terms of their potential to create a so- of Iivelihood to the dependent communities. Maintaining the forest cover also serves to protect the interests of the country's 6gricultural - sector. When forests have such varied roles to play, determining and h+tainini ecologically optimum levels of economic activities inside the forest area &;be crucial for an over-populated developing economy. Deciding on a combination of forest uses and their levels of realisation for a specific area thus becomes an optimisation problem with revenue and welfare maximisation objective. Mirmd~(1993) had suggested that forest managers should be trying to develop policies that are consistent with a three-part objective function: one that simuItaneously ernphasises revenue generation, social development and environmental services. Any strategy' chosen by a forest manager affects the contradictions and complementarity among these three objectives where in the choice ought to maximise the welfare function: W = V (revenue generation, social development, environmental services). If xl, x2, . ...x, represent the forest strategies available, Revenue generation = f ( x,, xz,.. ..x,), Social development = g (XI,~2.. ..x,), Environmental services = h (xl, ~2...exn) The naional development objective whether it be the pmfit motive or protection of the nMural wealth has not been enough even to sustain conservation itself. The present paper discusses a combination of revenue generating strategies for tropical forests along with their social and environmental repercussions.

OBJECTIVE The paper attempts to assess and compare the potential and realised u forests: tourism and extraction of produces, at forest gate prices. Among different direct use values of forests, the values to be extracted and scales of exploitation have to be chosen on the basis of four criteria: whether they have backstop technologies/ sources, whether they provide local households with employment/livelihood, whether . they can be maintained at levek below the rate of regeneration in the forest at a reasonable cost and the costs involved in extraction. Questions raised in this context would include: whether tourism or extraction of NWFPs would be a better net revenue earner?, to what extent can they be kept at sustainable levels?, and to what extent are tourism and extraction cmpatible in a protected area? Current data availability allows us only to compare the financial potential of the two economic activities, viz., tourism and extraction and to analyse their compatibility in the context of ecological sustainability and management feasibility.

STUDY AREA Two forest areas near : Sathyamangalam Forest Division (referred to as, extractive resenreslreserVe forests frpnri now ~ln)and Indira Oandhi Wild Life SancstUa@ (hitherto referred ti as the sanctmryflGWS), hamalai were taken for 400 INDIAN SOCIETY OF AGRICULTURAL ECONOMICS

understanding and comparing two use values of tropical dry deciduous forests: recreation and extraction of forest produce. Sathyamangalam is the northern-most taluk in district of , with about 62 per cent of its area under forest cover. The forest division is located between Coimbatore and , about 65 km from Coimbatore. Sathyamangalam forest division with a reserve forest area of 1,45,000 hectares is constituted of five forest ranges. Apart from the sheer size and diversity of terrain, the division also is constrained in its operations by virtue of it being the home range of the forest brigand, Veerappan. The Indira Gandhi Wild Life Sanctuary and National Park constituted by six forest ranges, is also one of the hot spots of biodiversity in the . Located in Coimbatore district of Tamil Nadu, the sanctuary covers an area of 95,800 hectares of which 10,800 hectares has been declared as National Park.

METHODOLOGY Recorded official data on flow of revenue for past ten years from various sources have been collected from the Divisional Forest Office, Sathyamangalam, Office of the Wild Life Warden, IGWS, and the multi purpose co-operative society (LAMP) at Sathyamangalam. Revenue to the forest department is taken as the indicator of the realisable worth of forests at forest gate prices, regarding the two use values under scrutiny: extraction and tourism. In between the ten years (1989-1999) there has been several policy changes leading to subsequent changes in many activities inside the forests. For instance sandalwood, mosses and stones used to be good revenue earners till they were banned in 1993-94 and in the sanctuary the NWFPs which used to be auctioned publicly, began to be allotted to a co-operative society from 1994 onwards. One major constraint in the current analysis originates from the difficulty in identifying, segregating and quantifying different cost components. Since administrative costs were found to be overlapping between various activities including conservation and management, only incomes are being examined in the present study. The costs involved (fixed, operational and externalities) if available would have provided a clear picture of relative economic efficiency of the revenue earning activities. Sunk costs associated with tourism in meeting the infrastructure requirement of tourists (roads, buildings, etc.), costs in the form of negative externality of accumulated garbage and nuisance, opportunity cost in setting up farms for all NWFPs and the economies of scale involved in habitat conservation are ignored. The managerial cost involved in ensuring that non-wood produces are harvested at sustainable rates, and the costs involved in confining the tourist activities to sustainable levels have also not been accounted for in the present study. Income from both tourism and extraction are computed at forest gate prices which are much below market rates. Non-wood produces are allotted to the tribal co- operative societies wherever they exist, at fair prices fixed by the FD. Fair prices of non-wood products are derived from the market price after making allowances for 400 INDIAN SOCIETY OF AGRICULTURAL ECONOMICS

