Bhim Prasad Shrestha, chairman the Federation of Community Forest Users of Nepal (FECOFUN) is a troubled man. The ongoing Maoist insurgency has affected nearly 11,500 forest user groups in 74 districts-which amounts to more than 1,196,199 households, undermining one of Nepal's most successful environmental and conservation initiatives which took decades of persistence to build up.

Following the Maoist insurgency, the movement of villagers in community forests around the country has been restricted due to the fear of both the insurgents and the security forces. "In some districts, it's extremely risky to go into forest areas. You might meet Maoists who think you are an informer for the security forces. Or you might be questioned by army patrols who think that you're a Maoist," says Shrestha. "You're also likely to meet armed poachers," he adds, referring to the increase in poaching in protected areas, where the army has been pulled in. Since the escalation of the violence, and the subsequent imposition of a state of emergency, the army has pulled out troops from remote outposts in protected areas, especially in hilly regions where insurgents are most likely to attack by night and steal arms, and where it is hard to send reinforcements due to the terrain.

In the initial phases of the insurgency, a couple of villagers out looking for fodder were shot dead mistaken for Maoists by security forces. Today, most of FECOFUN's activities are largely restricted to district headquarters, where members focus their energies on developing human resources. "Even then, it's risky for villagers as they have to pass through Maoist-controlled areas or through security posts," says Shrestha.

All this has already taken its toll on community forestry and conservation efforts. Twenty-seven districts have been identified as hotspots for Maoist activity, while 25 are affected. Reports so far say that the insurgents have destroyed nine district offices, 33 area office and 142 range posts. "The government has received a rude awakening, but this is a crucial time to take stock of the situation. The implications will be large, long-term scars in terms of both environment degradation and lost opportunities in conservation," says wildlife biologist Pralad Yonzan, who has been tracking the impact of the insurgency on bio-diversity and wildlife conservation efforts.

So far, analysts point out, community forestry has sustained management practices in some 8473 km sq of forest-an area cumulatively larger that the total forest cover of 5827 km sq in the protected areas. Since 1975, the army has been patrolling most protected areas, with some exceptions, like Annapurna, Makalu Barun, Manaslu, and Kanchenjunga, where community-based initiatives are taking place.

In areas like the Manaslu Conservation area, where community-based initiatives have been taking off, there is no army presence, and the Maoists have destroyed offices of the King Mahendra Trust for Nature Conservation in the villages of Philim, Prok and Samagaon in northernmost Gorkha. Recent visitors to the area expressed concern at the amount of illegal timber being transported by yaks to Tibet. "When we were here seven years ago, we would see caravans of about 30 yaks transporting timber to Tibet. This time, we saw double that number," says journalist Mohan Mainali. Since food supplies subsidised by the government ran out four months ago and there are signs that the government is wary of supplying more food, fearing it may be intercepted by insurgents, local villagers will be increasingly compelled to fell trees and transport them to Tibet for money. Since the insurgency, reports of smuggling of timber to bordering regions of India and Tibet have increased.

Existing data indicate that there is no damage done by Maoists where a large number of army personnel continue to be posted. The Department of National Parks and Wildlife Reserves has received just one damage report from Langtang and none from Chitwan. Neither area has seen a decrease in the number of troops deployed for patrolling. But in other protected areas that are closer to the heartland of the insurgency, or that are very remote, and where the army is not stationed-such as Annapurna, Manaslu, Makalu Barun-some 40 instances of insurgency-related damage have been reported. In the remote forests of Makalu Barun and Manaslu areas, the Maoists train their cadres and extort money from tourists.

"The exceptions are Bardia and Sukhlaphanta in west Nepal, which are used by the insurgents as base and escape routes to India," says Yonzan. While the army, which maintains two companies in the western and eastern parts of Bardia, has tried to maintain as many of the original posts in the park area, at least 30-35 percent of park area is unreachable. So far, of the 112 original guard posts in 11 protected areas, only 34 remain. The reduction of armed posts by an alarming 70 percent has been a boon to poachers.

In Dolpo, where strict conservation and patrolling in the past twenty years has raised the population of rare species like the musk deer and snow leopard, poachers are having a field day. Rangers and game scouts tell of finding traps with deer skeletons. Since 1998, officials at the Sekpa check post of Shey Phoksumdo National Park have discovered some 500 traps meant for musk deer. Game scouts say they found fifty such traps on the steep slopes directly below the Suligad barrack near Dunai, where Maoists made a major attack two years ago killing more than 20 policemen. In Chitwan, where a higher number of army remain posted, the number of rhinos killed by poachers has doubled in the past year. Between July 2001 and June 2002, 38 great one-horned rhinos have been killed. Only the carcasses or skeletons were found with skull bones minus the horn.

Both conservation and community forestry in Nepal were working up to being success stories. While statistical reports indicate that Nepal's aggregate forest cover has gone down - reflecting deforestation largely in the plains owing to encroachment, timber lobby groups, illicit tree felling, and local politics - everyone agrees that the resurgence of canopy in the mid-hills, particularly in districts such as Dhading and Kavre, is real. Meanwhile, since 1961, the number of rhinos in the Royal Chitwan and Royal Bardia National Parks has grown six-fold to more than 600. Tigers, which numbered less than 100 at one time, have now gone up to 350, 125 of them breeding adults. There are currently 300-500 snow leopards-one tenth of the world's snow leopard population-in Nepal.

But the ongoing conflict, together with the recent disputes over logging benefits and forest registration processes to manage the woods, may destroy the strength and authority of forest user groups that took decades to develop. According to government statistics, owing to the insurgency, Nepal's GDP has already dropped by 10 percent-about $512 million, which includes trade, tourism, infrastructure and industrial production.

The loss of human life, the dysfunctional administrative units, the displacement of people, these same ground realities have had an equally serious impact on community participation and the management of common property resources, a vital factor in not just conservation, but the sort of rural development that address many of the concerns fuelling the insurgency. "Biodiversity conservation is the key element in sustainable development," says Yonzon. "But unlike what many donors think, putting money into poverty alleviation can't guarantee improvement in biodiversity."