, but are under pressure from communities sourcing timber and fuelwood. These forests should be managed by local government bodies or rural communities; however under the current situation with a weak legal framework and a lack of awareness, the local government and communities are unaware that they are responsible for their management. This results in open uncontrolled access, and a rapid depletion of these resources.

7 Environment of the Kyrgyzstan 2008-2012. National Statistics Committee. 2013.

viii

12. Surveys of communities adjacent to four pilot Forest Enterprises (FEs) revealed a number of issues:

All communities felt that local governments and community groups should play a greater role in forest management and in providing for horizontal oversight.

Respondents indicated a number of concerns including (in order of priority): lack of timber and fuelwood, environmental degradation, establishment of Protected Areas without proper consultation and consideration of community needs, poor infrastructure and public facilities, inefficient electricity supply and lack of coal, limited access to potable water, etc.;

Communities believe that toughening the legal framework, increasing salaries of the Leskhoz field staff and joint Leskhoz-community management would improve forest management;

Information dissemination by the FEs is insufficient. Informal users of forest resources are keen to obtain information on procedures and arrangements to access forest resources and secure them through formal arrangements. Respondents also requested technical information on, for example, how to grow trees, how to fight pests and rodents, how to store seedlings, how to process NTFPs, etc.;

People believe that the FEs are not always fair in decision making, but feel this less strongly where Community Based Forest Management is more widespread;

Respondents think that corruption is primarily associated with illegal felling of timber, allocation of land and walnut trees in lease arrangements, and the allocation of pastures.

13. The institutional framework for forestry management has carried over from Soviet-era centralized practices. Despite changing circumstances and policies and the collapse in funding, the same Soviet style institutional hierarchy largely remains. There are currently four tiers of management: the SAEPF at the central level, seven territorial divisions overseeing one or more oblast, and 41 Leskhozes –FEs, 8 independent Forest Units (FUs) and FUs under the FEs. There were 2,051 people working in all SAEPF structures in 2014. FEs prepare annual plans and make executive decisions regarding management of these areas with supervisory bodies possessing limited capacity and resources for oversight and no mechanisms for horizontal accountability to local governments or communities.

14. Resource constraints remain an important issue. In 2013, roughly US$ 2.3 million was allocated by the Government for forestry, comprising about 0.15% of the overall country’s state budget. This budget is supplemented by “Special Means” comprising fees and other income directly generated by the FEs. Special means accounted for US$ 2.35 mln in 2013. By law, the SAEPF transfers 20 percent of its revenue to the national budget. Thus, Special Means revenue earned about US$ 2.2 mln in 2013, placing the total sum managed by SAEPF at around 0.25% of overall country budget. Two thirds of the total forestry budget was spent on salaries and social benefit payments. This leaves negligible amounts for carrying out forest conservation activities, let alone afforestation. Low wages and morale have led to significant staff turnover and a lack of incentives for performance.

15. There is growing tension between conservation and the subsistence use of forests in the provision of welfare to the local communities. Despite the prohibition of using forests for the production of timber products, the high level of poverty among the generally remote communities living near forests, a lack of arable land, and shortage of employment and off-farm opportunities have led to high pressure on the remaining forest resources. Demand for timber and fuel wood in the country is growing and there is land degradation caused by overgrazing of the natural pastures in forest areas.

16. Rural sector reforms were largely driven by fiscal necessity. Decentralization reforms in management of arable land, pasture, and irrigation water were triggered by a severe lack of public resources to effectively manage these resources. The government inherited Soviet-era management structures which were both inadequate for a market economy and required high levels of subsidization that ceased abruptly. In the forestry sector, this shortage of financing and resources were initially less acute due to the predominantly protection function of the forest. However, the subsidies from the centralized government system that had underwritten the operation of the FEs also stopped. At the same time, the country stopped receiving timber from the other Soviet republics.

ix

Facing a lack of fuelwood and increases in the price of electricity and gas, people resorted to illegal felling followed by livestock grazing, leading to further degradation of the resource.

17. The 2009 Pasture Law devolved the responsibility for the management of pasture outside of the State Forest Fund to local government and local communities. The land tax on pasture land goes to local budgets, although pastures remain in state ownership. Local governments further delegate management functions to the end users -- the Pasture Users’ Unions (PUU). The entire population of each local community (aiyl aimak) are automatically members of the PUU.

18. Forestry sector reforms commenced at the end of the 1990s with the development of a new sectoral policy. This policy had the three pillars of “State, Man, and Forest” working together to manage forests in a sustainable manner. Low levels of human and financial resources of the SAEPF meant that it could not play a strong policy-making role, nor was it able to carry out the meaningful monitoring and evaluation through its regional offices, even though its institutional mandate calls for substantial involvement and direction across the entirety of the forest management system. Several key concepts were never carried out, such as devolving power to the FEs and separating the productive from regulatory and control functions. Some FEs have managed to implement some of the planned afforestation activities, meeting nominally low reforestation targets, despite extremely low levels of financing.

19. The overlapping management responsibilities resulting from the Soviet land classification system which is still in effect creates challenges to managing rangelands sustainably. Municipal rangelands are spatially interconnected with SFF rangelands. Despite having two separate management regimes, it is difficult for users to limit their use to one area of pasture and avoid the other. It also exacerbates land use management problems in the case of traditional vertical transhumance livestock grazing, when allocating use rights, monitoring use, and planning improvements to the landscape and its infrastructure.

20. There has been no real coordination in these reform processes so far. Confusion between definitions of land ownership and their use in state cadaster undermines sustainable use and protection of these resources. Forests located outside of the SFF are being neglected and overexploited, while pastures located in the SFF are being used without consideration of country wide pasture management arrangements, leading to confusion among users and fueling conflicts.

21. A major policy shortcoming is the lack of an integrated institutional framework for the holistic management of all natural resources. The sustainable use of natural resources and providing for ecosystem-dependent livelihoods are challenged by the lack of an integrated governance strategy that views all resources holistically. Policies and management institutions for water use, agricultural land, pasture management, and forestry operate on separate tracks, with separate implementing agencies. The ongoing reforms have overlapping impacts on the environment and the relationship between use regimes and the welfare of communities. For example, pasture reforms did not cover the use of pastures in the State Forestry Fund, though at the level of communities, these are similar resources. Thus, forest use needs to be better integrated with other land uses, especially for cropping and grazing, water supply, prevention of natural disasters and protection of environment. Forest sector policy reform needs to be closely linked to policies on energy, environment, agriculture, and disaster risk management sectors.

22. There is increasing policy space to foster a more inclusive institutional framework that would help mediate different interests in the management of forest resources. The government has put in place policies creating the enabling environment for decentralization and partnership between the public sector, private sector and communities. These reforms started with piloting approaches through joint efforts of the SAEPF and several

donors, including Swiss KYRFOR Program, GIZ, WB, IFAD, JICA and the FAO over the past 10 years. In particular,

these efforts sought to foster community-based and joint management models which have achieved varying degrees of success. Kyrgyzstan’s recent strategic policy documents, including the National Strategy for Sustainable Development (NSSD) for 2013-2017

8, and the 5-year Government’s Program and Plan on Transition of the Kyrgyz

8

Approved by the National Council on Sustainable Development under the President of Kyrgyzstan on 21.01.2013.

x

Republic to Sustainable Development (2013-2017)9 serve as policy foundations which will facilitate broader

stakeholder involvement in resource management.

23. There are strong economic, social and environmental rationales for a renewed focus on improving forest ecosystem management. Forests are an important resource for the rural poor in the country. At the same time, there are significant ecological changes occurring, most notably due to the effects of climate change disproportionately affecting high altitude ecosystems. Adaptation and conservation mechanisms are needed to maintain both productive forests and pastures in the context of a vibrant landscape. There is, however, the potential to improve the management of forests and thereby create overall positive economic returns. The experience with forestry and other rural sector institutional reforms, the current operations of the state forestry management system, and case studies on the relationship between FEs and communities point to a series of potential areas for engagement. These are summarized in Table 1 and are provided in more detail in Table 10 on page 45. These insights will be used to inform the design of the World Bank and Global Environment Facility supported Integrated Forest Ecosystem Management Project (IFEMP) currently under preparation and to demonstrate the added value of World Bank support.

9

Approved by the Resolution of the Government on 30.04.2013 № 218

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Table 1. Summary of Recommended Interventions

Area Intervention Priority Time frame

Improving the policy, legal, and operational framework for forestry management

1. Develop a new integrated natural resource policy covering water, pastures, and forests (in a participatory manner), based on a cross-sectoral approach to facilitate better and more sustainable use of natural resources to contribute to rural economic growth and poverty alleviation while addressing issues of climate change mitigation and adaptation

High 18 months from decision to start (requires high level political will)

2. Streamline forestry legislation to: remove internal contradictions; take account of reforms in related sectors (i.e. agriculture/pastures); allow for the sustainable use of timber resources; reflect the regulatory needs of present circumstances; separate regulatory, control and monitoring functions from economic functions; and create a framework for public-private partnerships to enable access to finance for capital investments in FEs.

High Within 18 months

3. Activities to be supported/piloted by the Integrated Forest Ecosystem Management Project (IFEMP) include: a. developing a landscape-based integrated natural resource management approach to

planning within SFF and municipal forests to include: zoning; land, forest, water, non-timber forest product and pasture management; and allocation of resources incorporating the influence and impacts of the type of land use and intensity on ecosystem services – management plans will optimize sustainable resource whilst ensuring the continued provision of ecosystem services, as well as addressing issues of climate change adaptation and mitigation

b. testing fair and transparent forest tenure systems to reflect effective and sustainable practices

c. revising administrative and financing frameworks for FEs to include incentive structures aligned to the natural resource management goals and new accountability, transparency and grievance redress mechanisms

d. Increasing community/local government participation in management planning e. developing public private partnerships to access private sector capital to increase

investment in the sector, and generate sustainable economic growth

High To be implemented over project lifetime (i.e. over next 5 years)

Improving capacity and operating procedures

4. Develop the capacity to centrally assess forest and other (e.g. pasture) resources within the SFF and municipal forests to facilitate appropriate management and establish a baseline for future monitoring. Results of the assessment should be reflected in management plans for each area developed with the engagement of local government and communities. IFEMP will support: a. capacity building for national forest inventory and ongoing sector monitoring b. establishment of a Forest Management Information System for storage, analysis,

sharing, publication of geographic and numeric/textual data through a web based portal

c. understanding the value of ecosystem goods and services through Natural Capital Accounting

High To be implemented over project lifetime (i.e. over next 5 years)

5. Increasing investments in afforestation and the establishment of orchards both through public investment for forests which generate public good functions and through public-private partnerships for commercial forest plantations (e.g. for fast growing fuelwood) and orchards

Medium 3-5 years

Targeted support to forest communities

6. Investments for innovative environmentally sustainable technologies, energy efficiency and reducing reliance on/use of biomass

Medium 3-5 years

7. Extension support provided to the forestry management entities and local communities. Low 5-10 years

8. Community-Based Forest Management can be introduced in a landscape with multiple uses to ensure wider participation, especially in areas where there are multiple overlapping land uses such as livestock grazing, timber felling, haymaking and other uses.

Medium 3-5 years

9. Partnerships with communities should focus on high value forest products (i.e. walnuts and fruits, NTFPs which generate cash income and contribute significantly to local livelihoods), and on acute conflict in use, notably related to grazing and pastures and use of rangeland ecosystems.

Medium 3-5 years

1 | P a g e

1 INTRODUCTION

1.1 Background

1.1.1 Land Use and Livelihoods

24. More than half of Kyrgyzstan’s territory is made up of rangeland and forest lands. Kyrgyzstan has a total land area of about 200,000 km², with only about a half of the area inhabitable and accessible for use by its people. More than 15 percent of the total land area is covered by glaciers, snow fields and rocks, and more than 30 percent located in high montane ecosystems. Almost 90 percent of the country lies at an altitude higher than 1,500 meters above sea level (asl), with terrain dominated by the Tian Shan and Pamir mountain systems, which together occupy about 65% of the national territory. The country’s average elevation is 2,750 meters asl, and ranges from 394 meters asl to 7,439 meters asl.

25. The level of poverty level in Kyrgyzstan remains high, especially in remote and mountainous areas. More than one third of the country’s population (37%) were classified as poor and 4.4% extremely poor in 2013. Poverty in Kyrgyzstan has many dimensions, but location is a significant contributing factor. Thus, poverty in rural areas was measured at 41.1 percent compared to 28.5 percent in urban areas in 2013. Meanwhile, the level of poverty in mountainous areas was measured at 51% in comparison to 38% for the country overall in 2015. Kyrgyzstan’s population continues to grow (average rural population growth of 1.39% from 2009 to 2013 in comparison to urban growth of 1.56% for the same period)10. This means that unlike some countries in the region there is currently no large out-migration of the rural population. Population in both rural and urban areas has been growing continuously since the mid-1990s. The potential for this situation to change significantly is considered unlikely, so policy design needs to reflect the needs of an increasing rural population in an increasingly resource constrained environment.

26. The country’s population of 5.8 million people (2014) lives primarily on 19 percent of the habitable land area. There are about 25 cities and towns, home to 35 percent of the total population, with the remaining 65 percent living in approximately 1,800 villages clustered into 472 aiyl aimak (Rural Municipality Area - 2007, National Statistics Committee) spread in lowland and mountainous valleys along rivers and streams.

27. Agricultural land covers approximately 10.6 million ha, including 9 million ha of pastures, 1.2 million ha of cultivated land, 168,437 ha of hayfields, 36,000 ha of perennials, and 38,645 ha of fallow lands11. Arable land comprises only 7 percent of the total land area, compared with more than 50 percent for range and forest land.

10

WDI Data 1960-2013 11

Official data of the State Institute for Land Management (GIPROZEM)

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Figure 1. Elevation Map of the Kyrgyz Republic

Source: The geographical dimension of the Population Census and its contribution to the analysis of migration, Werner Haug, Swiss Federal Statistical Office.

