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Analysis Assessing poverty–deforestation links: Evidence from Swat, Pakistan

Shaheen Rafi Khan a, Shahrukh Rafi Khan b,⁎

a Sustainable Development Policy Institute, P. O. Box 1091, Islamabad, Pakistan b Department of Economics, Mount Holyoke College, 50 College Street, South Hadley, MA 01075-1481, USA

article info

Article history:

Received 5 June 2008 Received in revised form 21 January 2009 Accepted 16 April 2009 Available online 21 May 2009

Keywords:

Ecological degradation Deforestation Poverty Local institutions Resource management

1. Introduction

Pakistan is poorly endowed with forest resources. Further, the deforestation rate, at an annual 4.6%, is the second highest in the world and represents a loss of ecological services in the national context.1 For forest dependent communities, it constitutes a serious erosion of livelihoods.

Khan and Pervaiz (2001) point out that forest management in Pakistan has led to the divergence of individual versus social objectives with regard to the use of forest resources. The most important factor in this development is commercial timber extraction in which influential extractors collude with forest department officials. Co-opting officials has become easier as stagnant salaries have led to increased corruption. Forest fines and penalties have also become meaningless, as they have not kept pace with rising timber and fuel wood prices.2 Attempts to right price/tax the use of environmental resources is politically challenging as vested interests resist policy reform threatening their economic profits. They also

⁎ Corresponding author. 45 Brownley Drive, Stamford, CT 06905, USA. Tel.: +1 203 355 1884, +1 203 542 5292.

E-mail addresses: [email protected], [email protected] (S.R. Khan). 1 Government of Pakistan/World Wildlife Fund (2000). Government of Pakistan, Statistical Supplement (2008, p. 19) shows a steady increase in forest area from 1990-91 onwards to the current forest coverage of 4.2%. This increased coverage reflects the impact of farm forestry; primary forests however are degrading rapidly as indicated

earlier. 2 Government of Pakistan, Statistical Supplement (2008, p. 62) index of wholesale

prices shows timber and firewood prices have increased respectively by 62.09 and 76.28% between 2000-01 and 2006-07, the second and fourth highest among the 19 non-fuel related items for which indices are reported.

abstract

This paper contributes to the debate on the links between poverty and forestry degradation; the view that due to poverty and the meeting of subsistence needs the poor use natural resources more intensively and hence cause them to degrade. Using the case of the forest rich Swat district, Pakistan, the paper addresses the issue empirically, historically, and institutionally. We do not find empirical support for the “poverty– environment nexus”, in that the poor and other income groups are equally resource dependent and also show that resource degradation is not associated with poverty. Our historical and institutional analyses provide alternative explanations for resource degradation. Selective and rotating ownership patterns, starting with the 17th century, provided limited incentive for resource conservation. It also created tension between de jure and de facto owners, that has persisted, and is one source of forest degradation. Ill-defined resource rights have also exacerbated the impacts of several other factors contributing to forest degradation which is compounded by poor management, corruption, and perverse incentives.

indicate that the lack of clearly defined resource rights exacerbates the impact of perverse incentives.

Sultan-i-Rome (2005) points to various institutional failures that have led to forest degradation in Swat, Pakistan over the years. These include departmental malpractice, opaque resource rights, and judicial tardiness. He describes the tension between customary and statutory law and the progressive deterioration in conflict resolution mechanisms over time. He concludes that extended legal, judicial and governance lapses have been the key factors in forest degradation.

Khan and Naqvi's (2000) qualitative analysis of the relationship between poverty and resource degradation in Pakistan indicates that the poor are the most vulnerable to ecological degradation and yet, the absence of basic subsistence makes them predators of natural resources thereby further exacerbating their vulnerability. They argue that the poverty–resource degradation link reflects unavoidable responses. This link been referred to in the broader literature as the “poverty–environment nexus.”

We add to the empirical literature by deconstructing the nexus into two related elements. We first explore relative resource dependence by income group. If, as generally believed, the poor do indeed depend more on natural resources for their livelihoods, then in principle they could be contributing relatively more to resource degradation, even if not absolutely so. However this still needs to be established and that is what we turn to next using visual methods (satellite imagery, land use maps, poverty and institutional maps). The use of satellite imagery at the disaggregate level to explore the above hypotheses is also still fairly rare in the literature.

We find no support for the hypotheses that resource degradation is inversely associated with income or that poverty and forest degrada- tion are positively associated. Yet there is considerable evidence for a

2608 S.R. Khan, S.R. Khan / Ecological Economics 68 (2009) 2607–2618

high level of forest degradation in the study area and so we turn to a historical and institutional analysis for alternative explanations. We explain the emergence of formal and informal systems of resource rights, their interface, the disjuncture–or conjunction–between de jure and de facto rights, and the subsequent administrative and man- agement failures. We posit that the historical evolution of institutions is central to understanding the current problem of rapid deforestation and that policy needs to take into account local history and insti- tutional evolution. We view this historical and institutional analysis as the mainstay of our contribution to the literature.

Section 2 reviews the literature and conceptual issues pertaining to the poverty–environment nexus. Section 3 presents an overview of the case study area and its history. Section 4 discusses our research design, method, data and variables and the empirical analysis is pre- sented in Section 5. We review historical and institutional explana- tions for forest degradation in Section 6.