understanding and comparing two use values of tropical dry deciduous forests: recreation and extraction of forest produce. Sathyamangalam is the northern-most taluk in of Tamil Nadu, with about 62 per cent of its area under forest cover. The forest division is located between Coimbatore and Mysore, about 65 km from Coimbatore. Sathyamangalam forest division with a reserve forest area of 1,45,000 hectares is constituted of five forest ranges. Apart from the sheer size and diversity of terrain, the division also is constrained in its operations by virtue of it being the home range of the forest brigand, Veerappan. The Indira Gandhi Wild Life Sanctuary and National Park constituted by six forest ranges, is also one of the hot spots of biodiversity in the Western Ghats. Located in Coimbatore district of Tamil Nadu, the sanctuary covers an area of 95,800 hectares of which 10,800 hectares has been declared as National Park.

METHODOLOGY Recorded official data on flow of revenue for past ten years from various sources have been collected from the Divisional Forest Office, Sathyamangalam, Office of the Wild Life Warden, IGWS, Pollachi and the multi purpose co-operative society (LAMP) at Sathyamangalam. Revenue to the forest department is taken as the indicator of the realisable worth of forests at forest gate prices, regarding the two use values under scrutiny: extraction and tourism. In between the ten years (1989-1999) there has been several policy changes leading to subsequent changes in many activities inside the forests. For instance sandalwood, mosses and stones used to be good revenue earners till they were banned in 1993-94 and in the sanctuary the NWFPs which used to be auctioned publicly, began to be allotted to a co-operative society from 1994 onwards. One major constraint in the current analysis originates from the difficulty in identifying, segregating and quantifying different cost components. Since administrative costs were found to be overlapping between various activities including conservation and management, only incomes are being examined in the present study. The costs involved (futed, operational and externalities) if available would have provided a clear picture of relative economic efficiency of the revenue earning activities. Sunk costs associated with tourism in meeting the infrastructure requirement of tourists (roads, buildings, etc.), costs in the form of negative externality of accumulated garbage and nuisance, opportunity cost in setting up farms for all NWFPs and the economies of scale involved in habitat conservation are ignored. The managerial cost involved in ensuring that non-wood produces are harvested at sustainable rates, and the costs involved in confining the tourist activities to sustainable levels have also not been accounted for in the present study. Income from both tourism and extraction are computed at forest gate prices which are much below market rates. Non-wood produces are allotted to the tribal co- operative societies wherever they exist, at fair prices fixed by the FD. Fair prices of non-wood products are derived from the market price after making allowances for FOREST CONSERVATION, TOURISM AND EXTRACTION 40 1

collection and transport and a fixed percentage of subsidy. If there are no tribal societies operating in the jurisdiction of the forest division, like wood products, NWFPs also are auctioned publicly. Charges for recreation, wild life watching and accommodation in the sanctuary are currently being fixed arbitrarily by the FD.

RESULTS AND DISCUSSION An overall observation from the data reveals that annual forest revenue has been increasing in the extractive reserves and declining in the sanctuary. The increase can be mainly attributed to revenue from wood products in the extractive reserves, while the decline in the sanctuary to tourism replacing extraction as a source of revenue. In both the areas NWFPs have not been significant contributors to total revenue. Surprisingly, revenue from unit area of extraction of NWFPs is higher in the sanctuary compared to the reserve forests. Revenue from and expenses incurred in both the sanctuary and extractive reserves are compared on unit area basis (Figures 1 A and 1B and Table 1). In the case of sanctuary where all kinds of extractions are minimal and wild life based tourism is pursued, net revenue is shown to be decreasing at an increasing rate. Even though conservation is not taken as a revenue earner in itself, the risk of decreasing net profit discouraging future investments cannot be ruled out. Figure 1A. Revenue and Expenditure Per Unit Forest Area: Sathyamangalam Division