1.1.2 Climate Change Threats to Land and Livelihoods

28. Kyrgyzstan’s forests and pastures and the communities that depend on these resources will be disproportionately exposed to risks associated with a changing climate. The country is primarily made up of mountainous regions with high geographic exposure combined with a relatively high share of agriculture as a portion of GDP (20.8 % of GDP in 2013), high and increasing poverty rates and inequality, as well as relatively poor social services and public infrastructure, leaving it vulnerable to climate change impacts. Key resources and sectors such as water, land and forests, biodiversity and ecosystems, agriculture, energy and human health will be adversely affected. Average annual temperatures across the region have increased since the mid-20th century by 0.5°C in the south to 1.6°C in the north and impacts are already being observed, from melting glaciers in upland areas to droughts and floods in the lowlands. Warming in the Central Asian region is projected to be above the global mean land warming, 2.5°C above the 1951-1980 base period compared to 2°C for the rest of the world until the end of this century, and 8.5°C above base levels by 2100 in a 4° world. By 2050, it is anticipated that there will be a 31.3 percent increase in the population living in climate change hotspots. Model projections estimate that there will be 31-66 percent glacier volume loss in Central Asia in a 2° world, and 50-78 percent loss in a 4° world which will affect the Kyrgyz Republic’s Tien Shan glaciers.12

29. The agriculture sector in the Kyrgyz Republic is highly reliant on irrigation water, and climate change will have a great impact on water availability and agricultural productivity; changing precipitation regimes, reduced runoff, increasing temperatures and extended periods of above-average temperatures will increase stress on agricultural crops leading to decreases in plant productivity. As a

12

World Bank. 2014. Turn Down the Heat: Confronting the New Climate Normal. Washington, DC: World Bank. License: Creative Commons Attribution—Non-Commercial—No Derivatives 3.0 IGO (CC BY-NC-ND 3.0 IGO).

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result, in the context of already-degraded pasture lands, pasture growth and regeneration rates are expected to decline, potentially placing even more pressure on pastures in Forest Fund Land, while the risk of food insecurity is projected to increase. This change in water resource availability coupled with population growth will increase the challenge of balancing water demands for hydropower generation and agriculture/forestry. Particularly at risk are income-earning opportunities from agriculture and forest products, like non-timber forest product provisioning areas like the walnut forests; increased variability in temperature and precipitation regimes and seasonality could influence yields and the incomes of neighboring communities. Droughts will also very likely result in increased desertification. Approaches to address some of these climate change adaptation challenges are being piloted in the regional program: Climate Adaptation and Mitigation Program for Central Asia (CAMP4CA) of which Kyrgyzstan is a part, through tackling the non-climatic drivers of vulnerability in the region, such as inefficient infrastructure, unsustainable land and water management, rural poverty, and low adaptive capacity to ongoing and future changes.

1.1.3 Agriculture, Livestock and Pasture Land

30. Agriculture is a source of livelihoods and food security for 65 percent of the population. The share of Kyrgyzstan’s GDP from the agriculture sector has decreased over the last decade. In 2013, agriculture contributed only 20.8 percent to the country’s overall GDP, while industry contributed 34.4 percent, and services 44.8 percent. However, for the two-thirds of the country’s population living in rural areas, agriculture serves as a vital link to food security, providing subsistence combined with revenue generated through surplus trading.

31. Livestock is not only an important source of livelihood for 90 percent of the rural population, but also plays a prominent cultural role and is a valuable asset to respond to households’ sudden needs and financial shocks. Livestock output makes up almost half of the total agricultural output, while forestry output accounts for less than 1 percent. A recent baseline survey for IFAD’s Livestock and Market Development Project noted that about 90 percent of the rural population owns livestock. Livestock is used for various traditional ceremonies and events as well as function as rural savings accounts where animals can be sold to cope with sudden financial needs and crises.

32. The number of livestock is steadily growing. Animal husbandry is especially prevalent in the central and eastern mountainous regions of the Kyrgyz Republic, where other economic opportunities are limited. The number of livestock has been increasing rapidly during the last decade. According to official data, there were about 5.6 million sheep and goats in Kyrgyzstan in 2013, but anecdotal evidence suggests that this number is significantly underestimated, with the real number of sheep and goats likely approaching 8 million.

Table 2. Reported changes in livestock (in thousands)

Year/livestock 1990 2000 2004 2006 2008 2009 2010 2011 2012 2013

Cattle 1,205 947 1,034 1,116 1,224 1,278 1,299 1,338 1,367 1,404

Sheep and goats 9,996 3,799 3,773 4,046 4,502 4,816 5,038 5,288 5,424 5,641

Horses 313 354 347 347 362 372 378 388 399 407

Source: Compiled from data of the Kyrgyzstan’s National Statistics Committee

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33. Natural pastures are the principal source of forage and fodder for livestock. A very limited area, only about 330,000 ha of cultivated land and hayfields in Kyrgyzstan, is sown with fodder crops (compared to 9 million ha of natural pasture land) . Although this cultivated fodder area expands every year to respond to the growing livestock number, it is still far from sufficient to feed even the officially declared livestock population over the winter. Thus, natural pastures remain the primary source of fodder and forage year round, with the meadows in the sub-alpine and alpine zones used for summer grazing, and foothills providing grazing areas in spring, autumn and winter.

Table 3. Production of Fodder in Kyrgyzstan

Year 2009 2010 2011 2012 2013

Fodder area (ha) 284,900 291,500 290,000 310,000 330,000

Source: National Statistics Committee, 2015

1.1.4 Pasture Management, Land Management History and Reform

34. The land classification system inherited from the Soviet period creates confusion and conflicts on the ground. Land categories are defined by the country’s Land Code according to their designated use following the Soviet period’s classification. This creates confusion resulting from there being several types of overlapping uses and users on the same area of land, making land use trends difficult to monitor. The management of rangelands is fragmented between several institutions: rangelands within the State Forestry Fund or land under Specially Protected Areas are managed by the SAEPF. The rangelands classified as municipal lands are managed by the local government bodies and the Pasture Users’ Unions (PUU). However, administrative boundaries between these two types of pastures are vague, and this creates numerous conflicts.

Table 4. Kyrgyzstan Land Inventory as of 1 January 2012

Land Type (according to the State Inventory)

Size (in km2) % of

land area

State institution responsible

Inhabited/settled Land 2,729 1.4 Municipal governments Land used for the purpose of industry, construction, roads, and communication utilities

2,243 1.2 Ministry of Transport, Ministry of Construction, Ministry of Communications, local government bodies

Land under protected areas 7,074 3.7 State Agency for Environment Protection and Forest Ecosystem

State Forest Fund Land 26,178 13.6 State Agency for Environment Protection and Forest Ecosystem

State Reserve Land 97,305 50.7 Unclear Agricultural land 56,748 29.6 Ministry of Agriculture, local government

bodies, private entities Water Fund Land 7,693 Ministry of Agriculture Land area (without water area) 191,801 100 Total land area 199,951

Source: Kyrgyz Republic Government Resolution #701, October 10, 2012

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35. The overlapping management responsibilities resulting from the land classification system inherited from the Soviet period creates challenges to managing rangelands effectively and sustainably. Forests make up a limited portion of State Forest Fund (SFF) land -- 1,164,065 ha or 26.2 percent--while the greater part is grassland (about 34 percent of the SFF). The remaining 40 percent includes lands used as hayfields, arable lands, gardens and orchards, settlements, and other type of lands. The municipal rangelands are spatially connected with the rangelands of the State Forestry Fund (SFF) forming interlinked pastures otherwise visibly indistinguishable to pasture users in the landscape. Despite having two separate management regimes for these often adjacent lands, in practice it is difficult for users to use one area of pastureland and avoid the other areas. It also exacerbates land use management problems in Kyrgyzstan in the case of traditional vertical transhumance livestock grazing, when allocating use rights, monitoring use, and improving the landscape and its infrastructure.

1.1.5 Forest Ecosystem Services and Contribution to the Kyrgyz Economy

36. Forests in Kyrgyzstan furnish important environmental services and serve a critical protection function. Ninety percent of forests in Kyrgyzstan can be found at altitudes ranging from 700 to 3,600 meters asl; they contribute to natural disaster prevention, including reducing landslides, mudflows, erosion, and avalanches. Forests also regulate water flow in rivers, reducing riverbank erosion and protecting water from evaporation. Forests serve a water regulation function allowing water to infiltrate the soil, retaining moisture in vegetation and positively influence the local precipitation regimes. Upstream and downstream communities depend on forests to ensure the volume and quality of potable and irrigation water. Kyrgyzstan’s forests are also important for local biodiversity serving as a home for many endemic trees and bushes, including serving as an important source of genetic diversity for many plant species.

37. Approximately 2.4 million people live near forests, with a major concentration of these communities situated adjacent to walnut-fruit forests. More than 200,000 people live directly in Forestry Enterprise territory, and more than 1.8 million people live near forests and rely on forest resources to varying degrees for their livelihoods. Non-timber forest product (NTFP) producing forests cover less than 100,000 ha, but play a crucial role in the life and livelihood of these communities, either for subsistence products or as a source of additional income. While nut and fruit collection is mainly undertaken in the south of the country, berries and medicinal herbs are collected everywhere. The poorest households have little or no livestock and disproportionately depend on NTFPs for subsistence and additional income. Specifically, in the walnut and kernel value chain, 3,000-5,000 poor people are estimated to be employed as walnut crackers in Bazaar Korgon, and 1,000 in Jalal-Abad; 20 small and medium sized enterprises employ teams of women in processing and grading kernels destined for export; 400-500 collectors and traders sell walnuts during the high season; and 8,000-10,000 individuals are estimated to be employed in further value addition.13 All forests in Kyrgyzstan are traditionally divided into four major types.

13

Bourne, Willie. 2012. Analysis of the Walnut Value Chain in the Kyrgyz Republic. Working Paper. Washington D.C. PROFOR.

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Figure 2. Forest Types of Kyrgyzstan

1) Spruce forests: There are 109,372 households with a population of 546,862 living near the spruce forests

primarily situated in the western and central parts of the country, mostly in Issyk-Kul, Naryn oblasts and in Kemin rayon of Chuy oblast, as well as in the high areas of the Fergana Valley.

2) Walnut-fruit tree forests: Meanwhile, 1,279,081 individuals (255,816 households) live within or adjacent to walnut-fruit forests in the south, which occupy the lower mountain slopes at an altitude of roughly 1,300 to 1,800 meters asl. These forests are made up of naturally occurring and human-modified (i.e. planted and/or grafted) varieties of walnut (Juglans regia), apple (Malus species), plums (Prunus species), as well as other fruit-bearing tree species.

3) Juniper forests: Significant numbers of people live within and near juniper forests in different parts of the country: 109,372 with a population of 546,862.

4) Riparian forests. More than 30,000 households of 150,000 individuals live adjacent to riparian forests around the country.

Table 5. Area of major Non-Timber Forest Products

NTFP Area (ha)

Walnut trees 35,000

Pistachio trees 33,000

Almond trees 1,600

Apple trees 16,700

Apricot trees 1,000

Cherry / plum trees 400

Hawthorn bushes 2,500

Sea buckthorn bushes 3,600

Source: compiled by author from the SAEPF data, 2010

38. The demand for timber in the country, and especially near forest communities far outstrips supply and will continue to increase. The dependency on timber is high while commercial felling is

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prohibited and only low volumes of wood (approximately 25,000 cubic meters harvested annually) derived from maintenance/sanitary cutting. During the Soviet period, Kyrgyzstan imported 400,000-500,000 cubic meters of industrial roundwood and 2 million cubic meters of fuelwood annually. This is estimated as the minimal annual demand for timber and fuelwood for the country. Currently, timber continues to be primarily imported from Russia, at a total volume of around 67,500 cubic meters annually.14 Anecdotal evidence of illegal smuggling of timber into the country suggests an additional 40,000-50,000 cubic meters of timber is imported each year. This is still four or five times less than the estimated annual minimum demand. The cost of timber at the local market is high at 10,000-15,000 KGS per cubic meter (US$ 160-250/m3), which is not affordable for most households. These figures of limited wood supply in combination with the much higher demand, and the prevalence of wood used in construction and for energy indicates that illegal logging is prevalent in the country. With roughly half the rural population or approximately 1.6 million people under the age of 19, it is evident that the demand for timber, especially for housing construction will only increase.

39. There is a high and growing dependency of the rural population on fuelwood due to a shortage of natural gas and the rising cost of electricity. More than one third of houses in Kyrgyzstan rely only on coal and fuelwood for heating and cooking.15 However, there are many households, which use more than one source of heating or cooking, such as electricity in combination with coal/fuelwood, or gas with coal/fuelwood. With the rising cost of electricity and gas, as well as a shortage (especially in the South), many public institutions such as schools and hospitals have been switching to charcoal/fuelwood-based stoves and heating systems.

1.1.6 Forests and Pastures in a mixed-use Landscape

40. Multiple uses and purposes of forest landscapes: Kyrgyzstan’s landscapes encompass a wide range of values, goods and services and have multiple uses and purposes, which are valuable in different ways for different stakeholders. Forest landscapes are rich ecosystems, and support livelihoods of local communities in many ways. They include arable lands suitable for cropping and gardening, grasslands attractive for livestock grazing and hay making, nut and fruit trees for commercial harvesting, beekeeping, collection of berries, medicinal plants, and mushrooms. Some stunning landscapes also attract local and international tourists for recreation and skiing in winter.

41. Grasslands in forests are attractive for communities for livestock grazing and making hay. One-third of forest lands are sub-alpine and alpine meadows and steppe grasslands. Being within protected forest areas, they are noticeably less deteriorated and degraded than rangelands of the municipal lands. In addition, these pastures are often located at the average altitude between winter and summer pastures. In some localities it is impossible to reach summer alpine pastures in transhumance grazing avoiding SFF lands. Grasslands within SFF are also leased out for making hay for winter fodder. With the increasing dependency of the rural population on agriculture, especially on livestock, the intensity and expansion of use of grasslands also will increase.

42. New users of landscape resources and services have appeared, pushing the need to agree and ensure harmony of various rights to avoid conflicts and resource degradation. Mining exploration and excavation, hydropower plants and ski resorts are growing new users of landscapes in Kyrgyzstan,

14

Social and Economic Situation of the Kyrgyz Republic. National Statistics Committee of the KR, January – May, 2013. 15

Environment of the Kyrgyzstan 2008-2012. National Statistics Committee. 2013.

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which, if not regulated by clear and transparent guidelines, can result in huge environmental damages and fuel conflicts with local communities in competition for natural resources.

1.1.7 Progress and Potential for Forest Sector Reform

43. Forests outside of the SFF play an important role for communities, but are de facto under an open access regime. There is a relatively large area of an additional 277,000 ha of forests on municipal lands. These are mostly riparian forests and poplar plantations, playing a huge environmental role, and under pressure from communities for timber and fuelwood. They are de jure to be managed either by local government bodies or rural communities (Government Resolution #407, July 2011). However, with the weak legal framework, absence of inventory data of these lands and lack of awareness, local government bodies and communities don’t realize they are responsible for management of these forest resources. This results in problems related to open access, and a rapid depletion of these resources.