2. The empirical debate and conceptual issues

The empirical debate on the association of poverty and the environment has several themes.3 The first pertains to whether or not poverty increases environmental degradation. Second, since one of the mechanisms for resource degradation is the intensity of resource dependence, one strand of this empirical literature explores the extent of resource dependence by income group. The third pertains to whether or not environmental degradation increases poverty. The fourth views the correlations above as spurious and views poverty and resource degradation as jointly determined and caused by other factors. Finally, the quantitative debate above is complemented by historical and institutional analyses, the main focus of this paper.

Poverty, it is presumed, imposes short time horizons and risk aversion. Thus, poor people are viewed to have high pure rates of time preference. In terms of land use, this means overgrazing pastures, shortened fallow periods, and a reluctance to invest in land improve- ments when returns occur after a long gestation period. The poor are also viewed to be more risk averse because they possess fewer assets and limited access to credit and insurance and so face greater con- straints to managing their risks. Thus, they would be expected to be less willing to invest in conservation.

Degradation is also viewed to result from the ecological margin- alization of the poor. They are forced into areas that are already experiencing high levels of stress and where future outcomes are uncertain. Consequently, there is a tendency to mine resources un- sustainably. Finally, there is a more questionable contention that would lead to similar results which is that poverty generates fatalism and an acceptance of a given situation rather than a desire and re- sultant efforts to change it.

The evidence on such links are mixed with more studies refuting than supporting a causal link from poverty to resource degradation in general and forests in particular. Deininger and Minten (1999) develop a theoretical model that is estimated using socio-economic and physio-geographic information (including digital maps) to show lower poverty results in lower degradation in Mexico. Swinton, Escobar and Reardon (2003) draw on studies from across Latin America to show that the non-poor and the poor are both at fault for resource degradation within the general context of poor incentives for preservation and the particular context of the low resource base of the poor.

Other studies are more categorical in showing that resource degradation in general and deforestation in particular is not associated

3 We are grateful to one of the referees of this paper for suggesting the organizational framework for our literature review. For more elaborate frameworks and literature reviews, refer to Duraiappah (1998) and Opschoor (2007).

with poverty. Based on a qualitative study of Nicaraguan hillsides, Ravnborg (2003) demonstrates, based on an investigation of five environmentally harmful natural resource management practices, that the non-poor farmers rather than the poorest are responsible. Agudelo et al. (2003), using data from a household survey in a watershed region of the Colombian Andes, show that there is no straight forward linear association of poverty and natural resource degradation. The poorest have limited access to productive resources and it is the practices of the prosperous farmers that cause the greatest degradation.

Jodha (1998) posits that the poor have more reason to preserve resources that their livelihood depends on and there is some evidence to support this view. For example, Swinton et al. (2003) show that fallowing is a practice used by the poor that reduces soil erosion and fertility loss. Similarly Scherr (2000) shows instances in which the poor enhanced natural resource conservation.

A substantial body of the empirical literature quantifies the rela- tionship between environmental degradation and resource depen- dence by income group, the assumption being that greater dependence would lead to greater contribution to degradation. Jodha (1986) points to an inverse relationship between resource dependence, defined as the percentage of total income derived from common-pool resources, and income levels. Reddy and Chakravarty (1999) confirm this finding by demonstrating a difference of almost 19% in resource dependence between the rich and the poor. Cavendish (2000) also supports this finding, but finds absolute dependence levels to be much higher than most other studies for both poor and rich households. In a study exploring the benefits derived by income group from common forests in Nepal, Adhikari (2005) finds that the richer households derive more income from these resources than the poor both absolutely and relatively.

Narain, Gupta, and Van de Veld (2008) document that the inverse association of income and dependence on common-pool resources (CPRs) are not the norm in the literature and make a case for using permanent rather than current household income in exploring this association. They establish a U-shaped relationship between income levels and dependence, with such dependence declining at first and then increasing with income. They also find that dependence is im- pacted by the quality of natural resources (that the rich draw on a higher quality or resources), that there is a bi-modal pattern of de- pendence within groups (e.g. that the very rich do not draw on CPRs) and that overall resource dependence increases with the level of common-pool biomass availability.

Studies that suggest other factors are at play include Swinton and Quiroz (2003) who use farm survey data from the Peruvian Altiplano to quantitatively show that natural resource sustainability varies with management activity rather than poverty, although deforestation is associated with fuel wood harvesting by the poorest. Utilizing aggregate district and provincial level data, including satel- lite imagery for poverty mapping, Dasgupta et al. (2005) conclude that demographic pressure rather than poverty are the main drivers of deforestation in Cambodia and Laos. Markandya (1998, 2001) agues that the poverty–environment association is mediated via several factors such as gender, policy (e.g. commodity export drives displacing tenants, capital subsidies, credit policy, social sector delivery), insti- tutions (property regimes), incentives, demographics (rural–urban migration, civil war and population displacement), and economic growth and hence is complex and the evidence in most cases is sketchy at best.

