TIMBER VALUE CHAIN DEVELOPMENT (VCD) AND BUSINESS PLANNING FOR

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1 ANNEX1: TERMS OF REFERENCE (Ver. 2.0: 01 July 2016) TIMBER VALUE CHAIN DEVELOPMENT (VCD) AND BUSINESS PLANNING FOR YARKEY COMMUNITY FOREST, PATSHALING GEWOG, TSIRANG DZONGKHAG 1 July 2016

2 HELVETAS Swiss Intercooperation 2 1. Background Participatory Forest Management Project (PFMP) phase III builds on the successful evolution of community-based forestry in Bhutan over the past one and a half decade. It aims at enhancing the livelihoods benefits of community forestry (CF) and contributing to improved local governance, the democratisation process and the sustainability of CFs in Bhutan. PFMP Phase III outcome 1 is: Community Forest provides increasing benefits and income for groups from the sustainable management of forest harvesting and marketing of forest produce. To contribute towards this outcome, a timber value chain is considered important since timber provides different options for customer needs in terms of finished and semi-finished products in the market e.g. [log, sawn timber, furnitures etc...]. Rather than carry out a large scale assessment and value chain development, it is relevant and practical to start in one community forestry management group (CFMG). Experiences from the selected community group will be used as a basis in the follow-up 10 months extended period of the project. The community selected is Yarkey Community Forest group in Patshaling gewog under Tsirang Dzongkhag. It was selected for the following reasons: a) Potential for timber harvesting b) The group has a specific component on income through timber in their overall objectives c) CFMG express interest in engaging with timber VCD during Evaluation of Livelihood, Value Chain & Management mission s visit in March 2016 This community group has got an area of 128 hectares. The Community Forest Management Group (CFMG) is comprised of 44 households from Upper and Lower Patshaling villages. The community forest is located in cool broadleaved forest and the vegetation is dominated by Katus, Kharani, Bandari, Lakh Chilauney 1 and other cool broadleaved tree species. The over all forest condition is good with an average canopy density of less than 70%. The average basal area of the whole community forest is 17m 2 /hectare which shows potential for timber harvesting. The CF has got potential to sell 77 drashing 2 trees per annum. For proper and sustainable management of the community forest, the CFMG has divided the community forest into three blocks considering the need to provide different management and utilization of the forest resources in each block. From two blocks (Snumalingay Block [53ha] and Batari Block [37ha] the quality timber resources has been already extracted by the Forest Management Unit (FMU) that was operated in 1990s. This happened before the community group was formed. Besides management of timber resources, the CFMG has decided to manage non wood forest products (NWFPs) like Pipla, Chirata, Nakima, Phunchey, Bamboo, and Ferns which exist in the CF and also have the potential for value chain development (VCD). The community forest is also a habitat for different wild animals and bird species. For the social, economic and environmental improvement of their community as well as to keep the community forest intact, the CFMG has framed four main objectives of community forest management as mentioned below: 1. Management of community forest in a sustainable manner. 2. Income generation of the CFMGs from community forest through sale of excess timber and NWFP resources. 3. Water source protection for continuous supply of clean drinking and irrigation water. 4. To improve the vegetative coverage of open and degraded areas. The management plan is valid from 2008 till Local name of tree species in Lhotshamkha