Table 6. Forest area in 2011

Ha %

SFF and protected area forest cover 839,560 4.22 Forest area outside SFF and protected areas 277,000 1.39 Total forest area 1,164,065 5.61 Source: Kyrgyz Government Resolution #407 on Approval of the Results of Forest Inventory in the Kyrgyz Republic, July 26, 2011

44. The sustainable and balanced use of natural resources, and the livelihoods that depend upon the ecosystem services from these resources, are challenged by the lack of an integrated governance strategy, the lack of policy clarity around the objectives of resource management and the intended beneficiaries of resource use, particularly among local populations. The structure of government, particularly the still-evolving mandates of multiple national agencies and local governments, also creates challenges for effective natural resource use and management. Governance gaps may prevent the benefits from the use of natural resources such as forests, non-timber forest products (NTFP), wildlife, genetic resources and minerals, pastures and water from accruing to either local residents or to Government in a transparent, predictable and sustainable manner. These opaque and patchy use arrangements impose a cost on sustainable development, create risks of intensifying conflicts, and may exacerbate the effects of climate change and natural disasters.

45. Significant reforms in arable land, pasture and water sector management have been underway to promote local natural resource management; however, the track record of forest reforms has been uneven. Forest sector reform lags behind reforms in agriculture and pasture land management. Although the existing policies stipulate that local people should have a say in forest management, the framework to facilitate this input has not been well-developed. The Kyrgyz Government is seeking opportunities for broader-based, more effective forest policy reform in Kyrgyzstan that would promote engagement of local users in forest management and promote the economic use of resources.

46. A new wave of forest sector reforms aims to increase Kyrgyzstan’s forest area and to protect its ecological functions as well as promote its economic benefits through sustainable forest and pasture management. The SAEPF proposed the introduction of reforms based on results of piloting various approaches in six FEs, with lessons learned reflected in an updated approach to forest sector reform. Thus far the piloting of new approaches has focused on gradually transferring economic functions (beekeeping, carpentry, wood processing, investments in processing infrastructure (i.e. sawmills, workshops), sale of honey and nuts, sale of firewood, timber harvesting, irrigation, tourism, etc.) to communities and the private sector through public private partnerships (PPPs) and co-management

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arrangements; promoting financial and organizational flexibilities at the FE level to improve their capacity for new co-management functions; promoting partnership and cooperation between local authorities, local communities and NGOs; and testing innovative management approaches and identifying bottlenecks for effective natural resource management. Key elements of the reform are based on decentralization and partnership among public sector institutions (Leskhoz, aiyl okmotu, rayon administration), the private sector and communities.

1.2 Objectives and Scope

47. The objective of this study is to enhance knowledge and capacity for understanding the institutional, legal, and operational issues involved in integrated forest governance. The study aims to support government efforts to reform forest sector policy by identifying opportunities to improve forest management and address gaps which create conflicts, contribute to environmental degradation and limit livelihood opportunities. Further, the analysis will inform the preparation of a new forest sector investment project.

48. The existing examples of community engagement in forest management in Kyrgyzstan form a diverse portfolio of approaches with a mixed set of results. Several current governance and de facto management approaches involve a form of leasing to individual households, whereas other approaches place more emphasis on joint community decision making. This study reviews the experience of community based forest management (CBFM) as a strategy to strengthen local governance of natural resources in Kyrgyzstan and inform forest sector reform efforts. This analysis aims to assess how a locally-driven approach to managing forest landscapes, such as through CBFM and other forms of community engagement in forest management have the potential to address existing challenges, and the regulatory, administrative and informational changes and resources needed for such an approach to succeed.

1.3 Methodology

49. The study utilized quantitative and qualitative research methodology. It was based on the case studies of four communities that are (1) piloting different forms of community based forest management, or (2) engaged in a more traditional forest governance arrangement. For comparison purposes, the case studies were selected to capture the fullest range of existing local forest governance structures in Kyrgyzstan. These case study reviews have been performed by KAFLU using qualitative analysis tools, such as Focus Group Discussions (FGD), and expert interviews. Additionally KAFLU surveyed 406 people in four communities using structured questionnaires.

50. Pilots were selected by the SAEPF together with the GIZ and the World Bank. GIZ contracted UNIQUE forest and land use consultants to conduct a baseline survey in the six forestry enterprises (FE) and to establish a monitoring system. This report draws substantially from the baseline information from the UNIQUE report on the same four pilots examined by KAFLU. In addition, the analysis builds on a literature review, statistical data, and financial data provided by the SAEPF.

51. The KAFLU case studies were conducted in four pilot FEs, which were selected due to their distinct forest ecosystems, such as juniper forests in Nookat in Osh region, walnut-fruit forests in Kyzyl Unkur in Jalalabad region, spruce forests in Jety Oguz, and riparian forest in Balykchy, both in Issyk Kul oblast. Other selection criteria were engagement in forest management and piloting of alternative tenure arrangements such as CBFM in Kyzyl Unkur piloted the Swiss KYRFOR Program for more than 10 years, and Joint Forest Management (JFM) in Balykchy piloted by UNDP and JICA for several years. All four FEs have developed robust and progressive management arrangements which will be able to provide to provide the evidence base to advance reforms in the forest sector.

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Table 7. Major Characteristics of Pilot FEs Forestry enterprise (FE) information

Kyzyl Unkur Walnut- Fruit Forest

Nookat Juniper Forest

Balykchy Riparian Forest

Jety Ogyz Spruce Forest

Total FE land area (ha) 57,910

94,240 8,850 91,529

Total forest land within the SFF (ha)

29,007 31,907 3,662 36,504

FE area covered with forest (ha)

25,480 25,750 1,974 31,210

FE area not covered with forest (ha)

28,910 55,013 3,662 55,013

FE pasture area (ha) 19,889 20,005 239 25,280 Reforested area 1,452 255 708 2,010 Percentage of dead and failed trees in reforestation

76.6 9.3 n/a 60.7

Major forest plants Walnut, apple, nuts Juniper

Poplar, elm, willow, sea-buckthorn

Spruce

Pilots CBFM with KYFOR JFM with JICA, UNDP, KfW/ARIS with plantations

Endemic and rare plant species

Hawthorn (Crataegus knorringiana), wild apples (Malus sieversii, Malus niedzwetzkyana)

Endemic nitraria bush (Nitraria sibirica), poplar, elm, willow, sea buckthorn

Beech marten (Martes martes foina), Red pika (Ochotona rutila).

Endemic and rare animal and bird species

Marmot (Marmota menzbieri), dhole (Cuon alpinus), wild sheep (Ovis ammon).

lynx (Lynx isabellinus), saker falcon (Falco cherrug), serpent eagle (Circaetus gallicus), golden aagle (Aqulia сhrysaetos), Himalayan griffon (Gyps himalayensis)

sandgrouse (Syrrhaptes paradoxus), gopher relic (Spermophilus relictus), bat (Tadarida teniotis), Central Asian frog (Rana asiatica)

snow leopard, wild sheep (Ovis ammon), ibex (Capra ibex), Tian Shan Elm (Cervus elaphus), brown bear (Ursus arctos isabellinus),

Source: compiled from report by KAFLU and UNIQUE

52. Kyzyl Unkur walnut- fruit forest FE is located in the northeastern part of Jalalabad region. It is a medium --sized FE with a total area of 57,910 ha, with less than half of that territory (25,480 ha) actually covered by forest. The remaining area is grassland (19,889 ha),) which is used as pastures for grazing livestock and making hay. The forest is mostly comprised of walnut and wild fruit trees, with several varieties of endemic wild apple, juniper, spruce, and maple trees.

53. Nookat juniper forest FE in Osh region is a juniper dominated forest, with a total area of approximately 92,500 ha, located throughout the mountains at an altitude of 1,500 to 4,000 m asl, with one third of the FE area under rocky mountains, glaciers and snowfields. Only 25,750 ha of FE has forest cover.

54. Balykchy riparian forest FE possesses a small area, with its desert climate and terrain limiting potential opportunities. The Balykchy FE occupies 3,971 ha of the mountain desert ecosystem landscape in the Issyk-Kul lake basin, the northern slope of Terskei Ala-Too and the southern slope of Kungei Ala-Too located at an attitude ranging from 1,600 to 3,400 m asl. These barren lands are difficult to use for productive purposes. The classified forest is a riparian area of 1,900 ha with vegetation mainly made up of made up of shrub plants. Closed contiguous forest stands are present on only 435 ha.

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55. Jety Oguz spruce forest FE in Issyk- Kul oblast has a mild climate, fertile soils and plentiful rivers, which create a biodiversity rich habitat. The Jety Oguz FE occupies quite a large area of 91,520 ha between Lake Issyk-Kul and the northern slope of Teskey Ala-Too of the Tien Shan mountain ranges at an altitude of 1,609 to 4,500-5,000 m asl. Much of the FE land is barely accessible due to a lack of infrastructure and steep mountain slopes. One-third of its area or 31,210 ha is covered with forest and pastures make up a significant area as well (23,641 ha).

56. Community members with strong and weaker links to forests and forested land use were interviewed in the pilot FES. There were 406 persons interviewed in four pilot FEs, including FE employees, individuals who do not use forests and forest resources, and forest users with formal and informal contractual arrangements. The majority of those interviewed hold formal contracts for forest use. One third or 29% of respondents were women. Slightly less than half of respondents, or 44%, were individuals aged 30 to 50 years old, 20% were under age 30, and the remainder were remainder were over 50 years old.

Diagram 1. Survey Sample in 4 Pilot FEs

57. This study also incorporates updated data and findings from the Development Potential for Forest and Rural Livelihoods in the Kyrgyz Republic Study (October 2011) financed by the Program on Forests Facility (PROFOR) 2012.

2 THE HISTORY OF REFORMS IN NATURAL RESOURCE MANAGEMENT

58. Changes in forest management in Kyrgyzstan have occurred within the context of larger reforms in the rural sector that have important implications for the effective use of forest resources. Specifically, decentralization reform first began with the restructuring and then dismantling of about 590 state and collective farms, which were the smallest administrative units in rural areas during the Soviet era. Arable land, livestock and machinery were distributed to and privatized by employees of these farms. About 25 percent of arable land was kept in the State Fund for Agricultural Land (SFAL) and later transferred to local governments to be allocated to the expansion of settlements, distributed to those who had not received a share of land, and leased out for cultivation.

59. The rural government’s claiming responsibility for land in its territory led to two major improvements in management. Firstly, decision-making on a key local resource was made much closer to local residents, which should lead to efficiencies as a result of more intimate knowledge of local

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Balykchy Riparian FE Kyzyl Unkur Walnut-Fruit FE

Nookat Juniper FE Jety Oguz Spruce FE

Work in FE Forest user with contract

Forest user without contract Don't use forest

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characteristics and local communities’ needs and demands. Second, the transfer resulted in a dramatic increase in responsibility and discretion to act for the rural governments’ themselves, with the potential for significant impact on local government finance in rural areas.

60. Local governments have not been fully empowered to manage the State Fund for Agricultural Land (SFAL) effectively. While the transfer of that land was a positive change, the actual management of the SFAL by local government has nonetheless had shortcomings. More than 20% of the SFAL land has been transferred either for settlement expansion needs or into private ownership. However, while about 66% of the total SFAL land is rented out, more than 26% continues to be unused16. Some studies indicate that aiyl okmotu (local government) manage this land in a non-transparent way, with very little information disseminated to the public on the availability of land, and on lease tenders and their requirements. Local governments need technical and financial support to undertake zoning of the lands managed to properly account for assets under their control and to develop harmonized land management strategies. Management arrangements lack community involvement, which could enhance transparency, accountability and effectiveness in land management.

2.1 Water Resource Management and Governance Reform

61. Agriculture in Kyrgyzstan is irrigation-based. Due to the geographical, terrain, and agri-climatic conditions, agriculture in Kyrgyzstan depends heavily on irrigation water. The Kyrgyz Republic generally has sufficient water resources to meet its needs, originating from the melting of snow and glaciers, formed by perennial and ephemeral rivers, brooks and springs, freshwater and brackish lakes, including Issyk Kul Lake. However, the average annual precipitation in the Kyrgyz Republic is inadequate for cropping, with annual rainfall varying between 350-700 mm in the south of the country. Annual evapotranspiration (crop water demand) exceeds effective precipitation by a factor of four, particularly during the summer months, making irrigation critical to agricultural production. A total of 90 percent of crops are grown on 1.2 million ha of arable land, out of which 798,906 ha is irrigated land.17 Farms grow staple crops, such as grain, especially wheat and barley, on more than half (53.6 percent), of the country’s arable land.

62. There has been decentralization of irrigation water management accompanied by privatization of agricultural land as a response to a shortage of state resources. In order to maintain the irrigation infrastructure, the Kyrgyz Government, with the support of International Financial Institutions (IFIs), initiated reforms in the water management sector by devolving management of secondary irrigation systems to the users themselves through the establishment of Water Users’ Associations (WUA) and by introducing the principle of payment for use of water in 1995.18 The Irrigation Service Fee (ISF) was set by Parliament at a rate of 15 KGS per 1,000 m3, and was later doubled in 1999.

63. WUAs are responsible for the operation of Irrigation and Drainage (I&D) networks and water distribution among WUA members. WUAs look after the construction, modernization, repair, cleaning and other actions that support the functioning of the on-farm irrigation network and its expansion. Additionally, they are in charge of water pollution prevention and professionalization of their members in irrigated agriculture.

16

Findings of the study on barriers and bottlenecks in effective management of agricultural land. LBD, 2012. 17

Kyrgyz Government Resolution #701 on the Results of the State Inventory of Land as of January 1, 2012. 18

Kyrgyz Government Regulation on Water Users’ Associations in Rural Areas, adopted in 1995.

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64. Owing to fragmented land use, the subsistence nature of agricultural activity of large segments of the population, and low level levels of technical farming knowledge and capacity, water management is very basic. WUAs focus mostly on water distribution among all users and only achieve patchy maintenance and rehabilitation of networks. Currently, about 80% of the country’s on-farm irrigation system, serving about 767,000 ha, is managed by the 475 WUAs. This means that WUAs are responsible for the management of 22,700 km of on-farm irrigation schemes, 4,300 km of drainage networks, more than 250 water pools, and more than 20,000 hydro-technical facilities.19

65. WUAs have many challenges which are beyond their capacity to address. The greatest challenge face by WUAs today is a lack of resources to maintain the on-farm irrigation system. Despite donor support over the past few decades and the establishment and capacity building of WUAs, irrigation water infrastructure remains ineffective in many areas. The general decline of water infrastructure also translates into diminishing amounts of water being delivered, increasing scarcity of the resource relative to what was enjoyed before. The existing ability and willingness to pay for services does not match what would be needed for adequate upkeep.