These reviews suggest that the evidence is far from conclusive in establishing the poverty–degradation link and that the real issues may well be the nature and extent of the community's stake in the health and productivity of environmental resources and the techno- logical and institutional mechanisms available to safeguard these resources. For example, Jodha (1995, 1998) contends that dilution or disintegration of the community's stake and erosion of grassroots

level mechanisms to protect and augment it are the fundamental reasons behind environmental resource degradation rather than poverty.

Essentially, Jodha claims that the resource management problem is functionally linked with cognitive space, property regimes and scarcity. Exposure to market forces and the integration into the broader administrative and legal framework weaken traditional man- agement regimes and lead to neglect and degradation of hereditary resource endowments. He presents alternative scenarios where endowments are similar, but outcomes differ because economic and institutional parameters differ.

Schlager and Ostrom (1992) underscore the congruence of clearly defined resource rights and sustainable resource use. Incentives need to be framed in a manner that promotes sustainable resource use; nevertheless, the risk is always present that they could become perverse and engender degradation. Howard et al. (1997) classify these incentives into direct fiscal and financial incentives and indirect incentives. They suggest restructuring indirect incentives to empower local forest dependent communities to give them an effective stake in sustainable forest management and this is also an issue we explore.

Mogaka et al. (2001), in a study based in South and East Africa, argue that while forest resources have a high economic value for forest dependent local communities, there are significant economic costs associated with sustainable use as well. If communities are to act as efficient actors in promoting forest conservation, economic benefits received must be visibly more than those obtained from unsustainable use. This latter risk is always present with the rapid rise in forest product prices.

This strand of the literature suggests that strong and effective institutions can mediate many of the tendencies that lead the poor to degrade the environment. While, there are many dimensions to an institutional analysis, we focus on the interface between resource rights and perverse incentives.

3. Case study area, forest degradation and brief history

Our case study area is the region of Swat district, which is situated in the North-West Frontier Province of Pakistan (refer to Appendix A Chart I for map). As indicated in Government of Pakistan (1999), it historically consisted of two tracts, Swat Kohistan, which is located on the upper reaches of the Swat River, and the main Swat Valley. In 1917, Swat was proclaimed a state, accessed to Pakistan in 1947, and integrated administratively with the country in 1969. It is now referred to as Swat District.

The present district covers an area of 4000 square miles. It borders the Gilgit agency in the Northeast, Chitral in the North and Dir in the West. In 1998, the district population was estimated at 1.26 million and the annual population increase lies between 3–4%. Literacy levels are generally low and far lower for women (25.2% male compared to 3.7% female).

The Swat Valley has a Pathan majority, most of which belongs to the Akozai branch of the Yusufzai Pathans. Indigenous ethnic groups referred to as Kohistanis mainly inhabit swat Kohistan; these comprise the Ghauri tribe in the north and the Torwali tribe in the south. A large Gujjar community (itinerant grazers) has also taken permanent re- sidence in Swat. Agriculture and horticulture are the major source of income, followed by wages and salaries, and local and foreign remittances. The most important cash and fruit crops in the district include wheat, maize, persimmon, tomato, onions, apple, and apricot.

The Swat Valley and Swat Kohistan are extremely rich in natural resources. Swat once was credited for having the world's only virgin deodar (cedar) forests. Despite extensive deforestation, even today the district is rich in forest cover. Agricultural land, pastureland, and rangeland are found throughout the area while alpine pastures lie to the extreme north of the Swat Valley and Swat Kohistan. Table 1

above provides an overview of the change in natural resources from 1969 to 2005 based on 403 responses.

As evident from the table above, forest cover has been rapidly shrinking since 1969 when Swat state was taken over by Pakistan while the increase in agricultural land by 27% represents encroach- ment explained in Section 6 below.

The recent history of Swat begins with the Yusufzai Pathans who invaded and, subsequently, governed the region in the 16th century, defending it successfully against several waves of invaders. They main- tained a tribal set-up and by the 20th century Swat was in a state of anarchy, with the local khans (chiefs) individually ruling the area that fell under their sphere of influence. A dramatic turn in Swat's history came about in September 1917, when Miangul Abdul Wadud, a Yusufzai Pathan, proclaimed Swat an independent state. The British, who ruled India at the time, did not recognize Abdul Wadud formally, but in 1926 agreed to accept him as the wali, or state ruler. Abdul Wadud abdicated in favor of his son, Miangul Jehanzeb, in December 1949.

The walis are credited with consolidating the state. They put ef- ficient government machinery in place and undertook a large number of development projects. The first wali, Miangul Abdul Wadud, in- stituted a land settlement system and brought the forests under state management. He signed the Instrument of Accession in 1947 and the second wali signed the Supplementary Instrument of Accession in 1954 and Swat state was finally merged into Pakistan in 1969.4 Swat residents consider the rule of the walis as the golden period in the region's history.5

4. Research design, method, data and variables6

The geographic focus of our study is Swat District that contains two sub-divisions; Swat and Matta. There are 8 tehsils in the district. These tehsils are not regular revenue tehsils as in other districts in the country but are small administrative units that evolved when the district was a state. Matta tehsil, with 13 union councils, is the main Swat valley and Swat Kohistan, with 53 union councils, is an adjoining valley. Historically, these valleys have had the largest primary forest concentrations in the country and they are the most vulnerable to degradation. We purposively selected Matta valley which has three eco-zones (low, mid and high), defined by ecological, agricultural and altitudinal characteristics, as indicated in the land use map (Appendix B Chart II). The numbers represent the 18 villages in the sample.

