6. POVERTY AND THE FOREST SECTOR

6.1 Introduction

Any discussion of the potential for the forest sector in Kyrgyzstan to contribute to poverty reduction needs to begin with a reminder that the total area of forests is only a small proportion of the land area. This clearly limits the extent to which forests could be expected to contribute to poverty reduction at the national level, and also suggests that forests are only likely to contribute to poverty reduction for people living in or near forested areas. However, these are often remote, marginalized rural areas with relatively few income opportunities.

A second preliminary point that needs to be made is that the Government expects each ministry to contribute to poverty reduction. The Poverty Reduction Strategy Paper (Kyrgyz Republic 2003) has a few pages on the environment, but pays very little attention to the role of natural resources in poverty reduction. Nevertheless, the Government launched its PRGF (Poverty Reduction and Growth Facility) programme in 2002, and each ministry has been tasked with coming up with contributions towards poverty alleviation. The SFS is expected to take responsibility for this, but there has been no mention of specific steps. The SFS claims that, through CFM, they are creating employment opportunities for the population living in and near the forests. In this context it needs to be emphasised that employment, income generation and economic growth do not necessarily contribute to poverty reduction unless the benefits reach the poor. An analysis of the distribution of CFM benefits does not suggest either that the poor benefit substantially, or even that access to CFM leases is equitable.

6.2 Relationships between human settlements and forests

In order to understand the patterns of human use of forests and the potential for enhanced utilization of forests for livelihoods and poverty reduction, it is necessary to understand the relationships between human settlements and forests. This differs somewhat according to forest type and distribution.

Human settlements are often closely interrelated with walnut-fruit forests or riverside forests, whereas spruce forests grow partly within reach, but not in close vicinity to the villages. Juniper forests typically occur even further away from permanent settlements. A considerable share of juniper forests and some spruce forests occupy remote, higher areas of the Kyrgyz mountains which are not accessible all year round. However, such stands have also been affected by human land use for many centuries, since these areas were and still are used as high pastures in summer. In many parts of the country riverside forests are the only forests within reach of settlements.

We will now look at the application or potential of CFM for livelihoods and poverty reduction in each of the various forest types. We will begin with the walnut-fruit forests, where CFM is most relevant and add remarks on other forest types.

6.3 Walnut-fruit forests

The Walnut-fruit forests, livelihoods and income

In the case of the walnut-fruit forests, it is estimated that more than 100,000 people live in villages within or at the periphery of the forest belt (estimate made on the basis of national census results for 1999 (Abdymomunov 2001a; 2001b)). (In fact, many people actually live within the boundaries of leshozes, which can almost be thought of as forest dwelling communities under the authority of the leshoz director.) Agroforestry resource use is predominant in these forests, which can be described as a cultural landscape, a mosaic of natural, often strongly anthropogenically influenced forest stands, forest plantations, farming plots in forest openings and increasingly in open forest stands, and pastures.

Although the extent to which local people "depend" on the walnut-fruit forests for livelihoods has been questioned (Marti 2000, Carter et al. 2003), the land resources of leshozes as a whole contribute a great deal to many local livelihoods, including the viability of agriculture and livestock raising. Some people actually farm on plots within leshoz territories and, although illegal, grazing in leshoz territory is very much the norm and is an important activity in forested areas. Forest and non-forest leshoz resources are an essential part of rural livelihoods.

In general, people in the walnut-fruit forest areas seem to be content with access to those forest products that are mainly or only used for home consumption (and this is probably a significant proportion of forest products used). Where there are complaints about access for this type of use the problem seems to be mainly related to low supply limited to population, not a problem of effectively enforced restrictions. However, when forest products have market value, access becomes a problem.

The annual walnut harvest is a major source of cash income (at least in years when there is a good harvest). It has always been important for the maintenance of the leshozes and has become even more so as funding from the central government for leshozes has reduced to a point where leshozes are required to be largely self-sufficient. To a lesser extent the same is true of other fruit and nut products, but walnuts remain the most important NTFP product.

Potential of CFM for poverty reduction in walnut-fruit forests

Prior to the introduction of CFM, the labour for the annual walnut harvest was provided by casual labour and part of this labour requirement was met by the issuing of seasonal leases or contracts. These contracts allowed workers to keep an agreed percentage of the harvest for sale for their own benefit. The balance was paid to the leshoz. These contracts were essentially piece work paid in kind.