66. WUAs are not responsible for decision making on water use, with this remaining in a heavy centralized state system. Despite decentralization of water management of on-farm systems to users, overall water management is still heavily centralized, with a multi-stage management system with functions and responsibilities distributed among the various ministries and departments, such as the National Parliament, the Government, MAWR (with the specialized WRD), SAEPF, the Agency of Geology and Mineral Resources, other water use ministries and departments, local governance bodies, and WUAs. Although WUAs are responsible for management of on-farm irrigation systems, the irrigation service fee is established by the Parliament. Currently, it’s established at the level of 1-3 tyins (0.01 - 0.03 KGS) per cubic meter of irrigation water, which does not even cover 30% of the required finances to maintain the system. Over the period of 2001-2010, the ISF has increased from KGS 2.74/1,000 m3 to KGS 6.65/1,000 m3. Meanwhile, a large portion of the ISF goes towards financing the budget of the MAWR rayon departments, increasing from KGS 19.8 million in 2001 to KGS 42.9 million in 2009. In addition, the ISF payment is not adequately enforced by law and thus some WUAs are only able to collect less than 80% of their annual fee. The results of several studies showed that mostly the better off WUAs and those with powerful connections are often the free riders.

67. Collection of ISF payments are steadily growing due to the efforts of WUAs. Despite all the difficulties, and extremely low rate set for the ISF, WUAs have been able to increase revenue from the collection of water fees. This is primarily a result of WUA efforts. Thus from zero in 2001, water fee collection was at 43,719,000 KGS in 2007, and reached 57,232,004 KGS in 2013 (90% of planned collection), and 55,997,752 KGS in 2014 (89% of planned collection).

2.2 Pasture Management Reform

68. Pasture management decentralization was initiated as a response to inefficient management of these vast resources by three tiers of government, widespread degradation of pastures, and growing conflicts between users. According to the Kyrgyz Republic’s Constitution, pasturelands are owned by the state. While most arable land was privatized, pastures and forests were maintained under state ownership. In these cases, the argument against privatizing these lands was the need to protect environmental resources and to ensure equitable access to these resources for the broader population.

19

CAIC Consulting, 2010

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69. Pre-reform pasture management faced several structural challenges. The breakdown of the support network of collective farms and social services for summer pastures, the lack of trucks to transport animals to pastures, the weakened state structures to enforce allocation and use patterns coupled with the re-emergence of individual herders as economic agents, have all contributed to a crisis in pasture management. With a recovery in herds following the shock of the first years following independence, pressure on pastures has promptly and continually increased.

70. The Kyrgyz Government introduced a pasture lease system to prevent further deterioration of these vast resources. In order to stop degradation of pastures, especially near villages and to ensure community access to them, the Kyrgyz Government adopted Resolution #360 on Procedures on Lease and Use of Pastures (June 4, 2002). However, the new legislation did not address issues of access. Functional responsibilities to manage pastures were diluted, with too many agencies involved in policy-making: Ministry of Agriculture, Giprozem, State Forestry Service, local state administrations, and rural governments. This led to the fracturing of governance and the absence of long-term planning and investments. It also precluded effective policy in providing equitable access to these land resources to the people. In practice, pasture allocation was conducted only by rural governments, while revenues from leasing of pasture land was taken by rayon administrations. In effect, there was little government management of pasture lands at any level, and consequently no measures to promote sustainable use of state-owned pasture land. In terms of pasture use, only 625,903 ha of pasture land (7%) in 2003, and about 927,000 ha (11%) in 2005 were officially rented, according to the official data of the State Registration Agency.

71. Individuals used pastures on an ad hoc basis, with overgrazing in areas close to settlements. Despite being prohibited, the subleasing of pasture land was widely practiced, whereby the official lessee allowed herders and livestock owners to graze livestock on his plots gaining significantly more income than was being paid to the state. The revenue coming to the state budget for use of pastures was meager in comparison to real use and payments. Even formally concluded lease contracts were not honored by any party. According to State Registration Agency data, only 4,800,000 KGS out of 6,430,000 KGS that were supposed to be paid were accounted to the state budget in 2003 and 7.7 million KGS were realized of the anticipated 11.2 million KGS in 2007. Due to the inefficient management of pasture lands on the part of the state, huge areas were operated outside of the legislation. There were no opportunities for sustainable development of pasture resources due to inadequate legislation, unclear responsibilities of government institutions, and a lack of incentives for the local self-government bodies or farmers to make or attract investments. There were many conflicts between individuals and state agencies on the use of pasture resources, which were difficult to address as a result of the above mentioned problems.

72. To sustainably manage natural pasture lands it is critical that they be treated as a single, integrated whole and that they are not divided into parcels for the sake of leasing. Sustainable pasture management depends on maintaining the pasture ecosystem, which is impossible if they are not managed as a whole under the specific geographic and terrain conditions. All pasture categories outside of the State Forest Fund, including the water points located on them or associated with them, are now considered as one management entity which is administered at the community level.

73. The 2009 Pasture Law decentralized the management of pasture ecosystems within the State Land Fund (SLF) to local government and local communities. The major features of the pasture management decentralization reforms are that local governments are responsible for their management and the land tax on pasture land goes to the local budgets, although pastures remain in state ownership. Local governments further delegate management functions to the end users -- the Pasture Users’

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Unions (PUU). These institutions are close to the users and can be held accountable. These reforms have been supported by the WB, IFAD, UNDP and other donors.

74. The entire population of the aiyl aimak are automatically by law members of the PUU. The PUU has an executive body – The Pasture Committee (PC) or Jaiyt Committee (JC), which is comprised of elected members of the PUU, the head of local government, the head of local council and other members of formal institutions. The key principle is that members of the PUU make the majority of the JC and they are accountable to the assembly of PUU.

75. To avoid resource fragmentation and degradation, the use of pastures is now based on ecosystem use rights, rather than leases. The requirements under the five-year Community Pasture Management Plan (CPMP) and annual use plan ensures mobility of the livestock to protect pastures from overgrazing and maintain sustainable use. Lease of the plots is prohibited and use rights are allocated by the JC every year in accordance with the annual use plan. Violation of management plan agreements and rules is punishable by law. Although the penalty imposed for violation of CPMP and the annual grazing plan is low, it allows JC to exercise power over herders to enforce pasture rotation and limit grazing to the allowed carrying capacity on each pasture plot.

76. The new law has been introduced to ensure that fees for the use of pastures should be based on the number of animals (head based). This requirement is also aimed at treating pastures not as fragmented land plots, but as one whole ecosystem. Animal-based fees allow mobility of the livestock and protect the ecosystem from overuse and degradation. Fees for pasture use are established each year for each pasture system and for each type of pasture use by the responsible JC. Pasture use fees, which are collected by the JC, are largely used for pasture improvement and pasture investments.

77. With the PUU and JC managing pasture ecosystems over the last five years, some positive changes have been observed. The collection of pasture use fees has skyrocketed from about 8 million in 2009 to 111 million KGS in 2013, and 130 million KGS in 2014. This increase was achieved not due to the increase of the use fee, which at large remains almost the same across the country on average, but due to a more efficient and transparent collection system on the part of the JCs.

78. Each PUU has a pasture management plan, which regulates grazing to prevent pasture degradation. It is too early to evaluate changes in the condition of the pastures, but the fact that almost 80% of livestock holders send their livestock to summer pastures gives hope for restoration of winter and near village pastures. More shepherds are reportedly using remote pastures.

2.3 Forest Resource Management and Opportunities for Reform

79. The focus of forest management in Kyrgyzstan during the Soviet era shifted from production objectives to strictly protective functions due to extreme overexploitation. In the first decades of the Soviet period, forest policy focused on the use of forests as a productive asset. There were massive timber harvests, and a huge volume of that timber was used for construction purposes. Through this unsustainable practice, Kyrgyzstan lost about half of its forest cover by 1966. In this short period, the area of spruce forests alone decreased by 26 percent.

80. The state policy and the legislation underpinning it shifted from intensive harvesting toward the protection of forests, which was to be enforced by Leskhozes at the local level in the 1960s. Since then, the state policy focused on the protection and expansion of forests. The Leskhozes have essentially been economic units charged with organizing rural forest use, including providing many basic social services to communities living around forests and working in the Leskhoz (much the same as occurred in kolkhoz and sovkhoz for crop-growing and herding).

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81. The forestry sector also experienced a shock with the sudden end of state financing with the collapse of the Soviet Union leading to weak protection and almost no afforestation. With the collapse of the Soviet Union, massive subsidies from the centralized government system that had underwritten the operation of the Leskhozes abruptly stopped. At the same time, the country stopped receiving timber from the other (now-former) Soviet republics. Facing a lack of wood for fuel and increases in the price of electricity and gas, people resorted to illegal felling.

82. Pressure on forests from local communities felling and grazing livestock led to further degradation of the resources. The increasing overall poverty level led to a significant increase in the human pressure on forests, both to collect forest products and to graze livestock. The absence of financial and human resources in the forestry institutions in the country, combined with the increased human pressure on forests, made reforms in the forest sector an urgent priority.

83. Reforms have begun with the development of a new sectoral policy and concept led by strong leadership at the Forestry Agency and supported by other donors. To a significant degree, forest sector policy has been developed and implemented with the close involvement of the Kyrgyz-Swiss Forestry Program (KIRFOR), which provided technical assistance to the sector in developing policy and legislation until its completion in 2009. The evolving policy toward forests can be tracked through the development of four major policy documents:

1. The Presidential Decree on New National Forest Policy (#300, October 6, 1998)

2. The Concept of the Development of the Forest Sector through 2025.

3. The National Forest Program to Support the Implementation of the Concept of the Development of the Forest Sector till 2015

4. The National Action Plan for the Development of the Forest Sector 2006-2010 (NAP) with activities specified to implement a National Program (with a subsequent Action Plan for 2011-15)

84. The policy is characterized as having the three pillars of ‘State, Man, and Forest’ working together to manage forests in a sustainable manner. At the same time, the emphasis on preservation has continued strongly in policy and law throughout the past 20 years. Forests are considered especially valuable and are designated as serving for the most part only environmental functions, including ecology, sanitation and hygiene, recreation and water protection. Policy still does not allow for commercial activities involving timber harvesting. NTFPs are somewhat less regulated, but gathering these products is not supposed to contradict the basic principle of protecting trees. The most progressive three directions of this new policy were: i) to promote decentralization with regard to the management of forest resources through empowering the FEs with wider decision making power on leasing out territory and enter into new tenure arrangements with communities; and ii) to enhance engagement of the local communities—‘man’—in decision-making; and to separate economic functions from the regulatory/protective function, with the private sector carrying out the harvest of timber.

85. The implementation of this policy has been lagging mostly due to weak commitment, very limited state funding to undertake planned activities and limited technical capacity to implement the action plans, especially at the regional and local levels. Many directions announced in the concept, program, and plan were never carried out, such as decentralizing power to the level of FE and separating productive functions from regulatory and control functions. Forestry enterprises have managed to implement some technical afforestation activities, meeting NAP targets on planting trees, reforestation, and preparing seedlings and seeds. Considering that there was almost no funding provided to undertake these tasks, the results can be considered impressive. Forestry enterprises in Kyrgyzstan spent only

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USD 10 for a hectare of reported afforestation works, while such work usually requires at least USD 600 per hectare (Project Appraisal Document. Tian Shan Ecosystems Development Project, WB). However, the results of the afforestation were reported to be unsustainable with a low survival rate of plantations.

86. A National Action Plan (NAP) for the Development of the Forest Sector for the next five years (2011-2015) was developed but was never approved by the Government. It is evident that the new set of targets in the draft NAP is more realistic, considering the minimal funding for its implementation. The area for planting forests on SFF lands in this plan is half the size of the previous plan (5,000 ha) and on lands outside the SFF, the target is one-fifth the size (1,150 ha).

87. The major weakness of the policy is that it is still focused on preservation probably since under current conditions it is unrealistic to carry out a more proactive policy that would seek to maximize benefits from forests while sustaining and increasing the amount of forest cover. Kyrgyzstan’s recent strategic policy documents, including the National Strategy for Sustainable Development (NSSD) for 2013-201720, and the five-year Government’s Program and Plan on Transition of the Kyrgyz Republic to Sustainable Development (2013-2017)21 identify the need to address natural resource management and sustainable development. These Programs and Forestry Policy and NAP can serve as a foundation for further advancement of the reforms.

2.4 Land Sector Reform Policies and Progress

88. There has been no real coordination in these reforms processes so far. Confusion between definitions of land ownership and their use in state cadaster undermines sustainable use and protection of these resources. Forests located outside of the SFF are being neglected and overexploited, while pastures located on the SFF are being used without consideration of country wide pasture management arrangements, leading to confusion among users and fueling conflicts.

Table 8. Forest Land by Management Designation Land Type by Management

Designation

Forest land (ha)

Covered by forest

Not covered by forest

Total Tree and bush

plantations

State Forest Fund 492,602 388,554 881,156 109,593

Conservation area 58,705 37,027 95,732 9,705

Ayil Okmotyl 29,041 12,402 41,443 162,976

Reserve Fund 60,657 79,915 140,572 176,586

TOTAL 643,717 520,348 1,164,065 463,470

89. In response to growing conflicts between communities, JCs and FEs, Ministry of Agriculture and SAEPF signed a Memorandum on Cooperation in April 2013, which laid the foundation for further integration of pastures as one ecosystem. The memorandum set a condition for JC to rent pasture lands from the FE for 3-5 years. This was a big step forward, but follow-up is needed to specify the details of

20

Approved by the National Council on Sustainable Development under the President of Kyrgyzstan on 21.01.2013. 21

Approved by the Resolution of the Government on 30.04.2013 № 218.

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such cooperation. The arrangements of cooperation between FEs and JCs need to be further elaborated and reflected in relevant legislation.

90. The lack of a coordinated, landscape approach toward management of natural resources appears to be the primary issue. There remains no systematic approach to managing these resources, and there is little effort to think in terms of a larger ecosystem. First, management of these resources is concentrated in the capital city, Bishkek, with limited finances and capacity available on the regional level and none on the local level. Next, different institutions manage different resources, and there is little coordination or even communication between them on issues of policy and access. Moreover, these institutions have different agendas—often contradictory—so the policies of one institution may conflict or even undermine the policies of another. Finally, many of the good policies and laws that do exist are not enforced and thus have no impact at the ground.

2.5 Major findings from a rapid review of reforms in land, forest and water management

91. The Kyrgyz Republic’s experience with a series of agricultural sector reforms points to important conclusions about political economy considerations and factors leading to relative success or failure of these reforms. While it is difficult to conclude about the overall success of the reforms (especially regarding pastures and forests), the experience of the past 24 years highlights the complexities of carrying out reforms in a challenging environment.

