𝐍𝐚𝐭𝐢𝐨𝐧𝐰𝐢𝐝𝐞 𝐂𝐨𝐧𝐬𝐮𝐥𝐭𝐚𝐭𝐢𝐨𝐧𝐬 𝐄𝐱𝐚𝐦𝐢𝐧𝐞 𝐅𝐨𝐫𝐞𝐬𝐭 𝐒𝐞𝐜𝐭𝐨𝐫’𝐬 𝐋𝐨𝐰 𝐆𝐃𝐏 𝐒𝐡𝐚𝐫𝐞 𝐀𝐦𝐢𝐝 𝐕𝐚𝐬𝐭 𝐂𝐨𝐯𝐞𝐫𝐚𝐠𝐞

By Kezang Choden

In a nationwide effort to assess the forest sector’s contribution to country’s Gross Domestic Product (GDP), the Natural Resources and Environment Committee (NREC) convened a series of stakeholder meetings across six dzongkhags- Wangdue Phodrang, Bumthang, Mongar, Pemagatshel, Chukha, and Haa-between April 22 and May 5, 2024. The meetings brought together representatives from the Divisional Forest Office (DFO), Natural Resources Development Corporation Limited (NRDCL), National Statistics Bureau (NSB), local governments, the Regional Revenue and Customs Office (RRCO), Bhutan Chamber of Commerce and Industry (BCCI), Regional Office of Industry, Commerce and Employment (RoICE), wood-based industries, and the Department of Geology and Mines (DGM).

Despite Bhutan’s forest cover remaining at a substantial 69.71 percent, the forestry sector contributed just 2.48 percent to the national GDP in 2023. Stakeholders and officials expressed concern over the underperformance of the sector relative to its resource base, citing market constraints, outdated royalty structures, and environmental degradation as key challenges.

In Wangdue Phodrang Dzongkhag, which holds the largest forest area in the country- 258,969.43 hectares- officials raised alarm over 25.1 percent of current water sources drying up, a trend linked to 28.0 percent forest degradation and deforestation. The district’s two main Forest Management Units (FMUs), Khotakha and Gogona, are operating at full capacity and continue generating revenue despite shifting market dynamics and revised sales pricing.

The NRDCL Regional Manager in Wangdue outlined current initiatives in the Sha region, including timber extraction through FMUs, dredging, and surface collection. He proposed several interventions to enhance the sector’s economic value, such as conducting export market studies, revising forest produce pricing and royalties, and developing value-addition infrastructure like charcoal factories.

The Chief Forestry Officer (CFO) presented the DFO’s organizational structure and highlighted revenue generated from timber and non-wood forest products (NWFPs), with sand ranked as the highest revenue-generating NWFP. Key challenges identified included outdated royalty schedules, lack of real-time market data, and limited authority to monetize ecosystem services.

As part of the field engagement in Wangdue, the NREC visited Sha Khotokha to observe scientific thinning practices. The team also toured the NRDCL depot and met with sawmill owners to discuss timber supply constraints and explore ways to boost the sector’s contribution to the economy.

During a session in Bumthang, the CFO of the Department of Forests and Park Services provided an overview of the division’s operations, covering timber and firewood allotments, NWFPs, thinning practices, and export data over the past three years. In addition, the CFO of Phrumsengla National Park (PNP) reported contributions from timber, NWFPs, permits, and forest offences, noting that revenue from offences played a surprisingly significant role. Meanwhile, the CFO of Wangchuck Centennial National Park (WCNP) highlighted pressing challenges such as habitat fragmentation, human-wildlife conflict, poaching, and illegal wildlife trade, exacerbated by climate change.

The Regional Revenue and Customs Director shed light on revenue trends and tax contributions, noting that out of 1,776 taxpayers in the region, 128 were wood-based businesses, including 38 sawmills, 68 furniture units, and 22 logging operations. He identified issues such as delayed data collection, low tax literacy, and unauthorized transactions as persistent obstacles.

In Mongar, the NREC Chairperson emphasized the urgency of enhancing the forestry sector, particularly in light of Bhutan’s trade imbalance. He cited the Gelephu Mindfulness City project- which alone is expected to require 15,000 cubic meters of timber annually and involves an investment of Nu one billion- as a call for improved sectoral strategies. The Mongar Dzongda echoed the sentiment, expressing hope that the consultations would inform future policy directions.

A presentation in Pemagatshel reviewed a three-year GDP contribution analysis of the forest sector, with NWFPs ranking as the top revenue sources ahead of timber, penalties, and fees. Among the regions assessed- Pemagatshel, Nganglam, and Yurung, Pemagatshel contributed the most, while Yurung ranked lowest. Ongoing constraints such as limited market access and inadequate technical and financial capacities were key discussion points during the session.
The consultation in Phuentsholing focused on identifying sectoral challenges and gaps, with participants offering recommendations to strengthen the forest sector’s role in national economic growth. These included improving data systems, boosting market access, and enhancing institutional capacity. The committee documented the feedback for policy review and future parliamentary deliberation.

In Haa Dzongkhag, the CFO presented an overview of local forest resources and their economic significance, reporting a 69 percent forest cover. He discussed management of five FMUs, community forest initiatives, non-wood product promotion, technical staffing, and subsidized timber schemes. Between 2022 and 2024, the division generated Nu 22.06 million from commercial and subsidized sales, with commercial sources accounting for Nu 18.871 million. However, the region also faces challenges such as pest infestations, illegal harvesting, forest fires, and financial limitations related to rural infrastructure and procurement.

The NREC team concluded its Haa visit by inspecting the NRDCL depot and scientific thinning operations. Across all consultations, a consistent theme emerged: the forestry sector holds untapped potential, but addressing structural, financial, and policy-related gaps is critical to unlocking its full contribution to Bhutan’s economic and environmental goals.

Findings from the six regional consultations- held in Phuentsholing on April 22, Pemagatshel on April 25, Mongar on April 28, Bumthang on April 30, Wangduephodrang on May 1, and Haa on May 5- will be compiled for presentation during the upcoming session of Parliament.