4 The first wali, Abdul Wadud, was illiterate and so the stamp from his seal (ring) represented the signature.

5 Even though our fieldwork indicated that the Walis of Swat increasingly used natural resources, particularly forests, for political patronage, that era is nonetheless associated with much better resource management and conservation than the succeeding era.

6 District information is from Government of Pakistan (1999) and the rest of the information for this section was derived from fieldwork.

S.R. Khan, S.R. Khan / Ecological Economics 68 (2009) 2607–2618 2609

Table 1

Change in quantity of natural resources (1965–2005).

Natural Increase/decrease Change (%) Increase/decrease Change (%)

resource

Swat Valley Swat Kohistan

Conifer forests Oak forests Agriculture land Pasture land Water

Decrease Decrease Increase Decrease Decrease

−62 −75 +29 N/A − 53

Decrease −34 Decrease −43 Increase N/A Decrease N/A N/A N/A

Source: SDPI survey. Note: the numbers in the table represent a tabulation of responses on the natural resource questionnaire regarding degradation.

2610 S.R. Khan, S.R. Khan / Ecological Economics 68 (2009) 2607–2618

Table 2

OLS and 2SLS estimation of resource dependence.

Variables/statistics Eq. (1)—2SLS Eq. (2) —2SLS OLS (LHS/NRI) (LHS/RI) (LHS/RI)

Constant Education (years) Profession

(non-agriculture = 1) Age

Migration (migrant from household=1)

Livestock owned (numbers) Medium altitude eco-zone High altitude eco-zone Predicted NRI

NRI Adjusted R2 F-stat n

−35.29 (−1.52) 6.44⁎(5.09) 25.91⁎⁎(2.18)

1.26⁎(3.43) −30.36 (−1.40)

4.24⁎⁎(1.95) 16.69 (1.31) 5.08 (0.34)

.07 5.43⁎ 401

2.52 (1.12)

2.13⁎(5.90) 5.77⁎(2.73) 20.62⁎(8.30) 0.01 (0.76)

.26 36.40⁎ 401

2.60⁎⁎⁎(1.66)

2.14⁎(6.14) 5.79⁎(2.78) 20.62⁎(8.35)

0.01 (0.93) 0.26 37.77⁎ 402

Notes: E1 (low eco-zone) is the excluded variable. RI = resource income. NRI = non-resource income. LHS = left hand side variable.

Parentheses contain t-statistics. ⁎Significant at the 1% level. ⁎⁎Significant at the 5% level. ⁎⁎⁎Significant at the 10% level.

We selected five villages from the low zone, four from the mid- zone, and three from the high zone. Household information was collected from 403 households. Since our main interest was in re- source dependence and this was anticipated to be much higher in the high eco-zone, we selected an additional 200 households from an additional six villages in this zone, for an extended sample of 603, for the qualitative analysis.

For the analysis of resource dependence, information was collected on resource income (RI) as the dependent variable and the independent variables included income from other sources or non-resource in- come (NRI) and livestock numbers (LS), given their potential impact on resource degradation. Depending on the eco-zone, natural resources (firewood, timber, fodder and other forest products) are either pur- chased from the market or collected directly from the forests. The low eco-zone has a relatively high density of village settlements. Its location does not permit easy access to natural resources, with such resources being accessed indirectly via purchases from the market. The mid- zone is defined by extensive horticultural activities and lies in closer proximity to the forests, allowing households direct access to forest resources. This zone includes a mix of coniferous and deciduous forests. The high eco-zone falls along the upper valley ranges and includes largely coniferous forests, grazing lands and alpine pastures. The village households are located both on the forest fringes, as well as within the forests where land has been cleared for residential purposes, agriculture and livestock grazing.

A household survey was pre-tested and implemented over a six- month period, from April to September 2005. Information on natural resource management (NRM), village attributes, local history, in- stitutions and community perceptions regarding forest management by the state was collected via a community surveys, focus group discussions (FGD) and key respondent interviews. This fieldwork also included a survey of prices, village profiles, and a natural re- source survey.7

Total household aggregate income was derived from: natural re- sources (fuel wood (wood and brush) collection, timber, fodder, non- timber forest products (NTFPs), fish, and forest royalties); agriculture (crops and orchards as an annual figure including both kharif (summer) and rabi (winter) season crops); livestock; employment; donations/transfers; forest royalties; and rental income.

5. Empirical results

5.1. The poverty–resource dependence association

As mentioned in the introduction, we quantitatively examined poverty–resource degradation links by deconstructing them into two related elements; resource dependence by income group and the impact of resource dependence (poverty) on resource degra- dation. Resource dependence is defined as the ratio of income from natural resources to income from all other sources. Natural resource income refers to self-consumption and sale of natural re- sources (defined above) collected from government and community forests.8

Our first objective was to assess if resource dependence is in- versely and significantly associated with other (non-resource) in- come, controlling for livestock, ownership and eco-zones. Our OLS (ordinary least squares) result (Table 2) suggests that the income coefficient is insignificant. Since non-resource income (NRI) might be endogenous, we address this potential problem using 2SLS (two- stage least squares) estimation. Since the bulk of non-resource

7 Copies of the household and natural resource instruments can be made available on request to [email protected].

8 Communities continue to retain subsistence and royalty rights in these forests subsequent to government take-over of the forests.

income is wage income, we instrument it using the human capital model.9

NRI = NRI ðEd; Prof; Age; M; LS; E2; E3Þ ð1Þ where

Ed education measured in years Prof profession (dummies for skilled and unskilled) Age proxy for experience

M LS E

migration status livestock (numbers) E stands for the three eco-zones (low, middle and high).

