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1. Low Financial Capital 2. Low Human Capital 3. Low Natural Capital 4. Low Physical Capital 5. Low Social Capital Artisans 4/29

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1. Low Financial Capital 2. Low Human Capital 3. Low Natural Capital 4. Low Physical Capital 5. Low Social Capital Artisans 4/29 Lack of basic and vocational education (2b, 8) 2a. Lack of improved skills (A4) {7} Lack of appropriate training (A4) Underdeveloped financial institutions in rural area Social exclusion of occupational/lower caste and 1a. Limited access to financial resources including Complex and lengthy procedure of issuing loans girl child loan (A6) {10} (Bad governance) (8) Limited financial access (A6) (1a, 8) Lack of physical property for financial 2b. Lack of basic education and exposure {2} guarantee/collateral Forced child labor for food security 2. Low human Low motivation of uneducated parents capital Limited scale of production (8) Existence of child marriage tradition 1b. Low income {2} Low price of products (A6) (8) Low wage on labor work Malnutrition Alcoholism/addiction Labor-intensive production process 2c. Poor health Uses of less efficient primitive technology for Lack of money for treatment and care (A6) (1a, 8) 1c. High production cost of the product production Unhygienic/unsafe working environment (4c, 8) High transportation cost Lack of marketing concepts and skills Resource depletion and degradation Lack of market infrastructure (A3) Limited access to resources of artisans and small 3a. Unavailability of raw materials (A5) {5) 1. Low financial capital Distorted and imperfect rural market system traders (A5) (3a, 8) 1d. Limited marketing facilities (A3) {2} Lack of market and marketing information Lack of uniformity in quality of raw materials Late payments/credit sale of the product 3b. Low quality raw materials Lack of grading facilities Seasonal market of handmade product 3. Low natural capital Lack of land from old generation Lack of industrialization of traditional occupation of Lack of access during registration the artisans Land division among the family members (male 3c. Low or no landholding 1e. Slow transformation of business and traditional Low willingness and capacity to take risks of members only) Artisans occupations adopting new technology Dependency on traditional/conventional skills (A4) Sale of private farmland 4/29/03 - v3 (2a, 8) Limited investment capacity (A6) (8) Hierarchical caste system exist in the society (8) 5a. Low social recognition of the traditional Limited income (1b, 8) Socially humiliated relationship among various occupation {3} Low production 1f. Lack of food security (A8) castes (untouchability) (8) Expensive living cost (food items) Unhygienic job Large family size Socially humiliated relationship among various castes (untouchability) (8) Low social recognition (5a, 8) 5b. Dis-popularity of job among young generations 4a. Lack of transportation access and remoteness Low income in comparison to other occupation (8) {2} Lack of investment capital (A6) (8) Less availability of raw materials (A5) 4b. Lack of basic infrastructure or physical facilities Poor planning and ill implementation High intensity of labor work 5. Low Social Capital 4c. Lack of good working place {2} Limited opportunities available Lack of investment capital (A6) (8) 5d. Lack of professional union/networks among 4. Low physical capital producers 4d. Lack of storage facility Lack of investment capital to make the stores (A6) (8) Lack of support institution (8) 5c. Unemployment/underemployment (A7) Negatively influenced by party politics Lack of entrepreneurship of artisans Lack of improved and updated skills (A4) (2a, 8) Lack of trust among each other 4e. Less developed industries Complex government rules and bureaucratic Lack of initiative by government harassment (8) Lack of investment capitals (A6) 5e. Family dependency on single member Table of Content ACRONYMS .............................................................................................................................3 ACKNOWLEDGEMENTS............................................................................................................5 EXECUTIVE SUMMARY ............................................................................................................6 1. INTRODUCTION AND BACKGROUND ....................................................................................9 1.1 ABOUT THE REPORT ..........................................................................................................9 1.2 OBJECTIVES ....................................................................................................................10 1.3 GENERAL BACKGROUND OF POVERTY IN NEPAL .............................................................10 1.4 THE LIVELIHOOD APPROACH AS A BASIS OF UNDERSTANDING POVERTY .........................14 2. METHODOLOGY ................................................................................................................15 2.1 APPROACH ......................................................................................................................15 2.2 RESPONDENT CATEGORIES ..............................................................................................15 2.3 SELECTION OF SITES, RESPONDENTS AND COLLECTION OF DATA .....................................16 2.3.1 Sites.............................................................................................................................16 2.3.2 Questionnaire..............................................................................................................17 2.3.3 Time and duration of the survey .................................................................................17 2.3.4 Interview .....................................................................................................................17 2.3.5 DATA ANALYSIS...........................................................................................................18 2.3.6 LITERATURE REVIEW....................................................................................................18 2.3.7 LIMITATIONS, ISSUES AND LESSONS .............................................................................19 3. PROBLEM ANALYSIS AND PRIORITIZATION .......................................................................20 3.1 INTRODUCTION................................................................................................................20 3.2 INTRODUCTION TO FOUR FOCUS GROUPS .........................................................................20 3.3 PROBLEM TREES..............................................................................................................21 3.3.1 Resource poor farmers................................................................................................23 3.3.2 Landless ......................................................................................................................29 3.3.3 Artisans, traders and small-scale entrepreneurs........................................................33 3.3.4 Urban and peri-urban poor ........................................................................................37 3.4 BRIEF DESCRIPTION OF PRIORITY PROBLEMS ...................................................................40 1. Lack of favorable policies................................................................................................40 2. Lack of support services...................................................................................................45 3. Shrinking market and lack of marketing infrastructure...................................................48 4. Limited agricultural inputs including irrigation......................................................50 5. Limited and/or no land holding .......................................................................................50 6. lack of access to natural resources and raw materials....................................................51 7. Limited education, awareness and exposure ...................................................................52 8. Lack of food security........................................................................................................53 9. Low income ......................................................................................................................54 10. Low agricultural production..........................................................................................55 11. Lack of employment opportunities.................................................................................55 12. Forced child labor .........................................................................................................57 13. Exploitation and limited access to decision making......................................................57 14. Lack of financial capital ................................................................................................58 15. Lack of skills and quality training services....................................................................59 16. Large family size............................................................................................................59 1 4. ANALYSIS OF NATIONAL CAPACITIES, EXISTING INITIATIVES AND GAPS TO ADDRESS THE PRIORITIZED PROBLEMS ........................................................................................................61 4.1 PRIORITIZED CONSTRAINTS WITH RESPECTIVE NATIONAL CAPABILITIES.........................61 4.2 CATALOGUE OF FUNDING ON POVERTY ON FOREST RELATED RESEARCH (SCALE AND FOCUS OF FUNDING TO BE ELABORATED) ..............................................................................70 5. BIBLIOGRAPHY/REFERENCES.............................................................................................71
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