92. Underlying Political Economy Factors:

Agricultural sector reforms were driven in large part by fiscal necessity. Decentralization reforms in management of arable land, pasture land, and irrigation water were triggered by a severe lack of public resources to effectively manage them. The government inherited Soviet-era management structures which were both inadequate for a market economy and which required high levels of subsidization which abruptly were no longer available. In the forestry sector, this shortage of financing and resources was less urgent due to the nature of its primary function, which has been to protect resources from illegal use, and there was also no social and economic pressure from surrounding communities. The major challenge which the forestry sector faced at the time of transition was to protect resources from the people surrounding them.

There was an early embrace of policies to empower local decision-making as a way of addressing challenges. The motivation was to provide some cushion in food security to the increasingly poor rural population with a fast growing poverty level, to ensure the equitable access to the resources while conflicts between users were growing, and to halt fast degradation and unsustainable overexploitation, which occurred under the de facto open access status. There were local pressures to assert more control over resources which dovetailed with the government’s need to shed the fiscal burden of its centralized management systems. Farmers and local communities were increasingly called upon to make the best of their situations with essentially only regulatory oversight, often patchy in nature, by the government. At the same time, there was sufficient political vision in key agencies at the national level to affect the reforms rather than allow the old systems to continue in an underfunded manner.

At the same time, the withdrawal of centralized state management created opportunities for vested interests to assert themselves. This occurred primarily at two levels. First, the transfer of decision-making to local institutions (WUAs, pasture committees, ayil okmotus) in some instances permitted local elites to capture access to some resources. The behavior of the elites

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in equitably managing resources depended in a large part on local level social capital dynamics, notwithstanding guidelines and regulations to provide for fair management, consideration of the interests of the poor and other vulnerable segments of the population. There was naturally significant variation in how these institutions were managed. The second level involved local public management entities such as Leskhozes where state control remained, but financing and oversight was weak, prompting the exercise of significant discretion. This discretion in turn naturally contributed to rent-seeking behavior.

93. Key design factors:

Integrated approaches to ecosystems and rural development. A major shortcoming, especially in the livestock sector, has been the lack of coordination which leads degradation of resources as well as inefficient use of rural assets for the population. Integration across sectors is important.

Decentralized decision-making works in principle in the agricultural sector, but it needs to be comprehensive in order to have a framework that will prompt good management. There is enough relative success in agricultural performance to validate decentralization to local government or users’ groups. However, the success of these overall reforms was hampered by their often piecemeal nature and lack of clarity in the legal framework, especially with regard to how management was to be executed and financed, and the control/accountability mechanisms. This in turn frustrated the emergence of transparent locally-understood fair ‘rules of the game’ that would maximize efficiency and contribute to equity. Without the ‘full package’ the changes are unlikely to be sustainable.

Key elements for local ownership are the effective means of ensuring a fee-based system. Payment systems create mutual accountability among users and management systems (either user-based or local governments). At the same time, the mechanism for payment should be clear and enforceable; the recent changes to pasture management have led to a more locally suitable, effective means for collecting payment. WUAs, on the other hand, suffer from problems because of the difficulties of enforcing payment.

94. Key Implementation Factors:

Ability to sustain reforms. While there were pressing fiscal needs and often visionary leadership, the actual process of reform and making the necessary adjustments for a successful transition takes considerable time. This is particularly the case when trying to nurture a structure of incentives that would reliably encourage good local management practices, including discouraging rent-seeking and corruption. This was hard to achieve with the many changes in government and the consequent volatility of commitment to leadership reform.

Addressing the local balance of power. Localized decision-making led to more proactive management in large part. Mechanisms to provide for local accountability (largely transparency/information flows, participation in decision-making, and monitoring opportunities) needed to be developed to guard against poor management and abuse.

Technical and financial support from donors is important to providing for quality and sustainability of complex reforms. To the extent that long term donor engagement (five years or more) was guaranteed, this provided both technical, and to some extent, a policy framework to see the reforms through. It also allowed for better monitoring to make adjustments.

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3 ORGANIZATIONAL STRUCTURES AND MANAGEMENT OF FOREST RESOURCES

95. The forest resources management system inherited from the Soviet period is strictly hierarchical. Currently, the management structure is comprised of four tiers: Department of Forest Ecosystems and Specially Protected Areas (DFESPA) within the SAEPF at the central level with a 36-person staff, seven Territorial Divisions for Environmental Protection and the Development of Forestry Ecosystems (TDEPDFE), overseeing one or more oblast, and 41 Leskhoz – Forestry Enterprise (FE) and eight separate Lesnichestvo - Forestry Unit (FU), 202 Lesnichestvo or forestry units (FU) under the FEs, with 978 Obhod- ranges. There were 2,051 people working in all SAEPF structures at the national, regional, and local levels in 2014, including 836 forestry personnel.

96. The major tasks of the SAEPF are the following:

Developing and implementing policy Overseeing state control of the implementation of legislation, protection, and use of natural

resources Undertaking inventory and assessment of natural resources Disseminating information about the environment.

SAEPF (2,052 persons - 1

location)

TDEPDFE(100 persons -7

locations)

DFESPA(36 persons – 1

location)

Department of Forest and Hunting Inventory

(1 location)

Leskhoz (FE)(41 locations)

Lesnichestvo Independent FU

(8 locations)

Lesnichestvo (FU) (202 locations)

Obkhod (Range)(978 locations)

Protected areas (10 locations)

State Nature Parks(9 locations)

Station for forest protection

Figure 3. Organizational Structure of Forest Management

97. The Department of Forest Ecosystems and Specially Protected Areas – DFESPA (the protected areas unit was transferred to this department in 2012) is charged with developing and implementing policy, drafting legislation and monitoring its enforcement, reviewing and approving annual plans and budgets as well as reports, appointing the management of forestry enterprises, and providing overall supervision for forestry activities around the country.

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Figure 4. Organizational Structure of DFESPA

98. There are seven Territorial Divisions of Environmental Protection and the Development of Forestry Ecosystems (TDEPDFE or ‘Territorial Divisions’): Chui-Bishkek, Osh, Issyk-Kul, Talas, Jalal-Abad, Naryn, and Batken. They were established in 2009 through the merger of regional or inter-regional environmental and hunting divisions with regional forestry departments. They have their own regulations approved by the SAEPF, but are not independent bodies because they are funded at the national level and serve as structural divisions of the SAEPF at the regional level. The role of Territorial Divisions in the management of forest resources is limited. They have no power to appoint or fire FE management, since the director and chief forester are appointed and dismissed by the central office at the SAEPF. These divisions also have no power to approve work plans and budgets, serving rather as clearinghouses for forestry enterprises through the compilation and submission of information to the national level.

99. Leskhoz (Forestry Enterprises) are the local-level forest management entities at the core of forest management in Kyrgyzstan. FEs are comprised of forestry units, the number of which depends on the size of the area—and the forestry units are further divided into range districts with average size of 2,150 - 3,200 ha. There are a total of 978 ranger districts in 202 forestry units of 41 forestry enterprises. These enterprises manage about 82 percent of the total land of the State Forestry Fund.

Diagram 2. Typical Organizational Structure of an FE

Source: KAFLU report

DFESPA

(1 location-36 people- )

Unit for Monitoring and Analysis on Environmental Protection

Activities

(4 people)

Unit for Specially Protected Areas and Preservation of Biodiversity (5

people)

Scientific Center for Sustainable Management of Natural Resources

and Retraining

(7 people)

HR and Financial Management

(6 people)

Forest Ecosystem Unit

(6 people)

Optional Structures varying from Leskhoz to Leskhoz

Forest Unit Administration

Technical Unit

1. Chief Forest range

2. Engineer on Forest

Plantations

3. Engineer on Forest

Protection and Conservation

Financial Unit

1. Chief Accountant

2. Bookkeeper,

3. Cashier

Forest Range A

1. Forest Ranger

2. Ranger Assistant

Forest Range B

1. Forest Ranger

2. Ranger Assistant

Forest Range C

1. Forest Ranger

2. Ranger Assistant

Director

(Secretary, Driver)

Mechanic Workshop

1. Head of the Workshop

2. Head Assistant

Nursery

1. Chief o nursery

2. Chief’s Assistant

Farm

1. Chief of the farm

2. Chief’s Assistant

XXXX

1. Head of XXXX

2. Head’s Assistant

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100. The territory of an FE includes forested land and open land for planned afforestation at some later point in varying proportions. Land without forest cover is often used as pasture, and in a few cases it may be suitable for cultivation. Although in the Soviet past FE provided a range of social services such as operating schools for FE residents, they no longer provide these services, forcing villagers to go farther afield to schools and other facilities maintained by local governments.

101. The decision making process is also heavily centralized at the FE level. The director makes all decisions, often without consultation with staff. In a large FE such concentration of power creates delays in decision making and undermines accountability of the foresters to their communities. In the course of the survey, many respondents suggested that decision making within FE should also be decentralized to the level of the FU.

102. FE activities are outlined in five-year National Action Plans as well as through annual work plans. Annual planning is based on the findings and recommendations of the forest inventory, which is conducted every 10 years by a special department within the SAEPF. Planning is based on the target of reaching the forest-cover levels of 1930 and on the results of the evaluation of forest conditions and dynamics due to forest use in the 10 years preceding the last forest inventory. Currently, the NAP aims at afforestation on 3,000 ha annually. The SAEPF defines the figures for afforestation for each FE based on inventory documents to arrive at the 3,000 ha figure.

103. Each FE prepares its own detailed annual plan based on the previous year’s work plan, its own fall inventory, and a spring technical review of conducted projects. They have no flexibility in adjusting these work plans because they are approved and thus fixed within the NAP for five years. Therefore, although FEs develop their own detailed annual work plans, they still are limited by the top-down targets for afforestation and by the financial resources available.

104. There are no requirements to share any of the planning information, either while drafting it or when finalized, with local communities. There are no mechanisms for soliciting public participation in planning or monitoring, outside of some theoretical rights under the CBFM model. The FE in essence operate in a silo separated from nearby communities and their local governments for formal work planning, budgeting, and reporting on activities, including land leases and permit provision. There are neither accountability nor feedback mechanisms regarding FE performance or community priorities.

Table 9. Pilot Forest Enterprise Organizational Data

Forestry enterprise (FE) information

Balykchy Jety Ogyz Kyzyl Unkur Nookat

F E number of staff 30 57 26 30 Area per staff (ha) 295 1,600 2,227 3,141 FE total annual income in 2013 (KGS)

2,264,609 7,761,151 7,249,931 2,423,239

FE income per ha of total area (KGS)

570 85 137 26

FE income per ha of forest covered area (KGS)

1,147 249 285 94

FE major sources of income - Seedlings - firewood, - livestock grazing - farming crops

- firewood - saplings - livestock grazing - tourism

- walnut harvesting - livestock grazing - beekeeping

- firewood - seedlings - livestock grazing - farming crops

Source: KAFLU report. GIZ report

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4 SECTOR CAPACITY

4.1 Financing

105. The forestry sector is seriously underfunded. The SAEPF has two sources of funding: annual funding from the national budget and ‘Special Means’ (Spets Sredstva) – from the FEs and National Fund for Environmental Protection and Development of the Forestry Sector (NFEPDFS). ‘Special Means’ originate with public sector entities’ direct collection of funds from the provision of services, such as user or permit fees. The national budget covers only the salaries and mandatory social benefit payments to the national Social Fund for staff. All incremental expenses, as well as all activities and projects, must be covered by the revenue from special means.

106. In 2013 allocations from the state budget for forestry were: 117,724,314 KGS, or about USD2.3m, which makes up about 0.15% of the overall country’s state budget. Revenue from Special Means was 119,908,040 KGS or USD2.35m in 2013. By law, the SAEPF is obligated to transfer 20 percent of its revenue to the national budget. After all mandatory transfers, Special Means revenue made up 110,506,028 KGS (USD2.2m). This budget does not account for the budget under the Specially Protected Areas, management of which was transferred to the DFEPSA in 2012, and which made up an additional 12,143,577 KGS (USD 238,109) in 2013. Two-thirds, or 67 percent of the total forestry budget from the state budget and Special Means were spent on salaries and social benefits payments for employees.

Diagram 3. Expenditures of the DFESPA in 2013 (%).

107. The inadequate staffing and financial resources of the Forestry Department mean not only that it cannot play a policy-making role but also that it is unable to support or carry out the meaningful monitoring and performance evaluation of lower-level subordinate offices, even though its institutional mandate calls for substantial involvement and direction in the entire forestry management system. This institutional disconnect between mandate and resources is in large part due to continuing emphasis on retaining Soviet-era structures and management styles. This system poorly matches Kyrgyzstan’s resource base and has thus far been observed to be inadequate for the country to tackle its particular forestry management challenges.

57.7%

9.3%

2.8%

1.6%

0.0%

6.0%

16.2%

6.4%

salaries

Social Fund

Trips

Utlities and communications

Rents

Transportation

Procurment of goods and services

Capital investments

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108. The trend in use of forest resources are towards an increase of revenue from the collection of nuts and fruits, plantations and the new use of forest resources, such as mining and installation of communication facilities on forest lands. At the same time, there is a small decrease in revenue from the use of pastures for grazing, and from the use of forest land for cropping (Diagram 4).

Diagram 4. Change in shares of various land lease fees in all FE revenues 2009-2013 (%)

109. The lease of pasture land—the non-forested land set aside for afforestation and located under Leskhoz management—stands as the most significant source of FE revenue. The major sources of revenue for FE from the use of the forest land in 2013 were the lease of land for pastures (34%), collection of nuts and fruits (26%), recreation and tourism (12%), plantations (11%), and use of arable land (8%). In forests with nuts, especially walnuts, leases of walnut forest plots rank as the primary source of revenue. In some areas, the largest source of revenue is the lease of pasture land in the State Forestry Fund for grazing, while in others it comes from seasonal leases for the use of non-timber forest products. The decrease in revenue from the pasture use is probably due to the reforms in the pasture management sector, which started in 2010 and the establishment of the PUUs. At the initial stage, FEs were not confident in the capacity of the PUUs when engaged in the renting out forest pasturelands.

110. The process of approval of annual budgets of the FE is very cumbersome and inflexible. The FE prepares an annual budget which it submits to the Territorial Division -- TDEPDFE. The RDEPDFE collects budgets of all subordinate FEs and submits them to the DFESAP. The DFESAP approves budgets within the SAEPF and submits these to the Ministry of Finance. The Ministry of Finance approves budgets and following, an FE can start withdrawing funds from its Special Means Account, located at the Treasury. The process is lengthy and even after approval funds arrive in the FE accounts with significant delays. Since many activities of the FE are of a seasonal nature, such delays cause disruptions to many time sensitive forestry operations.