The second stage equation is the original OLS with predicted NRI: RI = RI ðpredicted NRI; LS; E2; E3Þ: ð2Þ

Even though the fit of the first stage equation is poor, the F-statistic from the first stage equation demonstrates the validity of the in- strument. As shown above in Table 2, there is virtually no difference in the OLS equation and the second stage 2SLS equation suggesting that endogeneity is not an issue.

Eq. (2), like the OLS result, has a good fit for cross sectional analysis with all included variables having the expected signs. The hypothesis that resource dependence varies inversely with household income is refuted. As expected, eco-zones have the expected signs, differences in magnitudes, and are highly significant.10 Also as expected, livestock owned has a positive and highly significant coefficient. While we reject the hypothesis that the poor are necessarily more resource dependent, we nonetheless explore the second link stated above between poverty and forest degradation.

9 Mean and standard deviations of all variables used in the quantitative analysis are reported in Appendix Table 1.

10 For example, those residing respectively in the high and middle eco-zones derive Rs. 20,620 and Rs. 5790 more annually from resources than those residing in the low eco-zones. The average exchange rate of the Rs. for $1 was 59.86 in 2005-2006, Government of Pakistan (2008), Statistical Supplement, p. 76.

5.2. The forest degradation–poverty association11

To explore the association of poverty and resource degradation, we generated a relative poverty ranking of villages and overlapped it spatially with forest degradation using satellite imagery. From a list of the most frequently used global poverty indicators, we selected those for which data had already been collected as part of our sur- veys.12 After a number of iterations we arrived at a final set of five indicators including mean annual per-capita household income, em- ployment rate, mean per-capita household livestock numbers, mean per-capita rooms per household, and per-capita area of land under private ownership.

The individual villages were ranked for each indicator. We then arrived at the final ranking by taking the un-weighted average of the individual rankings with the lowest ranking representing the poorest village. Our main concern is the high zone where degradation is a serious problem. Here, we have a mix of both rich and poor villages, which is counter intuitive as one would, a priori, expect the more remote areas to be poor.

There is no evidence of a poverty–environment nexus within the high zone. Appendix C Chart III shows the high poverty-ranked villages (3, 4, 9, 12, 16–18) in the high zone and the red shading shows the degraded areas in the high zone. Only two of the seven villages overlap with the degraded areas confirming the lack of correspon- dence between poverty and forest degradation. The absence of an explicit relationship between poverty and resource dependence, com- bined with a lack of correspondence between zones of poverty and forest degradation, led us to explore alternative explanations for such degradation.

6. Historical and institutional analyses

6.1. Historical analysis13

The system of resource rights in the main Swat Valley was es- tablished after the Yusufzai Pathans invaded the valley in the 16th century. Customary law governing rights to natural resources was rooted in a system introduced by a Yusufzai notable and revenue expert, Sheikh Malli. This system was known as garzinda wesh; trans- lated literally, it means moveable distribution. The rationale was that as land differed in composition, location/accessibility, fertility, and availability of water, it was necessary to ensure equal sharing of its best and worst features. Land allotments were by village and re- allotments, by ballot, were carried out every 5, 7 or 10 years, as agreed mutually between the villages. The land allotments included a mix of agricultural land, forest (zangal), pasture (warshoo), and wasteland. While the system assured socio-economic justice, it relocated entire villages and took away the incentive to use natural resources in a sustainable manner.

Within the village allotments, the entitlements to common prop- erty resources (shamilaat) that included forests, pastures, rangelands, and water were in proportion to the size of private holdings of agricultural land. The holdings were referred to as dawtar and the owners as dawtaris. The sale and purchase of agricultural land meant that the dawtars varied over time and, commensurately, so did the common property entitlements within the village.

11 As indicated in Section 2, Dasgupta et al. (2003) and Deininger and Minten (1999) also use spatial data. The former used aggregate district and provincial level data and the latter indicate some problems with aggregate analysis.

12 There are likely to be rich people in poor villages and vice versa but we are concerned here with average village prosperity.

13 We restrict our analysis to the main Swat-Kohistan valleys due to space constraints. For more details, refer to Khan and Pervaiz (2001) and Sultan-i-Rome (2005, 2006).

Religious and tribal status was the basis for separate entitlements known as serai and the owners of such lands were called stanadars. These were community land grants and were made to holy families/ persons to construct mosques as well as for self-sustenance.

A more important type of land grant, that subsequently had im- portant political ramifications in that it established a basis for here- ditary title, was to the tribal elders and this was referred to as khan serai. Originally, these grants had the functional purpose of providing the wherewithal to entertain, a critical requisite for leadership: the categories were daday serai (maize serving area), mela serai (guest area), and telu serai (oil burning area in the hujra (segregated space for male congregation)). Serai holdings were mundai (with defined borders) and did not preclude dawtar shares.