600

500 -

? - -- - .- -- -- I 1 400 - I------Revenuelha ;, 1- 1- -~-.. Expenditurelha 300 - ~ 200 - . - 100 . 0, , , , , , , . , , , I

Year INDIAN SOCIETY OF AGRICULTURAL ECONOMICS

Figure 1B. Revenue and Expenditure Per IJnit Forest Area: IGWS

. .... / ..- . Expenditurelha --...I .. .-- -. ------I I 'm---am.. ..-.---a I - i

Year

Wood Products Analysis of the components of total revenue in the forests shows the dominance of wood products. The bar charts (Figures 2A and 2B) suggest that in both reserve forest and sanctuary, total revenue is directly related to wood products over the years. Sandalwood, and eucalyptus are the major sources of wood products in the extractive reserves while in the sanctuary, teak poles and pulp wood dominate. Even charcoal and firewood used to fetch good revenue as did confiscated products in certain years. Extraction of wood products is on the decline and tourism becomes the major contributor to revenue and as a consequence, total revenue has shown a decreasing trend in the sanctuary. Among all the wood products only firewood and small timber are locally relevant, the supply of which would not have come in the records since firewood for adjoining forest villages must be collected at random by the villagers having collection rights. The auctioned quantity of charcoal and lops of wood is generally bought by firewood based industries and hotels. As complete restrictions on extractions come into force, the local needs of firewood have to be met from village common property resourceslfarm forestry while paper and other industries might have to switch over to private plantationslfarm forestry to get raw materials. Since tree felling for extracting timber has been identified as a major cause of deforestation (Agarwal, 1992), the above substitution becomes significant in the practice of conservation. This shift of focus of FD from selection felling or maintaining forests based on silvicultural management systems can generate resources for conservation and other productive activities like watch and ward, censuses, regeneration of NWFP source plants, etc. Auctioning dead and valuable trees would then constitute the only source of revenue FOREST CONSERVATION, TOURISM AND EXTRACTION 403

TABLE 1. ANNUAL REVENUE PER LWIT AREA FROM MAJOR SOURCES - --Mean* (Rs./ha) Source of revenue WS Sathya- rnangalam (1) 2) (3) Grazing fee 533 0.784 Tourism 14.458 Nil NWFP 22.876 17.16 Teak poles 146.554 Nil

Timber 224.600 140.500 Pulp wood 505.430 2 1.580

Total I 67.1 89.439 Expen 154.: 06.83

;ource: Fon:st Department Records, Divisional Forest Offiice, Sathyannangalam and 0'ffice of the \Mild Life Warden, IGWS, Pollachi. * Mean of rc :venue for the years between 1989-1999 wher lever extraction took place/:area of extraction. *-*..~- Mean(,.,-.,, 1~59-1999) of total revenue of the division/total area. * division/ tctal area.

from wood pro,,,,,. ,iowever, tne current trend in revenue of the reserve forests does not seem to reflect such a shift in the pattern of income generation and is still 1 dependent upon wood products. This lends credence to the argument that there still needs to be much more than just a ban on tree felling to reap other benefits I sustainably. This point would be discussed in the subsequent sections. , Non- Wood Forest Products i During the ten years under study: 1989-1999, NWFPs have never been a major I contributor, even in the case of extractive reserves (Figures 2A and 2B) and has I consistently been around Rs. 2.5 lakhslannum. This is largely explained by low prices I fetched at the FD. A comparison of Figures 3A and 3B show that in a given year, the I

same product fetches much more revenue to the LAMP. Also in the case of many !, , products, extraction is not being done (Figure 4) at feasible scales due to inaccessi- 11 bility factor especially in Sathyanlangalam division. Among the 15 NWFPs being extracted, the prominent ones in terms of 11 contribution to total revenue are given in Table 2. Major NWFPs are nellikkai (hits I of Emblica oflcinqlis used in food and pharmaceutical industry), date leaves (leaves of phoenix dkc&kz$m used for making brooms, etc.), poochakkai (soap nuts, li 1 Sapindus mukorossi), gallnuts (fruits of Terminalia chebula used in pharmaceutical I industry), honey, etc. Collection of stones and mosses which used to earn good revenue has been banned sime 1993. Trends in annual revenue from major NWFPs are shown in Figures 3A and 3B. The co-operative society seems to earn most from '1' 11

L I nellikkui, while for the FD it is the date leaves which earn them the maximum revenue among NWFPs.