The CFM contracts adopted a different approach. The tenants were given the right to keep the full harvest of walnuts for their own benefit in return for carrying out specified tasks for the leshoz. No cash payments were involved either way. From the point of view of the tenants, the potential for cash income was a major advantage over the seasonal leases, providing labour demands for contracted tasks were not too great. In fact, disagreements over the extent to which demands were fair (complaints from tenants) and the extent to which demands were met (complaints from the leshoz) led to the development of institutional arrangements aimed to resolve disputes in the form of CFM Boards consisting of SFS, leshoz and community representatives, along with members from the Ail Okmots and other interested parties. (See below for more details.)

Fisher (2003) presents some of the reasons why it is difficult to obtain reliable hard data "on the contribution of CFM leases to household income":

· There is likely to be systematic under-reporting of income by the tenants themselves (due to fear that they will be asked to repay income in excess of estimates^[7]). On the other hand leshozes and SFS are likely to over-estimate income in order to support claims that the arrangements are too generous to tenants.

· Much of household income is in the forms of subsistence goods and many goods are bartered. Even income from walnuts, which is an important part of cash income, is sometimes in the form of bartered goods.

· Other benefits from CFM plots (firewood, mushrooms and sale of various fruits) are either non-cash benefits or not recorded systematically.

· The value of arable fields and pastures access is not easily converted to cash equivalent.

· Walnut harvests (and, to a lesser extent, fruit harvests) are extremely variable from season to season. As households do not usually record income, there is a dependence on memory. Recall data (especially over the long term) are always extraordinarily variable. The good harvest in 2002 may have biased memories.

· Even during a particular season, market prices vary considerably.

Despite these difficulties there is a consensus that CFM (at least in walnut forests) makes a very important contribution to income. In general tenants interviewed...from several leshozes consistently said that at least 50-60 percent of income came from walnut harvests in 2002. (It is not always clear whether this referred to all household "income" or just cash income.)

In Usgen, the officially recorded 2002 harvest was 120 tonnes (possibly a considerable underestimate), of which the leshoz received 60 tonnes, seasonal tenants 30 and CFM tenants 30. The average for each of the 70 CFM tenants who had walnut stands would be c 0.430 tonne. At an average of 25 Kg/ha average income from walnuts would have been at least 10,750 soms (about USD 240 at current prices.

In comparison with this, seasonal tenants keep only 40 percent of the harvest (sometimes less), do not have legal access to other products on their plots (such as fuelwood) and do not have any guarantee that their leases will be extended. Furthermore, they do not have the expectation that they will receive 49 year leases at the end of a probationary five-year period. There is no doubt that this expectation is of great importance to most CFM tenants.

It needs to be stressed here that the claim that income from walnut harvests in 2002 represented about 50-60 percent of household incomes refers to a year where there was a very good walnut harvest. In other years the harvest can be negligible. Nevertheless, it is obvious that income from walnut harvests can be very important to those with access.

The access to forest resources is usually distributed on a territorial basis with exclusive harvesting rights, although in some cases several families can have access to the same plot for a specific product (e.g one family collects apples, another walnuts, the third hay). Leshozes are reluctant to give precise information about the allocation of plots and conditions for leases. The map of a leshoz would show a mosaic of lease agreements for various size plots that are in use by individual families under various types of leases and conditions. Only a small part of the map would indicate CFM agreements.

Limitations of CFM as practiced, for poverty reduction

Despite the potential benefits, there are two factors which affect the potential for poverty reduction. The first of these is the limited number of leases made available for CFM. The second concern is about equity of access.