Only the Yusufzais could be dawtaris, with ownership rights to agricultural land and hence to common-pool resources. Non-dawtaris comprised different ethnic groups, tenants, and village artisans. They were required to pay begar (labor tax) and qalang (grazing tax) for tenancy and grazing rights. They were allowed use rights by dawtaris in the forests but, even as owners of purchased land, had no owner- ship rights in common property. Thus the resource rights regime differentiated clearly between the rights of owners and users.

When Swat state came into existence in 1917, the wali (ruler) claimed ownership and custodial rights over the forests. He estab- lished a forest department to manage the forests and sanctioned a 10% royalty from the commercial proceeds of timber. The wali also instituted two types of timber quotas. The local quota was meant for local residents requiring timber for domestic use. The qaumi (people's) quota applied to residents of areas where natural resources were not found in abundance. It was also used to acquire timber for public schemes. The wesh rotations were abolished, locking in private ownership and common property entitlements spatially and in terms of shares. In the sense that dawtar shares determined the division of royalties, historical ownership rights persisted. As in the pre-state days, the rights regime continued to differentiate between owners and users. In fact, the old system continued to prevail for all natural resources except forests. For instance, the practice of begar and qalang was left unaltered by the wali. With regard to forests, the only change in terms of subsistence use was the qaumi quota; in other respects the old divisions and entitlements remained.

In 1926, Swat State and the colonial administration of the Govern- ment of India entered into a formal agreement to manage and con- serve forests. The agreement transferred administrative authority of these forests to the Government of India, but the de facto control and management remained with Swat State. While the rules and regulations were drawn up by the colonial government, the wali continued to exercise effective jurisdiction over the forests.

The independence of Pakistan in 1947, and the subsequent signing of the instrument of accession had no significant impact on natural resource management in Swat State. Resource rights remained un- changed for both owners and users. There were no efforts from either the Pakistani government (with whom the State had not merged at the time) or the wali to undertake any forest or land settlements in the main Swat Valley.

A change in management practices came about after Swat State merged with Pakistan in 1969. The forests were declared provincial subjects under the sole jurisdiction of provincial governments.14 In 1975, the provincial government declared forests as protected, and converted them into state property. The local and awami quotas continued; the latter were determined solely by the forest department that was susceptible to political influences. As a consequence,

14 Despite the change of management, many of the officials working in the Forest Department under the wali continued to hold their posts after the merger with Pakistan. The implementation mechanisms were however completely overhauled.

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the quotas benefited a select few. Under the new system, traditional owners were to be compensated by providing them a share in royal- ties for timber extraction. Currently, the royalty share in Matta is fixed at 60%.

The period between 1969 and 1975 was marked by confusion regarding community resource entitlements. Pre-merger, the wali's rule was authoritative, the writ of law was well established, and resource rights for communities relatively well defined. The walis closely monitored natural resources, forests in particular, and ensured that no illegal felling took place. With their strict vigilance gone, there was confusion surrounding the future rights of communities and natural resources began to be freely exploited.

Another major change in the ownership patterns also came about during the tenure of Prime Minister Zulfiqar Ali Bhutto (1972–77). At this time, the issue of de facto versus de jure ownership became important. The period saw large-scale purchases by resident Gujjars and land tenants of agricultural land and grazing land “bandajaat” from the landowners. The tenants and Gujjars also claimed the land they were cultivating and grazing, encouraged by the land and ten- ancy reforms instituted by the populist Bhutto government. This also triggered a willingness to sell by the absentee landlords. Prior to this development, any non-Pathan had to seek consensus of the jirga (council of village elders) or the consent of the khan (chief) to pur- chase land. The tenants had now become de jure owners and were relieved of their obligation to pay begar and qalang to the Pathans. Land settlements, which took place in 1986, further formalized this process.

6.2. Institutional analysis15

Customary and statutory law defines resource rights in the Matta tehsil. Customary law was prevalent during the pre-wali era when communities owned and managed the forests. Over time, the forests came progressively under state control which managed them under statutory writ — first, under the walis and later the federal govern- ment. Thus, forest ownership, originally vested in the communities, was in time transferred to the state. While communities continue to retain rights in the forests the forest department's (FD) legal term for them is now “concessionists” rather than rights holders.

The transition from community to state ownership and from customary to statutory law has engendered conditions detrimental to the forests and turned harmonious relations between communities and the state into exploitative and conflict-ridden ones. Good gov- ernance characterizes the wali era in that enforcement was both strict and fair. However, after the provincial government takeover in 1969, governance failures have become endemic and forests have degraded both due to community and timber contractor inroads — the latter aided in no small part by forest department officials and local elders. Thus the post-merger period resulted in a rapid increase in defores- tation, stemming from institutional failure.