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

2009

2010

2011

2012

2013

Recreation and tourism

Orchard

Nursery

Haymaking

Arable land lease

Fish cultivation

Timber and fuelwood

Mining

Nuts and fruits collection

Trade facilities

Communications

Plantations

Pastures

Beekeeping

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Diagram 5. FE Budget Approval and Fund Release Process

Leskhoz prepares budget and submits to Territorial

Division

Territorial Divisions collect budgets from leskhozes

and submits to DFESPA

DFESPA collects budgets, approves with SAEPF and submits to the Ministry

of Finance for agreement

District Treasury releases funds

After Ministry of Finance approval, leskhozes can use Special Means in line

with the approved budget

Special Means are accumulated from

various payments for leases, use of forest

resources

111. Budget of the FE depends on the resources it can lease out or sell, not on the protective importance of the forest. As can be seen from the budgets of four Pilot FEs, state budget is the largest revenue they receive annually, ranging from 28% of the total budget of Kyzyl Unkur FE to 51% of the total budget of Nookat FE.

112. With limited capacity and resources, the Kyrgyz Government is not capable of protecting forests from illegal use. Leaving aside the issues arising from poor incentives for Leskhoz employees, the sources of revenue for carrying out the core mandate of the Leskhoz is simply inadequate. Virtually no projects that require funding can be completed or even begun because there is no budget for them. Leskhozes must rely on local communities and local governments for many key activities, especially in the case of urgent needs such as fire-fighting or pest control. The only solution for forest management in Kyrgyzstan is to engage rural communities and private entrepreneurs in their management.

4.2 Human capacity

113. There are insufficient staff to manage forestry on the ground. All forest lands are protected and managed by less than 1,256 employees. With a general SLF area in-country of 2.7 million ha, this means there are about 2,150 ha of land to protect and improve per person. According to interview responses and UNIQUE’s report, it is quite a challenge for the rangers and foresters to oversee areas of about 2,500 ha average per person considering the rough terrain and long distances to cover.

114. There has been a high turnover of forest sector management at all levels—a serious problem for ensuring institutional memory, creating a stable professional environment, and motivating personnel. In addition, perhaps as a reflection of the limited high-level attention paid to the forestry management system, appointments are often politicized, despite the need for specialized knowledge and skills. FE directors are supposed to be approved formally by oblast administration, resulting in the position often being assigned to a political nominee instead of to a forestry professional.

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115. Incentives for managing forests well are lacking for FE management and employees. In all four pilot FEs, employees noted that the salaries they receive are too low. Indeed, salaries are far too low to motivate staff to carry out the protective functions that FE are supposed to provide, meaning that workers must seek additional benefits or income. At the same time, the FEs legitimately need funds to carry out the projects needed to maintain the forest, so they too look toward opportunities with the potential for supplemental income. The expectation of an imminent departure increases the likelihood that individuals will break the law, since they can expect to be far from the scene and avoid punishment if ever their illegal activity is detected. In any case, SAEPF and Territorial Division control is patchy at best due to resource constraints, and fines are comparatively inconsequential. There are no accountability mechanisms other than the vertical hierarchy in place. Staff are not evaluated through a standard evaluation process and there are no any incentive programs conducted by the Agency.

116. Technical capacity is weak. In all four pilot areas employees believe that they lack updated technical knowledge on major forest management activities, such as handling seedlings, afforestation, dry land irrigation approaches, and working with GIS equipment. It was noted that there have been no retraining programs organized for the employees over the last five years.

5 FOREST SECTOR PERFORMANCE

117. The forest sector’s performance can, in part, be judged by the fees it collects, the quality and effectiveness of its services, and the satisfaction of its users and other clients. Data on the contractual arrangement for grazing pastures, accessing forest land for the collection of NTFPs, and for cropping on forest lands shows that there has been a slight increase in the number of contracts and subsequent rise in collected revenue, mostly on the lease of forest lands which started in 2012; however, it is likely related to the fact that specially protected areas and national parks have been transferred to the DFESPA in 2012 and appeared in the budget. Otherwise, there are no visible dynamics in contractual arrangements along types of tenure.

Table 9. Contracts for Pasture Lease, CBFM Arrangements, and Lease of Forest Land 2009-2013

Year

Pasture Leases CBFM Arrangement Lease of Forest Land TOTAL

contracts (N) area (ha)

Payment (KGS)

contracts (N) area (ha)

contracts (N) area (ha)

payment (KGS) contracts Area (ha)

Payment (KGS)

2009

4,095 235,393.7 8,163,614 1,179 11,125.35 11,754 17,957.85 10,983,418 17,028 264,477 19,147,032

2010

4,238 215,238.5 8,835,093 1,095 9,886.05 10,324 13,532.79 10,422,440 15,657 238,657 19,257,532

2011

3,387 221,893 7,052,053 1,081 9,407 10,576 15,257 12,953,932 15,044 246,557 20,005,985

2012

3,742 244,341 11,547,760 1,167 16,270.3 16,188 33,078.33 24,087,234 21,097 293,689.6 35,634,994

2013

4,227 313,531.6 14,024,596 1,163 9,500.87 16,443 33,600.16 28,535,417 21,833 356,632.6 42,560,013

118. FEs conduct annual afforestation and, according to the official data, forest area has increased by 9.9% (or by 104,900 ha) during the last 5 years.22 However, there is no data on the monitoring of these plantations over time to assess their survival. A comprehensive inventory is needed to see if these areas are being converted to forest.

22

National Report on Environment in the Kyrgyz Republic for 2006-2011, approved by the Government Resolution.

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119. The state budget allocation for the FE Kyzyl Unkur at the amount of 1.8 million KGS in 2013 was almost fully spent to cover salaries and Social Fund payments of the 26 FE employees. The remaining 4.5 million KGS were spent to cover expenses on housing, utilities, fuel and transportation costs, maintenance and a very small amount on reforestation work. FE conducted afforestation but the survival rate was very low. The major reason for this was high grazing pressure on plantations. The access for local communities to FE pastures is arranged by the Jaiyt Committee (JC); however, rangers monitor pasture use.

120. With the prohibition of walnut cutting, the anecdotal evidence suggests that there is significant illegal logging and firewood cutting in the Kyzyl Unkur FE area. Walnut cuttings are prohibited by law and sanitary felling is done mostly for poplar and elm trees. Annual approved thinning and sanitation cuts are about 340m3, which is at least 10 times less than local communities’ needs.

121. The limited allowed maintenance cuttings of juniper forest suggest illegal logging and firewood harvesting occurs. Kyrgyz law prohibits felling of juniper even for sanitary and maintenance purposes. The amount of allowed annual maintenance cutting is about 53m3. In 2013 Nookat FE sold only about 690 m3 of firewood.

122. Nookat FE conducted afforestation activities and about 225 ha were reforested with juniper and pine trees with an estimated 90% survival rate.

123. Balykchy FE has successfully piloted a partnership with the private sector in afforestation. With the support of JICA, the Balykchy FE management has successfully piloted a reforestation approach through the afforestation of 25 ha with poplar trees. This was made possible through the construction of a water reservoir and irrigation channels system in order to irrigate forest lands. FE rented out land to private individuals to plant orchards through competitive tenders with announcements in the local newspapers, which led to successful afforestation of otherwise barren areas and addressed issues of livelihoods of local communities.

124. In the Jety Oguz FE, the pressure from the population is mostly for pasture grazing lands. Fertile soils also play host to diversified agro-farming systems including a wide spectrum of crops and fruit orchards (pears, apples, apricot, black currant). Rich mountainous rangelands favor livestock breeding and milk processing. The area has potential for tourism development with an area of about 2,000 ha along the lake, as well as ongoing tourism facilities in the mountainous areas.

125. Major concerns expressed by the staff of the four pilot FEs on their ability to perform their functions were noted to be the following (in order of priority):

Inflexibility of decision making and too strict centralized control

Low salaries of rangers and foresters

Lack of technologies for tree nurseries and plantations, as well as felling

Lack of machinery and basic equipment (phones, cameras, GPSs)

Lack of drinking and irrigation water

Fragmentation of municipal and SFF land causes difficulties to manage legal and technical support to swap lands

Illegal logging

In Kulatov AA in Osh region, a cement factory provided support with afforestation of the 10 ha of AA land with elm and ash as compensation for the environmental damages. UN provided assistance with planting 60 kg of almond seeds.

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Policy on full prohibition of thinning and sanitary cleaning in juniper and walnut- fruit forests needs to be reviewed. Forest is aging and prohibition on thinning and clearing natural forest does not allow regeneration and improve growth performance

Conflicts with JC 126. According to the survey data, most respondents believe that forest resources are improved. Less than 27% of respondents think that the forest condition has deteriorated, while 51 percent of all respondents think that forest conditions have improved.

127. Information dissemination by the FE is insufficient. With regard to the assessment of the work of FEs, people believe that information dissemination is still weak (39% stated that the FE always informs them, 27.2% stated that they are sometimes informed by the FE, and 17.5% stated that the FE never informs anyone on decisions made).

128. Access to information ensures legal and secure access to resources. The results of the survey in the four pilot FEs demonstrated that informal users of forest resources (without any contract or use ticket) are keen to obtain information on procedures and arrangements to access forest resources and secure them through formal arrangements, as well as payment for the use of these resources. Survey respondents indicated that they want, not only information on access to resources, on various tenure types, but also more technological information on how to grow trees, how to fight pests and rodents, how to store seedlings, and how to process NTFPs.

129. People believe that the FE is not always fair in its decision making, but less so where CBFM is widespread. The level of community trust in FE’s decision making is different in each area, but in general, more than half of respondents were not sure if FE always makes fair decisions (56%), one-fourth of respondents are confident that FE is always fair (28%), some think that the FE never makes fair decisions (9%), and the rest think that sometimes FE can be unfair (6%). The highest level of trust is shown in FEs where CBFM arrangements are spread (Nookat and Kyzyl Unkur FE).

130. Some people think that there is corruption in the forest management system (22% think so, 36.3% think that there is no corruption, and 41.7% did not want to respond to this question). People think that there is some level of corruption in the forestry sector, because in their opinion more illegal felling is occurring and some people illegally privatize forest land. They also believe that allocation of forest land and rights is unfair and not transparent. But the majority of those who think that there is corruption mentioned that it’s mostly at the higher levels of FE management.

131. Respondents of the survey think that corruption primarily happens around illegal felling of timber, allocation of land and walnut trees into lease arrangements, and the allocation of pastures. People think that there is corruption within the forestry management sector when appointments are made (appointments in exchange for a fee)

132. All communities participating in the survey see a bigger role for them and AO in forest management. Almost all interviewed think that users should participate in forest management. People want and think they should have right to participate in making decisions about their forests. There is also a strong opinion that three parties should be engaged in forest management: Leskhoz, AO and the community. They see participation as translating into joint meetings, discussing issues related to forest resource allocation, conducting joint planning of forest-related activities, and organizing joint conservation.

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133. Major issues faced by communities in the four FEs with regards to forest management (in priority order):

Lack of timber

Lack of fuelwood

Degradation of biological diversity, pastures and forests (aging trees, low survival rates of new plantations)

Recent establishment of Dashman Protected Area on the 5,000 ha of FE Kyzyl Unkur without proper consultation and consideration of needs of local communities has fueled dissatisfaction among forest users

Poor infrastructure and decaying public facilities (school, day care, hospital)

Insufficient electricity supply, no coal

Limited access to clean potable water

High unemployment and limited business opportunities

Mudflows and landslides, weather extremes, natural disasters

Growing hay being more profitable than growing vegetables

Community members would like to grow seedlings but lack fencing

Growing number of wolves

Forest fires

Illegal logging

Rabbits damaging fruit trees

134. Communities believe that toughening the legal framework, increasing salaries of the Leskhoz field staff and joint Leskhoz-community management would improve forest management. It is informative that survey results show that there is weak law enforcement on the ground in relation to violation of forest management and use regulations. People believe that if the penalties for illegal forest activities are stricter, forest management would be improved. All categories of those interviewed think that the low level of salaries of working level FE employees also negatively affect the quality of forest management because it pushes FE staff into corrupt practices. And finally, engagement of communities is also seen as a step towards the improvement of forest resources.

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Diagram 6. Opinion of respondents on three major improvement needed for better forest management

135. The Pilots’ experiences strengthened the confidence of communities in positive engagement of private sector and communities in forest management. The survey results also show that overall people do not think that engagement of the private sector in forest management would improve conditions of forest resources. The percent of those who think that the private sector can positively affect forest management is highest in Balykchy, where the FE had a successful pilot with the engagement of private entrepreneurs in afforestation. Similarly, the percentage of those who think that communities’ engagement in forest management is beneficial is highest in Kyzyl Unkur and Nookat, where CBFMs have been active for almost a decade and people have learned to take responsibility for the forest resources they use.

4.6

2.1

4

9.7

5

11.4

19.1

16.8

10.8

16.2

To give more management rights to localcommunities

To give more forest management rights tothe private sector

To inform timely on changes in legislation

To disseminate more information on forestprotection among communities

State forestry should protect forestresources

To give more jobs to local population

To toughen legal framework

To increase salary rates of theworking levelleskhoz staff

To improve livelihood of local communities

Forestry should work together withcommunities

0 5 10 15 20 25

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Diagram 7. The major improvements needed for better forest management in 4 Pilot FEs (% of responses)

6 GOVERNANCE ARRANGEMENTS AND ACCESS TO FOREST RESOURCES

6.1 General information

136. Forests play an important role in the livelihoods of communities living in and near them. Kyrgyzstan has classified 23 ecosystems, which are diverse, ranging from glaciers and snow fields to deserts. At the same time, there are very limited areas of closed forests, mostly these ecosystems are meadows and rangelands with shrubs and open stand wood forest. These ecosystems, together with climate, soil and hydrology characteristics, location and size of the forests, closeness of communities to markets and infrastructure, available various economic opportunities define livelihoods of local communities and their dependency on forest resources. At the same time, these ecosystems and type and degree of dependency of local communities on forest resources dictate management approaches of the FEs.