According to interviews by Kaspar Schmidt and his team, a central concern for nearly all local informants was the need to grant forest access to all local residents. Village heads pointed out that the local population demands access to forest resources for everybody. Most informants would prefer an even distribution of rights of use, at least for the time of the walnut harvest, to the current situation which is judged to be unjust and sometimes even socially explosive.^[8]

In general, the participation of people in CFM remains limited to a maximum of about one or two dozen per forest range (there are usually three to six ranges in a leshoz). This amounts to only 5-10 percent of the total population. One exception is Ortok leshoz where some 145 families had CFM contracts as of early 2004. (Ortok has a very large forested area and relatively low population pressure.) It seems fairly clear that the usual process is that a ranger sets the limit to the number of CFM leases according to the number needed to obtain the labour required to fulfil the annual range workplan. Any additional CFM tenants will mean the loss of direct income for the forest range, and are thus not desirable. On the other hand seasonal leases bring in substantial additional income from the leshoz’s share of the walnut collection (usually 60 percent) and any leases beyond the number of CFM leases likely to contribute needed labour tend to be issued as seasonal leases. Under this approach, leshozes are able to meet their workplans without paying wages. This is obviously attractive from the point of view of leshoz maintenance, but provides little scope for making CFM an option for creating additional income for significant numbers of people. (As part of a process of leshoz reform, all forest ranges have to sustain their activities from their own revenue and funding from the government is limited to paying salaries of the central staff of the leshoz. Given current economic conditions there may be little choice, but this represents a fundamental challenge to broader implementation of CFM.)

According to the CFM Regulations:

When distributing plots, all local people must have equal opportunities to get a plot for CFM activities, if they are willing and capable to carry out forest management activities on the plots, taking into account the forest plots demand and supply ratio. [Section 1.4.5]

In relation to this, Fisher comments

This is certainly an endorsement of equity in plot distribution. It is, however, ambiguous, since it could be read as stating that everyone should get plots subject to these conditions, or alternatively that competition for a limited number of plots should be based on equal opportunity. This really does need to be clarified. However, it seems clear that the second, more narrow, interpretation is not in the spirit of CFM. (Fisher 2003: 23)

The total area of forest available for CFM leases naturally varies according to the population density, available forest area and availability of suitable (i.e. valuable) species in any given leshoz, and there are very large variations in this respect. (As Table 4 shows, the potential for distribution of CFM leases with potential for walnut harvest is much greater in Ortok leshoz than Usgen leshoz.) Nevertheless, present limits are set more on the basis of needs of the leshoz rather than on the basis of limited suitable forest resources. Unless there is a shift in thinking and practice towards treating access to CFM leases as a right rather than as a leshoz management device, no major achievements will be made towards poverty reduction.

Table 4: Population and forested area, Ortok and Usgen Leshozes

Sources: ¹ (Abdymomunov 2001a), ² (Abdymomunov 2001b), ³ (Goslesagentsvo and LES-IC 1997; Forest Inventory Unit 2002)

Clearly the number of CFM leases which leshozes are prepared to make available is currently a limitation on potential for poverty reduction. The question of equity (who gets the leases) is also an issue.

Research by Nurlan Akenshaev in Ortok village (a settlement in Ortok leshoz, one of the two lehozes where CFM was first introduced) looked at the population based on locally ranked wealth categories and compared the numbers in each category with the number of CFM and seasonal tenants in each category (see Table 5). Although there seems to be an observable trend towards average and wealthy families having a greater than proportional share of CFM leases, analysis by Kaspar Schmidt shows the relationship is not statistically significant. However, the relationship is statistically significant if CFM and seasonal leases are taken together. Wealth then becomes a significant factor. Wealthier households are more likely to have access to forest resources in either form than very poor or poor households. It is certainly clear that there is no bias towards the poor (which would be expected if poverty reduction was a basis for distribution). It should be noted here that the figures refer to the number of leases, not the size of leases. It would be interesting to see if the average size of leases granted to the poor and very poor was the same as that granted to average and wealthy tenants, but reliable data may not be available.

Table 5: Classification of households of Ortok village and CFM and seasonal tenants into wealth categories (based on data collected by Nurlan Akenshaev)

More anecdotal data supports the suggestion that there is at least a mild bias towards wealthier, or perhaps more influential, people in the granting of leases:

• Forest officials (including both senior SFS officials and leshoz staff) frequently present arguments against giving leases to the poor in terms of very negative stereotypes as lazy, drunkards, etc. Households with female heads have been refused leases on the grounds that they do not have the capacity to do the work without adult male members. Typically poverty is regarded as the result of the failure to take opportunities.