Figure 2A. Wood and Non-Wood Produces in Forest Revenue: Sathyamangalam Division

OWP : NWP

Year

Figure 2B. Share of Different Sources in Total Forest Revenue Over Years: IGWS

8Nonwood Rs

Tourism

FOREST CONSERVATION, TOURISM AND EXTRACTION 407

currently proceeding at a minimum level in the sanctuary, earns more than that in the reserve forests of Sathyamangalam from unit area. The huge area under the division of Sathyamanglam and the nuisance factor of the forest bandit might have been significant contributory factors for this poor performance of non-wood products here. Manageable extents of reserves would help in proper estimation of extractable produces, vigil and regeneration. Given the fact that the two regions are of comparable vegetative potential while the sanctuary permits removal of only very few NWFPs, this under-exploitation of NWFPs in the extractive reserves seems difficult to com~rehend.

Figure 5. Revenue from NWFPs

Considering the estimate that, usually the flow is only 2.5 to 3.5 per cent of the inventory of NWFP in a forest (Godoy and Bawa, 1992), there should be NWFPs valued about at Rs. 766 and Rs. 534 per hectare per year in the sanctuary and the extractive reserves respectively. The total revenue from NWFPs in the forests under study can also be compared against estimated net incomes fi-om NWFPs in other forests. The net economic value of non-timber forest products of Mudumalai sanctuary in Tamil Nadu has been estimated as 3 U.S $/ha/year in 1989 (Sukumar, 1989). While the value of floral inventory in a forest in Peru has been estimated as 420 US $/ha/year (Peters et al., 1989), in Central Indian tropical dry deciduous forests about 375 US $/ha/year worth NWFPs has been estimated in the form of medicinal value (at 1994 prices, derived from Purushothaman et al., 2000). It is also estimated that the annual economic value of selected NWFPs varies between Rs. 538 * . \ :.

wientifie and hmminpats may r&dm their habitat p~htkdin these nwmfarest pmduots sbdd b

&&Wed Wst af~as,while dim& &termfive smesbuld. k Sentified. Thi8.calls for a detailed essential plants artrsth should come Eram theirmhl habitats, reqdre the extmctim of the wbbplant, bblb or root tubers. Cmof s& h'erbal ww3.Ek dp 3s'hiotrM help in au-ting the rbhess and diV ir - oa$t qmential forest pmducb shoqd b linked to jeg&eq&mwe forests.an$ nadd#&h the prick. . ., Tmrbrn . ' i, . . . . I Faunal dimity in the hama1aiiarp;jbn hzus be@n in~reasi&~encouraging wild life enthusiasts -and SCTC -utrz& 'thdy. Atnoag the diflkxmt o~ponm&"ofkx@%"h5rri (mcm than 70 per cent the revkde &omom , showing that tourists paying a single tky visit largely:*wnber hseprefrritqgX to &ay over night inside the mmtuwy. TI& in &at ean b taken sd~tageof in dmigt6~gfurther tion activities. C-1 visits c hlancially ssiEsustainable edy if "em% amt kept at a minimum, and revenue plauighed back inta the syktem. The Cme of dosing the ,area .+dr all other actiwities aim deserves a re-think. We i Compatibility of wild tourism and extraction of forest products have been : qu8stio&.o~g ta the 1. lZxt~aAon &s&mce to wild life habitats: ' There me no ecmqamh studies of -logha1 and ecanomi~externalities of .@dmad tx4~a&ioi4;based on .the carrying capa~ityWor natural rsgemmlim; ta authmjusti@ ai$daof one against the other. On the contpwy, &we are im&moa.of msbined co-ex-= of wild animals and indigenous wkc&w;s in mry itre& of Indian forests. 2. Wild mkds paw threa* fh the Me af Wse engaged in extrmtim and could I ,, create .bemle. . versus animal ~onflkkThis could Ere haramha even in resexwe fmests. Maintaining the wild life dewily at app&&atel; assessed carrying capacity of the forest coupled with skill and experience of 'bfra:

collectors in the locality should fake care of the situation. Another new + . approa~hof community owngship and management of wild life parks, which ci)n povide built. in solutl.bnk to people animal, conflicts has been the case in ~imbabwe(Pezqce and warford, 1993). Comrnunily proprietorship of natuial resources have been bqtional in several'di@-icts of Zimbabwe from ,1988.Apart from success;fiJ!y faing up sustainable off-take quotas for 'diffkent sources of income, (like 'hqnting and extrpctiqn of timber), the sdherne has been getting net profits &fof which 20 t~ 37 per cent have been . reportedly going to the commwity (apart from compensation for losses bcurryd k adsby animals) aqd the rest ~e-invested. 3. &lost of the forest i)roduccs for& food base for the animals inhabiting the&

a 1As I discussed in the,'section dn N%Tl!s,, produces which hpve alternate sources in plantatiops'and fqforestry like goose berries, tamarind, date leaves, etc.,.need.nqt ?lways.be coming fiom forests. For the herbdplant pa* which, need to. be; extragted,&op tlie habitat itse!f, there has to be periodical censuses and thorough uantity checks along Fth right pricing.

Wood aid nonwoud @UO& ate hwwdly linked to duus.seGtors: ranging from paper,, akmical and p~a~uticdindustries to ootcape industries; with little or no Backward linkage; Tourism a prwtised at *sent draws fiorn+bmts witkt much fomTtid linkages compared td4e%tmotion.. It probably helps in adding tsi the willingness tapay for~~msermtiunkough better awa?.eness about'the naturd world. Apart &om k probable am of unmanageable nwber of tourist$ disturbing wiklmms,. tourism dso hasf the ex&mality d! ld-g *dpliuting the &rest environment. Extraction activities are largely based an the traditicmal hiliarity of the local dwellers with the area and their customary occupation. Even though By t4fhk of bitfer iacme$ Imd e&nofnio linkage&,lo* ecdlogikpl externalities, pofkdtbf cahmmity sttikeg @d n&enee ef sl~~s&urces, esseaial. non-wood products cl&sm grmW mle in sugterining fiest 60dWaTkm. Wood product extiact5dn, & hiqheJt mcomk ~ncr,la be@ relocated Myfrom natt.mil forests due lo' tbeir'ft#at&ely hi& ecological em-2disies, low local stakes and possible a~tedttisowdb. ~otfdimas &om ifi our study is n~ a lubti+e enterprise in terms ofrmue am& extemalMe$ adcommd~ &. ExttaCtke~ismks mder 5a~dpme cqr&tiy earning b.1h (Rs. 17h fiom m)as colnpsrsd to the wild llifa+khc+ whiOb cairn Rs. 67h( Bs. 22h fibm FWl? W W.l'%a &mt&sa;a respective@] per yew. With the'prevdling income pattern, the r shown &e p&mti81 for game increase in revenue which can to wood prcrB%K:ts and hence mynot be

pmven paM&id Z1 :wnoEtise and WP7 T;" --. --=.------7-' 3dY - f

A&*.J.&- FOREST CONSERVATION, TOURISM AND EXTRACTION 41 1

REFERENCES Agarwal, A. (Ed.) (1992), Price ofForests. Centre for Science and Environment, New Delhi. Chopra, K. (1993), "The Value of Non-Timber Forest Products: An Estimation for Tropical Deciduous Forests," Economic Botnny, Vol. 47, No. 3, pp. 251-257. Godoy, R.A and K.S. Bawa (1992). "Guidelines for the Economic Valuation of Non-timber Tropical Forest Products", Current Anthropology. Vol. 33, No. 4, pp. 423-432. Manoharan. T.R and P.K. Muraleedharan (2000). "Valuation of Intangible Benefits of Forest conservation: A Case Study of Periyar Tiger Reserve, Kerala" (Unpublished). .Miranda, M.L. (1993), "Optimisation of Welfare Function in Forestry", in W.L. Adamowicz; W. White and W.E. Philips, (Ed.) (1993), Forestry and the Environment: Economic Perspectives, CAB International, Oxford, U.K. pp. 57-75. Pearce, D.W. and J. Warford (1993), Environment nnd Economic Development, Oxford University Press, London. Peters, C.; A. Gentry and R.O. Mendelsohn (1989), "Valuation of an Amazonian Rainforest," Nnture. Vol. 339, pp. 655-656. Purushothaman, S.; S. Viswanath and C. Kunhikkannan (2000), "Economic Valuation of Extractive Conservation in a Tropical Deciduous Forest of Madhya Pradesh, ," Forthcoming article in Tropical Ecology. Sukumar, R. (1 989), The Asian Elephnn!: Ecology nnd Mnnngement. Cambridge University Press, Cambridge.