Forest Resources

Subject: Economics

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Among all the natural resources, forest resources stand in the second position for the economic development as well as to maintain environmental balance in Nepal. Nepal is rich in forest resource. There are several benefits of the forest resources and they are highlighted below: - Major source of Energy -Sources of Industrial Raw Material -Source of agricultural input -Employment opportunities -Sources of tourism Along with the various direct benefits of the forest resources it has got some indirect benefits as well and they are : -Soil and water conservation -Pollution Control -Ecological balance -Hydrological regulations
Forest Resources


Among all the natural resources, forest resources stand in the second position for the economic development as well as to maintain environmental balance in Nepal. Nepal is very rich in forest resources. Therefore, "Hariyo Ban Nepal Ko Dhan" is the famous saying symbolic of the important source of government revenue. The forest resources contribute Rs.47 crores annually for the national economy. But about 1000/ of a forest is annually destroyed. Therefore, the consequence of rapid deforestation is bound to prove fatal . The role or importance of the forest resources can be classified as direct and indirect benefits as given below:

Direct Benefits of Forest Resources

1) Major source of Energy (Fire or Fuelwood)

Firewood is the only source of energy for cooking purpose in Nepal. It is the cheapest source of energy. People of rural areas, rather the people of urban areas who can afford another alternative source of energy, entirely depend on the fuelwood so that the status of domestic energy consumption constitutes 75%.

2) Sources of Industrial Raw Materials

The raw materials needed for the forest-based industries such as furniture, paper, matches, plywood etc are obtained only from the forest. The preservation and enhancement of these raw materials further accelerate the industrialization.

3) Source of Agricultural Inputs

Forest resource has played a significant role in the agricultural development of Nepal. Since more than 78% people are engaged in agriculture and they have to make various types of agricultural tools like a plough, spade, sickle, axe etc to carry out agricultural activities.

4) Employment opportunities

Labour intensive occupations such as woodwork, cane and bamboo work, the collection of herbs, firewood, and timber and so on which provide employment opportunities can be provided by the forest resources. The datas obtained shows that more than 18% Nepalese have been employed by the forest directly and indirectly.

5) Promotion of tourism

Forest attract a good number of tourists. The foreigners have a great charm for wildlife. Forests provide the shelter for wild animals and birds. Forest is also considered as hunting spot. Green vegetation of it is the heart-touching center of tourists attraction.

Indirect Benefits of Forest Resources

1) Soil and Water Conservation

Although Nepal has reported by 29% of its forests land, shrubland and grassland, it is necessary for it to increase their proportions and enhance their effectiveness and efficiency in conserving soil and water. Forests are the best agents for prevention of erosion.

2) Pollution control

Land, water, and air pollution are rapidly increasing in Nepal, especially in Kathmandu and other densely populated towns and cities. Integrated management of forests and watersheds together with recycling of organic wastes can contribute significantly to the control of pollution and in the promotion of water supply.

3) Ecological balance

Forests maintain ecological balance. Trees, perennial shrubs, etc play a very important role in carbon recycling and in regulating the CO2 and O2 balance in the global atmosphere. Similarly, trees planted along contour rows in the hills and shelterbelts or windbreaks in the plains can protect people, their animals, and crops very efficiently.

4) Hydrological regulations

Forests also help hydrological regulation on the mountainous, hills and terrain. They sustain this monsoon type of climate and precipitation. They regulate rainfall.

Causes of Rapid Deforestation in Nepal


Deforestation has become the great challenge in the developing countries like Nepal. There are several reasons for rapid deforestation in Nepal. Some major reasons are explained below:

1) Population Growth

The population growth of Nepal is 2.24 per year. The large size population cause increase demand for food consumption and construction purposes. Obviously, the solution comes in the form of cutting down trees as a new settlement.

2) Illegal Export

Smugglers have carried out wood-pouching illegally. Large quantities of timber and raw materials have been exported to India the data of which search up to 1.3% of the decline in the Terai forest annually. The government, policies to curb the illegal trade in wood and furniture seem to have failed to a considerable extent.

3) Frequent ForestFire

Forest fire can take place knowingly or unknowingly. It has become the cause of destroying forests, every year resulting in the disappearance of so many rare flora and fauna. Forests fire results sometimes from human careless and sometimes from natural events.

