The forest resource covers almost 40% of the land resource. As one of the main landholders of the country with agrarian economy, it has also the responsibility of contributing to reduce poverty, which is the sole goal of the country now. The government policy documents focus on rehabilitation of degraded lands, environmental conservation and poverty reduction through people's participation. Leasehold Forestry and Livestock Program is the continuation and extension of Hills Leasehold Forestry and Forage Development Project (HLFFDP) implemented in 10 hills district since 1992 with the assistance of International Fund for Agricultural Development (IFAD).

The program area covers 22 hill districts (excluding 5 districts led by TA) , extended from east to west of the country.

Eastern Development Region:

Panchthar, Terathum, Bhojpur, Khotang and Okhaladhunga.

Central Development Region:

Sindhuli, Makawanpur, Chitawan, Dhading, Sindhupalchok, Kabrepalanchok, Dolakha and Ramechap

Western Development Region:

Lamagung, Tanahu and Gorkha

Mid -Western Development Region:

Pyuthan and Salyan

Far-Western Development Region:

Baitadi, Dadeldhura, Doti and Achham

TA Areas : 5 Districts

Nawalparasi, palpa,  Gulmi, Arghakhanchi,  Syanja

Rationale of the Program

There is a strong technical, social, institutional and economic rationale to continue leasehold forestry and associated livestock activities in the hills of Nepal. This rationale stems from the result of the HLFFDP and the priorities of tenth Plan.
The Interim Evaluation of HLFFDP found that the transfer of land with degraded forests to the poor could both reduce poverty and reforest the hills. The Sustainable Livelihoods Analysis of leasehold groups also supports that leasehold forestry can be an effective approach to poverty reduction, women's empowerment and reduce the drudgery by saving time in collecting fuel wood and fodder. Experience has also shown that a saving-based approach to develop rural financial services is the most appropriate.
This program also a community-based forest management approach is specially designed to benefit the poorest communities. Providing land with degraded forest to poor households on a 40-years renewable lease, provides the poor with security of tenure and the confidence to develop the land which then enables them to generate income and other benefits to move out of poverty trap. The Poverty Reduction Strategy Paper, recognizes leasehold forestry for poverty reduction as a program with the highest priority (PI).