Community FGDs (focus group discussions) indicate that the forest department is viewed as inefficient and corrupt. The discussions cited collusion with the timber mafia and the selective application of fines and penalties for forest transgressions as manifestations of such corruption. The deteriorating state of resources other than the forests,

15 The institutional analysis in this sub-section is based on key respondent interviews and focus group discussions (FGDs). The interviewees include forest department officials, heads of local and foreign NGOs working in the area, and donor representatives. The FGDs were with local communities across the zones. The essence of the notes of the principal investigator, who personally led the fieldwork, is contained in this sub-section. Other interviews and FGDs were taped and in some cases translated and transcribed. We have not used direct quotes since the text in these cases is rough. These tapes and documents and also field reports of other field team members can be made available to the interested reader by [email protected].

such as grazing lands, pastures and fisheries present an equally dismal picture and this is partly due to the opaque rights that presently govern these resources.

Communities perceive customary law in a positive light stating a positive correlation between sustainable resource use and customary law. This is largely a result of the clarity of established norms, owner- ship and close monitoring of natural resources, which holds despite the fact that customary law puts no limit on the use of resources for subsistence.

In contrast, they have formed a jaundiced view of statutory law and the associated forest department mandate. The reasons that they cite for this include excessive rent-seeking practices, bureau- cratic hurdles, and most importantly the loose writ of the forest department, which results in the failure to implement rules and regulations. Discretionary powers encourage corruption and collu- sion with timber contractors.16 The forest department is under- staffed, with one forest guard being assigned, on average, to four villages. Delays in the release of royalties to communities have un- dermined the state's credibility. Further, the forest department is tardy in educating communities about sustainable forest practices and the potential benefits that could accrue as a result. The utility of such education is self-evident when the enforcement writ is weak and the resource needs many.

The interrelationships of statutory and customary law and the complex and conflicting system of resource rights it has created are the primary source of forest degradation. In this context, we identified four categories of forest “owners”: the forest department (FD); com- munities with use rights; de jure owners living in close proximity to their forest holdings; de jure owners not living in close proximity to their forest holdings.

De jure owners living in close proximity to the land use the services of gujjar who normally pay qalang (grazing tax) and tenants who pay begar (free labor for using their land and forests), and they do not claim royalties. However, de jure owners not living in close proximity to their land create rival ownership claims by the long-resident gujjars. In such situations, the latter do not pay qalang, claim royalties and, effectively control the forests thereby becoming de facto owners. These forests are disputed and the subject of frequent litigation.

The Bhutto era (1971–1977) saw new pro-community rulings being instituted. These aggravated existing tensions between com- munities and forest owners, with adverse effects on the forests. Fear- ing outright acquisition de jure owners sold their forest clearings (bandajat) to de facto owners during the Bhutto era. The nature of the sale deed was such that any area under tree cover remained the property of the de jure owners while uncovered area became the entitlement of de facto owners. This provided an incentive to de facto owners to fell trees, thereby laying claim to additional land even though it was against the spirit of the sale deed. In addition, when the provincial government declared the forests as protected in 1975 and compensated the de jure owners with a 60% share in royalty, the de facto owners received no such rights. On the one hand, this led to significant deforestation and land use change (forests were converted to agricultural land) and on the other hand it increased tensions between de jure and de facto owners.

Appendix D Chart IV characterizes the overlap between owner- ship conflict and forest degradation for four blocks and shows that the ownership–degradation nexus is more pronounced and over rides poverty considerations. The spatial disjuncture between de jure and de facto ownership is a key factor in degradation. The

16 One example of this is the post of “forest magistrate” who is the sole authority responsible for implementing any penalties against transgressors. This combined with the rising timber prices and meaningless level of fines and penalties have acted as a perverse incentive for timber extraction.

degraded forests represent areas where de jure and de facto owners are different because de jure owners reside at a distance from the forests. Conversely, the well-protected forests are those where de jure and de facto owners are one and the same and live close to the forests.

Shaur Block consists of compartments 1–8 and 12–22 that are privately owned and well protected. By contrast, in compartments 9–11 and 23–25, where the de jure owners reside down country and the de facto owners (Gujjars) are proximate settlers, are in a de- graded state.

In Biha Block, compartments 1–13 are contested by the Dir residents and are in a degraded state. The remaining compartments, 11–47, are privately owned and in relatively good shape. However, the watershed dividing the two districts is subject to frequent in- cursions by the Dir residents and this part of the private forests is also degraded.

Rohringar Block is the most degraded block in Matta tehsil. Compartments 1–5, 12–17 and 31–35 are disputed, compartments 7–11 are tenant controlled, and compartments 18–30 are communally owned. In each case, the ownership incentive for conserving the forests is weak.

Finally, in Lalku Block the Mians are the de jure and de facto owners of compartments 7–46, a well-protected forest tract. In contrast, compartments 6–16 and 49–53 are disputed, while compart- ments 1–5 and 47 are tenant controlled. The two latter categories of forests are degraded.

Ill-defined resource rights have exacerbated the impacts of several other factors contributing to forest degradation. One of the main forces resulting in the change in the demarcation of the land has resulted from the rapid increase in population in the valleys. With demographic pressure the demand for food and cash crops increased and accelerated encroachments on forest land. The same forces also resulted in livestock intrusions. This also resulted in out-migration down country and abroad given the limited num- ber of employment opportunities in the mountain areas. The sub- sequent inflow of remittances increased the demand for modern housing structures and fuel wood and with that an increase in timber prices. Despite many promises, there has been no development of alternative sources of energy such as via the tapping of hydro power potential.

