It is only a short drive from the lovely town of Charikot that the smoke of a new distillation unit processing local Non Timber Forest Products (NTFPs) can be seen from a distance. The distillation unit produces high quality essential oils that reach the domestic and international markets.

Dolakha district of Nepal harbours a rich biodiversity with abundant variety of Medicinal and Aromatic plants. Since many of these plants have valuable therapeutic and medicinal use, their over-exploitation for commercial purpose often drives them towards extinction or makes them vulnerable to loss.

With the support of UNDP/GEF Small Grants Programme, Deudhunga Multipurpose Cooperative (DMC) has been successful in establishing an innovative socially inclusive model of enterprise working towards the sustainable management of these plants

The distillation unit provides employment opportunities for low income people such as the herbs collectors and distillation unit workers and supports altogether 250 households living below the poverty line.

The Community Forest User Groups (CFUGs) work to conserve the NTFPs by following a systematic and sustainable collecting method that ensures their regeneration under natural condition. They supply the raw materials and everyday 600 kgs of raw materials are processed in the distillation unit, producing 2.5 litres of essential oil. Each collector, mainly from deprived classes like Tamang, Sherpa and Dalit earns Rs. 1.5 per kilo of raw material collected. Furthermore and depending on the forest where the NTFPs have been harvested from, additional 0.25 paisa per kg. Royalty is allocated to the appropriate CFUGs fund.

With the support of the Programme, NTFP management plans have been developed and trainings on sustainable forest management have been organized. A memorandum of understanding has been signed with the local herbs collectors for sustainable harvesting practice.

Altogether 18 community forests covering 6545.13 hectares of land have been certified for sustainable harvest. 30% of the total income of the oil market is allocated to the pro-poor user groups, 30% to the CFUGs and 40% to the DMC. Acknowledging that the total income of the oil market can exceed 100'000 Nrs per year, the impact on the livelihood improvement in the area has been remarkable.

The market linkage part has been coordinated by the Himalayan Bio Trade Pvt. Ltd. (HBTL), Male International Pvt. Ltd. and Sustainable Bio Trade Group (SBTG).

"After the installation of the processing unit by DMC, there have been income generating opportunities for women, students and deprived people. The community has been utilising their fund for community works and infrastructure set up like schools, trails and buildings. The development of the villages in the area is now in the hands of the communities. The livelihood improvement has been remarkable." says Parbat Gurung, chairman of the DMC.