• The leshozes and the forest rangers are regularly criticised by Ail Okmot officials, aksakals (elders), women’s councils and others for unequal, and socially unjust allocation of access rights to land and forest resources (seasonal leases, long term leases, CFM leases)^[9]. They are accused of tendencies to allocate forest leases on the basis of kinship or personal relation, to give preference to former or current leshoz collaborators, to give forest plots primarily to those who already have plots and to rich and influential households, or to give bigger or more productive forest plots to these groups of households. They also point out that the decision-making process is often very non-transparent. This often leaves households with none of the above characteristics, in particular the poor households, without formal access rights to forest resources and also leads to situations in which a few households control huge areas.

• CFM leases are frequently allocated to leshoz staff, including rangers.

• According to a report by a Swiss sociologist (Scherrer, 2004) on the whole decision making process in the context of CFM, including the criteria used for allocating plots, "poverty" is never mentioned as a criterion. Current/past leshoz staff membership, or belonging to the inner circle around the leshoz are much more factors of importance.

CFM Boards and Commissions - Checks and balances

In recognition of concerns about equity in the process of allocating leases, and of disputes arising from the enforcement of conditions of leases and performance of contracted tasks, institutional arrangements have been made to provide some sort of independent arbitration. Under the CFM rules, three bodies have been established at leshoz level (Carter et al. 2003):

• A CFM Board (at leshoz level) is intended to act as an arbitrator in the case of disputes or complaints.

• At leshoz level, the "first" commission allocates leshoz land to be available for CFM.

• At range level (but only established in some ranges) the "second" commission is responsible for the allocation of plots.

These three organizations include representatives of the leshoz, the SFS, the Ail Okmot, the tenants and others. They are supposed to be appointed in all leshozes where CFM functions. In practice they are not always present and there is considerable confusion about their roles and functions.

Fisher (1999), in reference to meetings of prototypes of these institutions, observed that they tended to function as an instrument of the leshoz (assisting the leshoz to implement CFM leases) rather than as an independent body. According to Scherrer (2004), the boards are still seen as very much as leshoz instruments. The idea of an independent institution acting to provide checks and balances has certainly not developed strongly or been widely adopted in other leshozes.^[10] It would seem, if CFM is to emerge as an approach based on rights to natural resources, support for the further development of these institutions as civil institutions, independent of the SFS and leshozes, will be crucial.

6.4 Poplar plantations

In Chui Leshoz (northern Kyrgyzstan), an experiment has been carried out with a modified approach to CFM involving the establishment of poplar plantations (Fisher 2003). The approach is to provide tenants with a plot of land on which they establish poplar plantations. The tenant covers all costs and in return expects to receive 100 percent of profit when the seedlings are harvested in 15-20 years. (It seems that the percentage may be 70 percent if the leshoz provides seedlings.)

The difficulty with this approach, in terms of poverty reduction, is that the benefits will be in the long term (15-20 years). The profits will potentially be quite large and the SFS has been concerned that the arrangement is too generous. Much of the interest comes from a large nearby town.

6.5 Riverside forests

Riverside forests are narrow strips of forests, typically with little active management on the part of the SFS. In areas where the settlements are located close to the forest (such as in Talas Oblast), the forests are under high pressure because of illegal cutting of firewood. Where the forests are dense bushes, firewood is the main product. Other products collected in riverside forests, both for self-consumption and for sale, include berries, mushrooms and medicinal plants (Roth and Murzakmatova 2003). In more open areas the land is equally used for (also illegal) grazing. People living the closest to the forests are interested in obtaining user rights, preferably under CFM conditions, but other types of lease are also taken. Reasons are stated as "caring for the forest", "helping the leshoz preventing illegal felling", "planting fruit-trees", "own recreation ground". It is often the case that the home-plot of people interested in CFM in river-side forests immediately borders the forest strip. While these people may be the most concerned and the best equipped to look after the forest, giving exclusive use rights to a limited group of people in an area with large demand for firewood may create social problems. The potential tenants may also see the potential for CFM leases ultimately leading to private ownership as their main motivation.

In Usgen Rayon, southern Kyrgyzstan, a considerable part of the original riverside forests has been transformed into paddy fields, even though the ground appears to be stony river bedding and laborious investments are needed to make it suitable for tillage. The exact loss of forests is unknown as statistics are not available. The remaining forests are typically used for collecting firewood and grazing of livestock in spring and autumn, before going to and after returning from the summer pastures.