137. Ecosystems and their resources affect neighboring communities. Due to ecosystem peculiarities, the FE territories include not only forest and shrub areas, but the whole ecosystem, including lands that are used for other agricultural purposes. The forests themselves play an important role locally in providing limited amounts of timber, fuelwood, and NTFPs. The territory of FEs and the forests located on them must therefore be considered in the context not only of national objectives to preserve forests, but also for their de facto role in the communities around them. Even in the context of preservation, the source of pressure on forests originates mostly from local communities, so an understanding of

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Jety Oguz spruce forest FE

Balykchy riparian forest FE

Nookat juniper forest FE

Kyzyl Unkur walnut-fruit FE

To give more management rights to local communities

To give more forest management rights to the private sector

To inform timely on changes in legislation

To disseminate more information on forest protection among communities

State forestry should protect forest resources

To give more jobs to local population

To toughen legal framework

To increase salary rates of theworking level leskhoz staff

To improve livelihood of local communities

Forestry should work together with communities

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community interests and usage patterns is critical to having a full picture of issues around forest management in the country. The pattern of usage of forest by nearby communities also affects downstream communities, which do not have direct access to forest resources but depend on them for grazing livestock, obtaining fuel wood and timber, as well as for irrigation and drinking water.

6.2 Use of forest resources by communities

138. Most communities living around and near forests in the pilot FEs are poor and lack economic opportunities, and forest resources are important for their livelihoods. People who live adjacent to the country’s forests usually do not have many economic opportunities. Their villages are often at high elevations, far from markets and jobs, with poor economic and social infrastructure. Furthermore, many settlements were a part of the forestry state farms during the Soviet period and people living on FE territory often have either very small land plots or none at all. For all interviewed, the major source of revenue are salaries (60.9%), with cropping (19%) and livestock (13.9%) playing only a minor role. Social benefits and pensions together comprise only 5% of household revenue. Interesting to note, remittances are not considered a significant source of livelihood (0.3%). At the same time, for 49% of respondents forest resources are important and 45% very important for their livelihoods.

Diagram 8. Major Sources of Livelihood in Pilot Communities

139. Communities living near forests do not have a large number of livestock dependent on available pasture areas, but are thinking of increasing this number. Only about 50% interviewed own sheep (49%), and the majority of those who own sheep do not have more than 20 head. About 70% of respondents have up to three dairy cows, less than 30% have 1-2 bulls. Half of all respondents have up to two horses. Most livestock is in the Jety Oguz FE area, where the pasture area is sufficient, and the least in the Balykchy FE area, where there are only 230 ha of pasture. However, almost 90% of all respondents do plan to increase the number of their livestock, though the number of positive responses were significantly lower in Balykchy than in other areas.

140. FE pastures are often part of one contiguous rangeland ecosystem, with pastures of the AA very important for forest communities. It is not surprising that survey results showed that communities use pastures of the aiyl aimak managed by the JC, as well as pastures of the FE. Pastures of the FE are used more, especially in Nookat, and Kyzyl Unkur, where pasture areas of the AA are very limited. In the Balykchy FE area, where the pasture area is very small, communities use mostly pastures of the AA.

0

10

20

30

40

50

60

70

80

Jety Ogyz Spruce FE Balykchy Riparian FE Kyzyl Unkur Walnut-Fruit FE

Nookat Juniper FE

Salary

Cropping

Livestock

Social Benefits

Pension

Remittances

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141. 43% of respondents mentioned livestock grazing as the most important activity in the forest, followed by collection of timber, and then collection of nuts and fruits. There is no significant difference in importance of the forest resources for men and women.

142. Legislation defines only four major types of forest use. Article 48 of the Forest Code identifies the following types of forest uses:

Tilling, hay making, grazing, beekeeping, collecting food and medicinal plants

Harvesting secondary forest resources (bark, stubs, etc.)

Scientific, recreational, and hunting purposes, and for tourism

Timber

Diagram 9. Five Most Important Activities in 4 FEs

Diagram 10. Use of Forest resources in 4 FE

KAFLU survey, 2014

6.3 Access arrangements

143. Tenure regimes revolve primarily around arrangements with the Leskhoz for use, and there are several types of arrangements, formal and informal, that permit access to forests and use of their

0% 20% 40% 60% 80% 100%

1st

2nd

3rd

4th

5th

Livestock grazing

Hay making

Timber and fuelwood

Medicinal and aromatic plants

Beekeeping

Collection of nuts and fruits

Recreation

Nursery

Fish cultivation

Cropping

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Balykchyriparianforest

Jety Oguzspruce forest

Nookatjuniper forest

Kyzyl Unkurwalnut-fruit

forest

Fishing

Recreation

Beekeeping

Cropping

Collection of berries, mushroom

Fruits collection

Medicinal and aromatic plants

Timber and fuelwood

Hay making

Livestock grazing

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various resources. Use of the forests and their resources can be accomplished through the use of SFF land for production purposes and through the harvesting of forest resources.

144. Two formal arrangements govern the use of forest resources according to the Forestry Code: leases and special permits (FC Art. 53). In addition, Collaborative or Community-Based Forest Management was introduced in 2001 and, after a pilot phase, has been applied to FEs around the country. Using land for production purposes is formalized through a lease agreement. People use forest land to grow cereals, vegetables, and fruits, to graze livestock, and to make hay. Lease agreements can be for one use or for multiple uses within the allocated area (FC Art. 43). Leases can be seasonal or long term with a limit of up to 49 years. Subleasing forest land is prohibited by law but widely exercised in practice.

145. Seasonal leases are for land plots. This is a lease arrangement for less than a year period. People prefer to a use seasonal lease arrangements to access the forest for fruit and nut collection as it is easier to estimate the future harvest. Seasonal leases are considered to be less desirable for land on which to gather hay and cultivate crops; for these activities residents prefer long-term leases. Leases are granted based on a villager’s application to the FE. At the end of the year, the lessee informally tells the Leskhoz if he/she plans to apply for the same lease next year. Users prefer seasonal licenses because when the yields of nuts and fruits are low, they are not required to take the lease or pay for its use. Users also know that because they pay for the seasonal leases in cash, they are not required to participate in the costs of forest maintenance and improvements.

146. Long-term leases: Long-term leases are made for a period of over a year. They are usually for five to 10 years but can go up to 49 years. This type of lease is popular for the use of pastures and arable land. It is allocated through an FE decision and based on application. The lessee is assigned a designated land parcel for use as pasture or for cultivation, concludes a long-term lease agreement, and pays an annual fee as established either by regulation #360 or by purchasing a forest ticket issued by the Leskhoz (which should not be lower than the annual rate of land tax approved by the Parliament). This type of lease is usually formalized with a contract and often is even registered with the state registry. Since payment for leases is based on area and is still relatively low, people seek to retain their leases and often sublease surplus or unused area to others.

147. Collaborative Forest Management (CFM) or Community Based Forest Management (CBFM) was formally introduced in 2001 with the support of the Kyrgyz-Swiss Forest Project. The Kyrgyz-Swiss Forest Project started piloting this type of forest use in walnut and fruit-tree forests in the southern part of the country, because these forests are extremely important for biodiversity preservation, they are under heavy pressure from local communities, and it was hoped that the benefits of CBFM to the local population would be significant and immediate. However, this model has started to spread on its own into other areas as well. People have entered into CBFM to lease areas near roads to organize trading markets or cafes in areas frequented by tourists. There are fewer cases of CBFM arrangements where households lease land for planting trees.

148. The major principles of CBFM are spelled out in the Regulation on Community Based Forest Management, Government Resolution #482, October 2007. The land plot given under the CBFM arrangement cannot exceed 5 ha in walnut and fruit forests, 20 ha in mixed forests, and 2 ha in riverbank forests. The first agreement under CBFM is for five years and can be extended for a period of up to 50 years. Lessees for CBFM have to be from local communities and must agree to fully protect their forest plots and to undertake forest projects, which in turn means that lessees must have an adequate labor force and knowledge of forest-related activities.

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149. All resources are required to be accounted for when assessing the expected benefits of a CBFM forest plot. For example, a CBFM forest plot with walnut trees may contain part of a hayfield that the lessee also uses. In this case, the benefit accrued from the hayfield should be added to the amount of the expected benefits from the plot.

150. CBFM in practice appears to function as a kind of omnibus leasing arrangement between the Leskhoz and multiple lessees from nearby villages. There is no organization of the community per se or even a group of households who become part of a committee or other governance structure in relation to the forest. Community members do not participate in any planning or decision-making regarding the upkeep of the forest area as a whole, as these are the direct and sole responsibility of the Leskhoz. There is no consolidated accounting concerning community usage of the forest or the impacts it has on the community such as soil erosion or water quality. To some extent, this arrangement appears to reflect the specialized skills necessary to properly assess the quality of the forests, which only Leskhoz professionals have (or at least should have).

151. Special permits: There are two types of permits for the use of forest resources: felling permits and forest permits. These permits are issued for one season only, irrespective of how long the user plans to harvest resources. A forest permit, sometimes called a ticket, grants formal permission for the use of NTFP. The forest ticket also specifies the type and amount of resources that can be extracted and the period during which collection is allowed. When NTFPs are collected for commercial purposes, they must be paid for at the rates that have been established by Government Resolution for regional and national bodies.

152. Informal use: In addition to these formalized arrangements, there are still many different types of informal uses of forest resources. Some use is informal but legal, such as collecting mushrooms, berries, fruits, and medicinal plants for personal consumption. However, almost all of the subjects interviewed admitted to collecting mushrooms for sale, and many collect berries and fruits for sale either raw or processed in jams. In cases in which NTFPs are collected for commercial purposes, permits and fees are supposed to be mandatory, but are rarely used when collectors are from local communities.

153. Kyzyl Unkur FE land is densely populated and hosts several communities surrounding the FE area, which are highly dependent on the forest resources. Local communities with 1,300 households live in the forest areas and have no agricultural land, depending fully on the forest resources. High livestock grazing pressure leads to degradation of forest resources.

154. The major use of forest resources by local communities in Nookat FE are pastures for grazing livestock. The Nookat FE is surrounded by densely populated villages of 12 aiyl aimaks. One-third of the FE land is used by local communities as pasturelands and hay fields.

155. Favorable locations with easy access to infrastructure advance livelihoods of local communities. Balykchi Leskhoz borders the city of Balykchi, and 4 AA: Kok Moinok, Toru Aigyr, Tamchy, and Chong Sary Oi. Local communities are engaged in growing fruits, especially apricot and apple, which is actively sought out and exported to Russia and Kazakhstan. With a railway and highway going through the area, access to markets is favorable to growing fruits for export.

156. More than half of the respondents in the four Pilot FEs mentioned that they use formal agreements with FE to access and use resources. In the four pilot FEs about 54% use forest resources based on written agreements with the FE, 10.3% use forest resources based on verbal agreement with the FE, and 6% usually buy forest permits.

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7 MOVING TOWARDS AN INTEGRATED APPROACH TO FOREST GOVERNANCE

7.1 Strategic Relevance

157. There are strong economic, social and environmental rationales for the development of forest ecosystems management in Kyrgyzstan. First of all, forests are an important resource for a significant segment of the population (65%). Moreover, in most cases the remoteness of forests means that nearby populations are similarly isolated from economic centers and are relatively poor and therefore it is an asset especially or the poor. Second, there are important ecological changes occurring, most notably due to climate change and its effects, especially affecting high altitude ecosystems. Poor protection of the resource leads in some cases to damaging levels of exploitation. Adaptation and conservation mechanisms are needed to preserve the resource. Finally, the existing management systems are clearly inadequate for efficient, equitable, and effective use of these resources, yet there is a clear path toward how such management could be improved within the context of overall positive economic returns from such enhanced management.

158. The environmental function of forests in Kyrgyzstan is becoming increasingly relevant. The effects of climate change and desertification are reflected in more frequent natural disasters such as floods, mudslides and landslides, especially in mountainous areas. There is an accompanying loss of biological diversity. Deterioration of vegetation coupled with soil and water shortages are leading to low productivity of agriculture and animal husbandry. Moreover, the growing livestock number and lack of non-farm sources of livelihoods will increase the already adverse human pressure on fragile forest ecosystems. Most of the disadvantaged and poor populations in Kyrgyzstan live in high altitude areas near forests and highly depends on its resources. With almost absent non-farm employment, the shortage of arable land, irrigation and inputs, their dependence on use and extraction of forest resources will only grow.

159. Forestry management shortcomings are manifest. The forests are not properly protected by the state due to a shortage of human, financial and organizational resources. The management system of natural resources in Kyrgyzstan is highly fragmented through different legal frameworks, different strategies, and different institutions. Legal, policy and institutional fragmentation exists, but there is a total lack of coordination between institutions managing a landscape for different purposes, and a lack of harmony within legislation. The only thing that holds all this together is that forest resources are used by local communities, which live nearby and depend on them for their livelihoods. However, the separate interactions between community members and various entities responsible for management mean that this does not provide effective coordination.

7.2 Improving the policy, legal, and operational framework for forestry management

160. A holistic cross-sectoral approach factoring in all uses of areas should underlie new policies and strategies toward natural resources, including water, pastures, and forest lands. Forestry should be viewed in a more integrated way with other land uses, especially for cropping and grazing, water supply, prevention of natural disasters and conservation. Policy in the forest sector needs to be closely linked to policies in energy (in terms of the promotion of alternative sources of energy), environment, agriculture, and disaster risk management. In addition to the substantive rationale for ensuring linkages, the connection to other policies will also help overcome the past lack of proper attention from the government to forestry issues on a stand- alone basis.

161. In the management of forest resources, there is a need to develop and introduce landscape based integrated management of natural resources. In order to develop a system of sustainable use of

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forest resources, there is a need to base planning on an integrated landscape management approach that considers land zoning, the availability of water resources especially for downstream communities, and the influence and impact of the intensity and nature of use on biodiversity. Forest should not be seen only valuable for its tree resources; it is a fragile habitat for many rare and endemic flora and fauna.

162. Forestry legislation needs to be harmonized with the landscape approach and linked to legislation concerning management of other natural resources. Forestry legislation has been updated, but there is still little substantive change from Soviet-era practices, which were characterized by a centralized system and a focus on conservation rather than sustainable production (with the attendant contradictions that this raises for Leskhozes). The existing legal framework in the forest sector is confusing and has many contradictions within and with other sectoral legislations. In addition, forest landscape development strategies should be in line with a landscape approach and be based on solid resources knowledge and assessment.

163. Forestry legislation needs to be improved in order to remove internal contradictions and reflect the regulatory needs of present circumstances. A review of legislation in order to articulate authority, processes, and accountability mechanisms more clearly, as well facilitate overall streamlining will provide a sounder, more grounded basis for management. In particular, forestry legislation needs to reflect a policy of an integrated approach and balance rights and interests of different uses of forests, timber, pasturage, NTFPs, recreation, and other uses. Current regulations have established one model for CBFM, but provisions should be made to allow for greater flexibility in community involvement, with inclusion of the community playing an equal role to the forestry management aspects of CBFM.