3 HELVETAS Swiss Intercooperation 3 2. Objective(s) 1. Study the income potential through timber (log & sawn) or value addition on timber for Yarkey Community Forest. 2. Outline the different timber value chain (VC) approaches relevant in that particular Community Forest. 3. Based on the analyzed VCD, an appropriate business plan is developed for the Yarkey Community Forest that would enable members to start a business and to generate additional income for the CFMGs. 3. Expected results (or Output) 1. Best or appropriate timber value chain analyzed, strategic interventions along the VC mentioned. 2. CFMG members are sensitized on the process of value chain development process and transparent business plan preparation to prevent surprises and disagreement later with CFMGs while implementing the business plan. 3. A workable and conducive business plan developed for the Yarkey Community Forest 4. Main Tasks and Activities of the Consultant A) Feasibility study value chain development Develop feasible value chain in collaboration with the CFMG, Territorial Divisions/DzFS of Tsirang Dzongkhag. The following list needs to be considered in the development of VCD: o Annual harvesting limit (AHL) and excess timber harvesting from the CF area (species) and its sustainability on overall management of the community forest. o Understand the perception and views of local CFMG members on timber business through value addition. o Understanding potential products that the market both local and regional can absorb and CFMG can produce with quality. o Calculate and understand the cost of production (CoP) per commodity/product based on the prioritized products. o Understand and provide comparative view on (cost/benefit) selling the excess timber in form of log, sawn and as value added products. Review of relevant documents, reports and policy documents. Facilitate group meetings with the CFMG and one-on-one discussion with the market actors B) Business plan preparation A workable business plan developed in close consultation with the CFMG members. Work with CFMG members and stakeholders of business community to come up with Workable Business Plan for the Yarkey Community forest.

4 HELVETAS Swiss Intercooperation 4 5. Working methodology 1. Understand forest policy on timber marketing especially from community forest in form of log, sawn timber or value addition to the timber and take it to market. 2. Review Community forest management plan 3. Local language is preferred in group meetings, key informant meetings and general meetings for better understanding of the process. 4. Presentations should be in local language/dialect (as preferred by the participants). 5. Interviews with stakeholders such as wood based industries, furniture house, shopkeepers and general public customers. 6. Responsibilities Mr...., from...dzongkhag...shall be supported by SFED, DoFPS, MoAF, Mr. Sangay Wangdi, Sr. Programme Officer, Rural Economy, HSI, Mr. Tshering Phuntsho, National CF Network Facilitator, HSI and respective territorial divisions with support from ex-dzongkhag Forestry Sectors staff. 7. Time Frame of the assignment The national consultant is expected to deliver the task assigned within 16 days including preparation, travel and discussion, meetings at district and Gewog level. The consultant should work closely with HELVETAS Swiss Intercooperation, Social Forestry and Extension Division (SFED) and concerned Territorial Divisions with advice and guidance from Ex-Dzongkhag Forestry Sector staff for smooth organization and conduct of the meetings and discussions. 8. Programme/Mission Schedule Date Activity No. Of Days Preparation of training materials and coordination with DzFO Mongar on logistics arrangement 2 Travel to field (Tsirang) 1 Discussion with CFO, Extension section head under territorial division and travel to Yarkey Community 1 Group discussion, key informant discussion on VCD 2 Timber VCD analysis and finalization 1 Presentation of VCD to CFMGs for feedback and suggestions. 1 Based on the finalized timber VCD, meeting on development of business plan for agreed VCD 2 Finalization of first draft of business plan 1 Presentation of first draft to CFMGs for feedback and suggestions 1 Travel back to Thimphu 1 Finalization of two documents a) Timber value chain for Yarkey CF and b) Business Plan for Yarkey CF 3

5 HELVETAS Swiss Intercooperation 5 Date Activity No. Of Days Total Days Logistics Logistics and travel related to the consultancy (lodge, food, and transportation) shall be directly supported by HELVETAS Swiss Intercooperation as per HELVETAS Administrative Manual. Meals, lodge and DSA for participants as per RGoB rules shall be supported by HELVETAS Swiss Intercooperation through the consultant. 10. Reporting / Debriefing Debriefing... by the consultant shall be attended by HELVETAS Swiss Intercooperation and SFED for feedback, suggestions and comments. Preferably 2 days prior to the debriefing, a draft copy of Timber VCD and business plan should be shared to HSI and SFED. The final report on analyzed VCD and business plan with inputs from the debriefing should be made available to HSI and SFED before or on Documents 1. Forest and Nature Conservation Act of Bhutan Forest and Nature Conservation Rules of Bhutan National Strategy for Community Forest The Way Ahead, May Interim Timber marketing Guidelines for Community Forest, Draft RNR Marketing Policy of the Kingdom of Bhutan, Yarkey Community Forest Management Plan, March /07/2016