In other places, the river-side forests may be sources of seabuck thorn, a berry that is commonly harvested for making jam (berries are rich in vitamin C) and for pressing oil which has medicinal properties.

6.6 Juniper forests

In general, juniper forests are on the higher mountain slopes, and far away from the permanent settlements. These forests play a role in the household economies only a few months per year, when people temporarily reside in the jailoos (high summer pastures). The use of trees and timber is strictly prohibited, but people collect dry branches for firewood and graze cattle in the open juniper stands. Medicinal herbs, various berries and mushrooms are collected mainly for local use (Roth and Murzakmatova 2003), although marketing prospects are developing in some areas. Illegal felling of the beautiful and aromatic juniper timber occurs, although again no statistics are available. Local people are reluctant to take management responsibilities if it would include remaining responsible for controlling illegal felling. As long as access to firewood and grazing is assured, their needs and expectations are fulfilled. The main potential for livelihoods lie in continued use for these purposes, which could be improved by developing optimised sylvopastoral systems. Juniper forests offers little potential for poverty reduction.

In January 2004, the EC-sponsored Juniper Forests Management Plans Project (JUMP) started, with the aim of introducing the "sustainable multipurpose management in juniper forests". Activities are mainly organizational, scientific and educational. In the longer term the local population, who will participate in the elaboration of the new Integrated Management Plans (IMP) together with other local stakeholders, are intended to benefit from improved management of these forests and their increased involvement in forest management will be promoted by this project (Cornet and Rajapbaev 2004).

In the project proposal a list of partners for IMPs in the project has been included. These are all institutional partners. The local population are mentioned as "final beneficiaries":

Final beneficiaries:

(i) The local stakeholders, especially the rural population, which will be involved in the process of definition, implementation and follow-up of the IMP in the area. The implementation of such IMPs should create the conditions for both social development and conservation of the resource for the long run. The involvement of local people in the introduction of sustainable management in the area is both an objective and a mean which gives the basic content of the proposed project. Especially local communities will be included in the workshops and field studies, and the methodology for planning will be based on the involvement of these benficiaries.

(ii) In a more global and abstracted way, there should be in the same time an important gain for the whole collectivity in terms of preservation of the biodiversity in the area.

(Laboratory of Forest Policy ENGREF 2001)

The immediate project target group, however, is the State Forestry Service, which will be equipped with both educated and trained staff and technical tools for a new style of forest management aiming at sustainability in association with the stakeholders.

6.7 Spruce forests

Spruce forests are in an intermediate position between the walnut-fruit forests and the juniper forests in terms of playing a role in people’s livelihoods. The forests are at intermediate distance from villages, and people can relatively easily collect firewood. Forests are also well used for grazing and fruits like berries and medicinal plants are collected in season. Also mushrooms are collected on a large scale. Typically, they are pickled and kept for the winter. Marketing of wild mushrooms is prohibited following an incident in the late 1990s when people died after eating poisonous mushrooms, but is still being practised despite the ban (Roth and Murzakmatova 2003).

The most important source of income from the spruce forests is the timber, but so far this has never been accessible to the local people. Harvesting and selling of round timber has been exclusively in the hands of the leshozes. Now that the SFS is orienting itself towards privatization of productive tasks in the forest, the door is possibly opening for local people to get income from felling/selling round timber. Basically, this will have to take place on a tender basis. In principle local companies (to be established) could get a concession for a certain price. Of course regional or Bishkek based firms will also compete, and it remains to be seen how this will develop for the local economy, especially in terms of employment. The ideal situation would be that redundant leshoz staff might start small private companies and provide local employment. Apart from thinning and felling, other productive tasks, like producing planting material, planting itself and maintenance of young stands could also be handed over to private companies in future.

However, economic activities involving timber harvesting and processing do not necessarily translate into poverty reduction. For this to happen there needs to be an explicit policy of directing contracts to local companies and encouraging local employment.

CFM following the individual lease/contract approach does not seem to have much potential in the spruce forests and, while local timber cooperatives might have potential, the dislike of cooperative organizations might make this impossible.