164. The tenure system needs to be improved. Policy and legal analysis is needed to develop tenure systems for the use of forest resources. This system should be clear, fair, transparent and attractive for local communities, private sector and forestry management without overlapping claims. This is a basic condition for exercising management, encouraging investment and proper maintenance, and establishing responsibility and accountability to prompt better performance. Survey results showed that in areas where new forest management approaches were piloted, the forest management and forest resource situation has improved. For example, in Balykchy, the Joint Forest Management with engagement of the private sector and significant investments into irrigation system visibly increased forest-covered areas. Due to positive results of that pilot, the interest to grow fruit trees in local communities is increasing. Similar progress has occurred in Nookat and Kyzyl Unkur, where people have become engaged in planting fruit and especially walnut trees, and fast growing varieties for fuelwood and timber. The greatest change with community engagement in forest management was noted as a change in attitude by local communities to their forests, stronger ownership of resources for better protection, and more sustainable use.

165. The incentive structures for Leskhozes should be improved by revising their administrative and financing frameworks. The Leskhozes must continue protecting forests from unsustainable use on the part of the communities and businesses at large, but in practice executing the protective role is not possible solely through the vertical accountability structure that controls the performance of the Leskhoz. The structure of forest institutions should be re-examined and revised to become more flexible and responsive, giving more autonomy to the staff operating at the local level. The four-tiered management system combined with a shortage of resources is not effective and cannot ensure the protection nor the sustainable use of resources. Central agencies should engage in more coordinating and policy-making, while allowing the Leskhoz to have greater operational authority in terms of developing work plans, etc. More stability in appointments is also warranted.

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166. Greater autonomy and financial incentives would provide Leskhozes with resources for operations. Resource constraints must be urgently addressed. The salaries and other benefits of Leskhoz employees should be made at least comparable to other public servants. This is critical for morale, enforcing appropriate behavior and performance among Leskhoz workers while not unduly burdening the budget. Leskhozes should be allowed greater latitude for revenue generation, with a larger direct retention of various types of user fees and permits to fund projects and operational costs. However, there is a need to develop safeguards to ensure a fair and transparent decision-making process, with reliable and effective grievance redress mechanisms.

167. Accountability mechanisms need to be introduced in the legislation. Accountability mechanisms are a key means of promoting better management and service provision. There are two major pathways of accountability that should be strengthened in addition to the existing upward vertical accountability to the state’s forestry management agency now in place: (i) downward accountability to citizens and local communities in a service provider-citizen/client relationship and (ii) horizontal accountability to local governments. This can be achieved through:

Increasing the involvement of communities through a deliberate, gradual process. As noted above, the steps to improve transparency should be implemented rapidly to give a sense of how the forest assets are being used and to improve accountability. This should include planning for future activities to improve the forests under Leskhoz management. There should be local level reporting by the Leskhoz to the communities to further build understanding of how the Leskhoz resources are utilized. However, given the lack of precedent for full community management of forest resources and the issues of potential exclusion, community involvement should be implemented in a controlled manner. Survey results showed that people are not fully convinced that communities can be effectively engaged in community based forest management.

Enhancing the role for local governments in holding the Leskhozes accountable. Mechanisms for local governments to provide feedback on Leskhoz performance, requires an interface with the adjacent Leskhoz to be developed. Assessments within the forestry management hierarchy should take this feedback into account for the staffing of local government directly interfacing with the Leskhoz. This involvement does present the danger of undue local political influence on the Leskhoz but appears to be the most appropriate means of building local level accountability. Such accountability is necessary because the forests are important to the lives of those living in local communities. Local governments should be aware and involved in tenure arrangements.

168. Transparency must underpin management for accountability mechanisms to work. Transparency requirements should be established; this could take the form of reporting the amount of forest resources, expectations for sanitation cutting, and all use/lease arrangements. There may be a role for some formal reporting on the annual performance of the Leskhoz to local governments as well.

169. The legal framework for public-private partnerships needs to be developed. Public afforestation should be aimed at environmental services, while public-private, or public-community partnerships could aim at productive forest plantations for energy and timber purposes. Agroforestry through public-private partnerships are relevant for the SLF and even more so on the forest lands of the Aiyl Aimak, which are currently neglected. Partnerships could include local government, private entrepreneurs and pasture committees. This approach would not only have the advantage of increasing plantations, but facilitate preservation of existing forest and forest stands. Elements of Social Forestry could be introduced in these schemes. There are no private agents for forest-related activities. An improved legal framework with stronger incentives, capacity building and linkages to the market is needed. In addition, such partnerships would require access to finances to ensure capital investments needed for business development.

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7.3 Improving capacity and operating procedures

170. The knowledge basis for forestry management needs to be strengthened. Although forests are of a strictly protective nature in Kyrgyzstan, no substantive assessment of environmental services has been conducted, such as regarding the protection of watersheds, halting land degradation and desertification. The lack of accurate and complete information on forest resources needs to be addressed in order to have a proper basis for evidence-based decision making in sustainable forest management planning. The risks and potential trade-offs in use of forest resources need to be made clear. Such monitoring would include physical and ideally economic assessments of forest resources (including capacity to estimate yields) and a mapping of the exact areas of these resources (with reference to administrative boundaries) to provide for a proper inventory and allow for monitoring and evaluation. Mapping can be done with a forest resource assessment and monitoring system with the use of Remote Sensing (RS) and Geographic Information System (GIS) technologies. This system would provide the SAEPF with (i) scientific and comprehensive information on existing resources (ii) future afforestation/ reforestation needs, thereby contributing to better planning.

171. The technical capacity in the sector is weak for supporting innovative pilots on the ground. There is low technical capacity among forestry staff as well as communities in growing seedlings, tree planting materials, establishing nurseries, and associated techniques. At the same time, economic and financial skills are crucial for management planning. Finally, investments need to target innovative technologies for environmentally cautious techniques, energy efficiency and reducing reliance/use of biomass that are suitable for Kyrgyzstan.

172. Extension support should be provided to the forestry management entities, as well as to communities living near forests. Such support can focus on topics of improving afforestation techniques, efficiency of water use, processing technologies for NTFP. Survey respondents indicated that would like to receive technical knowledge on how to grow seedlings, trees, how protect them from and fight with diseases, pests, how to process and market forest products from FE.

173. Capacity to publicly finance afforestation needs to be in place where there is a clear public goods rationale. Public afforestation activities by the State needs to be focused on areas of environmental importance, especially in areas prone to natural disasters and conducted based on soil quality, availability of water, and protection from livestock, where survival chances are the highest. Species selection for such plantations should also consider the needs of local communities.

174. There needs to be a focus on facilitation and operationalization of public private partnerships. About 40% of respondents of the survey believe that afforestation should be done by the Leskhozes but also by the people. It shows that there are people in communities who are ready to invest in plantations. The main facilitation activities will involve putting in place a legal framework that clearly spells out how risk, obligations, and benefits are apportioned from the plantations. At the same time, effort needs to be made to operationalize such partnerships, especially at the outset. Lessons learned from such partnerships need to then be disseminated. Some steps might include financial incentives, such as small loan programs, grants or other funding to offset risks and legal expertise for lease and/or use agreements.

175. Community Based Forest Management can be introduced in a landscape with multiple uses to ensure wider participation, such as where there is livestock grazing, timber felling, haymaking and other uses. For such an approach necessary elements include:

Engagement of a third party/external player in building a community/Leskhoz partnership to

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ensure open and fair dialogue. The community should participate in the inventory and mapping of the resources. Inventory of

the SAEPF gives little relevant information to communities (it conducts inventory only of trees). SAEPF data needs to be used as a foundation, but community needs an inventory of the other resources in the landscape especially those important for livelihoods (wildlife, tourism routes and landscapes, berries and fruits, haymaking, grazing and etc.). Benefit-sharing is a key for successful community participation. For example, the major potential

source of community organizations’ revenue is timber. However, all trees currently belong to

the state.

176. Partnerships with communities should focus on high value forest products (walnuts and fruits which is a cash NTFP and contribute significantly to local livelihoods), and on acute conflict in use -- grazing and pastures. These interventions would reach maximum beneficiaries and create significant added value. Livelihoods, for example, can be improved through a value chain market approach to walnuts and fruit that includes the maintenance and regeneration of trees, and community based post harvesting and market infrastructure (drying and storage facilities). Possible results of a value chain approach include:

Improvements to post-harvest handling

Means to increase farmer income through local product processing

Reduced input supply costs through bulk buying

Organized group selling or volume transportation to town

Improved access to micro-finance

Increased price through improved negotiation with traders

Scaling up of production areas based on increased volumes sold

New employment opportunities for local people to provide essential services to support the product chain (e.g. collection services for product assembly, input supply etc.)

Improved enabling environment for value addition prior to export (e.g. vacuum packed walnuts, walnut oil products, beer nuts etc.)

Government promotion of Kyrgyz walnuts and related industries in Osh and Jalal-Abad

177. Partnerships with communities can also focus on management and use of rangelands ecosystems (major use of forest lands). In the framework of such partnerships, local communities represented by the Pasture Committees, Leskhoz, and local governments can set up a coordination bodies, or expand relevant Pasture Committees to include Leskhoz management and rangers and develop integrated plans on the use and improvement of pastures of the AA and SFL. Such plans would include an assessment of the resources, a plan for environmentally sustainable use, and joint management of use and investments.

178. Overall, the existing Kyrgyzstan’s Concept for Forest Development has laid a sufficient foundation to continue reforms in the sector using a landscape approach and integrated management in partnership with communities and the private sector. The Government’s commitment to the continuation of the reforms is crucial to introduce structural changes. If such commitment is not adequate, investments will need to take a bottom-up approach– focusing on forest communities and local governments.

179. There are strong economic, social and environmental rationales for a renewed focus on improving forest ecosystem management. Forests are an important resource for the rural poor in the

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country. At the same time, there are significant ecological changes occurring, most notably due to the effects of climate change disproportionately affecting high altitude ecosystems. Adaptation and conservation mechanisms are needed to maintain both productive forests and pastures in the context of a vibrant landscape. There is, however, the potential to improve the management of forests and thereby create overall positive economic returns. The experience with forestry and other rural sector institutional reforms, the current operations of the state forestry management system, and case studies on the relationship between FEs and communities point to a series of potential areas for engagement. These are presented in Table 10 and summarized in Table 1 in the executive summary. These insights will be used to inform the design of the World Bank and Global Environment Facility supported Integrated Forest Ecosystem Management Project (IFEMP) currently under preparation.

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Table 10. Recommended Interventions

Area Intervention Priority / Recommended time frame

Improving the policy, legal, and operational framework for forestry management

1. A new integrated natural resource policy covering water, pastures, and forest lands should be formulated based on a holistic cross-sectoral approach factoring in all uses of these areas.

High priority – formulated through participatory process – 12-18 months

2. A landscape-based integrated natural resource management approach to planning, zoning of land, forest management activity, water resource management and allocation incorporating the influence and impacts of the type of land use and intensity on ecosystem services should be developed and integrated into legislation and management practices.

High priority – should follow development of policy (1) – approach can be demonstrated in the new Integrated Forest Ecosystem Management Project (IFEMP)

3. Forestry legislation needs to be streamlined in order to remove internal contradictions, take account of reforms in related sectors (i.e. agriculture/pastures) and reflect the regulatory needs of present circumstances.

High priority – should follow (1)

4. The forest tenure system needs to reflect effective and sustainable practices, be transparent and clearly understood by all stakeholders, and operate on principles of equity and fairness.

High priority – should follow development of policy (1) – approach can be demonstrated in IFEMP

5. The administrative and financing frameworks for FEs should be revised and corresponding incentive structures aligned to the natural resource management goals. Greater autonomy and financial incentives would increase revenue, providing FEs with resources for operations and at the same time improving forest conditions.

High priority – trials should begin immediately, to be replicated in IFEMP, and permanent changes in legislation made as part of (3)

6. Accountability mechanisms, and a fair and transparent decision making process at the FE level should be developed and introduced into legislation, with reliable and effective grievance redress mechanisms to address conflicts. Transparency must underpin management for accountability mechanisms to work.

High priority – trials should begin immediately, to be replicated in IFEMP, and permanent changes in legislation made as part of (3)

7. The institutional and legal arrangements for the separation between regulatory and economic functions of the FEs should be further explored through piloting in selected FEs.

High priority – trials should begin immediately, to be replicated in IFEMP, and permanent changes in legislation made as part of (3)

8. There is a need to increase involvement of communities through a deliberate, gradual (and supported) process, with an enhanced role for local governments in holding FE accountable.

Medium priority – this can be rolled out over a longer period but trialed through the IFEMP

9. The legal and enabling framework for public-private partnerships needs to be developed to enable access to finance for capital investments in FEs.

Medium priority – this can be rolled out over a longer period but trialed through the IFEMP

10. The lack of accurate and complete information on forest resources needs to be addressed in order to have a proper basis for evidence-based decision making in sustainable forest management planning.

High priority – this can be support by the IFEMP

11. Forest resources within the SFF and on municipal lands need to be assessed in order to facilitate appropriate management and establish a baseline for future monitoring. Results of the assessment should be reflected in management plans for each area developed with the engagement of local government and communities.

High priority – this can be support by the IFEMP

Improving capacity and operating procedures

12. The research and technical capacity in the sector requires reinforcement for the development of innovative pilots on the ground.

Medium priority – capacity building over the next 5 years

13. Economic and financial skills are crucial for management planning. Medium priority – capacity building over the next 5 years

14. Extension support should be provided to the forestry management entities, as well as to communities living near forests.

Low priority – to be considered over the next 3 to 5 years

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Area Intervention Priority / Recommended time frame

15. Capacity to publicly finance afforestation needs to be in place where there is a clear public goods rationale.

Medium priority – to be developed as part of the PPP below

16. A public-private partnership framework for afforestation needs to be developed

Medium priority – over next 5 years

Targeted support to forest communities

17. Investments need to target innovative environmentally sustainable technologies, energy efficiency and reducing reliance/use of biomass that are appropriate for Kyrgyzstan’s context.

Medium priority – this can be rolled out over a longer period but trialed through the IFEMP

18. Community-Based Forest Management can be introduced in a landscape with multiple uses to ensure wider participation, especially in areas where there are multiple overlapping land uses such as livestock grazing, timber felling, haymaking and other uses.

Medium priority – this can be rolled out over a longer period but trialed through the IFEMP

19. Partnerships with communities should focus on high value forest products (i.e. walnuts and fruits, NTFPs which generate cash income and contribute significantly to local livelihoods), and on acute conflict in use, notably related to grazing and pastures.

Medium priority – this can be rolled out over a longer period but trialed through the IFEMP

20. Partnerships with communities can also focus on management and use of rangeland ecosystems.

Medium priority – this can be rolled out over a longer period but trialed through the IFEMP