4) Migration

Generally, residents of hilly and mountain region migrate to the Terai and city areas to better their living standard. For migration settlement, an extension of cultivation land to meet basic needs reinforces the encroachment of forests. It has become a common phenomenon in Nepal for long.

5) High dependency for Industrial Raw Materials

There is increasing demand for raw materials for forest-based industries such as paper industry, herbal industry, rubber industry etc. Due to the collection of raw materials in large quantities from the forest, the process of deforestation has been very high in Nepal. The process of deforestation is still continuing in the Terai region of Nepal.

6) Lack of Consciousness

The rural people are virtually ignorant. They don't know the ill consequences of environmental degradation and natural calamities arising out of the deforestation. They don't know that the landslides, soil erosion, shortage of fodder and fuel wood are the outcomes of deforestation. As a result, the forest is being destroyed rapidly.

7) Defective Government Policy

The government policy regarding forests does not seem to be effective and competent. Due to the corrupt administration as well policies are not in a position to be implemented properly forests are not protected well and satisfactory forest have not been properly demarcated and fire lines are lacking.

Consequences of Deforestation in Nepal


Deforestation adversely affects ecology and economic life of human society as well as other living services. Some adverse effects that take place in Nepal due to rapid deforestation are explained below:

1) Environmental effects

Experts say that there should be at least 43% of the total land covered by forest for ecological balance. Deforestation causes climate changes and irregular rainfall which in turn, causes drought and floods, soil erosion, landslides etc. It also causes reduction and even extinction of various species of wildlife and vegetation. Hence, deforestation has negative effects on the plants, animals, and human lives.

2) Shortage of forest-based products

Forest-based industries such as match industry, paper industry, herbal industry, rubber industry, furniture and timber industries are in dangered of collapsing due to the shortage of raw materials. They may be unable to run at full capacity due to insufficient supply of raw materials. Supplies of firewood, timber, agricultural inputs and wooden handicrafts in the process of deforestation continue at the current rate.

3) Effects on industries

Deforestation brings about the lack of supply of raw materials for forest-based industries like paper, furniture, medicine, etc. These industries cannot be run in the case of unavailability of raw materials.

4) Decline in export earning

One of the major sources of foreign currency earning in Nepal is an export of forest-based products such as paper products, herbal products, wooden products, and handicrafts. But due to the deforestation, the export of these items may largely reduce. Consequently, one of the sources of foreign exchange will dry up so that the balance of payment problem will further deteriorate.

5) Decline in underground water

It is one of the major sources of water in Nepal. It is mostly popular in Terai regions of Nepal. Underground water can be put to household uses and irrigation purposes. The supply of underground water is determined by the availability of dense forest in the locality. As the area of forest resources decreases, the supply of underground water would also decline and there would be the shortage of water for the growing population.

6) Effect on human life

Deforestation makes the sources of water like river, ponds, taps dry up. Rainfall will be irregular. The climate will be changeable and quite unpredictable. People will have to face drinking water crisis. The irregularity of the climate brings health hazard. In this way, deforestation directly affects human lives.

7) Effects on employment opportunities

Forest-based industries have provided job opportunities to many people, when these industries close down resulting from the deforestation, many people get affected by losing their employment the situations of unemployment gets even worse.


Adhikari, Ramesh Prasad, Economics-XI, Asmita Pustak Prakashan, Kathmandu

Kanel, Navaraj, Principles of Economics-XI, Buddha Prakashan, Kathmandu

Kharel, Khom Raj, Economics In English Medium-XI, Sukunda Pustak Bhawan, Kathmandu

Things to remember
  1.  Nepal is very rich in forest resources,
  2. "Hariyo Ban Nepal Ko Dhan" is the famous saying symbolic of the important source of government revenue.
  3. It is the major source of energy(75%) and provides many employment opportunities to skilled and unskilled manpower in forest-based industry such as match industry, paper industry, etc.
  4. Deforestation has become the great challenge in the developing countries like Nepal. 
  • It includes every relationship which established among the people.
  • There can be more than one community in a society. Community smaller than society.
  • It is a network of social relationships which cannot see or touched.
  • common interests and common objectives are not necessary for society.

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