Nepalese non-timber forest products: An analysis of the equitability of profit distribution across a supply chain to India

Abstract

The collection and sale of non-timber forest products is a major source of livelihood in some regions of Nepal. The research reported in this paper compares the resource rent or contribution margin of collectors, village traders, Nepali wholesalers and Indian traders for two highly traded non-timber forest products of Nepal, namely asparagus and lichen. The causes of inequitable margins are investigated, and measures for increasing equity within the supply chain are identified. The research revealed that the margin of asparagus collectors was higher than for the lichen collectors, as lichen was subjected to the high transaction costs of illegal exports. Furthermore, collectors who stayed overnight in the forest during the collection period (overnight-stayers) to reduce travelling time had a higher margin than those who went home every day after collection (non-overnight-stayers). In four distinct trading chains analysed, Nepali wholesalers and Indian traders captured most of the resource rent. The difference in collection costs between overnight-stayers and non-overnight-stayers does not affect the margin of other stakeholders in the value chain. It was hypothesised that the inequity is exacerbated by a low level of understanding of marketing among collectors, and this is confirmed by survey results. It is argued that the margin of collectors could be increased by providing training, technical support, market and price information, and other forms of institutional support.