Second, the lack of a proper demarcation of forest and non-forest land has also contributed to forest degradation. In 1986, the govern- ment of NWFP instituted a land settlement for such demarcation. However, there is a lack of coordination between revenue and forest department officials. The patwaris (revenue officials) are supposed to do the annual girdawari (land use survey) but are willing to work with influentials to change records. Thus, while the records of the forest department show forests, the revenue records show them as farmlands. Civil courts have often settled against the forest depart- ment by reference to the de facto situation and hence have accele- rated deforestation.

Third, prior to the current conflict raging between the military and the Taliban militants, Swat was one of the most popular cool weather tourist sites in the country.17 Over the years, this resulted in a large number of river front hotels built from the top to the center of the main valley and some of the side valleys. Much of the refuse and sewage went untreated into the rivers. Also due to the increasing

17 Information gleaned from local contacts suggests an intensification of degradation post 2005 as a result of the “talibanization” of Swat and the attack on state institutions like public girl schools, police stations, and law courts and the subsequent military response. Under the cover of conflict, the timber mafia has trucked down vast amounts of timber with payoffs to the Taleban. The heavy air bombardment of the high forest covered mountains where the Taleban take refuge is also taking its toll. A full account would have to await a survey once the conflict subsides.

number of tourists over time and the relative increase in local prosperity the demand for fuel wood increased.

Fourth, one of the most destructive manifestations of mismanage- ment were the long delays in the release of royalty shares to claimants. This induced poor communities to sell their royalty rights in advance to rapacious timber merchants for a fraction of their real value. With an extraction rights in hand, the merchants removed timber beyond mandated amounts in collusion with forest guards. Due to this abuse of harvesting quotas, civil society organizations working with international donor organizations won a rare victory in the form of a ban on commercial logging.18 Even this backfired because it induced higher amounts of illicit cutting.

Fifth, a much trumpeted initiative of the military government that assumed power in 1999 was the devolution of power to the grassroots level. However, there was ineffectual implementation and little community participation so that the joint forest management plans that were to be a part of this initiative failed and local politicians in the “devolved” administrative structure became privy to the timber smuggling.19

7. Summary and conclusion

In this paper, we explore the debates around poverty–resource degradation linkages; that the poor are more resource dependent and consequently contribute relatively more to resource degrada- tion. Our quantitative results show no clear association between income (poverty) and resource dependence. Utilizing satellite imagery and poverty mapping, we also demonstrate that there is no necessary overlap between poverty and forest degradation. We turned to a historical and institutional analysis to explain forest degradation.

Our historical analysis starting with the 16th century indicates that selective and rotating ownership patterns provided limited incentive for resource conservation. However, once the walis of Swat took control in the early 20th century, ownership was frozen and resources were protected by stringent oversight of the forest department they created.

When Swat was administratively merged into Pakistan in 1969, the government declared forests protected and created tensions between customary and statutory law. They also did not invest in developing the managerial ability required to protect resources. Given the rapid rise in timber prices, the forest department officials have more incentive to collude with “forest mafias” than to protect community resources. Furthermore, the lack of coordina- tion between the forest and revenue departments and the lack of an implemented land demarcation enables encroachment on forest land for alternative uses via corruption and accommodating courts.

The populist government that absorbed Swat exacerbated the conflict between de jure owners with property rights and tenants or de facto owners. Unless de jure owners were also de facto owners, the nature of contracts resulted in tension and forest degradation.

Swat district residents depend substantially on natural resources for subsistence use and as an income source. Such dependence underscores the need both for defining the rights to these resources clearly based on an understanding of local history and institutional evolution. It also requires instituting sound management systems that avoid perverse incentives. Only with such policies in place can the current rapid rate of deforestation be avoided and sustainable resource use ensured.

18 This outcome was the result of the appointment by the military government of a respected ex head of a civil society organization as Minister of the Environment.

19 For a review of devolution in various contexts including resource management refer to Shyamsundar (2008).

S.R. Khan, S.R. Khan / Ecological Economics 68 (2009) 2607–2618 2613

2614 S.R. Khan, S.R. Khan / Ecological Economics 68 (2009) 2607–2618 Appendix A. Chart I

Appendix B. Chart II

S.R. Khan, S.R. Khan / Ecological Economics 68 (2009) 2607–2618 2615

2616 S.R. Khan, S.R. Khan / Ecological Economics 68 (2009) 2607–2618 Appendix C. Chart III

Appendix D. Chart IV

S.R. Khan, S.R. Khan / Ecological Economics 68 (2009) 2607–2618 2617

2618

S.R. Khan, S.R. Khan / Ecological Economics 68 (2009) 2607–2618

Appendix Table 1

Descriptive statistics (403 households).

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Variables Mean Standard deviation

Resource income (Rs. annual) Non-resource income (Rs. annual) Livestock (numbers) Age (years)

Migration (migrant from household=1) Education (years) Profession (non-agriculture=1) Low eco-zone

Middle eco-zone High eco-zone

14,281.82 21,260.99 71,391.49 114,981.76 2.09 2.72 51.14 16.13 0.07 0.26 2.93 4.70 0.35 0.48 0.42 0.49 0.36 0.48 0.22 0.42

Source: SDPI survey, 2005.

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